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Item 2. Management’s Discussion and Analysis

2021-05-10 compared with 2021-01-29 · 111 added, 95 removed, 81 unchanged (72% of the section changed)

49 unchanged sentences

Management’s Discussion

BioVie is a clinical-stage company pursuing

the discovery, development, and commercialization of innovative drug therapies targeting life-threatening complications of liver

Our initial disease target is ascites, a serious medical condition affecting about 100,000 Americans and many times

more worldwide.

Our therapeutic drug candidate BIV201 is based on a drug that is approved in about 40 countries to treat related

complications of liver cirrhosis (part of the same disease pathway as ascites), but not yet available in the US.

The active agent

in BIV201, terlipressin, is a potent vasoconstrictor which is in use for various medical conditions around the world.

is for BIV201 to interrupt the ascites disease pathway, thereby halting the cycle of accelerating fluid generation in ascites patients.

Comparison of the three months ended December 31, 2020 to the

three months ended December 31, 2019

is a clinical-stage company pursuing

the discovery and development of innovative drug therapies to address severe unmet needs in chronic debilitating diseases.

currently focused on developing and commercializing BIV201 (continuous infusion terlipressin), a novel approach to the treatment

of ascites due to chronic liver cirrhosis.

Our therapy BIV201 is based on a drug that is approved in about 40 countries to treat

related complications of liver cirrhosis (part of the same disease pathway as ascites), but not yet available in the United States.

BIV201’s active agent is a potent vasoconstrictor and has shown efficacy for reducing portal hypertension in studies around

The goal is for BIV201 to interrupt the ascites disease pathway, thereby halting the cycle of accelerating fluid generation

in ascites patients.

Comparison of the three months ended March 31, 2021 to the three

months ended March 31, 2020

Net income (loss)

The net loss for the three months ended

December 31, 2020 was approximately $3.1 million as compared to a net income of $6.7 million for the three months ended December

The increase in loss of approximately $9.8 million was primarily due to a change in fair value of derivative liabilities

of approximately $7.4 million, a decrease in interest expense of approximately $21,000 and increase in operating expenses of approximately

$2.4 million.

March 31, 2021 was approximately $3 million as compared to a net loss of $366,000 for the three months ended March 31, 2020.

increase in loss of approximately $2.6 million was primarily due an increase in operating expenses of $2.3 million, a change in

fair value of derivative liabilities of approximately $367,000, and a decrease in interest expense of approximately $34,000.

Total operating expenses for the three

months ended December 31, 2020 were approximately $3 million as compared to $710,000 for the three months ended December 31, 2019.

net increase of approximately $2.4 million during the three months ended December 31, 2020, was primarily due to an increase in

research and development activities after the Company’s public offering of registered common stock which occurred on September

22, 2020 and the related expense of $1.5 million directors’ compensation related to stock options issued to the Board of

Directors in December 31, 2020.

months ended March 31, 2021 were approximately $3 million as compared to $699,000 for the three months ended March 31, 2020.

net increase of approximately $2.3 was primarily consisted of increases in research and development expenses of $344,000 and selling,

general and administrative expenses of $2 million related to stock-based compensation and due diligence services related to the

Company’s purchase of NeurMedix’s assets.

(See Note 9 Subsequent events in the accompanying condensed financial statements.)

Research and Development Expenses

Research and development expenses were

approximately $938,000 for the three months ended December 31, 2020, a net increase of approximately $591,000, from $347,000 for

the three months ended December 31, 2019.

Research and development activities increased after the Company raised funds in the public

offering on September 22, 2020 and the funds were used for preparing for the 2B trials.

approximately $697,000 for the three months ended March 31, 2021, a net increase of approximately $344,000, from $353,000 for the

three months ended March 31, 2020.

Research and development activities increased in preparation and launch of the Phase 2b clinical

Selling, General and Administrative Expenses

Selling, general and

administrative expenses were approximately $2.1 million for the three months ended December 31, 2020 compared to $307,000 for

the three months ended December 31, 2019.

The net increase of approximately $1.8 million was primarily attributed to

directors’ compensation of $1.5 million related to stock options issued to Board of Directors in December 2020 and

approximately $220,000 professional consulting fees related to researching new business development pursuits.

Comparison of the six months ended December 31, 2020 to the six

months ended December 31, 2019

Selling, general and administrative

expenses were approximately $2.2 million for the three months ended March 31, 2021 compared to $289,000 for the three months ended

March 31, 2020.

The net increase of approximately $1.9 million was primarily attributed to legal and consulting expenses totaling

approximately $1 million for due diligence services in the acquisition of NeurMedix assets, and approximately $804,000 related

to stock-based compensation for stock options granted to certain management and the Company’s key consultants and amortization

for stock options granted to directors.

