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 ...

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: December 31, 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 or ...

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 ...

PART I [Business Overview](index=5&type=section&id=Item%201.%20Business) BioVie Inc. is a clinical-stage biopharmaceutical company focused on developing innovative drug therapies for chronic debilitating conditions, specifically liver disease (BIV201) and neurodegenerative diseases (NE3107) [Pipeline Overview](index=5&type=section&id=Pipeline%20Overview) The company's mid-2021 clinical development pipeline includes programs for Liver Cirrhosis (BIV201) and Neurodegenerative Disease (NE3107) - The clinical development pipeline as of mid-2021 includes programs for Liver Cirrhosis (BIV201) and Neurodegenerative Disease (NE3107)[13](index=13&type=chunk) [Liver Cirrhosis Program](index=5&type=section&id=Liver%20Cirrhosis%20Program) BioVie's BIV201, an orphan drug for ascites due to chronic liver cirrhosis, is in a Phase 2b trial with top-line results expected in early 2022, utilizing a proprietary liquid formulation - **BIV201** (continuous infusion terlipressin) is an orphan drug candidate for ascites due to chronic liver cirrhosis, with a Phase 2a clinical trial completed in 2019 and a Phase 2b trial currently underway at several US medical centers[11](index=11&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk) - Top-line results for the Phase 2b trial are expected in early 2022, to be followed by a proposed single pivotal Phase 3 trial beginning in 2022[11](index=11&type=chunk)[14](index=14&type=chunk) - A proprietary novel liquid formulation of terlipressin has been invented, intended to improve convenience for outpatient administration and confirmed to have room temperature stability for **18 months** (potential for up to two years)[17](index=17&type=chunk) - **BIV201** has FDA Fast-Track status and Orphan Drug designation for ascites and hepatorenal syndrome (HRS), targeting an addressable ascites market exceeding **$650 million**[18](index=18&type=chunk) [About Ascites and Liver Cirrhosis](index=7&type=section&id=About%20Ascites%20and%20Liver%20Cirrhosis) Liver cirrhosis affects 600,000 Americans, causing over 40,000 annual deaths, with ascites as a common complication involving kidney dysfunction and fluid accumulation - About **600,000 Americans** and millions worldwide suffer from liver cirrhosis, which is the 11th leading cause of death in the US, killing over **40,000 people annually**[20](index=20&type=chunk) - Ascites is a common complication of advanced liver cirrhosis, characterized by kidney dysfunction and the accumulation of large amounts of fluid in the abdominal cavity[20](index=20&type=chunk) [The Need for an Ascites Therapy](index=7&type=section&id=The%20Need%20for%20an%20Ascites%20Therapy) There is a critical unmet medical need for ascites therapy, with no FDA-approved medications, leading to high mortality and over $5 billion in annual treatment costs - No medications are approved by the FDA specifically for treating ascites, leading to a critical unmet medical need[21](index=21&type=chunk) - An estimated **40% of patients** with ascites die within two years of diagnosis, and U.S. treatment costs for liver cirrhosis, including ascites, exceed **$5 billion annually**[21](index=21&type=chunk) [The Ascites Development Pathway](index=8&type=section&id=The%20Ascites%20Development%20Pathway) Ascites develops from portal hypertension, causing splanchnic vasodilation and low arterial blood volume, which activates neurohormonal systems leading to kidney salt and water retention - Ascites develops through portal hypertension, leading to splanchnic vasodilation and low arterial blood volume, which activates neurohormonal systems causing kidneys to retain salt and water[23](index=23&type=chunk) [The BIV201 Mechanism of Action](index=8&type=section&id=The%20BIV201%20Mechanism%20of%20Action) BIV201 aims to alleviate portal hypertension and correct splanchnic vasodilation, increasing effective blood volume and reducing kidney signals for fluid retention in ascites patients - **BIV201** aims to alleviate portal hypertension and correct splanchnic vasodilation, increasing effective blood volume and reducing kidney signals to retain excess salt and water[24](index=24&type=chunk) - If successful, **BIV201** could halt the cycle of accelerating fluid generation in ascites patients and reduce the need for frequent paracentesis procedures[24](index=24&type=chunk) [Future Possible BIV201 Indications](index=8&type=section&id=Future%20Possible%20BIV201%20Indications) BIV201 has potential future applications in life-threatening liver cirrhosis conditions like Bleeding Esophageal Varices (BEV) and Hepatorenal Syndrome-Acute Kidney Injury (HRS-AKI) - **BIV201** has potential future applications in Bleeding Esophageal Varices (BEV), which requires emergency treatment to avoid blood loss and death[25](index=25&type=chunk)[26](index=26&type=chunk) - **BIV201** has Orphan Drug designation for Hepatorenal Syndrome-Acute Kidney Injury (HRS-AKI), a deadly condition of kidney failure, and a pivotal US Phase 3 clinical trial is planned for late 2021[25](index=25&type=chunk)[27](index=27&type=chunk) [Neurodegenerative Disease Program](index=9&type=section&id=Neurodegenerative%20Disease%20Program) BioVie acquired NE3107, a novel orally administered small molecule inhibiting inflammation-driven insulin resistance, for Alzheimer's and Parkinson's Disease, with a pivotal Phase 3 for Alzheimer's authorized by the FDA - BioVie acquired NeurMedix, Inc.'s biopharmaceutical assets in June 2021, including **NE3107**, a potentially selective inhibitor of inflammatory ERK signaling[12](index=12&type=chunk)[28](index=28&type=chunk) - **NE3107** is a novel orally administered small molecule believed to inhibit inflammation-driven insulin resistance and major pathological inflammatory cascades, with potential applications for Alzheimer's and Parkinson's Disease[12](index=12&type=chunk)[28](index=28&type=chunk) - The FDA has authorized a potentially pivotal Phase 3 study for **NE3107** in mild to moderate Alzheimer's disease (NCT04669028), planned to initiate in the second half of 2021[12](index=12&type=chunk)[28](index=28&type=chunk) [Alzheimer's Disease](index=9&type=section&id=Alzheimer's%20Disease) Alzheimer's disease affects 6 million Americans, linked to inflammation and insulin resistance, which NE3107's anti-inflammatory and insulin-sensitizing activity aims to disrupt - Alzheimer's disease (AD) affects an estimated **6 million Americans** and is characterized by progressive cognitive deterioration[29](index=29&type=chunk) - Scientific evidence strongly links inflammation, type 2 diabetes, and inflammation-driven insulin resistance as drivers of AD pathology[30](index=30&type=chunk)[32](index=32&type=chunk) - **NE3107's** combination of anti-inflammatory and insulin sensitizing activity has the potential to disrupt the forward-feeding cycle of AD pathology[33](index=33&type=chunk) [Parkinson's Disease](index=10&type=section&id=Parkinson's%20Disease) Parkinson's Disease affects 1 million Americans, with neuroinflammation playing a key role; NE3107 showed promise in preclinical studies by decreasing inflammation and increasing neuron survival - Neuroinflammation and activation of brain microglia, leading to increased proinflammatory cytokines, play a pivotal role in Parkinson's Disease (PD), which affects an estimated **1 million Americans**[38](index=38&type=chunk) - In mouse models of PD, **NE3107** decreased inflammation and TNF in the brain and increased neuron survival[39](index=39&type=chunk) - An unpublished marmoset study reported **NE3107** decreased movement abnormalities, and in combination with levodopa, had a stronger effect while developing less levodopa-induced dyskinesia (LID)[39](index=39&type=chunk) [Oncology](index=11&type=section&id=Oncology) NE3107 shows oncology potential by decreasing inflammatory cell signaling in vitro, animal models, and human trials, particularly for cancers dependent on inflammatory pathways - **NE3107** has been observed to decrease inflammatory cell signaling in vitro, in animal models, and in human clinical trials, suggesting potential in certain cancers[41](index=41&type=chunk) - BioVie is developing clinical trial-enabling data for Multiple Myeloma and Prostate cancers, where inflammatory cell signaling is crucial for disease progression[42](index=42&type=chunk) [Intellectual Property](index=11&type=section&id=Intellectual%20Property) BioVie protects its products through patents, trade secrets, and FDA data exclusivity, holding Orphan Drug Designations for BIV201 and 15 issued U.S. patents for NE3107 - **BIV201** was awarded Orphan Drug Designations in the U.S. for hepatorenal syndrome (Nov 2018) and ascites (Sept 2016)[44](index=44&type=chunk) - A PCT application covers novel liquid formulations of terlipressin (WO2020/237170), with patent protection sought in the United States, Europe, China, and Japan[44](index=44&type=chunk) - As of August 5, 2021, the company has **15 issued U.S. patents**, 1 pending U.S. patent application, 1 pending U.S. provisional application, and 6 issued foreign patents protecting **NE3107** and related compounds[46](index=46&type=chunk) Selected NE3107 Patent Expiration Dates | Title | Patent Number | Expiration Date | | :----------------------------------- | :------------ | :-------------- | | Steroids Having 7-Oxygen and 17-Heteroaryl Substitution | 8,569,275 | 2/14/2024 | | | 9,102,702 | 3/28/2024 | | | 9,115,168 | 3/28/2024 | | Unsaturated Steroid Compounds | 8,586,770 | 6/2/2026 | | Solid State Forms of a Pharmaceutical | 8,252,947* | 4/18/2030 | | Crystalline Anhydrate Forms of a Pharmaceutical | 9,555,046 | 4/3/2029 | | | 9,850,271 | 4/3/2029 | | | 10,995,112 | 4/3/2029 | | Pharmaceutical Solid State Forms | 8,518,922 | 9/24/2031 | | Methods of Preparing Pharmaceutical Solid State Forms | 9,314,471 | 6/28/2029 | | Steroid Tetrol Solid State Forms | 8,486,926 | 1/10/2030 | | Drug Identification and Treatment Method | 8,354,396 | 7/7/2031 | | Method For Preparing Substituted 3,7-Dihydroxy Steroids | 9,163,059** | 6/5/2029 | | | 9,994,608 | 6/5/2029 | | Treatment Methods Using Pharmaceutical Solid State Forms | 9,877,972 | 4/3/2029 | [Government Regulation](index=12&type=section&id=Government%20Regulation) Drug development and commercialization are subject to extensive government regulation, primarily by the FDA, covering all stages from research to post-approval marketing, with critical compliance requirements - Government authorities extensively regulate the research, development, testing, manufacture, quality control, approval, labeling, marketing, and distribution of pharmaceutical products[49](index=49&type=chunk) - Failure to comply with applicable requirements can result in administrative or judicial sanctions, including refusal of approval, withdrawal of approval, clinical holds, fines, and product recalls[50](index=50&type=chunk) [United States Drug Development Process](index=12&type=section&id=United%20States%20Drug%20Development%20Process) The FDA regulates drugs under the FDCA, requiring preclinical tests, an IND, human clinical trials (Phase 1, 2, 3) adhering to GCPs, and an NDA or BLA for marketing approval - The FDA regulates drugs under the Federal Food, Drug and Cosmetic Act (FDCA), requiring preclinical tests, an IND, and human clinical trials (Phase 1, 2, 3) before marketing[50](index=50&type=chunk)[51](index=51&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) - Clinical trials must adhere to FDA's Good Clinical Practices (GCPs) and be reviewed and approved by an independent institutional review board (IRB)[52](index=52&type=chunk)[54](index=54&type=chunk) [U.S. Review and Approval Processes](index=14&type=section&id=U.S.