BIOVIE INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We have evaluated, with the participation of our principal executive and our principle financial officer, the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of the effectiveness of internal control to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2022 using the criteria established in Internal Control Integrated Framework (“2013 Framework”) issued by the Committee of Sponsoring Organization of the Treadway Commission (“COSO”). Based on our evaluation using those criteria, our management has concluded that, as of June 30, 2022, our internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles for the reasons discussed above. Changes in Internal Control Over Financial Reporting There were no changes in our internal controls over financial reporting during quarter ended June 30, 2022, that materially affected, or are reasonably likely to materially affect our internal controls over financial reporting. ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. - 34 - Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The following table sets forth certain information regarding our Board of Directors, our executive officers, and some of our key employees, as of September 13, 2022. Name Age Director Since Position Cuong Do 56 2016 CEO & President and Director Terren Peizer 63 2018 Chairman Joanne Wendy Kim 67 -- Chief Financial Officer Joseph M. Palumbo, MD 62 -- Chief Medical Officer Penelope Markham, PhD 56 -- EVP - Liver Cirrhosis R&D Chris Readings, PhD 75 -- EVP - Neuroscience R&D Clarence Ahlem 67 -- EVP - Neuroscience Product Development Jim Lang 57 2016 Director Michael Sherman 63 2017 Director Richard J. Berman 80 2019 Director Steve Gorlin 85 2020 Director Robert Hariri, MD, PhD 63 2020 Director Sigmund Rogich 78 2020 Director According to our Bylaws, the directors shall be elected at the annual meeting of the stockholders and each director shall be elected to serve until his successor shall be elected and shall qualify. A director need not be a stockholder. Directors shall not receive any stated salary for their services as directors or as members of committees, but by resolution of the Board of Directors a fixed fee and expenses of attendance may be allowed for attendance at each meeting. The Bylaws shall not be construed to preclude any director from serving the Company in any other capacity as an officer, agent or otherwise, and receiving compensation therefor. There are no familial relationships among any of our directors or officers. Mr. Terren Peizer, Chairman of the Board of Directors, is also the founder of Catasys, Inc. a U.S. reporting company listed on Nasdaq on whose board Mr. Sherman also serves. Additionally, Jim Lang currently serves as a director at OptimizeRX, a U.S. reporting company that is listed on the Nasdaq stock exchange. None of our other directors or officers is or has been a Director or has held any form of directorship in any other U.S. reporting companies. None of our directors or officers has been affiliated with any Company that has filed for bankruptcy within the last five years. We are not aware of any proceedings to which any of our officers or directors, or any associate of any such officer or director, is a party that are adverse to the Company. We are also not aware of any material interest of any of our officers or directors that is adverse to our own interests. Biographical Information Mr. Cuong Do , has served on the Company’s board of directors since 2016 and effective April 27, 2021 was appointed the Company’s CEO and President. He served as the President, Global Strategy Group, at Samsung from February 2015 to December 2020. Mr. Do helped set the strategic direction for Samsung Group’s diverse business portfolio. He was previously the Chief Strategy Officer for Merck from October 2011 to March 2014, and Tyco Electronics from June 2009 to October 2011, and Lenovo from December 2007 to March 2009. Mr. Do is a former senior partner at McKinsey & Company, where he spent 17 years and helped build the healthcare, high tech and corporate finance practices. He holds a BA from Dartmouth College, and an MBA from the Tuck School of Business at Dartmouth. We believe Mr. Do’s qualifications to serve on our Board of Directors and as the CEO are primarily based on his decades of experience as an executive in the pharma, biotech, and other high technology industries and his extensive experience in strategy, corporate finance practice and the development of companies in all stages. - 35 - Table of Contents Mr. Terren Peizer , Chairman of the Board of Directors, since July 2018, is an entrepreneur, investor, and financier with a particular interest in healthcare, having founded and successfully commercialized several healthcare companies. Mr. Peizer was the founder of Ontrak (Formerly known as Catasys, Inc.), a leader in behavioral and mental health management services, having served as the Chairman of the Board of Directors since Ontrak’s inception in 2003 through April 11, 2021. Effective April 12, 2021, Mr. Peizer was appointed to serve as Ontrak’s Executive Chairman. He was the founder, Chairman and CEO of NeurMedix, Inc., a biotechnology company with a focus on inflammatory, neurological and neuro-degenerative diseases. Mr. Peizer is also Executive Chairman of Verde, Inc., a company producing 100% plant-based, compostable, and biodegradable plastic. He is the Executive Chairman of the mobility delivery company ZipMo, Inc. He also is the Executive Chairman of the blockchain company, Casper Labs, Inc. Mr. Peizer owns Acuitas Group Holdings, LLC, (Acuitas) his personal holding company that owns his portfolio Company interests. Through Acuitas , Mr. Peizer owns, Acuitas Capital, LLC, an industry leader in investing in micro and small capitalization equities, having invested over $1.5 billion directly into portfolio companies. Mr. Peizer has been the largest beneficial shareholder of, and has held various senior executive positions with several other publicly traded growth companies. He served as Chairman of Cray, Inc., a supercomputer company recently sold to Hewlet Packard, Inc. Mr. Peizer has a background in venture capital, investing, mergers and acquisitions, corporate finance, and previously held senior executive positions with the investment banking firms Goldman Sachs, First Boston, and Drexel Burnham Lambert. He received his B.S.E. in finance from The Wharton School of Finance and Commerce. We believe Mr. Peizer’s qualifications to serve on our board of directors include his role as an investor and executive positions in several private and public companies, including numerous companies in the healthcare field. He has extensive knowledge and experience in the financial and healthcare industries and provides extensive insight and experience with capital markets and publicly traded companies at all stages of development. Ms. Joanne Wendy Kim has served as the Company’s Chief Financial Officer since October 2018. Ms. Kim previously served as CFO for several companies throughout her career, previously with Landmark Education Enterprises, and prior to that; other public entities in the entertainment and financial services industry sectors. She provided interim CFO services to various organizations through Group JWK from 2016 to 2018. In her various roles, Ms. Kim oversaw corporate finance and operational groups, closed eight acquisitions, secured bank financings, developed and implemented new business strategies, managed risk and implemented new financial policies and procedures. As a CPA professional, she advised on accounting transactions, SEC reporting matters and other regulatory matters to clients serving as a Director at BDO USA, LLP’s National Office SEC Department and sat the US desk in London for BDO LLP UK Firm in 2008-2016 and as a Senior Manager at KPMG in earlier part of her career. She brings more than 35 years of accounting and finance experience to this position. Ms. Kim earned her BSA in accounting and finance at California State University, Long Beach. Wendy Kim’s qualifications to serve as our Chief Financial Officer are primarily based on her 35 years of accounting and finance experience both as a CFO and as a CPA in major global accounting and consultancy firms. Dr. Joseph M. Palumbo has served as our Chief Medical Officer since November 2021. Formerly he served as the CMO at Zynerba Pharmaceuticals from July 2019 to October 2021, responsible for clinical operations, development, regulatory, and medical affairs. Prior to his time at Zynerba, Dr. Palumbo held senior worldwide governance roles at Mitsubishi Tanabe Pharma in both the United States and Japan from April 2012 to June 2019, where he led medical science and translational research across multiple therapeutic areas, and guided successful registrational programs for Radicava® (edaravone) for the treatment of Amyotrophic Lateral Sclerosis . From April 2003 to March 2012, Dr. Palumbo was Global Head and Franchise Medical Leader for Psychiatry, and the Interim Head of Global Neuroscience at Johnson & Johnson, where he led the medical teams who achieved successful global registrations for Risperdal® (risperidone); Concerta® (methylphenidate HCL); and Invega® (paliperidone). He was Head of Psychiatry and Neurology at Pharmanet for from April 2002 to April 2003. Dr Palumbo previously held industry positions in European Pharma with Sanofi-Synthelabo from April 1999 to April 2002, Biotech at Cephalon, from April 1997 to April 1998, and from July 1989 to April 2002, he held senior leadership and hospital administration roles at prestigious academic research institutions including Yale, Cornell, and the University of Pennsylvania. He holds a Bachelor of Arts at the University of Pennsylvania and received his Doctor of Medicine at the George Washington University School of Medicine. He was a Biological Sciences Training Program Fellow of the National Institutes of Health and Chief Resident for the Abraham Ribicoff Clinical Neuroscience Research Unit at Yale University. Dr Palumbo has received Board Certification in Psychiatry and Addiction Psychiatry. - 36 - Table of Contents Dr. Palumbo’s qualifications to serve as our Chief Medical Officer is based on the decades and depth of experiences in the roles he has served in his medical profession and commercial experience in the healthcare industry and biopharma industries. Dr. Penelope Markham currently serves as our Executive Vice President of Liver Cirrhosis Research and Development. Formerly she served as the Company’s Chief Scientific Officer from November 2018 to June 30, 2021. Dr. Markham served as a Technical Consultant at LAT Pharma for 7 years prior to our acquisition of LAT Pharma. She has spent 15 years in immunology, infectious disease, bacteriology and drug discovery research. Dr. Markham was a co-founder and Research Director for Influx, Inc. involved in antibiotic drug discovery. She has been a member of NIH grant review panels and consulted for several pharmaceutical companies in a variety of therapeutic areas including Orphan Drug development. Dr. Markham has more than 20 publications in peer-reviewed journals and three patents. She holds a BS in Biochemistry from the University College Cork, Ireland, a Masters from Strathclyde University, Scotland, and a PhD from Rush University, Chicago. Dr. Markham’s qualifications to serve as our EVP-Liver Cirhossis – Research and Development scientist are primarily based on her years of experience with LAT Pharma, as well as having been a member of NIH grant review panels and consulted for several pharmaceutical companies in a variety of therapeutic areas including Orphan Drug development. Dr. Chris Reading joined the Company on July 1, 2021 and serves as our Executive Vice President of Neuroscience-Research and Development. Formerly, he served as the Chief Scientific Officer, Hollis-Eden Pharmaceuticals and its successor companies from 2000 to 2021. Previously, served as the VP of Product and Process Development for SyStemix/Novartis from 1993 to 1999 From there, he moved to San Diego where he has spent over 20 years on the NE3107 platform development. He received his Ph.D. in Biochemistry from UC Berkeley, performed post-doctoral studies in cancer biology at UC Irvine, and joined MD Anderson Cancer Center and the University of Texas, Graduate School of Biomedical Sciences in Houston for 13 years, where he became Associate Professor of Medicine in the Department of Developmental Therapeutics with a joint appointment in the Department of Tumor Biology. Dr Reading’s qualifications to serve as our EVP of Neuroscience Research and Development are based on his over 40 years of research and drug development experience, and over 130 peer-reviewed scientific publications, he has also authored numerous patents in the areas of monoclonal antibodies, cell separation technologies, stem cell transplantation, and sterol drug development. Mr. Clarence Ahlem joined the Company on July 1, 2021 and serves as our Executive Vice President- Product Development. Previously he served as the Vice President of Product Development of Hollis-Eden Pharmaceuticals and successor companies Harbor Biosciences and Harbor Therapeutics from 2000 to 2014, where he led the development effort for NE3107 for its initial clinical application, type 2 diabetes. He previously served as the manager of bioorganic chemistry at Systemix, Inc. in Palo Alto CA from June 1991 to June 1995. He began his career in industry with a six-year term in the Therapeutics Division at Hybritch developing synthetic bifunctional antibodies and their clinical applications. Prior to that worked four years in academic research on the enzymology of DNA replication at the University of California San Diego. He received his MS in microbiology at SDSU in 1981. Mr. Ahlem’s qualifications to serve as our EVP of Product Development are based on more than 35 years of product-oriented research and product development experience that include protein and cell-based biopharmaceutical development, and responsibility for pharmacological characterization, manufacturing, and regulatory submissions to support pharmaceutical development of novel derivatives of the dehydroepiandrosterone metabolome, including NE3107. - 37 - Table of Contents Mr. Jim Lang has served as the Company’s director since 2016. He is currently CEO of EVERSANA, the leading commercialization services company for the life sciences industry. In five years since he founded EVERSANA, it is now over $1B in revenue, with >7000 employees across 40 global locations. He formerly served as the CEO of Decision Resources Group (DRG), which he transformed into a leading healthcare data and analytics firm. Prior to that, Jim was CEO of IHS Cambridge Energy Research Associates (IHS CERA), a recognized leader in energy industry subscription information products, and formerly the President of Strategic Decisions Group (SDG), a leading global strategy consultancy. Mr. Lang holds a BS summa cum laude in electrical and computer engineering from the University of New Hampshire and an MBA with Distinction from the Tuck School of Business. Jim Lang currently also serves as a Director at OptimizeRX (OPRX), a Nasdaq listed Company. Jim Lang’s qualifications to serve on our Board of Directors are primarily based on his decades of experience as a strategy consultant, broad industry expertise, and senior-level management experience running several healthcare and information technology companies. Mr. Michael Sherman JD has served as the Company director since 2017. He retired from his position as a Managing Director at Barclays Plc in 2018, where he had worked since 2008. Previously he was a Managing Director at Lehman Brothers, Inc. He has worked in investment banking for 30 years. Mr. Sherman has significant experience in healthcare finance, most recently assisting on a $450 million convertible transaction for Neurocrine Biosciences. He has worked on successful financial transactions for Teva Pharmaceutical Industries, Amgen Inc., Cubist Pharmaceuticals, Merck & Co., and Cardinal Health, among other companies. After graduating from the University of Pennsylvania, Michael Sherman received his JD, cum laude, from the Harvard Law School. Michael Sherman’s qualifications to serve on our Board of Directors are primarily based on his decades of finance industry experience and investment banking. Mr. Sherman has significant experience in healthcare finance including having worked on successful financial transactions for several pharmaceutical and healthcare focused companies. Mr. Richard J. Berman has served as the Company’s director since June 2019. Mr. Berman has over 35 years of venture capital, senior management, and merger & acquisitions experience. He currently is a director of four public companies including; Cryoport Inc., Genius Group, Context Therapeutics, and over the last