iBio Annual Report 2016 | Quarterlytics

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FY2016 Annual Report · iBio

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2016

For the transition period from ___ to ___

Commission file number 001-35023

iBio, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

26-2797813
(I.R.S. Employer Identification No.)

600 Madison Avenue, Suite 1601, New York, NY
(Address of principal executive offices)

10022-1737
(Zip Code)

Registrant’s telephone number, including area code: (302) 355-0650

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $0.001 par value

Name of exchange on which registered
NYSE MKT

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act:

Large accelerated filer
Non-accelerated filer

¨
¨

¨
Accelerated filer
Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately
$30,100,00 as of December 31, 2015, based upon the closing sale price on the NYSE MKT of $0.56 per share reported for such date.

There were 89,109,410 shares of the registrant’s common stock issued and outstanding as of October 13, 2016.

iBio, Inc.

Annual Report on Form 10-K

Table of Contents

PART I

PART II

Business
Risk Factors
Unresolved Staff Comments
Property
Legal Proceedings
Mine Safety Disclosures

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information

PART III

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services

Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

Item 5.

Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.

Item 10.
Item 11.
Item 12.
Item 13.
Item 14.

Item 15.

Exhibits and Financial Statement Schedules

PART IV

Page

4
16
28
28
28
29

30
30
30
36
36
36
36
37

38
42
44
45
48

Unless the context requires otherwise, references in this Annual Report on Form 10-K to “iBio,” the “Company,” “we,” “us,” “our” and
similar terms mean iBio, Inc.

Certain statements in this Annual Report on Form 10-K may constitute forward-looking statements as defined in Section 27A of the
Securities Act of 1933 (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), the Private
Securities Litigation Reform Act of 1995 (the “PSLRA”) or in releases made by the Securities and Exchange Commission (the “SEC”), all
as may be amended from time to time. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and
the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. All statements contained in this
Annual Report on Form 10-K, other than statements that are purely historical, are forward-looking statements. Forward looking-statements
can be identified by, among other things, the use of forward-looking language, such as the words “plans,” “intends,” “believes,” “expects,”
“anticipates,” “estimates,” “projects,” “potential,” “may,” “will,” “would,” “could,” “should,” “seeks,” or “scheduled to,” or other similar
words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions.
Forward-looking statements are based upon management’s present expectations, objectives, anticipations, plans, hopes, beliefs, intentions
or strategies regarding the future and are subject to known and unknown risks and uncertainties that could cause actual results, events or
developments to be materially different from those indicated in such forward-looking statements, including the risks and uncertainties set
forth in Item 1A of this Annual Report on Form 10-K and in other securities filings by the Company. These risks and uncertainties should
be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. As such, no assurance
can be given that the future results covered by the forward-looking statements will be achieved. All information in this Annual Report on
Form 10-K is as of October 13, 2016, unless otherwise indicated. The Company does not intend to update this information to reflect events
after the date of this report.

We maintain a website at www.ibioinc.com to provide information to the general public and our stockholders on iBio and its management,
financial results and press releases. Copies of this Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports
on Form 8-K and our other reports filed with the SEC can be obtained free of charge as soon as reasonably practicable after such material is
electronically filed with, or furnished to, the SEC on our website at www.ibioinc.com or directly from the SEC’s website at www.sec.gov.
Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on
Form 10-K.

Item 1. Business.

Overview

PART I

We are a biotechnology company focused on commercializing our proprietary technologies and product candidates and providing
product development and manufacturing services to clients and collaborators. The Company’s technologies constitute a proprietary,
transformative platform for development and production of biologics in hydroponically grown green plants.

Stated simply, iBio’s technologies harness the natural protein production capability that plants use to sustain their own growth, and
direct it instead to produce proteins for a range of applications including for vaccines and biopharmaceuticals. The Company’s technologies
can be used to produce a wide array of biologics and also to create and produce proprietary derivatives of preexisting products with
improved properties. The Company has used its technologies and its collaborative relationships to demonstrate the applicability of its
technologies to a diverse range of product candidates including products against fibrotic diseases, vaccines, enzyme replacements,
monoclonal antibodies, and recombinant versions of marketed products that are currently derived from human blood plasma.

In addition to the broad array of biological products that can be produced with the Company’s technologies we believe our
technologies offer other advantages that are not available with conventional manufacturing systems. These anticipated advantages may
include reduced production time and lower operating costs. Further, we believe that the capital investment required to create facilities that
will manufacture proteins using the Company’s technologies will be substantially less than the capital investment which would be required
for the creation of similar capacity facilities utilizing conventional manufacturing methods dependent upon animal cells, bacterial
fermenters and chicken eggs. Additionally, operating costs in a manufacturing facility using iBio’s platform are expected to be reduced
significantly in comparison to conventional manufacturing processes due to the rapid nature of our production cycle and the elimination of
the expenses associated with the operation and maintenance of bioreactors, fermenters, sterile liquid handling systems and other expensive
equipment which is not required in connection with the use of the Company’s technologies.

Among the Company’s proprietary technologies are the patented iBioLaunch technology ™, the patented iBioModulator™
technology, and additional newer and more advanced technologies. Bio-Manguinhos/Fiocruz, or Fiocruz, a unit of the Oswaldo Cruz
Foundation, a central agency of the Ministry of Health of Brazil, is sponsoring the development an iBioLaunch-produced yellow fever
vaccine to replace the vaccine it currently makes in chicken eggs for the populations of Brazil and more than 20 other nations. These
advances are occurring subsequent to the demonstration of safety of iBioLaunch-produced vaccine candidates against each of the H1N1
“Swine” flu virus and the H5N1 avian flu virus in successfully completed Phase 1 clinical trials.

We developed our iBioModulator technology based on the use of a modified form of the cellulose degrading enzyme lichenase,
from Clostridium thermocellum, a thermophilic and anaerobic bacterium. iBioModulator enables an adjuvant component to be fused
directly to preferred recombinant antigens to create a single protein for use in vaccine applications.

The iBioModulator platform has been shown to be applicable to a range of vaccine proteins and can significantly modify the
immune response to a vaccine in two important ways. Animal efficacy studies have demonstrated that it can increase the strength of the
initial immune response to a vaccine antigen (as measured by antibody titer) and also extend the duration of the immune response. These
results suggest the possibility that use of the iBioModulator platform may lower vaccine antigen requirements and enable fewer doses to
establish prolonged protective immunity.

In addition to technology developed for iBio pursuant to agreements with Fraunhofer U.S.A., Inc., iBio’s more recently developed
technologies provide the Company with higher expression yields of certain proteins and increased efficiency in adapting gene sequences to
achieve specific product objectives. In addition, iBio is developing improved, proprietary manufacturing processes that the Company
expects to protect as trade secrets.

Our near-term focus is to realize two key objectives: (1) the establishment of additional business arrangements pursuant to which
commercial, government and not-for-profit licensees will utilize the Company’s technologies in connection with the development and
manufacturing of therapeutic proteins and vaccine products; and (2) the further development of select product candidates based upon or
enhanced by our technology platforms. These objectives are the core components of our strategy to commercialize the proprietary
technologies we have developed and validated.

Our strategy to engage in partnering and out-licensing of our technologies seeks to preserve the opportunity for iBio to share in the
successful development and commercialization of product candidates by our licensees while enhancing our own capital and financial
resources for development, alone or through commercial alliances with others, of high-potential product candidates based upon our
technologies. In addition to financial resources we may receive in connection with the license of our technologies, we believe that
successful development by third party licensees of iBio technology-enhanced product candidates will further validate our technologies,
increase awareness of the advantages that may be realized by the use of such platforms and promote broader adoption of our technologies
by additional third parties.

The advancement of iBio technology-enhanced product candidates is a key element of our strategy. We believe that selecting and
developing products which individually have substantial commercial value and are representative of classes of pharmaceuticals that can be
successfully produced using our technology platforms will allow us to maximize the near and longer term value of our technologies while
exploiting individual product opportunities. To realize this result, we are currently internally advancing through preclinical IND enabling
studies a proprietary recombinant protein we call IBIO-CFB03 for treatment of idiopathic pulmonary fibrosis, systemic sclerosis, and
potentially other fibrotic diseases. To the extent that we anticipate the opportunity to realize additional value, we may elect to further the
development of this or other product candidates through the early stages of clinical development before seeking to license the product
candidate to other industry participants for late stage clinical development and if successful, commercialization.

On December 16, 2015, we formed iBio CMO LLC (“iBio CMO”), a Delaware limited liability corporation, to develop and
manufacture plant-made pharmaceuticals. As of December 31, 2015, we owned 100% of iBio CMO. On January 13, 2016, we entered into
a contract manufacturing joint venture with an affiliate of Eastern Capital Limited (“Eastern”), a stockholder of the Company (the “Eastern
Affiliate”). The Eastern Affiliate contributed $15 million in cash for a 30% interest in iBio CMO. We retained a 70% interest in iBio CMO
and contributed a royalty bearing license which grants iBio CMO a non-exclusive license to use our proprietary technologies for research
purposes and an exclusive U.S. license for manufacturing purposes. We retained the exclusive right to grant product licenses to those who
wish to sell or distribute products made using our technology.

iBio CMO’s operations take place in Bryan, Texas in a facility controlled by another affiliate of Eastern (the “Second Eastern
Affiliate”) as sublandlord. The facility is a Class A life sciences building on the campus of Texas A&M University, designed and equipped
for plant-made manufacture of biopharmaceuticals. The Second Affiliate granted iBio CMO a 34-year sublease for the facility. Commercial
operations commenced in January 2016. iBio CMO expects to operate on the basis of three parallel lines of business: (1) Development and
manufacturing of third party products; (2) Development and production of iBio’s proprietary product(s) for treatment of fibrotic diseases;
and (3) Commercial technology transfer services.

Proprietary iBio technologies have been used to advance development of certain products that have been commercially infeasible
to develop with conventional technologies such as Chinese hamster ovary cell systems and microbial fermentation methods. They can be
used to create and operate manufacturing facilities at substantially lower capital and operating costs. These include development and
manufacture of both vaccine and therapeutic product candidates. iBio CMO is promoting commercial collaborations with third parties on
the basis of these technology advantages and plans to work with customers to achieve laboratory scale technical milestones that can form
the basis of longer-term manufacturing business arrangements. iBio itself is a client of iBio CMO for further IND advancement of its
proprietary products beginning with IBIO-CFB03 for the treatment of a range of fibrotic diseases. iBio will work with iBio CMO on the
production of IBIO-CFB03 for clinical trials and, with clinical success, for commercial launch.

Due to the lower capital and operating cost requirements for pharmaceutical production via iBio technology versus legacy
methods, certain corporations and governments that have not already established manufacturing capacity for biologic products are client
prospects for both development and for commercial technology transfer services to enable autonomous manufacturing in the market being
served. For example, in Brazil, iBio has been collaborating with the Oswaldo Cruz Foundation (Fiocruz) to develop a recombinant yellow
fever vaccine based on iBio technology. iBio’s contract with Fiocruz provides for commercial technology transfer services as the product
candidates enters human clinical trials. Over time, iBio expects to work closely with iBio CMO to provide such technology transfer
services for a variety of both commercial and government clients.

Our Business

Our Technology Platforms – iBioLaunch, iBioModulator, and iBio Advanced Technologies

iBioLaunch

iBioLaunch is the name iBio uses to describe iBio’s proprietary, transformative platform comprising multiple technologies for the
development and production of therapeutic proteins and vaccines using transient gene expression in green plants. Based upon the results of
successful Phase 1 clinical trials demonstrating the safety of vaccine candidates against H1N1 influenza and H5N1 influenza,
immunogenicity data from in vivo preclinical studies in well-established highly predictive animal models and results from feasibility
studies and other discovery and development work we have performed, we believe that the iBioLaunch platform can produce therapeutic
proteins and vaccines more efficiently, as measured by time, cost and yield, than current conventional biologics manufacturing methods. As
awareness of these advantages increases, we expect broader adoption of the iBioLaunch platform by biologics market participants.

An additional advantage of the iBioLaunch platform includes successful production of proteins that are difficult or impossible to
produce on a commercially practical basis with conventional systems. This unique capability has been demonstrated by production of
antigens for vaccine candidates for both hookworm and malaria, each of which requires production and purification of proteins that could
not be feasibly made with other systems. For companies developing proprietary product opportunities, challenges often include overcoming
obstacles to efficient production of complex or multiple proteins with simultaneous control of enzymes that modify the properties of the
desired end product. iBioLaunch technology offers the flexibility and sophistication necessary to enable practical development of such
complex products.

With iBioLaunch, it is possible to manufacture product candidates in less than a month from identifying the protein of interest.
This rapid production cycle makes iBioLaunch particularly well-suited for producing treatments and vaccines for pandemic diseases and
for bioterror response. The rapid production cycle is also advantageous to researchers and others seeking to develop new products as a
greater number of experiments can be conducted in any time period at a cost less than that associated with conventional expression systems.

Utilizing expression technology which is transient, occurring over a period of four to seven days after introducing a foreign gene,
iBioLaunch eliminates the initial steps upon which other conventional expression technologies are dependent – namely the need to isolate a
high producing cell clone from millions of non-productive cells and then grow the clonal cells in a sterile fermenter to start the
manufacturing process. This saves the year of process development time commonly associated with mammalian cell systems and eliminates
the need for expensive fermenters and a sterile liquid-handling system to prevent bacterial, fungal, or viral contamination of the protein
drug. In the iBioLaunch system, no animal- or human-derived materials are used, eliminating the risk of contamination by human
infectious agents. In place of such materials, normal green plants, grown under clean and controlled conditions, provide the biomass for
pharmaceutical protein manufacturing. Because this entire process uses commonly available materials, we are not dependent on unique
sources of raw material, nor are we limited to purchasing from single suppliers.

The iBioLaunch process begins with robotic seeding into an inert matrix for hydroponic growth, followed by automated
infiltration of the young seedlings for gene expression and protein production. The innovation of the iBioLaunch technology is typified by
its proprietary vector technology. The iBioLaunch vectors are designed to bring foreign DNA to the nucleus of cells in the leaves of plants
by allowing a vector and bacterial host to be introduced into the plant by “infiltrating” the bacterial vector host under a slight vacuum. The
bacterial vector “launches” the foreign DNA into the plant nucleus, where it is coded into instructions that direct the plant’s own protein
manufacturing apparatus to make foreign proteins. A clever arrangement of genes for plant viral enzymes causes these protein production
instructions to be copied hundreds of thousands of times in each plant cell. Our proprietary gene transfer vectors combine the desirable
features of the DNA mobilization plasmid of Agrobacterium tumefaciens with gene control elements taken from single-stranded RNA plant
viruses.

Subsequent to the incorporation of the iBioLaunch vector in the plant tissues, the following steps lead to target protein synthesis:

The vector is transported to the nucleus of each cell, where RNA polymerase II transcribes viral-related sequences and the gene(s)
of interest into messenger RNA.

The viral-related messenger RNA moves to the plant cell cytoplasm, and is translated on ribosomes to make proteins representing
the viral replicase gene, movement protein, and our protein of interest.

The viral replicase protein causes the production of hundreds of additional messenger RNA molecules encoding the production of
our protein of interest, and these messengers dominate the plant protein production machinery.

Large amounts of the protein of interest accumulate and await purification.

The net effect of applying the iBioLaunch system is that the natural plant protein production capability becomes devoted to the

expression of the desired gene, and the target protein rapidly accumulates to extremely high levels suitable for commercial use.

iBioModulator

In addition to iBioLaunch, we have developed iBioModulator, a technology platform that is designed to improve the potency and
duration of effect of both prophylactic and therapeutic vaccines produced with any recombinant expression technology including
iBioLaunch. We developed our iBioModulator technology based on the use of a modified form of the cellulose degrading enzyme lichenase
from Clostridium thermocellum, a thermophilic and anaerobic bacterium.

iBioModulator technology enables an adjuvant component to be fused directly to preferred recombinant antigens to create a single

protein for use in vaccine applications.

The iBioModulator platform has been shown to be applicable to a range of vaccine proteins, and can significantly modify the
immune response to a vaccine in two important ways. Animal efficacy studies have demonstrated that it can increase the strength of the
initial immune response to a vaccine antigen (as measured by antibody titer) and also extend the duration of the immune response. These
results suggest the possibility that use of the iBioModulator platform may lower vaccine antigen requirements and enable fewer doses to
establish prolonged protective immunity. We believe that the ability to provide better immune response and longer-term protection with
fewer or zero booster inoculations would add significant value to a vaccine by reducing the overall costs and logistical difficulties of its use.

iBio Advanced Technologies

iBio has developed and acquired rights to additional proprietary technologies that are superior to our earlier technologies for
certain applications and that in some cases are associated with individual products such as our IBIO-CFB03 product candidate for fibrotic
diseases. iBio Advanced Technologies include rights to certain patented and unpatented technologies developed by Novici Biotech LLC,
patents and unpatented inventions licensed from the University of Pittsburgh, and novel manufacturing methods and processes developed
by iBio CMO LLC.

Application of iBio Technologies - Target Markets and Product Candidates

Target Markets and Commercialization Activities

Based on the scientific data that have been derived from the successful Phase 1 clinical trials of the iBioLaunch-derived influenza
vaccine candidates and the results of the feasibility and preclinical studies conducted to date evaluating iBioLaunch-produced and
iBioModulator-enhanced product candidates, we believe that we have demonstrated the suitability and applicability of these platform
technologies to a broad range of therapeutic protein classes and both prophylactic and therapeutic vaccines.

Currently, we are engaged in efforts to commercialize our technology platforms. Our strategy is to enter important markets
through license agreements, commercial collaborations, and manufacturing contracts. Our current marketing efforts focus on those decision
makers whom we expect will be attracted to the cost and efficiency advantages that may be obtained through use of our platforms. We
believe that the advantages of our platforms will enable us to compete effectively against the providers of other manufacturing systems that
may be slower, more capital intensive and more costly to operate. We anticipate realizing revenues in connection with licenses we may
grant and technology transfer services we may provide.

In all geographic regions, including the U.S. and Western Europe, the robust ability of our technology platforms to favorably
produce a wide range of protein types, including our ability to produce product candidates that are otherwise not feasible to commercially
manufacture, offers us the opportunity to obtain value through exclusive, individual product licenses which can be worldwide or
geographically limited. In other geographic regions, such as Brazil, India and China where the economies and middle classes are growing
rapidly and decision-makers are building domestic biologics infrastructures, we anticipate entering into and deriving revenues from licenses
that may include multiple product categories to which our technology applies.

Additionally, we believe that governments and state corporations seeking to establish and maintain autonomous biodefense
capabilities will also be attracted to the advantages realizable with our platforms. The market for biodefense countermeasures reflects
continued awareness of the threat of global terror and biowarfare activity as well as the need to have capacities to quickly manufacture both
vaccines and therapeutics to a numerous and ever evolving list of biological agents that could be used to harm populations.

To enhance our success in the commercialization of our multiple technologies, we are engaging in efforts to advance select iBio
sponsored product candidates. Our current internal efforts focus on the further development of a proprietary recombinant protein product
candidate, IBIO-CFB03, for the treatment of idiopathic pulmonary fibrosis, systemic sclerosis, and other fibrotic diseases. We have
selected this product candidate for further advancement on the basis of its individual commercial value and its value as representative of a
class of products in an attractive market that may be successfully derived from the iBio platform. We believe that demonstration of
successful utilization of technologies by each of us and our license partners will enhance market awareness of the broad applicability and
potential advantages realizable with the platforms and generate increased opportunities for us to realize value from these assets.

Product Candidates

The table below summarizes key information regarding examples of the categories and product classes and the status of product

candidates generated from our platforms:

Market

Class

Product

Status /Other

Therapeutic Protein

Anti-fibrosis Protein
Plasma-Derived Proteins
Enzyme Replacement
Monoclonal Antibodies

IBIO-CFB03
C1 Esterase Inhibitor
Alpha-Galactosidase
Palivizumab

Preclinical Orphan Designation

Feasibility Demonstrated
Feasibility Demonstrated
Feasibility Demonstrated

Vaccines

Viral Disease Vaccines

Biodefense

Parasitic Pathogen Vaccine

Therapeutic Vaccine

Bacterial Disease Vaccine
Bacterial Disease Vaccine
Monoclonal Antibody

H1N1 Influenza
H5N1 Influenza
Yellow Fever
Malaria
Hookworm
Human Papillomavirus (HPV)

Phase I – Completed
Phase I – Completed
Preclinical
Phase I
Phase I
Feasibility Demonstrated

Anthrax
Anthrax/Plague
Anthrax

Phase I
Feasibility Demonstrated
Feasibility Demonstrated

Therapeutic Protein Product Candidates

Using our proprietary technologies, we have expressed and demonstrated the feasibility of production of many classes of
therapeutic proteins. The proteins that we have successfully produced range from large and complex monoclonal antibodies to smaller
proteins such as interferons, growth factors, and enzymes.

IBIO-CFB03, a Proprietary Product for Treatment of Fibrosis

iBio has exclusively licensed and is developing, on its iBioLaunch™ platform and with its more advanced technology, an
innovative new product we have designated “IBIO-CFB03” for treatment of idiopathic pulmonary fibrosis (IPF) and systemic sclerosis
(SSc), both fatal and incurable diseases. The total number of people affected by systemic sclerosis and IPF, while large in comparison to
many biotechnology target markets, is small enough for iBio’s drug to qualify for the regulatory and financial benefits available under U.S.
and European Orphan Drug incentives.

iBio’s candidate product has demonstrated efficacy in both animal disease models and through the reversal of fibrosis in human
skin organ culture. Preclinical studies have established a strong safety profile for IBIO-CFB03 with no toxicity seen at concentrations well
above the predicted effective doses. The drug is readily diffusible into organs and tissues and can reach its target site via several modes of
administration. Systemic administration is effective at reducing skin and lung fibrosis. The anti-fibrotic effects of IBIO-CFB03 are
observed even after the onset of fibrosis, suggesting that it is capable of reversing fibrosis—an effect not observed with any of the potential
anti-fibrotic therapies that are currently in clinical use. Patients with existing fibrosis enter the clinic long after the onset of their disease,
and thus do not benefit significantly from a drug used to prevent fibrosis rather than treat existing fibrosis.

Experimental drugs demonstrating efficacy against life-threatening diseases in early clinical trials are given higher priority review
for marketing approval by regulatory agencies in the U.S. and Europe. In addition, both the U.S. and Europe offer financial and regulatory
incentives for the development of new drugs for the treatment of smaller patient populations (Orphan Drugs), and such drugs can be
approved for marketing faster and with less total investment than drugs that are intended to treat major diseases. iBio has obtained Orphan
Drug designation for its drug candidate for systemic sclerosis.

Recombinant forms of Plasma Derived Products

Using iBioLaunch, we have successfully produced human C1 esterase inhibitor and human alpha 1-antitrypsin, each of which is
an important therapeutic product that has been traditionally derived from human blood plasma. The production via the iBioLaunch system
of plasma-sparing recombinant forms of these products offers an alternative process that may lessen reliance on human blood supplies and
eliminate the safety concerns that may be associated with use of animal and human cells or other tissue components.

Other Therapeutic Proteins

In addition to the recombinant form of plasma derived products, using iBioLaunch, we have been able to express and demonstrate
the feasibility of production of substantially all other classes of therapeutic proteins. The therapeutic proteins that we have successfully
produced range from large and complex monoclonal antibodies to smaller proteins such as interferons, growth factors, and enzymes. All the
candidate therapeutic proteins manufactured using iBioLaunch have assembled correctly assembled and demonstrated full activity in
relevant bioassays. We are currently evaluating several potential proprietary iBioLaunch produced therapeutic protein candidates for
further development internally at iBio or together with collaborators.

Vaccine Candidates

We have used iBioLaunch to successfully express and demonstrate the feasibility of production of a broad array of vaccine
candidates, including vaccine candidates that have to date been impossible to produce on a commercially practical basis using conventional
manufacturing systems. Additionally, we have used iBioModulator to improve the performance of therapeutic vaccine candidates.

The ability of the iBioLaunch platform to manufacture proteins that are difficult or impossible to produce on a commercially
practical basis with conventional manufacturing systems has been demonstrated by the production of antigens for vaccine candidates for
both hookworm and malaria. These iBioLaunch-produced vaccine candidates are being developed by the Sabin Institute and the Bill and
Melinda Gates Foundation, respectively, and each is being advanced to Phase 1 clinical trials that are expected to commence in the next 12
months, subject availability of funding at each respective organization and satisfaction of other conditions.

The safety of an iBioLaunch-produced H1N1 influenza vaccine candidate and an iBioLaunch H5N1 influenza vaccine has been
demonstrated in successfully completed Phase 1 human clinical trials and the efficacy of these iBioLaunch derived vaccine candidates has
been demonstrated in well established, highly predictive animal models. We have also demonstrated the efficiencies of our iBioLaunch
technology at the laboratory level by producing candidate influenza vaccines in weeks versus the months required for commercially used
chicken egg methods. The rapid production of an iBioLaunch derived vaccine candidate for the recently emerged new strain of influenza,
H7N9, demonstrates the flexibility and responsiveness of the platform. This speed of production is an advantage that we believe may be
particularly attractive to public health authorities seeking to protect citizens in the case of a pandemic outbreak.

Our collaborator, Fiocruz, is advancing the development of an iBioLaunch-produced yellow fever vaccine candidate. In addition
to furthering preclinical IND enabling studies of this vaccine candidate, in April 2013, Fiocruz committed to the design of a new plant-
based multipurpose manufacturing facility in Brazil and anticipates construction of such facility in the next few years. This multipurpose
facility is being designed in manner that will enable the incorporation and utilization of our iBioLaunch platform.

Biodefense Countermeasures

Our technology platforms have advantages that we believe are particularly well suited for the biodefense market. Speed of
production and capability to produce both vaccines and therapeutic proteins using the iBioLaunch platform and the potential to improve
performance of vaccines through the application of the iBioModulator platform are each key features of biologics manufacturing systems
that may be sought by governments and state corporations seeking to establish autonomous capabilities to protect their populations from
bioterrorism threats. In addition to our demonstration of the feasibility of iBioLaunch produced monoclonal antibody candidates for the
treatment of anthrax, next generation anthrax vaccine candidates derived from the iBioLaunch platform have been evaluated by our
collaborator, Fraunhofer, pursuant to a funding award granted to Fraunhofer in December 2012 by the National Institute of Allergy and
Infectious Diseases. With Fraunhofer, we are evaluating opportunities and seeking funding from additional sources to further demonstrate
the applicability and advantages of our platforms in connection with the development of biodefense countermeasures.

Strategic Alliances and Collaborations

A significant component of our business plan is to enter into strategic alliances and collaborations with other for-profit entities,
governments, foundations, and others as appropriate to gain access to funding, capabilities, technical resources and intellectual property to
further our development efforts, commercialize our technology and to generate revenues.

Collaboration with Fraunhofer Center for Molecular Biology (“Fraunhofer”)

In 2003, we engaged Fraunhofer to perform research and development activities to develop the iBioLaunch platform and to create
our first product candidate. Pursuant to the Technology Transfer Agreement (“TTA”) between our company and Fraunhofer, effective in
January 2004, we paid $3.6 million to Fraunhofer to acquire the exclusive rights to intellectual property owned by Fraunhofer which, as
subsequently enhanced and improved, constitutes the iBioLaunch platform.

Following this initial engagement, we expanded our relationship with Fraunhofer to include additional and continuing research and
development activities and we benefited from the establishment of numerous non-commercial arrangements among the Company, certain
government entities, a non-governmental organization (which we refer to as a “NGO”) and Fraunhofer which allowed us to further advance
the development of our technology platforms and select product candidates through indirect access to non-dilutive funding.

To evidence these expanded activities, at various times, we entered into additional agreements with Fraunhofer and periodically
amended the TTA, including most recently a settlement agreement we entered into with Fraunhofer in September 2013 (the “Settlement
Agreement”). The amendments to the TTA include a commitment by Fraunhofer to further develop exclusively for and transfer to us rights
to proprietary technology and intellectual property rights in the fields defined in the agreements comprising principally plant-based human
vaccines, human antibodies, and human therapeutic proteins and veterinary applications of plant-based influenza vaccines. Additionally the
TTA provides that Fraunhofer will pay to us a royalty payment equal to 9% of all receipts, if any, realized by Fraunhofer from sales,
licensing or commercialization of the intellectual property licensed from us.