%20Review%20and%20Approval%20Processes) The FDA's NDA/BLA review assesses safety, efficacy, and cGMP compliance, potentially involving advisory committees and REMS, a lengthy process with possible 'complete response' letters - The FDA reviews NDAs/BLAs for safety, effectiveness, and cGMP compliance, potentially involving advisory committees and requiring a Risk Evaluation and Mitigation Strategy (REMS)[64](index=64&type=chunk)[65](index=65&type=chunk) - The review process is lengthy and difficult, and the FDA may issue a 'complete response' letter if regulatory criteria are not satisfied, requiring additional data or trials[67](index=67&type=chunk) [Orphan Drug Designation](index=15&type=section&id=Orphan%20Drug%20Designation) Orphan Drug designation is granted for products treating rare diseases (fewer than 200,000 US individuals), providing seven years of market exclusivity upon first FDA approval - Orphan Drug designation is for drugs treating rare diseases (fewer than **200,000 individuals** in the US)[69](index=69&type=chunk) - First FDA approval for an Orphan designated product grants **seven years of market exclusivity** for that indication, with similar ten-year exclusivity in the European Union[70](index=70&type=chunk) [Expedited Development and Review Programs](index=15&type=section&id=Expedited%20Development%20and%20Review%20Programs) The FDA offers Fast Track, Priority Review, and Accelerated Approval programs to expedite development and review for serious or life-threatening conditions with unmet medical needs - The FDA's Fast Track program expedites review for new drugs treating serious or life-threatening conditions with unmet medical needs[71](index=71&type=chunk) - Priority Review is for products offering significant treatment improvements, while Accelerated Approval is for serious illnesses based on surrogate endpoints, requiring post-marketing studies[73](index=73&type=chunk) [Post-Approval Requirements](index=16&type=section&id=Post-Approval%20Requirements) Approved drugs are subject to continuous FDA regulation, including record-keeping, adverse event reporting, product sampling, and strict compliance with promotion, advertising, and cGMP manufacturing - FDA-approved products are subject to continuous regulation, including record-keeping, adverse event reporting, product sampling, and compliance with promotion and advertising standards[74](index=74&type=chunk) - Manufacturers must comply with cGMP regulations, and any issues can lead to product restrictions, suspension, or withdrawal from the market[75](index=75&type=chunk) [Employees](index=17&type=section&id=Employees) BioVie's business is managed by a dedicated executive team, including the CEO, CFO, and Executive VPs, who devote full-time efforts, supported by experienced scientific, medical, and regulatory consultants - The company's executive management team, including Cuong Do (CEO & President) and Wendy Kim (CFO), devote full-time efforts to company activities[78](index=78&type=chunk) - BioVie relies on a team of highly experienced scientific, medical, and regulatory consultants for product development[78](index=78&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks that could materially and adversely affect BioVie's business, financial condition, operating results, and stock price - The company's business, financial condition, operating results, and prospects are subject to various risks that could materially adversely affect them[79](index=79&type=chunk) [Risks Relating to Our Business and Industry](index=17&type=section&id=Risks%20Relating%20to%20Our%20Business%20and%20Industry) Key business risks include no approved products or revenues, limited operating history, substantial capital needs, generic competition, drug development failure, COVID-19 impacts, and complex regulations - The company has no products approved for commercial sale and has never generated revenues, with profitability dependent on successful development, regulatory approval, and commercialization of product candidates[81](index=81&type=chunk)[82](index=82&type=chunk) - As a development-stage company, BioVie faces inherent risks including lack of operating history, insufficient capital, expected substantial losses, and limited experience in regulatory, manufacturing, and marketing areas[83](index=83&type=chunk) - The company will need to raise substantial additional capital to fund operations, and failure to do so could lead to delays, reduction, or termination of research and development programs[100](index=100&type=chunk)[102](index=102&type=chunk) - Drug development is a time-consuming and risky process; product candidates may fail in clinical trials due to safety or efficacy issues, or may not receive necessary regulatory approvals[108](index=108&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - The company has no manufacturing experience and relies on third-party Contract Manufacturing Organizations (CMOs); failure to comply with cGMP or secure adequate manufacturing capacity could adversely affect the business[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - The biotechnology and biopharmaceutical industries are highly competitive, characterized by rapid technological developments, and BioVie may be unable to compete with larger, better-resourced enterprises[152](index=152&type=chunk)[154](index=154&type=chunk) [RISKS RELATING TO OUR COMMON STOCK](index=28&type=section&id=RISKS%20RELATING%20TO%20OUR%20COMMON%20STOCK) Risks related to BioVie's common stock include potential dilution from future capital raises, significant control by current officers, market price volatility, and the impact of restricted shares eligible for resale - Future issuance of additional common stock or preferred stock could result in substantial dilution of existing stockholders' ownership percentage[166](index=166&type=chunk)[171](index=171&type=chunk) - Directors and executive officers own **79.7%** of outstanding common stock, giving them significant influence over company affairs and matters requiring member approval[169](index=169&type=chunk) - The market price and trading volume of the common stock may be volatile due to various factors, including company performance, investor perceptions, and general economic conditions[172](index=172&type=chunk) - A large number of restricted shares held by affiliates are eligible for resale under Rule 144, which could reduce the market price of the shares[173](index=173&type=chunk)[175](index=175&type=chunk) [Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments - There are no unresolved staff comments[192](index=192&type=chunk) [Properties](index=32&type=section&id=Item%202.%20Properties) BioVie maintains a corporate office in Santa Monica under a month-to-month lease and assumed a lease in San Diego from NeurMedix effective July 1, 2021 - The company leases corporate office space in Santa Monica, CA, from a related party (Acuitas Group Holdings, LLC) on a month-to-month basis for **$1,000 monthly**[193](index=193&type=chunk) - Effective July 1, 2021, the company assumed NeurMedix's lease in San Diego, CA, requiring monthly payments of **$8,782**[193](index=193&type=chunk) [Legal Proceedings](index=32&type=section&id=Item%203.%20Legal%20Proceedings) To the company's knowledge, neither BioVie 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, and there are no judgments against them[194](index=194&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is 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,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section provides information on the market for BioVie's common equity, related stockholder matters, and issuer purchases of equity securities, noting no issuer repurchases during the fiscal year ended June 30, 2021 [Unregistered Sales of Securities](index=33&type=section&id=Unregistered%20Sales%20of%20Securities) All unregistered sales of securities during the fiscal year ended June 30, 2021, were previously disclosed in Quarterly Reports on Form 10-Q or Current Reports on Form 8-K - All unregistered sales of securities during the year ended June 30, 2021, were previously disclosed in a Quarterly Report on Form 10-Q or Current Report on Form 8-K[197](index=197&type=chunk) [Issuer Purchases of Common Stock](index=33&type=section&id=Issuer%20Purchases%20of%20Common%20Stock) There were no issuer repurchases of common stock during the fiscal year ended June 30, 2021 - There were no issuer repurchases of shares of common stock during the year ended June 30, 2021[197](index=197&type=chunk) [Reserved](index=33&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved[198](index=198&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) This section reviews BioVie's financial condition and results, highlighting a significant increase in net loss for FY2021 due to the NeurMedix acquisition and ongoing liquidity challenges - The net loss for the year ended June 30, 2021, was approximately **$130.3 million**, a significant increase from **$16.7 million** in the prior year, primarily due to the **$130.6 million** purchase of biopharmaceutical assets from NeurMedix[203](index=203&type=chunk) - As of June 30, 2021, the company had working capital of approximately **$3.6 million**, cash of **$4.5 million**, stockholders' equity of **$5.1 million**, and an accumulated deficit of **$224.9 million**[210](index=210&type=chunk) - The company's future viability is largely dependent on its ability to raise additional capital, with a recent capital raise in August 2021 providing **$17.8 million** in net proceeds[211](index=211&type=chunk)[212](index=212&type=chunk) [Overview](index=33&type=section&id=Overview) BioVie Inc. is a clinical-stage company developing innovative drug therapies for liver disease (BIV201) and neurodegenerative disease (NE3107), with both candidates in or planning advanced clinical trials - BioVie Inc. is a clinical-stage company developing innovative drug therapies for liver disease (BIV201) and neurodegenerative disease (NE3107)[199](index=199&type=chunk) - **BIV201** is in a Phase 2b trial for refractory ascites, with a pivotal Phase 3 trial for HRS-AKI planned for late 2021[200](index=200&type=chunk) - **NE3107**, acquired in June 2021, is entering a potentially pivotal Phase 3 study for Alzheimer's disease, with preclinical results supporting advancement in Parkinson's and oncology[201](index=201&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) The company experienced a substantial increase in net loss for FY2021, primarily driven by expensing the NeurMedix biopharmaceutical asset acquisition as in-process research and development (IPR&D) - Total operating expenses for FY2021 increased by approximately **$135.4 million** to **$138.1 million**, primarily due to the **$130.6 million** purchase of NeurMedix biopharmaceutical assets[204](index=204&type=chunk) [Net loss](index=34&type=section&id=Net%20loss) BioVie's net loss significantly increased to $130.3 million in FY2021 from $16.7 million in FY2020, primarily due to the $130.6 million expense from the NeurMedix asset acquisition Net Loss Comparison (Year Ended June 30) | Metric | 2021 (approx.) | 2020 (approx.) | | :----- | :------------- | :------------- | | Net Loss | $(130.3) million | $(16.7) million | | Increase in Net Loss | $(113.6) million | N/A | - The primary driver for the increase in net loss was the **$130.6 million** expensed as purchased in-process research and development (IPR&D) from the NeurMedix biopharmaceutical asset acquisition[203](index=203&type=chunk) [Research and Development Expenses](index=34&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses surged to $133.2 million in FY2021 from $1.2 million in FY2020, predominantly due to the $130.6 million expensed for the NeurMedix asset acquisition, with a smaller increase attributed to BIV201 Phase 2b trial preparations Research and Development Expenses (Year Ended June 30) | Metric | 2021 | 2020 | | :----- | :-------------- | :-------------- | | R&D Expenses | $133.2 million | $1.2 million | | Increase | $132.0 million | N/A | - The increase was primarily due to **$130.6 million** for purchased in-process research and development (IPR&D) from the NeurMedix asset acquisition[205](index=205&type=chunk) - An additional **$1.4 million** increase in R&D expenses was attributed to preparations and launch of Phase 2b clinical trials for **BIV201**[204](index=204&type=chunk)[206](index=206&type=chunk) [Selling, General and Administrative Expenses](index=34&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) Selling, general and administrative expenses increased to $4.6 million in FY2021 from $1.3 million in FY2020, mainly driven by higher stock compensation for directors and increased costs associated with national exchange listing and professional fees Selling, General and Administrative Expenses (Year Ended June 30) | Metric | 2021 (approx.) | 2020 (approx.) | | :----- | :------------- | :------------- | | SG&A Expenses | $4.6 million | $1.3 million | | Increase | $3.3 million | N/A | - The increase primarily consisted of an additional **$2.8 million** in stock compensation expense for directors and approximately **$475,000** for national exchange listing fees, investor relations, and other professional fees[207](index=207&type=chunk) [Other Income and Expense, Net](index=35&type=section&id=Other%20Income%20and%20Expense,%20Net) Other income, net, improved to $7.8 million in FY2021 from an expense of $14 million in FY2020, primarily due to a $17.5 million change in the fair value of derivative liabilities and a $4.2 million reduction in interest expense Other Income and Expense, Net (Year Ended June 30) | Metric | 2021 (approx.) | 2020 (approx.) | | :----- | :------------- | :------------- | | Other Income (Expense), Net | $7.8 million | $(14.0) million | | Change in Fair Value of Derivatives | $(8,279,919) | $9,211,686 | | Interest Expense | $559,455 | $4,772,429 | - The change was primarily due to a **$17.5 million** change in the fair value of derivatives and a **$4.2 million** reduction in interest expense related to embedded conversion derivative liability from warrants[203](index=203&type=chunk)[209](index=209&type=chunk) [Capital Resources and Liquidity](index=35&type=section&id=Capital%20Resources%20and%20Liquidity) BioVie faces substantial doubt about its ability to continue as a going concern due to recurring losses, negative cash flows, and a significant accumulated deficit. While a recent capital raise provided $17.8 million, current projections indicate cash depletion within 12 months without further expenditure delays or additional financing Key Financial Position Metrics (June 30, 2021) | Metric | Amount (approx.) | | :----- | :--------------- | | Working Capital | $3.6 million | | Cash | $4.5 million | | Stockholders' Equity | $5.1 million | | Accumulated Deficit | $(224.9) million | - The company has not generated any revenues and does not expect to in the foreseeable future, making future operations dependent on securing