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. 35 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, 2023 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, 2023, 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, 2023, 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. 36 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 August 9, 2023. Name Age Director Since Position Cuong Do 57 2016 CEO & President and Director Joanne Wendy Kim 68 — CFO Joseph M. Palumbo, MD 63 — Chief Medical Officer Jim Lang 58 2016 Chairman of the Board Michael Sherman 64 2017 Director Richard J. Berman 81 2019 Director Steve Gorlin 86 2020 Director Robert Hariri, MD, PhD 64 2020 Director Sigmund Rogich 79 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. 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. 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 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 served on the U.S. 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. 37 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. 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. Mr. Jim Lang has served as the Company’s director since 2016 and as the Chairman of the Board since March 2023. 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. 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. 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. 38 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 U.S. 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. 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. 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 Clarence Ahlem (Form 4s filed on January 18, 2023 and February 22, 2023), Richard J. Berman (Form 4s filed on January 18, 2023, April 6, 2023 and June 15, 2023), Cuong Do (Form 4s filed on July 7, 2022, January 18, 2023, February 22, 2023 and June 26, 2023), Steve Gorlin (Form 4 filed on January 18, 2023), Robert J. Hariri (Form 4 filed on January 18, 2023), Wendy Kim (Form 4s filed on January 8, 2023 and February 22, 2023), James Lang (Form 4 filed on January 18, 2023), Penelope Markham (Form 4s filed on January 18, 2023 and February 22, 2023), Joseph M Palumbo (Form 4s filed on January 18, 2023, February 22, 2023 and July 3, 2023), Terren Peizer (Form 3 filed on August 16, 2022 and Form 4s filed on August 26, 2022 and January 18, 2023), Christopher Reading (Form 4s filed on January 18, 2023 and February 22, 2023), Sigmund Rogich (Form 4 filed on January 18, 2023) and Michael Sherman (Form 4 filed on January 18, 2023), all Section 16(a) reports applicable to our directors, executive officers and greater-than-ten-percent beneficial owners with respect to fiscal 2023 were timely filed. 39 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 seven 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. 2023 Meetings and Attendance During fiscal year 2023, the Board held four regular Board of Directors meetings and one special meeting of the Board of Directors, four Audit Committee meetings, six 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 whom 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; ● 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 40 ● 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. 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; 41 ● 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. Board Diversity Matrix (As of August 11, 2023) Total Number of Directors: 8 Did Not Non- Disclose Female Male Binary Gender Part I: Gender Identity Directors 0 7 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 — 3 — — 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. 42 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, 2023 and 2022 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 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 2023 $ 618,000 $ 463,500 $ 734,668 $ 521,500 $ — $ — $ — $ 2,337,668 2022 $ 300,000 $ 400,000 $ 210,439 $ 3,632,382 $ — $ — $ — $ 4,542,821 Joanne Wendy Kim (3) Chief Financial Officer, Treasurer and Corporate Secretary 2023 $ 246,750 $ 150,625 $ 242,499 $ 84,000 $ — $ — $ — $ 723,874 2022 $ 235,000 $ 127,656 $ — $ 582,343 $ — $ — $ — $ 944,999 Joseph Palumbo (4) Chief Medical officer 2022 $ 525,000 $ 197,000 $ 242,499 $ 126,000 $ — $ — $ — $ 1,090,499 2022 $ 333,333 $ 239,167 $ — $ 244,465 $ — $ — $ — $ 816,965 (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 10 of our Notes to Financial Statements included in our Annual Report on Form 10-K for the year ended June 30, 2023. 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 in form of RSUs 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 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 RSU. (3) Ms. Kim served as the Chief Financial Officer and Corporate Secretary and Treasurer 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. Employment Agreements All employment arrangements are “at will” agreements. 43 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, 2023: Options Stock Awards Name Grant Date Number of securities underlying unexercised options exercisable Number of securities underlying unexercised options unexercisable Equity incentive plan awards: number of securities underlying unexercised unearned options Option 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 to vested Equity incentive plan awards: number of unearned shares, units or other rights that have not vested Equity incentive plan awards: market or payout value of unearned shares, units or other right that have not vested Cuong Do, CEO 01-19-19 800 — — $ 3.75 01-19-24 — — — $ — 01-19-20 800 — — $ 2.80 01-19-25 — — — $ — 12-18-20 24,375 — — $ 13.91 12-18-25 — — — $ — 08-20-21 387,400 — 357,600 $ 7.74 08-20-31 — — — $ — 06-21-22 41,506 — 83,014 $ 1.69 06-21-32 — — 83,014 $ 357,790 11-23-23 — — — $ — — — 59,436 $ 256,169 06-29-23 — — 175,000 $ 4.09 06-29-33 — — 149,500 $ 644,345 Joanne W. Kim, CFO 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 — — — $ — 08-20-21 40,726 — 83,441 $ 7.74 08-20-31 — — — $ — 11-23-22 — — — $ — — — 29,718 $ 128,085 06-07-23 5,000 — 15,000 $ 5.78 06-07-33 — — — $ — Joseph M. Palumbo, CMO 02-01-22 24,833 — 99,334 $ 3.20 02-01-32 — — — $ — 11-23-22 — — — $ — — — 29,718 $ 128,085 06-07-23 7,500 — 22,500 $ 5.78 06-07-33 — — — $ — Named executive officers held stock options to purchase a total of 1,371,729 shares of Common Stock as of June 30, 2023, with an aggregate grant date fair value of approximately $5.4 million, the last of which vests in 2027. Stock options granted prior to August 20, 2021, vested on the grant date; the stock options granted on August 20, 2021 vested 20% on the grant date, with the remaining stock options vesting in five equal annual installments beginning on the first grant date anniversary; the stock options granted on June 7, 2023, vested 25% on the grant date, with the remaining stock options vesting in four equal annual installments beginning on the first grant date anniversary; and the stock options and stock awards in the form RSUs granted to the CEO on June 21, 2022 and June 29, 2023 vests in three equal annual installments beginning on the first grant date anniversary. The RSU awarded on November 23, 2022 vested 25% on the grant date with the remaining RSU vesting in three equal annual installments beginning on the first grant date anniversary. The total RSUs outstanding awarded to the named executive officers totaled 351,386 with a market value totaling approximately $1.5 million as of June 30, 2023. Potential Payments Upon Termination or Change of 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. 44 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, 2023. Except as set forth in the table, during the fiscal year 2023, directors did not earn nor receive cash compensation or compensation in the form of stock awards, options awards or any other form. Name Stock awards (1) Option awards(1) Non-equity incentive plan compensation Change in pension value and nonqualified deferred compensation All other compensation Total Jim Lang $ 266,697 — $ — $ — $ — $ 266,697 Michael Sherman — 304,500 $ — $ — $ — $ 304,500 Richard Berman $ 266,697 — $ — $ — $ — $ 266,697 Steve Gorlin $ 209,549 — $ — $ — $ — $ 209,549 Robert Hariri MD, Phd $ 209,549 — $ — $ — $ — $ 209,549 Sigmund Rogich $ — 223,300 $ — $ — $ — $ 223,300 Terren Piezer (2) $ — 263,900 $ — $ — $ — $ 263,900 (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 10 of our Notes to Financial Statements included in our Annual Report on Form 10-K for the year ended June 30, 2023. 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. Piezer resigned from the Board of Directors effective March 2, 2023. 