decade served on the boards of six companies that reached a market capitalization over one billion including Cryoport, Advaxis, EXIDE, Internet Commerce Corporation, Kapitus and Ontrak. From 1998-2000, he was employed by Internet Commerce Corporation (now Easylink Services) as Chairman and CEO and was a director from 1998-2012. Previously, Mr. Berman was Senior Vice President of Bankers Trust Company, where he started the M&A and Leveraged Buyout Departments; created the largest battery company in the world in the 1980’s by merging Prestolite, General Battery and Exide and advised on over $4 billion of M&A transactions (completed over 300 deals). He is a past Director of the Stern School of Business of NYU where he obtained his BS and MBA. He also has US and foreign law degrees from Boston College and The Hague Academy of International Law, respectively. We believe Richard J. Berman’s qualifications to serve on our board of directors include his experience in the healthcare industry, and his current and past experience in numerous private and publicly traded companies. Mr. Steven Gorlin has served as the Company’s director since June 2020. He has founded many biopharma companies including Hycor Biomedical, Theragenics, Medicis Pharmaceutical, EntreMed, MRI Interventions, DARA BioSciences, MiMedx, Medivation (sold to Pfizer for $14 billion) and NantKwest. Mr. Gorlin served for many years on the Business Advisory Council to the Johns Hopkins School of Medicine and on The Johns Hopkins BioMedical Engineering Advisory Board. He is currently a member of the Research Institute Advisory Committee (RIAC) of Massachusetts General Hospital. He started The Touch Foundation, a nonprofit organization for the blind, and was a principal contributor to Camp Kudzu for diabetic children. - 38 - Table of Contents Steve Gorlin’s qualifications to serve on our Board of Directors are primarily based on his over 45 years of experience in founding and investing in several biopharma companies, leading multiple NASDAQ AND NYSE companies to their success. Dr. Robert Hariri MD, PhD , has served as the Company’s director since June 2020. Dr Hariri is the Chairman, founder, and CEO of Celularity, Inc., a leading cellular therapeutics company. He was the founder and CEO of Anthrogenesis Corporation, and after its acquisition served as CEO of Celgene Cellular Therapeutics. Dr. Hariri co-founded the genomic health intelligence company, Human Longevity, Inc. Dr. Hariri pioneered the use of stem cells to treat a range of life-threatening human diseases. He is widely acknowledged for his discovery of pluripotent stem cells and for assisting with discovering the physiological activities of tumor necrosis factor (TNF). He holds over 170 issued and pending patents. Robert (Bob) Hariri’s qualifications to serve on our Board of Directors are primarily based on his decades of founding and leading several companies in the cellular therapeutic space, as well as pioneering in the use of stem cells to treat a range of life-threatening human diseases and discoveries in the physiological activities of tumor necrosis factor. He has authored over 150 publications and garnered numerous awards for contributions to the fields of biomedicine and aviation. Mr. Sigmund (Sig) Rogich has served as the Company’s director since June 2020. Sig is the CEO and President of The Rogich Communications Group and serves on the Board of Keep Memory Alive, a philanthropic organization which raises awareness about brain disorders and Alzheimer's disease. Keep Memory Alive funds clinical trials to advance new treatments for patients with Alzheimer’s, Huntington’s and Parkinson’s disease, as well as multiple sclerosis. Mr. Rogich was formerly the US Ambassador to Iceland. He has served as a senior consultant to Presidents Ronald Reagan and George H.W. Bush. Mr. Rogich serves on multiple boards of directors for charitable causes. We believe Mr. Rogich’s qualifications to serve on our Board of Directors are based on his experience in the Communications sector and philanthropic organization raising awareness about brain disorders. His experience in service as a senior consultant to candidates of the highest office. Delinquent Section 16(a) Reports Section 16(a) of the Securities Exchange Act of 1934, as amended (Exchange Act), requires our directors and executive officers, and persons who own more than 10% of our outstanding common stock, to file with the SEC, initial reports of ownership and reports of changes in ownership of our equity securities. Such persons are required by SEC regulations to furnish us with copies of all such reports they file. To our knowledge, based solely on a review of the copies of such reports furnished to us regarding the filing of required reports, we believe that, except for the reports filed by Jonathan Adams (Form 4s filed on September 16, 2021, October 29, 2021 and February 16, 2022), Clarence Ahlem (Form 3 and Form 4 filed on September 28, 2021), Richard J. Berman (Form 3 and Form 4 filed on September 29, 2021 and Form 4 filed on April 20, 2022), Cuong Do (Form 4s filed on September 16, 2021, January 25, 2022 and July 7, 2022), Steve Gorlin (Form 4 filed on April 20, 2022), Robert J. Hariri (Form 3 and Form 4 filed on September 28, 2021 and Form 4 filed on April 20, 2022), Wendy Kim (Form 4 filed on September 16, 2021), James Lang (Form 4 filed on April 25, 2022), Penelope Markham (Form 4 filed on September 16, 2022), Joseph M Palumbo (Form 4 filed on February 17, 2022), Terren Peizer (Form 3 filed on August 16, 2022 and Form 4 filed on August 26, 2022), Christopher Reading (Form 3 filed on October 8, 2021 and Form 4 filed on October 8, 2021), Sigmund Rogich (Form 4 filed on April 21, 2022) and Michael Sherman (Form 4 filed on April 20, 2022), all Section 16(a) reports applicable to our directors, executive officers and greater-than-ten-percent beneficial owners with respect to fiscal 2022 were timely filed. - 39 - Table of Contents Independence of the Board of Directors Our common stock is traded on the Nasdaq Capital Market. The Board of Directors has determined that six of the members of the Board of Directors qualify as “independent,” as defined by the listing standards of the Nasdaq. Consistent with these considerations, after review of all relevant transactions and relationships between each director, or any of the director's family members, and the Company, its senior management and its independent auditors, the Board has determined further that Messrs. Lang, Sherman, Berman, Gorlin, Hariri and Rogich are independent under the listing standards of Nasdaq. In making this determination, the Board of Directors considered that there were no new transactions or relationships between its current independent directors and the Company, its senior management and its independent auditors since last making this determination. 2022 Meetings and Attendance During fiscal year 2021, the Board held four Board of Directors meetings, four Audit Committee meetings, five Compensation Committee meetings and one Nominating and Corporate Governance Committee meeting. All Directors attended at least 75% or more of the aggregate number of meetings of the Board and Board Committees on which they served. Committees of the Board of Directors Our Board of Directors has three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee. Both our audit committee and our compensation committee will be composed solely of independent directors. The audit committee is comprised solely of independent directors, and the compensation committee and the nominating and corporate governance committee are comprised solely of independent directors. Each committee operates under a charter approved by our Board of Directors and have the composition and responsibilities described below. The charter of each committee is available on our website. Audit Committee We have established an audit committee of the Board of Directors. The members of our audit committee are Richard Berman, Michael Sherman, Jim Lang and Sigmund Rogich each of which is an independent director within the meaning of the Nasdaq rules. Mr. Berman has served as chairman of the audit committee since October 2020 and qualifies as an “audit committee financial expert” as defined by Item 401(h)(2) of Regulation S-K. We have adopted an audit committee charter, detailing the principal functions of the audit committee, including: · assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent auditor’s qualifications and independence, and (4) the performance of our internal audit function and independent auditors; the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us; · pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence; · setting clear policies for audit partner rotation in compliance with applicable laws and regulations; - 40 - Table of Contents · obtaining and reviewing a report, at least annually, from the independent auditors describing (1) the independent auditor’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; · meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent auditor, including reviewing our specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and · reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. Compensation Committee We have established a compensation committee of the Board of Directors. The members of our Compensation Committee are Richard Berman, Michael Sherman and Steve Gorlin. Mr. Sherman has served as chairman of the compensation committee since October 2020. We have adopted a compensation committee charter, which details the principal functions of the compensation committee, including: · reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; · reviewing and making recommendations to our Board of Directors with respect to the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers; · reviewing our executive compensation policies and plans; · implementing and administering our incentive compensation equity-based remuneration plans; assisting management in complying with our proxy statement and annual report disclosure requirements; · approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; and · producing a report on executive compensation to be included in our annual proxy statement; and reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC. - 41 - Table of Contents Compensation Committee Interlocks and Insider Participation None of our officers currently serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more officers serving on our Board of Directors. Nominating and Corporate Governance Committee We have established a nominating and corporate governance committee of the Board of Directors. The members of our nominating and corporate governance committee are, Jim Lang, Michael Sherman and Robert Hariri. Mr. Lang has served as chair of the nominating and corporate governance committee since August 2021. We have adopted a nominating and corporate governance committee charter, which details the purpose and responsibilities of the nominating and corporate governance committee, including: · identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the Board of Directors, and recommending to the Board of Directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the Board of Directors; · developing and recommending to the Board of Directors and overseeing implementation of our corporate governance guidelines; · coordinating and overseeing the annual self-evaluation of the Board of Directors, its committees, individual directors and management in the governance of the company; and · reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary. The charter also provides that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and will be directly responsible for approving the search firm’s fees and other retention terms. We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the Board of Directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders. Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our Board of Directors. Set forth below is information concerning the gender and demographic background of each of our current directors, as self-identified and reported by each director. This information is being provided in accordance with Nasdaq’s board diversity rules. - 42 - Table of Contents Board Diversity Matrix (As of September 13, 2022) Total Number of Directors: 8 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 0 8 0 0 Part II: Demographic Background African American or Black - - - - Alaskan Native or Native American - - - - Asian - 1 - - Hispanic or Latinx - - - - Native Hawaiian or Pacific Islander - - - - White - 4 - - Two or More Races or Ethnicities - - - - LGBTQ+ - - - - Did Not Disclose Demographic Background - 3 - - Code of Ethics We have adopted a code of conduct and ethics meeting the requirements of Section 406 of the Sarbanes-Oxley Act of 2002. We believe our code of conduct and ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of violations; and provide accountability for adherence to the provisions of the code of ethic. Our code of conduct and ethics is available on our website . A copy of our code of conduct and ethics is filed as an exhibit to this Form 10-K. Anti-Hedging Policy We have adopted an insider trading policy that includes a provision restricting trading of any interest or provision relating to the future price of our securities, such as a put, call or short sale. ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table The following table sets forth the total compensation paid during the last two fiscal years ended June 30, 2022 and 2021 to the following executive officers of the Company, who are referred to as our “named executive officers”: ● Cuong Do, our President and Chief Executive Officer ● Joanne Wendy Kim, our Chief Financial Officer and Corporate Secretary ● Joseph Palumbo, our Chief Medical Officer ● Jonathan Adams, our former President and Chief Operating Officer - 43 - Table of Contents Name and Principal Position Year Salary Bonus Stock Awards (1) Option Awards (1) Non-Equity Incentive Plan Compensation Nonqualified Deferred Compensation Earnings All Other Compensation Total Cuong Do (2) Chief Executive Officer and President 2022 $ 300,000 $ 400,000 $ 210,439 $ 3,632,382 $ — $ — $ — $ 4,542,821 2021 $ — $ — $ 454,794 $ — $ — $ — $ — $ 454,794 Joanne Wendy Kim (3) Chief Financial Officer, Treasurer and Corporate Secretary 2022 $ 235,000 $ 127,656 $ — $ 582,343 $ — $ — $ — $ 944,999 2021 $ 120,625 $ — $ — $ 4,706 $ — $ — $ — $ 125,331 Joseph Palumbo (4) Chief Medical officer 2022 $ 333,333 $ 239,167 $ — $ 244,465 $ — $ — $ — $ 816,965 Jonathan Adams (5) Former President and Chief Operating Officer 2021 $ 250,000 $ — $ — $ 20,721 $ — $ — $ — $ 270,721 (1) The aggregate grant date fair value of such awards were computed in accordance with Financial Accounting Standards Board ASC Topic 718, Stock Compensation (ASC Topic 718), and do not take into account estimated forfeitures related to service-based vesting conditions, if any. The valuation assumptions used in calculating these values are discussed in Note 9 of our Notes to Financial Statements included in our Annual Report on Form 10-K for the year ended June 30, 2022. These amounts do not represent actual amounts paid or to be realized. Amounts shown are not necessarily indicative of values to be achieved, which may be more or less than the amounts shown as awards may subject to time-based vesting. The Stock Awards and Stock Option Awards were awarded pursuant to the 2019 Omnibus Incentive Plan, (the “2019 Plan”). (2) Mr. Do’s salary from April 27, 2021 (date of his appointment as CEO) through December 31, 2021 was paid through a restricted stock unit awards ("RSUs”). The aggregate grant date fair value of the award was $454,794 and the total 58,759 RSUs awarded allows Mr. Do to receive one shares of common stock for each restricted stock unit. (3) Ms. Kim served as the Chief Financial Officer and Corporate Secretary and Treasure on a full time basis effective July 1, 2021. (4) Dr. Palumbo joined the Company on November 1, 2021 and served as the Chief Medical Officer. (5) Mr. Adams served as President and Chief Operating Officer from July 2018 to April 27, 2021. - 44 - Table of Contents Narrative Disclosures to Summary of Compensation Table Employment Agreements All employment arrangements are “at will” agreements. Outstanding Equity Awards at Fiscal Year-End The following table sets forth all outstanding equity awards held by our named executive officers as of June 30, 2022: Option awards Stock awards Name Grant Date Number of Securities underlying Unexercised Options Exercisable Number of Securities Underlying Unexercised Options Unexercisable Options Exercise Price Option Expiration Date Number of shares or units of stock that have not vested Market Value of shares or units of stock that have not vested Equity incentive plan awards: number of unearned shares, units or