additional financing[210](index=210&type=chunk)[212](index=212&type=chunk) - A capital raise on August 11, 2021, generated approximately **$17.8 million** in net proceeds, which could sustain operations for **12 months** if planned expenditures are delayed[211](index=211&type=chunk) - These circumstances raise substantial doubt about the company's ability to continue as a going concern[215](index=215&type=chunk) [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) BioVie 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 - The company has no off-balance sheet arrangements that are material to investors[217](index=217&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines BioVie's critical accounting policies and estimates, including those for stock-based compensation, impairment of long-lived assets, and purchase accounting for transactions with related parties [Accounting for Stock-based Compensation](index=36&type=section&id=Accounting%20for%20Stock-based%20Compensation) The company follows ASC 718, measuring compensation expense for all share-based payment awards to employees and non-employee directors based on grant date fair value, recognized over the requisite service period - The company follows ASC 718, requiring measurement of compensation expense for all share-based payment awards to employees and non-employee directors based on grant date fair value[218](index=218&type=chunk) [Impairment of Long-Lived Assets](index=36&type=section&id=Impairment%20of%20Long-Lived%20Assets) Long-lived assets are reviewed for impairment when events indicate that their carrying amount may not be recoverable, with impairment recognized if the carrying amount exceeds the asset's fair value - Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable[219](index=219&type=chunk) [Purchase Accounting for Transactions with Related Party](index=36&type=section&id=Purchase%20Accounting%20for%20Transactions%20with%20Related%20Party) Purchase accounting for transactions with related parties (entities under common control) records assets and liabilities at their historical carrying cost, without a step-up in basis to fair market value - Purchase accounting for transactions with related parties (entities under common control) records assets and liabilities at historical carrying cost, without a step-up in basis to fair market value[220](index=220&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company - This item is not applicable[220](index=220&type=chunk) [Financial Statements and Supplementary Data](index=36&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the audited financial statements and supplementary data, including the balance sheets, statements of operations, changes in stockholders' equity, cash flows, and comprehensive notes, which provide detailed insights into the company's financial performance, position, and accounting policies - The financial information required by this item is indexed under Item 15 and incorporated by reference[221](index=221&type=chunk) [Report of Independent Registered Public Accounting Firm – EisnerAmper LLP](index=43&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm%20%E2%80%93%20EisnerAmper%20LLP) EisnerAmper LLP issued an unqualified opinion on BioVie's financial statements but highlighted 'going concern' doubt and identified related party transactions as a critical audit matter - EisnerAmper LLP expressed an unqualified opinion that the financial statements present fairly, in all material respects, the financial position and results of operations for the years ended June 30, 2021 and 2020[236](index=236&type=chunk) - The auditors noted a 'going concern' doubt due to the company's recurring losses from operations and negative cash flows from operating activities[237](index=237&type=chunk) - Related party transactions were identified as a critical audit matter due to their significance and the complexity of ensuring accurate recording and disclosure[243](index=243&type=chunk)[244](index=244&type=chunk) [Balance Sheets](index=45&type=section&id=Balance%20Sheets) The balance sheets show BioVie's financial position as of June 30, 2021, and 2020, reflecting a significant increase in cash and total assets, a decrease in total liabilities, and a shift from a stockholders' deficit to positive equity, primarily driven by financing activities and the NeurMedix asset acquisition Balance Sheet Highlights (June 30) | ASSETS | 2021 | 2020 | | :----- | :------------ | :------------ | | Cash | $4,511,642 | $37,195 | | Total Current Assets | $4,605,129 | $412,980 | | Intangible assets, net | $1,095,849 | $1,325,226 | | Goodwill | $345,711 | $345,711 | | TOTAL ASSETS | $6,046,689 | $2,083,917 | | LIABILITIES | | | | Accounts payable and accrued expenses | $996,374 | $1,259,206 | | Derivative liability - warrants | — | $16,411,504 | | Derivative liability - conversion option on convertible debenture | — | $5,000,800 | | Convertible debenture - related party, net | — | $848,543 | | Total current liabilities | $996,374 | $23,520,053 | | Loan Payable | — | $62,500 | | TOTAL LIABILITIES | $996,374 | $23,582,553 | | STOCKHOLDERS' EQUITY (DEFICIT) | | | | Common stock, $0.0001 par value | $2,232 | $520 | | Additional paid in capital | $229,933,505 | $19,538,742 | | Accumulated deficit | $(224,885,422)| $(41,037,898) | | Total stockholders' equity (deficit) | $5,050,315 | $(21,498,636) | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $6,046,689 | $2,083,917 | [Statements of Operations](index=46&type=section&id=Statements%20of%20Operations) The statements of operations reveal a significant increase in net loss to $(130.2) million in FY2021 from $(16.7) million in FY2020, primarily driven by a substantial increase in research and development expenses due to the NeurMedix asset acquisition Statements of Operations Highlights (Year Ended June 30) | OPERATING EXPENSES | 2021 | 2020 | | :----------------- | :-------------- | :-------------- | | Amortization | $229,377 | $229,377 | | Research and development expenses | $133,187,506 | $1,150,581 | | Selling, general and administrative expenses | $4,637,256 | $1,312,930 | | TOTAL OPERATING EXPENSES | $138,054,139 | $2,692,888 | | LOSS FROM OPERATIONS | $(138,054,139) | $(2,692,888) | | OTHER EXPENSE (INCOME), NET | $(7,804,935) | $13,983,881 | | NET LOSS | $(130,249,204) | $(16,676,768) | | Deemed dividends - related party | $53,598,320 | $17,099,058 | | NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $(183,847,524) | $(33,775,826) | | NET LOSS PER COMMON SHARE - Basic | $(14.82) | $(6.85) | | WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - Basic | 12,403,159 | 4,929,497 | [Statements of Changes in Stockholders' Equity (Deficit)](index=47&type=section&id=Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Deficit)) The statements of changes in stockholders' equity (deficit) show a substantial increase in additional paid-in capital and a reduction in the accumulated deficit from FY2020 to FY2021, driven by proceeds from common stock issuance, warrant redemptions, and stock-based compensation, despite significant net losses and deemed dividends Stockholders' Equity (Deficit) Changes (Years Ended June 30) | Metric | Balance, June 30, 2021 | Balance, June 30, 2020 | | :----- | :--------------------- | :--------------------- | | Common Stock Shares | 22,333,324 | 5,204,392 | | Common Stock Amount | $2,232 | $520 | | Additional Paid in Capital | $229,933,505 | $19,538,742 | | Accumulated Deficit | $(224,885,422) | $(41,037,898) | | Total Stockholders' Equity (Deficit) | $5,050,315 | $(21,498,636) | - Key activities in FY2021 included **$15.6 million** from common stock issuance, **$13.1 million** from related party warrant redemption, **$53.6 million** in deemed dividends, **$3.0 million** in stock-based compensation, and **$124.3 million** for shares issued for in-process R&D expenses[253](index=253&type=chunk) [Statements of Cash Flows](index=48&type=section&id=Statements%20of%20Cash%20Flows) The statements of cash flows indicate a significant increase in cash from financing activities in FY2021, offsetting substantial cash used in operating activities, resulting in a net increase in cash for the period, compared to a net decrease in the prior year Cash Flow Highlights (Year Ended June 30) | CASH FLOWS | 2021 | 2020 | | :--------- | :-------------- | :-------------- | | Net loss | $(130,249,204) | $(16,676,768) | | Net cash used in operating activities | $(10,453,047) | $(1,628,228) | | Net cash provided by financing activities | $14,927,494 | $1,325,500 | | Net increase (decrease) in cash | $4,474,447 | $(302,728) | | Cash, end of period | $4,511,642 | $37,195 | Non-Cash Financing Activities (Year Ended June 30) | Non-Cash Activity | 2021 | 2020 | | :---------------- | :------------ | :------------ | | Deemed dividends - related party | $53,598,320 | $17,099,058 | | Stock warrants classified as derivative liability | — | $7,530,308 | [Notes to Financial Statements](index=49&type=section&id=Notes%20to%20Financial%20Statements) The notes to the financial statements provide detailed disclosures on BioVie's background, liquidity, significant accounting policies, intangible assets, related party transactions, fair value measurements, equity transactions, commitments, contingencies, income taxes, and subsequent events, offering crucial context for the financial figures [1. Background Information](index=49&type=section&id=1.%20Background%20Information) BioVie Inc. is a clinical-stage company developing BIV201 for liver disease and NE3107 for neurodegenerative disorders. BIV201 is in Phase 2b for ascites with Phase 3 planned, holding FDA Fast-Track and Orphan Drug status. The company acquired NeurMedix assets, including NE3107, in June 2021 for approximately $130.6 million, initiating a pivotal Phase 3 for Alzheimer's - BioVie is developing **BIV201** (continuous infusion terlipressin) for ascites due to chronic liver cirrhosis, with a Phase 2a trial completed in 2019 and a Phase 2b trial underway as of July 2021[255](index=255&type=chunk)[256](index=256&type=chunk) - **BIV201** has FDA Fast-Track status and Orphan Drug designation for ascites and hepatorenal syndrome, with potential for **7 years of market exclusivity**[257](index=257&type=chunk) - On April 27, 2021, BioVie acquired biopharmaceutical assets from NeurMedix, Inc. (a related party), including **NE3107**, for approximately **$130.6 million** (common stock and cash)[259](index=259&type=chunk)[261](index=261&type=chunk) - **NE3107** is a small molecule inhibitor of insulin resistance and inflammatory cascades, with potential applications for Alzheimer's and Parkinson's Disease[259](index=259&type=chunk) [2. Liquidity and Going Concern](index=50&type=section&id=2.%20Liquidity%20and%20Going%20Concern) BioVie's recurring losses, negative cash flows, and accumulated deficit raise substantial doubt about its ability to continue as a going concern. Despite a recent $17.8 million capital raise, current projections indicate cash depletion within 12 months without further expenditure delays or additional financing, which management is actively pursuing Liquidity Metrics (June 30, 2021) | Metric | Amount (approx.) | | :----- | :--------------- | | Working Capital | $3.6 million | | Cash | $4.5 million | | Stockholders' Equity | $5.1 million | | Accumulated Deficit | $(224.9) million | - The company has not generated any revenues to date and expects no revenues in the foreseeable future, making future operations dependent on securing additional financing[263](index=263&type=chunk) - A capital raise on August 11, 2021, provided approximately **$17.8 million** in net proceeds, which could sustain operations for **12 months** if planned expenditures are delayed[263](index=263&type=chunk) - These circumstances raise substantial doubt about the company's ability to continue as a going concern, and the financial statements do not include adjustments for this uncertainty[265](index=265&type=chunk) [3. Significant Accounting Policies](index=51&type=section&id=3.