Prior to the effective date of the Settlement Agreement, we were obligated to make non-refundable payments to Fraunhofer
aggregating $10,000,000, in installments of $2,000,000 per year over a five year period commencing in November 2009 and expiring in
November 2014, and Fraunhofer was required to expend an amount at least equal to the amounts payable by us for the purpose of engaging
in services to further the development of our technology. In addition to the annual research service payments, we were required to make
royalty payments to Fraunhofer equal to 1% of all receipts derived by us from sales of products utilizing our proprietary technology and
15% of all receipts derived by us from licensing our propriety technology to third parties for a period of fifteen years. Additionally,
beginning in 2010 and continuing until 2024, the TTA provided that we remit minimum annual royalty payments to Fraunhofer in the
amount of $200,000 (the “Minimum Annual Payment”).

The Settlement Agreement, which was intended to better align the mutual interests of iBio and Fraunhofer, has the following effects:

· Our liabilities to Fraunhofer in the amount of approximately $2.9 million as of June 30, 2013 were released and terminated;

· Our obligation under the TTA, prior to the Settlement Agreement, to make three $1 million payments to Fraunhofer in April 2013,
November 2013, and April 2014 (“Guaranteed Annual Payments”) was terminated and replaced with an undertaking to engage
Fraunhofer for at least $3 million in work requested and directed by iBio before December 31, 2015. We believed that our right to
select and direct specific projects would improve the efficiency of our product development activities and that the extension of the
period over which this commitment must be fulfilled would enhance our ability to manage our cash outflow;

· We terminated and released Fraunhofer from the obligation to make further financial contributions toward the enhancement,
improvement and expansion of our technology in an amount at least equal to the Guaranteed Annual Payments, because we believed
our technology development phase was completed and prospectively would be focusing on product development. In addition, we
terminated and released Fraunhofer from the obligation to further reimburse us for certain past and future patent-related expenses;

· Our obligation to remit to Fraunhofer minimum annual royalty payments in the amount of $200,000 was terminated. Instead we will
be obligated to remit royalties to Fraunhofer only on technology license revenues that we actually receive and on revenues from
actual sales by us of products derived from our technology until the later of November 2023 or until such time as the aggregate
royalty payments total at least $4 million;

The rate at which we will be obligated to pay royalties to Fraunhofer on iBioLaunch and iBioModulator license revenues we receive
was reduced from 15% to 10%; and

· Any and all other claims of each party to any other amounts due at June 30, 2013 were mutually released.

Additionally, we and Fraunhofer entered into research and development service agreements with respect to two projects, specifically
the further development of the recombinant form of C1 esterase inhibitor and additional development services in connection with the
transfer of our technology related to facility design to Fiocruz. The technology transfer for facility design was completed for $97,767. The
C-1 program was suspended after payment of $544,687.

Alliance with GE Healthcare

In July 2012, we formed a global alliance with GE Healthcare (“GEHC”) to commercialize our plant-based technologies for the
manufacture of biopharmaceuticals and vaccines. The alliance builds on the development and marketing agreement which we entered into
with GEHC in 2010 and seeks to combine the iBioLaunch platform with GEHC’s capabilities in start-to-finish technologies for
biopharmaceutical manufacturing. Under the terms of global alliance agreement, iBio will be the preferred provider of vaccine or
therapeutic product manufacturing technology incorporating a plant based protein expression system, while GEHC will be the preferred
provider of engineering services and bioprocess solutions, to any customers that may be interested in a bio-manufacturing facility
incorporating a plant-based expression system. The global alliance agreement further specifies allocation of responsibilities for product
development, process scale-up, facilities design and development, and technology transfer among iBio, Fraunhofer, and GEHC.
Additionally, the global alliance agreement also sets forth the terms of a non-exclusive commercial license to iBio’s technology that we
have agreed to offer to any customer referred to it by GEHC as a part of the global alliance.

In April 2013, together with GEHC, we announced that Fiocruz had committed to build and had recently contracted with GEHC

for the design of new plant-based manufacturing facility that would use our iBioLaunch technology.

Although the Fiocruz project is proceeding, and was the subject of a recent visit of the Fiocruz team to the iBio CMO facility and
discussions with senior iBio management, political and economic conditions in Brazil have affected the original schedule and may continue
to affect the prospective schedule for development and completion.

Fiocruz Collaboration and License

In January 2011, we entered into collaboration and granted a commercial, royalty-bearing license to Fiocruz for the use of our
proprietary technology in connection with the development, manufacture and commercialization by Fiocruz of certain vaccine products.
Fiocruz, a unit of the Oswaldo Cruz Foundation, a central agency of the Ministry of Health of Brazil, is a leader in the production,
development and commercialization in Latin America of vaccines, reagents and biopharmaceuticals. Additionally, Fiocruz, a certified
World Health Organization provider to United Nations agencies, is a global leader in the manufacture of yellow fever vaccine. Fiocruz
manufactures and exports yellow fever vaccine to over 60 countries. The World Health Organization has estimated that 200,000
unvaccinated people contract yellow fever each year, and approximately 30,000 die from the disease.

Pursuant to the terms of the collaboration and license agreement among iBio, Fraunhofer and Fiocruz, Fiocruz has the right to
develop and commercialize yellow fever vaccine derived from the use of our iBioLaunch technology in Latin America, the Caribbean and
Africa. Fiocruz will fund development of this vaccine product and if successfully developed and commercialized, iBio will receive royalty
payments from the sales of the product in those territories. iBio has retained the right, which is sublicenseable, to commercialize the
product in all other territories subject to payment of a royalty back to Fiocruz. Additionally, Fiocruz has engaged iBio to perform certain
research and development activities associated with the yellow fever vaccine project. Based upon the expertise possessed by Fraunhofer, we
engaged Fraunhofer as a subcontractor to perform these research and development services.

In April 2013, Fiocruz committed to the design of a new plant-based multipurpose manufacturing facility in Brazil and anticipates
construction of such facility in the next few years. This multipurpose facility is being designed in manner that will enable the incorporation
and utilization of our iBioLaunch platform.

On June 12, 2014, Fiocruz, Fraunhofer and iBio executed an amendment to the Agreement (the “Amended Agreement”) which
provides for revised research and development, work plans, reporting, objectives, estimated budget, and project billing process. The effect
of the amendment resulted in a charge of approximately $1.007 million to general and administrative expenses for the noncollectibility of
an accounts receivable from Fiocruz for revenues recorded for the year ended June 30, 2013 and a credit of approximately $1.007 million to
research and development expenses and a corresponding adjustment to accounts payable relating to expenses accrued at June 30, 2013
owed to Fraunhofer.

For the year ended June 30, 2014, under the Amended Agreement, the Company recognized revenue of $205,000 for work
performed for Fiocruz pursuant to the Amended Agreement by the Company’s subcontractor, Fraunhofer, and recognized research and
development expenses of the same amount — $205,000 – due Fraunhofer for that work.

For the year ended June 30, 2015, under the Amended Agreement, the Company recognized revenue of $1,851,000 for work
performed for Fiocruz pursuant to the Amended Agreement by the Company’s subcontractor, Fraunhofer, and recognized research and
development expenses of the same amount — $1,851,000 - due Fraunhofer for that work.

For the year ended June 30, 2016, under the Amended Agreement, the Company recognized revenue of $758,000 for work
performed for Fiocruz pursuant to the Amended Agreement by the Company’s subcontractor, Fraunhofer, and recognized research and
development expenses of the same amount — $758,000 – due Fraunhofer for that work.

License and Collaboration with Caliber Biotherapeutics LLC

In February 2013, we entered into a license with Caliber Biotherapeutics LLC, a for-profit biotechnology company that is focused
on the development and commercialization of therapeutic proteins. This license to Caliber is for use of the iBioLaunch platform in
connection with the development of an undisclosed monoclonal antibody-based therapeutic protein for an oncology indication. Caliber will
conduct and fund the development of the product candidate and if successfully developed and commercialized, iBio will receive royalties
on the sale of such product and other revenues. Although the license is still valid, product development and other activities by Caliber have
been suspended without a disclosed plan for resumption.

Research and Development

Our research and development activities are directed and led by our President and by our Chief Scientific Officer. Excepting such
direction and management, we outsource all our research and development activities. Outsourcing our research and development work
allows us to develop our product candidates, and thereby promote the value of such product candidates and our technology platforms for
licensing and product development purposes, without bearing the full risk and expense of establishing and maintaining our own research
and development staff and facilities.

Fraunhofer was our principal research and development contractor and provided research and development services to us and our
predecessor company from 2003 through 2014. As a part of our collaboration with Fraunhofer, we established a business structure that
allowed us to enlarge and broaden the scope of applications of our platform technology and enhance the value of our retained commercial
rights by leveraging certain funding received by Fraunhofer from governmental entities, NGOs and other similar organizations.

We achieved this result by granting licenses (a) to the government and NGO entities for not-for-profit applications of the
intellectual property for which they have provided funding, and (b) to Fraunhofer for research purposes and applications in fields other than
those retained by iBio or granted to the governmental entity or NGO. iBio retained ownership of the intellectual property and exclusive
worldwide commercial rights in the fields of human health and veterinary influenza applications of the intellectual property. At this time,
we are not pursuing development of such intellectual property in the field of veterinary influenza.

Through June 30, 2016, Fraunhofer has been awarded a total of approximately $33 million in grants from the Bill & Melinda Gates
Foundation for development of product candidates based on the iBioLaunch platform and for research and development of vaccines against
influenza, including H5N1 avian influenza, malaria and African sleeping sickness (trypanosomiasis). To facilitate the grant and continuing
support by the Bill & Melinda Gates Foundation of the activities undertaken by Fraunhofer, we agreed to make our iBioLaunch platform
available to various programs to complete development and provide “Global Access” to vaccines against influenza, rabies virus, malaria
and trypanosomiasis, provided that if the Bill & Melinda Gates Foundation and Fraunhofer do not pursue such programs to completion, the
subject rights revert to us. The term “Global Access” means access for people most in need within the developing world in low income and
lower-middle-income countries, as identified by the World Bank. Because we have exclusive commercial rights to the technology and these
products for human health applications, this grant and any further similar grants benefit us by enabling the enhancement of Fraunhofer to
enhance our platform technology and expansion of the information about the technical performance of product candidates derived from our
technology. We may decide to commercially license such technology to collaborators for advancement into human clinical evaluation and
eventual commercial development.

DoD has also provided funding to Fraunhofer for advanced development of our technology platform and for preclinical and clinical
studies of an anthrax-plague combination vaccine and for an H1N1 influenza vaccine project. Through June 30, 2015, Fraunhofer received
funding and funding commitments for these projects totaling approximately $34 million. This funding is similarly beneficial to us because
we have retained the commercial rights to any technology improvements resulting from those projects.

In December 2012, the National Institute of Allergy and Infectious Diseases, a part of the National Institutes of Health, awarded a
contract to Fraunhofer, for the development of a new generation anthrax vaccine. Fraunhofer is developing this new generation vaccine
using the iBioLaunch platform and the funding it receives pursuant to the National Institute of Allergy and Infectious Diseases. We expect
funded work to advance our technology.

In summary, the advancement of our technology has indirectly benefited from the funding and funding commitments of research
and development activities at Fraunhofer in recent years by U.S. government and non-governmental organizations in aggregate amounts
exceeding $67 million.

Manufacturing

In addition to the platform and product development engagements, in 2006, we engaged Fraunhofer to create a prototype
production module for products made through the use of the iBioLaunch platform. The purpose of this engagement was to attract grants for
the improvement of the prototype to become a pilot plant and to demonstrate the ease and economy with which iBioLaunch-derived
products could be manufactured in order to attract potential licensees and increase the value of our share of business arrangements entered
into with entities. The prototype design, which encompassed the entire production process from seeding, pre-infiltration plant growth,
infiltration of plants with agrobacteria, harvesting of plant tissue and purification of target proteins, was completed in May 2008. A pilot
plant based upon this prototype funded substantially by DARPA was subsequently constructed by Fraunhofer at its facility in Newark,
Delaware. The physical assets consisting of the pilot plant, and the equipment in it, are owned by Fraunhofer and have been validated for
current Good Manufacturing Practices (“cGMP”) production, but all the proprietary intellectual property pertaining to those physical assets
is property of iBio. We are not limited to the use of this facility and have also contracted with Caliber Biotherapeutics LLC for certain
manufacturing services. We also expect to contract with other third party providers for development, manufacturing, fill and finish services.

In January 2016, we entered into a contract manufacturing joint venture operated through our subsidiary iBio CMO, which is
owned 70% by iBio and 30% by an affiliate of Eastern Capital Limited (“Eastern”), a stockholder of the Company. iBio CMO expects to
operate on the basis of three parallel lines of business: (1) Development and manufacturing of third party products; (2) Development and
production of iBio’s proprietary product(s) for treatment of fibrotic diseases; and (3) Commercial technology transfer services. We
contributed to iBio CMO a royalty bearing license which grants iBio CMO a non-exclusive license to use our proprietary technologies for
research purposes and an exclusive U.S. license for manufacturing purposes.

iBio CMO’s operations take place in Bryan, Texas in a facility controlled by another affiliate of Eastern, as sublandlord. The
facility is a Class A life sciences building on the campus of Texas A&M University, designed and equipped for plant-made manufacture of
biopharmaceuticals. iBio CMO has been granted a 34-year sublease for the facility. Commercial operations commenced in January 2016.

Proprietary iBio technologies have been used to advance development of certain products that have been commercially infeasible
to develop with conventional technologies such as Chinese hamster ovary cell systems and microbial fermentation methods. They can be
used to create and operate manufacturing facilities at substantially lower capital and operating costs. These include development and
manufacture of both vaccine and therapeutic product candidates. iBio CMO plans to promote commercial collaborations with third parties
on the basis of these technology advantages and to work with customers to achieve laboratory scale technical milestones that can form the
basis of longer-term manufacturing business arrangements. iBio itself will be a client of iBio CMO for further IND advancement of its
proprietary products beginning with IBIO-CFB03 for the treatment of a range of fibrotic diseases. iBio will work with iBio CMO on the
production of IBIO-CFB03 for clinical trials and, with clinical success, for commercial launch.

Intellectual Property

We exclusively control intellectual property developed at Fraunhofer for human health applications. We also exclusively control
the veterinary field for plant-made influenza vaccines. In addition, we have an exclusive worldwide license agreement with the University
of Pittsburgh covering U.S. and foreign patents and patent applications and related intellectual property owned by the University of
Pittsburgh pertinent to the use of endostatin peptides for the treatment of fibrosis. Our success will depend in part on our ability to obtain
and maintain patent protection for our technologies and products and to preserve our trade secrets. Our policy is to seek to protect our
proprietary rights, by among other methods, filing patent applications in the U.S. and foreign jurisdictions to cover certain aspects of our
technology.

We currently own 20 U.S. patents and 47 international patents. We have an exclusive license to three U.S. patents and one
application. Additionally, we have one U.S. and one international patent application allowed, as well as four U.S. and 15 international
applications pending. International patents and applications include numerous foreign countries including Australia, Brazil, Canada, China,
Hong Kong, India, Korea, and several countries in Europe. We continue to prepare patent applications relating to our expanding technology
in the U.S. and abroad.

The technology and products covered by our issued and pending patent applications is summarized below:

Technology and Product Patents (U.S.)

Transient expression of foreign genes in plants
Production of foreign nucleic acids and polypeptides in sprout systems
Production of pharmaceutically active proteins in sprouted seedlings
Systems and method for clonal expression in plants

o Virus-induced gene silencing in plants
o
o
o
o
o Recombinant carrier molecule for expression, delivery and purification of target polypeptides
o
o
o
o
o Anthrax antigens, vaccine compositions, and related methods
o Use of endostatin peptides for the treatment of fibrosis

Influenza antigens, vaccine compositions, and related methods
Plague antigens, vaccine compositions, and related methods
Influenza therapeutic antibodies
Trypanosomiasis vaccine

Pending Technology Patent Applications (U.S. and International)

Protein production in seedlings

o Virus-induced gene silencing in plants
o Activation of transgenes in plants by viral vectors
o
o Agroinfiltration of plants with launch vector
Transient expression of proteins in plants
o
Thermostable carrier molecule
o
Protein expression in clonal root cultures
o
Production of proteins in plants with launch vector
o
In vivo deglycosylation of recombinant proteins in plants
o

Pending Product Patent Applications (U.S. and International)

Influenza vaccines
Influenza therapeutic antibodies

o Antibodies
o
o
o Anthrax vaccines
o
o HPV vaccines
o
o Malaria vaccines
o

Plague vaccines

Trypanosomiasis vaccine

Endostatin fragments and variants for use in treating fibrosis

Competition

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a
strong emphasis on proprietary products. We face competition from many different sources, including commercial pharmaceutical and
biotechnology enterprises, academic institutions, government agencies and private and public research institutions. Our commercial
opportunities will be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have
fewer side effects or are less expensive than any products that we or our collaborators may develop based on the use of our platform
technology.

While we believe that the potential advantages of our technologies will enable us to compete effectively against other providers of
technology for biologic product manufacturing, many of our competitors have significantly greater financial resources and expertise in
research and development, manufacturing, preclinical testing, clinical trials, regulatory approvals and marketing approved products than we
do. Smaller or early stage companies may also prove to be significant competitors, particularly through arrangements with large and
established companies, and this may reduce the value of our platform technologies for the purposes of establishing license agreements. In
addition, these third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical
trial sites and patient registration for clinical trials, as well as in acquiring technologies and technology licenses complementary to our
programs or advantageous to our business.

We expect to rely upon licensees, collaborators or customers for support in advancing certain of our drug candidates and intend to
rely on additional work with our collaborators during our efforts to commercialize our product candidates. Our licensees, collaborators or
customers may be conducting multiple product development efforts within the same disease areas that are the subjects of their agreements
with us. Agreements with collaborators may not preclude them from pursuing development efforts using a different approach from that
which is the subject of our agreement with them. Any of our drug candidates, therefore, may be subject to competition with a drug
candidate under development by a customer.

There are currently approved vaccines and therapies for many of the diseases and conditions addressed by the product candidates
in our pipeline. There are also a number of companies working to develop new drugs and other therapies for diseases of commercial interest
to us that are undergoing various stages of testing including clinical trials. The key competitive factors affecting the success of our
platforms for commercial product candidates are likely to be efficacy, safety profile, price, and convenience.

Government Regulation and Product Approval

Regulation by governmental authorities in the U.S. and other countries is a significant factor in the development, manufacturing
and marketing of pharmaceutical drugs and vaccines. All of the vaccine and therapeutic products developed from our platform technologies
will require regulatory approval by governmental agencies prior to commercialization. In particular, pharmaceutical drugs and vaccines are
subject to rigorous preclinical testing and clinical trials and other pre-marketing approval requirements by the FDA and regulatory
authorities in other countries. In the U.S., various federal, and, in some cases, state statutes and regulations, also govern or impact the
manufacturing, safety, labeling, storage, record-keeping and marketing of vaccines and pharmaceutical products. The lengthy process of
seeking required approvals and the continuing need for compliance with applicable statutes and regulations requires the expenditure of
substantial resources. Regulatory approval, if and when obtained for any of our product candidates, may be limited in scope, which may
significantly limit the indicated uses for which our product candidates may be marketed. Further, approved vaccines and drugs are subject
to ongoing review and discovery of previously unknown problems that may result in restrictions on their manufacture, sale or use or in
their withdrawal from the market.

Before any product candidates with potential immunization or therapeutic value may be tested in human subjects, we must satisfy
stringent government requirements for preclinical studies. Preclinical testing includes both in vitro and in vivo laboratory evaluation and
characterization of the safety and efficacy of the product candidate. “In vitro” refers to tests conducted with cells in culture and “in vivo”
refers to tests conducted in animals. Preclinical testing results obtained from studies in several animal species, as well as data from in vitro
studies, are submitted to the FDA as part of an IND and are reviewed by the FDA prior to the commencement of human clinical trials.
These preclinical data must provide an adequate basis for evaluating both the safety and the scientific rationale for the initial clinical trials.
In the case of vaccine candidates, animal immunogenicity and immune protection tests must establish a sound scientific basis to believe
that the product candidate may be beneficial when administered to humans.

An IND becomes effective automatically 30 days after receipt by the FDA, unless the FDA raises concern or questions about the
conduct of the clinical trials as outlined in the IND prior to that time. In such an event, the IND sponsor and the FDA must resolve any
outstanding concerns before clinical trials can proceed. For additional information on the most recent FDA regulations and guidance on
vaccine and therapeutic product testing and approval, visit its website at http://www.fda.gov.

Any products we or a licensee manufactures or distributes under FDA approval are subject to continuing regulation by the FDA,
including record-keeping requirements and reporting of adverse experiences with the products. Drug manufacturers and their
subcontractors are required to register with the FDA and, where appropriate, state agencies, and are subject to periodic unannounced
inspections by the FDA and state agencies for compliance with current cGMPs, which are the standards the FDA requires be met during the
manufacturing of drugs and biologic products, and which impose procedural and documentation requirements upon us and any third party
manufacturers we utilize.

To the extent we conduct vaccine or therapeutic product development activities outside the United States, we will also be subject
to a wide variety of foreign regulations governing the development, manufacture and marketing of our product candidates. Whether or not
FDA approval has been obtained, approval of a product by the comparable regulatory authorities of foreign countries must still be obtained
prior to manufacturing or marketing the product in those countries. The approval process varies from country to country and the time
needed to secure approval may be longer or shorter than that required for FDA approval. We cannot assure you that clinical trials
conducted in one country will be accepted by other countries or that approval in one country will result in approval in any other country.
The product testing and clinical trial requirements that must be met before a product candidate can be marketed are substantial, time-
consuming, and require investments of millions of dollars per product candidate.

Employees

As of October 13, 2016, we had eight employees in iBio and eighteen employees in iBio CMO. Our employees are not represented
by any union and are not the subject of a collective bargaining agreement. We consider our relations with our employees to be good. Since
our business strategy is based on outsourcing some of our development and clinical trial work to third parties, we believe this staffing level
will be sufficient to meet our needs.

Item 1A. Risk Factors.

Our business faces many risks. Past experience may not be indicative of future performance, and as noted elsewhere in this
Annual Report on Form 10-K, we have included forward-looking statements about our business, plans and prospects that are subject to
change. Forward-looking statements are particularly located in, but not limited to, the sections “Business” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations.” In addition to the other risks or uncertainties contained in this report, the
risks described below may affect our operating results, financial condition and cash flows. If any of these risks occur, either alone or in
combination with other factors, our business, financial condition or operating results could be adversely affected and the trading price of
common stock may decline. Moreover, readers should note this is not an exhaustive list of the risks we face; some risks are unknown or not
quantifiable, and other risks that we currently perceive as immaterial may ultimately prove more significant than expected. Statements
about plans, predictions or expectations should not be construed to be assurances of performance or promises to take a given course of
action.

Risks Related to Our Financial Position and Need for Additional Capital

We have incurred significant losses since our inception. We expect to incur losses during our next fiscal year and may never achieve or
maintain profitability.

Since our 2008 spinoff from Integrated BioPharma, Inc., we have incurred operating losses and negative cash flows from
operations. Our net loss was approximately $10.7 million for the year ended June 30, 2016 and approximately $6.6 million for the year
ended June 30, 2015. As of June 30, 2016, we had an accumulated deficit of approximately $57.6 million.

To date, we have financed our operations primarily through the sale of common stock and warrants. We have devoted
substantially all of our efforts to research and development, including the development and validation of our technology platforms and the
development of a proprietary therapeutic product against fibrosis based upon our platform. We have not completed development of or
commercialized any vaccine or therapeutic product candidates. We expect to continue to incur significant expenses and operating losses for
at least the next year. We anticipate that our expenses and losses will increase substantially if we:

initiate clinical trials of our product candidates;

continue the research and development of our product candidates;

seek to discover additional product candidates; and

add operational, financial and management information systems and personnel, including personnel to support our product development
efforts.

To become and remain profitable, we must succeed in commercializing our technology platforms or we, alone or with our
licensees, must succeed in developing and eventually commercializing products that generate significant revenue. This will require us,
alone or with our licensees and collaborators, to be successful in a range of challenging activities, including completing preclinical testing
and clinical trials of our product candidates, obtaining regulatory approval for these product candidates and manufacturing, marketing and
selling those products for which regulatory approval is obtained or establishing collaborations with parties willing and able to provide
necessary capital or other value. We may never succeed in these activities and may never generate revenues that are significant or large
enough to achieve profitability.

Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our
failure to become and remain profitable would diminish the value of our company and could impair our ability to raise capital, expand our
business, diversify our product offerings or continue our operations. A decline in the value of our company could also cause you to lose all
or part of your investment.

We will need substantial additional funding to execute our business plan, which funding may not be available on commercially acceptable
terms or at all. If we are unable to raise capital when needed, we would be forced to delay, reduce or eliminate our product development
programs or commercialization efforts.

We have limited financial resources and will need substantial additional funding in connection with our continuing operations. To
the extent that we initiate or continue clinical development without securing collaborator or licensee funding, our research and development
expenses could increase substantially. Additionally, to the extent that our efforts to outlicense our technology platforms and product
candidates are unsuccessful or we find that it is necessary to advance the development of product candidates further than contemplated by
our current business plans to secure favorable licensing terms, we would require substantial additional capital.

On May 15, 2015, we entered into a common stock purchase agreement with Aspire Capital Fund, LLC (“Aspire Capital”),
pursuant to which we have the option to require Aspire Capital to purchase up to an aggregate of $15.0 million of shares of our common
stock upon and subject to the terms of the agreement over the 36-month term of the agreement. The agreement with Aspire Capital is more
fully described under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and
Capital Resources. The extent to which we utilize the purchase agreement with Aspire Capital as a source of funding will depend on a
number of factors, including the prevailing market price of our common stock, the volume of trading in our common stock and the extent to
which we are able to secure funds from other sources. The number of shares that we may sell to Aspire Capital under the purchase
agreement on any given day and during the term of the agreement is limited. Additionally, we and Aspire Capital may not effect any sales
of shares of our common stock under the purchase agreement during the continuance of an event of default under the purchase agreement.
Even if we are able to access the full $15.0 million under the purchase agreement, we may still need additional capital to fully implement
our business, operating and development plans.

When we elect to raise additional funds or additional funds are required, we may raise such funds from time to time through
public or private equity offerings, debt financings, corporate collaboration and licensing arrangements or other financing alternatives, as
well as through sales of common stock to Aspire Capital under the purchase agreement. Additional equity or debt financing or corporate
collaboration and licensing arrangements may not be available on acceptable terms, if at all. If we are unable to raise capital in sufficient
amounts when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or
commercialization efforts and our ability to generate revenues and achieve or sustain profitability will be substantially harmed.

We expect that our existing cash on hand as of June 30, 2016 in the amount of $23 million, together with funds we expect to
develop from future sales pursuant to the Aspire agreement, will be sufficient to meet our projected operating requirements through fiscal
year ending June 30, 2017. We have based this projection on assumptions that may prove to be wrong, in which case we may deplete our
cash resources sooner than we currently anticipate. Our future capital requirements will depend on many factors, including:

our ability to attract additional licensees or other third parties willing to fund development, and if successful, commercialization of
product candidates;

the success and expansion of our existing collaboration with Fiocruz and any new license agreements we may enter into;

the costs, timing and regulatory review of our product candidates;

the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-
related claims; and

the extent to which we acquire or invest in businesses, products and technologies.

Conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to
complete, and we may never generate the data necessary to attract additional licensees and we and our current licensees may never generate
the data required for product candidates to obtain the regulatory approvals necessary for product sales. Even if approved, product
candidates may not achieve commercial success. Currently, we expect our commercial revenues, if any, to be product development fees,
development milestone payments, and other license proceeds, including royalties derived from sales of products that we do not expect to be
commercially available for several years, if at all. Accordingly, to achieve our business objectives we will need to continue to rely on
additional financing which may not be available to us on acceptable terms, or at all.

If we are unsuccessful in raising additional capital or other alternative financing, we might have to defer or abandon our efforts to

commercialize our intellectual property and decrease or even cease operations.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our
technologies or product candidates.

Until such time as we can generate substantial license or product revenues, we expect to finance our cash needs through a
combination of equity offerings, collaborations, strategic alliances, licensing and other arrangements. Sources of funds may not be available
or, if available, may not be available on terms satisfactory to us.

If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Debt financing, if available,
would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to
take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any debt financing or
additional equity that we raise may contain terms, such as liquidation and other preferences, which are not favorable to us or our
stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to
relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on
terms that may not be favorable to us. Should the financing we require to sustain our working capital needs be unavailable or prohibitively
expensive when we require it, our business, operating results, financial condition and prospects could be materially and adversely affected
and we may be unable to continue our operations.

To the extent that we raise additional capital through a public or private offering and sale of equity securities, your ownership
interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a
stockholder. If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may
have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses
on terms that may not be favorable to us. Should the financing we require to sustain our working capital needs be unavailable or
prohibitively expensive when we require it, our business, operating results, financial condition and prospects could be materially and
adversely affected and we may be unable to continue our operations.