Comparison of the nine months ended March 31, 2021 to the nine

months ended March 31, 2020

Net income (loss)

The net income for the six months ended December

31, 2020 was $4.3 million as compared to a net income of $2.8 million for the six months ended December 31, 2019.

in net income of $1.5 million was due to a decrease in fair value of derivative liabilities of $521,000 and decrease in interest

expense of $2.9 million related to the embedded derivative liability warrants offset by an increase in operating expenses of $1.9

Total operating expenses for the six

months ended December 31, 2020 were approximately $3.5 million compared to $1.4 million for the six months ended December 31, 2019.

net increase of approximately $2.1 million was primarily due to increase in research and development activities after the Company

raised funds in the public offering on September 22, 2020 and an increase in selling, general and administrative expenses attributed

to directors’ compensation of $1.5 million related to stock options issued to the Board of Directors in December 2020.

The net income for the nine months ended March

31, 2021 was $1.3 million as compared to a net income of $2.5 million for the nine months ended March 31, 2020.

The decrease in

net income of $1.2 million was due to a decrease in interest expense of $3 million related to the embedded derivative liability

warrants offset by operating expenses increases totaling $4.3 million.

Total operating expenses for the nine

months ended March 31, 2021 were approximately $6.5 million compared to $2.1 million for the nine months ended March 31, 2020.

net increase of approximately $4.4 million was primarily consisted of increases in research and development expenses of $757,000

and selling, general and administrative expenses of $3.6 million attributed to stock-based compensation expenses for due diligence

related to the purchase of the NeurMedix assets.

Research and Development Expenses

Research and development expenses were

approximately $1.1 million for the six months ended December 31, 2020, an increase of $375,000, from $688,000 for the six months

ended December 31, 2019.

Research and development activities increased after the Company raised funds in the public offering on

September 22, 2020 and the funds were used for preparing for the 2B trials.

approximately $1.8 million for the nine months ended March 31, 2021, an increase of $757,000, from $1 million for the nine months

ended March 31, 2020.

Research and development activities increased in preparation and launch of Phase 2b clinical trials.

Selling, General and Administrative Expenses

Selling, general and

administrative expenses were approximately $2.3 million for the six months ended December 31, 2020, a net increase of

approximately $1.7 million, from $614,000 for the six months ended December 31, 2019.

The net increase was primarily

attributed to directors’ compensation of $1.5 million related to stock options issued to Board of Directors in December

2020 and payments to professional consultants researching new business development pursuits of approximately $220,000 offset

by a reduction in legal expenses of $63,000 and reduction in travel expenses of $25,000, that related to the capital raise in

the previous six month period ended December 31, 2019.

Selling, general and administrative

expenses were approximately $4.5 million for the nine months ended March 31, 2021, a net increase of approximately $3.6 million,

from $941,000 for the nine months ended March 31, 2020.

The net increase primarily consisted of stock-based compensation of $2.3

million related to stock options granted to the Board of Directors, management and certain key consultants to the Company and

amortization for stock options granted to directors;

and legal and consulting expenses totaling approximately $1 million for due

diligence services in the acquisition of NeurMedix assets as described below.

Capital Resources and Liquidity

On September 22, 2020, the Company closed a

registered public offering (the “Offering”) issuing 1,799,980 of its Class A common stock, par value $0.0001 per share

(the “Common Stock”) at $10 per share, resulting in net proceeds to the Company of approximately $15.6 million, net

of issuance costs of approximately $2.4 million;

and of which approximately $1.8 million was used to satisfy all amounts owing

in respect of a 10% OID Convertible Delayed Draw Debenture (the “Debenture”) due September 24, 2020 held by the Company’s

controlling stockholder, Acuitas Group Holdings, LLC (“Acuitas”).

Concurrently with the closing of the Offering

and repayment of the Debenture, the Company issued an aggregate of 6,909,582 shares of Common Stock to Acuitas, representing (i)

shares issuable pursuant to Acuitas’ rights under the Purchase Agreement dated July 3, 2018 with the Company resulting from

a 50% adjustment of the purchase price applicable to its initial investment in the Company and the exercise price of the warrants

received in such transaction and the price per share should it exercise certain rights to purchase additional securities in the

event of certain reductions in the useful life of the Company’s intellectual property rights, and (ii) the automatic exercise

of warrants issued to Acuitas in connection with the Debenture financing at the par value of the Common Stock.

(See Note 5 Related

Party Transactions in the accompanying interim condensed financial statements.)

On September 17, 2020, the Company’s

Common Stock was approved for listing on The NASDAQ Capital Market (“Nasdaq”) under the symbol “BIVI” and

began trading on September 18, 2020.

As of December 31, 2020, stockholders’

of March 31, 2021, the Company had working capital of approximately $10 million and cash of $11.4 million and, stockholders’

equity was approximately $11.4 million, and its accumulated deficit was approximately $93.4 million.

As a development stage enterprise,

the Company expects substantial losses in future periods.

The accompanying interim condensed financial statements were prepared

assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities

in the normal course of business.

Based on the Company’s plans, management believes it has sufficient funds to fund its operations

through our next round of clinical trials through February 2022.