%20Significant%20Accounting%20Policies) This section details BioVie's significant accounting policies, including adherence to GAAP, the use of estimates for financial reporting, cash and other asset classifications, fair value measurements, and specific policies for research and development expenses, income taxes, net loss per common share, stock-based compensation, goodwill, and impairment of long-lived assets [Basis of Presentation](index=51&type=section&id=Basis%20of%20Presentation) The financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and include all necessary adjustments for fair presentation - Financial statements are prepared in accordance with GAAP and include all adjustments necessary for fair presentation[267](index=267&type=chunk) [Use of Estimates](index=51&type=section&id=Use%20of%20Estimates) Management makes estimates and assumptions, based on historical experience and reasonable circumstances, that affect the reported amounts in the financial statements, particularly for share-based compensation, derivatives, and income taxes - The preparation of financial statements requires management to make estimates and assumptions, which affect reported amounts for share-based compensation, derivatives, and income taxes[268](index=268&type=chunk) [Cash](index=51&type=section&id=Cash) The company classifies highly liquid instruments with original maturities of three months or less as cash equivalents. Cash is held at two financial institutions, with balances sometimes exceeding federally insured limits, though no losses have been experienced - Highly liquid instruments with original maturities of **three months or less** are considered cash equivalents[269](index=269&type=chunk) - Cash is maintained at two financial institutions, and balances may at times exceed federally insured limits, but no losses have been experienced[269](index=269&type=chunk) [Other Assets](index=51&type=section&id=Other%20Assets) Other assets primarily consist of direct costs incurred for capital raises and registration statement filings, which are expected to be offset against future capital proceeds - Other assets consist of direct costs related to capital raises and registration statement legal and investment banking fees, which will be offset against future proceeds[270](index=270&type=chunk) [Fair Value of Financial Instruments](index=51&type=section&id=Fair%20Value%20of%20Financial%20Instruments) Fair value is defined as the price for an orderly transaction between market participants. The company categorizes inputs into a three-level hierarchy. The carrying amounts of cash and accounts payable approximate their fair value due to their short-term nature - Fair value is defined as the price received from selling an asset or paid to transfer a liability in an orderly transaction between market participants[270](index=270&type=chunk) - The fair value hierarchy prioritizes inputs as Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[270](index=270&type=chunk) - The carrying amounts of cash and accounts payable approximate their fair value due to their short-term nature[270](index=270&type=chunk) [Loan Pursuant to Paycheck Protection Program](index=51&type=section&id=Loan%20Pursuant%20to%20Paycheck%20Protection%20Program) BioVie received a $62,500 Paycheck Protection Program (PPP) loan in May 2020, which was subsequently forgiven on June 28, 2021, and recognized as a gain on extinguishment of debt - The company received a **$62,500 PPP loan** in May 2020, which was forgiven on June 28, 2021, and recognized as a gain on extinguishment of debt[271](index=271&type=chunk) [Research and Development](index=52&type=section&id=Research%20and%20Development) Research and development expenses, including costs for preclinical and clinical trials, personnel, supplies, and consultants, are expensed as incurred. In FY2021, this included $130.6 million for assets acquired from NeurMedix - Research and development expenditures are expensed as incurred, including costs for preclinical/clinical trials, personnel, supplies, and consultants[272](index=272&type=chunk) - In FY2021, the company recorded approximately **$130.6 million** for acquired in-process research and development (IPR&D) assets from NeurMedix as R&D expense[272](index=272&type=chunk) [Income Taxes](index=52&type=section&id=Income%20Taxes) BioVie uses the asset and liability method for deferred income taxes, applying a full valuation allowance against net deferred tax assets due to the unlikelihood of their realization. The company has no current tax expense due to its losses - The company uses the asset and liability method for deferred income taxes and applies a full valuation allowance against net deferred tax assets due to unlikelihood of realization[273](index=273&type=chunk)[342](index=342&type=chunk) - There is no current tax expense due to the company's losses[343](index=343&type=chunk) [Net Loss per Common Share](index=52&type=section&id=Net%20Loss%20per%20Common%20Share) Basic net loss per common share is calculated by dividing net loss by weighted average common shares outstanding. Diluted net loss per common share excludes potentially outstanding shares (stock options, warrants, convertible debentures) when their effect is anti-dilutive due to a net loss - Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding[275](index=275&type=chunk) - Diluted net loss per common share excludes potentially outstanding shares (stock options, warrants, convertible debentures) when their effect is anti-dilutive due to a net loss[275](index=275&type=chunk) Outstanding Stock Options and Warrants (June 30) | Instrument | 2021 Number of Shares | 2020 Number of Shares | | :--------- | :-------------------- | :-------------------- | | Stock Options | 755,200 | 60,400 | | Warrants | 158,761 | 1,374,667 | | Total | 913,961 | 1,435,067 | [Stock-based Compensation](index=53&type=section&id=Stock-based%20Compensation) Stock-based compensation is accounted for using the fair-value based method (Black-Scholes model) for both employee and non-employee awards, with expense recognized over the service period. The company recorded $3.0 million in expense for FY2021 - Stock-based compensation is accounted for under FASB ASC 718, using the fair-value based method (Black-Scholes model) for awards to employees and non-employee directors[277](index=277&type=chunk) - Compensation expense is generally recognized over the requisite service period, net of forfeitures[277](index=277&type=chunk) - The company recorded approximately **$3.0 million** in stock-based compensation expense for the year ended June 30, 2021[319](index=319&type=chunk) [Goodwill](index=53&type=section&id=Goodwill) Goodwill is recorded when an acquisition's purchase price exceeds the fair value of net identified assets. Annual impairment tests are performed, and no goodwill impairments were recognized for the years ended June 30, 2021, and 2020 - Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of net identified tangible and intangible assets[278](index=278&type=chunk) - The company performs annual impairment tests of goodwill, and no impairments were recognized for the years ended June 30, 2021 and 2020[278](index=278&type=chunk) [Impairment of Long-Lived Assets](index=53&type=section&id=Impairment%20of%20Long-Lived%20Assets) Long-lived assets, including intangibles, are reviewed for impairment when events or changes in circumstances suggest their carrying amount may not be recoverable. An impairment charge is recognized if the carrying amount exceeds the asset's fair value - Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable[279](index=279&type=chunk) - An impairment charge is recognized if the carrying amount of an asset exceeds its fair value, typically determined using discounted cash flows or appraisals[280](index=280&type=chunk) [Purchase Accounting for Transactions with Related Party](index=53&type=section&id=Purchase%20Accounting%20for%20Transactions%20with%20Related%20Party) Transactions with related parties, specifically entities under common control, are recorded at their historical carrying cost, without a step-up in basis to the fair market value of the acquired assets or liabilities - Purchase accounting for transactions with related parties (entities under common control) records assets and liabilities at historical carrying cost, without a step-up in basis to fair market value[281](index=281&type=chunk) [Recent Accounting Pronouncements](index=53&type=section&id=Recent%20Accounting%20Pronouncements) The company has reviewed recent Accounting Standards Updates (ASUs) and does not expect any to have a material impact on its balance sheets or statements of operations - No recent Accounting Standards Updates (ASUs) are expected to have a material impact on the company's financial statements[281](index=281&type=chunk) [4. Intangible Assets](index=54&type=section&id=4.%20Intangible%20Assets) BioVie's intangible assets consist of intellectual property acquired from LAT Pharma, Inc., which are amortized over an estimated useful life of 10 years. As of June 30, 2021, the net intellectual property stood at approximately $1.1 million Intangible Assets (June 30) | Metric | 2021 | 2020 | | :----- | :------------ | :------------ | | Intellectual Property | $2,293,770 | $2,293,770 | | Less Accumulated Amortization | $(1,197,921) | $(968,544) | | Intellectual Property, Net | $1,095,849 | $1,325,226 | - Amortization expense was **$229,377** for both the years ended June 30, 2021 and 2020, with intellectual property amortized over an expected useful life of **10 years**[283](index=283&type=chunk) Estimated Future Amortization Expense | Year ending June 30 | Amount | | :------------------ | :------------ | | 2022 | $229,377 | | 2023 | $229,377 | | 2024 | $229,377 | | 2025 | $229,377 | | 2026 | $178,341 | | Total | $1,095,849 | [5. Related Party Transactions](index=54&type=section&id=5.%20Related%20Party%20Transactions) This section details significant transactions with related parties, including the acquisition of NeurMedix assets for $130.6 million (expensed as IPR&D) and various equity and convertible debenture transactions with Acuitas Group Holdings, LLC, the company's controlling stockholder [Asset Acquisition with NeurMedix](index=54&type=section&id=Asset%20Acquisition%20with%20NeurMedix) On April 27, 2021, BioVie acquired biopharmaceutical assets from NeurMedix and Acuitas (related parties) for approximately $130.6 million, paid in common stock and cash. Due to common control, the total consideration was expensed as in-process research and development (IPR&D). The agreement also includes contingent stock consideration of up to 18 million shares upon milestone achievements - On April 27, 2021, BioVie entered an Asset Purchase Agreement with NeurMedix and Acuitas (related parties) to acquire assets, including **NE3107**[285](index=285&type=chunk) - The total cost of the asset purchase was approximately **$130.6 million**, comprising **8,361,308 common shares** (valued at **$14.87/share**) and approximately **$6.3 million** in cash payments[261](index=261&type=chunk)[288](index=288&type=chunk) - Due to the transaction being between entities under common control, the total consideration was expensed as in-process research and development (IPR&D)[272](index=272&type=chunk)[288](index=288&type=chunk) - The company may be obligated to deliver contingent stock consideration of up to **18 million shares** to NeurMedix upon achievement of four milestones[262](index=262&type=chunk)[286](index=286&type=chunk) [Equity Transactions with Acuitas](index=55&type=section&id=Equity%20Transactions%20with%20Acuitas) On September 22, 2020, BioVie settled its debenture with Acuitas for approximately $1.8 million and issued 6,909,582 common shares to Acuitas, including shares from purchase agreement rights and automatic warrant exercises. This resulted in a deemed dividend of $17.1 million for FY2020 - On September 22, 2020, approximately **$1.8 million** was paid to Acuitas, satisfying all amounts owed on the Debenture[289](index=289&type=chunk) - Concurrent with the public offering close on September 22, 2020, BioVie issued **6,909,582 common shares** to Acuitas, including **5.4 million** from purchase agreement rights and **1.5 million** from automatic warrant exercise[290](index=290&type=chunk) - The issuance of **1,125,000 common shares** and warrants to Acuitas for bridge financing was accounted for as a deemed dividend of **$17.1 million** for FY2020[302](index=302&type=chunk) [Convertible Debenture Transaction with Acuitas](index=56&type=section&id=Convertible%20Debenture%20Transaction%20with%20Acuitas) In September 2019, BioVie entered a Securities Purchase Agreement with Acuitas for a $2.0 million 10% OID Convertible Delayed Draw Debenture, issuing commitment shares and warrants. The debenture, which accrued principal and interest, was mandatorily redeemable upon the public offering's closing and was paid off in cash on September 22, 2020 - On September 24, 2019, BioVie entered a Securities Purchase Agreement with Acuitas for a **10% OID Convertible Delayed Draw Debenture** of up to **$2.0 million**, due September 24, 2020[299](index=299&type=chunk) - The agreement included the issuance of **1,125,000 common shares** and an equal number of warrants to Acuitas[299](index=299&type=chunk) - The debenture was convertible into common stock at **$4.00 per share** (or **80% of offering price** post-IPO) and was mandatorily redeemable upon the closing of the public offering[299](index=299&type=chunk) - The related Debenture was paid off in cash on September 22, 2020, expiring the conversion option[308](index=308&type=chunk) [6. Fair Value Measurements](index=58&type=section&id=6.%20Fair%20Value%20Measurements) This section details the fair value measurements of derivative liabilities, specifically warrants and the conversion option on the convertible debenture. These liabilities, valued at $21.4 million as of June 30, 2020, were automatically exercised or paid off by September 22, 2020, resulting in a change in fair value of $(8.3) million recorded as income in FY2021 - The fair value of derivative liabilities (warrants and conversion option on convertible debenture) prior to redemption on September 22, 2020, was **$13.1 million**[308](index=308&type=chunk) - A change in fair value of **$(8.3) million** was recorded in the Statements of Operations for the year ended June 30, 2021[308](index=308&type=chunk) Estimated Fair Value of Derivative Liabilities (June 30) | Derivative Liability | 2021 (Total) | 2020 (Total) | | :------------------- | :----------- | :----------- | | Warrants | $0 | $16,411,504 | | Conversion option on convertible debenture | $0 | $5,000,800 | | Total Derivatives | $0 | $21,412,304 | - The warrants were valued using the Black-Scholes-Merton model, with assumptions including a stock price of **$14** and exercise price of **$4.00** at June 30, 2020[314](index=314&type=chunk) [7. Equity Transactions](index=60&type=section&id=7.