20 On August 1, 2021, the Company began sponsoring an employee benefit plan subject to Section 401(K) of the Internal Revenue Service Code (the "401K Plan") pursuant to which, all employees meeting eligibility requirements are able to participate. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's Discussion In neurodegenerative disease, the Company's drug candidate NE3107 inhibits activation of inflammatory actions extracellular singleregulated kinase ...

Financial Performance - Revenue increased by 15% year-over-year, driven by strong sales in the Asia-Pacific region [1]. - Net profit margin improved to 12%, up from 10% in the previous quarter [2]. - Operating expenses rose by 8%, primarily due to increased marketing and R&D investments [3]. Market Expansion - The company successfully entered two new markets in Europe, contributing to a 20% increase in international sales [4]. - A new distribution center was opened in South America to support regional growth [1]. - Strategic partnerships were formed with local retailers in Southeast Asia to enhance market penetration [2]. Product Development - Launched three new products in the tech segment, which accounted for 25% of total revenue [3]. - R&D investment increased by 10% to accelerate innovation and product differentiation [4]. - Customer feedback on the latest product line has been overwhelmingly positive, with a 95% satisfaction rate [1]. Operational Efficiency - Implemented a new supply chain management system, reducing delivery times by 15% [2]. - Automation initiatives in manufacturing led to a 10% reduction in production costs [3]. - Employee training programs were expanded, resulting in a 20% improvement in operational productivity [4]. Sustainability Initiatives - Achieved a 30% reduction in carbon emissions through the adoption of renewable energy sources [1]. - Introduced eco-friendly packaging for all product lines, reducing plastic usage by 25% [2]. - Partnered with environmental organizations to promote sustainable practices across the supply chain [3]. Corporate Governance - Appointed two new independent directors to the board, enhancing governance and oversight [4]. - Conducted a comprehensive review of corporate policies to ensure compliance with global standards [1]. - Increased transparency in financial reporting, earning recognition from industry watchdogs [2].

PART I [Business Overview](index=5&type=section&id=Item%201.%20Business) BioVie Inc. is a clinical-stage biopharmaceutical company developing innovative drug therapies for neurological and neurodegenerative disorders and advanced liver disease, with lead candidates NE3107 and BIV201 in clinical development stages - BioVie Inc. is a clinical-stage company developing drug therapies for neurological/neurodegenerative disorders and liver disease[15](index=15&type=chunk)[52](index=52&type=chunk)[513](index=513&type=chunk) - **NE3107**, acquired from NeurMedix, is a novel orally administered small molecule believed to inhibit inflammation-driven insulin resistance and inflammatory cascades, implicated in Alzheimer's Disease (AD) and Parkinson's Disease (PD)[16](index=16&type=chunk)[56](index=56&type=chunk)[522](index=522&type=chunk) - **BIV201** (continuous infusion terlipressin) is an Orphan Drug candidate with FDA Fast Track status, being evaluated for refractory ascites due to liver cirrhosis[59](index=59&type=chunk)[104](index=104&type=chunk)[524](index=524&type=chunk) [Neurodegenerative Disease Program](index=5&type=section&id=Neurodegenerative%20Disease%20Program) BioVie's neurodegenerative program focuses on NE3107 for Alzheimer's and Parkinson's diseases, with a Phase 3 AD study targeting Q4 2023 completion and a successful Phase 2 PD study showing motor control improvements - **NE3107** inhibits inflammatory activation of ERK and NFkB, which are drivers of Alzheimer's disease (AD) and Parkinson's disease (PD)[53](index=53&type=chunk)[81](index=81&type=chunk) - The Phase 3 study for **NE3107** in mild to moderate AD (NCT04669028) is fully enrolled and targeting primary completion in Q4 2023[54](index=54&type=chunk)[62](index=62&type=chunk)[533](index=533&type=chunk) - The Phase 2 study of **NE3107** in Parkinson's disease (NCT05083260) met its primary (safety and drug-drug interaction) and secondary (promotoric activity) objectives, showing greater motor control improvements in patients, especially those under 70[55](index=55&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[98](index=98&type=chunk)[534](index=534&type=chunk) - Exploratory Phase 2 AD data showed **NE3107** enhanced cognition, reduced inflammation (TNF-α), decreased CSF phospho-tau levels, and improved neuronal health, with no drug-related adverse events[37](index=37&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) [Liver Disease Program](index=6&type=section&id=Liver%20Disease%20Program) BioVie's liver disease program centers on BIV201 for refractory ascites, a condition with no FDA-approved treatments, showing significant fluid reduction in a Phase 2b study and holding Orphan Drug and Fast Track designations - **BIV201** (continuous infusion terlipressin) has FDA Fast Track status and Orphan Drug designation for refractory ascites due to liver cirrhosis, a condition with high mortality and no FDA-approved drugs[59](index=59&type=chunk)[60](index=60&type=chunk)[97](index=97&type=chunk)[104](index=104&type=chunk)[111](index=111&type=chunk)[524](index=524&type=chunk) - Interim data from the Phase 2b study showed **BIV201** plus SOC resulted in a **34% reduction** in ascites fluid during treatment, significantly different from SOC only, with patients completing **BIV201** treatment experiencing a **53% reduction**[38](index=38&type=chunk)[107](index=107&type=chunk) - The company is developing a proprietary room-temperature stable liquid formulation of terlipressin in a pre-filled syringe, offering improved convenience and potential for up to two years of stability, differentiating it from existing refrigerated products[110](index=110&type=chunk) - The **BIV201** program aims to alleviate portal hypertension and correct splanchnic vasodilation to reduce salt and water retention, thereby halting ascites fluid generation[70](index=70&type=chunk) [Intellectual Property](index=13&type=section&id=Intellectual%20Property) BioVie protects its drug candidates BIV201 and NE3107 through patents, trade secrets, and non-disclosure agreements, with BIV201 holding Orphan Drug Designations and NE3107 protected by 15 issued U.S. patents - BioVie relies on patents, trade secrets, and non-disclosure agreements to protect its products[73](index=73&type=chunk)[214](index=214&type=chunk) - **BIV201** has U.S. Orphan Drug Designations for hepatorenal syndrome (Nov 2018) and ascites (Sept 2016)[74](index=74&type=chunk)[164](index=164&type=chunk) - The company has filed a PCT application for **BIV201**'s novel liquid formulations and is seeking patent protection in the U.S., Europe, China, Japan, and other jurisdictions[74](index=74&type=chunk)[110](index=110&type=chunk)[217](index=217&type=chunk) - As of August 15, 2023, **NE3107** and related compounds are protected by **15 issued U.S. patents**, 6 pending U.S. patent applications, 1 pending U.S. PCT application, and 6 issued foreign patents[76](index=76&type=chunk)[217](index=217&type=chunk) [Government Regulation](index=14&type=section&id=Government%20Regulation) BioVie's drug candidates are subject to extensive FDA regulation covering R&D, clinical trials, and approval, with BIV201 benefiting from expedited programs like Orphan Drug Designation and Fast Track status - Drug development is extensively regulated by the FDA in the U.S. and comparable foreign authorities, covering R&D, manufacturing, labeling, approval, and marketing[203](index=203&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) - The U.S. drug development process includes preclinical tests, IND application, three phases of human clinical trials (Phase 1, 2, 3), NDA/BLA submission, FDA inspection of manufacturing facilities, and review/approval[77](index=77&type=chunk)[114](index=114&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[266](index=266&type=chunk) - **BIV201** has received Orphan Drug Designation, which grants **7 years of market exclusivity** upon first FDA approval for the designated rare disease, under specific conditions[136](index=136&type=chunk)[137](index=137&type=chunk) - The FDA's Fast Track program, also granted to **BIV201**, expedites review for drugs treating serious conditions with unmet medical needs, potentially allowing rolling submissions[138](index=138&type=chunk) - Post-approval, products are subject to ongoing FDA regulation, including adverse event reporting, updated safety information, and compliance with cGMP for manufacturing[143](index=143&type=chunk)[144](index=144&type=chunk) [Employees](index=18&type=section&id=Employees) BioVie Inc. has 18 full-time employees, including its executive officers, and supplements its product development activities with a team of experienced scientific, medical, and regulatory consultants - The Company has **18 full-time employees**, including its CEO, CFO, and Chief Medical Officer[142](index=142&type=chunk) - BioVie relies on a team of highly experienced scientific, medical, and regulatory consultants for product development[142](index=142&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) BioVie faces significant risks as a development-stage biopharmaceutical company, including lack of approved products, continuous losses, dependence on successful clinical trials and regulatory approvals, need for additional capital, competition, reliance on third parties, and stock volatility - The company has no products approved for commercial sale, has not generated revenue, and may never achieve profitability, raising substantial doubt about its ability to continue as a going concern[150](index=150&type=chunk)[151](index=151&type=chunk)[155](index=155&type=chunk)[168](index=168&type=chunk) - Significant additional capital will be required to fund operations, and there is no assurance that sufficient financing will be obtained on acceptable terms, which could force delays, reductions, or termination of R&D programs[167](index=167&type=chunk)[170](index=170&type=chunk)[172](index=172&type=chunk) - Drug development is a time-consuming and uncertain process; product candidates may fail clinical trials, not receive regulatory approval, or be less effective/more expensive than competitors, leading to potential cessation of operations[174](index=174&type=chunk)[176](index=176&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk)[235](index=235&type=chunk)[236](index=236&type=chunk) - Reliance on third parties (CROs, CMOs) for clinical trials and manufacturing poses risks, including failure to meet deadlines, non-compliance with regulations (cGCPs, cGMP), and potential supply shortages[185](index=185&type=chunk)[186](index=186&type=chunk)[189](index=189&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[196](index=196&type=chunk) - Future equity offerings or issuance of shares upon exercise of options/warrants could result in substantial dilution for existing stockholders[243](index=243&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk)[249](index=249&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[6](index=6&type=chunk) [Properties](index=35&type=section&id=Item%202.%20Properties) BioVie Inc. maintains its headquarters in Carson City, Nevada, with an annual rent of **$2,200**, and a San Diego office under a 38-month lease with a monthly base rate of **$4,175**, subject to annual **3%** increases - The company's headquarters in Carson City, NV, has an annual rent of **$2,200** for a one-year term starting October 1, 2022[7](index=7&type=chunk)[85](index=85&type=chunk)[628](index=628&type=chunk) - The San Diego office relocated on February 26, 2022, with a 38-month lease commencing March 1, 2022, and a monthly base rate of **$4,175** that began June 1, 2022, with annual **3%** increases[7](index=7&type=chunk)[85](index=85&type=chunk)[315](index=315&type=chunk) [Legal Proceedings](index=35&type=section&id=Item%203.