We have a limited operating history, which may limit the ability of investors to make an informed investment decision.

We commenced independent operations in 2008, and our operations to date have included organizing and staffing our company,
business planning, raising capital, acquiring and developing our proprietary technology platforms, identifying potential product candidates
and undertaking, through third parties, preclinical trials and clinical trials of product candidates derived from our technologies. Certain
iBioLaunch-derived vaccine candidates have been evaluated in completed or ongoing Phase 1 clinical trials; however, all our other vaccine
and therapeutic protein product candidates are still in preclinical development. Neither we nor our collaborators have completed any other
clinical trials for any vaccine or therapeutic protein product candidate produced using iBio technology. As a result, we have not yet
demonstrated our ability to successfully complete any Phase 2 or pivotal clinical trials, obtain regulatory approvals, manufacture a
commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for
successful product commercialization. Consequently, any conclusion you reach about our future success or viability may not be as
predictive as it might be if we had a longer operating history.

Risks Related to the Development and Commercialization of Our Platform Technologies and Product Candidates

We may expend our limited resources to pursue a particular technology or product candidate and fail to capitalize on technologies or
product candidates that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we focus on specific product candidates derived from or enhanced by
our technologies. As a result, we may forego or delay pursuit of opportunities with other technology platforms or product candidates that
later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial
products or profitable market opportunities. Our spending may not yield any commercially viable products.

We have based our research and development efforts on our technology platforms and product candidates derived from such
platforms. Notwithstanding our large investment to date and anticipated future expenditures in these platforms, we have not yet developed,
and may never successfully develop, any marketed products using these technologies. As a result of our exclusive use of our own
platforms, we may fail to address or develop product candidates based on other scientific approaches that may offer greater commercial
potential or for which there is a greater likelihood of success.

We also may not be successful in our efforts to identify or discover additional product candidates using our technology platforms.
Research programs to identify new product candidates require substantial technical, financial and human resources. These research
programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical
development.

If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish
valuable rights to that product candidate through collaboration, licensing or other royalty arrangements on terms less favorable to us than
possible.

We are very early in our development efforts. If we or our collaborators are unable to successfully develop and commercialize product
candidates or experience significant delays in doing so, our business will be materially harmed.

Excepting a limited number of vaccine candidates that have been evaluated in completed Phase 1 clinical trials, all our other
vaccine and therapeutic protein product candidates are still in preclinical development. Our ability to generate product sales revenues for
our own products, which we do not expect will occur for many years, will depend heavily on the successful development and eventual
commercialization of our product candidates. The success of our product candidates will depend on several factors, including the
following:

•
•

•

completion of preclinical studies and clinical trials with positive results;
receipt of marketing approvals from applicable regulatory authorities;

obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

• making arrangements with third-party manufacturers for commercial manufacturing capabilities;

•

launching commercial sales of our products, if and when approved, whether alone or in collaboration with others;

successfully maintaining existing collaborations and entering into new ones throughout the development process as appropriate,
from preclinical studies through to commercialization;

acceptance of the products, if and when approved, by patients, the medical community and third-party payors;

effectively competing with other products;

obtaining and maintaining coverage and adequate reimbursement by third-party payors, including government payors, for any
products we successfully develop;

protecting our rights in our intellectual property portfolio; and

• maintaining a continued acceptable safety profile of the products following approval.

If we or our collaborators do not achieve one or more of these factors in a timely manner or at all, we could experience significant

delays or an inability to successfully develop and commercialize our product candidates, which would materially harm our business.

We may not be successful in our efforts to use iBioLaunch and iBioModulator to build a pipeline of product candidates and develop
marketable products.

While we believe that data we and our collaborators have obtained from preclinical studies and Phase 1 clinical trials of
iBioLaunch-derived and iBioModulator-enhanced product candidates has validated these technology platforms, our platforms have not yet,
and may never lead to, approvable or marketable products. Even if we are successful in further validating our platforms and continuing to
build our pipeline, the potential product candidates that we identify may not be suitable for clinical development for many possible reasons,
including harmful side effects, limited efficacy or other characteristics that indicate that such product candidates are unlikely to be products
that will receive marketing approval and achieve market acceptance. If we and our collaborators do not successfully develop and
commercialize product candidates based upon our technological approach, we will not obtain product or collaboration revenues in future
periods, which likely would result in significant harm to our financial position and adversely affect our stock price.

Neither we nor our licensees will be able to commercialize product candidates based on our platform technologies if preclinical studies do
not produce successful results or clinical trials do not demonstrate safety and efficacy in humans.

Preclinical and clinical testing is expensive, difficult to design and implement, can take many years to complete and has an
uncertain outcome. Success in preclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and
interim results of a clinical trial do not necessarily predict final results. We and our licensees may experience numerous unforeseen events
during, or as a result of, preclinical testing and the clinical trial process that could delay or prevent the commercialization of product
candidates based on our iBioLaunch and iBioModulator technologies, including the following:

Preclinical or clinical trials may produce negative or inconclusive results, which may require additional preclinical testing,
additional clinical trials or the abandonment of projects that we expect to be promising. For example, promising animal data may be
obtained about the anticipated efficacy of a therapeutic protein product candidate and then human tests may not result in such an
effect. In addition, unexpected safety concerns may be encountered that would require further testing even if the therapeutic protein
product candidate produced an otherwise favorable response in human subjects.

Initial clinical results may not be supported by further or more extensive clinical trials. For example, a licensee may obtain data that
suggest a desirable immune response from a vaccine candidate in a small human study, but when tests are conducted on larger
numbers of people, the same extent of immune response may not occur. If the immune response generated by a vaccine is too low or
occurs in too few treated individuals, then the vaccine will have no commercial value.

Enrollment in our or our licensee’s clinical trials may be slower than projected, resulting in significant delays. The cost of
conducting a clinical trial increases as the time required to enroll adequate numbers of human subjects to obtain meaningful results
increases. Enrollment in a clinical trial can be a slower-than-anticipated process because of competition from other clinical trials,
because the study is not of interest to qualified subjects, or because the stringency of requirements for enrollment limits the number
of people who are eligible to participate in the clinical trial.

· We or our licensees might have to suspend or terminate clinical trials if the participating subjects are being exposed to unacceptable
health risks. Animal tests do not always adequately predict potential safety risks to human subjects. The risk of any candidate
product is unknown until it is tested in human subjects, and if subjects experience adverse events during the clinical trial, the trial
may have to be suspended and modified or terminated entirely.

Regulators or institutional review boards may suspend or terminate clinical research for various reasons, including safety concerns
or noncompliance with regulatory requirements.

· Any regulatory approval ultimately obtained may be limited or subject to restrictions or post-approval commitments that render the

product not commercially viable.

The effects of iBioLaunch-derived or iBioModulator-enhanced product candidates may not be the desired effects or may include
undesirable side effects.

Significant clinical trial delays could allow our competitors to bring products to market before we or our licensees do and impair
our ability to commercialize our technology platform and product candidates based on our technology platform. Poor clinical trial results or
delays may make it impossible to license a product candidate or so reduce its attractiveness to prospective licensees that we will be unable
to successfully develop and commercialize such a product candidate.

If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize our
product candidates or will not be able to do so as soon as anticipated, and our ability to generate revenue will be materially impaired.

Our product candidates and the activities associated with their development and commercialization, including their design, testing,
manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to
comprehensive regulation by the FDA and by similar regulatory authorities outside the United States. Failure to obtain marketing approval
for a product candidate will prevent us from commercializing the product candidate. We have not received approval to market any of our
product candidates from regulatory authorities in any jurisdiction. We have only limited experience in filing and supporting the applications
necessary to gain marketing approvals and expect to rely on third parties to assist us in this process. Securing marketing approval requires
the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication
to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about the
product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities. Our product candidates may not
be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other
characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. If any of our product candidates
receives marketing approval, the accompanying label may limit the approved use in such a restrictive manner that it is not possible to
obtain commercial viability for such product.

The process of obtaining marketing approvals, both in the United States and abroad, is expensive and may take many years. If
additional clinical trials are required for certain jurisdictions, these trials can vary substantially based upon a variety of factors, including
the type, complexity and novelty of the product candidates involved, and may ultimately be unsuccessful. Changes in marketing approval
policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review
process for each submitted product application, may cause delays in the review and approval of an application. Regulatory authorities have
substantial discretion in the approval process and may refuse to accept a marketing application as deficient or may decide that our data is
insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained
from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate. Any marketing approval we
ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not
commercially viable.

Although the FDA and other regulatory authorities have approved plant-based therapeutics in the past, consistent with the
oversight of all products, the FDA is monitoring whether these plant-based therapeutics pose any health and human safety risks. While they
have not issued any regulations to date adverse to plant-based vaccines or therapeutics, it is possible that the FDA and other regulatory
authorities could issue regulations in the future that could adversely affect our product candidates.

If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects

for our product candidates may be harmed and our ability to generate revenues will be materially impaired.

Alternative technologies may supersede our technologies or make them noncompetitive, which would harm our ability to generate future
revenue.

The manufacture of biologics and the methods of such manufacture are intensely competitive fields. Each of these fields is
characterized by extensive research efforts, which result in rapid technological progress that can render existing technologies obsolete or
economically noncompetitive. If our competitors succeed in developing more effective technologies or render our technologies obsolete or
noncompetitive, our business will suffer. Many universities, public agencies and established pharmaceutical, biotechnology, and other life
sciences companies with substantially greater resources than we have are developing and using technologies and are actively engaging in
the development of products similar to or competitive with our technologies and products. To remain competitive, we must continue to
invest in new technologies and improve existing technologies. To make such renewing investment we will need to obtain additional
financing. If we are unable to secure such financing, we will not have sufficient resources to continue such investment.

Our competitors may devise methods and processes for protein expression that are faster, more efficient or less costly than that
which can be achieved using iBioLaunch. There has been and continues to be substantial academic and commercial research effort devoted
to the development of such methods and processes. If successful competitive methods are developed, it would undermine the commercial
basis for iBioLaunch and iBioModulator.

We have no experience in the sales, marketing and distribution of pharmaceutical products.

If we fail to establish commercial licenses for our iBioLaunch and iBioModulator platforms or fail to enter into arrangements with
partners with respect to the sales and marketing of any of our future potential product candidates, we might need to develop a sales and
marketing organization with supporting distribution capability in order to directly market product candidates we successfully develop.
Significant additional expenditures would be required for us to develop such an in-house sales and marketing organization.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we
may develop.

We face the risk of product liability exposure in connection with the testing of our product candidates in human clinical trials and
will face an even greater risk if we commercially sell any products that we may develop. If we cannot successfully defend ourselves against
claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual
outcome, liability claims may result in:

•

decreased demand for any product candidates or products that we may develop;

injury to our reputation and significant negative media attention;

• withdrawal of clinical trial participants;

•

significant costs to defend the related litigation;

substantial monetary awards to trial participants or patients;

loss of revenue;

reduced resources of our management to pursue our business strategy; and

the inability to commercialize any products that we may develop.

Prior to commencing human clinical trials, we will seek to obtain product liability insurance coverage. Such insurance coverage is
expensive and may not be available in coverage amounts we seek or at all. If we obtain such coverage, we may in the future be unable to
maintain such coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

Risks Related to Dependence on Third Parties

Establishing and maintaining collaborations is a key component of our business strategy. If we are unable to establish new collaborations
and maintain both new and existing collaborations, or if these collaborations are not successful, our business could be adversely affected.

Our current business plan contemplates that we will in the future derive significant revenues from collaborators and licensees that
successfully utilize iBioLaunch and iBioModulator in connection with the production, development and commercialization of vaccines and
therapeutic protein product candidates. Our realization of these revenues and dependence on existing collaborations, and any future
collaborations we enter into, is subject to a number of risks, including the following:

•

Collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations;

collaborators may not perform their obligations as expected;

collaborators may not pursue development and, if successful, commercialization of product candidates or may elect not to continue
or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or
available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;

collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a
product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our
products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or
can be commercialized under terms that are more economically attractive than ours, which may cause collaborators to cease to
devote resources to the commercialization of our product candidates;

collaborators with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may
not commit sufficient resources to the marketing and distribution of such product or products; or commercialization of product
candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or
arbitration, any of which would be time-consuming and expensive;

•

collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a
way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to
potential litigation;

collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;

collaborations may be terminated for the convenience of the collaborator and, if terminated, we would potentially lose the right to
pursue further development or commercialization of the applicable product candidates;

collaborators may learn about our technology and use this knowledge to compete with us in the future;

results of collaborators’ preclinical or clinical studies could produce results that harm or impair other products using our technology;

there may be conflicts between different collaborators that could negatively affect those collaborations and potentially others; and

the number and type of our collaborations could adversely affect our attractiveness to future collaborators or acquirers.

If our collaborations do not result in the successful development and commercialization of products or if one or more of our
collaborators terminates its agreement with us, we may not receive any future research and development funding or milestone or royalty
payments under the collaboration. If we do not receive the funding we expect under these agreements, our continued development of our
product candidates could be delayed and we may need additional resources to develop additional product candidates. There can be no
assurance that our collaborations will produce positive results or successful products on a timely basis or at all.

We seek to establish and collaborate with additional pharmaceutical and biotechnology companies for development and potential
commercialization of iBioLaunch-produced and iBioModulator-enhanced product candidates. We face significant competition in seeking
appropriate collaborators. Our ability to reach a definitive agreement for a collaboration depends, among other things, upon our assessment
of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s
evaluation of a number of factors. If we fail to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all,
we may have to curtail the development of a product candidate, reduce or delay its development or the development of one or more of our
other product candidates, or increase our expenditures and undertake additional development or commercialization activities at our own
expense. If we elect to fund and undertake development or commercialization activities on our own, we may need to obtain additional
expertise and additional capital, which may not be available to us on acceptable terms or at all. If we fail to enter into collaborations and do
not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to
further develop our product candidates or bring them to market or continue to develop our product platform and our business may be
materially and adversely affected.

If third parties on whom we or our licensees will rely for the conduct of preclinical studies and clinical trials do not perform as
contractually required or as we expect, we may not be able to obtain regulatory approval for or commercialize our product candidates and
our business may suffer.

We do not have the ability to independently conduct the preclinical studies and clinical trials required to obtain regulatory
approval for our product candidates. We have not yet contracted with any third parties to conduct clinical trials of product candidates we
develop independently of collaborators. We will depend on licensees or on independent clinical investigators, contract research
organizations and other third party service providers to conduct the clinical trials of our product candidates. We will rely heavily on these
parties for successful execution of our clinical trials but will not control many aspects of their activities. For example, the investigators
participating in our clinical trials will not be our employees. However, we will be responsible for ensuring that each of our clinical trials is
conducted in accordance with the general investigational plan and protocols for the trial. Third parties may not complete activities on
schedule, or may not conduct our clinical trials in accordance with regulatory requirements or our stated protocols. The failure of these
third parties to carry out their obligations could delay or prevent the development, approval and commercialization of our product
candidates.

Risks Related to Intellectual Property

If we or our licensors are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent
protection obtained is not sufficiently broad, competitors could develop and commercialize technology and products similar or identical to
ours, and our ability to successfully commercialize our technology and products may be impaired.

Our success depends in part on our ability to obtain and maintain patent and other intellectual property protection in the United
States and other countries with respect to our proprietary technology and products. We seek to protect our proprietary position by filing
patent applications in the United States and abroad related to our novel technologies and product candidates.

The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or
desirable patent applications at a reasonable cost, in a timely manner, or in all jurisdictions. It is also possible that we will fail to identify
patentable aspects of our research and development output before it is too late to obtain patent protection.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and
factual questions and has in recent years been the subject of much litigation. In addition, the laws of foreign countries may not protect our
rights to the same extent as the laws of the United States and we may fail to seek or obtain patent protection in all major markets. For
example, European patent law restricts the patentability of methods of treatment of the human body more than United States law does.
Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States
and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot know with
certainty whether we were the first to make the inventions claimed in our owned patents or pending patent applications, or that we were the
first to file for patent protection of such inventions, nor can we know whether those from whom we license patents were the first to make
the inventions claimed or were the first to file. As a result, the issuance, scope, validity, enforceability and commercial value of our patent
rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology
or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Changes
in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents
or narrow the scope of our patent protection.

Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the
enforcement or defense of our issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was
signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These include provisions that
affect the way patent applications are prosecuted and may also affect patent litigation. The U.S. Patent and Trademark Office, or U.S. PTO,
recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes
to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013.
Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith
Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the
enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.

Moreover, we may be subject to a third-party pre-issuance submission of prior art to the U.S. PTO, or become involved in
opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or
the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or
invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment
to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. In addition, if the
breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from
collaborating with us to license, develop or commercialize current or future product candidates.

Even if our pending or future patent applications issue as patents, they may not issue in a form that will provide us with any
meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our
competitors may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing
manner.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be
challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to
operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop
others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our
technology and products. Given the amount of time required for the development, testing and regulatory review of new product candidates,
patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our patent portfolio
may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-
consuming and ultimately unsuccessful.

Competitors may infringe our issued patents or other intellectual property. To counter infringement or unauthorized use, we may
be required to file infringement claims, which can be expensive and time-consuming. Any claims we assert against perceived infringers
could provoke these parties to assert counterclaims against us alleging that we infringe their intellectual property. In addition, in a patent
infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s
claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the
technology in question. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or
interpreted narrowly, which could adversely affect us and our collaborators.

Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would
be uncertain and could have a material adverse effect on the success of our business.

Our commercial success depends upon our ability, and the ability of our collaborators, to develop, manufacture, market and sell
our product candidates and use our proprietary technologies without infringing the proprietary rights of third parties. There is considerable
intellectual property litigation in the biotechnology and pharmaceutical industries. While no such litigation has been brought against us and
we have not been held by any court to have infringed a third party’s intellectual property rights, we cannot guarantee that our technology,
products or use of our products do not infringe third-party patents. It is also possible that we have failed to identify relevant third-party
patents or applications. For example, applications filed before November 29, 2000 and certain applications filed after that date that will not
be filed outside the United States remain confidential until patents issue. Patent applications in the United States and elsewhere are
published approximately 18 months after the earliest filing, which is referred to as the priority date. Therefore, patent applications covering
our products or technology could have been filed by others without our knowledge. Additionally, pending patent applications which have
been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, our products or the use
of our products.

We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with
respect to our products and technology, including interference or derivation proceedings before the U.S. PTO and similar bodies in other
countries. Third parties may assert infringement claims against us based on existing intellectual property rights and intellectual property
rights that may be granted in the future.

If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party
to continue developing and marketing our products and technology. However, we may not be able to obtain any required license on
commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors
access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing
technology or product. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are
found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our product candidates or
force us to cease some of our business operations, which could materially harm our business. Claims that we have misappropriated the
confidential information or trade secrets of third parties could have a similar negative impact on our business.

Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur
significant expenses, and could distract our limited number of personnel from their normal responsibilities. In addition, there could be
public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or
investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation
or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future
sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings
adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can
because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other
proceedings could compromise our ability to compete in the marketplace.

If we are unable to protect our trade secrets, our business and competitive position would be harmed.

In addition to seeking patents for some of our technology and product candidates, we also rely on trade secrets, including
unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to protect these trade
secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our
employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties.
We also seek to enter into confidentiality and invention or patent assignment agreements with our employees and consultants. Despite these
efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may
not be able to obtain adequate remedies for such breaches. Our trade secrets may also be obtained by third parties by other means, such as
breaches of our physical or computer security systems. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is
difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States
are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by
a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to
compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position
would be harmed.

Risks Related to iBio CMO’s Operations

If iBio CMO is unable to provide quality and timely offerings to its customers, its business could suffer, which could have a material
adverse impact on our business and results of operations.

In January 2016, we entered into a contract manufacturing joint venture operated through our subsidiary iBio CMO, which is
owned 70% by iBio and 30% by an affiliate of Eastern Capital Limited (“Eastern”), a stockholder of the Company. iBio CMO operates on
the basis of three parallel lines of business: (1) Development and manufacturing of third party products; (2) Development and production
of iBio’s proprietary product(s) for treatment of fibrotic diseases; and (3) Commercial technology transfer services. iBio CMO’s operations
take place in Bryan, Texas in a facility controlled by another affiliate of Eastern, as sublandlord. The facility is a Class A life sciences
building on the campus of Texas A&M University, designed and equipped for plant-made manufacture of biopharmaceuticals.

A failure of quality control systems in iBio CMO’s facilities could cause problems to arise in connection with facility operations
or during preparation or provision of products, in both cases, for a variety of reasons, including equipment malfunction, failure to follow
specific protocols and procedures, problems with raw materials or environmental factors. Such problems could affect production of a
particular batch or series of batches, requiring the destruction of products, or could halt facility production altogether. In addition, failure to
meet required quality standards may result in failure to timely deliver products to customers. Any such incident could, among other things,
lead to increased costs, lost revenue, reimbursement to customers, damage to and possibly termination of existing customer relationships,
time and expense spent investigating the cause and, depending on the cause, similar losses with respect to other batches or products. If
problems are not discovered before a product is released to the market, we may be subject to regulatory actions, including product recalls,
product seizures, injunctions to halt manufacture and distribution, restrictions on our operations, civil sanctions, including monetary
sanctions, and criminal actions. In addition, such issues could subject us to litigation, the cost of which could be significant.

A failure by iBio CMO to attract and maintain customers and any reduction in spending or demand for iBio CMO’s manufacturing,
development and technology transfer services could have a material adverse effect on our business.

iBio CMO’s operations will depend, in part, on its ability to attract and maintain customers for its development, manufacturing
and technology transfer services and on the amount of customer spending on such services. If iBio CMO fails to attract customers or its
customers’ and potential customers’ spending on iBio CMO’s services is reduced, this may have a material adverse effect on our business,
results of operations and financial condition.

iBio CMO’s operations are subject to environmental, health and safety laws and regulations, which could increase costs and restrict
operations in the future.

iBio CMO’s operations are subject to a variety of environmental, health and safety laws and regulations, including those of the
Environmental Protection Agency and equivalent local and state agencies. These laws and regulations govern, among other things, air
emissions, wastewater discharges, the use, handling and disposal of hazardous substances and wastes, soil and groundwater contamination
and employee health and safety. Any failure to comply with environmental, health and safety requirements could result in the limitation or
suspension of production or monetary fines or civil or criminal sanctions, or other future liabilities. iBio CMO is also subject to laws and
regulations governing the destruction and disposal of raw materials and the handling and disposal of regulated material.

Risks Related to Business Operations

If we acquire companies, products or technologies, we may face integration risks and costs associated with those acquisitions that could
negatively impact our business, results from operations and financial condition.

If we are presented with appropriate opportunities, we may acquire or make investments in complementary companies, products or
technologies. We may not realize the anticipated benefit of any acquisition or investment. If we acquire companies or technologies, we will
face risks, uncertainties and disruptions associated with the integration process, including difficulties in the integration of the operations of
an acquired company, integration of acquired technology with our products, diversion of our management’s attention from other business
concerns, the potential loss of key employees or customers of the acquired business, and impairment charges if future acquisitions are not
as successful as we originally anticipate. In addition, our operating results may suffer because of acquisition-related costs or amortization
expenses or charges relating to acquired intangible assets. Any failure to successfully integrate other companies, products or technologies
that we may acquire may have a material adverse effect on our business and results of operations. Furthermore, we may have to incur debt
or issue equity securities to pay for any additional future acquisitions or investments, the issuance of which could be dilutive to our existing
stockholders.

Risks Relating to Our Common Stock

Our operating results may vary significantly in the future, which may adversely affect the price of our common stock.

It is likely that our operating results may vary significantly in the future and that period-to-period comparisons of our operating
results are not necessarily meaningful indicators of the future. You should not rely on the results of one quarter as an indication of our
future performance. It is also possible that in some future quarters our operating results will fall below our expectations or the expectations
of market analysts and investors. If we do not meet these expectations, the price of our common stock may decline significantly.

Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.

Provisions of our certificate of incorporation, bylaws and provisions of applicable Delaware law may discourage, delay or prevent
a merger or other change in control that a stockholder may consider favorable. Pursuant to our certificate of incorporation, our Board of
Directors may issue additional shares of common or preferred stock. Any additional issuance of common stock could have the effect of
impeding or discouraging the acquisition of control of us by means of a merger, tender offer, proxy contest or otherwise, including a
transaction in which our stockholders would receive a premium over the market price for their shares, and thereby protect the continuity of
our management. Specifically, if in the due exercise of its fiduciary obligations, the Board of Directors were to determine that a takeover
proposal was not in our best interest, shares could be issued by our Board of Directors without stockholder approval in one or more
transactions that might prevent or render more difficult or costly the completion of the takeover by:

• Diluting the voting or other rights of the proposed acquirer or insurgent stockholder group,

•

Putting a substantial voting block in institutional or other hands that might undertake to support the incumbent Board of Directors,
or

Effecting an acquisition that might complicate or preclude the takeover.

Our certificate of incorporation also allows our Board of Directors to fix the number of directors in the by-laws. Cumulative
voting in the election of directors is specifically denied in our certificate of incorporation. The effect of these provisions may be to delay or
prevent a tender offer or takeover attempt that a stockholder may determine to be in his, her or its best interest, including attempts that might
result in a premium over the market price for the shares held by the stockholders.

We do not anticipate paying cash dividends for the foreseeable future, and therefore investors should not buy our stock if they wish to
receive cash dividends.

We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future
earnings to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock
in the foreseeable future.

The sale of our common stock through current or future equity offerings may cause dilution and could cause the price of our common stock
to decline.

We are entitled under our certificate of incorporation to issue up to 175 million shares of common stock, par value $.001 per share,
and 1 million shares of preferred stock, with no par value. As of June 30, 2016, we had issued and outstanding approximately 89.1 million
shares of common stock, and 12.3 million options to purchase shares of common stock. Additionally, we had approximately 2.7 million
shares of common stock reserved for future issuance of additional option grants under our 2008 Omnibus Equity Incentive Plan and 14.9
million shares reserved under the 2015 Aspire Purchase Agreement. Accordingly, we will be able to issue up to approximately 56 million
additional shares of common stock and 1 million shares of preferred stock. Sales of our common stock offered through current or future
equity offerings may result in substantial dilution to our stockholders. The sale of a substantial number of shares of our common stock to
investors, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time
and at a price that we might otherwise wish to effect sales.

The issuance of preferred stock or additional shares of common stock could adversely affect the rights of the holders of shares of our
common stock.

Our Board of Directors is authorized to issue up to 1 million shares of preferred stock without any further action on the part of our
stockholders. Our Board of Directors has the authority to fix and determine the voting rights, rights of redemption and other rights and
preferences of preferred stock. Currently, we have no shares of preferred stock outstanding. Our Board of Directors may, at any time,
authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to
receive dividend payments before dividends are distributed to the holders of common stock, and the right to the redemption of the shares,
together with a premium, before the redemption of our common stock, which may have a material adverse effect on the rights of the holders
of our common stock. In addition, our Board of Directors, without further stockholder approval, may, at any time, issue large blocks of
preferred stock. In addition, the ability of our Board of Directors to issue shares of preferred stock without any further action on the part of
our stockholders may impede a takeover of our company and may prevent a transaction that is favorable to our stockholders.

Risks Related to Our Agreement with Aspire Capital

Sales of our common stock to Aspire Capital may cause substantial dilution to our existing stockholders and the sale of the shares of our
common stock acquired by Aspire Capital could cause the price of our common stock to decline.

On May 29, 2015, we filed a prospectus supplement to our Registration Statement on Form S-3 (Registration No. 333-200410)
registering $15.0 million of our common stock that we may issue and sell to Aspire Capital from time to time pursuant to the purchase
agreement that we entered into with Aspire Capital on May 15, 2015, which is described under Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources, together with 450,000 commitment shares
issued to Aspire Capital in consideration for entering into the purchase agreement. It is anticipated that shares offered to Aspire Capital will
be sold over a period of up to 36 months from the date of the prospectus supplement. The number of shares ultimately offered for sale to
Aspire Capital is dependent upon the number of shares we elect to sell to Aspire Capital under the agreement. Depending upon market
liquidity at the time, sales of shares of our common stock under the agreement with Aspire Capital may cause the trading price of our
common stock to decline.