other rights that have not vested Equity incentive plan award: market or payout value of unearned shares, units or other rights that have not vested Cuong Do 12/18/16 800 — $ 26.25 12/18/21 — — — — 1/19/18 800 — $ 12.50 1/19/23 — — — — 1/19/19 800 — $ 3.75 1/19/24 — — — — 1/19/20 800 — $ 2.80 1/29/20 — — — — 12/18/20 24,375 — $ 13.91 12/18/25 — — — — 8/20/21 149,000 596,000 $ 7.74 8/20/31 — — — — 6/21/22 — 124,520 $ 1.69 6/21/27 124,520 $ 180,554 — — Joanne Wendy Kim 10/01/18 800 — $ 8.75 10/01/23 — — — — 10/01/19 800 — $ 8.75 10/01/24 — — — — 10/01/20 800 — $ 9.54 10/01/25 — — — — 8/20/21 24,833 99,334 $ 7.74 8/20/31 — — — — Joseph M Palumbo, MD 2/01/22 24,833 99,334 $ 3.20 2/01/32 — — — — There were a total 1,117,854 of stock options outstanding to named officers of as of June 30, 2022, with an aggregate grant date fair value of $4,459,190 the last of which vest in 2026. Potential Payments Upon Termination or Change-In-Control There are no arrangements with the named executive officers or our equity incentive plan or individual award agreements thereunder providing for certain payments to our named executive officers at or following or in connection with a termination of their employment or a change of control of the Company. - 45 - Table of Contents Director Compensation There are no arrangements pursuant to which our directors are or will be compensated in the future for any services provided to the Company. The following table provides information regarding compensation that was earned or paid to the individuals who served as non-employee directors during the year ended June 30, 2022. Except as set forth in the table, during the fiscal year 2022, directors did not earn nor receive cash compensation or compensation in the form of stock awards, options awards or any other form: Directors’ Compensation Table Name Stock awards Option awards(1) Non-equity incentive plan compensation Change in pension value and nonqualified deferred compensation All other compensation Total Terren Peizer (2) $ — $ — $ — $ — $ — $ — Cuong Do (3) $ — $ — $ — $ — $ — $ — Jim Lang $ — $ 417,907 $ — $ — $ — $ 417,906.86 Michael Sherman $ — $ 425,259 $ — $ — $ — $ 425,258.62 Richard Berman $ — $ 421,664 $ — $ — $ — $ 421,664.42 Steve Gorlin $ — $ 399,446 $ — $ — $ — $ 399,445.76 Robert Hariri MD, Phd $ — $ 399,446 $ — $ — $ — $ 399,445.76 Sigmund Rogich $ — $ 403,203 $ — $ — $ — $ 403,203.33 (1) The aggregate grant date fair value of such awards were computed in accordance with Financial Accounting Standards Board ASC Topic 718, Stock Compensation (ASC Topic 718), and do not take into account estimated forfeitures related to service-based vesting conditions, if any. The valuation assumptions used in calculating these values are discussed in Note 9 of our Notes to Financial Statements included in our Annual Report on Form 10-K for the year ended June 30, 2022. These amounts do not represent actual amounts paid or to be realized. Amounts shown are not necessarily indicative of values to be achieved, which may be more or less than the amounts shown as awards may subject to time-based vesting. (2) Mr. Peizer became our Chief Executive Officer and Chairman in July 2018 and served as the CEO to April 27, 2021 at which time Mr. Do was appointed the Company’s CEO. Mr Peizer did not earn nor was he paid any non-employee director's compensation. (3) Mr. Do was appointed CEO and President effective April 27, 2021. Mr. Do did not earn nor was he paid any director’s compensation since his appointment as CEO. - 46 - Table of Contents Our directors are eligible to participate in our equity incentive plans, which are administered by our Compensation Committee under authority delegated by our board of directors. The terms and conditions of option grants to our non-employee directors under our equity incentive plans are and will be determined in the discretion of our Compensation Committee, consistent with the terms of the applicable plan. 2022 compensation to existing board members were granted $7,767,256 worth of the Company’s stock options, and $11,109 for each member of the Audit Committee and $22,219 for the Chairman and $7,351 for each member of the Compensation Committee and $14,703 for the Chairman and $7,351 for each member of the Nominations and Governance Committee and $14,703 for the Chairman, using the Black-Scholes model with the price struck on the date of grant and vested 25% on the grant date and the remaining 75% vest over a 3-year period, on the first, second, and third anniversary of the grant date. Outstanding equity awards held by non-employee directors as of June 30, 2022 were as follows: Name Grant Date Number of securities underlying Unexercised options Exercisable Number of Securities Underlying Unexercised Options Unexercisable Options Exercise Price Option Expiration Date Jim Lang 12/18/16 800 26.25 12/18/21 01/19/18 800 12.50 01/19/23 01/19/19 800 3.75 01/19/24 01/19/20 800 2.80 01/29/25 12/18/20 49,500 49,500 13.91 12/18/25 04/05/22 31,975 95,925 5.04 04/05/27 Michael Sherman 10/13/17 800 25.00 10/13/22 10/13/18 800 6.25 10/23/23 10/13/19 800 7.50 01/13/24 10/13/20 800 9.90 01/13/25 12/18/20 51,550 51,550 13.91 12/18/25 04/05/22 32,538 97,613 5.04 04/05/27 Richard J. Berman 01/19/20 800 2.80 10/19/25 12/18/20 51,250 51,250 13.91 12/18/25 04/05/22 32,263 96,788 5.04 04/05/27 Steve Gorlin 12/18/20 48,150 48,150 13.91 12/18/25 04/05/22 30,563 91,688 5.04 04/05/27 Robert Hariri 12/18/20 47,950 47,950 13.91 12/18/25 04/05/22 30,563 91,688 5.04 04/05/27 Sigmund Rogich 12/18/20 48,650 48,650 13.91 12/18/25 04/05/22 30,850 92,550 5.04 04/05/27 There was a total of 1,349,100 stock options outstanding to directors as of June 30, 2022, with an aggregate grant date fair value of $12,858,693 million, the last of which vest in 2025. - 47 - Table of Contents Long-Term Incentive Plans and Awards Other than the options granted as described above, we do not currently have any long-term incentive plans that provide compensation intended to serve as incentive for performance. Since prior to such grants, no individual grants or agreements regarding future payouts under non-stock price-based plans had been made to any executive officer or any director or any employee or consultant since our inception, no future payouts under non-stock price-based plans or agreements had been granted or entered into or exercised by our officer or director or employees or consultants. 2019 Omnibus Equity Incentive Plan On April 20, 2019, our Board of Directors and our stockholders approved and adopted the 2019 Plan. The 2019 Plan allows us, under the direction of our Board of Directors or a committee thereof, to make grants of stock options, restricted and unrestricted stock and other stock-based awards to employees, including our executive officers, consultants and directors. The 2019 Plan allows for the issuance of up to 6,540,000 shares of common pursuant to new awards granted under the 2019 Plan and as of June 30, 2022, there were 3,705,157 shares of common stock available for new awards granted under the 2019 Plan. Equity Compensation Plan Information [1] The following table provides certain aggregate information with respect to all of the Company’s equity compensation plans in effect as of June 30, 2022: Plan Category (a) Number of securities to be issued upon exercise of outstanding options, warrants and right (b) Weighted-average exercise price of outstanding options, warrants and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 3,467,684 $ 7.15 3,763,916 Equity compensation plans not approved by security holders — — — Total 3,467,684 3,763,916 ___________ (1) We adopted our 2019 Omnibus Equity Incentive Plan (the “2019 Plan”) in 2019. - 48 - Table of Contents ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Based solely upon information made available to us, the following table sets forth information as of September 13, 2022 regarding the beneficial ownership of our common stock by: ● each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; ● each of our named executive officers and directors; and ● all our executive officers and directors as a group. The percentage ownership information shown in the table is based upon 30,165,319 shares of common stock outstanding as of September 13, 2022. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Except as otherwise indicated, each person or entity named in the table has sole voting and investment power with respect to all shares of our capital shown as beneficially owned, subject to applicable community property laws. In computing the number and percentage of shares beneficially owned by a person as of a particular date, shares that may be acquired by such person (for example, upon the exercise of options or warrants) within 60 days of such date are counted as outstanding, while these shares are not counted as outstanding for computing the percentage ownership of any other person. The address of each holder listed below, except as otherwise indicated, is c/o BioVie Inc., 680 W Nye Lane, Suite 201, Carson City, Nevada 89703. - 49 - Table of Contents Name and Address of Beneficial Owner Number of Common Shares of Beneficial Ownership Percentage of Beneficial Ownership Terren Peizer (1) 30,438,938 81.3 % Cuong Do (2) 521,241 1.7 % Joanne Wendy Kim (3) 49,100 * Joseph Palumbo (4) 24,883 * Penny Markham (5) 58,593 * Chris Reading (6) 44,700 * Clarence Ahlem (6\) 44,700 * Richard Berman (7) 85,913 * Steve Gorlin (8) 128,713 * Robert Hariri (9) 78,513 * James Lang (10) 126,252 * Sigmund Rogich (11) 79,500 * Michael Sherman (12) 121,299 * All directors and executive officers as a group (13) 31,802,345 82.5 % ___________ *Less than 1% (1) Includes warrants to purchase 7,272,728 shares of Common Stock. All shares held of record by Acuitas Group Holdings, LLC, a limited liability company 100% owned by Terren Peizer, and as to which, Mr. Peizer may be deemed to beneficially own or control. Mr. Peizer disclaims beneficial ownership of any such securities. (2) Includes warrants to purchase 70,667 shares of Common Stock and options to purchase 294,975 shares of Common Stock, all of which are exercisable within 60 days of September 13, 2022. 167,607 shares of Common Stock, warrants are held of record by Do & Rickles Investments, LLC, a limited liability company 100% owned by Cuong Do and his wife, and as such, Mr. Do may be deemed to beneficially own or control. (3) Includes options to purchase 47,100 shares of Common Stock exercisable within 60 days of September 13, 2022. (4) Represents options to purchase 24,833 shares of Common Stock exercisable within 60 days of September 13, 2022. (5) Includes options to purchase 47,900 shares of Common Stock exercisable within 60 days of September 13, 2022. (6) Represents options to purchase 47,700 shares of Common Stock exercisable within 60 days of September 13, 2022. (7) Includes options to purchase 84,313 shares of Common Stock, which are exercisable within 60 days of September 13, 2022. (8) Includes options to purchase 78,713 shares of common stock, all of which are exercisable within 60 days of September 13, 2022. Common Stock is held by Mr Gorlin’s wife. (9) Represents options to purchase 78,513 shares of common stock, all of which are exercisable within 60 days September 13, 2022. (10) Includes warrants to purchase 17,333 shares of Common Stock and options to purchase 83,875 shares of Common Stock, all of which are exercisable within 60 days of September 13, 2022. (11) Represents options to purchase 79,5005 shares of common stock, all of which are exercisable within 60 days of September 13, 2022. (12) Includes warrants to purchase 13,333 shares of Common Stock and options to purchase 87,288 shares of Common Stock, all of which are exercisable within 60 days of September 13, 2022. Common Stock held by Michael Sherman includes 13,333 shares of the Common Stock held of record by Sherman Children’s Trust Brian Krisber, Trustee. All shares of Common Stock, warrants and options are deemed to be beneficially owned or controlled by Michael Sherman. - 50 - Table of Contents ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The following includes a summary of transactions since June 30, 2021, to which we have been a party in which the amount involved exceeded or will exceed the lesser of (i) $120,000 and (ii) one percent (1%) of the average of our total assets at year-end for the prior two fiscal years, and in which any of our directors, executive officers or beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest. On July 15, 2022, the Company, entered into a securities purchase agreement (the “Purchase Agreement”) with Acuitas, pursuant to which Acuitas agreed to purchase from the Company, in a private placement (the “Private Placement”), (i) an aggregate of 3,636,364 shares of the Company’s Class A common stock, par value $0.0001 per share at a price of $1.65 per share, and (ii) a warrant to purchase 7,272,728 shares of Common Stock, at an exercise price of $1.82, with a term of exercise of five years; (collectively, the “Securities”). The aggregate purchase price for the Securities sold in the Private Placement was $6 million. The Private Placement closed on August 15, 2022. Review and Approval of Transactions with Related Persons Either the audit committee or the Board of Directors approves all related party transactions. The procedure for the review, approval or ratification of related party transactions involves discussing the proposed transaction with management, discussing the proposed transaction with the external auditors, reviewing financial statements and related disclosures, and reviewing the details of major deals and transactions to ensure that they do not involve related party transactions. Members of management have been informed and understand that they are to bring related party transactions to the audit committee or the Board of Directors for pre-approval. These policies and procedures are evidenced in the audit committee charter and our code of ethics. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The following table shows what the auditor billed for the audit and other services for the years ended June 30, 2022 and 2021. 2022 2021 Audit Fees $ 223,102 $ 191,970 Audit - Related Fees — — Tax Fees — — All other Fees — — Total $ 223,102 $ 191,970 Audit Fees —This category includes the audit of the Company’s annual financial statements, review of financial statements included in the Company’s Form 10-Q Quarterly Reports and services that are normally provided by the independent auditors in connection with engagements for those years. Audit-Related Fees —N/A Tax Fees —N/A - 51 - Table of Contents Policy on Audit Committee Pre-Approval of Audit and Permissible Non-audit Services of Independent Public Accountant Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. Prior to engagement of an independent registered public accounting firm for the next year’s audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the Audit Committee for approval. 1. Audit services include audit work performed in the preparation of financial statements, as well as work that generally only an independent registered public accounting firm can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards. 2. Audit-Related services are for assurance and related services that are traditionally performed by an independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements. 3. Tax services include all services performed by an independent registered public accounting firm’s tax personnel except those services specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice. 4. Other Fees are those associated with services not captured in the other categories. The Company generally does not request such services from our independent registered public accounting firm. Prior to engagement, the Audit Committee pre-approves these services by category of service. The fees are budgeted and the Audit Committee requires our independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging our independent registered public accounting firm. The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting. - 52 - Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a)(1),(2) Financial Statements The Financial Statements listed on page F-1 of this document are filed as part of this filing. (a)(3) Exhibits The following is a list of exhibits filed as a part of this report: Exhibit Number Description of Document 2.1 Agreement and Plan of Merger, dated April 11, 2016, among the Company, LAT Acquisition Corp and LAT Pharma, LLC (incorporated by reference to Exhibit 2.1 the Company’s Current Report on Form 8-K filed on April 15, 2016). 3.1 Articles of Incorporation of the Company as filed with the Secretary of State of Nevada (incorporated by reference to Exhibit 3.1 to the Company’s registration statement on Form S-1 filed on August 15, 2013, File No. 333-190635). 3.2 Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on July 22, 2016). 3.3 Certificate of Amendment to Articles of Incorporation (incorporated by reference to Appendix A to the Company’s Information Statement on Schedule 14C filed on July 13, 2018). 3.4 Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on July 3, 2018). 3.5 Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.6 to the Company’s registration statement on Form S-1 filed on November 22, 2019, File No. 333-231136). 3.6 Amended and Restated Bylaws of the Company, dated June 16, 2020 (incorporated by reference to Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q filed on November 10, 2021). 4.1 Specimen Certificate representing shares of Class A Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed on April 26, 2019, File No. 333-231136) . 4.2 Form of Warrant (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on September 25, 2019). 4.3 Form of 10% OID Convertible Delayed Draw Debenture (incorporated by reference to Exhibit 4.1 the Company’s Current Report on Form 8-K filed on September 25, 2019). 4.4 Description of Securities (incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K filed on August 30, 2021). 4.5 Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K/A filed on July 18, 2022). 4.6 Form of Warrant to Purchase Shares of Class A Common Stock of the Company ( incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed on December 1, 2021 ). 10.1# BioVie Inc. 2019 Omnibus Equity Incentive Plan (incorporated by reference to Appendix D to the Definitive Information Statement on Schedule 14C, filed on May 8, 2019). - 53 - Table of Contents 10.2 Asset Purchase Agreement by and Among BioVie, Inc., as Buyer, Neurmedix, Inc., as Seller and Acuitas Group Holdings, LLC as Guarantor of April 27, 2021 (incorporated by reference to Exhibit 2.1 to Form 8-K filed on April 27, 2021). 10.3 Amendment No. 1 of the Asset Purchase Agreement dated May 9, 2021 (incorporated by reference to Exhibit 2.2 to the Company’s Form 8-K filed on May 10, 2021). 10.4 Underwriting Agreement between the Company and ThinkEquity, a division of Fordham Financial Management, Inc., as representatives of the several Underwriters, dated August 8, 2021 (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed on August 11, 2021). 10.5# Employment Offer & Agreement Chris Reading and the Company, dated June 18, 2021 (incorporated by reference to Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q filed on November 10, 2021). 10.6# Employment Offer & Agreement Clarence Ahlem and the Company, dated June 18, 2021 (incorporated by reference to Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q filed on November 10, 2021). 10.7# Employment Offer & Agreement Joanne Wendy Kim and the Company, dated June 26, 2021 (incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q filed on November 10, 2021). 10.8# Employment Offer & Agreement Jonathan Adams and the Company, dated August 26, 2021 (incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q filed on November 10, 2021). 10.9# Employment Offer & Agreement Penelope Markham and the Company, dated September 7, 2021 (incorporated by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q filed on November 10, 2021). 10.10# Employment Offer & Agreement Joseph Palumbo and the Company, dated September 3, 2021 (incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q filed on November 10, 2021). 10.11 Loan and Security Agreement, dated November 30, 2021, among the Company, Avenue Venture Opportunities Fund II, L.P. and Avenue Venture Opportunities Fund, L.P. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on December 1, 2021). 10.12 Supplement to Loan and Security Agreement, dated November 30, 2021, among the Company, Avenue Venture Opportunities Fund II, L.P. and Avenue Venture Opportunities Fund, L.P. (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on December 1, 2021). 10.13 Securities Purchase Agreement, dated July 15, 2022 by and between the Company and Acuitas Group Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K/A filed on July 18, 2022). 10.14 Controlled Equity Offering SM Sales Agreement, dated August 31, 2022, by and among BioVie Inc. Cantor Fitzgerald & Co. and B. Riley Securities, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on August 31, 2022). 14.1 Code of Conduct and Ethics of BioVie Inc. (incorporated by reference to Exhibit 14.1 to the Company’s Registration Statement on Form S-1, File No. 333-231136). 21.1 Subsidiaries of BioVie Inc. 23.1 Consent of Independent Registered Public Accounting Firm - EisnerAmper LLP 31.1 Rule 13a-14(a) Certification - 54 - Table of Contents 31.2 Rule 13a-14(a) Certification 32.1 Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Calculation Linkbase Document 101.LAB XBRL Taxonomy Label Linkbase Document 101.PRE XBRL Taxonomy Presentation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document # Indicates a management contract or compensatory plan or arrangement - 55 - Table of Contents Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. BIOVIE INC. By: /s/ Cuong Do Name: Cuong Do Title: Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates indicated. Person Capacity Date /s/ Cuong Do Chief Executive Officer September 27, 2022 Cuong Do (Principal Executive Officer) /s/ Joanne Wendy Kim Chief Financial Officer September 27, 2022 Joanne Wendy Kim (Principal Financial Officer) /s/ Terren Piezer Chairman September 27, 2022 Terren Piezer /s/ Jim Lang Director September 27, 2022 Jim Lang /s/ Michael Sherman Director September 27, 2022 Michael Sherman /s/ Richard J. Berman Director September 27, 2022 Richard J. Berman /s/ Steve Gorlin Director September 27, 2022 Steve Gorlin /s/ Robert Hariri Director September 27, 2022 Robert Hariri /s/ Sigmund Rogich Director September 27, 2022 Sigmund Rogich - 56 - Table of Contents BioVie, Inc. Index to Financial Statements Report of Independent Registered Public Accounting Firm – EisnerAmper LLP F-2 Financial Statements: Balance Sheets F-4 Statements of Operations F-5 Statements of Changes in Stockholders’ Equity (Deficit) F-6 Statements of Cash Flows F-7 Notes to Financial Statements F-8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of BioVie, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of BioVie, Inc. (the “Company”) as of June 30, 2022 and 2021, and the related statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s recurring losses from operations and negative cash flows from operating activities raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. F- 2 Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Notes Payable As described in Note 7 to the accompanying financial statements, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) by issuing notes payable to the lender. The Loan Agreement included a conversion option which allows the lender to convert up to $5,000,000 of the principal amount of the notes payable into the Company’s Class A common stock and required the issuance of warrants to purchase 361,002 shares of the Company’s class A common stock by the lender. The carrying value of the notes payable was determined by allocating portions of the outstanding principal of the notes to the fair value of the warrants and the embedded conversion option. The fair values of the warrants and the conversion option of $194,531 and $188,030, respectively as of June 30, 2022, and the change in their fair values for the year ended June 30, 2022 of $3,287,418 were determined using a Black Scholes model which uses inputs such as the closing price of the stock, the option’s exercise price, the term of the option, a risk free interest rate and the volatility of the stock to arrive at the values. We identified the valuation and the accounting for the notes payable and the related derivative liabilities to be a critical audit matter due to the complexity of their accounting and the subjective judgment required by management in selecting the inputs and assumptions used in determining fair value. This in turn led to a high degree of auditor judgment, subjectivity and effort in applying the procedures related to the accounting and those assumptions. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures include obtaining an understanding and evaluating the design of controls relating the accounting and valuation of these instruments. Our procedures included, among others: reading the terms of the Loan Agreement; reviewing the valuation assumptions used by management; obtaining the valuation calculations from the Company and agreeing the inputs to the source information used by management; determining the mathematical accuracy of the calculations; reviewing the recording of the notes payable and related derivative liabilities; testing the amortization of the discount arising from the derivative liabilities through the end of the year; and confirming the notes payable balances with the lender at the end of the year. /s/ EisnerAmper LLP We have served as the Company’s auditor since 2019. EISNERAMPER LLP Iselin, New Jersey September 27, 2022 274 F- 3 BioVie Inc. Balance Sheets June 30 June 30, 2022 2021 ASSETS CURRENT ASSETS: Cash $ 18,641,716 $ 4,511,642 Prepaids and other assets 137,879 93,487 Total current assets 18,779,595 4,605,129 OTHER ASSETS: Operating lease right-of-use assets 118,254 — Intangible assets, net 866,472 1,095,849 Goodwill 345,711 345,711 Other assets, non-current 4,562 — Total other assets 1,334,999 1,441,560 TOTAL ASSETS $ 20,114,594 $ 6,046,689 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 2,442,804 $ 996,374 Current portion of other liabilities 1,304,925 — Current portion of operating lease liabilities 38,884 — Warrant liabilities 194,531 — Embedded derivative liability 188,030 — Total current liabilities 4,169,174 996,374 Other liabilities, net of current portion 48,385 — Operating lease liabilities, net of current portion 87,414 — Note payable net of financing costs and unearned premium and discount ($ 2,861,314 ) 12,138,686 — TOTAL LIABILITIES 16,443,659 996,374 Commitments and contingencies (Note 11) STOCKHOLDERS' EQUITY : Preferred stock; $ 0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding — — Common stock, $ 0.0001 par value; 800,000,000 shares authorized at June 30, 2022 and June 30, 2021, respectively; 24,984,083 and 22,333,324 shares issued and outstanding at June 30, 2022 and June 30, 2021, respectively 2,496 2,232 Additional paid in capital 254,638,329 229,933,505 Accumulated deficit ( 250,969,890 ) ( 224,885,422 ) Total stockholders' equity 3,670,935 5,050,315 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 20,114,594 $ 6,046,689 The accompanying notes are an integral part of the financial statements. F- 4 BioVie Inc. Statements of Operations Year ended Year ended June 30, 2022 June 30, 2021 OPERATING EXPENSES: Amortization $ 229,377 $ 229,377 Research and development expenses 17,258,341 2,544,648 In process research and development expenses — 130,642,858 Selling, general and administrative expenses 9,765,259 4,637,256 TOTAL OPERATING EXPENSES 27,252,977 138,054,139 LOSS FROM OPERATIONS ( 27,252,977 ) ( 138,054,139 ) OTHER (INCOME) EXPENSE: Change in fair value of derivative liabilities ( 3,287,418 ) ( 8,279,919 ) Gain on extinguishment of debt — ( 62,500 ) Interest expense 2,162,989 559,455 Interest income ( 44,080 ) ( 21,971 ) TOTAL OTHER INCOME, NET ( 1,168,509 ) ( 7,804,935 ) NET LOSS $ ( 26,084,468 ) $ ( 130,249,204 ) Deemed dividends - related party — 53,598,320 NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 26,084,468 ) $ ( 183,847,524 ) NET LOSS PER COMMON SHARE - Basic $ ( 1.06 ) $ ( 14.82 ) - Diluted $ ( 1.06 ) $ ( 14.82 ) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - Basic 24,662,557 12,403,159 - Diluted 24,662,557 12,403,159 The accompanying notes are an integral part of the financial statements. F- 5 BioVie Inc. Statements of Changes in Stockholders’ Equity (Deficit) For the Years Ended June 30, 2022 and 2021 Total Common Stock Common Stock Additional Paid in Accumulated Stockholders' Equity Shares Amount Capital Deficit (Deficit) Balance, June 30, 2020 5,204,392 $ 520 $ 19,538,742 $ ( 41,037,898 ) $ ( 21,498,636 ) Proceeds from issuance of common stock, net of costs of $ 2,371,790 1,799,980 180 15,627,830 — 15,628,010 Redemption of warrants - related party 1,549,750 155 13,132,230 — 13,132,385 Deemed dividend for purchase option - related party 5,359,832 536 53,597,784 ( 53,598,320 ) — Cashless exercise of options 3,238 — — — — Stock-based compensation — — 3,019,809 — 3,019,809 Proceeds from exercise of warrants 54,824 5 685,297 — 685,302 Issuance of shares for purchase of in process research and development expenses - related party 8,361,308 836 124,331,813 — 124,332,649 Net loss — — — ( 130,249,204 ) ( 130,249,204 ) Balance, June 30, 2021 22,333,324 $ 2,232 $ 229,933,505 $ ( 224,885,422 ) $ 5,050,315 Stock-based compensation — — $ 5,807,871 — 5,807,871 Proceeds from issuance of common stock, net costs of $ 2,224,992 2,592,000 259 $ 18,510,750 — 18,511,009 Stock based compensation - restricted stock 58,759 5 $ 386,203 — 386,208 Net loss — — $ — ( 26,084,468 ) ( 26,084,468 ) Balance, June 30, 2022 24,984,083 $ 2,496 $ 254,638,329 $ ( 250,969,890 ) $ 3,670,935 The accompanying notes are an integral part of the financial statements. F- 6 BioVie Inc. Statements of Cash Flows Year ended Year ended June 30, 2022 June 30, 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 26,084,468 ) $ ( 130,249,204 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of intangible assets 229,377 229,377 Stock based compensation - restricted stock 386,208 — Stock based compensation expense - stock options 5,807,871 3,019,809 Common shares issued for asset acquisition — 124,332,649 Gain on extinguishment of loan payable — ( 62,500 ) Amortization of financing costs 99,295 — Accretion of unearned loan discount 934,177 537,275 Accretion of loan premium 165,278 — Amortization of operating lease, net 8,044 — Change in fair value of derivative liability ( 3,287,418 ) ( 8,279,919 ) Changes in operating assets and liabilities: Other assets ( 48,954 ) 282,298 Accounts payable and accrued expenses 1,446,430 ( 262,832 ) Other liabilities 1,353,310 — Net cash used in operating activities ( 18,990,850 ) ( 10,453,047 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common stock 18,511,009 15,628,010 Payment of convertible debenture - related party — ( 1,821,818 ) Proceeds from convertible debenture - related party — 436,000 Proceeds from exercise of warrants — 685,302 Proceeds from note payable net of financing costs 14,609,915 — Net cash provided by financing activities 33,120,924 14,927,494 Net increase in cash 14,130,074 4,474,447 Cash, beginning of period 4,511,642 37,195 Cash, end of period $ 18,641,716 $ 4,511,642 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 964,241 $ 22,180 Cash paid for taxes $ — $ — SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: Deemed dividends - related party $ — $ 53,598,320 Right of use assets obtained in exchange for lease obligations $ 130,039 $ — The accompanying notes are an integral part of the financial statements. F- 7 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 1. Background Information BioVie Inc. (the “Company” or “we” or “our”) is a clinical-stage company developing innovative drug therapies to treat chronic debilitating conditions including liver disease and neurological and neuro-degenerative disorders and certain cancers. In liver disease, our Orphan Drug candidate BIV201 (continuous infusion terlipressin) is being developed as a future treatment option for patients suffering from ascites and other life-threatening complications of advanced liver cirrhosis caused by NASH, hepatitis, and alcoholism. The initial target for BIV201 therapy is refractory ascites. These patients suffer from frequent life-threatening complications, generate more than $5 billion in annual treatment costs, and have an estimated 50% mortality rate within 6 to 12 months. The US Food and Drug Administration (FDA) has not approved any drug to treat refractory ascites. A Phase 2a clinical trial of BIV201 was completed in 2019, and a multi-center, randomized 30-patient Phase 2b trial is currently underway. As of June 30 2022, ten US study centers had been activated and are actively screening and enrolling patients in the study. Top-line results from this trial are expected in mid calendar year 2023. The BIV201 development program was initiated by LAT Pharma LLC. On April 11, 2016, the Company acquired LAT Pharma LLC and the rights to its BIV201 development program. The Company currently owns all development and marketing rights to its drug candidate. Pursuant to the Agreement and Plan of Merger entered into on April 11, 2016, between our predecessor entities, LAT Pharma LLC and NanoAntibiotics, Inc., BioVie is obligated to pay a low single digit royalty on net sales of BIV201 (continuous infusion terlipressin) to be shared among LAT Pharma Members, PharmaIn