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 the 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. The fiscal year 2023 annual compensation granted to existing board members consisted of either an award of RSUs at one unit per share of Common Stock, a total of 155,636 RSU at a grant date market value of $952,492 or stock options to purchase a total of 195,000 shares of commons stock with a grant date fair value totaling $791,700. The former chairman of the Board of Directors, the chairman of the compensation committee and a member of the audit committee received stock options to purchase 65,000, 75,000 and 55,000 shares of Common Stock, respectively. The chairmen of the audit committee and the corporate governance and nominating committee each received 43,578 RSUs and the members of those committees each received 34,240 RSUs. 45 The following tables sets forth the outstanding equity awards held by non-employee directors as of June 30, 2023: Options (1) Stock Awards (2) Name Grant Date Number of securities underlying unexercised options exercisable Number of securities underlying unexercised options unexercisable Equity incentive plan awards: number of securities underlying unexercised unearned options Option 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 to vested Equity incentive plan awards: number of unearned shares, units or other rights that have not vested Equity incentive plan awards: market or payout value of unearned shares, units or other right that have not vested James Lang 01-19-19 800 — — $ 3.13 01-19-24 — — — $ — 01-19-20 800 — — $ 2.80 01-19-25 — — — $ — 12-18-20 74,250 — 24,750 $ 13.91 12-18-25 — — — $ — 04-05-22 63,950 — 63,950 $ 7.74 04-05-32 — — — $ — 11-23-22 — — — $ — — — 21,789 $ 93,911 Richard J. Berman 01-19-20 800 — — $ 2.80 01-19-25 — — — $ — 12-18-20 76,875 — 25,625 $ 13.91 12-18-25 — — — $ — 04-05-22 64,525 — 64,525 $ 5.04 04-05-27 — — — $ — 11-23-22 — $ — — — 21,789 $ 93,911 Steve Gorlin 12-18-20 72,225 — 24,075 $ 13.91 12-18-25 — — — $ — 04-05-22 61,125 — 61,125 $ 5.04 04-05-27 11-23-22 — — — $ — — — 17,120 $ 73,787 Robert Hariri 12-18-20 71,925 — 23,975 $ 13.91 12-18-25 — — — $ — 04-05-22 61,125 61,125 $ 5.04 04-05-27 — — — $ — 11-23-22 — — — $ — 17,120 $ 73,787 Sigmund Rogich 12-18-20 72,975 — 24,325 $ 13.91 12-18-25 — — — $ — 04-05-22 61,700 — 61,700 $ 5.04 04-05-27 — — — $ — 11-23-22 27,500 — 27,500 $ 6.12 11-23-27 — — — $ — Michael Sherman 10-13-18 800 — — $ 6.25 10-13-23 — — — $ — 10-13-19 800 — — $ 7.13 10-13-24 — — — $ — 10-13-20 800 — — $ 9.90 10-13-25 — — — $ — 12-18-20 77,325 — 25,775 $ 13.91 12-18-25 — — — $ — 04-05-22 65,075 — 65,075 $ 5.04 04-05-27 — — — $ — 11-23-22 37,500 — 37,500 $ 6.12 11-23-27 — — — $ — (1) There was a total of 1,483,300 stock options outstanding to directors as of June 30, 2023, with an aggregate grant date fair value of approximately $13.2 million, the last of which vest in 2027. Stock options granted on December 18, 2020 and April 5, 2022 vest 25% on grant date with the remaining stock options vesting in three annual equal installments beginning on the first grant date anniversary. Stock options granted on November 23, 2022 vest in four equal quarterly installments beginning February 9, 2023. (2) Equity awards granted the Board of Directors on November 23, 2022 were in the form of RSUs, one unit for one share of Common Stock, vest in four equal quarterly installments beginning February 9, 2023. There were 77,460 RSUs outstanding as of June 30, 2023, with an aggregate market value of approximately $335,000. 46 Long-Term Incentive Plans and Awards Other than the options granted and RSU awards 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, 2023, there were 2,269,952 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, 2023: (a) (b) (c) Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation pans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 4,530,121 $ 6.71 2,269,952 Equity compensation not approved by security holders — $ — — Total 4,530,121 $ 6.71 2,269,952 PAY VERSUS PERFORMANCE As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last two completed calendar years. In determining the “compensation actually paid” to our named executive officers (“NEOs”), we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table in previous years, as the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table. Pay Versus Performance Table The table below summarizes compensation values both previously reported in our Summary Compensation Table, as well as the adjusted values required in this section for fiscal years 2022 and 2023. Note that for our NEOs other than our principal executive officer (the “PEO”), compensation is reported as an average. 47 Year Summary Compensation Table Total for PEO ($)(1)(2) Compensation Actually Paid to PEO ($)(1)(3) Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($)(1)(4) Average Compensation Actually Paid to Non-PEO Named Executive Officers ($)(1)(5) Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($)(6) Net Loss ($)(7) (in thousands) 2023 $2,337,668 $3,434,517 $1,185,289 $1,185,289 $25.43 $(50,256) 2022 $4,542,821 $916,050 $605,653 $605,653 $8.55 $(25,084) (1) During fiscal years 2023 and 2022, the PEO was Cuong Do. During fiscal years 2023 and 2022, the non-PEO NEOs were Joanne W Kim and Joseph M Palumbo M.D. (2) The dollar amounts reported are the amounts of total compensation reported for Mr. Do and the average total compensation reported for Non-PEO Named Executive Officers for the applicable fiscal year in the “Total” column of the Summary Compensation Table (SCT). (3) The following table sets forth the adjustments made to the SCT total for each year represented in the pay versus performance table to arrive at “compensation actually paid” to our PEO, as computed in accordance with Item 402(v) of Regulation S-K: 2023 2022 SCT Total for PEO $2,337,668 $4,542,821 Less: Amount reported under the “Stock Awards” column in the SCT $(1,256,168) $(3,842,821) Add: Fair value as of fiscal year-end of awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year $2,770,583 $- Add: Change in fair value as of fiscal year-end, compared to prior fiscal year-end, of awards granted in any prior fiscal year that are outstanding and unvested as of the end of the fiscal year $(1,545,275) $- Add: Fair value as of vest date of awards granted and vested in the fiscal year $1,186,095 $1,153,260 Add: Change in fair value as of vesting date, compared to prior fiscal year-end, of awards granted in any prior fiscal year for which all vesting conditions were satisfied at fiscal year-end or during the fiscal year $(58,386) $(937,210) Less: Forfeitures during fiscal year equal to prior fiscal year-end value $- $- Total Adjustments $1,096,849 $(3,626,771) Compensation Actually Paid to PEO $3,434,517 $916,050 (4) The following table sets forth the adjustments made to the SCT total for each year represented in the pay versus performance table to arrive at “compensation actually paid” to our PEO, as computed in accordance with Item 402(v) of Regulation S-K: 48 2023 2022 Average SCT Total for Non-PEO NEOs $907,186 $880,982 Less: Amount reported under the “Stock Awards” column in the SCT $(347,499) $(413,404) Add: Fair value as of fiscal year-end of awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year $551,399 $144,034 Add: Fair value as of vest date of awards granted and vested in the fiscal year $96,750 $135,839 Add: change in fair value as of vesting date, compared to prior fiscal year-end of awards granted in any prior fiscal year for which all vesting conditions were satisfied at fiscal year-end or during the fiscal year $(22,548) $(141,798) Less: Forfeitures during fiscal year equal to prior fiscal year-end value $- $- Total Adjustments $278,102 $(275,329) Average Compensation Actually Paid to Non-PEO NEOs $1,185,289 $605,653 (5) The amounts reported represent the measurement period value of an investment of $100 in our stock on June 30, 2021 (the last trading day before the 2022 fiscal year), and then valued again on each of June 30, 2022 (the last trading day of the 2022 fiscal year) and June 30, 2023 (the last trading day of the 2023 fiscal year), based on the closing price per share of the Company’s common stock as of such dates and assuming the reinvestment of dividends. (6) The amounts reported represent net loss for the applicable fiscal year calculated in accordance with generally accepted accounting principles in the United States. 49 Relationship Between CAP Amounts and Performance Measures The following charts show graphically the relationships over the past two years of the CAP Amounts for the PEO and the Other NEOs as compared to our (i) cumulative total shareholder return and (ii) net loss. While the Compensation Committee makes executive compensation decisions in consideration of a variety of factors, including corporate and individual performance, the decisions of the Compensation Committee and Board of Directors in 2022 and 2023 were made independently of these disclosure requirements. 50 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 August 9, 2023 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 36,765,035 shares of Common Stock outstanding as of August 9, 2023. 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. Name and Address of Beneficial Owner Number of Common Shares of Beneficial Ownership Percentage of Beneficial Ownership Named executive officers and directors: James Lang (1) 170,570 * Richard Berman (2) 110,738 * Steve Gorlin (3) 178,468 * Robert Hariri (4) 119,895 * Sigmund Rogich (5) 145,075 * Michael Sherman (6) 202,525 * Cuong Do (7) 738,312 2.0 % Joanne Wendy Kim (8) 80,397 * Joseph Palumbo (9) 38,263 * All directors and executive officers as a group (9) 1,784,243 4.8 % 5% Stockholders Acuitas Group Holdings (10) 30,503,938 69.1 % * Less than 1% (1) Includes warrants to purchase 17,333 shares of Common Stock and options to purchase 134,636 shares of Common Stock, all of which are exercisable within 60 days of August 9, 2023. (2) Includes options to purchase 109,138 shares of Common Stock, all of which are exercisable within 60 days of August 9, 2023.   (3) Includes options to purchase 102,788 shares of Common Stock, all of which are exercisable within 60 days of August 9, 2023. 50,000 shares of common stock is held by Mr. Gorlin’s wife. (4) Includes options to purchase 102,775 shares of Common Stock, all of which are exercisable within 60 days of August 9, 2023. (5) Includes options to purchase 145,175 shares of Common Stock, all of which are exercisable within 60 days of August 9, 2023. 51 (6) Includes warrants to purchase 13,333 shares of Common Stock and options to purchase 168,513 shares of Common Stock, all of which are exercisable within 60 days of August 9, 2023. 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. (7) Includes warrants to purchase 70,666 shares of Common Stock and options to purchase 455,681 shares of Common Stock, all of which are exercisable within 60 days of August 9, 2023. 211,965 shares of Common Stock and 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. (8) Include options to purchase shares 70,967of Common Stock, all of which are exercisable within 60 days of August 9, 2023. (9) Includes options to purchase 30,833 shares of Common Stock, all of which are exercisable within 60 days of August 9, 2023. (10) Includes warrants to purchase 7,272,728 shares of Common Stock and options to purchase 65,000 shares of Common Stock, all of which are exercisable within 60 days of August 9, 2023. All shares held of record by Acuitas Group Holdings, LLC, a limited liability company 100% owned by Terren Peizer, and as which Mr. Peizer may be deemed to beneficially own or control. Mr. Peizer disclaims beneficial of any such securities. 52 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The following includes a summary of transactions since June 30, 2022, 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. 53 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, 2023 and 2022. 2023 2022 Audit Fees $ 317,772 $ 223,102 Audit - Related Fees — — Tax Fees — — All other Fees — — Total $ 317,772 $ 223,102 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 All Other Fees —N/A 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. 54 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 to 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). 3.7 First Amendment to the Amended and Restated Bylaws of the Company, dated March 12, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 13, 2023). 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 Current Report on 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 Current Report on 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). 10.2 Asset Purchase Agreement, dated April 27, 2021, among the Company, NeurMedix, Inc. and Acuitas Group Holdings, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on April 27, 2021). 10.3 Amendment No. 1 of the Asset Purchase Agreement, dated May 9, 2021, among the Company, NeurMedix, Inc. and Acuitas Group Holdings, LLC (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on May 10, 2021). 10.4 Amendment No. 2 to the Asset Purchase Agreement, dated January 13, 2023, among the Company, Acuitas Group Holdings, LLC and Acuitas Group Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 12, 2023). 10.5# Employment Offer & Agreement, between 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). 55 10.6# Employment Offer & Agreement, between 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, between 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, between 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). 10.9# Employment Offer & Agreement, between 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). 10.10 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). 10.11 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). 10.12 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 Current Report on Form 8-K/A filed on July 18, 2022). 10.13 Controlled Equity Offering SM Sales Agreement, dated August 31, 2022, among the Company, Cantor Fitzgerald & Co. and B. Riley Securities, Inc. (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on August 31, 2022). 10.14 Amended and Restated Registration Rights Agreement, dated August 15, 2022, by and between BioVie Inc. and Acuitas Group Holdings, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 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). 23.1 Consent of Independent Registered Public Accounting Firm - EisnerAmper LLP 31.1 Rule 13a-14(a) Certification 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 56 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 August 16, 2023 Cuong Do (Principal Executive Officer) /s/ Joanne Wendy Kim Chief Financial Officer August 16, 2023 Joanne Wendy Kim (Principal Financial Officer) /s/ Jim Lang Director August 16, 2023 Jim Lang /s/ Michael Sherman Director August 16, 2023 Michael Sherman /s/ Richard J. Berman Director August 16, 2023 Richard J. Berman /s/ Steve Gorlin Director August 16, 2023 Steve Gorlin /s/ Robert Hariri Director August 16, 2023 Robert Hariri /s/ Sigmund Rogich Director August 16, 2023 Sigmund Rogich 57 BioVie, Inc. Index to Financial Statements Report of Independent Registered Public Accounting Firm – EisnerAmper LLP (PCAOB Number 274 ) F-2 Financial Statements: Balance Sheets F- 4 Statements of Operations and Comprehensive Loss F-5 Statements of Changes in Stockholders’ Equity F-6 Statements of Cash Flows F-7 Notes to Financial Statements F-8 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, 2023 and 2022, and the related statements of operations and comprehensive loss, changes in stockholders’ equity, 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, 2023 and 2022, 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. Research and development expenses and related accruals As described in Note 3 to the accompanying financial statements, research and development expenses consists primarily of costs associated with the preclinical and/or clinical trials of drug candidates, compensation and other expenses for research and development, supplies and development materials, costs for consultants and related contract research and third-party facility costs. The amounts recorded for clinical trial expenses represent the Company’s estimates of clinical trial expenses based on facts and circumstances known to the Company at that time, and are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. We identified the accounting for the research and development expenses and related accruals to be a critical audit matter due to the degree of management judgement in ensuring they are complete and accurate, their significance, their increase from the prior year, and the risk of material misstatement due to the nature and timing of these costs and accruals. This in turn led to a high degree of auditor judgment, subjectivity, and effort in applying the procedures related to their accounting. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included, obtaining an understanding of management’s process and evaluating the design of controls over research and development expenses and the completeness and accuracy of related accruals, reading the terms of the master service agreements and statements of work for significant vendors and making selections of transactions to determine the adequacy of the support, their mathematical accuracy and their recording as research and development expenses. We also made inquiries of management and reviewed subsequent payments of major research and development expenses to ensure that accruals were complete as of June 30, 2023. /s/ EisnerAmper LLP We have served as the Company’s auditor since 2019. EISNERAMPER LLP Iselin, New Jersey August 16, 2023 F- 3 BioVie Inc. Balance Sheets June 30 June 30, 2023 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 19,460,883 $ 18,641,716 Investments in U.S. Treasury Bills 14,477,726 — Prepaids and other assets 102,526 137,879 Total current assets 34,041,135 18,779,595 Operating lease right-of-use assets 80,789 118,254 Intangible assets, net 637,095 866,472 Goodwill 345,711 345,711 Other assets, non-current — 4,562 TOTAL ASSETS $ 35,104,730 $ 20,114,594 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 3,476,259 $ 2,442,804 Current portion of other liabilities 48,385 1,304,925 Current portion of operating lease liabilities 44,909 38,884 Current portion of Note payable, net of financing cost, unearned premium and discount of $ 894,926 at June 30, 2023 9,105,074 — Warrant liabilities 894,280 194,531 Embedded derivative liability 925,762 188,030 Total current liabilities 14,494,669 4,169,174 Other liabilities, net of current portion — 48,385 Operating lease liabilities, net of current portion 42,505 87,414 Note payable, net of current portion, financing cost, unearned premium and discount of $ 227,268 at June 30, 2023 and $ 2,861,314 at June 30, 2022 5,227,270 12,138,686 TOTAL LIABILITIES 19,764,444 16,443,659 Commitments and contingencies (Note 12) 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, 2023 and June 30, 2022, respectively; 36,451,829 shares issued of which 36,428,949 shares outstanding at June 30, 2023 and 24,984,083 issued and outstanding at June 30, 2022; 3,643 2,496 Additional paid in capital 316,385,759 254,638,329 Accumulated other comprehensive income 176,591 Accumulated deficit ( 301,225,705 ) ( 250,969,890 ) Treasury stock ( 2 ) — Total stockholders’ equity 15,340,286 3,670,935 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 35,104,730 $ 20,114,594 The accompanying notes are an integral part of the financial statements. F- 4 BioVie Inc. Statements of Operations and Comprehensive Loss Year ended Year ended June 30, 2023 June 30, 2022 OPERATING EXPENSES: Amortization $ 229,377 $ 229,377 Research and development expenses 33,299,503 17,258,341 Selling, general and administrative expenses 11,551,568 9,765,259 TOTAL OPERATING EXPENSES 45,080,448 27,252,977 LOSS FROM OPERATIONS ( 45,080,448 ) ( 27,252,977 ) OTHER EXPENSE (INCOME): Change in fair value of derivative liabilities 1,437,481 ( 3,287,418 ) Interest expense 4,300,150 2,162,989 Interest income ( 562,264 ) ( 44,080 ) TOTAL OTHER EXPENSE (INCOME), NET 5,175,367 ( 1,168,509 ) NET LOSS $ ( 50,255,815 ) $ ( 26,084,468 ) NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 50,255,815 ) $ ( 26,084,468 ) NET LOSS PER COMMON SHARE - Basic $ ( 1.55 ) $ ( 1.06 ) - Diluted $ ( 1.55 ) $ ( 1.06 ) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - Basic 32,483,489 24,662,557 - Diluted 32,483,489 24,662,557 NET LOSS $ ( 50,255,815 ) $ ( 26,084,468 ) Other comprehensive income Unrealized gain on investments for available-for-sale 176,591 — Other comprehensive income 176,591 — Comprehensive loss $ ( 50,079,224 ) $ ( 26,084,468 ) The accompanying notes are an integral part of the financial statements. F- 5 BioVie Inc. Statements of Changes in Stockholders’ Equity For the Years Ended June 30, 2023 and 2022 Accumulated Additional Other Total Common Stock Common Stock Paid in Treasury Stock Treasury Stock Comprehensive Accumulated Stockholders’ Shares Amount Capital Shares Amount Income Deficit Equity Balance, June 30, 2021 22,333,324 $ 2,232 $ 229,933,505 — $ — $ — $ ( 224,885,422 ) $ 5,050,315 Stock option-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 Stock option-based compensation — — 4,222,845 — — — — 4,222,845 Stock-based compensation – restricted stock units 215,175 21 1,780,028 ( 22,880 ) ( 2 ) — — 1,780,047 Stock-based compensation – issuance of common stock 50,000 5 372,495 — — — — 372,500 — Cashless exercise of options 22,563 3 ( 3 ) — — — — — — Cashless exercise of warrants 3,590 — — — — — — — — Proceeds from exercise of options 800 — 2,240 — — — — 2,240 Proceeds from issuance of common stock, net costs of $2,008,898 7,539,254 754 49,464,349 — — — — 49,465,103 Proceeds from issuance of common stock, net of costs of $94,160 – Related Party 3,636,364 364 5,905,476 — — — — 5,905,840 Unrealized gain on available-for-sale securities — — — — — 176,591 — 176,591 Net loss — — — — — — ( 50,255,815 ) ( 50,255,815 ) Balance, June 30, 2023 36,451,829 $ 3,643 $ 316,385,759 ( 22,880 ) $ ( 2 ) $ 176,591 $ ( 301,225,705 ) $ 15,340,286 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, 2023 June 30, 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 50,255,815 ) $ ( 26,084,468 ) 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 units 1,780,047 386,208 Stock based compensation expense – stock options 4,222,845 5,807,871 Stock based compensation expense – stock issued 372,500 — Amortization of financing costs 170,219 99,295 Accretion of unearned loan discount 1,601,445 934,177 Accretion of loan premium 421,994 165,278 Change in operating lease right-of-use assets 37,465 8,044 Change in fair value of derivative liabilities 1,437,481 ( 3,287,418 ) Changes in operating assets and liabilities: Prepaids and other assets 39,915 ( 48,954 ) Accounts payable and accrued expenses 1,033,455 1,446,430 Operating lease liabilities ( 38,884 ) — Other liabilities ( 1,304,925 ) 1,353,310 Net cash used in operating activities ( 40,252,881 ) ( 18,990,850 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of U.S. Treasury Bills ( 14,301,135 ) — Net cash used in investing activities ( 14,301,135 ) — CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common stock 49,465,103 18,511,009 Proceeds from note payable net of financing costs — 14,609,915 Proceeds from exercise of stock options 2,240 — Net proceeds from issuance of common stock – Related Party 5,905,840 — Net cash provided by financing activities 55,373,183 33,120,924 Net increase in cash and cash equivalents 819,167 14,130,074 Cash and cash equivalents, beginning of period 18,641,716 4,511,642 Cash and cash equivalents, end of period $ 19,460,883 $ 18,641,716 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 2,106,491 $ 964,241 SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: Right of use assets obtained in exchange for lease obligations $ — $ 130,039 Unrealized gain on U.S. Treasury Bills $ 176,591 $ — 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, 2023 and 2022 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 neurological and neuro-degenerative disorders and liver disease. The Company acquired the biopharmaceutical assets of NeurMedix, Inc. (“NeurMedix”), from a related party privately held clinical-stage pharmaceutical company, in June 2021. The acquired assets included NE3107, a potentially selective inhibitor of inflammatory extracellular single-regulated kinase(“ERK”) signaling that, based on animal studies and 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 Disease (AD) and Parkinson’s Disease (PD), and NE3107 could, if approved represent an entirely new medical approach to treating these devastating conditions affecting an estimated 6 million Americans suffering from AD and 1 million Americans suffering from PD. The Company is conducting a potentially pivotal Phase 3 randomized, double-blind, placebo-controlled, parallel-group, multicenter study to evaluate NE3107 in patients who have mild to moderate Alzheimer’s disease (NCT04669028). The Company is targeting primary completion of this study in the fourth quarter of calendar year 2023. The Company completed its Phase 2 study assessing NE3107 in Parkinson’s disease patients in the fourth quarter of calendar year 2022. The NM201 study (NCT05083260) was a double-blind, placebo-controlled, safety, tolerability, and pharmacokinetics study in Parkinson’s disease (PD) participants treated with carbidopa/levodopa and NE3107. The study was primarily designed to assess safety (general safety in the patient population and potential for drug-drug interactions of NE3107 with levodopa); and secondary, to look for indications of promotoric activity akin to promotoric activity and apparent enhancement of levodopa activity observed in preclinical models. Both the safety and efficacy objectives of the study were met. Neuroinflammation, insulin resistance, and oxidative stress are common features in the major neurodegenerative diseases, including Alzheimer’s Disease (AD), Parkinson’s Disease (PD), frontotemporal lobar dementia, and Amyotrophic lateral sclerosis (ALS). NE3107 is an orally bioavailable, blood-brain permeable, small molecule, with potential anti-inflammatory, insulin