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

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

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

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

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

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

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

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 ...