Aspire Capital may ultimately purchase all, some or none of the $15.0 million of our common stock that we may sell under the
agreement. After Aspire Capital has acquired shares under the agreement, it may sell all, some or none of those shares. Sales to Aspire
Capital by us pursuant to the agreement may result in substantial dilution to the interests of other holders of our common stock. The sale of
a substantial number of shares of our common stock to Aspire Capital, or anticipation of such sales, could make it more difficult for us to
sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales. However, we have
the right to control the timing and amount of any sales of our shares to Aspire Capital and the agreement with Aspire Capital may be
terminated by us at any time at our discretion without any cost to us.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Property.

Our corporate office is located in subleased space, leased on a month-to-month basis, at 600 Madison Avenue, New York, New
York, and includes shared use of common facilities. In this space, we perform or maintain oversight of our administrative, clinical
development, regulatory affairs and business development functions.

iBio CMO’s operations take place in Bryan, Texas in a facility controlled by an affiliate of Eastern Capital Limited, the largest
stockholder of the Company, as sublandlord. The facility is a 139,000 square foot Class A life sciences building on the campus of Texas
A&M University, designed and equipped for plant-made manufacture of biopharmaceuticals. iBio CMO has a 34-year sublease for the
facility. Commercial operations commenced in January 2016. iBio CMO operates on the basis of three parallel lines of business: (1)
Development and manufacturing of third party products; (2) Development and production of the Company’s proprietary product(s) for
treatment of fibrotic diseases; and (3) Commercial technology transfer services.

Item 3. Legal Proceedings.

The following information supplements and amends our discussion set forth under Part II, Item 1 “Legal Proceedings” in the Company’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.

Lawsuits

On October 22, 2014, the Company filed a Verified Complaint in the Court of Chancery of the State of Delaware against
PlantForm Corporation (“PlantForm”) and PlantForm’s president seeking equitable relief and damages based upon PlantForm’s interference
with several contracts between the Company and Fraunhofer USA, including its Center for Molecular Biotechnology unit, (“Fraunhofer”)
and one of the Company’s consultants and misappropriating the Company’s intellectual property including trade secrets and know-how.
On May 14, 2015, after mediation ordered and supervised by the Chancery Court, PlantForm represented and agreed that all drug
development and manufacturing activities of PlantForm with Fraunhofer had ceased and would not be renewed at least until after the
termination of the Company’s litigation regarding similar subject matter with Fraunhofer, and all of the accrued claims between the
Company and PlantForm and its President were voluntarily dismissed with prejudice.

On March 17, 2015, the Company filed a Verified Complaint in the Court of Chancery of the State of Delaware against
Fraunhofer and Vidadi Yusibov (“Yusibov”), Fraunhofer’s Executive Director, seeking monetary damages and equitable relief based on
Fraunhofer’s material and continuing breaches of their contracts with the Company. On September 16, 2015, the Company voluntarily
dismissed its action against Yusibov, without prejudice, and thereafter on September 29, 2015, the Company filed a Verified Amended
Complaint against Fraunhofer alleging material breaches of its agreements with the Company and seeking monetary damages and equitable
relief against Fraunhofer. Briefing was completed on a motion to dismiss filed by Fraunhofer in lieu of filing an answer to the complaint.
Fraunhofer also moved for a protective order in connection with certain discovery served by iBio. The Court bifurcated the action to first
resolve the threshold question in the case – the scope of iBio’s ownership of the technology developed or held by Fraunhofer — before
proceeding with the rest of the case and the parties stipulated their agreement to that approach. After considering the parties’ written
submissions and oral argument on this threshold issue on April 29, 2016, the Court resolved the threshold issue in favor of iBio on July 29,
2016, holding that iBio owns all proprietary rights of any kind to all plant-based technology of Fraunhofer developed or held as of
December 31, 2014, including know-how, and is entitled to receive a transfer of the technology from Fraunhofer. On September 19, 2016,
Fraunhofer informed the Court that it does not intend to pursue its motion for protective order at this time. iBio intends to seek leave of
Court to supplement and amend its current complaint to add additional state law claims against Fraunhofer. The Company is unable to
predict the further outcome of this action at this time.

On October 24, 2014, a putative class action captioned Juan Pena, Individually and on Behalf of All Others Similarly Situated v.
iBio, Inc. and Robert B. Kay was filed in the United States District Court for the District of Delaware. The action alleged that the Company
and its Chief Executive Officer made certain statements in violation of federal securities laws and sought an unspecified amount of
damages. On February 23, 2015, the Court issued an order appointing a new lead plaintiff. On April 6, 2015, the plaintiffs filed an amended
class action complaint in the same matter captioned Vamsi Andavarapu, Individually And On Behalf Of All Others Situated v. iBio, Inc.,
Robert B. Kay, and Robert Erwin. The action alleged that the Company, its Chief Executive Officer, and its President made certain
statements in violation of federal securities laws and sought an unspecified amount of damages. On May 6, 2015, the Company, Mr. Kay,
and Mr. Erwin filed a motion to dismiss the amended class action complaint. On September 15, 2015, after voluntary mediation, the
Plaintiffs and the Company reached an agreement-in-principle to settle the action. On December 16, 2015, the Plaintiffs and the Company
entered a Stipulation and Agreement of Settlement that provides, among other things, for settlement payments totaling $1,875,000 in
exchange for the releases described therein. That stipulation was filed with the Court on December 18, 2015 and, on April 21, 2016, the
Court entered an Order and Final Judgment approving the settlement and dismissing the case. The settlement has been funded by the
Company’s insurance carrier.

On December 4, 2015, a putative derivative action captioned Savage, Derivatively on Behalf of iBio, Inc., Plaintiff, v. Robert B.
Kay, Arthur Y. Elliott, James T. Hill, Glenn Chang, Philip K. Russell, John D. McKey, and Seymour Flug, Defendants, and iBio, Inc.,
Nominal Defendant was filed in the Supreme Court of the State of New York, County of New York. The action alleged that the Company
and its management made misstatements about the Company’s business resulting either from (i) a failure by iBio’s directors to establish a
system of controls over the Company’s disclosures, or (ii) the directors’ consciously ignoring “red flags” relating to disclosures, and sought
to recover an unspecified amount of damages. On January 15, 2016, the defendants filed a motion to dismiss all claims against them. On
March 16, 2016, the plaintiff filed a Verified Amended Complaint that added an additional named plaintiff and alleged derivative claims
generally along the same lines as the original complaint, together with purported direct breach of fiduciary duty and unjust enrichment
claims based on the same conduct. The Verified Amended Complaint seeks to recover an unspecified amount of damages. On April 29,
2016, the defendants filed a motion to dismiss all claims against them. Plaintiffs’ opposition to the motion was filed on before June 6, 2016.
On June 22, 2016, the plaintiffs advised the Court that the parties had reached a settlement in principle, and on July 1, 2016, the Court
ordered that the defendants’ pending motion to dismiss be withdrawn without prejudice. The terms of the settlement are subject to
preliminary and final approval by the Court. The Company expects that the settlement will be funded by the Company’s insurance carrier.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

PART II

Market Information

Our common stock is traded on the NYSE MKT under the trading symbol “IBIO.”

The following table sets forth the high and low sale prices for our common stock during the years ended June 30, 2016 and 2015 as
reported by the NYSE MKT. The quotations shown represent inter-dealer prices without adjustment for retail markups, markdowns or
commissions, and may not necessarily reflect actual transactions.

Year ended June 30, 2016:

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Year ended June 30, 2015:

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

High

Low

$
$
$
$

0.95
0.71
0.65
0.74

0.75
3.21
1.06
1.13

$
$
$
$

0.62
0.55
0.45
0.56

0.39
0.61
0.42
0.74

Holders

As of October 13, 2016, there were 194 holders of record of our common stock.

Dividends

We have never declared or paid any cash dividends on our common stock.

Item 6. Selected Financial Data.

The information under this Item is not required to be provided by smaller reporting companies.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read together with our financial statements

and the notes thereto and other information included elsewhere in this Annual Report on Form 10-K.

Forward-Looking Information and Factors That May Affect Future Results

The following discussion contains forward-looking statements within the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. All statements contained in the following discussion, other than statements that are purely historical, are
forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as “believes,”
“expects,” “may,” “will,” “should,” “potential,” “anticipates,” “plans,” or “intends” or the negative thereof, or other variations thereof, or
comparable terminology, or by discussions of strategy. Forward-looking statements are based upon management’s present expectations,
objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future and are subject to known and unknown risks and
uncertainties that could cause actual results, events or developments to be materially different from those indicated in such forward-looking
statements, including the risks and uncertainties set forth in Item 1A - Risk Factors. These risks and uncertainties should be considered
carefully and readers are cautioned not to place undue reliance on such forward-looking statements. As such, no assurance can be given
that the future results covered by the forward-looking statements will be achieved.

Overview

Among the Company’s proprietary technologies are the patented iBioLaunch technology, the patented iBioModulator technology,
and additional newer and more advanced technologies. Bio-Manguinhos/Fiocruz, or Fiocruz, a unit of the Oswaldo Cruz Foundation, a
central agency of the Ministry of Health of Brazil, is sponsoring the development an iBioLaunch-produced yellow fever vaccine to replace
the vaccine it currently makes in chicken eggs for the populations of Brazil and more than 20 other nations. These advances are occurring
subsequent to the demonstration of safety of iBioLaunch-produced vaccine candidates against each of the H1N1 “Swine” flu virus and the
H5N1 avian flu virus in successfully completed Phase 1 clinical trials.

We developed our iBioModulator technology based on the use of a modified form of the cellulose degrading enzyme lichenase
from Clostridium thermocellum, a thermophilic and anaerobic bacterium. iBioModulator enables an adjuvant component to be fused
directly to preferred recombinant antigens to create a single protein for use in vaccine applications.

In addition to technology developed for iBio pursuant to agreements with Fraunhofer U.S.A., Inc., iBio’s more recently developed
technologies provide us with higher expression yields of certain proteins and increased efficiency in adapting gene sequences to achieve
specific product objectives. In addition, we are developing improved, proprietary manufacturing processes that we expect to protect as trade
secrets.

iBio CMO’s operations take place in Bryan, Texas in a facility controlled by another affiliate of Eastern (the “Second Eastern
Affiliate”) as sublandlord. The facility is a Class A life sciences building on the campus of Texas A&M University, designed and equipped
for plant-made manufacture of biopharmaceuticals. The Second Affiliate granted iBio CMO a 34-year sublease for the facility. Commercial
operations commenced in January 2016. iBio CMO operates on the basis of three parallel lines of business: (1) Development and
manufacturing of third party products; (2) Development and production of iBio’s proprietary product(s) for treatment of fibrotic diseases;
and (3) Commercial technology transfer services.

Proprietary iBio technologies have been used to advance development of certain products that have been commercially infeasible
to develop with conventional technologies such as Chinese hamster ovary cell systems and microbial fermentation methods. They can be
used to create and operate manufacturing facilities at substantially lower capital and operating costs. These include development and
manufacture of both vaccine and therapeutic product candidates. iBio CMO plans to promote commercial collaborations with third parties
on the basis of these technology advantages and to work with customers to achieve laboratory scale technical milestones that can form the
basis of longer-term manufacturing business arrangements. iBio itself will be a client of iBio CMO for further IND advancement of its
proprietary products beginning with IBIO-CFB03 for the treatment of a range of fibrotic diseases. iBio will work with iBio CMO on the
production of IBIO-CFB03 for clinical trials and, with clinical success, for commercial launch.

Results of Operations

Revenue

Gross revenue for 2016 and 2015 was approximately $.95 million and $1.85 million, respectively, a decrease of $.9 million.

Revenue has been primarily attributable to technology services provided to Bio-Manguinhos/Fiocruz (“Fiocruz”) in connection
with the development by Fiocruz of a yellow fever vaccine using our iBioLaunch™ technology. To fulfill our obligations, we engaged
Fraunhofer USA Inc. (“Fraunhofer”) as a subcontractor to perform the services required. During 2013, the Company, Fiocruz and
Fraunhofer were awaiting approval by the Brazilian government of a contract amendment reflecting a new work plan. During this waiting
period, no revenues were recognized by the Company in connection with services provided to Fiocruz through the subcontract arrangement
with Fraunhofer. In June 2014, the Company, Fiocruz and Fraunhofer amended their Collaboration and License Agreement reflecting the
new work plan and work was resumed by Fraunhofer for the Company to continue development of a yellow fever vaccine using the
Company’s iBioLaunch™ technology. In 2016, revenue was lower due to laboratory tasks performed pursuant to the agreement with
Fiocruz nearing completion, in some cases being completed and, therefore, requiring less total work than previously necessary.

Research and Development Expenses

Research and development expenses for 2016 and 2015 were approximately $3.2 million and $3.5 million, respectively, a decrease
of $.3 million. Research and development expenses in 2015 include a reconciliation for services rendered prior to October 1, 2014. In 2016,
expenses were increased to reflect the addition of iBio CMO operations and decreased due to changes in the laboratory work with Fiocruz
for a net decrease of $.3 million.

General and Administrative Expenses

General and administrative expenses for 2016 and 2015 were approximately $7.7 million and $5.0 million, respectively, an
increase of $2.7 million. General and administrative expenses principally include officer and employee salaries and benefits, legal and
accounting fees, insurance, consulting services, investor and public relations services, and other costs associated with being a publicly
traded company. The increase was primarily due to the expenses related to iBio CMO operations which commenced in December 2015 of
approximately $3.0 million.

Other Income (Expense)

Other income (expense) for 2016 and 2015 was approximately ($764,000) and $41,000, respectively.

As discussed above, iBio CMO’s operations take place in a facility in Bryan, Texas under a 34-year sublease. Such sublease is
accounted for as a capital lease. In 2016, other income (expense) included interest expense of $807,000 incurred under the capital lease and
interest and royalty income of $43,000. Other income in 2015 consisted of interest and royalty income.

Net loss attributable to noncontrolling interest

This represents the share of the loss in iBio CMO for the Eastern Affiliate for the year ended June 30, 2016.

Liquidity and Capital Resources

As of June 30, 2016, we had cash of $23 million as compared to $9.5 million as of June 30, 2015. The increase in cash was
primarily attributable to proceeds received from stock purchase agreements from Eastern and a contribution for the formation of iBio
CMO.

Net Cash Used in Operating Activities

Operating activities used $8.1 million in cash in 2016 to fund the loss for the period.

Net Cash Used in Investing Activities

In 2016, net cash used in investing activities was approximately $68,000 for additions to fixed assets.

Net Cash Provided by Financing Activities

In 2016, net cash provided by financing activities was approximately $21.7 million. The Company received approximately $7.2
million from Eastern from the sale of common stock and the exercise of warrants and $15 million from a capital contribution for the
formation of iBio CMO, offset by payments of $565,000 under the capital lease obligation.

Funding Requirements

We have incurred significant losses and negative cash flows from operations since our spinoff from Integrated BioPharma, Inc. in
August 2008. As of June 30, 2016, our accumulated deficit was approximately $57.6 million, and we used approximately $8.1 million of
cash for operating activities for the year ended June 30, 2016. As of June 30, 2016, cash on hand was approximately $23 million. The cash
on hand is expected to support the Company’s activities at least through June 30, 2017.

We have historically financed our activities through the sale of common stock and warrants. We plan to fund our future business
operations using cash on hand, through proceeds from the sale of additional equity and other securities and through proceeds realized in
connection with license and collaboration arrangements and operation of the Company’s new subsidiary, iBio CMO.

On May 15, 2015, we entered into a common stock purchase agreement (the “2015 Aspire Purchase Agreement”) with Aspire
Capital Fund, LLC, an Illinois limited liability company (referred to below as “Aspire Capital”) pursuant to which we have the option to
require Aspire Capital to purchase up to an aggregate of $15.0 million of shares of our common stock (the “Purchase Shares”) upon and
subject to the terms of the 2015 Aspire Purchase Agreement. The description of the 2015 Aspire Purchase Agreement and other
information included under the heading “Aspire Capital – 2015 Facility” set forth in Note 11 of the consolidated financial statements
included in this report is incorporated into this Item 7 by reference.

No shares have been sold under the 2015 Aspire Purchase Agreement as of the date of the filing of this report . Despite the
proceeds that we may receive pursuant to the 2015 Aspire Purchase Agreement, we may still need additional capital to fully implement our
business, operating and development plans for periods beyond June 30, 2017.

On November 20, 2014, we filed with the Securities and Exchange Commission a Registration Statement on Form S-3 under the
Securities Act, which was declared effective by the Securities and Exchange Commission on December 2, 2014. This registration statement
allows us, from time to time, to offer and sell shares of common stock, shares of preferred stock, debt securities, units comprised of shares
of common stock, preferred stock, debt securities and warrants in any combination, and warrants to purchase common stock, preferred
stock, debt securities and/or units, up to a maximum aggregate amount of $100 million of such securities. On May 29, 2015, we filed a
prospectus supplement to the Registration Statement registering $15.0 million of our common stock that we may issue and sell to Aspire
Capital from time to time pursuant to the 2015 Aspire Purchase Agreement, together with the 450,000 Commitment Shares issued to Aspire
Capital in consideration for entering into the 2015 Aspire Purchase Agreement. We currently have no other firm agreements with any third
parties for the sale of our securities pursuant to this registration statement. We cannot be certain that funding will be available on favorable
terms or available at all. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience
significant dilution. If we are unable to raise funds when required or on favorable terms, we may have to: a) significantly delay, scale back,
or discontinue the product application and/or commercialization of our proprietary technologies; b) seek collaborators for our technology
and product candidates on terms that are less favorable than might otherwise be available; c) relinquish or otherwise dispose of rights to
technologies, product candidates, or products that we would otherwise seek to develop or commercialize; or d) possibly cease operations.

On January 13, 2016, the Company entered into a contract manufacturing joint venture with an affiliate (the “Eastern Affiliate”) of
Eastern Capital Limited (“Eastern”), a stockholder of the Company. The Eastern Affiliate contributed $15 million in cash for a 30%
interest in the Company’s subsidiary iBio CMO LLC (“iBio CMO”). The Company retained a 70% interest in iBio CMO and contributed a
royalty bearing license which grants iBio CMO a non-exclusive license to use the Company’s proprietary technologies for research
purposes and an exclusive U.S. license for manufacturing purposes. On January 13, 2016, the Company also entered into share purchase
agreements with Eastern pursuant to which Eastern agreed to purchase 10 million shares of the Company’s common stock at $0.622 per
share. The closing for the sale of 3,500,000 of such shares occurred on January 25, 2016. The closing for the remaining 6,500,000 shares
occurred in April 2016. In addition, Eastern agreed to exercise warrants it previously acquired to purchase 1,784,000 shares of the
Company’s common stock at $0.53 per share. As of the date of the filing of this report, iBio CMO has received $15 million for the
capitalization of iBio CMO and the Company has received approximately $7.2 million from Eastern for the acquisition of 10 million shares
of common stock and the exercise of the warrants. Prior to the issuance of the shares of common stock pursuant to the purchase agreements
with Eastern, Eastern beneficially owned approximately 30% of the Company’s common stock, as reported in the Company’s Annual
Report on Form 10-K for the fiscal year ended June 30, 2015, filed with the SEC on October 13, 2015, calculated in accordance with the
SEC’s beneficial ownership rules. As of the closing of the purchase agreements with Eastern and the simultaneous exercise by Eastern of
its warrants to purchase iBio common stock, Eastern beneficially owned approximately 38% of the Company’s outstanding shares of
common stock. See Note 11 in the consolidated financial statements for a further description of the transactions.

Off-Balance Sheet Arrangements

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or
financial partnerships, such as entities often referred to as structured finance or special purpose entities (SPEs), which would have been
established for the purpose of facilitating off-balance sheet arrangements or other contractually limited purposes. As of June 30, 2016, we
were not involved in any SPE transactions.

Critical Accounting Policies and Estimates

A critical accounting policy is one that is both important to the portrayal of a company’s financial condition and results of
operations and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates
about the effect of matters that are inherently uncertain.

Our financial statements are presented in accordance with accounting principles generally accepted in the United States of
America (“U.S. GAAP”). All applicable U.S. GAAP accounting standards effective as of June 30, 2016 have been taken into consideration
in preparing the financial statements. The preparation of financial statements requires estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, expenses and related disclosures. Some of those estimates are subjective and complex, and,
consequently, actual results could differ from those estimates. The following accounting policies and estimates have been highlighted as
significant because changes to certain judgments and assumptions inherent in these policies could affect our financial statements.

We base our estimates, to the extent possible, on historical experience. Historical information is modified as appropriate based on
current business factors and various assumptions that we believe are necessary to form a basis for making judgments about the carrying
value of assets and liabilities. We evaluate our estimates on an ongoing basis and make changes when necessary. Actual results could differ
from our estimates.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or
determinable, and collectability is reasonably assured. Deferred revenue represents billings to a customer to whom the services have not yet
been provided.

The Company generates (or may generate in the future) contract revenue under the following types of contracts:

Fixed-Fee
Under a fixed-fee contract, the Company charges a fixed agreed upon amount for a deliverable. Fixed-fee contracts have fixed
deliverables upon completion of the project. Typically, the Company recognizes revenue for fixed-fee contracts after projects are
completed, delivery is made and title transfers to the customer, and collection is reasonably assured.

Time and Materials
Under a time and materials contract, the Company charges customers an hourly rate plus reimbursement for other project specific
costs. The Company recognizes revenue for time and material contracts based on the number of hours devoted to the project multiplied by
the customer’s billing rate plus other project specific costs incurred.

Grant Income
Grants are recognized as income when all conditions of such grants are fulfilled or there is a reasonable assurance that they will be

fulfilled. Grant income is classified as a reduction of research and development expenses.

Fixed Assets

Fixed assets are stated at cost net of accumulated depreciation. Depreciation is calculated using the straight-line method over the

estimated useful lives of the assets, generally three to five years.

Assets held under the terms of capital leases are included in fixed assets and are depreciated on a straight-line basis over the

shorter of terms of the leases or the economic lives of the assets.

Intangible Assets

The Company accounts for intangible assets at their historical cost and records amortization utilizing the straight-line method
based upon their estimated useful lives. Patents are amortized over a period of ten years and other intellectual property is amortized over a
period from 16 to 23 years. The Company reviews the carrying value of its intangible assets for impairment whenever events or changes in
business circumstances indicate the carrying amount of such assets may not be fully recoverable. Evaluating for impairment requires
judgment, and recoverability is assessed by comparing the projected undiscounted net cash flows of the assets over the remaining useful
life to the carrying amount. Impairments, if any, are based on the excess of the carrying amount over the fair value of the assets.

Research and Development Costs

All research and development costs are expensed as incurred. Accordingly, internal research and development costs are expensed
as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results
have been achieved.

Share-based Compensation

The Company recognizes the cost of all share-based payment transactions at fair value. Compensation cost, measured by the fair
value of the equity instruments issued, adjusted for estimated forfeitures, is recognized in the financial statements as the respective awards
are earned over the performance period. The Company uses historical data to estimate forfeiture rates.

The impact that share-based payment awards will have on the Company’s results of operations is a function of the number of
shares awarded, the trading price of the Company’s stock at the date of grant or modification, and the vesting schedule. Furthermore, the
application of the Black-Scholes option pricing model employs weighted-average assumptions for expected volatility of the Company’s
stock, expected term until exercise of the options, the risk-free interest rate, and dividends, if any, to determine fair value. Expected
volatility is based on historical volatility of the Company’s common stock; the expected term until exercise represents the weighted-
average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and the Company’s
historical exercise patterns; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods
corresponding with the expected life of the option. The Company has not paid any dividends since its inception and does not anticipate
paying any dividends for the foreseeable future, so the dividend yield is assumed to be zero.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized.
The effect of a change in tax rates or laws on deferred tax assets and liabilities is recognized in operations in the period that includes the
enactment date of the rate change. A valuation allowance is established to reduce the deferred tax assets to the amounts that are more likely
than not to be realized from operations.

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a

position taken on an income tax return.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The information under this Item is not required to be provided by smaller reporting companies.

Item 8. Financial Statements and Supplementary Data.

Financial statements and notes thereto appear on pages F-1 to F-23 of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Our management, under the direction of our Executive Chairman and Chief Financial Officer, has evaluated the effectiveness of
our disclosure controls and procedures (as defined in Rules 13a-15 under the Exchange Act) as of June 30, 2016. Based on that evaluation,
our Executive Chairman and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June
30, 2016.

(b) Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) under the
Exchange Act, during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

It is the responsibility of the management of iBio, Inc. to establish and maintain effective internal control over financial reporting
(as defined in Rule 13a-15(f) under the Exchange Act). Internal control over financial reporting is designed to provide reasonable assurance
to iBio’s management and board of directors regarding the preparation of reliable financial statements for external purposes in accordance
with generally accepted accounting principles.

iBio’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of iBio; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of iBio are being made only in accordance with authorizations of management and
directors of iBio; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or
disposition of iBio’s assets that could have a material effect on the financial statements of iBio.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore,
even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
presentation.

Management has performed an assessment of the effectiveness of iBio’s internal control over financial reporting as of June 30,
2016 based upon criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 COSO Framework). Based on this assessment, management has concluded that our internal control over
financial reporting was effective as of June 30, 2016.

/s/Robert B. Kay
Robert B. Kay
Executive Chairman
(Principal Executive Officer)

/s/Mark Giannone
Mark Giannone
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)

October 13, 2016

(d) Report of Independent Registered Public Accounting Firm

This Annual Report on Form 10-K does not include an attestation report by CohnReznick LLP, our independent registered public
accounting firm, regarding internal control over financial reporting. As a smaller reporting company, our internal control over financial
reporting was not subject to audit by our independent registered public accounting firm pursuant to rules of the Securities and Exchange
Commission that permit us to provide only management’s report.

Item 9B. Other Information.

None.

Item 10. Directors, Executive Officers and Corporate Governance

DIRECTORS

PART III

The name, age, years of service on our board of directors, principal occupation and business experience and certain other information for
each of our directors as of October 13, 2016 is set forth below:

Name
Robert B. Kay
Glenn Chang
Arthur Elliott, Ph.D.
Seymour Flug
General (Ret.) James T. Hill
John D. McKey, Jr.
Philip K. Russell, M.D.

Age Years of Service on our Board of Directors
76 Director since August 2008
68 Director since August 2008
80 Director since October 2010
81 Director since December 2012
70 Director since August 2008
73 Director since August 2008
84 Director since March 2010

The principal occupation, business experience and certain other information for each our directors is set forth below.

Robert B. Kay is our Executive Chairman and Chief Executive Officer and has served in these capacities since we became a publicly traded
company in August 2008. Previously, Mr. Kay was a founder and senior partner of the New York law firm of Kay Collyer & Boose LLP,
with a particular focus on mergers and acquisitions and joint ventures. Mr. Kay received his B.A. from Cornell University’s College of Arts
& Sciences and his J.D. from New York University Law School. Mr. Kay oversees every aspect of our business in his role as executive
chairman and chief executive officer. Given his years with the company and his prior experience, we believe that Mr. Kay has an excellent
understanding of our business and the global markets in which we operate and those in which we anticipate operating in the future.

Glenn Chang Since February 2014, Glenn Chang serves as Chief Financial Officer of Singer Vehicle Design, a private company in the
business of automotive design and restoration. Mr. Chang served as the Chief Financial Officer of Alma Bank, a New York headquartered
bank with over $900 million of assets and 13 branches in the New York City Metropolitan area from late 2012 to February 2014. Before
joining Alma, from 1999 to 2012, Mr. Chang served as a founder, Director, Chief Financial Officer and consultant to First American
International Bank which is the largest locally owned Chinese American Bank. Prior to that he spent 20 years at Citibank, N.A as Vice
President. Mr. Chang is a retired Certified Public Accountant. Mr. Chang’s extensive executive and financial leadership in his current and
former positions and his training and experience as a Certified Public Accountant adds vital expertise to our board of directors and our
Audit Committee in the form of financial understanding, business perspective and audit expertise. Mr. Chang is qualified as an Audit
Committee Financial Expert as defined in Regulation S-K Item 407(d)(5)(ii).

Arthur Y. Elliott, Ph.D. serves as a member of the American Association for Advancement of Science, American Society for
Microbiology, and American Tissue Culture Association. Prior to retiring, Dr. Elliott spent 16 years with Merck & Co., serving ultimately
as Executive Director of Biological Operations, Merck Manufacturing Division, responsible for the bulk manufacture, testing, release and
registration of all biological products sold. Dr. Elliott also directed the manufacturing, process development, and other operations of North
American Vaccine, Inc. for six years, and most recently served as consultant to Aventis (Sanofi Pasteur) Pharmaceutical Corporation in its
design and implementation of new, highly automated manufacturing facilities for influenza vaccines. Dr. Elliott has served with the United
States Department of Health and Human Services (“HHS”) in the Avian Influenza Pandemic Preparedness Program in Washington, D.C. as
Senior Program Manager for the Antigen Sparing Project since 2006. The program involves the cooperation of three pharmaceutical
companies and four government groups (NIH, CDC, United States Food and Drug Administration, and HHS). While at Merck, he worked
closely with both Merck Research Laboratories and the Merck Vaccine Division to forecast the timely transfer of technology for new and
improved products from the research laboratories through the manufacturing area and into the marketing division for sales introductions.
He has served as a biological consultant to the World Health Organization, NIH, and The Bill & Melinda Gates Foundation. Dr. Elliott
holds a Ph.D. in Virology from Purdue University, and an M.S. in Microbiology and a B.A. in Biology from North Texas State University.
Dr. Elliot’s extensive experience and expertise with the manufacture of vaccines and therapeutics is particularly relevant to our business and
our efforts to manufacture such products which in a key component of our business.