The Company’s future operations

will be dependent on the success of the Company’s ongoing development and commercialization effort, and management intends

to continue to secure additional required funding primarily through additional equity or debt financings.

We may also seek to secure

required funding through sales or out-licensing of intellectual property assets, seeking partnerships with other pharmaceutical

In addition, the Company has

not generated any revenues and no revenues are expected in the foreseeable future.

The Company’s future operations are dependent

on the success of the Company’s ongoing development and commercialization effort, as well as continuing to secure additional

As described in Note 9 Subsequent Events

in the accompany condensed interim financial statements, on April 27, 2021, the Company entered into an Asset Purchase Agreement

which was amended by Amendment No.

1 to the Asset Purchase Agreement on May 9, 2021, (collectively the Amended Asset Purchase

Agreement) with Neurmedix to acquire certain assets from NeurMedix and assume certain liabilities of NeurMedix, in exchange

for the consideration of cash and common stock of the Company.

At the close of the transaction, the Company will issue 8,361,308

shares of the Companys common stock and make a cash payment equal to the aggregate amount of NeurMedixs direct and

documented cash expenditures to advance certain clinical programs from March 1, 2021 through the closing, which cash payment is

estimated to be approximately $3.0 million.

The cash requirements for expenses such as the due diligence, legal fees and the

fairness opinion and including the $3 million cash consideration totals approximately $ 7.4 million and will be due at the close of

the transaction, currently anticipated in the last quarter of our fiscal year.

These expenditures will have a significant impact on

the Companys cash position and the funding of its future operations over the next 12 months, raising substantial doubt about

its ability to meet its financial cash flow requirements.

Subject to the terms and conditions of the Amended Asset Purchase

Agreement following the closing, BioVie will also be obligated to deliver contingent consideration to NeurMedix (or its successor)

consisting of (i) a cash payment of approximately $7.3 million, subject to a pivotal clinical trial for NE3107 meeting its primary

endpoint(s) and BioVie having successfully raised at least $50 million in new capital, and (ii) contingent stock consideration to

NeurMedix (or its successor) consisting of up to 18.0 million shares of BioVies common stock, with 4.5 million shares issuable

upon the achievement of each of the four milestones set forth in the Purchase Agreement, subject to a cap limiting the issuance of

shares if such issuance would result in the beneficial ownership of NeurMedix and its affiliates exceeding 87.5% of BioVies

issued and outstanding common stock.

future viability of the Company is largely dependent upon its ability to raise additional capital to finance its operations.

cannot assure you that our drug candidate will be developed, work, or receive regulatory approval;

that we will ever earn revenues

sufficient to support our operations or that we will ever be profitable.

Furthermore, since we have no committed source of sufficient

financing, we cannot assure that we will be able to raise money as and when we need it to continue our operations.

raise funds as and when we need them, we may be required to severely curtail, or even to cease, our operations.

intends to attempt to secure additional required funding primarily through additional equity or debt financings.

We may also seek

to secure required funding through sales or out-licensing of intellectual property assets, seeking partnerships with other pharmaceutical

companies or third parties to co-develop and fund research and development efforts, or similar transactions.

there can be no assurance that we will be able to obtain required funding.

If we are unsuccessful in securing funding

from any of these sources, we will defer, reduce, or eliminate certain planned expenditures in our research protocols.

The emergence of widespread health emergencies

or pandemics of the coronavirus ("Covid-19"), may lead to continued regional quarantines, business shutdowns, labor shortages,

disruptions to supply chains, and overall economic instability, including the duration and spread of the outbreak and restrictions

and the impact of Covid-19 on the financial markets and the overall economy, all of which are highly uncertain and cannot be predicted.

If the financial markets and/or the overall economy are impacted for an extended period, the Company’s ability to raise funds

may be materially adversely affected.

However, there can

be no assurance that we will be able to obtain required funding.

If we are unsuccessful in securing funding from any of these sources,

we will defer, reduce or eliminate certain planned expenditures in our research protocols.

If we do not have sufficient funds to

continue operations, we could be required to seek bankruptcy protection or other alternatives that could result in our stockholders

losing some or all of their investment in us.

management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient financing

on terms acceptable to the Company, if at all, to fund continuing operations.

These circumstances raise substantial doubt on the

Company’s ability to continue as a going concern.

The financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

emergence of widespread health emergencies or pandemics of the coronavirus ("Covid-19"), may lead to continued regional

quarantines, business shutdowns, labor shortages, disruptions to supply chains, and overall economic instability, including the

duration and spread of the outbreak and restrictions and the impact of Covid-19 on the financial markets and the overall economy,

all of which are highly uncertain and cannot be predicted.

If the financial markets and/or the overall economy are impacted for

an extended period, the Company’s ability to raise funds may be materially adversely affected.

Off-Balance Sheet Arrangements

8 unchanged sentences

Critical Accounting Policies and Estimates

For the six-month period ended December

For the nine-month period ended March

31, 2021, there were no significant changes to the Company’s critical accounting policies as identified in the Annual Report

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis