What changed in this filing

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Item 1. Financial Statements

2023-11-08 compared with 2023-05-12 · 507 added, 827 removed, 196 unchanged (87% of the section changed)

Financial Statements

Balance Sheets

Condensed Balance Sheets

September 30,

CURRENT ASSETS:

4 unchanged sentences

Total current assets

Operating lease right-of-use assets

Operating lease right-of-use assets, net

Intangible assets, net

Other assets, non-current

LIABILITIES AND STOCKHOLDERS’ EQUITY

1 unchanged sentence

Accounts payable and accrued expenses

Current portion of other liabilities

Other current liabilities

Current portion of operating lease liabilities

Current portion of Note payable, net of financing cost, unearned premium and discount of $ 1,108,932 at March 31, 2023

Current portion of note payable, net of financing cost, unearned premium and discount of $ 661,467 at September 30, 2023 and $ 894,926 at June 30, 2023

Warrant liabilities

1 unchanged sentence

Total current liabilities

Other liabilities, net of current portion

Operating lease liabilities, net of current portion

Note payable, net of current portion, financing cost, unearned premium and discount of $ 94,368 at March 31, 2023 and $ 2,861,314 at June 30, 2022

Note payable, net of current portion, financing cost, unearned premium and discount of $ 469,937 at September 30, 2023 and $ 227,270 at June 30, 2023

TOTAL LIABILITIES

5 unchanged sentences

0 shares issued and outstanding

Common stock,

$ 0.0001 par value;

800,000,000 shares authorized at March 31, 2023 and June 30, 2022, respectively;

36,153,911 shares issued of

which 36,131,311 shares outstanding at March 31, 2023 and 24,984,083 issued and outstanding at June 30,

Common stock, $ 0.0001 par value;

800,000,000 shares authorized at September 30, 2023 and June 30, 2023, respectively;

36,922,760 shares issued of which 36,899,880 shares are outstanding at September 30, 2023;

and 36,451,829 shares issued of which 36,428,949 shares outstanding at June 30, 2023;

Additional paid in capital

other comprehensive income

Accumulated other comprehensive income

Accumulated deficit

4 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes to unaudited condensed financial statements

Statements of Operations and Other Comprehensive Income

See accompanying notes to unaudited condensed financial

Condensed Statements of Operations and

Comprehensive Loss

Three Months Ended

Nine Months Ended

March 31, 2023

March 31, 2022

March 31, 2023

March 31, 2022

September 30, 2023

September 30, 2022

OPERATING EXPENSES:

5 unchanged sentences

( 8,834,338 )

( 34,103,655 )

( 17,961,126 )

OTHER EXPENSE (INCOME):

Change in fair value of derivative liabilities

( 1,168,804 )

Interest expense

Interest income

TOTAL OTHER EXPENSE, NET

$ ( 15,041,163 )

$ ( 7,040,644 )

TOTAL OTHER (INCOME) EXPENSE, NET

$ ( 10,710,464 )

3 unchanged sentences

$ ( 10,415,711 )

$ ( 41,143,876 )

$ ( 17,995,711 )

NET LOSS PER COMMON SHARE

2 unchanged sentences

$ ( 10,415,711 )

$ ( 41,143,876 )

$ ( 17,995,711 )

Other comprehensive income

Unrealized gain on investments for available-for-sale

Other comprehensive income

Other comprehensive loss

Reclassification of unrealized gains on available-for-sale investments upon settlement

Total other comprehensive loss

Comprehensive loss

1 unchanged sentence

$ ( 10,415,711 )

$ ( 41,127,371 )

$ ( 17,995,711 )

accompanying notes to unaudited condensed financial statements

Statements of Cash Flows

Nine Months Ended

March 31, 2023

March 31, 2022

See accompanying notes to unaudited condensed financial

Condensed Statements of Cash Flows

Three Months Ended

September 30, 2023

September 30, 2022

CASH FLOWS FROM OPERATING ACTIVITIES:

8 unchanged sentences

Accretion of loan premium

Realized gain on maturity of available-for sale

Change in operating lease right-of-use assets

Change in fair value of derivative liabilities

( 1,168,804 )

Change in operating assets and liabilities

Changes in operating assets and liabilities:

Prepaids and other assets

( 1,446,761 )

Accounts payable and accrued expenses

1 unchanged sentence

Other liabilities

( 1,159,768 )

Net cash used in operating activities

2 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of U.S.