%20Equity%20Transactions) This section summarizes BioVie's equity transactions, including activity related to stock options and warrants, as well as the issuance of common stock for services and interest payments [Stock Options](index=60&type=section&id=Stock%20Options) BioVie's stock option activity for FY2021 shows a significant increase in outstanding options to 755,200 from 60,400 in FY2020, primarily due to grants to board members and executive clinical team. Stock-based compensation expense was $3.0 million in FY2021 Stock Option Activity (June 30) | Metric | 2021 Options | 2020 Options | | :----- | :----------- | :----------- | | Outstanding | 755,200 | 60,400 | | Granted | 698,000 | 10,400 | | Exercised or Forfeited | (3,200) | (8,000) | | Weighted Average Exercise Price | $4.34 | $11.06 | | Exercisable | 236,500 | N/A | - Stock-based compensation expense was approximately **$3.0 million** for FY2021, compared to **$24,800** for FY2020[319](index=319&type=chunk) - As of June 30, 2021, unrecognized stock-based compensation cost was **$3.0 million**, expected to be recognized over approximately **2.5 years**[319](index=319&type=chunk) [Stock Warrants](index=62&type=section&id=Stock%20Warrants) Stock warrant activity for FY2021 shows a decrease in outstanding warrants to 158,761 from 1,374,667 in FY2020, primarily due to the exercise of 1,453,250 warrants by Acuitas and other exercises, despite new grants Stock Warrant Activity (June 30) | Metric | 2021 Number of Shares | 2020 Number of Shares | | :----- | :-------------------- | :-------------------- | | Outstanding and exercisable | 158,761 | 1,374,667 | | Granted | 293,248 | 1,250,000 | | Exercised | (55,904) | — | | Exercised - Acuitas | (1,453,250) | — | | Weighted Average Exercise Price | $10.37 | $7.72 | | Aggregate Intrinsic Value | $1,765,437 | $13,799,331 | [Issuance of common stock through exercise of Stock Options and Warrants](index=62&type=section&id=Issuance%20of%20common%20stock%20through%20exercise%20of%20Stock%20Options%20and%20Warrants) During FY2021, BioVie issued common stock through various cashless and cash exercises of stock options and warrants, including 2,210 shares from stock options and multiple issuances from warrant exercises totaling over 55,000 shares - On July 28, 2020, **2,210 shares** of common stock were issued via cashless exercise of stock options[322](index=322&type=chunk) - In January, March, and April 2021, the company issued common stock through cash and cashless exercises of warrants, including **27,000 shares** at **$12.50/share** and **14,324 shares** at **$12.50/share**[323](index=323&type=chunk) [Issuance of Shares for Services](index=62&type=section&id=Issuance%20of%20Shares%20for%20Services) In January 2020, BioVie issued 11,200 shares of common stock to board members as annual compensation and 4,422 shares to Acuitas for accrued interest on the Debenture - On January 2, 2020, **11,200 shares** of common stock were issued to board members as part of their annual compensation[324](index=324&type=chunk) - On January 2, 2020, **4,422 shares** of common stock were issued to Acuitas for **$13,487** of accrued interest on the Debenture[325](index=325&type=chunk) [Issuance of Stock Options](index=63&type=section&id=Issuance%20of%20Stock%20Options) BioVie granted various stock options during FY2020 and FY2021, including 691,600 shares to board members in December 2020 (vesting over 3 years) and smaller grants to executive clinical team members and consultants - On December 18, 2020, **691,600 stock options** were granted to board members as annual compensation, with **25% vesting** on grant date and the remainder over a **3-year period**[331](index=331&type=chunk) - Other grants included **800 shares** to an executive clinical team member (Nov 2019), **8,000 shares** to board members (Jan 2020), and **4,800 shares** to the Chief Operations Officer, an executive clinical team member, and key consultants (Jan 2021)[327](index=327&type=chunk)[328](index=328&type=chunk)[332](index=332&type=chunk) [Issuance of warrants](index=63&type=section&id=Issuance%20of%20warrants) In FY2021, BioVie issued warrants to purchase 203,250 common shares to Acuitas under the Bridge Financing terms and 89,998 common shares to underwriters of the Offering - On July 13, 2020, warrants to purchase **203,250 common shares** were issued to Acuitas, the controlling stockholder, under the Bridge Financing terms[333](index=333&type=chunk) - On September 22, 2020, warrants to purchase **89,998 common shares** were issued to the underwriters of the Offering[333](index=333&type=chunk) [8. Commitments and Contingencies](index=63&type=section&id=8.%20Commitments%20and%20Contingencies) This section outlines BioVie's commitments and potential liabilities, including office lease agreements, the invalidation of a key US patent for ascites treatment, and ongoing royalty obligations related to BIV201 and terlipressin products [Office Lease](index=63&type=section&id=Office%20Lease) BioVie maintains a month-to-month lease for its Santa Monica office at $1,000 per month and, effective July 1, 2021, assumed NeurMedix's San Diego lease requiring $8,782 monthly payments - The company accrues monthly lease payments of **$1,000** for its Santa Monica office under a month-to-month lease[334](index=334&type=chunk) - Effective July 1, 2021, BioVie assumed NeurMedix's lease in San Diego, requiring monthly payments of **$8,782**[335](index=335&type=chunk) [Challenge to US Patent](index=64&type=section&id=Challenge%20to%20US%20Patent) In November 2019, the U.S. Patent Trial and Appeal Board (PTAB) invalidated BioVie's U.S. Patent No. 9,655,945, 'Treatment of Ascites,' deeming all claims unpatentable due to prior art. This ruling does not affect the company's Orphan Drug designations for ascites and HRS or its pending patent applications for BIV201's liquid formulations - On November 13, 2019, the PTAB determined that all claims of BioVie's U.S. Patent No. 9,655,945 ('Treatment of Ascites') were not patentable due to prior art, rendering it no longer valid or enforceable[338](index=338&type=chunk) - This ruling is unrelated to the company's Orphan Drug designations for ascites and hepatorenal syndrome (HRS), which remain unchanged[339](index=339&type=chunk) - The ruling does not affect the company's rights in its pending patent application for proprietary liquid formulations of terlipressin[339](index=339&type=chunk) [Royalty Agreements](index=64&type=section&id=Royalty%20Agreements) 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. Additionally, it has an obligation to pay the University of Padova (Italy) a low single-digit royalty on net sales of terlipr

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: March 31, 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 or ot ...

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: December 31, 2020 ☐ 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 ...

[PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial position significantly improved in Q3 2020 due to a public offering, leading to increased cash, positive equity, and net income from derivative liability extinguishment [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) The balance sheet significantly strengthened by September 30, 2020, with cash increasing to over **$13.1 million** and stockholders' equity turning positive due to liability reduction Condensed Balance Sheet Highlights (Unaudited) | Metric | Sep 30, 2020 | Jun 30, 2020 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash | $13,195,562 | $37,195 | +$13,158,367 | | Total Current Assets | $13,247,756 | $412,980 | +$12,834,776 | | Total Assets | $14,861,349 | $2,083,917 | +$12,777,432 | | **Liabilities & Equity** | | | | | Total Current Liabilities | $203,174 | $23,520,053 | -$23,316,879 | | Total Liabilities | $265,674 | $23,582,553 | -$23,316,879 | | Total Stockholders' Equity (Deficit) | $14,595,675 | ($21,498,636) | +$36,094,311 | [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) The company reported a net income of **$7.3 million** for Q3 2020, driven by a non-cash gain on derivative liabilities, despite a large deemed dividend impacting common stockholders Condensed Statement of Operations (Unaudited, Three Months Ended Sep 30) | Metric | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Total Operating Expenses | $386,755 | $706,218 | -$319,463 | | Loss from Operations | ($386,755) | ($706,218) | +$319,463 | | Change in fair value of derivative liabilities | ($8,279,919) | ($362,586) | -$7,917,333 (Income) | | Net Income (Loss) | $7,333,916 | ($3,821,227) | +$11,155,143 | | Deemed dividends – Related party | $53,598,320 | $17,099,058 | +$36,499,262 | | Net Loss Attributable to Common Stockholders | ($46,264,404) | ($20,920,285) | -$25,344,119 | | Net Loss Per Common Share - Basic & Diluted | ($7.75) | ($5.06) | -$2.69 | [Condensed Statements of Cash Flows](index=5&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operations increased to **$1.1 million**, but financing activities, primarily a **$15.6 million** stock issuance, boosted cash by **$13.2 million** Condensed Statement of Cash Flows (Unaudited, Three Months Ended Sep 30) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,083,825) | ($590,914) | | Net cash provided by financing activities | $14,242,192 | $500,000 | | Net increase (decrease) in cash | $13,158,367 | ($90,914) | | Cash, end of period | $13,195,562 | $249,009 | [Condensed Statements of Changes in Stockholders' Equity/(Deficit)](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%2F%28Deficit%29) Stockholders' equity shifted from a **$21.5 million** deficit to a **$14.6 million** positive balance, driven by stock issuance and warrant redemption, offset by a large deemed dividend - The company's equity position shifted from a deficit of (**$21,498,636**) at the beginning of the quarter to a positive balance of **$14,595,675** at the end[18](index=18&type=chunk) - Key financing activities included raising **$15.6 million** from a common stock issuance and a **$13.1 million** related-party warrant redemption[18](index=18&type=chunk) - A significant non-cash deemed dividend of **$53,598,320** was recorded, which increased additional paid-in capital but also increased the accumulated deficit[18](index=18&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) Notes detail the company's BIV201 focus, improved liquidity from a **$15.6 million** public offering, key accounting policies, related-party transactions, and commitments [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses BIV201 development, Q3 2020 net income driven by derivative gains, reduced operating expenses, and enhanced liquidity from a **$15.6 million** public offering - The company's net income of **$7.3 million** for the quarter was primarily due to a **$7.9 million** positive change in the fair value of derivative liabilities and a **$2.9 million** decrease in interest expense[83](index=83&type=chunk) - Research and development expenses decreased by approximately **$241,000** year-over-year as activities were minimized while the company focused on its public offering[85](index=85&type=chunk) - Following a public offering that raised approximately **$15.6 million** in net proceeds, management believes it has sufficient funds for operations through at least **November 2021**[88](index=88&type=chunk)[91](index=91&type=chunk) - The public offering enabled the company to reduce total liabilities by **$23.3 million**, from **$23.6 million** on June 30, 2020, to approximately **$256,000** on September 30, 2020[90](index=90&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is **not applicable** to the company - The company states that this item is **not applicable**[97](index=97&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were **effective** as of September 30, 2020, with **no material changes** to internal controls during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2020[98](index=98&type=chunk) - There were **no changes** in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[99](index=99&type=chunk) [PART II – OTHER INFORMATION](index=22&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) The company is **not a party to any material legal proceedings**, nor are any officers or directors - The company is **not a party to any material legal proceedings**[99](index=99&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) This item is **not applicable** as the company is a smaller reporting company - This item is **not applicable** to smaller reporting companies[100](index=100&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) All sales of unregistered securities during the quarter were **previously disclosed on a Form 8-K** - Any sales of unregistered securities during the quarter were **previously disclosed on a Form 8-K**[100](index=100&type=chunk) [Item 3. Defaults Upon Senior Securities](index=23&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) **None** - **None**[100](index=100&type=chunk) [Item 4. Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) **None** - **None**[100](index=100&type=chunk) [Item 5. Other Information](index=23&type=section&id=Item%205.%20Other%20Information) **None** - **None**[100](index=100&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits, including **certifications from the Chief Executive Officer and Chief Financial Officer** and **Interactive Data Files (XBRL documents)** - The report includes **certifications from the Chief Executive Officer and Chief Financial Officer** as required by the Sarbanes-Oxley Act[101](index=101&type=chunk) - **Interactive Data Files (XBRL documents)** are also included as exhibits[101](index=101&type=chunk)