%20Legal%20Proceedings) To the company's knowledge, neither BioVie Inc. nor its officers or directors are party to any material legal proceedings or litigation, nor are there any judgments against them - Neither the Company nor its officers or directors are party to any material legal proceeding or litigation[8](index=8&type=chunk) - There are no judgments against the company or its officers/directors, and none have been convicted of securities-related felonies or misdemeanors[8](index=8&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) BioVie Inc. has no mine safety disclosures to report - No mine safety disclosures are applicable to the company[9](index=9&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) All sales of unregistered securities during FY2023 were previously disclosed in Form 10-Q or 8-K reports, and the company made no repurchases of Common Stock during this period - All sales of unregistered securities during the year ended June 30, 2023, were previously disclosed in Quarterly Reports on Form 10-Q or Current Reports on Form 8-K[12](index=12&type=chunk) - There were no issuer repurchases of Common Stock during the year ended June 30, 2023[13](index=13&type=chunk) [Reserved](index=36&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - Item 6 is reserved[14](index=14&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) BioVie Inc. is a clinical-stage company with no current revenues, reporting a net loss of **$50.3 million** in FY2023 due to increased clinical activities, and faces substantial doubt about its going concern ability due to an accumulated deficit of **$301 million** and reliance on future financing - BioVie Inc. is a clinical-stage company developing drug therapies for neurological/neurodegenerative disorders and liver disease, with no revenues generated to date and none expected in the foreseeable future[15](index=15&type=chunk)[45](index=45&type=chunk)[513](index=513&type=chunk)[538](index=538&type=chunk) Net Loss and Operating Expenses (Year Ended June 30) | Metric | 2023 (approx.) | 2022 (approx.) | Change (YoY) | | :----- | :------------- | :------------- | :----------- | | Net Loss | $(50.3) million | $(26.1) million | $(24.2) million increase | | Total Operating Expenses | $45.1 million | $27.3 million | $17.8 million increase | - The increase in net loss was primarily due to increased clinical activities (**$16.0 million**), administrative expenses (**$1.8 million**), and a **$6.3 million** increase in other expenses, mainly from a change in fair value of derivative liabilities (**$4.7 million**)[20](index=20&type=chunk)[21](index=21&type=chunk)[42](index=42&type=chunk) Capital Resources and Liquidity (as of June 30, 2023) | Metric | Amount (approx.) | | :----- | :--------------- | | Working Capital | $19.5 million | | Cash, Cash Equivalents & U.S. Treasury Bills | $33.9 million | | Stockholders' Equity | $15.3 million | | Accumulated Deficit | $(301) million | - The company sold approximately **7.5 million** shares of Common Stock under its Controlled Equity Offering Sales Agreement for total net proceeds of approximately **$49.5 million** during FY2023[44](index=44&type=chunk)[599](index=599&type=chunk) - Management expects future funding sources to include equity sales, loans, or strategic transactions, but there is no assurance of obtaining sufficient financing, raising substantial doubt about the company's ability to continue as a going concern[45](index=45&type=chunk)[46](index=46&type=chunk)[539](index=539&type=chunk)[541](index=541&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) BioVie's FY2023 financial results show a net loss increase to **$50.3 million** from **$26.1 million** in FY2022, driven by a **$17.8 million** rise in operating expenses, primarily from R&D activities and a **$6.4 million** increase in other expenses Net Loss and Operating Expenses (Year Ended June 30) | Metric | 2023 (approx.) | 2022 (approx.) | Change (YoY) | | :----- | :------------- | :------------- | :----------- | | Net Loss | $(50.3) million | $(26.1) million | $(24.2) million increase | | Total Operating Expenses | $45.1 million | $27.3 million | $17.8 million increase | Expense Breakdown (Year Ended June 30) | Expense Category | 2023 (approx.) | 2022 (approx.) | Change (YoY) | | :--------------- | :------------- | :------------- | :----------- | | Research and Development | $33.3 million | $17.3 million | $16.0 million increase | | Selling, General and Administrative | $11.6 million | $9.8 million | $1.8 million increase | | Other Expense (Income), Net | $5.2 million | $(1.2) million | $6.4 million increase | - The **$16.0 million** increase in R&D expenses was mainly due to increased clinical activities for Neuroscience **NE3107** studies, including the completion of the Parkinson's Phase 2 study and full enrollment of the Alzheimer's Phase 3 study[22](index=22&type=chunk)[40](index=40&type=chunk) - The **$1.8 million** increase in SG&A expenses was primarily attributed to increased stock compensation expense for the board of directors, legal, investor relations, and other professional fees[41](index=41&type=chunk) - The **$6.4 million** increase in net other expenses was driven by a **$2.1 million** increase in interest expense and a **$4.7 million** change in the fair value of derivative liabilities, partially offset by increased interest income[42](index=42&type=chunk) [Capital Resources and Liquidity](index=38&type=section&id=Capital%20Resources%20and%20Liquidity) As of June 30, 2023, BioVie reported **$19.5 million** in working capital and **$33.9 million** in cash, cash equivalents, and U.S. Treasury bills, but an accumulated deficit of **$301 million**, with future operations contingent on securing additional financing, raising substantial doubt about its going concern ability Capital Resources (as of June 30, 2023) | Metric | Amount (approx.) | | :----- | :--------------- | | Working Capital | $19.5 million | | Cash, Cash Equivalents & U.S. Treasury Bills | $33.9 million | | Stockholders' Equity | $15.3 million | | Accumulated Deficit | $(301) million | - The company has not generated any revenue and does not expect to in the foreseeable future, making future operations dependent on successful development and commercialization efforts, and securing additional financing[45](index=45&type=chunk)[538](index=538&type=chunk) - During FY2023, BioVie sold approximately **7.5 million** shares of Common Stock, generating **$49.5 million** in net proceeds[44](index=44&type=chunk)[599](index=599&type=chunk) - Management's plans for future funding include equity sales, loans, or strategic transactions, but the uncertainty of obtaining sufficient financing raises substantial doubt about the company's ability to continue as a going concern[45](index=45&type=chunk)[46](index=46&type=chunk)[539](index=539&type=chunk)[541](index=541&type=chunk) [Recently Issued Accounting Pronouncement](index=38&type=section&id=Recently%20Issued%20Accounting%20Pronouncement) The company does not expect a material impact from the adoption of ASU No. 2016-13, which replaces the incurred loss impairment methodology with expected credit losses, with its effective date for smaller reporting companies deferred to fiscal years beginning after December 15, 2022 - ASU No. 2016-13, which replaces the incurred loss impairment methodology with expected credit losses, is not expected to have a material impact on the company's financial statements[47](index=47&type=chunk)[552](index=552&type=chunk) - The effective date for smaller reporting companies for ASU 2016-13 was deferred for fiscal years beginning after December 15, 2022[47](index=47&type=chunk)[552](index=552&type=chunk) [Off-Balance Sheet Arrangements](index=38&type=section&id=Off-Balance%20Sheet%20Arrangements) BioVie Inc. has no off-balance sheet arrangements that are material or reasonably likely to have a current or future significant effect on its financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources - The company has no off-balance sheet arrangements that are material or likely to significantly affect its financial condition or results[48](index=48&type=chunk) [Critical Accounting Policies and Estimates](index=39&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) BioVie's critical accounting policies involve significant management estimates for clinical accruals, share-based compensation, derivatives, leases, and intangible asset valuation, while monitoring credit risk in cash and accounting for U.S. Treasury Bills as available-for-sale investments at fair value - The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts, including for clinical accruals, share-based compensation, derivatives, leases, and impairment of intangible assets and goodwill[526](index=526&type=chunk)[550](index=550&type=chunk) - Cash and cash equivalents include cash deposits and money market funds, with investments in U.S. Treasury Bills (maturities of three months or less) also classified here[50](index=50&type=chunk)[527](index=527&type=chunk) - Investments in U.S. Treasury Bills with maturities greater than three months are accounted for as available-for-sale and recorded at fair value, with unrealized gains included in other comprehensive income[39](index=39&type=chunk)[528](index=528&type=chunk)[646](index=646&type=chunk) - The company monitors the financial stability of institutions holding cash in excess of federally insured levels, acknowledging heightened uncertainties in financial markets could impact access to cash or financing[277](index=277&type=chunk)[645](index=645&type=chunk) - Operating leases are recognized as right-of-use assets and lease liabilities based on the present value of future minimum lease payments, using an incremental borrowing rate[530](index=530&type=chunk)[638](index=638&type=chunk) - Fair values of financial instruments are determined using a hierarchy (Level 1, 2, 3) that prioritizes observable inputs[278](index=278&type=chunk)[570](index=570&type=chunk)[571](index=571&type=chunk)[572](index=572&type=chunk)[639](index=639&type=chunk)[649](index=649&type=chunk)[650](index=650&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) BioVie Inc. has no material market risk disclosures to report - No quantitative and qualitative disclosures about market risk are applicable[658](index=658&type=chunk) [Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The financial statements and supplementary data are incorporated by reference from Item 15 of this report - Financial information is indexed under Item 15 and incorporated by reference[659](index=659&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=40&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) BioVie Inc. has no changes in or disagreements with accountants on accounting and financial disclosure to report - No changes in or disagreements with accountants on accounting and financial disclosures are applicable[659](index=659&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%209A.%20Controls%20and%20Procedures) BioVie's management, including the CEO and CFO, concluded that both disclosure controls and internal control over financial reporting were effective as of June 30, 2023, based on the COSO 2013 Framework, with no material changes during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, 2023[651](index=651&type=chunk) - Management concluded that internal control over financial reporting was effective as of June 30, 2023, based on the COSO 2013 Framework[660](index=660&type=chunk) - There were no material changes in internal controls over financial reporting during the quarter ended June 30, 2023[661](index=661&type=chunk) [Other Information](index=41&type=section&id=Item%209B.%20Other%20Information) BioVie Inc. has no other information to report under this item - No other information is applicable[662](index=662&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=41&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) BioVie Inc. has no disclosures regarding foreign jurisdictions that prevent inspections - No disclosures regarding foreign jurisdictions that prevent inspections are applicable[368](index=368&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=42&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) BioVie Inc.'s Board of Directors comprises seven members, with six independent, and has established Audit, Compensation, and Nominating and Corporate Governance committees, all composed of independent directors, while also adopting a Code of Conduct and Ethics and an anti-hedging policy Board of Directors and Executive Officers (as of August 9, 2023) | Name | Age | Director Since | Position | | :--- | :-- | :------------- | :------- | | Cuong Do | 57 | 2016 | CEO & President and Director | | Joanne Wendy Kim | 68 | — | CFO | | Joseph M. Palumbo, MD | 63 | — | Chief Medical Officer | | Jim Lang | 58 | 2016 | Chairman of the Board | | Michael Sherman | 64 | 2017 | Director | | Richard J. Berman | 81 | 2019 | Director | | Steve Gorlin | 86 | 2020 | Director | | Robert Hariri, MD, PhD | 64 | 2020 | Director | | Sigmund Rogich | 79 | 2020 | Director | - Six of the seven Board members qualify as 'independent' under Nasdaq listing standards[396](index=396&type=chunk) - The Board has three standing committees: Audit, Compensation, and Nominating and Corporate Governance, all composed solely of independent directors[388](index=388&type=chunk) - The company has adopted a Code of Conduct and Ethics and an insider trading policy that includes anti-hedging provisions[410](index=410&type=chunk)[411](index=411&type=chunk)[415](index=415&type=chunk) [Executive Compensation](index=48&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation for BioVie's named executive officers includes salary, bonus, and equity awards, with CEO Cuong Do's total compensation at **$2.34 million** in FY2023, and director compensation primarily