Corporation, and The Barrett Edge, Inc. In neurodegenerative disease, BioVie acquired the biopharmaceutical assets of NeurMedix, Inc. (“NeurMedix”), a privately held clinical-stage pharmaceutical company, in June 2021 (See Note 5 Related Party Transactions ). The acquired assets included NE3107, a potentially selective inhibitor of inflammatory extracellular single-regulated kinase(“ERK”) signaling that, based on animal studies, is believed to reduce neuroinflammation. NE3107 is a novel orally administered small molecule that is thought to inhibit inflammation-driven insulin resistance and major pathological inflammatory cascades with a novel mechanism of action. There is emerging scientific consensus that both inflammation and insulin resistance may play fundamental roles in the development of Alzheimer’s and Parkinson’s Disease, and NE3107 could, if approved represent an entirely new medical approach to treating these devastating conditions affecting an estimated 6 million Americans suffering from Alzheimer’s and 1 million from Parkinson’s. The FDA has authorized a potentially pivotal Phase 3 randomized, double-blind, placebo-controlled, parallel group, multicenter study to evaluate NE3107 in subjects who have mild to moderate Alzheimer’s disease (NCT04669028). In August 2021, the study was initiated and the Company is anticipating top line results in mid calendar year 2023. On January 20, 2022, the Company initiated a study by treating the first patient, in it’s Phase 2 study assessing NE3107’s safety and tolerability and potential pro-motoric impact in Parkinson’s disease patients. The NM201 study (NCT05083260) is a double-blind, placebo-controlled, safety, tolerability, and pharmacokinetics study in Parkinson’s Disease (PD). Participants will be treated with carbidopa/levodopa and NE3107 or placebo. Forty patients with a defined PD medication “off state” will be randomized 1:1 placebo to: active NE3107 20 mg twice daily for 28 days. Safety assessments will look at standard measures of patient health and potential for drug-drug interactions affecting L-dopa pharmacokinetics and activity. Exploratory efficacy assessments will use the Motor Disease Society Unified Parkinson’s Disease Rating (MDS-UPDRS) parts 1-3, ON/OFF Diary, and Non-Motor Symptom Scale. Topline results are expected for the NM201 study by the end of the calendar year 2022. Inflammation-driven insulin resistance is believed to be implicated in a broad range of serious diseases, including multiple myeloma and prostate cancer, and we plan to begin exploring these opportunities in the coming months using NE3107 or related compounds acquired in the NeurMedix asset purchase. NE3107 is patented in the United States, Australia, Canada, Europe and South Korea. F- 8 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 2. Liquidity and Going Concern The Company’s operations are subject to a number of factors that can affect its operating results and financial conditions. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, Company products; the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products; and the Company’s ability to raise capital. The Company’s financial statements have been 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. As of June 30, 2022, the Company had working capital of approximately $ 14.6 million, cash of approximately $18.6 18,641,716 million, stockholders’ equity of approximately $3.7 3,670,935 million, and an accumulated deficit of approximately $251 250,969,890 million. In addition, the Company has not generated any revenues to date 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 efforts, as well as its ability to secure additional financing as needed. Although our cash balance may possibly sustain operations over the next 12 months to 15 months from the balance sheet date if measures are taken to delay planned expenditures in our research protocols and slow the progress in the Company’s clinical programs, the Company’s current planned operations to meet certain goals and objectives, project cash flows to be depleted within that period of time. The future viability of the Company is largely dependent upon its ability to raise additional capital to finance its operations. Management expects that future sources of funding may include sales of equity, obtaining loans, or other strategic transactions. The continual widespread health emergencies or pandemics such as the coronavirus (“COVID-19”) pandemic (and its related variants), has led to continued regional quarantines, business shutdowns, labor shortages, disruptions to supply chains, and overall economic instability. Although some jurisdictions have relaxed these measures, others have not or have reinstated them as COVID-19 cases and its variants continue to emerge. The duration and spread of the COVID-19 pandemic and the long-term impact of COVID-19 and its variants on the financial markets and the overall economy are highly uncertain and cannot be predicted at this time. 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. In addition, the COVID-19 pandemic has created a widespread labor shortage, including a shortage of medical professionals, and has impacted and may continue to impact the potential patient participation in our studies, which may adversely impact our ability to continue or complete our clinical trials in the planned timeline. Although management continues to pursue the Company’s strategic 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. F- 9 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 3. Significant Accounting Policies Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheet and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, accounting for share-based compensation and other equity instruments, accounting for derivatives and accounting for income taxes. Actual results could differ from those estimates. Reclassifications Certain prior period amounts have been reclassified for consistency to conform with the current year’s presentation. Cash The Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents. Cash is maintained at two financial institutions, and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. Prepaid and other Assets Prepaid and other assets consist of prepayments of certain expenses and direct costs related to capital raise which will offset proceeds upon the close. Other Assets, non-current Other assets consist of security deposit for the office lease. Leases The Company determines whether an arrangement contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities, and operating lease liabilities, net of current portion on our balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As the Company’s leases do not provide an implicit rate, an incremental borrowing rate is used based on the information available at the commencement date in determining the present value of lease payments. The Company does not include options to extend or terminate the lease term in its calculation unless it is reasonably certain that the Company will exercise any such options. Rent expense is recognized under the operating leases on a straight-line basis. The Company does not recognize right of-use assets or lease liabilities for short-term leases, which have a lease term of twelve months or less, and instead will recognize lease payments as expense on a straight-line basis over the lease term. F- 10 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 3. Significant Accounting Policies (continued) Fair Value of Financial Instruments Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value for applicable assets and liabilities, we consider the principal or most advantageous market in which we would transact and we consider assumptions market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows: ● Level 1: Observable inputs such as quoted prices in active markets; ● Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions The Company’s financial instruments include cash, accounts payable, the carrying value of the operating lease liabilities and notes payable. The carrying amounts of cash and accounts payable approximate their fair value, due to the short-term nature of these items. The carrying amounts of notes payable and operating lease liabilities approximate their fair values since they bear interest at rates which approximate market rates for similar debt instruments. Research and Development Research and development expenses consist primarily of costs associated with the preclinical and/ or clinical trials of drug candidates, compensation and other expenses for research and development, personnel, supplies and development materials, costs for consultants and related contract research and facility costs. Expenditures relating to research and development are expensed as incurred. In the fiscal year ended June 30, 2021 the Company recorded the assets acquired totaling approximately $130.6 million from NeurMedix, a controlled affiliate of Acuitas, our majority shareholder, that were under development as research and development expenses in the accompanying Statements of Operations. See Note 1 - Background Information. Income Taxes The Company uses the asset and liability method of accounting for deferred income taxes. Deferred income taxes are measured by applying enacted statutory rates to net operating loss carryforwards and to the differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets are reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes uncertainty in income taxes in the financial statements using a recognition threshold and measurement attribute of a tax position taken or expected to be taken in a tax return. The Company applies the “more-likely-than-not” recognition threshold to all tax positions, commencing at the adoption date of the applicable accounting guidance, which resulted in no unrecognized tax benefits as of such date. Additionally, there have been no unrecognized tax benefits subsequent to adoption. The Company has opted to classify interest and penalties that would accrue, if any, according to the provisions of relevant tax law as general and administrative expenses, in the Statements of Operations. For the years ended June 30, 2022 and 2021, there was no such interest or penalty. F- 11 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 3. Significant Accounting Policies (continued) Net Loss per Common Share Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through stock options, warrants, and convertible debentures. For the year ended June 30, 2022 and 2021, such amounts were excluded from the diluted loss since their effect was considered anti-dilutive due to the net loss for the period. The table below shows the number of outstanding stock options and warrants as of June 30 2022 and 2021: Schedule of Dilutive securities were excluded from the computation of diluted loss per share June 30, 2022 June 30, 2021 Number of Shares Number of Shares Stock Options 3,398,764 755,200 Warrants 510,372 158,761 Total 3,909,136 913,961 Stock-based Compensation The Company has accounted for stock-based compensation under the provisions of FASB ASC 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). For employee awards, the fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. For non-employees, the fair value of each stock option award is estimated on the measurement date using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. For non-employees, the Company utilizes the graded vesting attribution method under which the entity treats each separately vesting portion (tranche) as a separate award and recognizes compensation cost for each tranche over its separate vesting schedule. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. For employee awards, the expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. The Company recognizes forfeitures as they occur. Goodwill Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of net identified tangible and intangible assets acquired. The Company performs an annual impairment test of goodwill and further periodic tests to the extent indicators of impairment develop between annual impairment tests. The Company’s impairment review process compares the fair value of the reporting unit to its carrying value, including the goodwill related to the reporting unit. To determine the fair value of the reporting unit, the Company may use various approaches including an asset or cost approach, market approach or income approach or any combination thereof. These approaches may require the Company to make certain estimates and assumptions including future cash flows, revenue and expenses. These estimates and assumptions are reviewed each time the Company tests goodwill for impairment and are typically developed as part of the Company’s routine business planning and forecasting process. While the Company believes its estimates and assumptions are reasonable, variations from those estimates could produce materially different results. The Company did not recognize any goodwill impairments for the years ended June 30, 2022 and 2021. F- 12 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 3. Significant Accounting Policies (continued) Impairment of Long-Lived Assets Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted estimated future cash flows, an impairment review is performed. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Generally, fair value is determined using valuation techniques such as expected discounted cash flows or appraisals, as appropriate. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated or amortized. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheets. Purchase Accounting for Transactions with Related Party Purchase accounting for transactions with related party, entities under common control, are recorded at the historical carrying cost with no step up in basis to the fair market value of the asset or liability are recognized. Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates (“ASU’s”). There were no recent ASU’s that are expected to have a material impact on our balance sheets or statements of operations. 4. Intangible Assets The Company’s intangible assets consist of intellectual property acquired from LAT Pharma, Inc. and are amortized over their estimated useful lives. The following is a summary of the intangible assets as of June 30, 2022 and 2021: Schedule of intangible assets June 30, 2022 June 30, 2021 Intellectual Property $ 2,293,770 $ 2,293,770 Less Accumulated Amortization ( 1,427,298 ) ( 1,197,921 ) Intellectual Property, Net $ 866,472 $ 1,095,849 Amortization expense amounted to $ 229,377 for each of the years ended June 30, 2022 and 2021, respectively. The Company amortizes intellectual property over the expected original useful lives of 10 years. Estimated future amortization expense is as follows: Schedule of future amortization expense Year ending June 30, 2023 $ 229,377 2024 229,377 2025 229,377 2026 178,341 $ 866,472 F- 13 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 5. Related Party Transactions Asset Acquisition with NeurMedix On April 27, 2021, the Company entered into an APA with NeurMedix and Acuitas, which are related party affiliates, pursuant to which the Company acquired certain assets from NeurMedix and assumed certain liabilities of NeurMedix, in exchange for consideration of cash and shares of common stock. The acquired assets include, among others, those related to certain drug candidates being developed by NeurMedix, including NE3107, a small molecule orally administered inhibitor of insulin resistance and the pathological inflammatory cascade, with a novel mechanism of action that has potential applications for treatment against Alzheimer’s Disease and Parkinson’s Disease. Subject to the terms and conditions of the Asset Purchase Agreement, following the closing, the Company may be obligated to deliver contingent stock consideration to NeurMedix (or its successor). Previously, the Company was obligated to deliver contingent stock consideration to NeurMedix (or its successor) consisting of shares of the Company’s common stock having an aggregate value of up to $3.0 billion, subject to the achievement of certain clinical, regulatory and commercial milestones related to the drug candidates to be acquired by the Company from NeurMedix, and subject to a cap limiting each issuance of shares if such issuance would result in the beneficial ownership of NeurMedix and its affiliates exceeding 89.9999% of the Company’s issued and outstanding common stock. Pursuant to Amendment No. 1 to the APA, dated May 9, 2021, the Company may now be obligated to deliver contingent stock consideration to NeurMedix (or its successor) consisting of up to 18 million shares of BioVie’s common stock, with 4.5 million shares issuable upon the achievement of each of the four milestones set forth in the APA, 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 the Company’s issued