sensitizing, and ERK-binding properties that may allow it to selectively inhibit ERK-, NFκB- and TNF-stimulated inflammation. NE3107’s potential to inhibit neuroinflammation and insulin resistance forms the basis for the Company’s work testing the molecule in AD and PD patients. NE3107 is patented in the United States, Australia, Canada, Europe and South Korea. The Company’s Orphan Drug candidate BIV201 (continuous infusion terlipressin), with FDA Fast Track status, is being evaluated in a U.S. Phase 2b study (NCT04112199) for the treatment of refractory ascites due to liver cirrhosis. BIV201 is administered as a patent-pending liquid formulation. The study was closed before full enrollment, without clinically meaningful adverse effects associated with BIV201 treatment. While the active agent is approved in the U.S. and in about 40 countries for related complications of advanced liver cirrhosis, treatment of ascites is not included in these authorizations. Patients with refractory ascites 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 U.S. Food and Drug Administration (“FDA”) has not approved any drug to treat refractory ascites. The BIV201 development program was initiated by LAT Pharma LLC (LAT Pharma). On April 11, 2016, the Company acquired LAT Pharma and the rights to its BIV201 development program. The Company currently owns all development and marketing rights to this drug candidate. Pursuant to the Agreement and Plan of Merger entered into on April 11, 2016, between our predecessor entities, LAT Pharma and NanoAntibiotics, Inc., the Company is obligated to pay a low single digit royalty on net sales of BIV201 (continuous infusion terlipressin), if approved, to be shared by the members of LAT Pharma, PharmaIn Corporation and The Barrett Edge, Inc. F- 8 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 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, 2023 the Company had working capital of approximately $ 19.5 million, cash and cash equivalents and US treasury bills totaling of approximately $ 33.9 million, stockholders’ equity of approximately $ 15.3 million, and an accumulated deficit of approximately $ 301 million. The Company is in the pre-revenue stage 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 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 development of next phase 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 Impact of COVID-19 pandemic 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. 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 clinical accruals, share-based compensation, accounting for derivatives, assumptions used in leases and recoverability of intangible assets, the inputs used in the valuation of goodwill and intangible assets in connection with impairment testing and accounting for income taxes. Actual results could differ from those estimates. Cash and cash equivalents Cash and cash equivalents consisted of cash deposits and money market funds held at a bank and funds held in a brokerage account which included a U.S. treasury money market fund and U.S. Treasury Bills with original maturities of three months or less. F- 9 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 3. Significant Accounting Policies (continued) Investments in U.S. Treasury Bills Investments in U.S. Treasury Bills with maturities greater than three months, are accounted for as available for sale and are recorded at fair value. Unrealized gains were included in other comprehensive income in the accompanying statements of operations and comprehensive loss. Concentration of Credit Risk in the Financial Service Industry As of June 30, 2023, the Company had cash deposited in certain financial institutions in excess of federally insured levels. The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in cash and cash equivalents. However, in March and April 2023, certain U.S. government banking regulators took steps to intervene in the operations of certain financial institutions due to liquidity concerns, which caused general heightened uncertainties in financial markets. While these events have not had a material direct impact on the Company’s operations, if further liquidity and financial stability concerns arise with respect to banks and financial institutions, either nationally or in specific regions, the Company’s ability to access cash or enter into new financing arrangements may be threatened, which could have a material adverse effect on its business, financial condition and results of operations. Fair value measurement of assets and liabilities We determine the fair values of our financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 - Inputs are unobservable inputs based on our 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. 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 a security deposit for an office lease. F- 10 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 3. Significant Accounting Policies (continued) 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 12 months or less at inception, and instead will recognize lease payments as expense on a straight-line basis over the lease term. 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. 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 and Comprehensive Loss. For the years ended June 30, 2023 and 2022, there was no such interest or penalty. 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 years ended June 30, 2023 and 2022, such amounts were excluded from the diluted loss since their effect was considered anti-dilutive due to the net loss for the periods. The table below shows the number of outstanding stock options, warrants and restricted stock units as of June 30: Schedule of Dilutive securities were excluded from the computation of diluted loss per share June 30, 2023 June 30, 2022 Number of Shares Number of Shares Stock Options 3,952,864 3,398,764 Warrants 7,770,285 510,372 Restricted Stock Units 596,457 124,520 Total 12,319,606 4,033,656 F- 11 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 3. Significant Accounting Policies (continued) 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 no t recognize any goodwill impairments for the years ended June 30, 2023 and 2022. 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. 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 and comprehensive loss. In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” This amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. In November 2019, the FASB issued No. 2019-10, Financial Instruments --Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date of ASU 2016-13 for Smaller Reporting Companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect a material impact from the adoption of ASU 2016-13 on the financial statements. F- 12 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 4. Investments in U.S. Treasury Bills available for sale The following is a summary of the U.S. Treasury Bills held at June 30, 2023: Schedule of U.S. treasury bills held Amortized Cost Basis Gross Unrealized Gain Gross Unrealized loss Fair Value Total Accumulated Other Comprehensive Income U.S. Treasury Bills due is 3 - 6 months $ 14,301,136 $ 176,591 $ — $ 14,477,726 $ 176,591 The Company purchased a total of approximately $ 46 million of U.S. Treasury Bills during the year ended June 30, 2023. The U.S Treasury Bills that matured were approximately $ 18 million and none were sold before maturity. 5. 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, 2023 and 2022: Schedule of intangible assets June 30, 2023 June 30, 2022 Intellectual Property $ 2,293,770 $ 2,293,770 Less Accumulated Amortization ( 1,656,675 ) ( 1,427,298 ) Intellectual Property, Net $ 637,095 $ 866,472 Amortization expense amounted to $ 229,377 for each of the years ended June 30, 2023 and 2022, 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, 2024 $ 229,377 2025 229,377 2026 178,341 $ 637,095 6. Related Party Transactions Equity Transactions with Acuitas On July 15, 2022, the Company entered into a securities purchase agreement with Acuitas Group Holdings, LLC (Acuitas), the Company’s majority stockholder, pursuant to which Acuitas agreed to purchase from the Company, in a private placement, (i) an aggregate of 3,636,364 shares of the Company’s Common Stock, at a price of $1.65 per share (the “PIPE Shares”), and (ii) a warrant to purchase 7,272,728 shares of Common Stock (“PIPE Warrant Shares”), at an exercise price of $1.82, with a term of exercise of five years. The warrant has a down round feature that reduces the exercise price of the warrant if the Company sells stock at a price lower than the exercise price of the warrant. On August 15, 2022, the Company received net proceeds of approximately $5.9 million, net of costs of approximately $94,000, and entered into an amended and restated registration agreement with Acuitas, which amended and restated that certain registration rights agreement, dated as of June 10, 2021, by and between the Company and Acuitas (the “Existing Registration Rights Agreement”), to amend the definition of “Registrable Securities” in the Existing Registration Rights Agreement to include the PIPE Shares and the PIPE Warrant Shares as Registrable Securities thereunder. F- 13 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 6. Related Party Transactions (continued) Asset Acquisition with NeurMedix On April 27, 2021, the Company entered into an Asset Purchase Agreement (“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. The acquired assets include, among others, certain assets related to the drug candidates then being developed by NeurMedix, including NE3107. On June 10, 2021, and pursuant to the terms of the APA, the Company issued to Acuitas (as NeurMedix’s assignee) 8,361,308 shares of the Company’s Common Stock and made a cash payment to Acuitas of approximately $2.3 million. 