consisting of equity awards under the 2019 Omnibus Equity Incentive Plan Summary Compensation Table (Year Ended June 30) | Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Total | | :-------------------------- | :--- | :----- | :---- | :----------- | :------------ | :---- | | Cuong Do, CEO & President | 2023 | $618,000 | $463,500 | $734,668 | $521,500 | $2,337,668 | | | 2022 | $300,000 | $400,000 | $210,439 | $3,632,382 | $4,542,821 | | Joanne Wendy Kim, CFO | 2023 | $246,750 | $150,625 | $242,499 | $582,343 | $723,874 | | | 2022 | $235,000 | $127,656 | — | $84,000 | $944,999 | | Joseph Palumbo, CMO | 2023 | $525,000 | $197,000 | $242,499 | $126,000 | $1,090,499 | | | 2022 | $333,333 | $239,167 | — | $244,465 | $816,965 | Compensation Actually Paid (CAP) vs. Summary Compensation Table (SCT) Total (Year Ended June 30) | Metric | 2023 | 2022 | | :----- | :--- | :--- | | SCT Total for PEO | $2,337,668 | $4,542,821 | | Compensation Actually Paid to PEO | $3,434,517 | $916,050 | | Average SCT Total for Non-PEO NEOs | $1,185,289 | $605,653 | | Average Compensation Actually Paid to Non-PEO NEOs | $1,185,289 | $605,653 | - As of June 30, 2023, named executive officers held stock options to purchase **1,371,729 shares** (aggregate grant date fair value of ~**$5.4 million**) and **351,386 RSUs** (market value of ~**$1.5 million**)[427](index=427&type=chunk) - Non-employee directors received compensation primarily in the form of equity awards, with FY2023 annual compensation including **155,636 RSUs** (grant date market value **$952,492**) or stock options for **195,000 shares** (grant date fair value **$791,700**)[431](index=431&type=chunk) Equity Compensation Plan Information (as of June 30, 2023) | Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance | | :------------ | :---------------------------------------------------------------------------------------- | :---------------------------------------------------------- | :----------------------------------------------------------- | | Approved by security holders | 4,530,121 | $6.71 | 2,269,952 | | Not approved by security holders | — | — | — | | Total | 4,530,121 | $6.71 | 2,269,952 | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=56&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of August 9, 2023, Acuitas Group Holdings, LLC, owned **69.1%** of BioVie's common stock, making it the majority stockholder, with directors and executive officers as a group owning **4.8%**, a concentration that could significantly influence company affairs Beneficial Ownership (as of August 9, 2023) | Name and Address of Beneficial Owner | Beneficial Ownership | Percentage of Beneficial Ownership | | :----------------------------------- | :------------------- | :------------------------------- | | Acuitas Group Holdings | 30,503,938 | 69.1% | | All directors and executive officers as a group | 1,784,243 | 4.8% | - Acuitas Group Holdings, LLC, **100%** owned by Terren Peizer, is the majority stockholder, holding **69.1%** of outstanding common stock[346](index=346&type=chunk)[455](index=455&type=chunk) - The concentration of ownership by directors, executive officers, and affiliates (**64.0%** as of August 9, 2023) could significantly influence company management and stockholder approval matters[248](index=248&type=chunk)[251](index=251&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=58&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) BioVie Inc. engages in related party transactions, including a Securities Purchase Agreement with majority stockholder Acuitas Group Holdings, LLC, for common stock and warrants, with all such transactions subject to review and approval by the audit committee or Board of Directors - The company entered into a Securities Purchase Agreement with Acuitas Group Holdings, LLC (a related party and majority stockholder) on July 15, 2022[467](index=467&type=chunk)[582](index=582&type=chunk) - Under this agreement, Acuitas purchased **3,636,364 shares** of Class A Common Stock at **$1.65 per share** and warrants to purchase **7,272,728 shares** at an exercise price of **$1.82**, for an aggregate purchase price of **$6 million**[467](index=467&type=chunk)[582](index=582&type=chunk) - All related party transactions are approved by either the audit committee or the Board of Directors, with policies and procedures in place to ensure proper review[458](index=458&type=chunk)[474](index=474&type=chunk) [Principal Accountant Fees and Services](index=59&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) For FY2023 and FY2022, BioVie Inc. incurred **$317,772** and **$223,102** in audit fees, respectively, from its independent registered public accounting firm, with the Audit Committee responsible for appointing and overseeing auditors and pre-approving all services Principal Accountant Fees (Year Ended June 30) | Fee Category | 2023 | 2022 | | :----------- | :--- | :--- | | Audit Fees | $317,772 | $223,102 | | Audit-Related Fees | — | — | | Tax Fees | — | — | | All Other Fees | — | — | | Total | $317,772 | $223,102 | - The Audit Committee is responsible for appointing, setting compensation, and overseeing the work of the independent registered public accounting firm[469](index=469&type=chunk) - The Audit Committee has a policy to pre-approve all audit and permissible non-audit services, with delegation authority to one or more members[469](index=469&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=60&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules, including audited financial statements for FY2023 and FY2022 by EisnerAmper LLP, which present the company's financial position, operations, equity changes, and cash flows in accordance with GAAP, while also highlighting a going concern uncertainty - The financial statements for the years ended June 30, 2023 and 2022 are filed as part of this report[489](index=489&type=chunk) - EisnerAmper LLP served as the independent registered public accounting firm and issued an unqualified opinion on the financial statements[486](index=486&type=chunk)[504](index=504&type=chunk)[517](index=517&type=chunk) - The financial statements were prepared assuming the company will continue as a going concern, but recurring losses and negative cash flows raise substantial doubt about this ability[514](index=514&type=chunk)[538](index=538&type=chunk)[541](index=541&type=chunk) [Financial Statements](index=63&type=section&id=Financial%20Statements) The financial statements, including Balance Sheets, Statements of Operations, Statements of Changes in Stockholders' Equity, and Statements of Cash Flows, reflect a net loss of **$50.3 million** in FY2023 and an accumulated deficit of **$301 million**, detailing assets, liabilities, equity, critical accounting policies, and related party transactions - The financial statements include Balance Sheets, Statements of Operations and Comprehensive Loss, Statements of Changes in Stockholders' Equity, Statements of Cash Flows, and Notes to Financial Statements[484](index=484&type=chunk) Balance Sheet Highlights (as of June 30) | Metric | 2023 | 2022 | | :----- | :--- | :--- | | Total Assets | $35,104,730 | $20,114,594 | | Total Liabilities | $19,764,444 | $16,443,659 | | Total Stockholders' Equity | $15,340,286 | $3,670,935 | Statements of Operations and Comprehensive Loss Highlights (Year Ended June 30) | Metric | 2023 | 2022 | | :----- | :--- | :--- | | Net Loss | $(50,255,815) | $(26,084,468) | | Basic Net Loss Per Common Share | $(1.55) | $(1.06) | | Diluted Net Loss Per Common Share | $(1.55) | $(1.06) | | Weighted Average Common Shares Outstanding (Basic & Diluted) | 32,483,489 | 24,662,557 | Statements of Cash Flows Highlights (Year Ended June 30) | Cash Flow Activity | 2023 | 2022 | | :----------------- | :--- | :--- | | Net cash used in operating activities | $(40,252,881) | $(18,990,850) | | Net cash used in investing activities | $(14,301,135) | — | | Net cash provided by financing activities | $55,373,183 | $33,120,924 | | Net increase in cash and cash equivalents | $819,167 | $14,130,074 | - The company's accumulated deficit increased to approximately **$301 million** as of June 30, 2023[43](index=43&type=chunk)[506](index=506&type=chunk)[538](index=538&type=chunk)

PART I – FINANCIAL INFORMATION This section covers BioVie Inc.'s unaudited condensed financial statements, management's discussion, market risks, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed financial statements for BioVie Inc., including balance sheets, statements of operations, cash flows, and changes in stockholders' equity, along with detailed notes explaining significant accounting policies, financial instruments, and equity transactions for the periods ended March 31, 2023 and 2022 [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets%20at%20March%2031%2C%202023%20(unaudited)%20and%20June%2030%2C%202022) This section details BioVie Inc.'s financial position, including assets, liabilities, and equity, at March 31, 2023, and June 30, 2022 | Metric | March 31, 2023 | June 30, 2022 | | :-------------------------- | :------------- | :------------ | | Cash and cash equivalents | $31,276,197 | $18,641,716 | | Investments in U.S. T-Bills | $12,521,448 | $- | | Total current assets | $44,047,435 | $18,779,595 | | Total Assets | $45,182,696 | $20,114,594 | | Total current liabilities | $16,004,339 | $4,169,174 | | Total Liabilities | $23,464,436 | $16,443,659 | | Total Stockholders' Equity | $21,718,260 | $3,670,935 | [Condensed Statements of Operations and Other Comprehensive Income](index=4&type=section&id=Condensed%20Statements%20of%20Operations%20and%20other%20comprehensive%20income%20(unaudited)%20-%20for%20the%20three%20months%20and%20nine%20months%20ended%20March%2031%2C%202023%20and%202022) This section details BioVie Inc.'s financial performance, including expenses and net loss, for the three and nine months ended March 31, 2023 and 2022 | Metric (Unaudited) | 3 Months Ended Mar 31, 2023 | 3 Months Ended Mar 31, 2022 | 9 Months Ended Mar 31, 2023 | 9 Months Ended Mar 31, 2022 | | :----------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development expenses | $11,196,835 | $3,577,142 | $24,999,665 | $11,385,586 | | Selling, general and administrative expenses | $2,520,330 | $2,114,348 | $8,931,957 | $6,403,508 | | Total operating expenses | $13,774,509 | $5,748,834 | $34,103,655 | $17,961,126 | | Change in fair value of derivative liabilities | $366,093 | $386,450 | $4,154,645 | $(1,168,804) | | Interest expense | $1,082,762 | $918,633 | $3,192,631 | $1,236,010 | | Net Loss | $(15,041,163) | $(7,040,644) | $(41,143,876) | $(17,995,711) | | Net Loss Per Common Share (Basic & Diluted) | $(0.43) | $(0.28) | $(1.32) | $(0.73) | [Condensed Statements of Cash Flows](index=5&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20(unaudited)%20-%20for%20the%20nine%20months%20ended%20March%2031%2C%202023%20and%202022) This section details BioVie Inc.'s cash flows from operating, investing, and financing activities for the nine months ended March 31, 2023 and 2022 | Cash Flow Activity (9 Months Ended Mar 31) | 2023 | 2022 | | :----------------------------------------- | :------------ | :------------ | | Net cash used in operating activities | $(28,965,321) | $(13,125,753) | | Net cash used in investing activities | $(12,504,943) | $- |\n| Net cash provided by financing activities | $54,104,745 | $33,120,924 | | Net increase in cash and cash equivalents | $12,634,481 | $19,995,171 | | Cash and cash equivalents, end of period | $31,276,197 | $24,506,813 | - Net proceeds from issuance of common stock significantly increased to **$48.2 million** in 2023 from **$18.5 million** in 2022, contributing to financing activities[107](index=107&type=chunk) [Condensed Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(unaudited)%20-%20for%20the%20periods%20from%20July%201%2C%202021%20through%20March%2031%2C%202022%20and%20July%201%2C%202022%20through%20March%2031%2C%202023) This section details changes in BioVie Inc.'s stockholders' equity, including common stock and accumulated deficit, for periods ended March 31, 2023 and 2022 | Metric (Unaudited) | June 30, 2022 | March 31, 2023 | | :----------------------------------------------- | :------------ | :------------- |\n| Common Stock Shares | 24,984,083 | 36,153,911 | | Additional Paid in Capital | $254,638,329 | $313,811,910 | | Accumulated Deficit | $(250,969,890)| $(292,113,766) |\n| Total Stockholders' Equity | $3,670,935 | $21,718,260 | - Proceeds from common stock issuance (net of costs) totaled approximately **$9.77 million** for the period July 1, 2022 - March 31, 2023, and **$32.52 million** for the period December 31, 2022 - March 31, 2023[110](index=110&type=chunk)[130](index=130&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) These notes provide detailed explanations of the company's business, liquidity challenges, significant accounting policies, and specific financial instruments and transactions, including related party dealings, debt, equity, and fair value measurements [Note 1. Background Information](index=9&type=section&id=1.