and outstanding common stock. On June 10, 2021, and pursuant to the Asset Purchase Agreement, the Company issued to Acuitas (as NeurMedix’s assignee) 8,361,308 shares of the Company’s common stock and made a cash payment of approximately $2.3 million, representing NeurMedix’s direct and documented cash expenditures to advance certain programs from March 1, 2021 through the closing date and cash payments to other third parties for expenses totaling approximately $4.0 million for due diligence, legal fees, transaction fees and the fairness opinion. Since the transaction was between entities under common control, there were no fair value adjustments of the purchased assets and the historical cost basis of the purchased assets was zero. The total consideration paid was expensed as in process research and development expense in the accompanying statement of operations for the year ended June 30, 2021. Equity Transactions with Acuitas On September 22, 2020, concurrent with the closing of the Company’s registered public offering, (“the Offering’), approximately $1.8 million was paid to Acuitas satisfying all amounts owed on the Debenture due September 24, 2020 held by the Company’s controlling stockholder, Acuitas. Additionally, in connection with the close of the public offering on September 22, 2020, the Company issued an aggregate of 6,909,582 shares of Common Stock to Acuitas, representing (i) 5.4 million shares issuable pursuant to Acuitas’ rights under the Purchase Agreement dated July 3, 2018, as amended on June 24, 2019 and October 9, 2019; and the various extension letters; which resulted in a deemed dividend at the close of the public offering at price of $10 per share, consistent with the Company’s accounting policy; and (ii) the automatic exercise of 1.5 million warrants issued to Acuitas in connection with the Debenture financing at the par value of the Common Stock. F- 14 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 5. Related Party Transactions (continued) During the year ended June 30, 2021, the Company received additional draws under the Debenture totaling $436,000. The total draws as of September 22, 2020 were $1.7 million and the related total number of warrants issuable at $4.00 per share of common stock was 424,750 of which 328,250 warrants had been issued. In accordance with the Debenture agreements, at September 22, 2020 upon the Company’s close of its public offering, all the warrants issued related to the debenture totaling 1,453,250 were mandatorily redeemed along with the additional 96,500 shares common stock issued to Acuitas. The following paragraphs summarize the background of those financings and arrangements which were settled and redeemed on September 22, 2020. On July 3, 2018, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Acuitas and certain other purchasers identified in the Purchase Agreement (together with Acuitas, the “Purchasers”) pursuant to which (i) the Purchasers agreed to purchase an aggregate of 2,133,332 shares of the our Series A Convertible Preferred Stock (the “Preferred Stock”) at a price per share of $1.50 per share of Preferred Stock (the “Initial Sale”) and (ii) we agreed to issue warrants (the “Warrants”) to purchase 1,706,666 shares of common stock, each subject to the terms and conditions set forth in the Purchase Agreement, for an aggregate consideration of $3.2 million. We received $160,000 of the $3.2 million in April and May 2018 as prepaid equity. Acuitas also received an additional 6,667 Warrants in connection with the payoff of a note issued by us in favor of Acuitas. The Initial Sale and issuance of the Warrants occurred on July 3, 2018. In addition, Acuitas had the option to purchase up to an additional 1,600,000 shares of common stock at a price per share of $1.88, and warrants on the same terms as the Warrants, within two weeks following the one year anniversary of the closing of the Initial Sale (the “Subsequent Sale”) in the event that we did not obtain $3,000,000 of funding through various non-dilutive grants prior to the one year anniversary of the closing of the Initial Sale, less any federal or FDA grant funding received by the Company. Acuitas is controlled by our Chairman and Chief Executive Officer, Terren Peizer and the Purchasers included James Lang, Cuong Do and Michael Sherman, who are members of our Board; and Jonathan Adam, a former Board member. The Purchase Agreement contained customary representations and warranties. In connection with the disclosure schedule associated with the representations and warranties, we also disclosed customary information, including the following: (i) the existence of the Mallinckrodt petition before the U.S. Patent Trial and Appeal Board, (ii) our capitalization, (iii) our obligation to pay a low single digit royalty on the net sales of BIV201 (continuous infusion terlipressin) to be shared among LAT Pharma LLC members, PharmaIN Corporation and The Barrett Edge, Inc. pursuant to the Agreement and Plan of Merger, dated April 11, 2016, by and between LAT Pharma LLC and us, (iv) our obligation to pay a low single digit royalty on net sales of all terlipressin products covered by specified patents up to a maximum of $200,000 per year pursuant to the Technology Transfer Agreement, dated July 25, 2016, by and between us and the University of Padova (Italy), and (v) certain recent issuances of common stock by us. Each share of Preferred Stock automatically converted into 1 share of common stock upon the filing with the Secretary of State of the State of Nevada of a Certificate of Amendment to our Articles of Incorporation (the “Amendment”) on August 13, 2018 that increased the number of authorized shares of common stock to 800,000,000. The Amendment was approved by the written consent of the holders of more than a majority of our issued and outstanding common stock on July 3, 2018 and was filed with the Secretary of State of the State of Nevada 20 calendar days following the distribution of our Definitive Information Statement on Schedule 14 that was filed with the SEC on July 13, 2018. F- 15 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 5. Related Party Transactions (continued) Pursuant to a letter agreement dated June 24, 2019, Acuitas agreed to modify its existing rights under the Purchase Agreement so that: - Acuitas agreed to immediately exchange its existing 1,606,667 Warrants for common stock such that it will have effectively exercised its Warrants in full pursuant to a cashless exercise thereof at an assumed current market price of $45.00 per share and, as a result received an aggregate of 95% of the shares covered thereby, or 1,526,094 shares of common stock; - Acuitas agreed to (i) waive its rights to a 50% adjustment of the purchase price of the Preferred Stock in the Initial Sale, the exercise price of the Warrants and the price per share in the Subsequent Sale in the event of certain reductions in the useful life of our current intellectual property rights, and (ii) effectively exercise its rights to purchase securities in a Subsequent Sale pursuant to a “cashless purchase” at an assumed current market price of approximately $11.25 per share, conditioned in each case on the listing of our common stock on Nasdaq or the raising of $2.0 million in additional funds in the form of another securities offering, in either case not later than November 30, 2019, which will result Acuitas having irrevocably waived its rights to an adjustment in the purchase price of the Preferred Stock in the Initial Sale and the exercise price of the Warrants and the purchase price of per share in the Subsequent Sale upon the issuance by us of an aggregate of 1,339,958 shares of common stock (the “Subsequent Sale Shares”) to Acuitas, which is expected to occur concurrently with the closing of our potential public offering and listing on Nasdaq; - Acuitas shall in exchange for the foregoing agreements and waivers have the option to purchase additional shares of common stock and warrants to purchase one share of common stock for each share of common stock purchased during the period from September 1, 2019 to November 30, 2019 at the then-effective purchase price of the Preferred Stock in the Initial Sale (the “Funding Option”), provided that any shares issued pursuant to any exercise of the Funding Option will reduce share-for-share the amount of shares issued pursuant to the deemed exercise of its rights to purchase securities in a Subsequent Sale mentioned above. Convertible Debenture Transaction with Acuitas On September 24, 2019, the Company entered into a Securities Purchase Agreement (the “2019 Purchase Agreement”) with Acuitas pursuant to which (i) Acuitas agreed to purchase a 10% OID Convertible Delayed Draw Debenture due September 24, 2020 for an aggregate commitment amount of up to $2.0 million, and (ii) the Company issued 1,125,000 shares (the “Commitment Shares”) of the Company’s common stock and warrants (the “Commitment Warrants”) to purchase an equal number of shares, each subject to the terms and conditions set forth in the 2019 Purchase Agreement. The Debenture accrues additional principal at the rate of 6% per annum and interest at the rate of 10% per annum, is convertible into shares of common stock at $4.00 per share prior to the completion of the company’s planned public offering of units (the “Public Offering”) or, subsequent to the closing of the Public Offering, the lower of $4.00 or 80% of the offering price per unit to the public in the Public Offering and are mandatorily redeemable upon such closing at 100% of the accrued principal amount and unpaid interest to the date of redemption. The Commitment Warrants are five-year warrants, exercisable upon the earlier of the effectiveness of the Company’s current reverse stock split or December 1, 2019, at an amount equal to the lower of $4.00 or 80% of the offering price per unit to the public in the Public Offering. Upon entering into the 2019 Purchase Agreement, the Company drew an initial $500,000 under the Debenture and in accordance with the 2019 Purchase Agreement, Acuitas received an additional 125,000 warrants (the “Bridge Warrants”) having the same terms as the Commitment Warrants. F- 16 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 5. Related Party Transactions (continued) Any future draws under the Debenture, which may be made from and after October 15, 2019, November 15, 2019 and December 15, 2019 in equal tranches of $500,000 each, will entitle Acuitas to receive additional Bridge Warrants in equal amount upon such funding. In addition, the 2019 Purchase Agreement provides that, should the underwriters in the Public Offering exercise their option to purchase additional securities during the 45 days following closing and the issuance of such securities would result in Acuitas’ beneficial ownership (on a fully diluted basis) of shares of common stock being below 60%, Acuitas shall be issued a number of additional shares of common stock and warrants having the same terms as the Commitment Warrants to result in its beneficial ownership (on a fully diluted basis) of shares of common stock equaling 60%. The issuance of 1,125,000 shares of the Company’s commons stock and warrants to purchase an equal amount number of shares, to its controlling stockholder for the Bridge Financing was accounted for as a deemed dividend due to its related party nature and $17.1 million representing the excess of the fair value of the consideration given for the financing, net of debt discount; was recorded in accumulated deficit for the year ended June 30, 2020, accordingly. A debt discount of $500,000 against the debenture was recorded which will be amortized over the term of the debenture using the effective interest method. The Company received draws under the Debenture that totaled approximately $1.3 million during the year ended June 30, 2020. The total interest expense related to the draws under the Debenture was approximately $99,000 for the year ended June 30, 2020. On April 1, 2020, the Company entered an amendment to modify the payment of accrued interest amounts under the original terms of the Debenture to capitalize all such amounts as would otherwise accrue on the Debenture. On January 4, 2020, payment of $13,487 accrued interest due was paid through the issuance of 4,422 shares of the Company’s common stock. Acuitas and the Company continue to discuss the need and timing for some or all the remaining draws under the Debenture Agreement. Subsequent to the initial $500,000 draw on September 24, 2019, the Company received draws that totaled $813,000 as July 13, 2020, and accordingly; the Company issued additional Bridge Warrants to purchase 203,250 shares of common stock to its controlling stockholder under the terms of the Bridge Financing. Accordingly, on April 16, 2020, the Company recorded the warrants to purchase 125,000 common stock related to the second $500,000 draw under the debenture as a derivative warrant liability as of June 30, 2020. The Company recorded the warrants related to the draws totaling $313,000 to purchase 78,250 common shares as derivative liabilities. Pursuant to the 2019 Purchase Agreement, Acuitas has agreed to further modify its existing rights under the Purchase Agreement dated July 3, 2018 with the Company so that Acuitas’ previous agreement in June 2019 to waive its rights to a 50% adjustment of the purchase price of the Preferred Stock in the July 2018 transaction, the exercise price of the warrants in such transaction and the price per share in a Subsequent Sale in the event of certain reductions in the useful life of our current intellectual property rights, and effectively exercise its rights to purchase securities in a Subsequent Sale pursuant to a “cashless purchase” at an assumed current market price of approximately $11.25 per share, conditioned in each case on the listing of the Company’s common stock on Nasdaq or the raising of $2.0 million in additional funds in the form of another securities offering, in either case not later than November 30, 2019, such that Acuitas will have irrevocably waived its rights to an adjustment in the purchase price of the Preferred Stock in the Initial Sale and the exercise price of the Warrants and the purchase price of per share in the Subsequent Sale upon the issuance by us of an aggregate of 2,679,916 shares of common stock and 2,679,916 warrants having the same terms as the Commitment Warrants to Acuitas, upon the closing of the Public Offering. F- 17 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 5. Related Party Transactions (continued) Pursuant to an amendment to the 2019 Purchase Agreement dated October 9, 2019, Acuitas agreed to modify its existing rights under the 2019 Purchase Agreement so that: - The Commitment Warrants (and related warrants issued upon the first draw under the Debenture) were replaced with warrants having similar terms, but which are automatically exercised upon the closing of the offering at an exercise price equal to the par value of the common stock; - Acuitas’ existing rights under the Purchase Agreement dated July 3, 2018 with the Company were further amended so that the number of Subsequent Sale Shares would be multiplied by four (in lieu of the changes to the Purchase Agreement originally provided for in the 2019 Purchase Agreement); and - The provisions of the 2019 Purchase Agreement providing that, should the underwriters in the offering exercise their option to purchase additional securities during the 45 days following closing and the issuance of such securities would result in Acuitas’ beneficial ownership (on a fully diluted basis) of shares of common stock being below 60%, Acuitas will be issued a number of additional shares of common stock and warrants having the same terms as the Commitment Warrants to result in its beneficial ownership (on a fully diluted basis) of shares of common stock equaling 60% have been modified such that, upon the exercise of such option by the underwriters, the Company will issue to Acuitas a number of securities that will result in Acuitas’ fully diluted beneficial ownership after the exercise of such option being the same as prior thereto. On July 14, 2020, the Company, entered into a further extension of its letter agreements dated April 8, 2020, that furthered extended its letter agreement dated February 10, 2020 with Acuitas regarding Acuitas’ previous agreement to modify its existing rights under the Purchase Agreement dated July 3, 2018 with the Company so that its June 2019 waiver of its rights to 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 commitment to purchase such securities upon the closing of the Company’s planned public offering of shares of Class A common stock (the “Common Stock”) as described in its Registration Statement on Form S-1 (File No. 333-231136) and commitment to purchase such additional securities would remain effective until October 31, 2020, and accordingly Acuitas shall be entitled to receive an aggregate of 5,359,832 shares of Common Stock at such closing. In addition, the parties agreed that certain draws under the Company’s current bridge financing with Acuitas were to be made based with respect to the Company’s ongoing capital requirements and current market conditions, notwithstanding certain scheduled availability dates set forth in the 10% OID Convertible Delayed Draw Debenture issued in connection therewith. The letter agreement of July 14, 2020 also confirmed the understanding between the Company and Acuitas regarding certain amounts funded to BioVie that were intended as “partial draws” of credit available under the Debenture which, as of the date hereof aggregated $813,000 in aggregate principal amount in additional to amounts initial funded under the Debenture. Accordingly, such “partial draws” shall accrue additional principal as amounts otherwise funded pursuant to the original schedule of draws included in the Debenture (as modified by the letter agreement between BioVie and Acuitas dated April 1, 2020 regarding the capitalization of interest otherwise payable) and shall entitle Acuitas to receive a pro rata amount of Bridge Warrants. F- 18 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 6. Other Liabilities Other liabilities at June 30, 2022 of $ 1,304,925 represented accrued annual performance bonuses $724,330 for the fiscal year ended June 30, 2022 and the current portion of the retention bonus arrangements with certain employees that were recognized in August 2021 totaling $ 1,161,000 . Total bonuses of approximately $1.9 million was recognized and included in the accompanying statement of operations for the year ended June 30, 2022. The payment terms of the retention bonus arrangement are equal monthly installments over a 24-month period and began in August 2021. The non-current portion of the retention bonus was $48,385 in the accompanying balance sheet at June 30, 2022. 