iBio Raises $6.2 Million Through Warrant Inducement Transaction

Rhea-AI Summary

iBio, an AI-driven innovator of precision antibody therapies, has secured $6.2 million through a warrant inducement transaction with institutional investors. The deal involves existing warrant holders agreeing to purchase 5,626,685 shares of common stock at a reduced price of $1.11 per share.

As part of the agreement, investors received new warrants to purchase up to 11,253,370 shares at $0.86 per share, with a five-year expiration period. The transaction is expected to close around April 30, 2025, with Chardan serving as the exclusive financial advisor.

The company plans to use the net proceeds for working capital and general corporate purposes. The new securities are being offered through a private placement and will require registration with the SEC before they can be sold in the United States.

Positive

• Secured $6.2M in immediate funding through warrant exercise
• Chardan's involvement as financial advisor adds credibility to the transaction

Negative

• Dilutive impact from issuing 5.6M new shares at discounted price of $1.11
• Additional dilution potential from 11.2M new warrants at even lower price of $0.86
• Reduced warrant exercise price indicates potential desperation for funding

Insights

Financial Analyst

iBio's $6.2M warrant exercise provides immediate capital but creates significant future dilution potential through new warrants at lower prices.

iBio has secured approximately $6.2 million in gross proceeds through a strategic warrant transaction that offers immediate capital but comes with notable dilution implications. Existing warrant holders agreed to exercise warrants for 5,626,685 shares at a reduced price of $1.11 per share, below what was likely the original exercise price.

The transaction's structure reveals important elements about the company's financing approach. In exchange for exercising existing warrants, investors received new warrants to purchase 11,253,370 shares (double the number exercised) at $0.86 per share, creating substantial potential future dilution. These new warrants have a 5-year exercise window, extending the dilution timeline considerably.

If all new warrants are eventually exercised, they would generate approximately $9.7 million in additional capital but would significantly increase the outstanding share count. The company disclosed that proceeds will fund "working capital and other general corporate purposes," indicating general operational support rather than specific strategic initiatives.

The involvement of Chardan as financial advisor suggests professional guidance in structuring this transaction. The closing, expected around April 30, 2025, includes the required registration rights for shares issuable upon exercise of the new warrants, which provides some liquidity assurance for the warrant holders.

Biotech Industry Specialist

iBio's $6.2M warrant financing provides needed capital for AI antibody development but creates substantial future dilution risk.

This warrant exercise agreement represents a double-edged financing solution for iBio, an AI-driven innovator in the competitive precision antibody therapeutics space. The $6.2 million capital infusion provides immediate operational runway, which is critical for antibody development programs that typically require substantial and sustained funding through extended research and clinical phases.

The transaction's structure reflects financing patterns common among development-stage biotech companies. By incentivizing existing warrant holders to exercise at $1.11, iBio secures immediate capital without the typical discount and extensive documentation required for traditional equity offerings. However, the issuance of new warrants for 11,253,370 shares at $0.86 creates substantial potential dilution.

For context, antibody therapeutics development requires significant capital investment across discovery, optimization, manufacturing process development, and clinical testing phases. The stated use of proceeds for "working capital and general corporate purposes" suggests these funds will support ongoing operations across their AI-driven platform rather than a specific development milestone.

The registration rights granted to new warrant holders indicates iBio is maintaining appropriate liquidity options for investors, which is essential for attracting and retaining institutional capital in the biotech sector. This balanced approach to capital formation allows continued advancement of their precision antibody platform while managing immediate funding requirements.

SAN DIEGO, April 29, 2025 (GLOBE NEWSWIRE) -- iBio, Inc. (Nasdaq: IBIO) (“iBio” or the “Company”), an AI-driven innovator of precision antibody therapies, announces today announced that it has entered into an agreement with institutional investors that are existing holders of warrants to purchase shares of common stock of the Company for cash (the “Existing Warrants”), wherein the investors agreed to exercise the Existing Warrants to purchase 5,626,685 shares of common stock at a reduced exercise price of $1.11 per share, resulting in gross proceeds of approximately $6.2 million, before deducting advisory fees and certain other expenses. The Company intends to use the net proceeds for working capital and other general corporate purposes.

In consideration for the exercise of the Existing Warrants for cash, the investors received new warrants (the “New Warrants”) to purchase up to an aggregate of 11,253,370 shares of common stock. The New Warrants are exercisable at $0.86 per common share, and expire five years from the issuance date. The closing of the warrant inducement transaction is expected to occur on or about April 30, 2025, subject to satisfaction of customary closing conditions.

Chardan acted as the exclusive financial advisor in connection with the transaction.

The securities in this private placement have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws, and may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. iBio granted registration rights to the purchasers of the New Warrants, and has agreed to file a registration statement with the Securities and Exchange Commission registering the shares of common stock issuable upon exercise of the New Warrants.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About iBio, Inc.

iBio (Nasdaq: IBIO) is a cutting-edge biotech company leveraging AI and advanced computational biology to develop next-generation biopharmaceuticals for cardiometabolic diseases, obesity, cancer and other hard-to-treat diseases. By combining proprietary 3D modeling with innovative drug discovery platforms, iBio is creating a pipeline of breakthrough antibody treatments to address significant unmet medical needs. Our mission is to transform drug discovery, accelerate development timelines, and unlock new possibilities in precision medicine. For more information, visit www.ibioinc.com or follow us on LinkedIn.

Forward-Looking Statements

Any statements contained in this press release about future expectations, plans, and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements.” These statements include statements regarding the intended use of proceeds, the expected gross proceeds from the offering and the expected closing of the offering. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the uncertainties related to market conditions and the completion of the offering on the anticipated terms or at all, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended June 30, 2024, and the Company’s subsequent filings with the SEC, including subsequent periodic reports on Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statements contained in this press release speak only as of the date hereof and, except as required by federal securities laws, iBio, Inc. specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

Corporate Contact:
iBio, Inc.
Investor Relations
ir@ibioinc.com

Media Contacts:
Ignacio Guerrero-Ros, Ph.D., or David Schull
Russo Partners, LLC
Ignacio.guerrero-ros@russopartnersllc.com
David.schull@russopartnersllc.com
(858) 717-2310 or (646) 942-5604

FAQ

How much money did iBio (IBIO) raise through warrant exercise in April 2025?

iBio raised $6.2 million in gross proceeds through a warrant inducement transaction, with institutional investors exercising warrants to purchase 5,626,685 shares at $1.11 per share.

What is the exercise price of iBio's new warrants issued in April 2025?

The new warrants issued by iBio have an exercise price of $0.86 per common share and expire five years from the issuance date.

How many new warrant shares did iBio (IBIO) issue in the April 2025 transaction?

iBio issued new warrants to purchase up to 11,253,370 shares of common stock as part of the warrant inducement transaction.

When will iBio's April 2025 warrant transaction close?

The warrant inducement transaction is expected to close on or about April 30, 2025, subject to customary closing conditions.

How will iBio use the $6.2 million raised from warrant exercise?

iBio plans to use the net proceeds from the warrant exercise for working capital and other general corporate purposes.