Seymour Flug prior to retiring was Chairman of the Board and CEO of Diners Club International and a Managing Director of Citibank.
Prior to joining Citibank, Mr. Flug served as Senior Vice President of Hess Oil Company. Mr. Flug began his career as Certified Public
Accountant at Deloitte & Touche, a predecessor to the firm now known as Deloitte. Mr. Flug received his B.B.A from Baruch College.
Mr. Flug’s experience leading a multinational company and his experience as a certified public accountant allow him to offer us unique
perspectives on global business opportunities, best business practices and additional audit expertise. Mr. Flug is qualified as an Audit
Committee Financial Expert as defined in Regulation S-K Item 407(d)(5)(ii).

General (Ret.) James T. Hill was the Commander of the 4-Star United States Southern Command, reporting directly to the President and
Secretary of Defense at the time of his retirement from active duty. As such he led all U.S. military forces and operations in Central
America, South America and the Caribbean, worked directly with U.S. Ambassadors, foreign heads of state, key Washington decision-
makers, foreign senior military and civilian leaders, developing and executing United States policy. His responsibilities included
management, development and execution of plans and policy within the organization including programming, communications, manpower,
operations, logistics and intelligence. General Hill’s experience implementing plans and policies within diverse geographic regions and his
insights regarding the conduct of business affairs in Central and South America is a key resource for us.

John D. McKey, Jr. serves since 2003 as of counsel at McCarthy, Summers, Bobko, Wood, Sawyer & Perry, P.A. in Stuart, Florida, and
previously was a partner from 1987 through 2003. From 1977 to 1987, Mr. McKey was a partner at Gunster Yoakley in Palm Beach,
Florida. Mr. McKey received his B.B.A at the University of Georgia and his J.D. from the University Of Florida College Of Law. Mr.
McKey’s extensive experience representing private and public companies operating in varied business sectors brings our board insights and
acumen to best corporate practices and implementation of strategic and financial plans.

Philip K. Russell, M.D. served in the U.S. Army Medical Corps from 1959 to 1990, pursuing a career in infectious disease and tropical
medicine research. Following his military service, Dr. Russell joined the faculty of Johns Hopkins University’s School of Hygiene and
Public Health and worked closely with the World Health Organization as special advisor to the Children’s Vaccine Initiative. He was
founding board member of the International AIDS Vaccine Initiative, and is an advisor to the Bill & Melinda Gates Foundation. He has
served on numerous advisory boards of national and international agencies, including the Centers for Disease Control (“CDC”), the
National Institutes of Health (“NIH”) and the Institute of Medicine. Dr. Russell is a past Chairman of the Albert B. Sabin Vaccine Institute.
Dr. Russell’s extensive experience and expertise in the field of infectious diseases and his association with leading governmental and not-
for-profit entities engaged in pioneering work throughout the world provides us with invaluable insights into priorities for these entities and
business development opportunities for us.

EXECUTIVE OFFICERS

The following table sets forth the names, ages and biographical information of our executive officers as of October 13, 2016:

Name
Robert B. Kay
Robert L. Erwin
Mark Giannone
Terence Ryan, Ph.D.

Age Position Held With Us
76 Executive Chairman and Chief Executive Officer
63 President
59 Chief Financial Officer
61 Chief Scientific Officer

The following are brief biographies of each executive officer:

Robert B. Kay has been our executive chairman and chief executive officer since we became a publicly traded company in August 2008.
Mr. Kay was a founder and senior partner of the New York law firm of Kay Collyer & Boose LLP, with a particular focus on mergers and
acquisitions and joint ventures. Mr. Kay received his B.A. from Cornell University’s College of Arts & Sciences and his J.D. from New
York University Law School.

Robert L. Erwin has been our President since we became a publicly traded company in August 2008. Mr. Erwin led Large Scale Biology
Corporation from its founding in 1988 through 2003, including a successful initial public offering in 2000, and continued as non-executive
Chairman until 2006. He served as Chairman of Icon Genetics AG from 1999 until its acquisition by a subsidiary of Bayer AG in 2006. Mr.
Erwin recently served as Managing Director of Bio-Strategic Directors LLC, providing consulting services to the life sciences industry. He
is currently Chairman of Novici Biotech, a private biotechnology company and a Director of Oryn Therapeutics. Mr. Erwin’s non-profit
work focuses on applying scientific advances to clinical medicine, especially in the field of oncology. He is co-founder, President and
Director of the Marti Nelson Cancer Foundation, Oncology. Mr. Erwin received his BS degree with Honors in Zoology and an MS degree
in Genetics from Louisiana State University.

Mark Giannone has served as our Chief Financial Officer since December 2013. Mr. Giannone has been a member of the accounting firm
of Bosco Giannone LLC since its formation in 1999. His prior experience included employment as a senior accountant at Kenneth
Leventhal & Co. (acquired by Ernst &Young LLP) and as a tax manager at BDO Seidman, a lecturer in various continuing education
programs for the New York State Society of Certified Public Accountants and New York University.

Terence E. Ryan , Ph.D., has been our chief scientific officer since March 2012, and prior to that served as senior vice president since
joining the Company in July 2010. Dr. Ryan previously served as assistant vice president, Systems Biology at Wyeth Pharmaceuticals
(later Pfizer, Inc.) from 2007 to 2010, and director of Integrative Biology at GlaxoSmithKline from 2003 to 2007. He has also been director,
Cell Biology at Celera Genomics from 2000 to 2003 and associate director of Cell Technologies and Protein Sciences at Regeneron
Pharmaceuticals, Inc. Dr. Ryan received his A.B. in Biology from Princeton University, his M.S. and Ph.D. in Microbiology from Rutgers
University and was a post-doctoral fellow in Molecular Virology at the University of Wisconsin.

CORPORATE GOVERNANCE

Board Committees

Our board of directors has the authority to appoint committees to perform certain management and administrative functions. Our board of
directors has constituted audit, compensation and nominating committees.

Nominating Committee and Nomination Process

The Nominating Committee was formed to address general governance and policy oversight; succession planning; to identify qualified
individuals to become prospective board members and make recommendations regarding nominations for our board of directors; to advise
the board with respect to appropriate composition of board committees; to advise the board about and develop and recommend to the board
appropriate corporate governance documents and assist the board in implementing guidelines; to oversee the annual evaluation of the board
and our chief executive officer, and to perform such other functions as the board may assign to the committee from time to time. The
Nominating Committee has a charter which is available on our website at www.ibioinc.com. The Nominating Committee consists of three
independent directors: Arthur Y. Elliott, Ph.D., (Nominating Committee Chairman), Glenn Chang and General James T. Hill.

Our directors take a critical role in guiding our strategic direction and oversee the management of our company. Board candidates are
considered based upon various criteria, such as their broad-based business and professional skills and experiences, a global business and
social perspective, concern for the long-term interests of our stockholders and personal integrity and judgment. In addition, directors must
have time available to devote to board activities and to enhance their knowledge of the life sciences industry. Accordingly, we seek to
attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities.

Our board of directors believes given the diverse skills and experience required to grow our company that the input of all members of the
Nominating Committee is important for considering the qualifications of individuals to serve as directors but does not have a diversity
policy. Further, the Nominating Committee believes that the minimum qualifications for serving as our director are that a nominee
demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the board’s oversight of our
business and affairs of and have an impeccable record and reputation for honest and ethical conduct in both his or her professional and
personal activities. Whenever a new seat or a vacated seat on the board is being filled, candidates that appear to best fit the needs of the
board and our company are identified and unless such individuals are well known to the board, they are interviewed and further evaluated
by the Nominating Committee. Candidates selected by the Nominating Committee are then recommended to the full board for their
nomination to stockholders. The Nominating Committee recommends a slate of directors for election at the annual meeting. In accordance
with NYSE MKT LLC rules, the slate of nominees is approved by a majority of the independent directors.

In carrying out its responsibilities, our board will consider candidates suggested by stockholders. If a stockholder wishes to formally place a
candidate’s name in nomination, however, he or she must do so in accordance with the provisions of our First Amended and Restated
Bylaws. Suggestions for candidates to be evaluated by the Nominating Committee must be sent to Secretary, iBio, Inc., 600 Madison
Avenue, Suite 1601, New York, NY 10022-1737.

Audit Committee

The Audit Committee of the board of directors makes recommendations regarding the retention of the independent registered public
accounting firm, reviews the scope of the annual audit undertaken by our independent registered public accounting firm and the progress
and results of their work, reviews our financial statements, and oversees the internal controls over financial reporting and corporate
programs to ensure compliance with applicable laws and regulations. The Audit Committee reviews all services performed for us by the
independent registered public accounting firm and determines whether they are compatible with maintaining the registered public
accounting firm's independence. The Audit Committee has a charter, which is reviewed annually and as may be required due to changes in
industry accounting practices or the promulgation of new rules or guidance documents. The Audit Committee charter is available on our
website at www.ibioinc.com. The Audit Committee consists of two independent directors as determined by NYSE MKT LLC listing
standards: Glenn Chang (Audit Committee Chairman) and Seymour Flug. Mr. Chang and Mr. Flug are each qualified as an Audit
Committee Financial Expert as defined in Regulation S-K Item 407(d)(5)(ii).

Compensation Committee

The Compensation Committee of the Board of Directors reviews and approves executive compensation policies and practices, reviews
salaries and bonuses for our senior executive officers, administers our equity incentive plan and other benefit plans, and considers other
matters as may, from time to time, be referred to them by our board of directors. The Compensation Committee has a charter which is
available on our website at www.ibioinc.com. The members of the Compensation Committee are General James T. Hill (Compensation
Committee Chairman), Arthur Y. Elliott, Ph.D. and Philip K. Russell, M.D.

Board Leadership Structure and Role in Risk Oversight

Our chief executive officer also serves as the executive chairman of our board of directors. We do not have a lead independent director.
Our executive chairman, when present, presides over all meetings of our board. We believe this leadership structure is appropriate for our
Company at this time because (1) of our size, (2) of the size of our board, (3) our chief executive officer is responsible for our day-to-day
operation and implementing our strategy, and (4) discussion of developments in our business and financial condition and results of
operations are important parts of the discussion at meetings of our board of directors and it makes sense for our chief executive officer to
chair those discussions.

Our board of directors oversees our risk management. This oversight is administered primarily through the following:

· Our board’s review and approval of our business strategy, including the projected opportunities and challenges facing our

business;

· At least quarterly review of our business developments and financial results;
· Our Audit Committee’s oversight of our internal controls over financial reporting and its discussions with management and the
independent registered public accountants regarding the quality and adequacy of our internal controls and financial reporting;
and

· Our board’s review and recommendations regarding our executive officer compensation and its relationship to our business

objectives and goals.

Meetings of the Board of Directors and Committees

During the fiscal year ended June 30, 2016, the board of directors held two meetings in person or by telephone and acted by unanimous
written consent on one occasion and the Audit Committee held four meetings in person or by telephone. No meetings in person or by
telephone were held and no actions were taken by either the Nominating Committee or Compensation Committee as matters addressable by
such committees were considered and approved by the full board. Between meetings, members of the board of the directors are provided
with information regarding our operations and are consulted on an informal basis with respect to pending business. Each director attended
at least 75% of the aggregate of the total number of meetings of the board and the total number of meetings of the committees on which
such director serves. All of our directors attended our 2015 Annual Meeting of Stockholders.

Although we do not have a policy with regard to board members’ attendance at our annual meetings of stockholders, all of the directors are
encouraged to attend such meetings.

Stockholder Communications with the Board of Directors

Interested parties may communicate with the board or specific members of the board, including the independent directors and the members
of the Audit Committee, by submitting correspondence addressed to the Board of Directors of iBio, Inc. c/o any specified individual
director or directors at 600 Madison Avenue, Suite 1601, New York, New York 10022-1737. Any such correspondence will be forwarded
to the indicated directors.

Code of Ethics

We have adopted a written code of ethics within the meaning of Item 406 of SEC Regulation S-K, which applies to all of our employees,
including our principal executive officer and our chief financial officer, a copy of which can be found on our website at www.ibioinc.com.
If we make any waivers or substantive amendments to the code of ethics that are applicable to our principal executive officer or our chief
financial officer, we will disclose the nature of such waiver or amendment in a Current Report on Form 8-K in a timely manner. No
waivers from any provision of our policy have been granted.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the 1934 Exchange Act requires our directors and executive officers, and persons who own more than ten percent of a
registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our
common stock and other equity securities. Officers, directors and greater than ten percent stockholders are required by SEC regulation to
furnish us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports
were required, during the fiscal year ended June 30, 2016, all Section 16(a) filing requirements applicable to our officers, directors and
greater than ten percent beneficial owners were complied with.

Item 11. Executive Compensation

Summary Compensation Table

The table below summarizes the total compensation paid or earned by our principal executive officer, principal financial officer and our
two other most highly compensated executive officers who were serving as executive officers at June 30, 2016, the end of our last
completed fiscal year. We refer to the executive officers identified in this table as our “named executive officers.

Name and
Principal Position
Robert B. Kay

Executive Chairman

Mark Giannone

Chief Financial Officer

Robert Erwin
President

Terence E. Ryan, Ph.D.

Chief Scientific Officer

Fiscal
Year

Salary

Bonus

Option
Awards (1)

Total

2016 $
2015

2016
2015

310,732 $
309,735

99,000
48,000

230,000
230,000

200,000
200,000

0 $
0

0
0

470,495 $
238,961

94,099
21,263

470,495
238,261

62,733
0

781,227
548,696

193,099
69,263

700,495
468,261

262,733
200,000

(1) Reflects (1) Reflects the aggregate grant date fair value computed in accordance with FASB ASC 718.

Outstanding Equity Awards at Fiscal Year-Ending June 30, 2016

The following table shows information regarding unexercised stock options held by our named executive officers as of June 30, 2016.

Name
Robert Kay (2)
Robert Kay (2)
Robert Kay (2)
Robert Kay (3)
Robert Kay (3)
Robert Kay (4)
Robert Kay (4)
Robert Kay (4)
Robert Kay (5)
Robert Kay (5)
Robert Erwin (2)
Robert Erwin (2)
Robert Erwin (2)
Robert Erwin (4)

Robert Erwin (4)
Robert Erwin (4)
Robert Erwin (5)
Robert Erwin (5)
Terence Ryan (6)
Terence Ryan (6)
Terence Ryan (5)
Mark Giannone (5)
Mark Giannone (5)
Mark Giannone (5)

Unexercised
Options

Exercise
Price

Expiration
Date

Market
Value (1)

250,000 $
250,000 $
300,000 $
500,000 $
500,000 $
300,000 $
300,000 $
300,000 $
600,000 $
750,000 $
250,000 $
250,000 $
300,000 $
300,000 $
300,000 $
300,000 $
600,000 $
750,000 $
100,000 $
100,000 $
100,000 $
100,000 $
50,000 $
150,000 $

0.20
0.66
1.73
3.07
3.07
1.96
1.10
0.50
1.00
1.72
0.20
0.66
1.73
1.96
1.10
0.50
1.00
1.72
1.38
1.96
1.72
0.58
0.49
1.72

2/13/19 $
8/10/19 $
8/16/20 $
12/30/20 $
12/30/20 $
10/21/21 $
7/24/22 $
7/16/23 $
9/5/24 $
9/4/25 $
2/13/19 $
8/10/19 $
8/16/20 $
10/21/21 $
7/24/22 $
7/16/23 $
9/5/24 $
9/4/25 $
7/14/20 $
10/21/21 $
9/4/25 $
1/24/24 $
9/5/24 $
9/4/25 $

130,000
15,000
-
-
-
-
-
66,000
-
-
130,000
15,000
-
-
-
66,000
-
-
-
-
-
14,000
11,500
-

(1)

(2)

(3)

(4)

(5)

(6)

The market value for each award is based upon the closing stock price of $0.72 per share of common stock on June 30, 2016, less
the exercise price of the option.

Options vested in five equal annual installments on the anniversary date of grant. Options fully vested as of June 30, 2016.

Options vested on the vesting commencement date of the grant. Options fully vested as of June 30, 2016.

Options vest in five equal annual installments on the anniversary date of grant.

Options vest in three equal annual installments on the anniversary date of grant.

Options vested in three equal annual installments on the anniversary date of grant. Options fully vested as of June 30, 2016.

Employment Agreements

As of June 30, 2016, we did not have any employment contracts or other similar agreements or arrangements with any of our named
executive officers.

Equity Incentive Plan

On August 12, 2008, the Company adopted the iBioPharma 2008 Omnibus Equity Incentive Plan (the “Plan”) for employees, officers,
directors and external service providers. In December 2013 our stockholders approved an amendment to the Plan to increase the number of
shares of our common stock authorized for issuance thereunder from 10 million shares to 15 million shares. Under the provisions of the
Plan, the Company may grant options to purchase stock and/or make awards of restricted stock up to an aggregate amount of 15 million
shares. Stock options granted under the Plan may be either incentive stock options (as defined by Section 422 of the internal Revenue Code
of 1986, as amended) or non-qualified stock options at the discretion of the board of directors. Vesting of awards occurs ratably on the
anniversary of the grant date over the service period as determined at the time of grant.

Director Compensation

Compensation for our non-employee directors has historically consisted of a grant of stock options vesting over a three-year period and
additional cash compensation. We do not have a fixed policy with respect to this compensation, but the compensation is generally equal for
each non-employee director except in cases where a director assumes additional responsibilities above and beyond standard board service.
Directors who are also our employees receive no additional compensation for their services as directors.

Director Compensation Table

The following table sets forth summary information concerning the total compensation paid to our non-employee directors for services to
the Company during the fiscal year ended June 30, 2016:

Director Compensation
General James T. Hill
Glenn Chang
John D. McKey
Philip K. Russell
Arthur Elliot
Seymour Flug

Fees
Earned
or Paid
in Cash

Option
Awards
(1)(2)

25,000 $
10,000
10,000
10,000
10,000
10,000
75,000 $

62,733 $
62,733
62,733
62,733
62,733
62,733
376,398 $

Total

87,733
72,733
72,733
72,733
72,733
72,733
451,398

(1)

(2)

Reflects the aggregate grant date fair value computed in accordance with FASB ASC 718.

The aggregate number of stock options outstanding for each non-employee director was as follows: Gen. Hill 490,000, Mr. Chang
490,000, Mr. McKey 590,000, Dr. Russell 400,000, Dr. Elliott 400,000, and Mr. Flug 280,000.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information with respect to the beneficial ownership of our outstanding common stock as of October 13,
2016:

·
·
·
·

each person who is known by us to be the beneficial owner of 5% or more of our outstanding common stock;
each of our directors including our chief executive officer;
each of our other named executive officers; and
all of our current executive officers and directors as a group.

Except as otherwise noted in the footnotes below, to our knowledge, each of the persons named in this table has sole voting and investment
power with respect to the securities indicated as beneficially owned.

Name and Address of Beneficial Owner (1)
5% Stockholders

Eastern Capital Limited
E. Gerald Kay
Carl DeSantis

Directors

Robert B. Kay
Glenn Chang
Arthur Y. Elliott, Ph.D.
John McKey, Jr.
Seymour Flug
General James T. Hill
Philip K. Russell, M.D.

Other Executive Officers

Robert L. Erwin
Terence E. Ryan, Ph.D.
Mark Giannone

All current directors and executive officers as a group (10 persons)

Number of
Shares
Beneficially
Owned (2)

Percent of
Shares
Beneficially
Owned (2)

33,744,000(3)
5,945,695(4)
5,014,873(5)

37.9%
6.7%
5.6%

4,200,962(6)
415,483(7)
313,333(8)
989,891(9)
193,333(8)
418,333(10)
313,333(8)

2,170,000(8)
233,333(8)
172,834(11)

9,420,835(12)

4.6%
0.5%
0.4%
1.1%
0.2%
0.5%
0.4%

2.4%
0.3%
0.2%

9.7%

(1)

(2)

The address of Eastern Capital Limited (“Eastern”) is Box 31363, Grand Cayman, E9 KY1 1206. The address of E. Gerald Kay is
c/o Integrated BioPharma, Inc., 225 Long Avenue, Box 278, Hillside, New Jersey 07205. The address of Carl DeSantis is c/o CDS
International Holdings, Inc., 3299 NW 2nd Avenue, Boca Raton, FL 33431. The address of each of our directors and executive
officers is c/o iBio, Inc., 600 Madison Avenue, Suite 1601, New York, New York 10022-1737.

Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to
shares of our common stock. On October 13, 2016, there were 89,109,410 shares of common stock outstanding. Shares of common
stock issuable under stock options that are exercisable within 60 days after October 13, 2016 are deemed outstanding and are
included for purposes of computing the number of shares owned and percentage ownership of the person holding the option but are
not deemed outstanding for computing the percentage ownership of any other person.

(3)

Consists of 33,744,000 shares of common stock. This information is based solely on information set forth in a Schedule 13D/A
Amendment No. 7 filed with the SEC on April 11, 2016 by Eastern, Portfolio Services Ltd. and Kenneth B. Dart.

(4)

(5)

(6)

(7)

(8)

(9)

Consists of 5,945,695 shares of common stock. This information is based solely on information set for forth in a Schedule 13D filed
with the SEC on June 13, 2013 by E. Gerald Kay and EGK, LLC. The number of shares of common stock beneficially owned by
these entities may have changed since the filing of the Schedule 13D.

Consists of 5,014,873 shares of common stock. This information is based solely on information set forth in a Schedule 13D/A
Amendment No. 3 filed with the SEC on November 18, 2014 by Carl DeSantis, the DeSantis Revocable Trust, and CD Financial
LLC.

Includes (i) 211,333 shares of common stock, (ii) 819,629 shares of common stock held by EVJ LLC, of which Mr. Kay is the
manager, and (iii) 3,170,000 shares of common stock underlying vested stock options held by Mr. Kay.

Includes (i) 12,150 shares of common stock and (ii) 403,333 shares of common stock underlying vested stock options.

All shares listed are shares of common stock underlying vested stock options.

Includes (i) 486,558 shares of common stock and (ii) 503,333 shares of common stock underlying vested stock options.

(10)

Includes (i) 15,000 shares of common stock and (ii) 403,333 shares of common stock underlying vested stock options.

(11)

Includes (i) 22,834 shares of common stock and (ii) 150,000 shares of common stock underlying vested stock options.

(12)

Includes 7,853,331 shares of common stock underlying vested stock options.

Equity Compensation Plans

The following table provides information regarding the status of the Plan at June 30, 2016:

Number of
Shares of
Common
Stock to be Issued
Upon Exercise of
Outstanding
Options

Weighted-Average
Exercise Price of
Outstanding
Options

Number of Options
Available for
Future Issuance
Under
Equity
Compensation
Plans
(excluding
securities
reflected in the
previous columns)
2,726,666

Equity compensation plan approved by stockholders

12,273,334 $

1.31

Equity compensation plans not approved by stockholders

—

Total

12,273,334 $

1.31

2,726,666

Item 13. Certain Relationships and Related Transactions and Director Independence.

Director Independence

Our board of directors has determined that Messrs. Chang, Flug and McKey, Drs. Elliott and Russell and General Hill are each
“independent directors” as such term is defined in Section 803 of the New York Stock Exchange MKT Company Guide.

Policies and Procedures for Related Person Transactions

The policy our board of directors is to review with management and our independent registered public accounting firm any related party
transactions brought to the board’s attention which could reasonably be expected to have a material impact on our financial statements. The
Company’s practice is for management to present to the board of directors each proposed related party transaction, including all relevant
facts and circumstances relating thereto, and to update the board of directors as to any material changes to any approved related party
transaction. In connection with this requirement, each of the transactions or relationships disclosed below were disclosed to and approved
by our board of directors. In addition, transactions involving our directors and their affiliated entities were disclosed and reviewed by our
board of directors in its assessment of our directors’ independence requirements.

Research and Development Services Vendor

In January 2012, the Company entered into an agreement with Novici Biotech, LLC (“Novici”) in which iBio’s President is a minority
stockholder. Novici performs platform technology development services for iBio, including laboratory feasibility analyses of gene
expression, protein purification and preparation of research samples. The transaction has been conducted on an arm’s length basis at market
terms. The accounts payable balance includes amounts due to Novici of approximately $200,000 and $153,000 at June 30, 2016 and 2015,
respectively. Research and development expenses related to Novici were approximately $1,036,000 and $995,000 for the years ended June
30, 2016 and 2015, respectively

Capital Lease with Largest Stockholder

As discussed in Item 2 above, iBio CMO is leasing its facility in Bryan, Texas as well as certain equipment from an affiliate of Eastern (the
“Affiliate”) under a 34-year sublease. iBio CMO began operations at the facility on December 22, 2015 pursuant to agreements between
iBio CMO and the Affiliate granting iBio CMO temporary rights to access the facility. These temporary agreements were superseded by
the Sublease Agreement, dated January 13, 2016, between iBio CMO and the Affiliate (the “Sublease”). The 34-year term of the Sublease
may be extended by iBio CMO for a ten-year period, so long as iBio CMO is not in default under the Sublease. Under the Sublease, iBio
CMO is required to pay base rent at an annual rate of $2,100,000, paid in equal quarterly installments on the first day of each February,
May, August and November. The base rent is subject to increase annually in accordance with increases in the Consumer Price Index. The
base rent under the Affiliate’s ground lease for the property is subject to adjustment, based on an appraisal of the property, in 2030 and
upon any extension of the ground lease. The base rent under the Sublease will be increased by any increase in the base rent under the
ground lease as a result of such adjustments. In addition to the base rent, iBio CMO is required to pay, for each calendar year during the
term, a portion of the total gross sales for products manufactured or processed at the facility, equal to 7% of the first $5,000,000 of gross
sales, 6% of gross sales between $5,000,001 and $25,000,000, 5% of gross sales between $25,000,001 and $50,000,000, 4% of gross sales
between $50,000,001 and $100,000,000, and 3% of gross sales between $100,000,001 and $500,000,000. However, if for any calendar year
period from January 1, 2018 through December 31, 2019, iBio CMO’s applicable gross sales are less than $5,000,000, or for any calendar
year period from and after January 1, 2020, its applicable gross sales are less than $10,000,000, then iBio CMO is required to pay the
amount that would have been payable if it had achieved such minimum gross sales and shall pay no less than the applicable percentage for
the minimum gross sales for each subsequent calendar year. iBio CMO is responsible for all costs and expenses in connection with the
ownership, management, operation, replacement, maintenance and repair of the property under the Sublease.

General and administrative expenses related to the Affiliate were approximately $565,000 in 2016. Interest expense incurred under the
capital lease obligation amounted to $807,000 in 2016.

Operating Lease with Minority Stockholder

Effective January 1, 2015, the Company is leasing office space on a month-to-month basis from an entity owned by a minority stockholder
of the Company for approximately $2,000 per month.

Limitation of Liability of Officers and Directors and Indemnification

Our certificate of incorporation, as amended, provides for indemnification of our officers and directors to the extent permitted by Delaware
law, which generally permits indemnification for actions taken by officers or directors as our representatives if the officer or director acted
in good faith and in a manner he or she reasonably believed to be in the best interest of the corporation.

As permitted under Delaware law, the By-laws contain a provision indemnifying directors against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with an action, suit or proceeding if
they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of our Company, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful.

Historical Relationship with Integrated BioPharma, Inc.

We were a subsidiary of Integrated BioPharma, Inc. (“Integrated BioPharma”) from February 21, 2003 until August 18, 2008. On that date,
Integrated BioPharma spun off iBio in a transaction that was intended to be a tax free distribution to Integrated BioPharma and its U.S.
stockholders. As part of that transaction, we entered into a number of agreements with Integrated BioPharma including an indemnification
and insurance matters agreement and a tax responsibility allocation agreement. Messrs. E. Gerald Kay and Carl DeSantis, affiliates of
Integrated BioPharma, were in 2008 and continue to remain beneficial holders of more than 5% of our common stock. The agreements are
described below.