7. Notes Payable On November 30, 2021, (the “Closing Date”) the Company entered into a Loan and Security Agreement and the Supplement to the Loan and Security Agreement and Promissory Notes (together, the “Loan Agreement”) with Avenue Venture Opportunities Fund, L.P. (“AVOPI” and Avenue Venture Opportunities Fund II, L.P. (“AVOPII”) together (“Avenue”) for growth capital loans in an aggregate commitment amount of up to $20 million (the “Loan”). On the closing date, $15 million funded (“Tranche 1”) and up to $5 million will be made available to the Company on or prior to September 15, 2022, subject to the Company’s achievement of certain milestones with respect to certain of its ongoing clinical trials (“Tranche 2”). The Loan bears interest at an annual rate equal to the greater of (a) the sum of 7.00 % plus the prime rate as reported in The Wall Street Journal and (b) 10.75%. The prime rate at June 30, 2022 was 11.75%. The Loan is secured by a lien upon and security interest in all of the Company’s assets, including intellectual property, subject to agreed exceptions. The maturity date of the Loan is December 1, 2024. An additional growth capital loan in an amount equal to $5 million may be available (i) upon the Company’s achievement of additional milestones with respect to certain of its ongoing clinical trials (ii) upon the mutual written agreement of the Company and the Lenders each acting in its sole discretion, and (iii) subject to execution and delivery by the Company and the Lenders of amendments to the loan documents and the Warrant (as defined below) to reflect such additional loan and approval of each Lender’s investment committee (“Tranche 3”). The Loan Agreement requires monthly interest-only payments during the first eighteen months of the term of the Loan, which may be increased up to an additional six months from the end of such eighteen-month period prior to receipt of the Tranche 2 Loan. Following the interest-only period, the Company will make equal monthly payments of principal, plus accrued interest, until the Loan’s maturity date when all remaining principal and accrued interest is due. If the Company prepays the Loan, it will be required to pay (a) a prepayment fee in an amount equal to 3.0% of the principal amount of the Loan that is prepaid during the interest-only period; and (b) a prepayment fee in an amount equal to 1.0% of the principal amount of the Loan that is prepaid after the interest-only period. At the Loan’s maturity date, or on the date of the prepayment of the Loan, a final payment equal to 4.25% of the sum of (a) the Loan commitment amount under Tranche 1 and Tranche 2, plus (b) the aggregate principal amount of additional growth capital loans borrowed under Tranche 3. The Loan Agreement includes a conversion option to convert up to $5.0 million of the principal amount of the Loan outstanding at the option of the Lenders, into shares of the Company’s Class A common stock at a conversion price of $6.98 per share. On the Closing Date, the Company issued to the Lenders warrants to purchase 361,002 shares of Class A common stock of the Company (the “Warrants”) at an exercise price per share equal to $5.82, the stock purchase price. The warrants are exercisable until November 30, 2026, the expiration date. F- 19 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 7. Notes Payable (continued) The amount of the carrying value of the notes payable were determined by allocating portions of the outstanding principal of the notes to the fair value of the warrants of approximately $ 1.4 million and the fair value of the embedded conversion option of approximately $ 2.2 million. Accordingly, the total amount of unearned discount of approximately $3.7 million, the total direct financing cost of approximately $ 390,000 and premium of $ 850,000 are recognized on an effective interest method over term of the Loan. The adjusted effective interest rate is 25%. The total interest expense of approximately $ 2.2 million for the year ended June 30, 2022; was recognized in the accompanying statements of operations and included the interest only payments totaling approximately $ 952,000 , the amortization of financing costs of approximately $ 99,000 , unearned discount of approximately $ 934,000 and the accretion of loan premium totaled of approximately $ 165,000 . As of June 30, 2022, the outstanding principal balance of $15 million would be paid in 18 monthly equal installments beginning July 1, 2023; a total of $10.0 million and $5.0 million in the fiscal years ended June 30, 2024 and 2025 respectively. The following is a summary of the Note Payable as of June 30, 2022 and June 30, 2021: Schedule of note payable June 30, 2022 June 30, 2021 Note Payable $ 15,000,000 $ — Less debt financing costs ( 290,790 ) Less unearned discount ( 2,735,802 ) Plus accretion of loan premium 165,278 — Note Payable, net of financing costs, unearned premiums and discount $ 12,138,686 $ — Estimated future amortization expense and accretion of premium is as follows: Schedule of Estimated future amortization expense and accretion of premium Unearned Discount Debt Financing Costs Loan accretion Premium Year ending June 30, 2023 $ 1,601,445 $ 170,219 $ 283,333 2024 1,023,145 108,751 283,333 2025 111,212 11,820 118,056 Total $ 2,735,802 $ 290,790 $ 684,722 F- 20 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 8. Fair Value Measurements At June 30, 2022 and 2021, the estimated fair value of derivative liabilities measured on a recurring basis are as follows: Schedule of derivative liabilities at fair value Fair Value Measurements at June 30, 2022 Level 1 Level 2 Level 3 Total Derivative liability - Warrants $ — $ — $ 194,531 $ 194,531 Derivative liability -Conversion option on notes payable — — 188,030 188,030 Total derivatives $ — $ — $ 382,561 $ 382,561 Fair Value Measurements at June 30, 2021 Level 1 Level 2 Level 3 Total Derivative liability - Warrants $ — $ — $ — $ — Derivative liability -Conversion option on note payable — — — — Total derivatives $ — $ — $ — $ — The following table presents the activity for liabilities measured at fair value using unobservable inputs for the year ended June 30, 2022 and 2021: Fair value, liabilities measured on recurring basis Derivative liabilities - Warrants Derivative liability - Conversion Option on Convertible Debenture Beginning balance at July 1, 2020 $ 16,411,504 $ 5,000,800 Additions to level 3 liabilities — — Change in fair value of level 3 liability ( 6,054,121 ) ( 2,225,798 ) Transfer in and/or out of Level 3 ( 10,357,383 ) ( 2,775,002 ) Balance at June 30, 2021 $ — $ — Additions to level 3 liabilities 1,456,513 2,213,466 Change in fair value of level 3 liability ( 1,261,982 ) ( 2,025,436 ) Transfer in and/or out of Level 3 — — Balance at June 30, 2022 $ 194,531 $ 188,030 F- 21 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 8. Fair Value Measurements (continued) On September 22, 2020, concurrent with the closing of the Offering; the warrants related to derivative liabilities were automatically exercised in full and the convertible Debenture was paid off in cash expiring the conversion option. The fair value of the derivative liabilities – warrants and derivative liability – conversion option on convertible Debenture prior to redemption at September 22, 2020 was $13.1 million, and the change in the fair value of $8.3 million from June 30, 2020 was recorded in the accompanying Statements of Operations for the year ended June 30, 2021. At September 22, 2020, the derivative liabilities, both the warrants and expired conversion option totaling $ 13.1 million were then recorded as additional paid in capital upon automatic exercise of the warrants and payoff of the Debenture. The fair values of derivative liabilities for the warrants and conversion option at June 30, 2022 in the accompanying balance sheet, were approximately $195,000 and approximately $188,000, respectively. The total change in the fair value of the derivative liabilities totaled approximately $3.3 million for the year ended June 30, 2022, and accordingly, was recorded in the accompanying statement of operations. The assumptions used in the Black Scholes model to value the derivative liabilities at June 30, 2022 included the closing stock price of $ 1.45 per share, and for the warrants the exercise price of $ 5.82 , 5 -year term, risk free rate of 3.01 % and volatility of 79.6 %. and for the embedded derivative liability of the conversion option, the conversion price of $ 6.98 ; 3 -year term, risk free rate of 2.99 % and volatility of 84.36 %. Derivative liability – Warrants The Company accounts for stock purchase warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreements. Under applicable accounting guidance, stock warrants that are precluded from being indexed to the Company’s own stock because of full-rachet and anti-dilution provisions or adjustments to the strike price due to an occurrence of a future event; are accounted as derivative financial instruments. The warrants issued on November 30, 2021 in connection with the Avenue loan financing were not considered to be indexed to the Company’s own stock, and accordingly, were recorded as a derivative liability at fair value in the accompany balance sheet at June 30, 2022. The Black Scholes model was used to calculate the fair value of the warrant derivative to bifurcate the warrant derivative amount from the Avenue loan amount funded. The warrants are recorded at their fair values at the date of issuance and remeasured at June 30, 2022. The assumptions used for the fair value calculation at November 30, 2021 follows: the closing stock price of $ 6.44 per share; the exercise price of $ 5.82 ; 5 year term; a risk free rate of 1.14 % and volatility of 74.4 %. Embedded derivative liability – Conversion Option The embedded derivative represents the optional conversion feature of up to $5.0 million of the outstanding Avenue note amounts meets the definition of a derivative and requires bifurcation from the loan amount. The Black Scholes model was used to calculate the fair value of the embedded derivative to bifurcate the embedded derivative amount representing the conversion option from the Avenue loan amount funded. The assumption used for the fair value calculation at November 30, 2021 follows: the closing stock price of $ 6.44 per share; the conversion price of $ 6.98 ; 3 year term; risk free rate of 0.81 % and volatility of 76.85 %. F- 22 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 9. Equity Transactions Stock Options The following table summarizes the activity relating to the Company’s stock options for the years ended June 30, 2022 and 2021: Schedule of Summary of stock options activity Options Weighted-Average Exercise Price Weighted Remaining Average Contractual Term Aggregate Intrinsic Value Outstanding at June 30, 2020 60,400 $ 11.06 4.2 $ 352,000 Granted 698,000 15.03 4.5 2,114,032 Options Exercised or Forfeited ( 3,200 ) 4.76 — — Outstanding at June 30, 2021 755,200 4.34 4.4 2,569,232 Granted 2,724,689 5.86 7.7 — Options Expired ( 8,000 ) 29.17 — — Options Forfeited ( 73,125 ) ( 13.91 ) — — Outstanding at June 30, 2022 3,398,764 $ 7.42 5.5 $ — Exercisable at June 30, 2022 865,775 $ 9.54 5.7 $ — The fair value of each option grant on the date of grant is estimated using the Black-Scholes Option – Pricing model reflecting the following weighted-average assumptions: Schedule of assumptions used June 30, 2022 June 30, 2021 Expected life of options (In years) 5 5 Expected volatility 76.47 % 77.29 % Risk free interest rate 1.56 % 0.39 % Dividend yield 0 % 0 % F- 23 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 9. Equity Transactions (continued) Expected volatility is based on the historical volatilities of three comparable companies of the daily closing price of their respective common stock and the expected life of options is based on historical data with respect to employee exercise periods. The Company accounts for forfeitures as they are incurred. The Company recorded stock-based compensation expense of approximately $ 5.8 million and $ 3.0 million for the years ended June 30, 2022 and 2021, respectively. The following is a summary of stock options outstanding and exercisable by exercise price as of June 30, 2022: Summary of stock options outstanding and exercisable Exercise Price Outstanding Weighted Average Contract Life Exercisable $ 1.69 124,520 5.0 — $ 1.81 10,000 4.9 — $ 1.98 72,000 4.9 2,000 $ 2.74 124,167 9.6 — $ 2.80 7,200 2.6 7,200 $ 3.20 248,167 9.6 24,833 $ 3.24 25,000 9.7 — $ 3.75 4,800 1.6 4,800 $ 5.04 755,000 4.8 188,750 $ 6.25 1,600 1.3 1,600 $ 7.50 25,600 3.6 25,600 $ 7.74 1,365,835 9.1 273,167 $ 8.75 1,600 1.8 1,600 $ 9.54 800 3.3 800 $ 9.90 800 3.3 800 $ 12.50 4,000 0.6 4,000 $ 13.91 618,475 3.5 321,425 $ 25.00 1,600 0.3 1,600 $ 26.25 2,000 0.3 2,000 $ 28.75 800 0.4 800 $ 42.09 4,800 3.6 4,800 3,398,764 865,775 Issuance of common stock through exercise of Stock Options and Warrants On July 28, 2020, the Company issued 2,210 shares of common stock pursuant to a cashless exercise of stock options to purchase 3,200 shares at an average exercise price of $ 4.76 per share. On January 27, 2021, the Company issued 304 shares of common stock pursuant to a cashless exercise of warrants to purchase 320 shares at an average exercise price of $ 1.88 per share. On March 23, 2021, the Company issued 27,000 shares of common stock pursuant to a cash exercise of warrants to purchase 27,000 shares at an average exercise price of $ 12.50 per share. F- 24 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 9. Equity Transactions (continued) On March 24, 2021, the Company issued 14,324 shares of common stock pursuant to a cash exercise of warrants to purchase 14,324 shares at an average exercise price of $ 12.50 per share. On April 19, 2021, the Company issued 724 shares of common stock pursuant to a cashless exercise of warrants to purchase 760 shares at an average exercise price of $ 1.88 per share. Issuance of common stock for cash On August 11, 2021, the Company closed a registered public offering issuing 2,500,000 of its Class A common stock at $ 8.00 per share, resulting in net proceeds to the Company of approximately $ 17.8 million, net of issuance costs of approximately $ 2.2 million. On September 24, 2021, the Company issued 92,000 of its Class A common stock at $ 8.00 per share in connection with the underwriters’ exercise of its over-allotment option in for the August 2021 registered public offering, resulting in net proceeds to the Company of approximately $ 707,000 , net of issuance cost of approximately $ 29,000 . Issuance of Shares for Services On August 20, 2021, the Company awarded 58,759 restricted stock units (“RSUs”) to the 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 entitles him to receive one share of common stock upon vesting. A total of 15,339 RSUs (representing the pro rata portion of the RSU award for the period from