Maturity of U.S.

Treasury Bills

( 12,504,943 )

Net cash used in investing activities

( 12,504,943 )

Net cash provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from issuance of common stock

Proceeds from note payable net of financing costs

Proceeds from exercise of stock options

Payment of note payable

( 2,500,000 )

Net proceeds from issuance of common stock - Related Party

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Net increase in cash and cash equivalents

3 unchanged sentences

Cash paid for interest

SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:

Right of use assets obtained in exchange for lease obligations

Treasury Bills

accompanying notes to unaudited condensed financial statements

Statements of Changes in Stockholders Equity

the periods July 1, 2021 through March 31, 2022

Comprehensive

Stockholders

Balance, June 30, 2021

$ 229,933,505

$ ( 224,885,422 )

Proceeds from issuance of common stock,net of cost of $2,224,992

Stock-based compensation – restricted stock units

Stock option based compensation

( 5,540,753 )

Balance, September 30, 2021

( 230,426,175 )

Stock-based compensation – restricted stock units

Stock option based compensation

( 5,414,317 )

Balance, December 31, 2021

( 235,840,492 )

Stock option based compensation

( 7,040,644 )

Balance, March 31, 2022

$ 252,833,422

$ ( 242,881,133 )

accompanying notes to unaudited condensed financial statements

Statements of Changes in Stockholders Equity

the periods July 1, 2022 through March 31, 2023

DISCLOSURE OF NONCASH INVESTING ACTIVITIES:

Reclassification of unrealized gains on available-for-sale investments upon settlement

See accompanying notes to unaudited condensed financial

Condensed Statements of Changes in Stockholders’

Treasury Stock

Comprehensive

6 unchanged sentences

Proceeds from issuance of common stock, net of costs of $368,370

Proceeds from issuance of common stock, net of costs

of $94,160 – Related Party

Proceeds from issuance of common stock, net of costs of $94,160

- Related Party

( 10,415,711 )

2 unchanged sentences

$ 267,343,509

Stock-based compensation – restricted stock units

Stock option based compensation

Cashless exercise of options

Cashless exercise of warrants

Proceeds from exercise of options

Proceeds from issuance of common stock, net of costs of $1,206,206

$ ( 261,385,601 )

Balance, June 30, 2023

$ 316,385,759

Balance, December 31, 2022

$ ( 301,225,705 )

Stock - based compensation - stock options

Stock-based compensation - restricted stock units

Issuance of restricted stock units

Stock option based compensation

Proceeds from issuance of common stock, net of costs of $118,891

Issuance of common stock from vesting of - restricted stock units

( 10,710,464 )

Unrealized gain on available-for-sale securities

Balance, March 31, 2023

Reclassification of unrealized gains on available for sale investments upon settlement

Balance, September 30, 2023

$ 319,480,409

$ ( 311,936,169 )

accompanying notes to unaudited condensed financial statements

to Condensed Financial Statements

the Three and Nine Months Ended March 31, 2023 and 2022

(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.

Company acquired the biopharmaceutical assets of NeurMedix, Inc.

(NeurMedix), a privately held clinical-stage pharmaceutical

company, in June 2021 (See Note 5 Related Party Transactions ).

The acquired assets included NE3107, a potentially selective inhibitor

of inflammatory extracellular single-regulated kinase(ERK) signaling that, based on animal studies, is believed to reduce

neuroinflammation.

NE3107 is a novel orally administered small molecule that is thought to inhibit inflammation-driven insulin resistance

and major pathological inflammatory cascades with a novel mechanism of action.

There is emerging scientific consensus that both inflammation

and insulin resistance may play fundamental roles in the development of Alzheimers Disease (AD) and Parkinsons 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.