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 year ended June 30, 2021. Subject to the terms and conditions of APA, as amended on May 9, 2021, the Company may be obligated to deliver contingent stock consideration to NeurMedix (or its successor) consisting of up to 18 million shares of the Company’s Common Stock, with 4.5 million shares issuable upon the achievement of each of the four milestones related to certain clinical, regulatory and commercial 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. 7. Other Liabilities The current portion of other liabilities at June 30, 2023 and June 30, 2022 were approximately $ 48,400 and $ 1.3 million, and included $ 48,400 and $ 580,614 , respectively, of a retention bonus payable for arrangements with certain employees. The payment terms of the total retention bonus arrangements of $ 1,161,000 recognized in August 2021 provided for equal monthly installments over a 24-month period and began in August 2021. 8. 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,” and together with AVOPI, “Avenue”) for growth capital loans in an aggregate commitment amount of up to $20 million (the “Loan”). On the Closing Date, $15 million of the Loan was funded (“Tranche 1”). The Loan provided for an additional $5 million to be 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, which were not achieved. 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, 2023 was 8.25 % . 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. The Loan Agreement requires monthly interest-only payments during the first eighteen months of the term of the 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, the Company will be obligated to pay a final payment equal to 4.25% of the Loan commitment amount, the sum of Tranche 1 and Tranche 2. 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 Avenue, into shares of the Company’s Common Stock at a conversion price of $6.98 per share. On the Closing Date, the Company issued to Avenue warrants to purchase 361,002 shares of Common Stock of the Company (the “Avenue Warrants”) at an exercise price per share equal to $5.82. The Avenue Warrants are exercisable until November 30, 2026. F- 14 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 8. Notes Payable (continued) The amount of the carrying value of the notes payable was determined by allocating portions of the outstanding principal of the notes; approximately $ 1.4 million to the fair value of the Avenue Warrants and approximately $ 2.2 million to the fair value of the embedded conversion option. 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 the term of the Loan. The adjusted effective interest rate is 25%. The total interest expense of approximately $ 4.3 million for the year ended June 30, 2023, was recognized in the accompanying statements of operations and comprehensive loss and included the interest only payments totaling approximately $ 2.1 million, the amortization of financing costs of approximately $ 170,000 , unearned discount of approximately $ 1.6 million and the accretion of loan premium of approximately $ 422,000 . 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 comprehensive loss 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, 2023, the remaining principal balance of $15 million under the Loan is payable in 18 monthly equal installments beginning July 1, 2023; for 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, 2023 and June 30, 2022: Current portion of Notes Payable Schedule of note payable June 30, 2023 June 30, 2022 Current portion of Notes Payable $ 10,000,000 $ — Less debt financing costs ( 108,751 ) — Less unearned discount ( 1,023,145 ) — Plus accretion of loan premium 236,970 — Current portion of Notes Payable, net of financing costs, unearned premiums and discount $ 9,105,074 $ — Non-current portion of Notes Payable June 30, 2023 June 30, 2022 Notes Payable $ 5,000,000 $ 15,000,000 Less debt financing costs ( 11,820 ) ( 290,790 ) Less unearned discount ( 111,212 ) ( 2,735,802 ) Plus accretion of loan premium 350,302 165,278 Notes Payable, net of the current portion financing costs, unearned premiums and discount $ 5,227,270 $ 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, 2024 $ 1,023,145 $ 108,751 $ 236,970 2025 111,212 11,820 25,758 Total $ 1,134,357 $ 120,571 $ 262,728 F- 15 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 9. Fair Value Measurements At June 30, 2023 and 2022, 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, 2023 Level 1 Level 2 Level 3 Total Derivative liability - Warrants $ — $ — $ 894,280 $ 894,280 Derivative liability - Conversion option on notes payable — — 925,762 925,762 Total derivatives $ — $ — $ 1,820,042 $ 1,820,042 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 note payable — — 188,030 188,030 Total derivatives $ — $ — $ 382,561 $ 382,561 The following table presents the activity for liabilities measured at fair value using unobservable inputs for the years ended June 30, 2023 and 2022: Fair value, liabilities measured on recurring basis Derivative liabilities - Warrants Derivative liability - Conversion Option on Convertible Debenture Balance at July 1, 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 Additions to level 3 liabilities — — Change in in fair value of level 3 liability 699,749 737,732 Transfer in and/or out of Level 3 — — Balance at June 30, 2023 $ 894,280 $ 925,762 The fair values of derivative liabilities for the Avenue Warrants and conversion option at June 30, 2023 in the accompanying balance sheet, were approximately $894,000 and approximately $926,000, respectively. The total change in the fair value of the derivative liabilities totaled approximately $1.4 million and $3.3 million for the year ended June 30, 2023, and 2022, respectively; and accordingly, was recorded in the accompanying statements of operations and comprehensive loss. The assumptions used in the Black Scholes model to value the derivative liabilities at June 30, 2023 included the closing stock price of $ 4.31 per share; for the Avenue Warrants, the exercise price of $ 5.82 , remaining term 3.4 year, risk free rate of 4.4 % and volatility of 92.0 % ; and for the embedded derivative liability of the conversion option, the conversion price of $ 6.98 ; remaining term 1.4 years, risk free rate of 5.18 % and volatility of 92.0 % . F- 16 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 9. Fair Value Measurements (continued) Derivative liability – Avenue 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 for as derivative financial instruments. The Avenue Warrants 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 sheets at June 30, 2023 and 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 Avenue Warrants are recorded at their fair values at the date of issuance and remeasured at June 30, 2023. The assumptions used for the fair value calculation at November 30, 2021 included: 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 liability represents the optional conversion feature of up to $5.0 million of the outstanding Loan, which 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 Loan amount funded. The assumption used for the fair value calculation at November 30, 2021 included: 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 % . Financial assets As of June 30, 2023, investments in U.S. Treasury Bills were valued through use of quoted prices and are classified as Level 1. The following table presents information about our assets that are measured at fair value on a recurring basis using the above input categories. Measured at fair value on a recurring basis Fair Value Measurements at June 30, 2023 Level 1 Level 2 Level 