April 27, 2021 to June 30, 2021) vested at the grant date, 21,710 vested at September 30, 2021 and 21,710 vested at December 31, 2021. Accordingly, the common stock was issued to the CEO at each of the quarter end vesting dates. The stock-based compensation expense related to these RSUs totaled $ 384,454 for the fiscal year ended June 30, 2022. On June 21, 2022, the Company awarded 124,520 RSUs to the President and CEO under the Company’s 2019 Omnibus. Each RSU awarded to the CEO entitles him to receive one share of common stock upon vesting. The RSUs vest in equal installments over three years on the anniversary Grant date. The grant date fair value was $ 1.69 per share of the Company’s common stock. The stock-based compensation expense related to these RSUs totaled $ 1,754 for the fiscal year ended June 30, 2022. Issuance of Stock Options On October 1, 2020, the Company granted stock options to purchase 800 shares of common stock at each grant date to the Chief Financial Officer as part of her compensation. The exercise prices of the stock options are $ 9.54 and are exercisable at any time and expire in 5 years from the date of issuance. F- 25 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 9. Equity Transactions (continued) On October 13, 2020, the Company granted stock options to purchase 800 shares of common stock, at each grant date; to a director as part of his annual director’s compensation. The exercise price of the stock options is $ 9.90 and are exercisable at any time and expire in 5 years from the date of grant. On December 18, 2020, the Company granted stock options under the Company’s 2019 Omnibus Incentive Compensation Plan to purchase 691,600 shares of common stock to the members of the board as part of their annual compensation. The first 25% of the stock options vest on the grant date, and the remaining 75% vest over a 3-year period, on the first, second, and third anniversary of the grant date. The stock options were issued at an exercise price of $ 13.91 per share and expire 5 years from the date of grant. On January 19, 2021, the Company granted stock option to purchase a total of 4,800 shares of common stock, granting 800 shares each to then Chief Operations Officer, an executive clinical team member and to four of its key consultants as part of their annual compensation. The exercise price of the options is $ 42.09 per share, are exercisable at any time and expire 5 years from the date of issuance. On August 20, 2021, the Company granted, under the 2019 Omnibus Plan, stock options to purchase 1,365,835 shares of common stock to the executive management team. Twenty percent (20%) of the shares underlying the options awarded vested on the grant date, and the remaining 80% vest equally over a 5-year period, on the first, second, third, fourth and fifth anniversary of the grant date. The exercise price of the options is $ 7.74 per share, the grant date fair value of the stock, and the options terminate on the earlier of the tenth anniversary of the grant date or the date as of which the options were fully exercised. On February 1, 2022, the Company granted stock options to purchase 124,167 shares of common stock to a new employee. Twenty percent (20%) of the shares underlying the options awarded vested on the grant date, and the remaining 80% vest equally over a 5 -year period, on the first, second, third, fourth and fifth anniversary of the grant date. The exercise price is $ 3.20 per share, the grant date fair value, and the options terminate on the tenth anniversary of the grant date. On February 1, 2022, the Company granted stock options to purchase 124,000 shares of common stock to two new employee. Twenty percent (20%) of the shares underlying the options awarded vested on the first grant anniversary date, and the remaining 80% vest in equal monthly installments over 48 months. The exercise price is $ 3.20 per share, the grant date fair value, and the options terminate on the tenth anniversary of the grant date. On February 8, 2022, the Company granted stock options to purchase 124,167 shares of common stock to a new employee. Twenty percent (20%) of the shares underlying the options awarded vest on the one-year anniversary of the grant date, and the remaining 80% vest in equal monthly installments over 48 month. The exercise price is $ 2.74 per share, the grant date fair value, and the options terminate on the tenth anniversary of the grant date. On March 1, 2022, the Company granted stock options to purchase 25,000 shares of common stock to a new employee. Twenty percent (20%) of the shares underlying the options awarded vest on the one-year anniversary of the grant date, and the remaining 80% vest in equal monthly installments over 48 month. options terminate on the tenth anniversary of the grant date or date as of which the options were fulling exercised. The exercise price is $ 3.24 per share, the grant date fair value, and the options terminate on the tenth anniversary of the grant date. F- 26 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 9. Equity Transactions (continued) On April 5, 2022, the Company granted stock options to purchase 755,000 shares of common stock to the independent directors of the board as compensation for services at an exercise price of $ 5.04 per share, the grant date fair value. Twenty-five percent (25%) of the shares underlying the options awarded vested on the grant date, and the remaining 75% vest ratably over three years on the first, second, and third anniversary of the grant date. The options terminate on the earlier of the fifth anniversary of the grant date or the date as of which the options are fully exercised. On June 3, 2022, the Company granted stock options to purchase 10,000 shares of common stock to a new employee. Twenty percent (20%) of the shares underlying the options awarded vested on the grant date, and the remaining 80% vest equally over a 5-year period, on the first, second, third, fourth and fifth anniversary of the grant date. The exercise price is $ 1.98 per share, the grant date fair value, and the options terminate on the tenth anniversary of the grant date. On June 3, 2022, the Company granted stock options to purchase 62,000 shares of common stock to a new employee. Twenty percent (20%) of the shares underlying the options awarded vest on the one-year anniversary of the grant date, and the remaining 80% vest in equal monthly installments over 48 month. The exercise price is $ 1.98 per share, the grant date fair value, and the options terminate on the tenth anniversary of the grant date. On June 6, 2022, the Company granted stock options to purchase 10,000 shares of common stock to a new employee. Twenty percent (20%) of the shares underlying the options awarded vest on the one year anniversary of the grant date, and the remaining 80% vest in equal monthly installments over 48 month. The exercise price is $ 1.81 per share, the grant date fair value, and the options terminate on the tenth anniversary of the grant date. On June 21, 2022, the Company granted stock options to purchase 124,520 shares of common stock to the CEO. The options vest in equal annual installments over three years on the anniversary grant date. The exercise price is $ 1.69 per share, the grant date fair value, and the options terminate on the tenth anniversary of the grant date. Pursuant to a former employee Separation Agreement, dated April 11, 2022; the Company modified a former employee’s stock option award granted on August 20, 2021 pursuant to the 2019 Omnibus Plan (“2021 Options Grant”). Pursuant to the terms of the Separation Agreement, effective on July 8, 2022, (“the Separation Date”) of the employee; the modification accelerated the vesting of options to purchase 74,500 shares of common stock as deemed vested, (“Accelerated Options”) and after giving effect to the Accelerated Options, extended the exercise period of the total vested outstanding and unexercised options of the 2021 Options Grant as of July 8, 2022 to one year following the Separation Date. The modification was remeasured as of the July 8, 2022 and the incremental difference totaled $181,154, net credit; due to the original exercise price of $7.74 is greater than the stock price of $1.80 on the remeasurement date and accordingly was recognized on July 8, 2022. Forfeiture of Stock Options On August 27, 2021, the Chief Executive Officer forfeited unvested stock options to purchase up to 73,125 shares of common stock that were previously granted to him as compensation as an independent director of the board. F- 27 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 9. Equity Transactions (continued) Stock Warrants The following table summarizes the warrants activity during the years ended June 30, 2022 and 2021: Summary of warrants activity Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Aggregate Intrinsic Value Outstanding and exercisable at June 30, 2020 1,374,667 $ 7.72 4.2 $ 13,799,331 Granted 293,248 6.61 4.8 — Exercised ( 55,904 ) 12.29 4.0 — Exercised - Acuitas ( 1,453,250 ) 4.00 4.0 — Outstanding and exercisable at June 30, 2021 158,761 $ 10.37 3.1 $ 1,765,437 Granted 361,002 5.82 5.0 — Expired ( 9,391 ) 62.50 — — Exercised — — — — Outstanding and exercisable at June 30, 2022 510,372 $ 6.17 3.8 $ — Of the above warrants, 4,815 expire in the fiscal year ending June 30, 2023, 2,714 expire in the fiscal year ending June 30, 2025, and 502,843 expire in the fiscal year ending June 30, 2026. Issuance of warrants On July 13, 2020, the Company issued Warrants to purchase 203,250 shares of common stock to its controlling stockholder under the terms of the Bridge Financing. The warrants were exercisable at an exercise price of $ 4 at any time from the date of issuance until 5 years from the date of issuance. (See Note 5 Related Party Transactions.) On September 22, 2020, the Company issued warrants to purchase 89,998 shares of common stock to the underwriters of the Offering in connection with the close of the Offering of registered Common Stock The warrants are exercisable at an exercise price of $ 12.50 at any time from date of issuance until 5 years from the date of issuance. F- 28 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 10. Leases Office Leases From July 1, 2018 to October 31, 2021, the Company paid monthly rent of $1,000 to Acuitas for its headquarter office at 2120 Colorado Avenue Suite 230, Santa Monica, CA 90404. Effective November 1, 2021, the Company relocated its headquarters to Nevada. The Company paid an annual rent of $2,200 for the address at 680 W Nye Lane, Suite 201, Carson City Nevada 897603. The rental agreement is for a one year term. On June 1, 2021, the Company assumed a NeurMedix office lease that was extended to February 2022 at 6165 Greenwich Dr Suite 150, San Diego, CA 92122. The lease agreement required monthly payments of $8,782. On February 26, 2022 the Company’s San Diego office relocated to 5090 Shoreham Place, San Diego, CA 92122. (the “New Office”). The New Office lease term for 38 months, commenced on March 1, 2022. The monthly base rate of $4,175 begins June 1, 2022 with annual increases of three percent. The operating lease cost recognized in in our statement of operations was approximately $ 89,400 and $ 10,000 for the fiscal years ended June 30, 2022 and 2021, respectively. The following table provides balance sheet information related to leases as of June 30, 2022 and June 30, 2021: Schedule of balance sheet information related to leases June 30, 2022 June 30, 2021 Assets Operating lease, right-of-use asset, net $ 118,254 $ — Liabilities Current portion of operating lease liabilities $ 38,884 $ — Operating lease liabilities, net of current portion 87,414 — Total operating lease liabilities $ 126,298 $ — At June 30, 2022, the future estimated minimum lease payments under non-cancelable operating leases are as follows: Schedule of future estimated minimum lease payments under non-cancelable operating leases Year ending June 30: 2023 $ 50,600 2024 52,156 2025 44,636 Total minimum lease payments 147,392 Less amount representing interest ( 21,094 ) Present value of future minimum lease payments 126,298 Less current portion of operating lease liabilities ( 38,884 ) Operating lease liabilities, net of current portion $ 87,414 The weighted average remaining lease term and discount rate as of June 30, 2022 and 2021 were as follows: Schedule of weighted average remaining lease term and discount rate June 30, 2022 June 30, 2021 Weighted average remaining lease term (Years) Operating leases 2.8 — Weighted average discount rate Operating leases 10.75 % — F- 29 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 11. Commitments and Contingencies Royalty Agreements Pursuant to the Agreement and Plan of Merger entered into on April 11, 2016, between our predecessor entities, LAT Pharma LLC and NanoAntibiotics, Inc., BioVie is obligated to pay a low single digit royalty on net sales of BIV201 (continuous infusion terlipressin) to be shared among LAT Pharma Members, PharmaIn Corporation, and The Barrett Edge, Inc. Pursuant to the Technology Transfer Agreement entered into on July 25, 2016 between BioVie and the University of Padova (Italy), BioVie is obligated to pay a low single digit royalty on net sales of all terlipressin products covered by US patent no. 9,655,645 and any future foreign issuances capped at a maximum of $200,000 per year. 12. Employee Benefit Plan On August 1, 2021, the Company began sponsoring an employee benefit plan subject to Section 401(K) of the Internal Revenue Service Code (the “401K Plan”) pursuant to which, all employees meeting eligibility requirements are able to participate. Subject to certain limitations in the Internal Revenue Code, eligible employees are permitted to make contributions to the 401K Plan on a pre-tax salary reduction basis and the Company will match 5% of the first 5% of an employee’s contributions to the 401K Plan. For the year ended June 30, 2022, the Company’s contributions to the 401K Plan totaled approximately $ 121,000 . F- 30 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2022 and 2021 13. Income Taxes Significant components of the Company’s deferred tax assets (liabilities) are as follows: Schedule of deferred tax assets June 30, 2022 June 30, 2021 Deferred tax assets (liabilities): Tax loss carryforward $ 6,410,653 $ 1,454,837 Intangible assets ( 258,209 ) ( 327,001 ) Stock based compensation 1,845,836 901,111 Valuation Allowance ( 7,998,280 ) ( 2,028,947 ) Net deferred tax assets $ — $ — At June 30, 2022 and 2021, the Company has recorded a full valuation against its net deferred tax assets of $ 7,999,280 and $ 2,028,947 , respectively, since in the judgement of management, these assets are not more than likely than not to be realized. The increase in the valuation allowance during the years ended June 30, 2022 and 2021 were $ 5,969,333 and $ 291,741 , respectively. At June 30, 2022, the Company had a Net Operating Loss (“NOL”) carryforward of approximately $23,600,000. NOL’s generated prior to 2018 will expire during the years ranging from 2032 to 2037. The Company has no current tax expense due to its losses. Reconciliation of the differences between income tax benefit computed at the federal and state statutory tax rates and the provision for income tax benefit for the years ended June 30, 2022 and 2021 is as follows: Schedule of effective income tax rate reconciliation 2022 2021 Income tax expense at federal statutory rate 21 % 21 % State taxes, net of federal benefit 9 % 9 % Change in valuation allowance - 30 % - 30 % Effective tax rate — — 14. Subsequent Events Company, entered into a securities purchase agreement (the “Purchase Agreement”) with Acuitas, pursuant to which Acuitas agreed to purchase from the Company, in a private placement (the “Private Placement”), (i) an aggregate of 3,636,364 shares of the Company’s Class A common stock, par value $ 0.0001 per share at a price of $ 1.65 per share, and (ii) a warrant to purchase 7,272,728 shares of Common Stock, at an exercise price of $ 1.82 , with a term of exercise of five years; (collectively, the “Securities”). The warrant has a down round feature that reduces the exercise price if the Company sells stock for lower price. The aggregate purchase price for the Securities sold in the Private Placement was $ 6 million. The Private Placement closed on August 15, 2022. On August 31, 2022, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. and B. Riley Securities, Inc. (collectively, the “Agents”), pursuant to which the Company may issue and sell from time to time shares of Company’s Class A common stock, par value $ 0.0001 per share, through the Agents, subject to the terms and conditions of the Sales Agreement. As of September 12, 2022, the Company has issued 1,544,872 shares under the Sales Agreement for a total net proceeds of $ 5.9 million after commissions and expenses of approximately $ 400,000 . F- 31