Indemnification. In general, under the indemnification and insurance matters agreement, we agreed to indemnify Integrated BioPharma, its
affiliates and each of its and their respective directors, officers, employees, agents and representatives from all liabilities that arise from:

·
·
·
·
·

any breach by us of the separation and distribution agreement or any ancillary agreement;
any of our liabilities reflected on our consolidated balance sheets included in the information statement relating to the spin-off;
our assets or businesses;
the management or conduct of our assets or businesses;
the liabilities allocated to or assumed by us under the separation and distribution agreement, the indemnification and insurance
matters agreement or any of the other ancillary agreements;
various on-going litigation matters in which we are named defendant, including any new claims asserted in connection with those
litigations, and any other past or future actions or claims based on similar claims, facts, circumstances or events, whether involving
the same parties or similar parties, subject to specific exceptions;
claims that are based on any violations or alleged violations of U.S. or foreign securities laws in connection with transactions arising
after the distribution relating to our securities and the disclosure of financial and other information and data by us or the disclosure
by Integrated BioPharma as part of the distribution of our financial information or our confidential information; or
any actions or claims based on violations or alleged violations of securities or other laws by us or our directors, officers, employees,
agents or representatives, or breaches or alleged breaches of fiduciary duty by our board of directors, any committee of our board or
any of its members, or any of our officers or employees.

Integrated BioPharma agreed to indemnify us and our affiliates and our directors, officers, employees, agents and representatives from all
liabilities that arise from:

·
·

any breach by Integrated BioPharma of the separation and distribution agreement or any ancillary agreement;
any liabilities allocated to or to be retained or assumed by Integrated BioPharma under the separation and distribution agreement, the
indemnification and insurance matters agreement or any other ancillary agreement;
liabilities incurred by Integrated BioPharma in connection with the management or conduct of Integrated BioPharma’s businesses;
and
various ongoing litigation matters to which we are not a party.

Integrated BioPharma is not obligated to indemnify us against any liability for which we are also obligated to indemnify Integrated
BioPharma. Recoveries by Integrated BioPharma under insurance policies will reduce the amount of indemnification due from us to
Integrated BioPharma only if the recoveries are under insurance policies Integrated BioPharma maintains for our benefit. Recoveries by us
will in all cases reduce the amount of any indemnification due from Integrated BioPharma to us.

Under the indemnification and insurance matters agreement, a party has the right to control the defense of third-party claims for which it is
obligated to provide indemnification, except that Integrated BioPharma has the right to control the defense of any third-party claim or
series of related third- party claims in which it is named as a party whether or not it is obligated to provide indemnification in connection
with the claim and any third-party claim for which Integrated BioPharma and we may both be obligated to provide indemnification. We
may not assume the control of the defense of any claim unless we acknowledge that if the claim is adversely determined, we will indemnify
Integrated BioPharma in respect of all liabilities relating to that claim. The indemnification and insurance matters agreement does not apply
to taxes covered by the tax responsibility allocation agreement.

Offset. Integrated BioPharma is permitted to reduce amounts it owes us under any of our agreements with Integrated BioPharma, by
amounts we may owe to Integrated BioPharma under those agreements.

Assignment. We may not assign or transfer any part of the indemnification and insurance agreement without Integrated BioPharma’s prior
written consent. Nothing contained in the agreement restricts the transfer of the agreement by Integrated BioPharma.

Tax Responsibility Allocation Agreement

In order to allocate our responsibilities for taxes and certain other tax matters, we and Integrated BioPharma entered into a tax
responsibility allocation agreement prior to the date of the distribution. Under the terms of the agreement, with respect to consolidated
federal income taxes, and consolidated, combined and unitary state income taxes, Integrated BioPharma will be responsible for, and will
indemnify and hold us harmless from, any liability for income taxes with respect to taxable periods or portions of periods ending prior to the
date of distribution to the extent these amounts exceed the amounts we have paid to Integrated BioPharma prior to the distribution or in
connection with the filing of relevant tax returns. Integrated BioPharma is also responsible for, and will indemnify and hold us harmless
from, any liability for income taxes of Integrated BioPharma or any member of the Integrated BioPharma group (other than us) by reason
of our being severally liable for those taxes under U.S. Treasury regulations or analogous state or local provisions. Under the terms of the
agreement, with respect to consolidated federal income taxes, and consolidated, combined and unitary state income taxes, we are
responsible for, and will indemnify and hold Integrated BioPharma harmless from, any liability for our income taxes for all taxable periods,
whether before or after the distribution date. With respect to separate state income taxes, we are also responsible for, and will indemnify
and hold Integrated BioPharma harmless from, any liability for income taxes with respect to taxable periods or portions of periods
beginning on or after the distribution date. We are also responsible for, and will indemnify and hold Integrated BioPharma harmless from,
any liability for our non-income taxes and our breach of any obligation or covenant under the terms of the tax responsibility allocation
agreement, and in certain other circumstances as provided therein. In addition to the allocation of liability for our taxes, the terms of the
agreement also provide for other tax matters, including tax refunds, returns and audits.

Item 14. Principal Accountant Fees and Services.

The following table represents aggregate fees billed to us by CohnReznick LLP:

Audit Fees
Audit-related Fees
Tax Fees
Other Fees
Total Fees

For the Year Ended
June 30,

2016

2015

138,969 $
—
—
—
138,969 $

88,357
—
—
—
88,357

In the above table, in accordance with the SEC’s definitions and rules, “audit fees” are fees we paid CohnReznick LLP for professional
services for the audit of our financial statements included in our Annual Reports on Form 10-K, review of our financial statements included
in our Quarterly Reports on Form 10-Q and services normally provided in connection with statutory and regulatory filings or engagements,
consents and assistance with and review of our documents filed with the Securities and Exchange Commission.

Pre-Approval Policies and Procedures

The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public
accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is
generally detailed as to the particular service or category of services and is generally subject to a specific budget. The independent
registered public accounting firm and management are required to periodically report to the audit committee regarding the extent of
services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services
performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. The Audit Committee has
determined that the rendering of the services other than audit services by CohnReznick LLP is compatible with maintaining the principal
accountant’s independence.

Item 15. Exhibits and Financial Statement Schedules.

(a) Exhibits and Index

PART IV

(1) A list of the financial statements filed as part of this report is set forth in the index to financial statements at page F-1 and is

incorporated herein by reference.

(2) An index of exhibits incorporated by reference or filed with this Report is provided below:

Exhibit No.
3.1
3.2
3.3
4.1
4.4
4.6
4.7
10.1

Description
Certificate of Incorporation of the Company (1)
Certificate of Amendment of the Certificate of Incorporation of the Company (1)
First Amended and Restated Bylaws of the Company (2)
Form of Common Stock Certificate (3)
Form of Common Stock Purchase Warrant (2013) (4)
Registration Rights Agreement, dated August 25, 2014, between the Company and Aspire Capital Fund, LLC (5)
Registration Rights Agreement, dated May 15, 2015, between the Company and Aspire Capital Fund LLC (6)
Technology Transfer Agreement, dated as of January 1, 2004, between the Company and Fraunhofer USA Center for

Molecular Biotechnology, Inc. as amended (7)

10.2

Ratification dated September 6, 2013 of Terms of Settlement by and between the Company and Fraunhofer USA Center

for Molecular Biotechnology, Inc. (8)+

10.3
10.4
10.5

Common Stock Purchase Agreement, dated August 25, 2014 between the Company and Aspire Capital Fund, LLC (5)
Common Stock Purchase Agreement, dated May 15, 2015 between the Company and Aspire Capital Fund, LLC (6)
Share Purchase Agreement, dated January 13, 2016, between iBio, Inc. and Eastern Capital Limited, for the purchase of

3,500,000 shares of common stock (9)

10.6

Share Purchase Agreement, dated January 13, 2016, between iBio, Inc. and Eastern Capital Limited, for the purchase of

6,500,000 shares of common stock (9)

10.7

Amended and Restated Limited Liability Company Operating Agreement of iBio CMO LLC, dated January 13, 2016,

between the Company, Bryan Capital Investors LLC and iBio CMO LLC (10)

10.8
10.9
21
23.1
31.1

License Agreement, dated January 13, 2016, between the Company and iBio CMO LLC (10)
Sublease Agreement, dated January 13, 2016, between College Station Investors LLC and IBIO CMO LLC (10)
Subsidiaries of Registrant *
Consent of Independent Registered Public Accounting Firm *
Certification of Periodic Report by Chief Executive Officer Pursuant to Rule 13a-14 and 15d-14 of the Securities

Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

31.2

Certification of Periodic Report by Chief Financial Officer Pursuant to Rule 13a-14 and 15d-14 of the Securities Exchange

Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

32.1

Certification of Periodic Report by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 *

32.2

Certification of Periodic Report by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 *

XBRL Instance*

101.INS
101.SCH XBRL Taxonomy Extension Schema*
101.CAL XBRL Taxonomy Extension Calculation*
101.DEF
XBRL Taxonomy Extension Definition*
101.LAB XBRL Taxonomy Extension Labeled*
101.PRE

XBRL Taxonomy Extension Presentation*

(1)

(2)

(3)

(4)

Incorporated herein by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 15, 2014
(Commission File No. 001-35023).
Incorporated herein by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 14, 2009
(Commission File No. 000-53125).
Incorporated herein by reference to the Company’s Form 10-12G filed with the SEC on July 11, 2008 (Commission File No. 000-
53125).
Incorporated herein by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 23, 2013 (Commission
File No. 001-35023).

(5)

(6)

(7)

(8)

(9)

(10)

*
+

Incorporated herein by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 26, 2014
(Commission File No. 001-35023).
Incorporated herein by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 15, 2015
(Commission File No. 001-35023).
Incorporated herein by reference to the Company’s Form 10-12G filed with the SEC on June 18, 2008 Commission File No. 000-
53125).
Incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2013, filed with
the SEC on September 30, 2013 (Commission File No. 001-35023).
Incorporated herein by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 14, 2016
(Commission File No. 000-35023).
Incorporated herein by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on February 22, 2016
(Commission File No. 001-35023).
Filed herewith.
Confidential treatment requested as to certain portions, which portions have been separately filed with the Securities and Exchange
Commission.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Dated: October 13, 2016

iBio, Inc.
(Registrant)

/s/Robert B. Kay

Robert B. Kay
Executive Chairman

(Principal Executive Officer)

/s/Mark Giannone

Mark Giannone
Chief Financial Officer

(Principal Financial Officer and

Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated:

Name

Title

Date

/s/Robert B. Kay
Robert B. Kay

/s/Mark Giannone
Mark Giannone

/s/Glenn Chang
Glenn Chang

/s/Arthur Y. Elliott
Arthur Y. Elliott, Ph.D.

/s/Seymour Flug
Seymour Flug

/s/James T. Hill
General James T. Hill, USA (Retired)

/s/John D. McKey, Jr.
John D. McKey, Jr.

/s/Philip K. Russell
Philip K. Russell, M.D.

Executive Chairman

(Principal Executive Officer)

Chief Financial Officer

(Principal Financial Officer and

Principal Accounting Officer)

Director

October 13, 2016

[This page intentionally left blank.]

iBio, Inc.

Financial Statement Index

Report of Independent Registered Public Accounting Firm
Financial Statements:

Consolidated Balance Sheets – June 30, 2016 and 2015
Consolidated Statements of Operations and Comprehensive Loss – Fiscal years ended June 30, 2016 and 2015
Consolidated Statements of Stockholders’ Equity – Fiscal years ended June 30, 2016 and 2015
Consolidated Statements of Cash Flows – Fiscal years ended June 30, 2016 and 2015
Notes to Consolidated Financial Statements

Page
F-2

F-3
F-4
F-5
F-6
F-7

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and
Stockholders of iBio, Inc.

We have audited the accompanying consolidated balance sheets of iBio, Inc. and Subsidiaries (the “Company”) as of June 30, 2016 and
2015, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the years then
ended. The Company’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are
free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal
control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of iBio,
Inc. and Subsidiaries as of June 30, 2016 and 2015, and the results of their operations and their cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of America.

/s/ CohnReznick LLP
Roseland, New Jersey
October 13, 2016

F-2

iBio, Inc. and Subsidiaries
Consolidated Balance Sheets
(In Thousands, except share and per share amounts)

June 30, 2016

June 30, 2015

Assets
Current assets:

Cash
Accounts receivable - trade
Accounts receivable - unbilled
Work in process
Prepaid expenses and other current assets

Total current assets

Fixed assets, net of accumulated depreciation
Intangible assets, net of accumulated amortization
Security deposit
Total Assets

Liabilities and Equity
Current liabilities:

Accounts payable (related party of $200 and $153 as of June 30, 2016 and 2015, respectively)
Accrued expenses (related party of $623 and $0 as of June 30, 2016 and 2015, respectively)
Capital lease obligation - current portion
Deferred revenue

Total Current Liabilities

Capital lease obligation - net of current portion

Total Liabilities

Commitments and Contingencies

Equity

iBio, Inc. Stockholders’ Equity:
Preferred stock - no par value; 1,000,000 shares authorized; no shares issued and outstanding
Common stock - $0.001 par value; 175,000,000 shares authorized; 89,109,410 and 77,205,410

shares issued and outstanding as of June 30, 2016 and 2015, respectively

Additional paid-in capital
Accumulated other comprehensive loss
Accumulated deficit

Total iBio, Inc. Stockholders’ Equity

Noncontrolling interest

Total Equity
Total Liabilities and Equity

23,014 $
484
122
22
264
23,906

25,574
2,092
28
51,600 $

1,177 $
920
170
24
2,291

25,265

27,556

9,494
445
-
-
182
10,121

13
2,360
-
12,494

1,104
159
-
-
1,263

1,263

89
67,468
(29)
(57,591)
9,937
14,107
24,044
51,600 $

77
59,006
(25)
(47,827)
11,231
-
11,231
12,494

The accompanying notes are an integral part of these consolidated financial statements.

F-3

iBio, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Loss
(In Thousands, except per share amounts)

Revenues

Operating expenses:

Research and development (related party of $1,036 and $995), net of $65 in grant income
General and administrative (related party of $565 and $0)

Total operating expenses

Operating loss

Other income (expense):

Interest expense (related party of $807 and $0)
Interest income
Royalty income

Total other income (expense)

Consolidated net loss

Net loss attributable to noncontrolling interest

Net loss attributable to iBio, Inc.

Comprehensive loss:

Consolidated net loss
Other comprehensive loss - foreign currency translation adjustments

Comprehensive loss

Loss per common share attributable to iBio, Inc. stockholders - basic and diluted

Weighted-average common shares outstanding - basic and diluted

Years Ended
June 30,

2016

2015

948 $

1,851

3,156
7,685
10,841

3,495
5,022
8,517

(9,893)

(6,666)

(807)
22
21

(764)

(10,657)
893
(9,764) $

(10,657) $
(4)

(10,661) $

-
9
32

(6,625)
-
(6,625)

(6,625)
(25)

(6,650)

(0.12) $

(0.09)

80,973

71,495

The accompanying notes are an integral part of these consolidated financial statements.

F-4

iBio, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity
Years Ended June 30, 2016 and 2015
(In Thousands)

Preferred Stock

Common Stock

Accumulated
Other

Additional
Paid-In Comprehensive Accumulated Noncontrolling

Shares Amount

Shares Amount Capital

Loss

Deficit

Interest

Total

Balance as of July 1, 2014

- $

- 65,642 $

66 $

47,235 $

- $

(41,202) $

- $

6,099

Sale of common stock

Commitment fee

Exercises of warrants

Share-based compensation

Foreign currency translation
adjustment

Net loss

Balance as of June 30, 2015

Balance as of July 1, 2015

Capital contribution -
noncontrolling interest

Sale of common stock

Exercises of warrants

Share-based compensation

Foreign currency translation
adjustment

Net loss

Balance as of June 30, 2016

- $

8,769

9,991

1,132

1,663

866

914

(25)

- 10,000

867

914

(25)

(6,625)

- 77,206 $

77 $

59,006 $

(25) $

(47,827) $

- $ 11,231

- 77,206 $

77 $

59,006 $

(25) $

(47,827) $

- $ 11,231

- 10,000

6,210

1,904

1,007

1,245

(4)

15,000 15,000

6,220

1,009

1,245

(4)

(9,764)

(893) (10,657)

- 89,110 $

89 $

67,468 $

(29) $

(57,591) $

14,107 $ 24,044

The accompanying notes are an integral part of these consolidated financial statements.

F-5

iBio, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands)

Cash flows from operating activities:

Net loss
Adjustments to reconcile net loss to net cash used in operating activities:

Share-based compensation
Amortization of intangible assets
Depreciation
Loss on abandonment of intangible assets
Changes in operating assets and liabilities

Accounts receivable – trade
Accounts receivable – unbilled
Work in process
Prepaid expenses and other current assets
Security deposit
Accounts payable
Accrued expenses
Deferred revenue

Net cash used in operating activities

Cash flows from investing activities:

Additions to intangible assets
Purchases of fixed assets

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from sale of common stock
Proceeds from exercise of warrants
Capital contribution – noncontrolling interest
Payment of capital lease obligation

Net cash provided by financing activities

Effect of exchange rate changes

Net increase in cash
Cash - beginning of year
Cash - end of year

Schedule of non-cash activities:

Purchases of fixed assets financed by capital lease
Unpaid intangible assets included in accounts payable – net
Unpaid intangible assets included in accrued expenses – net
Unpaid fixed assets included in accounts payable

Supplemental cash flow information:

Cash paid during the year for interest

Years Ended
June 30,

2016

2015

(10,657) $

(6,625)

1,245
363
577
33

(39)
(122)
(22)
(82)
(28)
(125)
761
24

914
358
5
48

(240)
-
-
(64)
-
806
73
-

(8,072)

(4,725)

-
(68)

(68)

6,220
1,009
15,000
(565)

21,664

(4)

13,520
9,494
23,014 $

26,000 $
129 $
- $
71 $

485 $

(202)
(13)

(215)

10,000
867
-
-

10,867

(23)

5,904
3,590
9,494

-
-
(12)
-

$
$
$
$

The accompanying notes are an integral part of these consolidated financial statements.

F-6

1. Nature of Business

iBio, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

iBio, Inc. and Subsidiaries (“iBio” or the “Company”) is a biotechnology company focused on the commercialization of its proprietary
plant-based protein expression technologies for vaccines and therapeutic proteins and on developing and commercializing select
biopharmaceutical product candidates. The advantages of iBio’s technology include reduced production time, capital and operating costs
for biopharmaceuticals and the ability to manufacture therapeutic proteins that are difficult or commercially infeasible to produce with
conventional methods.

iBio was established as a public company in August 2008 as the result of a spinoff from Integrated BioPharma, Inc. The Company operates
in one business segment under the direction of its Executive Chairman. The Company’s wholly-owned and majority-owned subsidiaries are
as follows:

iBioDefense Biologics LLC (“iBioDefense”) – iBioDefense, a wholly-owned subsidiary, is a Delaware limited liability company formed in
July 2013 to explore development and commercialization of defense-specific applications of the Company’s proprietary technology.
iBioDefense did not commence any business activities and was dissolved on June 10, 2016.

iBio Peptide Therapeutics LLC (“iBio Peptide”) – iBio Peptide, a wholly-owned subsidiary, is a Delaware limited liability company formed
in November 2013. iBio Peptide did not commence any business activities and was dissolved on June 9, 2016.

iBIO DO BRASIL BIOFARMACÊUTICA LTDA. (“iBio Brazil”) – iBio Brazil is a subsidiary organized in Brazil in which the Company
has a 99% interest. iBio Brazil was formed to manage and expand the Company’s business activities in Brazil. The activities of iBio Brazil
are intended to include coordination and expansion of the Company’s existing relationship with Fundacao Oswaldo Cruz/Fiocruz
(“Fiocruz”) beyond the current Yellow Fever Vaccine program (see Note 8) and development of additional products with private sector
participants for the Brazilian market. iBio Brazil commenced operations during the first quarter of the fiscal year ended June 30, 2015.

iBio Manufacturing LLC (“iBio Manufacturing”) – iBio Manufacturing, a wholly-owned subsidiary, is a Delaware limited liability
company formed in November 2015. iBio Manufacturing has not commenced any activities to date.

iBio CMO LLC (“iBio CMO”) – iBio CMO is a Delaware limited liability company formed on December 16, 2015 to develop and
manufacture plant-made pharmaceuticals. As of December 31, 2015, the Company owned 100% of iBio CMO. On January 13, 2016, the
Company entered into a contract manufacturing joint venture with an affiliate of Eastern Capital Limited (“Eastern”), a stockholder of the
Company (the “Eastern Affiliate”). The Eastern Affiliate contributed $15 million in cash for a 30% interest in iBio CMO. The Company
retained a 70% interest in iBio CMO and contributed a royalty bearing license which grants iBio CMO a non-exclusive license to use the
Company’s proprietary technologies for research purposes and an exclusive U.S. license for manufacturing purposes. The Company
retained the exclusive right to grant product licenses to those who wish to sell or distribute products made using the Company’s
technologies.

iBio CMO’s operations take place in Bryan, Texas in a facility controlled by another affiliate of Eastern (the “Second Eastern Affiliate”) as
sublandlord. The facility is a 139,000 square foot Class A life sciences building on the campus of Texas A&M University, designed and
equipped for plant-made manufacture of biopharmaceuticals. The Second Affiliate granted iBio CMO a 34-year sublease for the facility as
well as certain equipment (see Note 10). Commercial operations commenced in January 2016. iBio CMO expects to operate on the basis of
three parallel lines of business: (1) Development and manufacturing of third party products; (2) Development and production of iBio’s
proprietary product(s) for treatment of fibrotic diseases; and (3) Commercial technology transfer services.

2. Basis of Presentation

Liquidity

The Company’s primary sources of liquidity are cash on hand and cash available from the sale of common stock of the Company. At this
time, cash flows from operating activities represent net outflows for operating expenses and expenses for technology and product
development. As of June 30, 2016, the Company had $23.0 million in cash on hand which is expected to support the Company’s activities
through June 30, 2017.

Since its spin-off from Integrated BioPharma, Inc. in August 2008, the Company has incurred significant losses and negative cash flows
from operations. As of June 30, 2016, the Company’s accumulated deficit was $57.6 million, and it had cash used in operating activities of
$8.1 million and $4.7 million for the years ended June 30, 2016 and 2015, respectively. The Company has historically financed its activities
through the sale of common stock and warrants. Through June 30, 2016, the Company has dedicated most of its financial resources to
investing in its iBioLaunch™ and iBioModulator™ platforms, its proprietary candidates for treatment of fibrotic diseases, advancing its
intellectual property, and general and administrative activities.

F-7

On May 15, 2015, the Company entered into a common stock purchase agreement with Aspire Capital Fund, LLC (“Aspire Capital”)
pursuant to which the Company has the option to require Aspire Capital, upon and subject to the terms of the agreement, to purchase up to
$15 million of its common stock, over a three-year term. No shares have been sold under the 2015 Facility as of the date of the filing of this
report. See Note 11 for a further description of the agreement.

Coincident with the entry into the iBio CMO joint venture, Eastern agreed to acquire 10 million shares of the Company's common stock at
$0.622 per share. The closing for the sale of 3,500,000 of such shares occurred on January 25, 2016. The sale of the remaining 6,500,000
shares occurred on April 13, 2016. In addition, Eastern agreed to, and on January 25, 2016 did, exercise warrants it previously acquired to
purchase 1,784,000 shares of the Company's common stock at $0.53 per share. As of the date of the filing of this report, the Company has
received $15 million for the capitalization of iBio CMO and approximately $7.2 million from Eastern for the acquisition of 10 million
shares of common stock and the exercise of the warrants. See Note 11 for a further description of the transactions.

The Company plans to fund its future business operations using cash on hand, through proceeds from the sale of additional equity or other
securities, including sales of common stock to Aspire Capital pursuant to the common stock purchase agreement entered into on May 15,
2015, and through proceeds realized in connection with license and collaboration arrangements. The Company cannot be certain that such
funding will be available on favorable terms or available at all. To the extent that the Company raises additional funds by issuing equity
securities, its stockholders may experience significant dilution.

The Company's financial statements were prepared under the assumption that the Company will continue as a going concern. If the
Company is unable to raise funds when required or on favorable terms, this assumption may no longer be operative, and the Company may
have to: a) significantly delay, scale back, or discontinue the product application and/or commercialization of its proprietary technologies;
b) seek collaborators for its technology and product candidates on terms that are less favorable than might otherwise be available; c)
relinquish or otherwise dispose of rights to technologies, product candidates, or products that it would otherwise seek to develop or
commercialize; or d) possibly cease operations.

3. Summary of Significant Accounting Policies

Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions
have been eliminated as part of the consolidation.

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.
GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosures of
contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the
reporting period. These estimates include the valuation of intellectual property, legal and contractual contingencies and share-based
compensation. Although management bases its estimates on historical experience and various other assumptions that are believed to be
reasonable under the circumstances, actual results could differ from these estimates.

Accounts Receivable
Accounts receivable are reported at their outstanding unpaid principal balances net of allowances for uncollectible accounts. The Company
provides for allowances for uncollectible receivables based on management's estimate of uncollectible amounts considering age, collection
history, and any other factors considered appropriate. The Company writes off accounts receivable against the allowance for doubtful
accounts when a balance is determined to be uncollectible. At June 30, 2016 and 2015, the Company determined that an allowance for
doubtful accounts was not needed.

Revenue Recognition
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or
determinable, and collectability is reasonably assured. Deferred revenue represents billings to a customer to whom the services have not yet
been provided.

The Company’s contract revenue consists primarily of amounts earned under contracts with third-party customers and reimbursed expenses
under such contracts. The Company analyzes its agreements to determine whether the elements can be separated and accounted for
individually or as a single unit of accounting in accordance with the Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) 605-25, “Revenue Arrangements with Multiple Deliverables,” and Staff Accounting Bulletin 104,
“Revenue Recognition.” Allocation of revenue to individual elements that qualify for separate accounting is based on the separate selling
prices determined for each component, and total contract consideration is then allocated pro rata across the components of the arrangement.
If separate selling prices are not available, the Company will use its best estimate of such selling prices, consistent with the overall pricing
strategy and after consideration of relevant market factors. For the years ended June 30, 2016 and 2015, the Company did not have any
revenue arrangements with multiple deliverables.

The Company generates (or may generate in the future) contract revenue under the following types of contracts:

F-8

Fixed-Fee
Under a fixed-fee contract, the Company charges a fixed agreed upon amount for a deliverable. Fixed-fee contracts have fixed deliverables
upon completion of the project. Typically, the Company recognizes revenue for fixed-fee contracts after projects are completed, delivery is
made and title transfers to the customer, and collection is reasonably assured.

Time and Materials
Under a time and materials contract, the Company charges customers an hourly rate plus reimbursement for other project specific costs.
The Company recognizes revenue for time and material contracts based on the number of hours devoted to the project multiplied by the
customer’s billing rate plus other project specific costs incurred.

Grant Income
Grants are recognized as income when all conditions of such grants are fulfilled or there is a reasonable assurance that they will be
fulfilled. Grant income is classified as a reduction of research and development expenses. In 2016, grant income amounted to approximately
$65,000. No grant income was recognized in 2015.

Work in Process
Work in process consists primarily of the cost of labor and other overhead incurred on contracts that have not been completed as of June
30, 2016.

Research and Development
The Company accounts for research and development costs in accordance with the FASB ASC 730-10, “ Research and Development”
(“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal
research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted
work has been performed or as milestone results have been achieved.

Fixed Assets
Fixed assets are stated at cost net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated
useful lives of the assets ranging from three to fifteen years.

Assets held under the terms of capital leases are included in fixed assets and are depreciated on a straight-line basis over the terms of the
leases or the economic lives of the assets. Obligations for future lease payments under capital leases are shown within liabilities and are
analyzed between amounts falling due within and after one year (see Note 10).

Intangible Assets
The Company accounts for intangible assets at their historical cost and records amortization utilizing the straight-line method based upon
their estimated useful lives. Patents are amortized over a period of ten years and other intellectual property is amortized over a period from
16 to 23 years. The Company reviews the carrying value of its intangible assets for impairment whenever events or changes in business
circumstances indicate the carrying amount of such assets may not be fully recoverable. Evaluating for impairment requires judgment, and
recoverability is assessed by comparing the projected undiscounted net cash flows of the assets over the remaining useful life to the
carrying amount. Impairments, if any, are based on the excess of the carrying amount over the fair value of the assets. There were no
impairment charges for the years ended June 30, 2016 and 2015.

Derivative Instruments
The Company does not use derivative instruments in its ordinary course of business.