%20Background%20Information) This note provides an overview of BioVie Inc.'s clinical-stage drug development focus and key pipeline candidates like NE3107 and BIV201 - BioVie Inc. is a clinical-stage company developing drug therapies for neurological, neuro-degenerative disorders, and liver disease[82](index=82&type=chunk)[133](index=133&type=chunk) - NE3107, an orally administered small molecule, is being evaluated in a **Phase 3 study** for mild to moderate Alzheimer's Disease (targeting primary completion in **Q4 2023**) and has completed a **Phase 2 study** for Parkinson's Disease, meeting safety and drug-drug interaction objectives[42](index=42&type=chunk)[113](index=113&type=chunk)[152](index=152&type=chunk) - BIV201, an Orphan drug candidate for refractory ascites, showed a **34% reduction** in ascites fluid in a paused **Phase 2b study**, with overall treatment appearing well tolerated[25](index=25&type=chunk)[114](index=114&type=chunk) [Note 2. Liquidity](index=10&type=section&id=2.%20Liquidity) This note addresses BioVie Inc.'s liquidity challenges, accumulated deficit, and dependence on future financing to continue operations - The Company has an accumulated deficit of approximately **$292 million** as of March 31, 2023, and has not generated any revenue to date, raising substantial doubt about its ability to continue as a going concern[136](index=136&type=chunk)[137](index=137&type=chunk) | Metric (March 31, 2023) | Amount | | :---------------------- | :------------ | | Working Capital | $28.0 million | | Cash & US Treasury Bills| $43.8 million | | Stockholders' Equity | $21.7 million | - Future operations are dependent on securing additional financing through equity sales, loans, or other strategic transactions[155](index=155&type=chunk)[240](index=240&type=chunk) [Note 3. Significant Accounting Policies](index=10&type=section&id=3.%20Significant%20Accounting%20Policies) This note outlines BioVie Inc.'s accounting principles, including interim financial statement preparation and net loss per share calculation - Interim financial statements are prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions[156](index=156&type=chunk) - Basic and diluted net loss per common share are calculated by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, with anti-dilutive instruments excluded[157](index=157&type=chunk) - No recent Accounting Standards Updates (ASUs) are expected to have a material impact on the company's financial statements[158](index=158&type=chunk) [Note 4. Investments in U.S. Treasury Bills available for sale](index=11&type=section&id=4.%20Investments%20in%20U.S.%20Treasury%20Bills%20available%20for%20sale) This note details BioVie Inc.'s investments in U.S. Treasury Bills, classified as available-for-sale and recorded at fair value | Metric (March 31, 2023) | Amount | | :---------------------- | :------------ | | Amortized Cost Basis | $12,504,943 | | Gross Unrealized Gain | $16,505 | | Fair Value | $12,521,448 | - Investments in U.S. Treasury Bills with maturities greater than **3 months** are classified as available-for-sale and recorded at fair value, with unrealized gains included in other comprehensive income[161](index=161&type=chunk) [Note 5. Intangible Assets](index=12&type=section&id=5.%20Intangible%20Assets) This note describes BioVie Inc.'s intangible assets, primarily intellectual property, and their associated amortization expenses | Metric (Intellectual Property) | March 31, 2023 | June 30, 2022 | | :----------------------------- | :------------- | :------------ | | Intellectual Property | $2,293,770 | $2,293,770 | | Less Accumulated Amortization | $(1,599,331) | $(1,427,298) | | Intellectual Property, Net | $694,439 | $866,472 | | Amortization Expense | 3 Months Ended Mar 31, 2023 | 9 Months Ended Mar 31, 2023 | | :------------------- | :-------------------------- | :-------------------------- | | Amount | $57,344 | $172,033 | [Note 6. Related Party Transactions](index=13&type=section&id=6.%20Related%20Party%20Transactions) This note details BioVie Inc.'s transactions with related parties, including asset acquisitions and private placements with major stockholders - Acquired biopharmaceutical assets, including NE3107, from NeurMedix, Inc., a related party, in June 2021[42](index=42&type=chunk)[113](index=113&type=chunk)[166](index=166&type=chunk) - In August 2022, the Company received approximately **$5.9 million** in net proceeds from a private placement with Acuitas Group Holdings, LLC (majority stockholder), involving the issuance of **3,636,364 common shares** and warrants to purchase **7,272,728 shares**[142](index=142&type=chunk) - The company may be obligated to deliver contingent stock consideration of **up to 18 million shares** to NeurMedix upon achievement of certain clinical, regulatory, and commercial milestones[1](index=1&type=chunk) [Note 7. Other Liabilities](index=13&type=section&id=7.%20Other%20Liabilities) This note explains BioVie Inc.'s other liabilities, including the current portion and the impact of a retention bonus arrangement | Metric (Other Liabilities) | March 31, 2023 | June 30, 2022 | | :------------------------- | :------------- | :------------ | | Current portion | $193,542 | $1,304,925 | - The decrease in current portion of other liabilities is due to ongoing monthly installments of a **$1,161,000** retention bonus arrangement recognized in August 2021[193](index=193&type=chunk) [Note 8. Notes Payable](index=13&type=section&id=8.%20Notes%20Payable) This note details BioVie Inc.'s loan agreement, interest rates, maturity, and conversion options for its notes payable - The Company entered into a Loan Agreement with Avenue for **up to $20 million** in growth capital, with **$15 million** funded (Tranche 1)[2](index=2&type=chunk) - The Loan bears interest at an annual rate equal to the greater of (a) **7.00%** plus the prime rate (**8.0%** at March 31, 2023) or (b) **10.75%**, and matures on December 1, 2024[2](index=2&type=chunk) - The Loan Agreement includes a conversion option for **up to $5.0 million** of the outstanding principal into common stock at a conversion price of **$6.98 per share**[194](index=194&type=chunk) | Metric (Notes Payable) | March 31, 2023 | June 30, 2022 | | :--------------------- | :------------- | :------------ | | Notes Payable | $7,500,000 | $15,000,000 | | Net of current portion | $7,405,632 | $12,138,686 | [Note 9. Fair Value Measurements](index=16&type=section&id=9.%20Fair%20Value%20Measurements) This note explains BioVie Inc.'s fair value measurements for financial instruments, particularly derivative liabilities, using a three-level hierarchy - Fair values of financial instruments are determined using a hierarchy (Level 1, 2, 3), maximizing observable inputs[162](index=162&type=chunk) | Derivative Liabilities (Level 3) | March 31, 2023 | June 30, 2022 | | :------------------------------- | :------------- | :------------ | | Warrants | $1,956,781 | $194,531 | | Conversion Option | $2,580,425 | $188,030 | | Total Derivatives | $4,537,206 | $382,561 | - The total change in fair value of derivative liabilities was approximately **$4.2 million** for the nine months ended March 31, 2023, recorded in the statement of operations[7](index=7&type=chunk) [Note 10. Equity Transactions](index=19&type=section&id=10.%20Equity%20Transactions) This note details BioVie Inc.'s equity instruments, including stock options, warrants, restricted stock units, and stock issuance proceeds | Equity Instrument (March 31, 2023) | Number Outstanding |\n| :--------------------------------- | :----------------- |\n| Stock Options | 3,443,997 |\n| Warrants | 7,770,285 |\n| Restricted Stock Units | 527,549 | | Stock-Based Compensation Expense (9 Months Ended Mar 31) | 2023 | 2022 | | :------------------------------------------------------- | :------------ | :------------ | | Restricted Stock Units | $1,589,526 | $384,454 | | Stock Options | $3,480,425 | $4,004,718 | - During the nine months ended March 31, 2023, the company sold **7,372,691 shares** of common stock under a Sales Agreement for net proceeds of **$48.2 million**[205](index=205&type=chunk) [Note 11. Leases](index=23&type=section&id=11.%20Leases) This note describes BioVie Inc.'s lease arrangements, including right-of-use assets, lease liabilities, and weighted average lease terms - The company's San Diego office relocated to a new lease term of **38 months**, commencing March 1, 2022, with a monthly base rate of **$4,175**[19](index=19&type=chunk) | Lease Metric | March 31, 2023 | June 30, 2022 | | :--------------------------- | :------------- | :------------ | | Right-of-use asset, net | $90,549 | $118,254 | | Total operating lease liabilities | $97,779 | $126,298 | | Weighted average remaining lease term | **2.0 years** | **2.8 years** | | Weighted average discount rate | **10.75%** | **10.75%** | [Note 12. Commitments and Contingencies](index=24&type=section&id=12.%20Commitments%20and%20Contingencies) This note outlines BioVie Inc.'s royalty obligations on net sales of its drug candidates BIV201 and terlipressin products - The Company is obligated to pay a low single-digit royalty on net sales of BIV201 to members of LAT Pharma, PharmaIn Corporation, and The Barrett Edge, Inc[71](index=71&type=chunk)[153](index=153&type=chunk) - The Company is obligated to pay a low single-digit royalty on net sales of all terlipressin products covered by US patent no. 9,655,645, capped at a maximum of **$200,000** per year[39](index=39&type=chunk) [Note 13. Employee Benefit Plan](index=24&type=section&id=13.%20Employee%20Benefit%20Plan) This note details BioVie Inc.'s 401K plan, including company matching contributions for employee retirement savings - The Company sponsors a 401K Plan and matches **5%** of the first **5%** of an employee's contributions[23](index=23&type=chunk) | 401K Contributions | 3 Months Ended Mar 31, 2023 | 9 Months Ended Mar 31, 2023 | | :----------------- | :-------------------------- | :-------------------------- | | Company Match | $16,000 | $80,100 | [Note 14. Subsequent Events](index=24&type=section&id=14.%20Subsequent%20Events) This note reports BioVie Inc.'s equity sales and net proceeds received after the March 31, 2023, reporting period - After March 31, 2023, the Company sold **162,767 shares** of common stock for net proceeds of **$1.3 million** under its Sales Agreement[63](index=63&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses BioVie Inc.'s financial condition and results of operations, highlighting increased net losses driven by higher R&D expenses for clinical trials and changes in derivative liabilities, alongside updates on its drug pipeline and liquidity status [Business Overview and Pipeline Updates](index=25&type=section&id=2.1%20Business%20Overview%20and%20Pipeline%20Updates) This section provides an overview of BioVie Inc.'s clinical-stage drug development and updates on its NE3107 and BIV201 pipeline candidates - BioVie Inc. is a clinical-stage company developing innovative drug therapies for chronic debilitating conditions, including neurological, neuro-degenerative disorders, and liver disease[82](index=82&type=chunk)[133](index=133&type=chunk)[217](index=217&type=chunk) - NE3107 is in a potentially pivotal **Phase 3 study** for mild to moderate Alzheimer's Disease (targeting primary completion in **Q4 2023**) and has completed a **Phase 2 study** for Parkinson's Disease, meeting safety and drug-drug interaction objectives[42](index=42&type=chunk)[113](index=113&type=chunk)[152](index=152&type=chunk) - The Orphan drug candidate BIV201 for refractory ascites due to liver cirrhosis, with FDA Fast Track status, was paused in March 2023 after showing a **34% reduction** in ascites fluid in treated patients[25](index=25&type=chunk)[114](index=114&type=chunk) [Results of Operations](index=26&type=section&id=2.2%20Results%20of%20Operations) This section analyzes BioVie Inc.'s financial performance, focusing on net loss, operating expenses, and R&D costs for recent periods [Three Months Ended March 31, 2023 vs. 2022](index=26&type=section&id=2.2.1%20Three%20Months%20Ended%20March%2031%2C%202023%20vs.%202022) This section compares BioVie Inc.'s financial results for the three months ended March 31, 2023, and 2022, highlighting changes in net loss and expenses | Metric (3 Months Ended Mar 31) | 2023 | 2022 | Change | | :----------------------------- | :------------ | :------------ | :------------ | | Net Loss | $(15.0)M | $(7.0)M | $(8.0)M | | R&D Expenses | $11.2M | $3.6M | +$7.6M | | SG&A Expenses | $2.5M | $2.1M | +$0.4M | - The increase in R&D expenses was primarily due to significantly more active Neuroscience NE3107 studies, with the Parkinson's **Phase 2 study** reporting top results and the Alzheimer's **Phase 3 study** reaching full enrollment[191](index=191&type=chunk)[219](index=219&type=chunk) [Nine Months Ended March 31, 2023 vs. 2022](index=26&type=section&id=2.2.2%20Nine%20Months%20Ended%20March%2031%2C%202023%20vs.