[FORM 10-K Cover Page Information](index=1&type=section&id=FORM%2010-K%20Cover%20Page%20Information) [Registrant Information and Filing Status](index=1&type=section&id=Registrant%20Information%20and%20Filing%20Status) BioVie Inc. filed its annual report on Form 10-K for the fiscal year ended June 30, 2020, classifying as a non-accelerated filer and smaller reporting company - BioVie Inc. is a non-accelerated filer and a smaller reporting company[1](index=1&type=chunk) Market Value and Shares Outstanding | Metric | Value | | :----- | :---- | | Market Value of Non-Affiliate Equity (as of last business day of Q2) | $18,143,043 | | Shares of Class A Common Stock Outstanding (as of August 3, 2020) | 5,204,392 | [FORWARD-LOOKING STATEMENTS](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) [Disclaimer on Forward-Looking Statements](index=4&type=section&id=Disclaimer%20on%20Forward-Looking%20Statements) This report contains forward-looking statements regarding future events and financial performance, which involve risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are identified by specific terminology (e.g., 'intends,' 'estimates,' 'predicts,' 'potential,' 'continues,' 'anticipates,' 'plans,' 'expects,' 'believes,' 'should,' 'could,' 'may,' 'will')[5](index=5&type=chunk) - Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially[5](index=5&type=chunk) - The company does not undertake or intend to update or revise forward-looking statements, except as required by applicable law[6](index=6&type=chunk) PART I [ITEM 1. DESCRIPTION OF BUSINESS](index=5&type=section&id=ITEM%201.%20DESCRIPTION%20OF%20BUSINESS) BioVie Inc. is a clinical-stage biopharmaceutical company focused on developing BIV201 for ascites due to chronic liver cirrhosis, a condition with significant unmet medical need - BioVie is a clinical-stage company developing BIV201 (continuous infusion terlipressin) for ascites due to chronic liver cirrhosis[9](index=9&type=chunk) - Phase 2a clinical trial results for BIV201 showed maintained hemodynamic stability, predicted pharmacokinetics, and increased days between paracenteses (**71% to 414%**) in some patients[10](index=10&type=chunk) - The FDA granted BIV201 Fast-Track status and Orphan Drug designation for ascites and hepatorenal syndrome (HRS), indicating a significant unmet medical need[13](index=13&type=chunk)[24](index=24&type=chunk) - BioVie invented a proprietary novel liquid formulation of terlipressin for outpatient administration, offering potential differentiation through room temperature stability compared to existing refrigerated products[12](index=12&type=chunk) Ascites Market Opportunity | Metric | Value | | :----- | :---- | | Estimated U.S. hospital discharges annually for cirrhosis and ascites | 116,000 | | Average hospital stay for paracentesis patients | 8 days | | Average medical costs per paracentesis patient | >$86,000 | | Estimated total addressable ascites market size for BIV201 | >$650 million | | Mean one-year survival rate for refractory ascites patients | 50% | [Introduction to BioVie and BIV201](index=5&type=section&id=Introduction%20to%20BioVie%20and%20BIV201) [Clinical Development of BIV201](index=5&type=section&id=Clinical%20Development%20of%20BIV201) [Proprietary Liquid Formulation of Terlipressin](index=5&type=section&id=Proprietary%20Liquid%20Formulation%20of%20Terlipressin) [Market Opportunity and Unmet Medical Need](index=5&type=section&id=Market%20Opportunity%20and%20Unmet%20Medical%20Need) [Acquisition and Intellectual Property Rights](index=6&type=section&id=Acquisition%20and%20Intellectual%20Property%20Rights) [About Ascites and Liver Cirrhosis](index=6&type=section&id=About%20Ascites%20and%20Liver%20Cirrhosis) [The Need for an Ascites Therapy](index=6&type=section&id=The%20Need%20for%20an%20Ascites%20Therapy) [The Ascites Development Pathway](index=6&type=section&id=The%20Ascites%20Development%20Pathway) [The BIV201 Mechanism of Action](index=7&type=section&id=The%20BIV201%20Mechanism%20of%20Action) [Future Possible BIV201 Indications](index=8&type=section&id=Future%20Possible%20BIV201%20Indications) [Efflux Pump Antibiotics Program](index=8&type=section&id=Efflux%20Pump%20Antibiotics%20Program) [Intellectual Property](index=8&type=section&id=Intellectual%20Property) [Government Regulation](index=8&type=section&id=Government%20Regulation) [United States Drug Development Process](index=9&type=section&id=United%20States%20Drug%20Development%20Process) [U.S. Review and Approval Processes](index=10&type=section&id=U.S.%20Review%20and%20Approval%20Processes) [Orphan Drug Designation](index=11&type=section&id=Orphan%20Drug%20Designation) [Expedited Development and Review Programs](index=12&type=section&id=Expedited%20Development%20and%20Review%20Programs) [Post-Approval Requirements](index=13&type=section&id=Post-Approval%20Requirements) [Employees](index=13&type=section&id=Employees) [ITEM 1A. RISK FACTORS](index=13&type=section&id=ITEM%201A.%20RISK%20FACTORS) BioVie faces substantial risks due to its development-stage nature, including no approved products or revenues, significant capital needs, and uncertainties in clinical trials and regulatory approvals - The company has no products approved for commercial sale, has never generated revenues, and may never achieve profitability, raising substantial doubt about its ability to continue as a going concern[53](index=53&type=chunk)[54](index=54&type=chunk)[58](index=58&type=chunk) - Successful development and commercialization of BIV201 are highly uncertain, dependent on clinical trial safety/efficacy, regulatory approvals, market acceptance, and the ability to raise substantial additional capital[54](index=54&type=chunk)[60](index=60&type=chunk)[76](index=76&type=chunk)[84](index=84&type=chunk) - A U.S. patent ('945 Patent) for 'Treatment of Ascites' was invalidated by the PTAB in November 2019, though Orphan Drug designations and pending liquid formulation patents remain unaffected[111](index=111&type=chunk)[168](index=168&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk) - The company relies on third-party manufacturers and faces risks related to cGMP compliance, potential shortages, and the need to develop its own manufacturing capabilities if current arrangements fail[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - The COVID-19 pandemic poses risks of business disruption, affecting clinical trial recruitment and the ability to raise financing[87](index=87&type=chunk)[195](index=195&type=chunk) [Risks Relating to Our Business and Industry](index=14&type=section&id=Risks%20Relating%20to%20Our%20Business%20and%20Industry) [Risks Relating to Our Common Stock](index=25&type=section&id=Risks%20Relating%20to%20Our%20Common%20Stock) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=29&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) There are no unresolved staff comments from the SEC - No unresolved staff comments[165](index=165&type=chunk) [ITEM 2. PROPERTIES](index=29&type=section&id=ITEM%202.%20PROPERTIES) BioVie Inc. leases its office space on a month-to-month basis from Acuitas Group Holdings, LLC, a related party, for $1,000 per month - The company leases its office space from a related party (Acuitas Group Holdings, LLC) on a month-to-month basis[166](index=166&type=chunk) Office Lease Details | Metric | Value | | :----- | :---- | | Lessor | Acuitas Group Holdings, LLC (related party) | | Lease Type | Month-to-month | | Monthly Payment | $1,000 | | Cancellation Notice | 30 days written notice | [ITEM 3. LEGAL PROCEEDINGS](index=29&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company is not a party to any material legal proceedings, except for the invalidation of its U.S. Patent No. 9,655,945 for 'Treatment of Ascites' in November 2019 - The company and its officers/directors are not parties to any material legal proceedings or litigation, except for the invalidated '945 Patent[167](index=167&type=chunk) - U.S. Patent No. 9,655,945 ('Treatment of Ascites') was determined not patentable by the PTAB on November 13, 2019, rendering it no longer valid or enforceable[168](index=168&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=29&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) The company has no mine safety disclosures to report - No mine safety disclosures[169](index=169&type=chunk) PART II [ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=30&type=section&id=ITEM%205.%20MARKET%20FOR%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) All unregistered sales of securities during the fiscal year ended June 30, 2020, were previously disclosed, with no issuer repurchases of common stock in the fourth quarter - All unregistered sales of securities for the year ended June 30, 2020, were previously disclosed[171](index=171&type=chunk) - No issuer repurchases of common stock occurred during the fourth quarter of the year ended June 30, 2020[171](index=171&type=chunk) [ITEM 6. SELECTED FINANCIAL DATA](index=30&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA) Selected financial data is not required for this report - Selected financial data is not required[172](index=172&type=chunk) [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=30&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) BioVie Inc. is a clinical-stage biotechnology company focused on BIV201 for liver cirrhosis complications, facing substantial liquidity challenges with a significant net loss in FY2020 - BioVie is a clinical-stage biotechnology company developing BIV201 for life-threatening complications of liver cirrhosis, specifically ascites[174](index=174&type=chunk) - Key milestones in 2019 included announcing Phase 2a top-line results, meeting with the FDA for clinical study planning, inventing a novel liquid terlipressin formulation, and submitting a proposed Phase 2b/3 trial protocol[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - Key milestones in 2020 included receiving FDA feedback on trial design, submitting a revised Phase 2 design, filing patent applications for liquid terlipressin formulations, confirming 6-month room temperature stability for prefilled syringes, and planning a randomized 24-patient Phase 2 study followed by a pivotal Phase 3 trial[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) Financial Performance Summary (FY2020 vs. FY2019) | Metric | FY2020 (approx.) | FY2019 (approx.) | Change (approx.) | Primary Driver of Change | | :----- | :--------------- | :--------------- | :--------------- | :----------------------- | | Net Loss | $16.7 million | $2.4 million | +$14.3 million | Change in fair value of derivative liabilities ($9.2M) and interest expense ($4.8M) | | Total Operating Expenses | $2.7 million | $2.5 million | +$0.2 million | Comparable | | R&D Expenses | $1.2 million | $1.0 million | +$0.14 million | Readying for Phase 2/3 trials, manufacturing prefilled syringe, offset by lower trial expenses | | SG&A Expenses | $1.3 million | $1.3 million | Comparable | Decrease in legal/professional fees offset by increased insurance, payroll, and capital raise related expenses | - As of June 30, 2020, the company had approximately **$37,000 in cash** and an accumulated deficit of **$41.0 million**, raising substantial doubt about its ability to continue as a going concern without additional financing[189](index=189&type=chunk)[190](index=190&type=chunk)[327](index=327&type=chunk) [Overview](index=30&type=section&id=Overview) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) [Capital Resources and Liquidity](index=32&type=section&id=Capital%20Resources%20and%20Liquidity) [Off-Balance Sheet Arrangements](index=33&type=section&id=Off-Balance%20Sheet%20Arrangements) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) [Recent Accounting Pronouncements](index=34&type=section&id=Recent%20Accounting%20Pronouncements) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=34&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This item is not applicable to the company - This section is not applicable[204](index=204&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=34&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[205](index=205&type=chunk) [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](index=34&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) This item is not required for the company - This section is not required[205](index=205&type=chunk) [ITEM 9A. CONTROLS AND PROCEDURES](index=35&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of June 30, 2020, with no material changes reported - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2020[207](index=207&type=chunk) - Management concluded that internal control over financial reporting was effective as of June 30, 2020, based on the COSO 2013 Framework[208](index=208&type=chunk) - No material changes in internal controls over financial reporting occurred during the fourth quarter of the fiscal year ended June 30, 2020[209](index=209&type=chunk) [ITEM 9B. OTHER INFORMATION](index=35&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) There is no other information to report under this item - No other information to report[209](index=209&type=chunk) PART III [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](index=36&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) BioVie's Board of Directors and executive officers include key management and independent directors, supported by established committees and a code of conduct and ethics Board of Directors and Executive Officers (as of 10-K filing date) | Name | Age | Position | | :--- | :-- | :------- | | Terren Peizer | 61 | Chairman of the Board & Chief Executive Officer | | Jonathan Adams | 57 | President & Chief Operating Officer | | Joanne Wendy Kim | 65 | Chief Financial Officer and Corporate Secretary | | Penelope Markham, PhD | 54 | Chief Scientific Officer | | Jim Lang | 55 | Independent Director | | Cuong Do | 54 | Independent Director | | Michael Sherman | 61 | Independent Director | | Richard J. Berman | 76 | Independent Director | | Steve Gorlin | 83 | Independent Director | | Robert Hariri, MD, PhD | 61 | Independent Director | | Sigmund Rogich | 71 | Independent Director | - The company has established three standing committees: an audit committee, a compensation committee, and a nominating and corporate governance committee, all composed solely of independent directors[239](index=239&type=chunk) - A code of conduct and ethics has been adopted, designed to deter wrongdoing, promote ethical conduct, ensure accurate disclosures, and comply with applicable laws[250](index=250&type=chunk) [Board of Directors and Executive Officers](index=36&type=section&id=Board%20of%20Directors%20and%20Executive%20Officers) [Committees of the Board of Directors](index=39&type=section&id=Committees%20of%20the%20Board%20of%20Directors) [Code of Ethics](index=42&type=section&id=Code%20of%20Ethics) [ITEM 11. EXECUTIVE COMPENSATION](index=42&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Executive compensation for FY2020 included salaries and stock awards, with directors receiving stock options and common share grants, and the company adopting an Omnibus Equity Incentive Plan Summary Compensation Table (FY2020 vs. FY2019) | Name and Principal Position | Year | Salary | Stock Awards | Option Awards | Total | | :-------------------------- | :--- | :----- | :----------- | :------------ | :---- | | Terren Peizer, CEO & Chairman | 2020 | $— | $5,600 | $— | $5,600 | | | 2019 | $— | $7,000 | $— | $7,000 | | Jonathan Adams, President & COO | 2020 | $250,000 | $5,600 | $1,368 | $256,968 | | | 2019 | $250,000 | $7,000 | $11,789 | $268,789 | - Directors receive stock options and common share grants as remuneration for their service, with **800 stock options** and **1,600 common shares** granted annually per director[256](index=256&type=chunk) - The 2019 Omnibus Equity Incentive Plan was adopted, allowing for grants of stock options, restricted/unrestricted stock, and other stock-based awards, with up to **253,163 shares** of common stock available for new awards[258](index=258&type=chunk) [Summary Compensation Table](index=42&type=section&id=Summary%20Compensation%20Table) [Employment Agreements](index=43&type=section&id=Employment%20Agreements) [Compensation of Directors](index=43&type=section&id=Compensation%20of%20Directors) [Long-Term Incentive Plans and Awards](index=43&type=section&id=Long-Term%20Incentive%20Plans%20and%20Awards) [2019 Omnibus Equity Incentive Plan](index=43&type=section&id=2019%20Omnibus%20Equity%20Incentive%20Plan) [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](index=44&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) As of August 3, 2020, Terren Peizer, through Acuitas Group Holdings, LLC, is the largest beneficial owner with 85.8% of common stock, indicating significant insider control Beneficial Ownership (as of August 3, 2020) | Name and Address of Beneficial Owner | Number of Common Shares of Beneficial Ownership | Percentage of Beneficial Ownership | | :----------------------------------- | :---------------------------------------------- | :--------------------------------- | | Terren Peizer (via Acuitas Group Holdings, LLC) | 5,712,206 | 85.8% | | Jonathan Adams | 97,037 | 1.9% | | Joanne Wendy Kim | 1,600 | * | | Penelope Markham, PhD | 13,893 | * | | Cuong Do | 170,707 | 3.2% | | James Lang | 47,032 | 1.0% | | Michael Sherman | 36,685 | * | | Richard J. Berman | 2,400 | * | | All directors and executive officers as a group (eight persons) | 11,441,292 | 92.9% | - Terren Peizer, through Acuitas Group Holdings, LLC, is the controlling stockholder[267](index=267&type=chunk) - The high concentration of ownership by directors and executive officers could delay, defer, or prevent a change in control[139](index=139&type=chunk) [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](index=46&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) The company has engaged in significant related party transactions, primarily with Acuitas Group Holdings, LLC, involving equity purchases, convertible debentures, and multiple agreement amendments - In July 2018, Acuitas Group Holdings, LLC (controlled by CEO Terren Peizer) and other purchasers acquired **2,133,332 shares** of Series A Convertible Preferred Stock and warrants for **1,706,666 common shares** for **$3.2 million**[275](index=275&type=chunk)[365](index=365&type=chunk) - In September 2019, Acuitas agreed to purchase a **$2.0 million 10% OID Convertible Delayed Draw Debenture** and received **1,125,000 commitment shares** and warrants[281](index=281&type=chunk)[369](index=369&type=chunk) - The issuance of commitment shares and warrants for the bridge financing was accounted for as a deemed dividend of **$17.1 million** due to its related party nature, recorded in accumulated deficit[282](index=282&type=chunk)[372](index=372&type=chunk) - Multiple amendments to the purchase agreements and debenture terms have occurred, including cashless exercises of warrants, waivers of price adjustments, and modifications to share issuances to Acuitas, often tied to potential public offerings or capital raises[278](index=278&type=chunk)[280](index=280&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk)[368](index=368&type=chunk)[370](index=370&type=chunk)[374](index=374&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk) Debenture Draws and Interest (FY2020) | Metric | Amount (approx.) | | :----- | :--------------- | | Total draws under Debenture (FY2020) | $1.3 million | | Total interest expense related to Debenture draws (FY2020) | $99,000 | | Accrued interest paid via common stock issuance (Jan 2020) | $13,487 (4,422 shares) | | Total draws outstanding (as of Aug 3, 2020) | $1,433,000 | [Equity Transactions with Acuitas](index=46&type=section&id=Equity%20Transactions%20with%20Acuitas) [Convertible Debenture Transaction with Acuitas](index=47&type=section&id=Convertible%20Debenture%20Transaction%20with%20Acuitas) [ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES](index=49&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) The company incurred $130,000 in audit fees for the fiscal year ended June 30, 2020, an increase from the prior year, with no other reported fees Auditor Fees (FY2020 vs. FY2019) | Fee Type | FY2020 | FY2019 | | :------- | :----- | :----- | | Audit Fees | $130,000 | $63,000 | | Audit-Related Fees | — | — | | Tax Fees | — | — | | All Other Fees | — | — | | **Total** | **$130,000** | **$63,000** | - Audit fees increased from **$63,000** in FY2019 to **$130,000** in FY2020[290](index=290&type=chunk) PART IV [ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES](index=50&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists the financial statements and a comprehensive catalog of exhibits filed as part of the 10-K report, including key corporate and securities documents - Financial statements are listed on page F-1 and filed as part of this report[292](index=292&type=chunk) - Exhibits include key corporate documents such as the Agreement and Plan of Merger, Articles of Incorporation, Bylaws, Securities Purchase Agreements, Employment Agreements, and the 2019 Omnibus Equity Incentive Plan[293](index=293&type=chunk)[294](index=294&type=chunk) [Signatures](index=52&type=section&id=Signatures) [Report Signatures](index=52&type=section&id=Report%20Signatures) The report was duly signed on behalf of BioVie Inc. by its Chief Executive Officer, Chief Financial Officer, President and Chief Operating Officer, and all Directors on August 6, 2020 - The report was signed by the Chief Executive Officer, Chief Financial Officer, President and Chief Operating Officer, and all Directors on August 6, 2020[296](index=296&type=chunk)[297](index=297&type=chunk) [Index to Financial Statements](index=53&type=section&id=Index%20to%20Financial%20Statements) [Financial Statement Listing](index=53&type=section&id=Financial%20Statement%20Listing) This section provides an index to the financial statements, including the Report of Independent Registered Public Accounting Firm, Balance Sheets, Statements of Operations, Statements of Changes in Stockholders' Equity (Deficit), Statements of Cash Flows, and Notes to Financial Statements - The index lists the Report of Independent Registered Public Accounting Firm, Balance Sheets, Statements of Operations, Statements of Changes in Stockholders' Equity (Deficit), Statements of Cash Flows, and Notes to Financial Statements[299](index=299&type=chunk)[300](index=300&type=chunk) [Report of Independent Registered Public Accounting Firm](index=54&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) [Auditor's Opinion and Going Concern](index=54&type=section&id=Auditor%27s%20Opinion%20and%20Going%20Concern) EisnerAmper LLP issued an unqualified opinion on BioVie Inc.'s financial statements but highlighted a 'going concern' uncertainty due to recurring losses and negative operating cash flows - EisnerAmper LLP issued an unqualified opinion on the financial statements for June 30, 2020 and 2019[302](index=302&type=chunk) - The auditors noted a 'going concern' uncertainty due to recurring losses from operations and negative cash flows, raising substantial doubt about the company's ability to continue[303](index=303&type=chunk) - The audit did not include an opinion on the effectiveness of the company's internal control over financial reporting[305](index=305&type=chunk) [Financial Statements](index=55&type=section&id=Financial%20Statements) [Balance Sheets](index=55&type=section&id=Balance%20Sheets) The balance sheets show a decrease in total assets from $2.57 million in FY2019 to $2.08 million in FY2020, driven by a surge in derivative liabilities and a substantial accumulated deficit Balance Sheet Summary (as of June 30) | Metric | 2020 | 2019 | | :----- | :--- | :--- | | Cash | $37,195 | $339,923 | | Total Current Assets | $412,980 | $674,073 | | Intangible Assets, net | $1,325,226 | $1,554,603 | | Goodwill | $345,711 | $345,711 | | Total Assets | $2,083,917 | $2,574,387 | | Accounts Payable and Accrued Expenses | $1,259,206 | $443,480 | | Derivative Liability - Warrants | $16,411,504 | — | | Derivative Liability - Conversion Option on Convertible Debenture | $5,000,800 | — | | Convertible Debenture - Related Party, net | $848,543 | — | | Total Current Liabilities | $23,520,053 | $443,480 | | Total Liabilities | $23,582,553 | $443,480 | | Additional Paid in Capital | $19,538,742 | $9,392,573 | | Accumulated Deficit | $(41,037,898) | $(7,262,072) | | Total Stockholders' (Deficit) Equity | $(21,498,636) | $2,130,907 | - Cash decreased significantly from **$339,923** in 2019 to **$37,195** in 2020[309](index=309&type=chunk) - The company reported substantial derivative liabilities in 2020, totaling over **$21 million**, which were not present in 2019[309](index=309&type=chunk) [Statements of Operations](index=56&type=section&id=Statements%20of%20Operations) BioVie Inc. reported a net loss of $16.68 million for FY2020, a substantial increase from $2.44 million in the prior year, primarily due to derivative liabilities and interest expense Statements of Operations Summary (Year Ended June 30) | Metric | 2020 | 2019 | | :----- | :--- | :--- | | Amortization | $229,377 | $229,377 | | Research and Development Expenses | $1,150,581 | $1,008,100 | | Selling, General and Administrative Expenses | $1,312,930 | $1,259,096 | | Total Operating Expenses | $2,692,888 | $2,496,573 | | Loss From Operations | $(2,692,888) | $(2,496,573) | | Change in Fair Value of Derivative Liabilities | $9,211,686 | — | | Gain on Settlement of Debt | — | $(51,400) | | Interest Expense | $4,772,429 | $273 | | Total Other Expense (Income), Net | $13,983,881 | $(52,286) | | Net Loss | $(16,676,768) | $(2,444,287) | | Deemed Dividends for Commitment Shares and Ratchet Adjustments | $17,099,058 | $48,659 | | Net Loss Attributable to Common Stockholders | $(33,775,826) | $(2,492,946) | | Net Loss Per Common Share - Basic | $(6.85) | $(0.98) | | Weighted Average Number of Common Shares Outstanding - Basic | 4,929,497 | 2,539,611 | - Net loss increased significantly from **$2.44 million** in 2019 to **$16.68 million** in 2020, primarily due to derivative liabilities and interest expense[314](index=314&type=chunk) - Research and development expenses increased by approximately **$142,000**, while selling, general, and administrative expenses remained comparable year-over-year[187](index=187&type=chunk)[188](index=188&type=chunk)[314](index=314&type=chunk) [Statements of Changes in Stockholders' Equity (Deficit)](index=57&type=section&id=Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20(Deficit)) The statements of changes in stockholders' equity show a shift from positive equity in FY2019 to a significant deficit in FY2020, driven by net loss and deemed dividends Stockholders' Equity (Deficit) Summary (Year Ended June 30) | Metric | 2020 | 2019 | | :----- | :--- | :--- | | Common Stock Shares | 5,204,392 | 4,058,724 | | Common Stock Amount | $520 | $406 | | Additional Paid in Capital | $19,538,742 | $9,392,573 | | Accumulated Deficit | $(41,037,898) | $(7,262,072) | | Total Stockholders' Equity/(Deficit) | $(21,498,636) | $2,130,907 | | Net Loss | $(16,676,768) | $(2,444,287) | | Deemed Dividends for Commitment Shares | $17,099,058 | — | | Issuance of Commitment Shares | 1,125,000 shares | — | | Issuance of Shares in Exchange for Debt Settlement | — | 7,804 shares | | Cashless Exercise of Warrants | — | 1,544,746 shares | - The accumulated deficit increased from **$7.26 million** in 2019 to **$41.04 million** in 2020[318](index=318&type=chunk) - A significant deemed dividend of **$17.10 million** related to commitment shares contributed to the increase in accumulated deficit in 2020[318](index=318&type=chunk) [Statements of Cash Flows](index=58&type=section&id=Statements%20of%20Cash%20Flows) For FY2020, BioVie Inc. experienced a net decrease in cash of $302,728, with operating activities using $1.63 million and financing activities providing $1.33 million Statements of Cash Flows Summary (Year Ended June 30) | Metric | 2020 | 2019 | | :----- | :--- | :--- | | Net Loss | $(16,676,768) | $(2,444,287) | | Net Cash Used in Operating Activities | $(1,628,228) | $(2,501,577) | | Net Cash Provided by Financing Activities | $1,325,500 | $2,795,700 | | Net (Decrease) Increase in Cash | $(302,728) | $294,123 | | Cash, End of Period | $37,195 | $339,923 | | Proceeds from Convertible Debenture - Related Party | $1,263,000 | — | | Proceeds from Loan Payable | $62,500 | — | | Proceeds from Issuance of Preferred Shares | — | $3,040,000 | | Cash Paid for Interest | $3,093 | — | - Net cash used in operating activities decreased from **$2.50 million** in 2019 to **$1.63 million** in 2020[319](index=319&type=chunk) - Financing activities in 2020 were primarily supported by **$1.26 million** from a convertible debenture and **$62,500** from a loan payable[319](index=319&type=chunk) [Notes to Financial Statements](index=59&type=section&id=Notes%20to%20Financial%20Statements) [Note 1. Background Information](index=59&type=section&id=Note%201.%20Background%20Information) BioVie Inc. is a clinical-stage company developing BIV201 for ascites due to chronic liver cirrhosis, holding FDA Fast-Track and Orphan Drug designations, and effected a 125-for-1 reverse stock split in November 2019 - BioVie Inc. is a clinical-stage company developing BIV201 (continuous infusion terlipressin) for ascites due to chronic liver cirrhosis[320](index=320&type=chunk) - BIV201 has FDA Fast-Track status and Orphan Drug designation for ascites, potentially granting **7 years** of market exclusivity[322](index=322&type=chunk) - The company is developing a patent-pending novel liquid formulation of terlipressin, which could provide up to **20 years** of patent coverage[322](index=322&type=chunk) - A **125-for-1 reverse stock split** was effected on November 22, 2019, in preparation for a potential NASDAQ listing[325](index=325&type=chunk) [Note 2. Liquidity and Going Concern](index=60&type=section&id=Note%202.%20Liquidity%20and%20Going%20Concern) The company's recurring losses and accumulated deficit of approximately $41 million as of June 30, 2020, raise substantial doubt about its ability to continue as a going concern without additional financing - As of June 30, 2020, the company had an accumulated deficit of approximately **$41 million** and has not generated any revenues, raising substantial doubt about its ability to continue as a going concern[327](index=327&type=chunk) - Future viability is dependent on raising additional capital through equity sales, loans, or strategic transactions, with no assurance of success[329](index=329&type=chunk)[330](index=330&type=chunk) - The COVID-19 pandemic may materially adversely affect the company's ability to raise funds if financial markets and the overall economy are impacted for an extended period[329](index=329&type=chunk) [Note 3. Significant Accounting Policies](index=61&type=section&id=Note%203.%20Significant%20Accounting%20Policies) The financial statements are prepared in accordance with GAAP, relying on management estimates for key areas, with R&D expenses expensed as incurred, and a $62,500 PPP loan received in May 2020 - Financial statements are prepared in accordance with GAAP, relying on management estimates for areas such as share-based compensation, derivatives, and income taxes[332](index=332&type=chunk)[333](index=333&type=chunk) - Research and development expenses are expensed as incurred[338](index=338&type=chunk) - The company received a **$62,500** loan under the Paycheck Protection Program (PPP) in May 2020, accounted for as debt, with forgiveness application pending[337](index=337&type=chunk) - Goodwill is tested annually for impairment, and long-lived assets are reviewed for impairment when circumstances indicate carrying amounts may not be recoverable[345](index=345&type=chunk)[347](index=347&type=chunk) [Note 4. Intangible Assets](index=65&type=section&id=Note%204.%20Intangible%20Assets) The company's intangible assets, primarily intellectual property acquired from LAT Pharma, Inc., are amortized over a 10-year useful life, with a net value of $1,325,226 as of June 30, 2020 Intangible Assets (as of June 30) | Metric | 2020 | 2019 | | :----- | :--- | :--- | | Intellectual Property | $2,293,770 | $2,293,770 | | Less Accumulated Amortization | $(968,544) | $(739,167) | | Intellectual Property, Net | $1,325,226 | $1,554,603 | | Amortization Expense (annual) | $229,377 | $229,377 | - Intangible assets are amortized over an estimated useful life of **10 years**[353](index=353&type=chunk) [Note 5. Renegotiated Debt](index=65&type=section&id=Note%205.%20Renegotiated%20Debt) In July 2018, Geis-Hides Consulting LLC settled a $132,000 debt with the company for $65,000 cash and 2,080 common shares, resulting in a $51,400 gain on settlement - A debt of **$132,000** owed to Geis-Hides Consulting LLC was settled for **$65,000 cash** and **2,080 common shares** in July 2018[355](index=355&type=chunk) - This settlement resulted in a **$51,400 gain** on settlement of debt, recorded as other income for the year ended June 30, 2019[355](index=355&type=chunk) [Note 6. Related Party Transactions](index=66&type=section&id=Note%206.%20Related%20Party%20Transactions) BioVie has engaged in extensive related party transactions, primarily with Acuitas Group Holdings, LLC, involving debt settlements, equity purchases, and a convertible debenture, leading to significant deemed dividends - Debt settlements with related parties (Barrett Ehrlich, Elliot Ehrlich, Jonathan Adams) in 2018 resulted in significant gains recorded in additional paid-in capital[358](index=358&type=chunk)[360](index=360&type=chunk)[362](index=362&type=chunk) - In July 2018, Acuitas Group Holdings, LLC and other related parties purchased **$3.2 million** in Series A Convertible Preferred Stock and warrants[365](index=365&type=chunk) - In September 2019, Acuitas provided bridge financing of up to **$2.0 million** via a convertible debenture, leading to the issuance of **1,125,000 commitment shares** and warrants[369](index=369&type=chunk) - The issuance of commitment shares and warrants to Acuitas was accounted for as a **$17.1 million deemed dividend**, recorded in accumulated deficit for FY2020[372](index=372&type=chunk) - Multiple amendments to the Acuitas agreements have occurred, modifying warrant terms, share issuances, and the debenture's draw schedule, often in anticipation of a public offering[368](index=368&type=chunk)[374](index=374&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk) [Equity Transactions with Acuitas](index=67&type=section&id=Equity%20Transactions%20with%20Acuitas) [Convertible Debenture Transaction with Acuitas](index=68&type=section&id=Convertible%20Debenture%20Transaction%20with%20Acuitas) [Note 7. Commitments and Contingencies](index=71&type=section&id=Note%207.%20Commitments%20and%20Contingencies) BioVie's commitments include a related-party office lease, while a significant contingency is the invalidation of its '945 Patent, though Orphan Drug designations and pending liquid formulation patents remain unaffected - The company has a month-to-month office lease with Acuitas Group Holdings, LLC (a related party) for **$1,000 per month**[379](index=379&type=chunk) - U.S. Patent No. 9,655,945 ('Treatment of Ascites') was invalidated by the PTAB on November 13, 2019, rendering it no longer valid or enforceable[381](index=381&type=chunk) - The patent invalidation does not affect the company's Orphan Drug designations for ascites and hepatorenal syndrome, nor its pending patent application for liquid terlipressin formulations[382](index=382&type=chunk) - BioVie is obligated to pay low single-digit royalties on BIV201 net sales to LAT Pharma LLC members, PharmaIN Corporation, and The Barrett Edge, Inc., and up to **$200,000 annually** to the University of Padova for terlipressin products covered by specified patents[383](index=383&type=chunk)[384](index=384&type=chunk)[385](index=385&type=chunk) [Note 8. Fair Value Measurements](index=72&type=section&id=Note%208.%20Fair%20Value%20Measurements) As of June 30, 2020, BioVie reported total derivative liabilities of $21.41 million, valued using the Black-Scholes-Merton model with Level 3 unobservable inputs Fair Value Measurements of Derivative Liabilities (as of June 30, 2020) | Derivative Liability | Level 3 Fair Value | | :------------------- | :----------------- | | Warrants | $16,411,504 | | Conversion Option on Convertible Debenture | $5,000,800 | | **Total Derivatives** | **$21,412,304** | - Derivative liabilities are classified as Level 3, meaning they are valued using unobservable inputs[386](index=386&type=chunk) - The Black-Scholes-Merton model is used for valuation, incorporating assumptions such as stock price, exercise/conversion price, term, volatility, and risk-free interest rate[390](index=390&type=chunk) - Warrants are accounted for as derivative financial instruments due to anti-dilution provisions or strike price adjustments based on future events[388](index=388&type=chunk) [Note 9. Equity Transactions](index=74&type=section&id=Note%209.%20Equity%20Transactions) BioVie's equity transactions include stock option grants, share issuances for cash, services, and debt settlement, and warrants subject to price adjustments due to down-round features Stock Option Activity (Year Ended June 30) | Metric | 2020 | 2019 | | :----- | :--- | :--- | | Options Outstanding | 60,400 | 58,000 | | Options Granted | 10,400 | 16,800 | | Options Exercised or Forfeited | (8,000) | — | | Weighted Average Exercise Price | $11.06 | $12.50 | | Aggregate Intrinsic Value | $352,600 | $273,000 | | Stock-based Compensation Expense | $24,846 | $64,860 | - The company issued **1,526,094 common shares** in June 2019 from a cashless exercise of warrants[406](index=406&type=chunk) - Warrants issued in 2017 and 2018 included down-round features, triggering reductions in exercise price and resulting in deemed dividends of **$20,995** and **$44,889**, respectively[419](index=419&type=chunk)[420](index=420&type=chunk)[421](index=421&type=chunk)[423](index=423&type=chunk) Warrant Activity (Year Ended June 30) | Metric | 2020 | 2019 | | :----- | :--- | :--- | | Warrants Outstanding and Exercisable | 1,374,667 | 124,667 | | Warrants Granted | 1,250,000 | 1,713,333 | | Warrants Exercised | — | 1,626,859 | | Weighted Average Exercise Price | $7.72 | $45.00 | | Aggregate Intrinsic Value | $13,799,331 | $1,202,678 | [Note 10. Income Taxes](index=80&type=section&id=Note%2010.%20Income%20Taxes) As of June 30, 2020, BioVie had net deferred tax assets of $1,737,206, primarily from tax loss carryforwards, but a full valuation allowance was recorded due to uncertainty of realization Deferred Tax Assets (as of June 30) | Metric | 2020 | 2019 | | :----- | :--- | :--- | | Tax Loss Carryforward | $2,100,816 | $1,424,714 | | Intangible Assets | $(371,063) | $(450,835) | | Stock Based Compensation | $7,453 | $18,809 | | Valuation Allowance | $(1,737,206) | $(992,688) | | Net Deferred Tax Assets | $— | $— | - A full valuation allowance of **$1,737,206** was recorded against net deferred tax assets in 2020, as realization is not more likely than not[426](index=426&type=chunk) - The company had approximately **$5.1 million** in Net Operating Loss (NOL) carryforwards as of June 30, 2020[427](index=427&type=chunk) [Note 11. Subsequent Events](index=80&type=section&id=Note%2011.%20Subsequent%20Events) Subsequent to June 30, 2020, the company received additional draws totaling $170,000 under the convertible debenture, bringing the total outstanding draws to $1,433,000 as of August 3, 2020 - Additional draws of **$170,000** were received under the debenture after June 30, 2020[429](index=429&type=chunk) - Total outstanding draws under the debenture amounted to **$1,433,000** as of August 3, 2020[429](index=429&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: March 31, 2020 ☐ 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 ...