In connection with the issuances of debt and/or equity instruments, the Company may issue options or warrants to purchase common stock.
In certain circumstances, these options or warrants may be classified as liabilities rather than as equity. In addition, the debt and/or equity
instrument may contain embedded derivative instruments, such as conversion options or anti-dilution features, which in certain
circumstances may be required to be bifurcated from the associated host instrument and accounted for separately as a derivative liability
instrument. The Company accounts for derivative liability instruments under the provisions of FASB ASC 815, “Derivatives and Hedging.”

There are no options or warrants of the Company presently outstanding that require accounting as a derivative liability.

Foreign Currency
The Company accounts for foreign currency translation pursuant to FASB ASC 830, “ Foreign Currency Matters.” The functional currency
of iBio Brazil is the Brazilian Real. Under FASB ASC 830, all assets and liabilities are translated into United States dollars using the
current exchange rate at the end of each fiscal period. Revenues and expenses are translated using the average exchange rates prevailing
throughout the respective periods. All transaction gains and losses from the measurement of monetary balance sheet items denominated in
Reals are reflected in the statement of operations as appropriate. Translation adjustments are included in accumulated other comprehensive
loss.

F-9

Share-based Compensation
The Company recognizes the cost of all share-based payment transactions at fair value. Compensation cost, measured by the fair value of
the equity instruments issued, adjusted for estimated forfeitures, is recognized in the financial statements as the respective awards are
earned over the performance period. The Company uses historical data to estimate forfeiture rates.

The impact that share-based payment awards will have on the Company’s results of operations is a function of the number of shares
awarded, the trading price of the Company’s stock at the date of grant or modification, and the vesting schedule. Furthermore, the
application of the Black-Scholes option pricing model employs weighted-average assumptions for expected volatility of the Company’s
stock, expected term until exercise of the options, the risk-free interest rate, and dividends, if any, to determine fair value. Expected
volatility is based on historical volatility of the Company’s common stock; the expected term until exercise represents the weighted-
average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and the Company’s
historical exercise patterns; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods
corresponding with the expected life of the option. The Company has not paid any dividends since its inception and does not anticipate
paying any dividends for the foreseeable future, so the dividend yield is assumed to be zero.

Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized. The effect of a
change in tax rates or laws on deferred tax assets and liabilities is recognized in operations in the period that includes the enactment date of
the rate change. A valuation allowance is established to reduce the deferred tax assets to the amounts that are more likely than not to be
realized from operations.

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position
taken on an income tax return. The Company has no liability for uncertain tax positions as of June 30, 2016 and 2015. Interest and
penalties, if any, related to unrecognized tax benefits would be recognized as income tax expense. The Company does not have any accrued
interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the years ended
June 30, 2016 and 2015.

4. New Accounting Pronouncements

In May 2014, ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”) was issued. The amendments in ASU 2014-
09 affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of
nonfinancial assets unless contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will
supersede the revenue recognition requirements in ASC 605, “Revenue Recognition,” and most industry-specific guidance.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To
achieve that core principle, an entity should apply the following steps:

Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

ASU 2014-09 was scheduled to be effective for annual reporting periods beginning after December 15, 2016, including interim periods
within that reporting period. Early application is not permitted. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts
with Customers (Topic 606): Deferral of Effective Date” (“ASU 2015-14”) which defers the effective date of ASU 2014-09 by one year.
ASU 2014-09 is now effective for annual reporting periods after December 15, 2017 including interim periods within that reporting period.
Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods
within that reporting period. The Company is currently evaluating the effects of adopting ASU 2014-09 on its consolidated financial
statements.

Effective January 1, 2016, the Company adopted ASU 2014-12, “ Accounting for Share-Based Payments When the Terms of an Award
Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU No. 2014-12”). ASU No. 2014-12
requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a
performance condition. An entity should recognize compensation cost in the period in which it becomes probable that the performance
target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already
been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining
unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of
compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest
and should be adjusted to reflect those awards that ultimately vest. ASU 2014-12 became effective for interim and annual periods beginning
on or after December 15, 2015. The adoption of ASU 2014-12 did not have a significant impact on the Company’s consolidated financial
statements.

F-10

In June 2014, ASU 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about
an Entity’s Ability to Continue as a Going Concern” (“ASU No. 2014-15”) was issued. Before the issuance of ASU 2014-15, there was no
guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to
continue as a going concern or to provide related footnote disclosures. This guidance is expected to reduce the diversity in the timing and
content of footnote disclosures. ASU 2014-15 requires management to assess an entity’s ability to continue as a going concern by
incorporating and expanding upon certain principles that are currently in U.S. auditing standards as specified in the guidance. ASU 2014-15
becomes effective for the annual period ending after December 15, 2016 (year ended June 30, 2017 for the Company) and for annual and
interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effects of adopting ASU 2014-15 on its
consolidated financial statements but the adoption is not expected to have a significant impact on the Company’s consolidated financial
statements.

Effective January 1, 2016, the Company adopted ASU 2015-01, “ Income Statement - Extraordinary and Unusual Items (Subtopic 225-20):
Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” (“ASU 2015-01”). ASU 2015-01
eliminates the concept of an extraordinary item from accounting principles generally accepted in the United States of America. As a result,
an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an
extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-
per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for
items that are unusual in nature and occur infrequently. ASU 2015-01 became effective for interim and annual periods beginning on or after
December 15, 2015. The adoption of ASU 2015-01 did not have a significant impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, “ Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt
Issuance Costs” (“ASU 2015-03”) as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The
FASB received feedback that having different balance sheet presentation requirements for debt issuance costs and debt discount and
premium creates unnecessary complexity. Recognizing debt issuance costs as a deferred charge (that is, an asset) also is different from the
guidance in International Financial Reporting Standards, which requires that transaction costs be deducted from the carrying value of the
financial liability and not recorded as separate assets. Additionally, the requirement to recognize debt issuance costs as deferred charges
conflicts with the guidance in FASB Concepts Statement No. 6, “Elements of Financial Statements,” which states that debt issuance costs
are similar to debt discounts and in effect reduce the proceeds of borrowing, thereby increasing the effective interest rate. FASB Concepts
Statement No. 6 further states that debt issuance costs cannot be an asset because they provide no future economic benefit. To simplify
presentation of debt issuance costs, the amendments in this update require that debt issuance costs related to a recognized debt liability be
presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The
recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. For public business
entities, the amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and
interim periods within those fiscal years. The Company will evaluate the effects of adopting ASU 2015-03 if and when it is deemed to be
applicable.

In November 2015, the FASB issued ASU 2015-17, “ Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU
2015-17”). ASU 2015-17 requires deferred tax assets and liabilities to be classified as noncurrent in the consolidated balance sheet. ASU
2015-17 becomes effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. A
reporting entity should apply the amendment prospectively or retrospectively. The Company is currently evaluating the effects of adopting
ASU 2015-17 on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, “ Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of
Financial Assets and Financial Liabilities” (“ASU 2016-01”). The amendments require all equity investments to be measured at fair value
with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or
those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive
income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the
entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the
amendments eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not
public business entities and the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is
required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. This
guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company
will evaluate the effects of adopting ASU 2016-01 if and when it is deemed to be applicable.

In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842)” (“ASU 2016-02”) which supersedes existing guidance on
accounting for leases in “Leases (Topic 840).” The standard requires lessees to recognize the assets and liabilities that arise from leases on
the balance sheet. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use
asset representing its right to use the underlying asset for the lease term. The new guidance is effective for annual reporting periods
beginning after December 15, 2018 (fiscal year ended June 30, 2020 for the Company) and interim periods within those fiscal years. The
amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier
application permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the effects of
adopting ASU 2016-02 on its consolidated financial statements.

F-11

In March 2016, the FASB issued ASU 2016-09, “ Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU
2016-09 affects entities that issue share-based payment awards to their employees. ASU 2016-09 is designed to simplify several aspects of
accounting for share-based payment award transactions which include – the income tax consequences, classification of awards as either
equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. This guidance is effective for annual
periods beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the
impact of ASU 2016-09 on its consolidated financial statements.

In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations
and Licensing” (“ASU 2016-10”) related to identifying performance obligations and licensing. ASU 2016-10 is meant to clarify the
guidance in FASB ASU 2014- 09, “ Revenue from Contracts with Customers.” Specifically, ASU 2016-10 addresses an entity’s
identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise to grant a license of
intellectual property and whether or not that revenue is recognized over time or at a point in time. The pronouncement has the same
effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within those fiscal years, beginning
after December 15, 2017. The Company is currently evaluating the impact of ASU 2016-10 on its consolidated financial statements.

In May 2016, the FASB issued ASU 2016-12, " Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and
Practical Expedients" ("ASU 2016-12"). The amendments in ASU 2016-12 affect the guidance in ASU 2014-09 by clarifying certain
specific aspects of the guidance, including assessment of collectability, treatment of sales taxes and contract modifications, and providing
certain technical corrections. ASU 2016-12 will have the same effective date and transition requirements as ASU 2014-09. The Company
is currently evaluating the impact of ASU 2016-12 on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash
Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and
classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The new standard
will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the
amendments prospectively as of the earliest date practicable. The Company is currently in the process of evaluating the impact of ASU
2016-15 on its consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a
material effect on the accompanying consolidated financial statements.

5. Financial Instruments and Fair Value Measurement

The carrying values of cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses in the
Company's consolidated balance sheets approximated their fair values as of June 30, 2016 and 2015 due to their short-term nature. The
carrying value of the capital lease obligation approximated its fair value at June 30, 2016 as the interest rate used to discount the lease
payments approximated market.

6. Fixed Assets

iBio CMO is leasing its facility in Bryan, Texas as well as certain equipment from the Second Affiliate under a 34-year sublease. See Note
10 for more details of the terms of the sublease.

The economic substance of the sublease is that the Company is financing the acquisition of the facility and equipment and, accordingly,
the facility and equipment are recorded as assets and the lease is recorded as a liability. As the sublease involves real estate and equipment,
the Company separated the equipment component and accounted for the facility and equipment as if each was leased separately.

The following table summarizes by category the gross carrying value and accumulated depreciation of fixed assets (in thousands):

Facility under capital lease
Equipment under capital lease
Facility improvements
Office equipment and software

Accumulated depreciation – assets under capital lease
Accumulated depreciation – other

Net fixed assets

F-12

June 30,
2016

June 30,
2015

20,000 $
6,000
42
137
26,179
(571)
(34)
(605)
25,574 $

-
-
-
40
40
-
(27)
(27)
13

Depreciation expense was approximately $577,000 and $4,600 in 2016 and 2015, respectively. Depreciation of the assets under the capital
lease amounted to approximately $571,000 in 2016.

Intangible Assets

The Company has two categories of intangible assets – intellectual property and patents. Intellectual property consists of all technology,
know-how, data, and protocols for producing targeted proteins in plants and related to any products and product formulations for
pharmaceutical uses and for other applications. Intellectual property includes, but is not limited to, certain technology for the development
and manufacture of novel vaccines and therapeutics for humans and certain veterinary applications acquired in December 2003 from
Fraunhofer USA Inc., acting through its Center for Molecular Biotechnology (“Fraunhofer”), pursuant to a Technology Transfer
Agreement, as amended (the “TTA”). The Company designates such technology acquired from Fraunhofer as iBioLaunch technology or as
iBioModulator technology. The value attributed to Patents owned or controlled by the Company is based on payments for services and fees
related to the further development and protection of the Company’s patent portfolio.

In January 2014, the Company entered into a license agreement with a U.S. university whereby iBio acquired exclusive worldwide rights to
certain issued and pending patents covering specific candidate products for the treatment of fibrosis (the “Licensed Technology”). The
license agreement provides for payment by the Company of a license issue fee, annual license maintenance fees, reimbursement of prior
patent costs incurred by the university, payment of a milestone payment upon regulatory approval for sale of a first product, and annual
royalties on product sales. In addition, the Company has agreed to meet certain diligence milestones related to product development
benchmarks. As part of its commitment to the diligence milestones, the Company successfully commenced production of a plant-made
peptide comprising the Licensed Technology before March 31, 2014. The next milestone – filing a New Drug Application with the FDA or
foreign equivalent covering the Licensed Technology (“IND”) – became due on December 1, 2015. A six-month extension was
automatically granted until June 1, 2016 under the license agreement. On August 11, 2016, the agreement was amended and replaced the
original milestone schedule to provide that the IND filing be accomplished by June 30, 2017.

The following table summarizes by category the gross carrying value and accumulated amortization of intangible assets (in thousands):

Intellectual property – gross carrying value
Patents – gross carrying value

Intellectual property – accumulated amortization
Patents – accumulated amortization

Net intangible assets

June 30,
2016

June 30,
2015

3,100 $
2,265
5,365
(1,932)
(1,341)
(3,273)
2,092 $

3,100
2,181
5,281
(1,776)
(1,145)
(2,921)
2,360

Amortization expense, included in general and administrative expenses, was approximately $363,000 and $358,000 for 2016 and 2015. In
addition, in 2016 and 2015, the Company incurred losses on the abandonment of patents of approximately $33,000 and $48,000,
respectively. The weighted-average remaining life for intellectual property and patents at June 30, 2016 was approximately 7.5 years and
6.6 years, respectively. The estimated annual amortization expense for the next five years and thereafter is as follows (in thousands):

For the Year Ending
June 30,

2017
2018
2019
2020
2021
Thereafter
Total

8. Significant Vendors

345
327
297
265
244
614
2,092

Fraunhofer
Fraunhofer was the Company’s most significant vendor solely on the basis of the three-party Yellow Fever vaccine development program
among Fiocruz/Bio-Manguinhos, the Company, and Fraunhofer (described in greater detail below). The accounts payable balance under
this three-party agreement includes amounts due Fraunhofer of approximately $341,000 and $445,000 as of June 30, 2016 and 2015,
respectively, and accrued expenses of $122,000 and $0 as of June 30, 2016 and 2015, respectively. See Note 16 – Commitments and
Contingencies.

F-13

On January 4, 2011, the Company entered into the Collaboration and License Agreement (the “CLA”) which is a three party agreement
involving the Company, Fraunhofer and Fiocruz, a public entity, member of the Indirect Federal Public Administration and linked to the
Health Ministry of Brazil, acting through its unit Bio-Manguinhos. The CLA provides for the development of a Yellow Fever vaccine to be
manufactured and distributed within Latin America and Africa by Fiocruz. The CLA was supplemented by a bilateral agreement between
iBio and Fraunhofer dated December 27, 2010 in which the Company engaged Fraunhofer as a contractor to provide the research and
development services (both, together, the “Agreement”). The services are billed to Fiocruz at Fraunhofer’s cost, so the Company’s revenue
is equivalent to expense and there is no profit.

On June 12, 2014, Fiocruz, Fraunhofer and iBio executed an amendment to the CLA (the “Amended Agreement”) which provides for
revised research and development, work plans, reporting, objectives, estimated budget, and project billing process. In 2016 and 2015, under
the Amended Agreement, the Company recognized revenue of $758,000 and $1,851,000, respectively, for work performed for Fiocruz
pursuant to the Amended Agreement by the Company’s subcontractor, Fraunhofer, and recognized research and development expenses of
the same amount due Fraunhofer for that work.

In September 2013, the Company and Fraunhofer completed the Terms of Settlement for the TTA Seventh Amendment (the “Settlement
Agreement”). Under the terms of the Settlement Agreement various contractual obligations existing at June 30, 2013 were released,
terminated or modified. See Note 16 - Commitments and Contingencies for significant modifications.

On March 17, 2015, the Company filed a Verified Complaint in the Court of Chancery of the State of Delaware against Fraunhofer and
Vidadi Yusibov, Fraunhofer's Executive Director. See Note 16 - Lawsuits for additional information.

Novici Biotech, LLC

In January 2012, the Company entered into an agreement with Novici Biotech, LLC (“Novici”) in which iBio’s President is a minority
stockholder. Novici performs laboratory feasibility analyses of gene expression, protein purification and preparation of research samples. In
addition, the Company and Novici collaborate on the development of new technologies and product candidates for exclusive worldwide
commercial use by the Company. The accounts payable balance includes amounts due to Novici of approximately $200,000 and $153,000
at June 30, 2016 and 2015, respectively. Research and development expenses related to Novici were approximately $1,036,000 and
$995,000 in 2016 and 2015, respectively.

9. Accrued Expenses

Accrued expenses consist of the following (in thousands):

Interest – related party (see Note 14)
Rent and real estate taxes – related party (see Note 14)
Research and development
Salaries and benefits
Facility expenses
Stock exchange fees
Other accrued expenses

Total accrued expenses

10. Capital Lease Obligation

June 30,
2016

June 30,
2015

323 $
300
122
55
53
-
67
920 $

-
-
-
39
-
65
55
159

As discussed above, iBio CMO is leasing its facility in Bryan, Texas as well as certain equipment from the Second Affiliate under a 34-
year sublease. iBio CMO began operations at the facility on December 22, 2015 pursuant to agreements between iBio CMO and the
Second Affiliate granting iBio CMO temporary rights to access the facility. These temporary agreements were superseded by the Sublease
Agreement, dated January 13, 2016, between iBio CMO and the Second Affiliate (the “sublease”). The 34-year term of the sublease may
be extended by iBio CMO for a ten-year period, so long as iBio CMO is not in default under the sublease. Under the sublease, iBio CMO is
required to pay base rent at an annual rate of $2,100,000, paid in equal quarterly installments on the first day of each February, May,
August and November. The base rent is subject to increase annually in accordance with increases in the Consumer Price Index. The base
rent under the Second Affiliate’s ground lease for the property is subject to adjustment, based on an appraisal of the property, in 2030 and
upon any extension of the ground lease. The base rent under the sublease will be increased by any increase in the base rent under the
ground lease as a result of such adjustments. iBio CMO is also responsible for all costs and expenses in connection with the ownership,
management, operation, replacement, maintenance and repair of the property under the sublease.

F-14

In addition to the base rent, iBio CMO is required to pay, for each calendar year during the term, a portion of the total gross sales for
products manufactured or processed at the facility, equal to 7% of the first $5,000,000 of gross sales, 6% of gross sales between $5,000,001
and $25,000,000, 5% of gross sales between $25,000,001 and $50,000,000, 4% of gross sales between $50,000,001 and $100,000,000, and
3% of gross sales between $100,000,001 and $500,000,000. However, if for any calendar year period from January 1, 2018 through
December 31, 2019, iBio CMO’s applicable gross sales are less than $5,000,000, or for any calendar year period from and after January 1,
2020, its applicable gross sales are less than $10,000,000, then iBio CMO is required to pay the amount that would have been payable if it
had achieved such minimum gross sales and shall pay no less than the applicable percentage for the minimum gross sales for each
subsequent calendar year. Percentage rent amounted to $27,000 in 2016.

Interest expense incurred under the capital lease obligation amounted to $807,000 and $0 in 2016 and 2015, respectively.

Future minimum payments under the capitalized lease obligations are due as follows:

Year Ending:
2017
2018
2019
2020
2021
Thereafter

Total minimum lease payments

Less: current portion
Long-term portion of minimum lease obligations

11. Stockholders’ Equity

Principal

Interest

169,818 $
183,110
197,443
212,898
229,562
24,441,676

25,434,507 $
(169,818)
25,264,689

1,930,182 $
1,916,890
1,902,557
1,887,102
1,870,438
35,933,324

Total
2,100,000
2,100,000
2,100,000
2,100,000
2,100,000
60,375,000

45,440,493 $

70,875,000

Preferred Stock
The Company’s Board of Directors is authorized to issue, at any time, without further stockholder approval, up to 1 million shares of
preferred stock. The Board of Directors has the authority to fix and determine the voting rights, rights of redemption and other rights and
preferences of preferred stock. As of June 30, 2016 and 2015, there were no shares of preferred stock issued and outstanding.

Common Stock
As of June 30, 2016 and 2015, the Company was authorized to issue up to 175 million shares of common stock. As of June 30, 2016, the
Company had reserved up to 15 million shares of common stock for incentive compensation (stock options and restricted stock). No shares
are reserved for the exercise of warrants.

Issuances of common stock were as follows:

Aspire Capital – 2014 Facility

On August 25, 2014, the Company entered into a common stock purchase agreement with Aspire Capital Fund, which provided that, upon
the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of
$10.0 million of shares of the Company’s common stock over the approximately 24-month term of the purchase agreement. As of April 28,
2015, Aspire Capital fulfilled its commitment to purchase $10.0 million of the Company’s common stock under the agreement.

In consideration for entering into the purchase agreement, following the approval of the issuance of the shares by NYSE MKT, Aspire
Capital received a commitment fee of $300,000 – 3% of the $10 million commitment – payable in 681,818 shares of the Company’s
common stock priced at $0.44 per share, the closing price on the day preceding execution of the agreement. In addition, on September 19,
2014 following approval of the issuance of the shares by NYSE MKT, Aspire Capital purchased 1,136,354 shares of common stock at
$0.44 per share for $500,000 pursuant to the terms of the purchase agreement.

Concurrently with entering into the purchase agreement, the Company also entered into a registration rights agreement with Aspire Capital,
in which the Company agreed to file one or more registration statements as permissible and necessary to register under the Securities Act of
1933, as amended, the sale of shares of the Company’s common stock under the purchase agreement.

After the Securities and Exchange Commission declared effective the registration statement, on any trading day on which the closing sale
price of the Company’s common stock exceeded the “Floor Price” of $0.44 (the closing sale price of the Company’s shares on the business
day before the Company entered into the purchase agreement with Aspire Capital), the Company had the right, in its sole discretion, to
present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to purchase up to 150,000 shares of common stock per
trading day, provided that the aggregate price of such purchase did not exceed $500,000 per trading day, up to an additional $9.5 million of
common stock in the aggregate at a per share price equal to the lesser of the lowest sale price of common stock on the purchase date, or the
arithmetic average of the three lowest closing sale prices of common stock during the ten consecutive trading days ending on the trading
day immediately preceding the purchase date.

F-15

In addition, on any date on which the Company submitted a purchase notice to Aspire Capital in an amount equal to 150,000 shares of
common stock and the closing sale price of common stock was equal to or greater than the Floor Price of $0.44, the Company also had the
right, in its sole discretion, to present Aspire Capital with a volume-weighted average price (“VWAP”) purchase notice directing Aspire
Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on the NYSE
MTK on the next trading day, subject to a maximum number of shares determined by the Company, and a minimum trading price equal to
the greater of (a) 80% of the closing price of common stock on the business day immediately preceding the date of the VWAP purchase, or
(b) such higher price as set forth by the Company in the notice for the VWAP purchase. The purchase price per share pursuant to such
VWAP purchase notice was the lower of (i) the closing sale price on the date of sale and (ii) 97% of the volume-weighted average price for
common stock traded on the NYSE MKT on (i) the date of the VWAP purchase if the aggregate stock to be purchased on that date did not
exceed the volume maximum stated in the Company’s notice for the VWAP purchase, or (ii) the portion of such business day until such
time as aggregate stock to be purchased equaled the volume maximum stated in the Company’s notice or the time at which the sale of the
stock fell below the minimum trading price described above.

The purchase agreement provided that the Company and Aspire Capital could not effect any sales under the purchase agreement on any
purchase date where the closing sale price of common stock is less than $0.44 (the closing sale price of shares on the business day before
the Company entered into the purchase agreement referred to as the “Floor Price”). A lower Floor Price of $0.20 per share of Common
Stock applied, if the Company’s stockholders approved the transaction contemplated by the Purchase Agreement. The Company was under
no obligation to request our stockholders to approve the transaction contemplated by the Purchase Agreement. However, the purchase price
for any purchases of shares under the purchase agreement could not be less than $0.44 per share, unless stockholder approval was obtained.
There were no trading volume requirements or restrictions under the purchase agreement with Aspire Capital, and the Company controlled
the timing and amount of any sales of our common stock to Aspire Capital. Aspire Capital had no right to require any sales by the
Company, but was obligated to make purchases from the Company as directed in accordance with the purchase agreement. There were no
limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights,
penalties or liquidated damages in the purchase agreement.

Aspire Capital purchased 8,768,806 shares of common stock for $10,000,000 pursuant to the terms of the purchase agreement, fulfilling its
commitment to purchase $10.0 million of the Company’s common stock under the agreement.

Aspire Capital – 2015 Facility

On May 15, 2015, the Company entered into a common stock purchase agreement (the “2015 Aspire Purchase Agreement”) with Aspire
Capital, pursuant to which the Company has the option to require Aspire Capital to purchase up to an aggregate of $15.0 million of shares
of the Company’s common stock (the “Purchase Shares”) upon and subject to the terms of the 2015 Aspire Purchase Agreement. In
consideration for entering into the purchase agreement, Aspire Capital received a commitment fee of 450,000 shares (the “Commitment
Shares”).

On any business day after the Commencement Date (as defined below) and over the 36-month term of the 2015 Aspire Purchase
Agreement, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”)
directing Aspire Capital to purchase up to 200,000 Purchase Shares per business day; however, no sale pursuant to such a Purchase Notice
may exceed five hundred thousand dollars ($500,000) per business day, unless the Company and Aspire Capital mutually agree. The
Company and Aspire Capital also may mutually agree to increase the number of shares that may be sold to as much as an additional
2,000,000 Purchase Shares per business day. The purchase price per Purchase Share pursuant to such Purchase Notice (the “Purchase
Price”) is the lower of (i) the lowest sale price for the Company’s common stock on the date of sale or (ii) the average of the three lowest
closing sale prices for the Company’s common stock during the 10 consecutive business days ending on the business day immediately
preceding the purchase date. The applicable Purchase Price will be determined prior to delivery of any Purchase Notice.

In addition, on any date on which the Company submits a Purchase Notice to Aspire Capital for at least 150,000 Purchase Shares and the
closing sale price of the Company’s common stock is higher than $0.40, the Company also has the right, in its sole discretion, to present
Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to
purchase an amount of the Company’s common stock equal to up to 35% of the aggregate shares of common stock traded on the next
business day (the “VWAP Purchase Date”), subject to a maximum number of shares determined by the Company (the “VWAP Purchase
Share Volume Maximum”). The purchase price per Purchase Share pursuant to such VWAP Purchase Notice (the “VWAP Purchase Price”)
shall be the lesser of the closing sale price of the Company’s common stock on the VWAP Purchase Date or 97% of the volume weighted
average price for the Company’s common stock traded on the VWAP Purchase Date if the aggregate shares to be purchased on that date
does not exceed the VWAP Purchase Share Volume Maximum, or the portion of such business day until such time as the sooner to occur of
(1) the time at which the aggregate shares traded has exceeded the VWAP Purchase Share Volume Maximum, or (2) the time at which the
sale price of the Company’s common stock falls below the VWAP Minimum Price Threshold (to be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction). The VWAP Minimum Price
Threshold is the greater of (i) 80% of the closing sale price of the Company’s common stock on the business day immediately preceding
the VWAP Purchase Date or (ii) such higher price as set forth by the Company in the VWAP Purchase Notice.

F-16

The number of Purchase Shares covered by and timing of each Purchase Notice or VWAP Purchase Notice are determined at the
Company’s discretion. The aggregate number of shares that the Company can sell to Aspire Capital under the 2015 Aspire Purchase
Agreement may in no case exceed 15,343,406 shares of our common stock (which is equal to approximately 19.99% of the common stock
outstanding on the date of the 2015 Aspire Purchase Agreement, including the 450,000 Commitment Shares issued to Aspire Capital in
consideration for entering into the 2015 Aspire Purchase Agreement) (the “Exchange Cap”), unless (i) shareholder approval is obtained to
issue more, in which case the Exchange Cap will not apply; provided that at no time shall Aspire Capital (together with its affiliates)
beneficially own more than 19.99% of the Company’s common stock.

The 2015 Aspire Purchase Agreement contains customary representations, warranties, covenants, closing conditions and indemnification
and termination provisions. Sales under the 2015 Aspire Purchase Agreement could commence only after certain conditions were satisfied
(the date on which all requisite conditions have been satisfied being referred to as the “Commencement Date”), which conditions included
the delivery to Aspire Capital of a prospectus supplement covering the Commitment Shares and the Purchase Shares, approval for listing on
NYSE MKT of the Purchase Shares and the Commitment Shares, the issuance of the Commitment Shares to Aspire Capital, and the receipt
by Aspire Capital of a customary opinion of counsel and other certificates and closing documents. Either party had the option to terminate
the 2015 Aspire Purchase Agreement in the event the Commencement Date had not occurred by July 1, 2015. The 2015 Aspire Purchase
Agreement may be terminated by the Company at any time, at its discretion, without any cost or penalty.