%202022) This section compares BioVie Inc.'s financial results for the nine months ended March 31, 2023, and 2022, detailing changes in net loss and expenses | Metric (9 Months Ended Mar 31) | 2023 | 2022 | Change | | :----------------------------- | :------------ | :------------ | :------------ | | Net Loss | $(41.1)M | $(18.0)M | $(23.1)M | | Total Operating Expenses | $34.1M | $18.0M | +$16.1M | | R&D Expenses | $25.0M | $11.4M | +$13.6M | | SG&A Expenses | $8.9M | $6.4M | +$2.5M | | Other Expense, Net | $7.0M | $0.035M | +$7.0M | - The **$13.6 million** increase in R&D expenses was mainly driven by **$12.3 million** from increased clinical activities, particularly for Neuroscience NE3107 studies[47](index=47&type=chunk)[83](index=83&type=chunk) - The **$7.0 million** increase in other expenses was primarily due to a **$5.3 million** change in the fair value of derivative liabilities and a **$2.0 million** increase in interest expense[221](index=221&type=chunk)[222](index=222&type=chunk) [Capital Resources and Liquidity](index=27&type=section&id=2.3%20Capital%20Resources%20and%20Liquidity) This section discusses BioVie Inc.'s financial resources, liquidity position, and dependence on future financing due to lack of revenue | Metric (March 31, 2023) | Amount | | :---------------------- | :------------ | | Cash & US Treasury Bills| $43.8 million | | Working Capital | $28.0 million | | Stockholders' Equity | $21.7 million | | Accumulated Deficit | $(292.1) million | - The company has not generated any revenue and expects no revenue in the foreseeable future, making future operations dependent on securing additional financing[240](index=240&type=chunk) - Management expects future funding sources to include equity sales, loans, or other strategic transactions[240](index=240&type=chunk) [Critical Accounting Policies and Estimates](index=27&type=section&id=2.4%20Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no significant changes to BioVie Inc.'s critical accounting policies for the nine months ended March 31, 2023 - No significant changes to critical accounting policies were identified for the nine months ended March 31, 2023, compared to the prior fiscal year[223](index=223&type=chunk) [Recent Accounting Pronouncements](index=28&type=section&id=2.5%20Recent%20Accounting%20Pronouncements) This section states that recent accounting pronouncements are not expected to materially impact BioVie Inc.'s financial statements - Recent accounting pronouncements are not expected to have a material impact on the company's balance sheets or statements of operations[50](index=50&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks include uncertainties related to the COVID-19 pandemic's long-term impact on financial markets and its ability to raise funds, as well as potential liquidity concerns in the financial services industry affecting access to cash or new financing - The long-term impact of the COVID-19 pandemic on financial markets and the overall economy remains uncertain, potentially adversely affecting the company's ability to raise funds[29](index=29&type=chunk)[116](index=116&type=chunk) - The company monitors the financial stability of institutions holding its cash, but heightened uncertainties in the financial services industry could threaten its ability to access cash or secure new financing[74](index=74&type=chunk)[160](index=160&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed effective at a reasonable assurance level as of March 31, 2023, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2023[243](index=243&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2023[84](index=84&type=chunk) PART II – OTHER INFORMATION This section details legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) To the company's knowledge, neither it nor its officers or directors are party to any material legal proceedings or litigation, and there are no judgments against them - Neither the Company nor its officers or directors are party to any material legal proceeding or litigation, and no judgments exist against them[225](index=225&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including future dilution from equity offerings, warrants, options, RSUs, and contingent stock consideration, as well as substantial control over management by certain stockholders who are also officers and directors - Future equity offerings, options, warrants, stock awards, or other arrangements may lead to future dilution for existing stockholders[34](index=34&type=chunk)[55](index=55&type=chunk)[226](index=226&type=chunk) - The company is obligated to issue **up to 18 million shares** of common stock upon achievement of certain clinical, regulatory, and commercial milestones for its drug candidates, which could further dilute existing stockholders[1](index=1&type=chunk)[246](index=246&type=chunk) - Certain stockholders who are also officers and directors, including the majority shareholder Mr. Terren Peizer, have significant control (**65% of common stock**) over the company's management and matters requiring member approval[35](index=35&type=chunk)[227](index=227&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - No unregistered sales of equity securities were reported[248](index=248&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[229](index=229&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[37](index=37&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) The company reported no other material information for this item - No other material information was reported[36](index=36&type=chunk)[75](index=75&type=chunk)[229](index=229&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including amendments to bylaws, certifications from the CEO and CFO, and XBRL taxonomy documents - Exhibits include Amendment No. 2 to Asset Purchase Agreement, certifications of CEO and CFO (pursuant to 18 U.S.C. Section 1350 and Rule 13a-14(a)), and XBRL taxonomy extension documents[38](index=38&type=chunk)[86](index=86&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)

On August 20, 2021, the Company awarded 58,759 restricted stock units ("RSUs") to the Company's President and CEO under the Company's 2019 Omnibus Incentive Equity Plan (the "2019 Omnibus Plan") as his salary for the period from April 27, 2021, the date of his appointment, through December 31, 2021. The number of RSUs awarded was based on a prorated annual base salary of $600,000 at a 10% discount to the grant date fair value of $7.74 per share of the Company's common stock. Each RSU awarded to the CEO enti ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________to _____________ Commission File Number: 001-39015 BIOVIE INC. (Exact name of registrant as specified in its charter) Nevada 46-2510769 (State o ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) BioVie Inc. is a clinical-stage company developing drug therapies for chronic debilitating conditions, focusing on liver and neurodegenerative diseases, protected by patents and subject to extensive regulation [Company Overview and Pipeline](index=5&type=section&id=Company%20Overview%20and%20Pipeline) BioVie is a clinical-stage company developing therapies for chronic conditions, focusing on liver disease and neurodegenerative diseases[10](index=10&type=chunk) - The company's liver disease candidate, BIV201 (terlipressin), targets refractory ascites and is in a Phase 2b trial with top-line results expected in mid-2023[11](index=11&type=chunk) - The neurodegenerative disease candidate, NE3107, acquired from NeurMedix, is being evaluated for Alzheimer's Disease (Phase 3 trial) and Parkinson's Disease (Phase 2 trial)[13](index=13&type=chunk)[14](index=14&type=chunk) [Liver Cirrhosis Program (BIV201)](index=6&type=section&id=Liver%20Cirrhosis%20Program%20(BIV201)) BIV201 is an orphan drug candidate for treating ascites due to chronic liver cirrhosis, with a Phase 2b study initiated in June 2021 and a potential pivotal Phase 3 trial planned for 2023[18](index=18&type=chunk)[21](index=21&type=chunk) - The company has developed a proprietary novel liquid formulation of terlipressin with confirmed room temperature stability for 18 months, a key differentiator from other terlipressin products requiring refrigeration[22](index=22&type=chunk) - BIV201 has received FDA Fast-Track status and Orphan Drug designation for ascites and hepatorenal syndrome (HRS), with the total addressable market for ascites estimated to exceed **$650 million**[23](index=23&type=chunk) [Neurodegenerative Disease Program (NE3107)](index=9&type=section&id=Neurodegenerative%20Disease%20Program%20(NE3107)) NE3107 is a novel, orally administered small molecule designed to inhibit inflammation-driven insulin resistance, believed to play a fundamental role in Alzheimer's and Parkinson's Disease[33](index=33&type=chunk) - A potentially pivotal Phase 3 study for NE3107 in mild to moderate Alzheimer's disease was initiated on August 5, 2021, with primary completion targeted for mid-2023[33](index=33&type=chunk) - A Phase 2 study (NM201) for NE3107 in Parkinson's disease patients was initiated on January 20, 2022, to assess safety, tolerability, and pro-motoric impact, with topline results expected by the end of calendar year 2022[44](index=44&type=chunk) [Intellectual Property](index=11&type=section&id=Intellectual%20Property) BIV201 has Orphan Drug Designations in the U.S. for hepatorenal syndrome and ascites, and the company has filed a PCT application for its novel liquid formulation of terlipressin[50](index=50&type=chunk) NE3107 U.S. Patent Portfolio Summary (as of Aug 22, 2022) | Category | Count | | :--- | :--- | | Issued U.S. Patents | 15 | | Pending U.S. Patent Application | 1 | | Pending U.S. PCT Application | 1 | | Issued Foreign Patents | 6 | [Government Regulation](index=12&type=section&id=Government%20Regulation) The company's products are subject to extensive regulation by the FDA in the U.S. and comparable foreign authorities, covering research, development, testing, manufacturing, and marketing[55](index=55&type=chunk) - The U.S. drug development process involves preclinical testing, an Investigational New Drug (IND) application, and three phases of human clinical trials (Phase 1, 2, and 3) to establish safety and efficacy before submitting a New Drug Application (NDA) or Biologics License Application (BLA)[58](index=58&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - The company may utilize programs like Orphan Drug Designation, which provides seven years of market exclusivity for a rare disease, and Fast Track designation to expedite the review process for drugs addressing unmet medical needs[75](index=75&type=chunk)[76](index=76&type=chunk)[78](index=78&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks, including no revenue, substantial losses, dependence on clinical trial success, and the need for significant additional capital to fund operations - **Business & Financial Risks:** The company has no approved products, has never generated revenue, and will require substantial additional capital to fund operations; failure to raise funds could force a cessation of operations[86](index=86&type=chunk)[87](index=87&type=chunk)[106](index=106&type=chunk) - **Clinical & Regulatory Risks:** Drug development is a lengthy and uncertain process, product candidates may be found unsafe or ineffective in clinical trials, and failure to obtain FDA approval would prevent commercialization; the COVID-19 pandemic could also disrupt clinical trials and supply chains[113](index=113&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk) - **Competitive & Market Risks:** The company faces competition from established pharmaceutical companies, and even if approved, its products may not be adopted over existing treatments; failure to protect intellectual property could compromise its competitive advantage[155](index=155&type=chunk)[158](index=158&type=chunk)[143](index=143&type=chunk) - **Stock & Ownership Risks:** Investors face potential dilution from future equity offerings and milestone-based share issuances, while executive officers and directors beneficially own approximately **81.8%** of outstanding common stock, giving them significant control over management and company affairs as of September 13, 2022[167](index=167&type=chunk)[170](index=170&type=chunk)[172](index=172&type=chunk) [Unresolved Staff Comments](index=32&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[191](index=191&type=chunk) [Properties](index=32&type=section&id=Item%202.%20Properties) The company leases office space for its headquarters in Carson City, Nevada, and maintains an office in San Diego, California - The company's headquarters is located at 680 W. Nye Lane, Carson City, Nevada, under a 12-month lease that began November 1, 2021, with an annual rent of **$2,200**[192](index=192&type=chunk) - The company leases an office at 5090 Shoreham Place, San Diego, California, under a 38-month lease that commenced on March 1, 2022, with monthly base rent of **$4,175** starting June 1, 2022[193](index=193&type=chunk) [Legal Proceedings](index=32&type=section&id=Item%203.