BioVie(BIVI) - 2023 Q3 - Quarterly Report

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 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 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 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 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] Condensed Statements of Changes in Stockholders' Equity 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][130] Notes to Unaudited Condensed Financial Statements 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 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][133] - 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][113][152] - 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][114] Note 2. Liquidity 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][137] | 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][240] Note 3. Significant Accounting Policies 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] - 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] - No recent Accounting Standards Updates (ASUs) are expected to have a material impact on the company's financial statements[158] Note 4. Investments in U.S. Treasury Bills available for sale 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] Note 5. Intangible Assets 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 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][113][166] - 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] - 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] Note 7. Other Liabilities 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] Note 8. Notes Payable 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] - 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] - 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] | 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 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] | 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] Note 10. Equity Transactions 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] Note 11. Leases 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] | 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 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][153] - 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] Note 13. Employee Benefit Plan 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] | 401K Contributions | 3 Months Ended Mar 31, 2023 | 9 Months Ended Mar 31, 2023 | | :----------------- | :-------------------------- | :-------------------------- | | Company Match | $16,000 | $80,100 | Note 14. Subsequent Events 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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][133][217] - 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][113][152] - 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][114] Results of Operations 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 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][219] Nine Months Ended March 31, 2023 vs. 2022 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][83] - 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][222] Capital Resources and Liquidity 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] - Management expects future funding sources to include equity sales, loans, or other strategic transactions[240] Critical Accounting Policies and Estimates 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] Recent Accounting Pronouncements 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] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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][116] - 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][160] Item 4. Controls and Procedures 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] - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2023[84] PART II – OTHER INFORMATION This section details legal proceedings, risk factors, equity sales, defaults, and exhibits Item 1. Legal Proceedings 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] Item 1A. Risk Factors 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][55][226] - 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][246] - 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][227] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - No unregistered sales of equity securities were reported[248] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - No defaults upon senior securities were reported[229] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable to the company[37] Item 5. Other Information The company reported no other material information for this item - No other material information was reported[36][75][229] Item 6. Exhibits 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][86][230][231]