The Company’s net proceeds will depend on the Purchase Price, the VWAP Purchase Price and the frequency of the Company’s sales of
Purchase Shares to Aspire Capital; subject to the maximum $15.0 million available amount. The Company’s delivery of Purchase Notices
and VWAP Purchase Notices will be made subject to market conditions, in light of the Company’s capital needs from time to time. The
Company expects to use proceeds from sales of Purchase Shares for general corporate purposes and working capital requirements.

In connection with the 2015 Aspire Purchase Agreement, the Company also entered into a Registration Rights Agreement (the
“Registration Rights Agreement”) with Aspire Capital, dated May 15, 2015. The Registration Rights Agreement provides, among other
things, a requirement to register the sale of the Commitment Shares and the Purchase Shares to Aspire Capital pursuant to the Company’s
existing shelf registration statement (the “Registration Statement”). The Company further agreed to keep the Registration Statement
effective and to indemnify Aspire Capital for certain liabilities in connection with the sale of the Securities under the terms of the
Registration Rights Agreement. On May 29, 2015, the Company filed a prospectus supplement to the Company’s existing Registration
Statement on Form S-3, registering $15.0 million of the Company’s common stock that it may issue and sell to Aspire Capital from time to
time pursuant to the 2015 Aspire Purchase Agreement, together with the 450,000 Commitment Shares issued to Aspire Capital in
consideration for entering into the 2015 Aspire Purchase Agreement.

No shares have been sold under the 2015 Facility as of the date of the filing of this report.

Eastern – Share Purchase Agreements

On January 13, 2016, the Company entered into a share purchase agreement with Eastern pursuant to which Eastern agreed to purchase
3,500,000 shares of the Company’s common stock at a price of $0.622 per share. The Company received proceeds of $2,177,000 and the
shares were issued on January 25, 2016. In addition, Eastern agreed to exercise warrants it had previously acquired to purchase 1,784,000
shares of the Company’s common stock at an exercise price of $0.53 per share. The Company received proceeds of approximately
$945,000 from the exercise of the warrants and the shares were issued on January 25, 2016.

On January 13, 2016, the Company entered into a separate share purchase agreement with Eastern pursuant to which Eastern agreed to
purchase 6,500,000 shares of the Company’s common stock at a price of $0.622 per share, subject to the approval of the Company’s
stockholders. The Company’s stockholders approved the issuance of the 6,500,000 shares to Eastern at the Company’s annual meeting on
April 7, 2016. On April 13, 2016, the Company issued the 6,500,000 shares and received proceeds of $4,043,000. These shares are subject
to a three-year standstill agreement which will restrict additional acquisitions of the Company’s common stock by Eastern and its controlled
affiliates to limit its beneficial ownership of the Company’s outstanding shares of common stock to a maximum of 38%, absent the
approval by a majority of the Company’s board of directors.

Exercises of Warrants
In 2015, the Company issued 1,636,000 shares of common stock for the exercise of warrants and received proceeds of approximately
$867,000. In addition, the Company issued 26,691 shares of common stock for the cashless exercise of 75,000 warrants.

In 2016, in addition to the exercise of warrants by Eastern discussed above, the Company issued 120,000 shares of common stock for the
exercise of warrants and received proceeds of approximately $64,000.

Warrants
The Company has historically financed its operations through the sale of common stock and warrants, sold together as units.

F-17

The following table summarizes all warrant activity for 2016 and 2015:

Outstanding as of July 1, 2014

Exercised
Expired

Outstanding as of June 30, 2015

Exercised
Expired

Outstanding as of June 30, 2016

Exercisable as of June 30, 2016

12. Earnings (Loss) Per Common Share

Weighted-
average
Exercise
Price

1.38
0.51
0.66
1.63
0.53
2.08
-

Warrants

8,769,911 $
(1,711,000) $
(425,587) $
6,633,324 $
(1,904,000) $
(4,729,324) $
- $

- $

Basic earnings (loss) per common share is computed by dividing the net income (loss) allocated to common stockholders by the weighted-
average number of shares of common stock outstanding during the period. For purposes of calculating diluted earnings per common share,
the denominator includes both the weighted-average number of shares of common stock outstanding during the period and the number of
common stock equivalents if the inclusion of such common stock equivalents is dilutive. Dilutive common stock equivalents potentially
include stock options and warrants using the treasury stock method. The following table summarizes the components of the earnings (loss)
per common share calculation (in thousands, except per share amounts):

Years ended
June 30,

2016

2015

Basic and diluted numerator:

Net loss available to iBio, Inc. stockholders

(9,764) $

(6,625)

Basic and diluted denominator:

Weighted-average common shares outstanding

80,973

71,495

Per share amount

(0.12) $

(0.09)

In 2016 and 2015, the Company incurred net losses which cannot be diluted; therefore, basic and diluted loss per common share is the
same. As of June 30, 2016, shares issuable which could potentially dilute future earnings included approximately 12.3 million stock
options. As of June 30, 2015, shares issuable which could potentially dilute future earnings included approximately 9.5 million stock
options and 6.6 million warrants.

13. Share-Based Compensation

The following table summarizes the components of share-based compensation expense in the Consolidated Statements of Operations (in
thousands):

Research and development
General and administrative

Totals

Year Ended
June 30,

2016

2015

20 $
1,245
1,265 $

-
914
914

Stock Options
On August 12, 2008, the Company adopted the iBioPharma 2008 Omnibus Equity Incentive Plan (the “Plan”) for employees, officers,
directors and external service providers. The original Plan provided that the Company may grant options to purchase stock and/or make
awards of restricted stock up to an aggregate amount of 10 million shares. On December 18, 2013, the Plan was amended to increase the
number of shares reserved for awards under the Plan from 10 million to 15 million. As of June 30, 2016, there were approximately 2.9
million shares of common stock reserved for future issuance under the Plan. Stock options granted under the Plan may be either incentive
stock options (as defined by Section 422 of the Internal Revenue Code of 1986, as amended) or non-qualified stock options at the discretion
of the Board of Directors. Vesting of service awards occurs ratably on the anniversary of the grant date over the service period, generally
three or five years, as determined at the time of grant. Vesting of performance awards occurs when the performance criteria have been
satisfied. The Company uses historical data to estimate forfeiture rates.

Issuances of stock options during 2015 were as follows:

On September 4, 2014, the Company granted stock options to members of the Board of Directors, officers and employees to purchase 1.64
million shares of common stock. These options vest ratably on the anniversary of the date of grant over a three year service period, expire
ten years from the date of grant, and have an exercise price of $0.49 per share.

Issuances of stock options during 2016 were as follows:

On September 4, 2015 and March 1, 2016, the Company granted stock options to members of the Board of Directors, officers and
employees to purchase 2.75 million shares of common stock. These options vest ratably over a three to five year service period, expire ten
years from the date of grant, and have a weighted average exercise price of $1.64 per share.

F-18

Issuances of stock options during 2015 were as follows:

On September 5, 2014, the Company granted stock options to members of the Board of Directors, officers and employees to purchase 1.64
million shares of common stock. These options vest ratably on the anniversary of the date of grant over a three year service period, expire
ten years from the date of grant, and have a weighted-average exercise price of $0.86 per share.

On November 20, 2014, the Company granted stock options to a consultant to purchase 100,000 shares of common stock. These options
vest over a three year service period, expire four years from the date of grant, and have an exercise price of $1.15 per share.

On October 17, 2014, a consulting agreement dated March 1, 2012 with a former employee was terminated for cause. As a result, 500,000
options with an exercise price of $0.87 were cancelled.

The following table summarizes all stock option activity during the years ended June 30, 2016 and 2015:

Weighted-
average
Exercise
Price

Weighted-
average
Remaining
Contractual
Term (in years)

Outstanding as of July 1, 2014

Granted
Forfeited/expired

Outstanding as of June 30, 2015

Granted
Forfeited/expired

Outstanding as of June 30, 2016
As of June 30, 2016 vested and expected to vest

Exercisable as of June 30, 2016

Stock
Options

8,483,334 $
1,740,000 $
(700,000) $
9,523,334 $
2,750,000 $
- $
12,273,334 $
12,225,441 $

7,583,357 $

1.25
0.88
0.75
1.22
1.64
-
1.31
1.31

1.31

Aggregate
Intrinsic Value
(in thousands)
179

7.0 $

6.6 $

1,848

6.4 $
6.4 $

5.1 $

993
991

773

The total fair value of stock options that vested during 2016 and 2015 was approximately $800,000 and $1.1 million, respectively. As of
June 30, 2016, there was approximately $1.6 million of total unrecognized compensation cost related to non-vested stock options that the
Company expects to recognize over a weighted-average period of 1.9 years.

The weighted-average grant date fair value of stock options granted during 2016 and 2015 was $0.62 and $0.43 per share, respectively. The
Company estimated the fair value of options granted using the Black-Scholes option pricing model with the following assumptions:

Risk-free interest rate
Dividend yield
Volatility
Expected term (in years)

14. Related Party Transactions

2016

2015

1.83% - 2.13% 1.3% - 2.3%

109.49% - 112.17% 96.7% - 113.9%

4 - 9

Novici Biotech, LLC
In January 2012, the Company entered into an agreement with Novici Biotech, LLC (“Novici”) in which iBio’s President is a minority
stockholder. Novici performs laboratory feasibility analyses of gene expression, protein purification and preparation of research samples. In
addition, the Company and Novici collaborate on the development of new technologies and product candidates for exclusive worldwide
commercial use by the Company. The accounts payable balance includes amounts due to Novici of approximately $200,000 and $153,000
at June 30, 2016 and 2015, respectively. Research and development expenses related to Novici were approximately $1,036,000 and
$995,000 in 2016 and 2015, respectively.

Agreements with Eastern Capital Limited and its Affiliates.
As more fully discussed in Note 11, the Company entered into two share purchase agreements with Eastern and sold 10 million shares of
common stock at a price of $0.622 per share. The Company received proceeds of $6,220,000. In addition, Eastern agreed to exercise
warrants it had previously acquired to purchase 1,784,000 shares of the Company’s common stock at an exercise price of $0.53 per share.
The Company received proceeds of approximately $945,000 from the exercise of the warrants.

F-19

Concurrently with the execution of the Purchase Agreements, iBio entered into a contract manufacturing joint venture with an affiliate of
Eastern to develop and manufacture plant-made pharmaceuticals through iBio’s recently formed subsidiary, iBio CMO. The Eastern
Affiliate contributed $15.0 million in cash to iBio CMO, for a 30% interest in iBio CMO. iBio retained a 70% equity interest in iBio CMO.
As the majority equity holder, iBio has the right to appoint a majority of the members of the Board of Managers that manages the iBio
CMO joint venture. Specified material actions by the joint venture require the consent of iBio and the Eastern Affiliate. iBio contributed to
the capital of iBio CMO a royalty bearing license, which grants iBio CMO a non-exclusive license to use the iBio’s proprietary
technologies, including the iBioLaunch technology and additional iBio technologies, for research purposes and an exclusive U.S. license
for manufacturing purposes. iBio retains all other rights in its intellectual property, including the right for itself to commercialize products
based on its proprietary technologies or to grant licenses to others to do so.

In connection with the joint venture, the Second Eastern Affiliate, which controls the subject property as sublandlord, granted iBio CMO a
34-year sublease of a Class A life sciences building in Bryan, Texas, on the campus of Texas A&M University, designed and equipped for
plant-made manufacture of biopharmaceuticals. Accrued expenses at June 30, 2016 due to the Second Eastern Affiliate is $623,000.
General and administrative expenses related to Second Eastern Affiliate were approximately $565,000 in 2016. Interest expense related to
the Second Eastern Affiliate was approximately $807,000 in 2016. The terms of the sublease are described in Note 10.

A three-year standstill agreement (the “Standstill Agreement”) that took effect upon the issuance of the Eastern Shares pursuant to the
6,500,000 Purchase Agreement restricts additional acquisitions of iBio common stock by Eastern and its controlled affiliates to limit its
beneficial ownership of the Company’s outstanding shares of common stock to a maximum of 38%, absent approval by a majority of the
Company’s Board of Directors.

Operating Lease with Minority Stockholder
Effective January 1, 2015, the Company is leasing office space on a month-to-month basis from an entity owned by a minority stockholder
of the Company. Rent was $2,200 per month through November 2015 and increased to $2,500 per month effective December 2015. Rent
expense totaled $28,500 and $13,200 in 2016 and 2015, respectively.

15. Income Taxes

The components of net loss consist of the following (in thousands):

United States
Brazil
Total

For the Years Ended
June 30,

2016

2015

(10,635) $
(22)
(10,657) $

(6,532)
(93)
(6,625)

The components of the provision (benefit) for income taxes consist of the following (in thousands):

Current – Federal, state and foreign
Deferred – Federal
Deferred – State
Deferred – Foreign
Total
Change in valuation allowance
Income tax expense

For the Years Ended
June 30,

2016

2015

- $
(260)
(9)
(1)
(270)
270
- $

-
(2,299)
(377)
(12)
(2,688)
2,688
-

The Company has deferred income taxes due to income tax credits, net operating loss carryforwards, and the effect of temporary
differences between the carrying values of certain assets and liabilities for financial reporting and income tax purposes.

F-20

The components of the Company’s deferred tax assets and liabilities are as follows (in thousands):

Deferred tax assets (liabilities):

Net operating loss
Share-based compensation
Research and development tax credits
Suspended losses in iBio CMO
Basis in iBio CMO
Intangible assets
Vacation accrual and other
Valuation allowance
Total

As of June 30,

2016

2015

17,172 $
726
1,097
255
145
(219)
17
(19,193)
- $

14,213
3,992
890
-
-
(188)
16
(18,923)
-

The Company has a valuation allowance against the full amount of its net deferred tax assets due to the uncertainty of realization of the
deferred tax assets due to operating loss history of the Company. The Company currently provides a valuation allowance against deferred
taxes when it is more likely than not that some portion, or all of its deferred tax assets will not be realized. The valuation allowance could
be reduced or eliminated based on future earnings and future estimates of taxable income.

Federal net operating losses of approximately $5.5 million were used by the Former Parent prior to June 30, 2008 and are not available to
the Company. The Former Parent allocated the use of the Federal net operating losses available for use on its consolidated Federal tax
return on a pro rata basis based on all of the available net operating losses from all the entities included in its control group.

U.S. Federal and state net operating losses of approximately $44.7 million and $33.5 million, respectively, are available to the Company as
of June 30, 2016 and will expire at various dates through 2036. These carryforwards could be subject to certain limitations in the event
there is a change in control of the Company pursuant to Internal Revenue Code Section 382, though the Company has not performed a
study to determine if the loss carryforwards are subject to these Section 382 limitations. The Company has a research and development
credit carryforward of approximately $1.1 million at June 30, 2016. In addition, the Company has foreign net operating losses totaling
approximately $89,000 with no expiration date.

A reconciliation of the statutory tax rate to the effective tax rate is as follows:

Statutory federal income tax rate
State (net of federal benefit)
Research and development tax credit
Permanent differences
Expiration of stock options and warrants
Change in valuation allowance
Effective income tax rate

Years Ended
June 30,

2016

2015

34%
6%
1%
(7)%
(31)%
(3)%
-%

34%
6%
1%
-%
-%
(41)%
-%

The Company has not been audited in connection with income taxes. iBio files U.S. Federal and state income tax returns subject to varying
statutes of limitations. The 2011 through 2015 tax returns generally remain open to examination by U.S. Federal and state tax authorities. In
addition, the 2014 and 2015 Brazilian federal tax return remains open to examination by Brazil federal tax authorities.

16. Commitments and Contingencies

Agreements
In September 2013, the Company and Fraunhofer completed the Terms of Settlement for the TTA Seventh Amendment (the “Settlement
Agreement”). Under the terms of the Settlement Agreement various contractual obligations existing at June 30, 2013 were released,
terminated or modified. The significant modifications post June 30, 2013 are of follows:

The Company’s obligation under the TTA, prior to the Settlement Agreement, to make three $1 million payments to Fraunhofer in April
2013, November 2013, and April 2014 (the “Guaranteed Annual Payments”) was terminated and replaced with an undertaking to engage
Fraunhofer to perform for at least $3 million in work requested and as directed by iBio before December 31, 2015. For the year ended June
30, 2015, $2.7 million in research and development services were performed by Fraunhofer. As of December 31, 2015, the total
engagement of Fraunhofer for work requested by iBio is $3.0 million. In addition to the foregoing, the Company sought to engage
Fraunhofer for substantial additional other work, but Fraunhofer did not respond to the Company’s requests for proposals for such work.

The Company’s obligation to remit to Fraunhofer minimum annual royalty payments in the amount of $200,000 was terminated. Instead
under the terms of the TTA and for a period of 15 years, the Company shall pay Fraunhofer one percent (1%) of all receipts derived by the
Company from sales of products produced utilizing the iBioLaunch or iBioModulator technology and ten percent (10%) of all receipts
derived by the Company from licensing either of those technologies to third parties. The Company will be obligated to remit royalties to
Fraunhofer only on technology license revenues that iBio actually receives and on revenues from actual sales by iBio of products derived
from the technology developed under the TTA until the later of November 2023 or until such time as the aggregate royalty payments total
at least $4 million. All new intellectual property invented by Fraunhofer during the period of the TTA is owned by and is required to be

transferred to iBio. The Company has no financial obligations to Fraunhofer with respect to the Company’s use of technologies developed
independently of Fraunhofer.

F-21

On June 12, 2014, Fiocruz, Fraunhofer and iBio executed an amendment to the CLA (the “Amended Agreement”) to create a new research
and development plan for the development of a recombinant Yellow Fever vaccine providing revised reporting, objectives, estimated
budget, and project billing process. Under the CLA and bilateral agreement between iBio and Fraunhofer dated December 27, 2010,
Fraunhofer, which has been engaged to act as the Company’s subcontractor for performance of research and development services for the
new research and development plan, will bill Fiocruz directly on behalf of the Company at the rates, amounts and times provided in the
Amended Agreement, and the proceeds of such billings and only the proceeds will be paid to Fraunhofer for its services so the Company’s
expense is equal to its revenue and no profit is recognized for these activities under the Amended Agreement. For the year ended June 30,
2015, $2.1 million in research and development services were performed by Fraunhofer for the Company pursuant to the amended CLA. As
of December 31, 2015, the total engagement of Fraunhofer for work requested by iBio is $3.0 million. See Note 8 - Significant Vendors for
additional information. In addition to the foregoing, the Company sought to engage Fraunhofer for substantial additional other work, but
Fraunhofer did not respond to the Company’s requests for proposals for such work.

On January 14, 2014 (the “Effective Date”), the Company entered into an exclusive worldwide License Agreement (“LA”) with the
University of Pittsburgh (“UP”) covering all of the U.S. and foreign patents and patent applications and related intellectual property owned
by UP pertinent to the use of endostatin peptides for the treatment of fibrosis. The Company paid an initial license fee of $20,000 and is
required to pay all of UP’s patent prosecution costs that were incurred prior to, totaling $30,627, and subsequent to the Effective Date. On
each anniversary date the Company is to pay license fees ranging from $25,000 to $150,000 for the first five years and $150,000 on each
subsequent anniversary date until the first commercial sale of the licensed technology. Beginning with commercial sales of the technology
or approval by the FDA or foreign equivalent, the Company will be required to pay milestone payments, royalties and a percentage of any
non-royalty sublicense income to UP.

On December 30, 2013, the Company entered into a Project Agreement with the Medical University of South Carolina (“MUSC”)
providing for the performance of research and development services by MUSC related to peptides for the treatment of fibrosis. The
agreement requires the Company to make payments totaling $78,000 through December 1, 2014 and provides the Company with certain
intellectual property rights. Effective September 1, 2014, the Company and MUSC executed an Amendment to the agreement. The
Amendment extended the term of the agreement to December 31, 2015 and increased the total payments due MUSC from the Company by
$161,754.

New Lease
As discussed above, iBio CMO is leasing its facility in Bryan, Texas from the Second Affiliate under a 34-year sublease. See Note 10 for
more details of the sublease.

Lawsuits
On October 22, 2014, the Company filed a Verified Complaint in the Court of Chancery of the State of Delaware against PlantForm
Corporation (“PlantForm”) and PlantForm’s president seeking equitable relief and damages based upon PlantForm’s interference with
several contracts between the Company and Fraunhofer USA, including its Center for Molecular Biotechnology unit, (“Fraunhofer”) and
one of the Company’s consultants and misappropriating the Company’s intellectual property including trade secrets and know-how. On
May 14, 2015, after mediation ordered and supervised by the Chancery Court, PlantForm represented and agreed that all drug development
and manufacturing activities of PlantForm with Fraunhofer had ceased and would not be renewed at least until after the termination of the
Company’s litigation regarding similar subject matter with Fraunhofer, and all of the accrued claims between the Company and PlantForm
and its President were voluntarily dismissed with prejudice.

On March 17, 2015, the Company filed a Verified Complaint in the Court of Chancery of the State of Delaware against Fraunhofer and
Vidadi Yusibov (“Yusibov”), Fraunhofer’s Executive Director, seeking monetary damages and equitable relief based on Fraunhofer’s
material and continuing breaches of their contracts with the Company. On September 16, 2015, the Company voluntarily dismissed its
action against Yusibov, without prejudice, and thereafter on September 29, 2015, the Company filed a Verified Amended Complaint
against Fraunhofer alleging material breaches of its agreements with the Company and seeking monetary damages and equitable relief
against Fraunhofer. Briefing was completed on a motion to dismiss filed by Fraunhofer in lieu of filing an answer to the complaint.
Fraunhofer also moved for a protective order in connection with certain discovery served by iBio. The Court bifurcated the action to first
resolve the threshold question in the case – the scope of iBio’s ownership of the technology developed or held by Fraunhofer — before
proceeding with the rest of the case and the parties stipulated their agreement to that approach. After considering the parties’ written
submissions and oral argument on this threshold issue on April 29, 2016, the Court resolved the threshold issue in favor of iBio on July 29,
2016, holding that iBio owns all proprietary rights of any kind to all plant-based technology of Fraunhofer developed or held as of
December 31, 2014, including know-how, and is entitled to receive a transfer of the technology from Fraunhofer. On September 19, 2016,
Fraunhofer informed the Court that it does not intend to pursue its motion for protective order at this time. iBio intends to seek leave of
Court to supplement and amend its current complaint to add additional state law claims against Fraunhofer. The Company is unable to
predict the further outcome of this action at this time.

F-22

On October 24, 2014, a putative class action captioned Juan Pena, Individually and on Behalf of All Others Similarly Situated v. iBio, Inc.
and Robert B. Kay was filed in the United States District Court for the District of Delaware. The action alleged that the Company and its
Chief Executive Officer made certain statements in violation of federal securities laws and sought an unspecified amount of damages. On
February 23, 2015, the Court issued an order appointing a new lead plaintiff. On April 6, 2015, the plaintiffs filed an amended class action
complaint in the same matter captioned Vamsi Andavarapu, Individually And On Behalf Of All Others Situated v. iBio, Inc., Robert B.
Kay, and Robert Erwin. The action alleged that the Company, its Chief Executive Officer, and its President made certain statements in
violation of federal securities laws and sought an unspecified amount of damages. On May 6, 2015, the Company, Mr. Kay, and Mr. Erwin
filed a motion to dismiss the amended class action complaint. On September 15, 2015, after voluntary mediation, the Plaintiffs and the
Company reached an agreement-in-principle to settle the action. On December 16, 2015, the Plaintiffs and the Company entered a
Stipulation and Agreement of Settlement that provides, among other things, for settlement payments totaling $1,875,000 in exchange for
the releases described therein. That stipulation was filed with the Court on December 18, 2015 and, on April 21, 2016, the Court entered an
Order and Final Judgment approving the settlement and dismissing the case. The settlement has been funded by the Company’s insurance
carrier.

On December 4, 2015, a putative derivative action captioned Savage, Derivatively on Behalf of iBio, Inc., Plaintiff, v. Robert B. Kay, Arthur
Y. Elliott, James T. Hill, Glenn Chang, Philip K. Russell, John D. McKey, and Seymour Flug, Defendants, and iBio, Inc., Nominal
Defendant was filed in the Supreme Court of the State of New York, County of New York. The action alleged that the Company and its
management made misstatements about the Company’s business resulting either from (i) a failure by iBio’s directors to establish a system
of controls over the Company’s disclosures, or (ii) the directors’ consciously ignoring “red flags” relating to disclosures, and sought to
recover an unspecified amount of damages. On January 15, 2016, the defendants filed a motion to dismiss all claims against them. On
March 16, 2016, the plaintiff filed a Verified Amended Complaint that added an additional named plaintiff and alleged derivative claims
generally along the same lines as the original complaint, together with purported direct breach of fiduciary duty and unjust enrichment
claims based on the same conduct. The Verified Amended Complaint seeks to recover an unspecified amount of damages. On April 29,
2016, the defendants filed a motion to dismiss all claims against them. Plaintiffs’ opposition to the motion was filed on June 6, 2016. On
June 22, 2016, the plaintiffs advised the Court that the parties had reached a settlement in principle, and on July 1, 2016, the Court ordered
that the defendants’ pending motion to dismiss be withdrawn without prejudice. The terms of the settlement are subject to preliminary and
final approval by the Court. The Company expects that the settlement will be funded by the Company’s insurance carrier.

17. Segment Reporting

As discussed above, iBio Brazil began operations in the first quarter of fiscal 2015. In accordance with FASB ASC 280, “ Segment
Reporting,” the Company discloses financial and descriptive information about its reportable geographic segments. Geographic segments
are components of an enterprise about which separate financial information is available and regularly evaluated by the chief operating
decision maker in deciding how to allocate resources and in assessing performance.

Year ended June 30, 2016

United States

Brazil

Total

Net revenues
Research and development expenses
General and administrative expenses
Operating loss
Interest expense
Interest and other income
Consolidated net loss
Total assets
Fixed assets, net
Intangible assets, net
Depreciation expense
Amortization of intangible assets

948 $
3,156
7,663
(9,871)
(807)
43
(10,635)
51,580
25,574
2,092
575
363

- $
-
22
(22)
-
-
(22)
20
-
-
2
-

948
3,156
7,685
(9,893)
(807)
43
(10,657)
51,600
25,574
2,092
577
363

Year ended June 30, 2015

United States

Brazil

Total

Net revenues
Research and development expenses
General and administrative expenses
Operating loss
Interest expense
Interest and other income
Consolidated net loss
Total assets
Fixed assets, net

Intangible assets, net
Depreciation expense
Amortization of intangible assets

1,851 $
3,495
4,929
(6,573)
-
41
(6,532)
12,448

3
2,360
3
358

- $
-
93
(93)
-
-
(93)
46

10
-
2
-

1,851
3,495
5,022
(6,666)
-
41
(6,625)
12,494

13
2,360
5
358

F-23

Subsidiaries of Registrant

Exhibit 21

iBioDefense Biologics LLC (wholly-owned)

iBio Peptide Therapeutics LLC (wholly-owned)

iBio Manufacturing LLC (wholly-owned)

iBIO DO BRASIL BIOFARMACÊUTICA LTDA. (99% ownership)

iBio CMO LLC (70% ownership)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-171315, File No. 333-175420 and
File No. 333-200410) of iBio, Inc. and Subsidiaries of our report dated October 13, 2016, on our audits of the consolidated financial
statements of iBio, Inc. and Subsidiaries as of June 30, 2016 and 2015 and for the years then ended, included in this Annual Report on
Form 10-K.

Exhibit 23.1

/s/ CohnReznick LLP
Roseland, New Jersey
October 13, 2016

Exhibit 31.1

CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Robert B. Kay, certify that:

I have reviewed this Annual Report on Form 10-K of iBio, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s

internal control over financial reporting.

October 13, 2016

/s/Robert B. Kay
Robert B. Kay
Executive Chairman
(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Mark Giannone, certify that:

I have reviewed this Annual Report on Form 10-K of iBio, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s

internal control over financial reporting.

October 13, 2016

/s/Mark Giannone
Mark Giannone
Chief Financial Officer
(Principal Financial Officer)

CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.1

In connection with the Annual Report of iBio, Inc. (the Company) on Form 10-K for the year ended June 30, 2016 as filed with
the Securities and Exchange Commission on the date hereof (the Report), I, Robert B. Kay, Executive Chairman of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

October 13, 2016

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.

/s/Robert B. Kay
Robert B. Kay
Executive Chairman
(Principal Executive Officer)

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to iBio, Inc. and
will be furnished to the Securities and Exchange Commission or its staff upon request.

CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.2

In connection with the Annual Report of iBio, Inc. (the Company) on Form 10-K for the year ended June 30, 2016 as filed with
the Securities and Exchange Commission on the date hereof (the Report), I, Mark Giannone, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

October 13, 2016

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.

/s/ Mark Giannone
Mark Giannone
Chief Financial Officer
(Principal Financial Officer)