%20Legal%20Proceedings) The company reports that it is not a party to any material legal proceedings - The company is not a party to any material legal proceedings[194](index=194&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[195](index=195&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) During the fiscal year ended June 30, 2022, the company did not engage in any issuer repurchases of its common stock - There were no issuer repurchases of common stock during the year ended June 30, 2022[197](index=197&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For FY 2022, the company's net loss decreased to **$26.1 million** from **$130.2 million** due to a one-time IPR&D expense in 2021, while operating expenses increased from clinical trials and expanded operations, leading to substantial doubt about its going concern ability [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Comparison of Operations (Year Ended June 30) | Metric | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | **Net Loss** | $26.1M | $130.2M | -$104.1M | | **Total Operating Expenses** | $27.3M | $138.1M | -$110.8M | | Research & Development | $17.3M | $2.5M | +$14.8M | | Selling, General & Admin | $9.8M | $4.6M | +$5.2M | - The decrease in net loss was primarily due to a one-time **$130.6 million** In-Process Research and Development (IPR&D) expense recorded in June 2021 related to the NeurMedix asset acquisition[205](index=205&type=chunk)[206](index=206&type=chunk) - R&D expenses increased by **$14.8 million**, driven by clinical operations for the Alzheimer's Phase 3 trial, initiation of the Parkinson's Phase 2 trial, and an expanded clinical team[207](index=207&type=chunk) - SG&A expenses increased by **$5.2 million** due to higher employee compensation (including **$2.4 million** in stock-based compensation), legal fees, and investor relations costs associated with expanded operations[209](index=209&type=chunk) [Capital Resources and Liquidity](index=35&type=section&id=Capital%20Resources%20and%20Liquidity) Financial Position as of June 30, 2022 | Metric | Amount | | :--- | :--- | | Working Capital | $14.6 million | | Cash | $18.6 million | | Stockholders' Equity | $3.7 million | | Accumulated Deficit | $251 million | - The company's ability to continue as a going concern is in substantial doubt, as its future viability depends on raising additional capital to finance operations[217](index=217&type=chunk)[221](index=221&type=chunk) - Subsequent to the fiscal year-end, the company raised capital through a Controlled Equity Offering Sales Agreement (net proceeds of **$5.9 million** as of Sep 12, 2022) and a private placement with Acuitas (gross proceeds of **$6 million**)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of June 30, 2022 - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[230](index=230&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of June 30, 2022[231](index=231&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=39&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's leadership includes CEO Cuong Do and Chairman Terren Peizer, with an eight-member board, six independent directors, and three standing committees, all operating under a code of ethics - The executive team is led by Cuong Do (CEO & President), Terren Peizer (Chairman), Joanne Wendy Kim (CFO), and Joseph M. Palumbo, MD (Chief Medical Officer)[235](index=235&type=chunk) - The Board of Directors has determined that six of its eight members are independent: Messrs. Lang, Sherman, Berman, Gorlin, Hariri, and Rogich[270](index=270&type=chunk) - The Board has three standing committees: Audit, Compensation, and Nominating and Corporate Governance, each composed solely of independent directors[272](index=272&type=chunk) Board Diversity Matrix (As of September 13, 2022) | Category | Count | | :--- | :--- | | **Total Directors** | **8** | | **Gender Identity** | | | Male | 8 | | Female | 0 | | **Demographic Background** | | | Asian | 1 | | White | 4 | | Did Not Disclose | 3 | [Executive Compensation](index=47&type=section&id=Item%2011.%20Executive%20Compensation) For fiscal year 2022, CEO Cuong Do's total compensation was **$4.54 million**, largely from stock and option awards, while non-employee directors received stock options, all under the 2019 Omnibus Equity Incentive Plan FY 2022 Named Executive Officer Compensation | Name and Position | Salary | Bonus | Stock/Option Awards | Total Compensation | | :--- | :--- | :--- | :--- | :--- | | **Cuong Do** (CEO & President) | $300,000 | $400,000 | $3,842,821 | $4,542,821 | | **Joanne Wendy Kim** (CFO) | $235,000 | $127,656 | $582,343 | $944,999 | | **Joseph Palumbo** (CMO) | $333,333 | $239,167 | $244,465 | $816,965 | - Non-employee directors received compensation in the form of option awards, with grant date fair values ranging from approximately **$399,000** to **$425,000** for fiscal year 2022[299](index=299&type=chunk) - As of June 30, 2022, there were **3,705,157 shares** available for new awards under the 2019 Omnibus Equity Incentive Plan[305](index=305&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=53&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of September 13, 2022, the company's ownership is highly concentrated, with Chairman Terren Peizer holding approximately **81.3%** and all directors and executive officers as a group owning approximately **82.5%** of outstanding common stock Beneficial Ownership (as of September 13, 2022) | Beneficial Owner | Percentage Ownership | | :--- | :--- | | Terren Peizer (Chairman) | 81.3% | | All directors and executive officers as a group | 82.5% | - The percentage ownership is based on **30,165,319 shares** of common stock outstanding as of September 13, 2022[309](index=309&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=55&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company engaged in a significant related party private placement with Acuitas, an entity controlled by Chairman Terren Peizer, for **$6 million** in stock and warrants, with all such transactions subject to audit committee or Board approval - On July 15, 2022, the company entered into a securities purchase agreement with Acuitas (an entity controlled by Chairman Terren Peizer) for a private placement of **3,636,364 shares** and warrants to purchase **7,272,728 shares** for an aggregate price of **$6 million**, which closed on August 15, 2022[318](index=318&type=chunk) - The company has a formal procedure for the review and approval of related party transactions by either the audit committee or the Board of Directors[319](index=319&type=chunk) [Principal Accountant Fees and Services](index=55&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) EisnerAmper LLP, the company's principal accountant, billed **$223,102** for audit services in FY 2022, an increase from the prior year, with all services pre-approved by the Audit Committee Auditor Fees | Fee Category | 2022 | 2021 | | :--- | :--- | :--- | | Audit Fees | $223,102 | $191,970 | | **Total** | **$223,102** | **$191,970** | - The Audit Committee is responsible for appointing, setting compensation, and overseeing the work of the independent registered public accounting firm, and has a policy to pre-approve all services[323](index=323&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=57&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K report, including corporate governance documents, material agreements, and certifications - This section lists all exhibits filed with the annual report, including corporate governance documents, material agreements, and certifications[330](index=330&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=62&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) EisnerAmper LLP issued an unqualified opinion on the financial statements but included a "Going Concern" paragraph due to recurring losses and negative cash flows, identifying the valuation of notes payable and derivative liabilities as a critical audit matter - The auditor expressed an unqualified opinion that the financial statements are presented fairly in all material respects[338](index=338&type=chunk) - A 'Going Concern' paragraph was included, citing recurring losses and negative cash flows from operations, which raise substantial doubt about the company's ability to continue as a going concern[339](index=339&type=chunk) - The valuation and accounting for notes payable and related derivative liabilities were identified as a critical audit matter due to complexity and subjective judgment[346](index=346&type=chunk) [Financial Statements Data](index=64&type=section&id=Financial%20Statements%20Data) The company's financial statements show a significant increase in cash to **$18.6 million** and total liabilities to **$16.4 million** as of June 30, 2022, while the net loss for FY 2022 significantly reduced to **$26.1 million** from **$130.2 million** in FY 2021, primarily due to a one-time IPR&D expense Balance Sheet Highlights (as of June 30) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Cash | $18,641,716 | $4,511,642 | | Total Assets | $20,114,594 | $6,046,689 | | Total Liabilities | $16,443,659 | $996,374 | | Total Stockholders' Equity | $3,670,935 | $5,050,315 | | Accumulated Deficit | ($250,969,890) | ($224,885,422) | Statement of Operations Highlights (Year Ended June 30) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Research and development expenses | $17,258,341 | $2,544,648 | | In process R&D expenses | $0 | $130,642,858 | | Selling, general and administrative | $9,765,259 | $4,637,256 | | **Net Loss** | **($26,084,468)** | **($130,249,204)** | | Net Loss Per Share (Basic & Diluted) | ($1.06) | ($14.82) | Cash Flow Highlights (Year Ended June 30) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($18,990,850) | ($10,453,047) | | Net cash provided by financing activities | $33,120,924 | $14,927,494 | | **Net increase in cash** | **$14,130,074** | **$4,474,447** | [Notes to Financial Statements](index=68&type=section&id=Notes%20to%20Financial%20Statements) The notes provide critical details on accounting policies, related party transactions, debt, and equity, including the 'going concern' uncertainty, the NeurMedix asset acquisition, a **$15 million** loan with warrants and conversion options, and significant stock option grants [Note 2. Liquidity and Going Concern](index=69&type=section&id=Note%202.%20Liquidity%20and%20Going%20Concern) The financial statements were prepared assuming the company will continue as a going concern, but recurring losses and negative cash flows raise substantial doubt about this ability[363](index=363&type=chunk) - The company's future viability is largely dependent on its ability to raise additional capital to finance operations[364](index=364&type=chunk) [Note 5. Related Party Transactions](index=74&type=section&id=Note%205.%20Related%20Party%20Transactions) In June 2021, the company acquired assets from NeurMedix, a related party affiliate, in exchange for **8,361,308 shares** of common stock and approximately **$2.3 million** in cash, with the total consideration expensed as in-process R&D[387](index=387&type=chunk)[388](index=388&type=chunk) - The NeurMedix APA includes contingent consideration of up to **18 million shares** of common stock, issuable upon the achievement of four specific clinical, regulatory, and commercial milestones[388](index=388&type=chunk) [Note 7. Notes Payable](index=79&type=section&id=Note%207.%20Notes%20Payable) On November 30, 2021, the company entered into a loan agreement for up to **$20 million**, drawing an initial **$15 million**, bearing interest at the greater of **10.75%** or prime + **7.00%**[410](index=410&type=chunk) - The loan includes a conversion option for the lender to convert up to **$5.0 million** of principal into common stock at **$6.98 per share**[412](index=412&type=chunk) - In connection with the loan, the company issued warrants to purchase **361,002 shares** of common stock at an exercise price of **$5.82 per share**[413](index=413&type=chunk) [Note 9. Equity Transactions](index=83&type=section&id=Note%209.%20Equity%20Transactions) In August 2021, the company closed a public offering, issuing **2.5 million shares** at **$8.00 per share**, resulting in net proceeds of approximately **$17.8 million**[433](index=433&type=chunk) - During fiscal year 2022, the company granted **2,724,689 stock options**, primarily to the executive management team and independent directors[426](index=426&type=chunk) - Stock-based compensation expense was approximately **$5.8 million** for the year ended June 30, 2022, compared to **$3.0 million** in the prior year[429](index=429&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2022 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________to _____________ Commission File Number: 001-39015 BIOVIE INC. (Exact name of registrant as specified in its charter) Nevada 46-2510769 (State or ot ...