3 Total Cash $ 6,304,543 $ — $ — $ 6,304,543 U.S. Treasury Bills due in 3 months or less 13,156,340 — — 13,156,340 U.S. Treasury Bills due in 3 - 6 months 14,477,726 — — 14,477,726 Total $ 33,938,609 $ — $ — $ 33,938,609 Fair Value Measurements at June 30, 2022 Level 1 Level 2 Level 3 Total Cash $ 18,641,716 $ — $ — $ 18,641,716 U.S. Treasury Bills due in 3 months or less — — — — U.S. Treasury Bills due in 3 - 6 months — — — — Total $ 18,641,716 $ — $ — $ 18,641,716 F- 17 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 10. Equity Transactions Stock Options The following table summarizes the activity relating to the Company’s stock options for the years ended June 30, 2023 and 2022: Schedule of summarizes the activity relating to the Company’s stock options Options Weighted-Average Exercise Price Weighted Remaining Average Contractual Term Aggregate Intrinsic Value 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 — Granted 714,667 5.90 8.6 38,610 Options Expired ( 10,000 ) 28.69 — — Options Canceled ( 49,667 ) 7.74 — — Options Exercised ( 100,900 ) 8.12 — — Outstanding at June 30, 2023 3,952,864 $ 7.10 6.3 $ 1,067,966 Exercisable at June 30, 2023 1,473,413 $ 7.68 5.4 $ 315,206 The fair value of each option grant on the date of grant is estimated using the Black-Scholes option. The pricing model reflects the following weighted-average assumptions for the years ended June 30, 2023 and 2022: Schedule of assumptions used June 30, 2023 June 30, 2022 Expected life of options (In years) 6 5 Expected volatility 81.65 % 76.47 % Risk free interest rate 3.82 % 1.56 % Dividend Yield 0 % 0 % 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 option-based compensation expense of approximately $ 4.2 million and $ 5.8 million for the years ended June 30, 2023 and 2022, respectively. F- 18 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 10. Equity Transactions (continued) The following is a summary of stock options outstanding and exercisable by exercise price as of June 30, 2023: Schedule of summary of stock options outstanding and exercisable Exercise Price Outstanding Weighted Average Contract Life Exercisable $ 1.69 124,520 4.0 41,507 $ 1.81 10,000 3.9 2,000 $ 1.98 72,000 3.9 16,000 $ 2.74 124,167 8.6 35,180 $ 2.80 5,600 1.6 5,600 $ 3.13 4,000 0.6 4,000 $ 3.20 248,167 8.6 79,834 $ 3.24 25,000 8.7 6,667 $ 4.09 175,500 10.0 — $ 5.04 755,000 3.8 377,500 $ 5.21 10,000 9.4 — $ 5.78 148,000 9.9 29,600 $ 6.12 195,000 4.4 97,500 $ 6.25 1,600 0.3 1,600 $ 7.36 124,167 9.8 — $ 7.50 800 1.3 800 $ 7.74 1,241,668 8.1 447,000 $ 7.81 62,000 9.8 — $ 8.75 1,600 0.8 1,600 $ 9.54 800 2.3 800 $ 9.90 800 2.3 800 $ 13.91 618,475 2.5 321,425 $ 42.09 4,000 2.6 4,000 3,952,864 1,473,413 Issuance of Common Stock through exercise of Stock Options and Warrants In December 2022, the Company issued 22,082 shares of Common Stock pursuant to a cashless exercise of stock options to purchase 99,300 shares at an average exercise price of $ 7.64 . In November 2022, the Company issued 800 shares of Common Stock pursuant to a cash exercise of stock options to purchase 800 shares at an average exercise price of $ 2.80 per share. In October 2022, the Company issued 3,590 shares of Common Stock pursuant to a cashless exercise of warrants to purchase 8,000 shares at an average exercise price of $ 2.25 . In May 2023, the Company issued 481 shares of Common Stock pursuant to a cashless exercise of stock options to purchase 800 shares at an average exercise price of $ 3.13 . Issuance of common stock for cash During the three months ended September 30, 2021, the Company issued 2,592,000 of its Class A common stock at $8.00 per share in connection with its registered public offering of approximately $ 18.5 million, net of issuance costs of approximately $ 2.2 million. F- 19 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 10. Equity Transactions (continued) 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 the Company’s common stock through the Agents, subject to the terms and conditions of the Sales Agreement. On April 6, 2023, the Company and B. Riley Securities, Inc. mutually agreed to terminate B. Riley Securities, Inc.’s role as a sales agent under the Sales Agreement. During the year ended June 30, 2023, the Company sold 7,539,254 shares of common stock under the Sales Agreement for total net proceeds of $ 49.5 million after 3% commissions and expenses of approximately $ 2.0 million. Issuance of restricted stock units for services On August 20, 2021, the Company awarded 58,759 RSUs to the Company’s President and CEO under the Company’s 2019 Omnibus Incentive Equity Plan (the “2019 Omnibus Plan”) as his salary for the period from April 27, 2021, the date of his appointment, through December 31, 2021. The number of RSUs awarded was based on a prorated annual base salary of $600,000 at a 10% discount to the grant date fair value of $ 7.74 per share of the Company’s Common Stock. Each RSU awarded to the CEO entitled 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 the remaining 21,710 vested at December 31, 2021. Accordingly, the CEO was issued an aggregate of 58,759 shares of Common Stock over the vesting period of the RSUs. The stock-based compensation expense related to these RSUs was $ 384,456 for the 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 Plan. Each RSU awarded to the CEO entitles him to receive one share of Common Stock upon vesting. The RSUs vest in three equal annual installments beginning on the first grant anniversary date. 41,506 RSUs vested in June 2023 at a fair value of $ 5.90 per share of the Company’s Common Stock. The stock-based compensation expense related to these RSUs was approximately $ 243,000 and $ 1,754 for the years ended June 30, 2023, and 2022, respectively. On November 23, 2022, the Company awarded 381,976 RSUs to certain employees and a consultant, with a grant date fair value of $ 6.12 per share. 25% of these RSUs vested on the grant date and the remaining RSUs vest in three equal installments over three years beginning on the first anniversary of the grant date. For the year ended June 30, 2023, the stock-based compensation expense related to these RSUs was $ 584,424 . On February 16, 2023, the Company delivered the vested portion of the RSU’s and issued 72,612 shares of Common Stock net of 25 % withholding. 22,880 shares issued to employees were withheld in Treasury stock in exchange for payment of withholding tax on behalf of the employees. On November 23, 2022, the Company issued equity awards for the Board of Directors’ annual compensation. Four directors received RSUs to purchase a total of 155,636 shares of Common Stock at the grant date fair value of $ 6.12 per share, a total cost of $ 952,492 recognized as stock compensation in the year ended June 30, 2023. Three directors received stock options to purchase 195,000 shares of Common Stock at an exercise price of $ 6.12 per share, the grant date fair value. The total stock compensation cost of stock options of $ 791,700 was recognized in the year ended June 30, 2023. The equity awards vest every three months beginning from the last annual shareholders’ meeting on November 9, 2022, on February 9, 2023, May 9, 2023, August 9, 2023 and earlier of November 9, 2023 or the next annual shareholders’ meeting. While the agreements contain certain contractual vesting terms, there are circumstances where the vesting can be accelerated that is not within the Company’s control and as a result, for accounting purposes, the awards are assumed to have been fully vested on the grant date, accordingly, the Company recognized the total compensation cost of $ 1,744,192 on November 23, 2022. On February 9, 2023, the Company delivered the vested portion and issued 39,088 shares of Common Stock. On May 9, 2023, the Company delivered the vested portion and issued 39,088 shares of Common Stock. On June 20, 2023, the Company awarded 149,500 RSUs to the President and CEO under the Company’s 2019 Omnibus Plan. Each RSU awarded to the CEO entitles him to receive one share of Common Stock upon vesting. The RSUs vest in three equal annual installments beginning on the first grant date anniversary. Compensation expense related to vested RSUs for the year ended June 30, 2023 was approximately $1.8 million. The following table summarizes vesting of restricted common stock: Schedule of vesting of restricted common stock Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested at June 30, 2021 — $ — Granted 124,520 1.69 Unvested at June 30, 2022 124,520 1.69 Granted 687,112 5.89 Vested ( 215,175 ) 5.27 Unvested at June 30, 2023 596,457 $ 5.24 F- 20 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 10. Equity Transactions (continued) Issuance of Shares for Services On April 6, 2023, the Company awarded 50,000 shares of Common Stock to a vendor as part of their fees in exchange for services. The fair value of the Common Stock at the date of issuance was $ 7.45 per share. The stock-based compensation expense related to this Common Stock issuance was $ 372,500 . Issuance of Stock Options under the 2019 Omnibus Plan. On August 20, 2021, the Company granted stock options to purchase 1,365,835 shares of Common Stock to the executive management team. 20% of the shares underlying the options awarded vested on the grant date, and the remaining 80% will 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 on which the options have been fully exercised. 