In August 2021, the Company initiated the

FDA authorized potentially pivotal Phase 3 randomized, double-blind, placebo-controlled, parallel group, multicenter study to evaluate

NE3107 in subjects who have mild to moderate AD (NCT04669028).

The Company is targeting primary completion of this study in the fourth

quarter of calendar year 2023.

Phase 2 study of NE3107 in Parkinsons disease (PD (NCT05083260), completed in December was a double-blind, placebo-controlled,

See accompanying notes to unaudited condensed financial

Notes to Condensed Financial Statements

For the Three Months Ended September 30, 2023

Background Information

(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

The acquired assets included NE3107, a potentially selective inhibitor of inflammatory extracellular single-regulated

kinase (“ERK”) signaling that, based on animal studies, is believed to reduce neuroinflammation.

NE3107 is a novel

orally administered small molecule that is thought to inhibit inflammation-driven insulin resistance and major pathological

inflammatory cascades with a novel mechanism of action.

There is emerging scientific consensus that both inflammation and insulin

resistance may play fundamental roles in the development of Alzheimer’s 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.

Late in September 2023, the final patient completed

the last treatment at week 30 in the Company’s multicenter, randomized, double-blind, placebo-controlled Phase 3 study (NCT04669028)

of NE3107 in patients who have mild to moderate Alzheimer’s disease.

The database cleaning process remains underway, with the clinical

team resolving outstanding queries and entering final data into the electronic data system.

Final database lock, unblinding and subsequent

release of topline results is anticipated to occur during the fourth quarter of calendar year 2023.

The Company completed its Phase 2 study assessing

NE3107 in PD 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 PD participants treated with carbidopa/levodopa and NE3107.

45 patients with a defined

L-dopa off state were randomized 1:1 to placebo:NE3107 20 mg twice daily for 28 days.

This trial was launched with two

design objectives:

1) the primary objectives are safety and a drug-drug interaction study as requested by the FDA to demonstrate the

absence of adverse interactions of NE3107 with levodopa;

and 2) the secondary objective is to determine if preclinical indications of

promotoric activity and apparent enhancement of levodopa activity can be seen in humans.

Both objectives were met.

The Company continues

to process its findings from its completed NM201 study as it prepares for the next round of clinical studies in PD.

Neuroinflammation,

insulin resistance, and oxidative stress are common features in the major neurodegenerative diseases, including AD, PD, frontotemporal

lobar dementia, and Amyotrophic lateral sclerosis (ALS).

NE3107 is an oral small molecule, blood-brain permeable, compound with potential

anti-inflammatory, insulin sensitizing, and ERK-binding properties that may allow it to selectively inhibit ERK-, NFκB- and TNF-stimulated

inflammation.

NE3107s potential to inhibit neuroinflammation and insulin resistance forms the basis for the Companys work

testing the molecule in AD and PD patients.

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 AD, 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.

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.

Companys Orphan drug candidate BIV201 (continuous infusion terlipressin), with FDA Fast Track status is being evaluated

in a US Phase 2b study for the treatment of refractory ascites due to liver cirrhosis was paused in March 2023.

Data from the first

15 patients treated with BIV201 plus standard of care (SOC) resulted in a 34% reduction in ascites fluid during the 28 days after

treatment initiation compared to the 28 days prior to treatment (p=0.0046).

This improvement was significantly different from those

treated with SOC only who experienced a mean increase in ascites fluid of 3.1% (BIV201 vs.

Patients who completed the

treatment with BIV201 experienced a 53% reduction in ascites fluid (p=0.001), which was significantly different from those treated

with SOC (p=0.007).

This improvement was sustained in this group during the 3 months after treatment initiation as compared to the

3-month pre-treatment period (43% reduction, p=0.06).

Overall treatment appeared to be well tolerated.

There were no unexpected

serious adverse events and overall safety was consistent with the patient population.

The current trial (NCT04112199) evaluates the

efficacy of BIV201 combined with SOC, compared to SOC alone, for the treatment of refractory ascites.