PART I – FINANCIAL INFORMATION This section presents BioVie Inc.'s unaudited condensed financial statements, management's discussion, market risk disclosures, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201%2E%20Financial%20Statements) This section presents BioVie Inc.'s unaudited condensed financial statements and detailed notes for the periods ended December 31, 2021 and 2020 [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) This section details BioVie Inc.'s financial position, including assets, liabilities, and equity, as of December 31, 2021, and June 30, 2021 | Metric | December 31, 2021 (Unaudited) ($) | June 30, 2021 ($) | | :-------------------------- | :-------------------------------- | :---------------- | | **ASSETS** | | | | Cash | $30,391,675 | $4,511,642 | | Total current assets | $30,546,543 | $4,605,129 | | Total assets | $31,873,415 | $6,046,689 | | **LIABILITIES & EQUITY** | | | | Total current liabilities | $4,358,438 | $996,374 | | Total liabilities | $15,808,323 | $996,374 | | Total stockholders' equity | $16,065,092 | $5,050,315 | - The company's cash significantly increased from **$4.5 million** at June 30, 2021, to **$30.4 million** at December 31, 2021. Total assets grew from **$6.0 million** to **$31.9 million**, while total liabilities increased from **$1.0 million** to **$15.8 million**, primarily due to new debt and derivative liabilities. Stockholders' equity also saw a substantial increase from **$5.1 million** to **$16.1 million**[8](index=8&type=chunk) [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) This section outlines BioVie Inc.'s financial performance, presenting revenues, expenses, and net loss for the three and six months ended December 31, 2021 and 2020 | Metric | Three Months Ended Dec 31, 2021 ($) | Three Months Ended Dec 31, 2020 ($) | Six Months Ended Dec 31, 2021 ($) | Six Months Ended Dec 31, 2020 ($) | | :----------------------------------------- | :---------------------------------- | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development expenses | $4,591,432 | $938,101 | $7,437,026 | $1,063,112 | | Selling, general and administrative expenses | $2,016,234 | $2,067,920 | $4,660,579 | $2,272,320 | | Total operating expenses | $6,665,010 | $3,063,365 | $12,212,294 | $3,450,120 | | Loss from operations | $(6,665,010) | $(3,063,365) | $(12,212,294) | $(3,450,120) | | Change in fair value of derivative liabilities | $(1,555,254) | $— | $(1,555,254) | $(8,279,919) | | Interest expense | $316,263 | $143 | $317,378 | $559,455 | | Net (loss)/income | $(5,414,317) | $(3,057,807) | $(10,955,070) | $4,276,109 | | Net loss attributable to common stockholders | $(5,414,317) | $(3,057,807) | $(10,955,070) | $(49,322,211) | | Net loss per common share - Basic | $(0.22) | $(0.22) | $(0.45) | $(4.95) | - The company reported an increased net loss for both the three and six months ended December 31, 2021, primarily driven by a significant increase in research and development expenses due to ongoing clinical trials. For the six months ended December 31, 2021, net loss was **$10.96 million**, a substantial shift from a net income of **$4.28 million** in the prior year, largely influenced by changes in fair value of derivative liabilities and increased operating expenses[11](index=11&type=chunk) [Condensed Statements of Cash Flows](index=5&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section details BioVie Inc.'s cash flows from operating, investing, and financing activities for the six months ended December 31, 2021 and 2020 | Metric | Six Months Ended Dec 31, 2021 ($) | Six Months Ended Dec 31, 2020 ($) | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Net (loss)/income | $(10,955,070) | $4,276,109 | | Stock option based compensation expense | $3,074,384 | $1,536,929 | | Change in fair value of embedded derivative liability | $(995,701) | $(2,225,798) | | Change in fair value of warrant liability | $(559,553) | $(6,054,121) | | Net cash used in operating activities | $(7,240,891) | $(2,403,168) | | Net proceeds from issuance of common stock | $18,511,009 | $15,628,010 | | Proceeds from note payable net of financing costs | $14,609,915 | $— | | Net cash provided by financing activities | $33,120,924 | $14,242,192 | | Net increase in cash | $25,880,033 | $11,839,024 | | Cash, end of period | $30,391,675 | $11,876,219 | - Net cash used in operating activities significantly increased to **$7.24 million** for the six months ended December 31, 2021, from **$2.40 million** in the prior year. This was offset by a substantial increase in cash provided by financing activities, reaching **$33.12 million**, primarily from common stock issuance and a new note payable, leading to a net increase in cash of **$25.88 million** and an ending cash balance of **$30.39 million**[13](index=13&type=chunk) [Condensed Statements of Changes in Stockholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20%28Deficit%29) This section tracks changes in BioVie Inc.'s stockholders' equity, including common shares, paid-in capital, and accumulated deficit for the six months ended December 31, 2021 | Metric | Balance, June 30, 2021 ($) | Balance, December 31, 2021 ($) | | :----------------------------------------- | :------------------------- | :----------------------------- | | Common Shares | 22,333,324 | 24,984,083 | | Common Stock Amount | $2,232 | $2,496 | | Additional Paid in Capital | $229,933,505 | $251,903,088 | | Accumulated Deficit | $(224,885,422) | $(235,840,492) | | Total Stockholders' Equity (Deficit) | $5,050,315 | $16,065,092 | - Stockholders' equity increased from **$5.05 million** at June 30, 2021, to **$16.07 million** at December 31, 2021. This increase was driven by proceeds from common stock issuance (**$18.51 million**) and stock-based compensation (**$2.21 million**), partially offset by a net loss of **$5.41 million**, leading to an increased accumulated deficit[15](index=15&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed financial statements, covering accounting policies, liquidity, and financial components [1. Background Information](index=7&type=section&id=1%2E%20Background%20Information) This note provides an overview of BioVie Inc.'s business, focusing on its clinical-stage drug development programs for liver and neurodegenerative diseases - BioVie Inc. is a clinical-stage company focused on developing drug therapies for chronic debilitating conditions, including liver disease and neurodegenerative disorders[16](index=16&type=chunk) - The company's lead candidate, BIV201 (continuous infusion terlipressin), is an Orphan Drug candidate for refractory ascites in advanced liver cirrhosis. A Phase 2b trial is underway with top-line results expected in mid-2022, potentially followed by a pivotal Phase 3 trial in late 2022[17](index=17&type=chunk) - NE3107, acquired from NeurMedix in June 2021, is a novel orally administered small molecule targeting inflammation-driven insulin resistance for Alzheimer's and Parkinson's Disease. A pivotal Phase 3 study for Alzheimer's was initiated in August 2021, with top-line results anticipated in H1 2023. A Phase 2 study for Parkinson's disease was initiated in January 2022, with top-line results expected in mid-2022[19](index=19&type=chunk)[20](index=20&type=chunk) [2. Liquidity](index=8&type=section&id=2%2E%20Liquidity) This note discusses BioVie Inc.'s financial resources, working capital, and ability to meet obligations, highlighting going concern risks and COVID-19 impact | Metric | December 31, 2021 ($) | | :------------------ | :-------------------- | | Working Capital | ~$26.2 million | | Cash | ~$30.4 million | | Stockholders' Equity| ~$16.1 million | | Accumulated Deficit | ~$235.8 million | - The company has not generated revenues and expects future operations to depend on successful development, commercialization, and securing additional financing. Current planned operations project cash flows to be depleted within the next 12 months, raising substantial doubt about the company's ability to continue as a going concern[22](index=22&type=chunk)[25](index=25&type=chunk) - The COVID-19 pandemic poses a risk to the company's ability to raise funds and complete clinical trials on schedule due to potential impacts on financial markets, the economy, and labor shortages[24](index=24&type=chunk) [3. Significant Accounting Policies](index=9&type=section&id=3%2E%20Significant%20Accounting%20Policies) This note outlines key accounting principles and methods used in preparing BioVie Inc.'s unaudited interim financial statements, including fair value measurements and net loss per share - The unaudited interim condensed financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC instructions to Form 10-Q, reflecting all necessary adjustments for fair presentation[27](index=27&type=chunk) - Fair value measurements are categorized into a three-level hierarchy based on input observability (Level 1: quoted prices in active markets; Level 2: observable inputs other than quoted prices; Level 3: unobservable inputs)[29](index=29&type=chunk) - Basic and diluted net loss per common share are calculated by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding. Potentially dilutive shares (stock options, warrants, convertible debentures) were excluded due to their anti-dilutive effect during periods of net loss[30](index=30&type=chunk) [4. Intangible Assets](index=10&type=section&id=4%2E%20Intangible%20Assets) This note details BioVie Inc.'s intangible assets, primarily intellectual property, including their carrying value and amortization expense | Metric | December 31, 2021 ($) | June 30, 2021 ($) | | :-------------------------- | :-------------------- | :---------------- | | Intellectual Property | $2,293,770 | $2,293,770 | | Less Accumulated Amortization | $(1,312,610) | $(1,197,921) | | Intellectual Property, Net | $981,161 | $1,095,849 | - Intangible assets consist of intellectual property acquired from LAT Pharma, Inc., amortized over an estimated useful life of 10 years. Amortization expense was **$57,344** for each of the three-month periods ended December 31, 2021 and 2020, and **$114,689** and **$114,688** for the six-month periods, respectively[33](index=33&type=chunk) [5. Related Party Transactions](index=10&type=section&id=5%2E%20Related%20Party%20Transactions) This note describes BioVie Inc.'s transactions with related parties, including asset acquisitions and equity issuances, and their financial impact - In April 2021, BioVie acquired biopharmaceutical assets, including NE3107, from NeurMedix, Inc. and Acuitas Group Holdings, LLC (related parties). The consideration included cash and up to **18 million shares** of common stock contingent on achieving certain clinical, regulatory, and commercial milestones[35](index=35&type=chunk)[36](index=36&type=chunk) - In June 2021, the company issued **8,361,308 shares** of common stock to Acuitas and made a cash payment of approximately **$2.3 million** for NeurMedix's expenditures, expensing the total consideration as research and development due to the common control transaction[37](index=37&type=chunk) - In September 2020, the company satisfied a **$1.8 million** debenture owed to Acuitas and issued **6,909,582 shares** of common stock to Acuitas, including shares for purchase rights and automatic exercise of warrants[38](index=38&type=chunk)[39](index=39&type=chunk) [6. Other Liabilities](index=11&type=section&id=6%2E%20Other%20Liabilities) This note outlines BioVie Inc.'s other liabilities, specifically retention bonus arrangements with employees, and their recognition in the financial statements - Other liabilities include **$1,161,000** recognized in August 2021 for retention bonus arrangements with certain employees, payable in equal monthly installments over 24 months[41](index=41&type=chunk) [7. Notes Payable](index=12&type=section&id=7%2E%20Notes%20Payable) This note details BioVie Inc.'s loan and security agreement, including principal, interest, conversion options, and net carrying value of the note payable - On November 30, 2021, BioVie entered into a Loan and Security Agreement with Avenue Venture Opportunities Fund, L.P. and Avenue Venture Opportunities Fund II, L.P. for growth capital loans up to **$20 million**. An initial **$15 million** was funded (Tranche 1), with up to **$5 million** (Tranche 2) available by September 15, 2022, contingent on clinical trial milestones[43](index=43&type=chunk) - The loan bears interest at an annual rate equal to the greater of **7.00%** plus the prime rate or **10.75%**, secured by all company assets. It includes a conversion option for lenders to convert up to **$5 million** of principal into Class A common stock at **$6.98 per share**[43](index=43&type=chunk)[45](index=45&type=chunk) | Metric | December 31, 2021 ($) | | :---------------------------------------- | :-------------------- | | Note Payable | $15,000,000 | | Less debt financing costs | $(375,900) | | Less unearned discount | $(3,536,524) | | Plus accretion of loan premium | $23,611 | | Note Payable, net of financing costs and premiums | $11,111,187 | [8. Fair Value Measurements](index=13&type=section&id=8%2E%20Fair%20Value%20Measurements) This note explains BioVie Inc.'s fair value measurements for derivative liabilities, including warrants and conversion options, and their valuation methodologies | Derivative Liability | December 31, 2021 ($) | | :------------------------------------ | :-------------------- | | Warrants | $896,959 | | Conversion option | $1,217,765 | | Total derivatives | $2,114,724 | - The fair values of derivative liabilities for warrants and the conversion option were approximately **$897,000** and **$1.2 million**, respectively, at December 31, 2021. The total change in fair value of derivative liabilities, approximately **$1.6 million**, was recorded in the statement of operations for the three and six months ended December 31, 2021[55](index=55&type=chunk) - These derivative liabilities were valued using the Black-Scholes model, with key assumptions including stock price, exercise/conversion price, term, risk-free rate, and volatility[55](index=55&type=chunk)[57](index=57&type=chunk)[59](index=59&type=chunk) [9. Equity Transactions](index=14&type=section&id=9%2E%20Equity%20Transactions) This note describes BioVie Inc.'s equity activities, including stock option grants, public offerings, and restricted stock