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. 25 % of the shares underlying the options awarded vested on the grant date, and the remaining 75 % vest ratably over three 3 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 Xwhich the options are fully exercised. 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”), the Company accelerated the vesting of options scheduled to vest on the first and second anniversary of the grant date 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 (totaling 74,500 options) to one year following the Separation Date. The unvested portion of the 2021 Option Grant (totaling 49,667 options) was canceled. The modification was remeasured as of July 8, 2022, and the incremental difference totaled $181,154, net credit, due to the original exercise price of $7.74 being greater than the stock price of $1.80 on the remeasurement date, and accordingly was recognized on July 8, 2022. On June 21, 2022, the Company granted stock options to purchase 124,520 shares of Common Stock to the CEO. The options vest in three equal annual installments beginning on the first grant date anniversary. 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. During the fiscal year ended June 30, 2022, the Company granted stock options to purchase a total of 479,334 shares of Common Stock in connection with compensation packages of seven new employees. The exercise prices were based on each of respective the grant date fair values with vesting terms over a five years period and the options terminate on the earlier of tenth grant date anniversary or the date of which the options are fully exercised. On June 7, 2023, the Company granted stock options to purchase 148,000 shares of Common Stock to the certain employees. 20% of the shares underlying the options awarded vested on the grant date, and the remaining 80 % will vest in four equal annual installments beginning, on the first grant date anniversary. The exercise price of the options is $ 5.78 per share, the grant date fair value of the stock, and the options terminate on the earlier of the tenth grant date anniversary or the date of which the options are fully exercised. During the fiscal year ended June 30, 2023, the Company granted stock options to purchase a total of 286,167 share of Common Stock in connection with compensation packages of three new employees. The exercise prices were as of each respective grant date fair value with vesting terms over five year period and the options terminate on the earlier of tenth grant date anniversary or the date of which the options are fully exercised. 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 of Directors. F- 21 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 10. Equity Transactions (continued) Stock Warrants The following table summarizes the warrants activity during the years ended June 30, 2023 and 2022: 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, 2021 158,761 $ 10.37 3.1 $ 1,765,437 Granted 361,002 5.82 5.0 — Expired ( 9,391 ) 12.29 — — Exercised — — — — Outstanding and exercisable at June 30, 2022 510,372 $ 6.17 3.8 $ — Granted 7,272,728 1.82 5.0 — Expired ( 4,815 ) 75.00 — — Exercised ( 8,000 ) 2.25 — — Outstanding and exercisable at June 30, 2023 7,770,285 $ 2.06 4.0 $ 18,318,954 The total warrants outstanding at June 30, 2023 expire in the following fiscal years ending June 30 as follows: 101,380 in 2025; 35,175 expire in 2026; and 7,633,730 in 2027. 11. Leases Office Leases The Company paid an annual rent of $2,200 for its headquarters at 680 W Nye Lane, Suite 201, Carson City Nevada 897603. The rental agreement is for a one-year term and commenced on October 1, 2022. On February 26, 2022, the Company’s San Diego office relocated to 5090 Shoreham Place, San Diego, CA 92122. The term for the new office lease is 38 months and commenced on March 1, 2022. The monthly base rate of $4,175 began June 1, 2022, with annual increases of three percent. Total operating lease expense of approximately $ 52,000 and $ 89,000 for the year ended June 30, 2023 and 2022, respectively; were included in the accompanying statements of operations and comprehensive loss. The right-of-use asset, net and current and non current portion of the operating lease liabilities included in the accompany balance sheets at June 30 follows: Schedule of balance sheet information related to leases June 30, 2023 June 30, 2022 Assets Operating lease, right-of-use asset, net $ 80,789 $ 118,254 Liabilities Current portion of operating lease liabilities $ 44,909 $ 38,884 Operating lease liabilities, net of current portion 42,505 87,414 Total operating lease liabilities $ 87,414 $ 126,298 F- 22 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 11. Leases (continued) At June 30, 2023, 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 2024 $ 52,156 2025 44,636 Total minimum lease payments 96,792 Less amount representing interest ( 9,378 ) Present value of future minimum lease payments 87,414 Less current portion of operating lease liabilities ( 44,909 ) Operating lease liabilities, net of current portion $ 42,505 Total cash paid for amounts included in the measurement of lease liabilities were $ 50,600 and $ 4,175 for the years ended June 30, 2023 and 2022, respectively. The weighted average remaining lease term and discount rate as of June 30, 2023, and 2022 were as follows: Schedule of weighted average remaining lease term and discount rate June 30, 2023 June 30, 2022 Weighted average remaining lease term (Years) Operating leases 1.8 2.8 Weighted average discount rate Operating leases 10.75 % 10.75 % 12. Commitments and Contingencies Royalty Agreements Pursuant to the Agreement and Plan of Merger entered into on April 11, 2016, by and between our predecessor entities, LAT Pharma and NanoAntibiotics, Inc., the Company is obligated to pay a low single digit royalty on net sales of BIV201 (continuous infusion terlipressin) to be shared by the members of LAT Pharma Members, PharmaIn Corporation, and The Barrett Edge, Inc. Pursuant to the Technology Transfer Agreement entered into on July 25, 2016, by and between the Company and the University of Padova (Italy), the Company is obligated to pay a low single digit royalty on net sales of all terlipressin products covered by U.S. patent no. 9,655,645 and any future foreign issuances, capped at a maximum of $200,000 per year. 13. 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., The Company made contributions of approximately $ 171,900 and $ 121,000 , for the years ended June 30, 2023 and 2022, respectively. F- 23 BioVie Inc. Notes to Financial Statements For the Years Ended June 30, 2023 and 2022 14. Income Taxes Significant components of the Company’s deferred tax assets (liabilities) are as follows: Schedule of deferred tax assets June 30, 2023 June 30, 2022 Deferred tax assets (liabilities): Tax loss carryforward $ 4,018,817 $ 6,410,653 Intangible assets ( 189,854 ) ( 258,209 ) Stock based compensation 1,788,862 1,845,836 R&D capitalized 7,938,602 — Valuation Allowance ( 13,556,427 ) ( 7,998,280 ) Net deferred tax assets $ — $ — At June 30, 2023 and 2022, the Company has recorded a full valuation against its net deferred tax assets of approximately $ 13.6 million and $ 8.0 million, 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, 2023 and 2022 were approximately, $ 5.6 million and $ 6.0 million, respectively. At June 30, 2023, the Company had a Net Operating Loss (“NOL”) carryforward of approximately $ 168 million. NOL’s generated prior to 2018 have expiration dates ranging from 2032 to 2037 . The Company has no current tax expense due to its net losses and a full valuation allowance. 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, 2023 and 2022 is as follows: Schedule of effective income tax rate reconciliation 2023 2022 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 — — 15. Subsequent Events Subsequent to June 30, 2023 the Company sold 336,089 shares of common stock for net proceeds of $ 1.6 million net of 3% commission and expenses totaling approximately $ 50,000 under the Sales Agreement with the Agent. F- 24