unit awards, and their impact on compensation and capital | Stock Options Activity (Six Months Ended Dec 31, 2021) | Number of Options | Weighted Average Exercise Price ($) | | :----------------------------------------------------- | :---------------- | :---------------------------------- | | Outstanding at June 30, 2021 | 755,200 | $4.34 | | Granted | 1,365,835 | $7.74 | | Forfeited | (73,125) | $(13.91) | | Outstanding at December 31, 2021 | 2,047,910 | $9.79 | | Exercisable at December 31, 2021 | 509,667 | $9.36 | - Stock option-based compensation expense was **$1,147,422** and **$3,074,384** for the three and six months ended December 31, 2021, respectively. As of December 31, 2021, approximately **$5.7 million** of unrecognized compensation cost related to non-vested stock options is expected to be recognized over **4.5 years**[62](index=62&type=chunk)[63](index=63&type=chunk) - The company completed a public offering in August 2021, issuing **2,500,000 shares** of Class A common stock at **$8.00 per share**, generating net proceeds of approximately **$17.8 million**. An additional **92,000 shares** were issued in September 2021 from an over-allotment option, yielding approximately **$707,000** net proceeds[66](index=66&type=chunk)[67](index=67&type=chunk) - The company awarded **58,759 restricted stock units (RSUs)** to the President and CEO, with **58,759 shares** issued by December 31, 2021. Stock-based compensation expense related to these RSUs was **$97,695** and **$384,454** for the three and six months ended December 31, 2021, respectively[68](index=68&type=chunk)[69](index=69&type=chunk) [10. Commitments and Contingencies](index=17&type=section&id=10%2E%20Commitments%20and%20Contingencies) This note outlines BioVie Inc.'s contractual obligations, including lease agreements and royalty payments, and discusses intellectual property and legal contingencies - The company relocated its headquarters to Reno, NV, effective November 1, 2021, and entered into a new office lease in San Diego, CA, commencing March 1, 2022, for **40 months** with monthly base rent starting at **$4,175**[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - A U.S. patent for 'Treatment of Ascites' (No. 9,655,945) was revoked in November 2019 following an Inter Partes Review, but this ruling does not affect the company's Orphan Drug designations for ascites and hepatorenal syndrome or its pending patent application for proprietary terlipressin formulations[76](index=76&type=chunk)[77](index=77&type=chunk) - BioVie is obligated to pay low single-digit royalties on net sales of BIV201 to LAT Pharma Members, PharmaIn Corporation, and The Barrett Edge, Inc., and on terlipressin products covered by US patent no. 9,655,645 to the University of Padova, capped at **$200,000 per year**[78](index=78&type=chunk)[79](index=79&type=chunk) [11. Employee Benefit Plan](index=18&type=section&id=11%2E%20Employee%20Benefit%20Plan) This note details BioVie Inc.'s 401K employee benefit plan, including eligibility, company matching contributions, and associated expenses - Effective August 1, 2021, the company sponsors a 401K Plan, allowing eligible employees to make pre-tax contributions. The company matches **5%** of the first **5%** of an employee's contributions[81](index=81&type=chunk)[82](index=82&type=chunk) - Company contributions to the 401K Plan totaled approximately **$22,800** for the three months and **$46,600** for the six months ended December 31, 2021[82](index=82&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of BioVie Inc.'s financial condition and operational results, covering drug candidate progress, financial performance, liquidity, and accounting policies [Management's Discussion](index=19&type=section&id=Management%27s%20Discussion) This section provides an overview of BioVie Inc.'s clinical-stage drug development programs, focusing on BIV201 for liver disease and NE3107 for neurodegenerative disorders - BioVie Inc. is a clinical-stage company developing innovative drug therapies for chronic debilitating conditions, focusing on liver disease with BIV201 and neurodegenerative diseases (Alzheimer's and Parkinson's) with NE3107[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - BIV201, an Orphan Drug candidate for refractory ascites, is currently in a multi-center Phase 2b trial with top-line results expected in mid-2022, potentially leading to a pivotal Phase 3 trial in late 2022[87](index=87&type=chunk) - NE3107, acquired in June 2021, is in a potentially pivotal Phase 3 study for mild to moderate Alzheimer's disease, initiated in August 2021 with primary completion targeted for H1 2023. A Phase 2 study for Parkinson's disease was initiated in January 2022, with top-line results expected in mid-2022[88](index=88&type=chunk)[90](index=90&type=chunk) [Comparison of the three months ended December 31, 2021 to the three months ended December 31, 2020](index=20&type=section&id=Comparison%20of%20the%20three%20months%20ended%20December%2031%2C%202021%20to%20the%20three%20months%20ended%20December%2031%2C%202020) This section analyzes changes in BioVie Inc.'s net loss, operating expenses, and other income for the three months ended December 31, 2021, compared to the prior year - Net loss increased by **$2.3 million** to **$5.4 million** for the three months ended December 31, 2021, compared to **$3.1 million** in the prior year. This was primarily due to a **$3.6 million** increase in loss from operations, partially offset by a **$1.3 million** increase in other income from derivative liabilities, and increased interest expense[91](index=91&type=chunk) - Total operating expenses rose by approximately **$3.6 million** to **$6.7 million**, mainly driven by a **$3.7 million** increase in research and development expenses due to the Alzheimer's Phase 3 and BIV201 Phase 2b clinical trials, and increased compensation for neuroscience personnel[92](index=92&type=chunk)[93](index=93&type=chunk) - Selling, general and administrative expenses remained stable at approximately **$2.0 million**, as a **$451,000** decline in stock compensation expense was offset by a **$458,000** increase in legal and investor relations expenses[95](index=95&type=chunk) [Comparison of the six months ended December 31, 2021 to the six months ended December 31, 2020](index=21&type=section&id=Comparison%20of%20the%20six%20months%20ended%20December%2031%2C%202021%20to%20the%20six%20months%20ended%20December%2031%2C%202020) This section analyzes changes in BioVie Inc.'s net loss, operating expenses, and derivative liabilities for the six months ended December 31, 2021, compared to the prior year - The company shifted from a net income of **$4.3 million** to a net loss of **$11 million** for the six months ended December 31, 2021, a decline of approximately **$15.2 million**. This was attributed to an **$8.8 million** increase in loss from operations and a **$6.7 million** change in the fair value of derivative liabilities[97](index=97&type=chunk) - Total operating expenses increased by approximately **$8.7 million** to **$12.2 million**. Research and development expenses surged by **$6.3 million**, primarily due to increased activity in Alzheimer's Phase 3, Parkinson's Phase 2 preparations, BIV201 Phase 2b, and compensation for neuroscience personnel[98](index=98&type=chunk)[99](index=99&type=chunk) - Selling, general and administrative expenses increased by approximately **$2.4 million** to **$4.7 million**, mainly due to a **$1.5 million** increase in compensation expense (including **$1.2 million** in stock-based compensation) and **$765,000** in expenses related to national exchange listing and operational expansion[100](index=100&type=chunk) [Capital Resources and Liquidity](index=22&type=section&id=Capital%20Resources%20and%20Liquidity) This section discusses BioVie Inc.'s capital resources, liquidity, and future funding requirements, addressing the company's ability to continue as a going concern | Metric | December 31, 2021 ($) | | :------------------ | :-------------------- | | Working Capital | ~$26.2 million | | Cash | ~$30.4 million | | Stockholders' Equity| ~$16.1 million | | Accumulated Deficit | ~$235.8 million | - The company's future operations are dependent on securing additional financing, as current planned operations are expected to deplete cash within the next 12 months, raising substantial doubt about its ability to continue as a going concern[102](index=102&type=chunk)[103](index=103&type=chunk)[107](index=107&type=chunk) - Management intends to secure funding through additional equity or debt financings, sales/out-licensing of intellectual property, or partnerships. Failure to obtain sufficient funding may require curtailing or ceasing operations, potentially leading to bankruptcy[104](index=104&type=chunk)[105](index=105&type=chunk) [Off-Balance Sheet Arrangements](index=22&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms that BioVie Inc. has no material off-balance sheet arrangements impacting its financial condition or results of operations - The company has no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on its financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources[108](index=108&type=chunk) [Critical Accounting Policies and Estimates](index=23&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section states that there were no significant changes to BioVie Inc.'s critical accounting policies and estimates during the reported interim periods - There were no significant changes to the company's critical accounting policies for the three-month and six-month periods ended December 31, 2021, as identified in the Annual Report Form 10-K for the fiscal year ended June 30, 2021[110](index=110&type=chunk) [New Accounting Pronouncements](index=23&type=section&id=New%20Accounting%20Pronouncements) This section addresses the impact of recent accounting pronouncements on BioVie Inc.'s financial statements, concluding they are not applicable or have minimal effect - The company assessed recent accounting pronouncements and determined they are either not applicable or are expected to have a minimal impact on its balance sheets or statement of operations[111](index=111&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that quantitative and qualitative disclosures about market risk are not applicable to the company as a smaller reporting company - Quantitative and Qualitative Disclosures About Market Risk are not applicable to the company as it is a smaller reporting company[112](index=112&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204%2E%20Controls%20and%20Procedures) This section confirms the effectiveness of BioVie Inc.'s disclosure controls and procedures as of December 31, 2021, and reports no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2021[114](index=114&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended December 31, 2021, that materially affected or are reasonably likely to materially affect internal control over financial reporting[115](index=115&type=chunk) PART II – OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, defaults, mine safety, and a list of exhibits [Item 1. Legal Proceedings](index=24&type=section&id=Item%201%2E%20Legal%20Proceedings) The company reports no knowledge of any material legal proceedings or litigation involving itself or its officers and directors, nor any judgments against them - Neither the company nor its officers or directors are party to any material legal proceeding or litigation, and there are no judgments against them[117](index=117&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A%2E%20Risk%20Factors) This section highlights the risk of future stockholder dilution from equity offerings, outstanding options, warrants, loan conversion, and contingent share issuances for drug candidate milestones - Stockholders may experience future dilution from additional equity offerings or the issuance of shares subject to options, warrants, stock awards, or other arrangements[118](index=118&type=chunk)[119](index=119&type=chunk) - As of December 31, 2021, there were warrants to purchase **519,763 shares** and options for **2,047,910 shares** outstanding. The loan agreement also includes a conversion feature for up to **$5 million** of outstanding principal into common stock[120](index=120&type=chunk) - The company is obligated to issue up to **18 million shares** of common stock upon achieving certain clinical, regulatory, and commercial milestones for its drug candidates (NE3107, NE3291, NE3413, NE3789), which could further dilute existing stockholders[121](index=121&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - There were no unregistered sales of equity securities[122](index=122&type=chunk) [Item 3. Defaults Upon Senior Securities](index=24&type=section&id=Item%203%2E%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period - There were no defaults upon senior securities[122](index=122&type=chunk) [Item 4. Mine Safety Disclosures](index=24&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[122](index=122&type=chunk) [Item 5. Other Information](index=24&type=section&id=Item%205%2E%20Other%20Information) The company reports no other information to disclose in this section - There is no other information to disclose[122](index=122&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206%2E%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Loan and Security Agreement, Supplement, Form of Warrant, and certifications from the CEO and CFO - Key exhibits include the Loan and Security Agreement (10.1), Supplement to Loan and Security Agreement (10.2), Form of Warrant (10.3), and certifications from the CEO (31.1, 32.1) and CFO (31.2, 32.2)[122](index=122&type=chunk) SIGNATURES This section formally attests to the accuracy and completeness of the report, signed by BioVie Inc.'s Chairman, CEO, and CFO [SIGNATURES](index=26&type=section&id=SIGNATURES) The report is duly signed by Cuong V Do, Chairman and CEO, and Joanne Wendy Kim, CFO, on behalf of BioVie Inc. on February 7, 2022 - The report was signed by Cuong V Do, Chairman and Chief Executive Officer, and Joanne Wendy Kim, Chief Financial Officer, on February 7, 2022[127](index=127&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________to _____________ Commission File Number: 001-39015 BIOVIE INC. (Exact name of registrant as specified in its charter) Nevada 46-2510769 (State o ...