Terlipressin was administered with a continuous low dose infusion via a portable pump in two 28-day treatment cycles.

endpoints are the incidence of complications of at least Grade 2 severity, and the change in cumulative ascites in the 12-week

period following randomization compared to a 12-week pre-treatment period.

The BIV201 trial planned to enroll 30 patients to be

treated in the home care setting.

The active agent is approved in the U.S.

and in about 40 countries for related complications of

advanced liver cirrhosis.

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’s Orphan Drug candidate BIV201

(continuous infusion terlipressin), has been granted Fast Track designation status by the U.S.

Food and Drug Administration (“FDA”),

is being evaluated and discussed after receiving guidance from the FDA regarding the design of Phase 3 clinical testing of BIV201 for

the treatment of ascites due to chronic liver cirrhosis.

BIV201 is administered as a patent-pending liquid formulation.

The Phase 2b 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 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

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., BioVie 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

Companys operations are subject to a number of factors that can affect its operating results and financial conditions.

include, but are not limited to:

the results of clinical testing and trial activities;

the Companys ability to obtain regulatory

approval to market its products;

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.

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:

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, if approved;

the Companys ability to negotiate favorable licensing or other manufacturing and

marketing agreements for its products, if approved;

and the Companys ability to raise capital to support its operations.

The Companys

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 March 31, 2023, the Company had working capital of $ 28 .0 million, cash and cash equivalents and US treasury bills totaling approximately $ 43.8 million, stockholders equity of approximately

$ 21.7 million, and an accumulated deficit of approximately $ 292 million.

The Company has not generated any revenue to date and no revenue

is expected in the foreseeable future.

The Companys future operations are dependent on the success of the Companys ongoing

development and commercialization efforts, as well as its ability to secure additional financing as needed.

Although our cash balance

may 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 Companys clinical programs, the Companys current planned operations to

meet certain goals and objectives project cash flows to be depleted within that period of time.

expects that future sources of funding may include sales of equity, obtaining loans, or other strategic transactions.

duration and spread of the COVID-19 pandemic and the long-term impact of COVID-19 and any variants on the financial markets and the overall

economy continue to be uncertain and cannot be predicted at this time.

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

for an extended period, the Companys ability to raise funds may be materially adversely affected.

management continues to pursue the Companys 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 Companys ability to continue as a going concern.

The financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

Accounting Policies

of Presentation – Interim Financial Information

unaudited interim condensed financial statements and related notes have been prepared in accordance with accounting principles generally

accepted in the United State of America (U.S.

GAAP) for interim financial information and with the instructions to Form

10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the SEC) for Interim Reporting.

they do not include all of the information and footnotes required by U.S.

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 September 30, 2023, the Company had working capital of approximately $ 9.6 million, cash and cash equivalents

totaling of approximately $ 21.2 million, stockholders’ equity of approximately $ 7.5 million, and an accumulated deficit of approximately

$ 311.9 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.

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.

Significant Accounting Policies

Basis of Presentation – Interim Financial Information

These unaudited interim condensed financial

statements and related notes have been prepared in accordance with accounting principles generally accepted in the United State of

America (“U.S.

GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of

Regulation S-X of the Securities and Exchange Commission (the “SEC”) for Interim Reporting.

Accordingly, they do not

include all of the information and footnotes required by U.S.

GAAP for complete financial statements.

The unaudited interim

condensed financial statements furnished reflect all adjustments (consisting of normal recurring accruals) that are, in the opinion of

management, considered necessary for a fair presentation of the results for the interim periods presented.

Interim results are not necessarily

indicative of the results for the full year.

The condensed balance sheet at June 30, 2022 was derived from audited annual financial statements

but does not contain all the footnote disclosures from the annual financial statements.

These unaudited interim condensed financial statements

should be read in conjunction with the Companys audited financial statements for the fiscal years ended June 30, 2022 and 2021

in our Annual Report on Form 10-K filed with the SEC on September 27, 2022.

For a summary of significant accounting policies, see the

Companys Annual Report on Form 10-K for the fiscal year ended June 30, 2022, filed with the SEC on September 27, 2022 (the 2022

loss per Common Share

net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted average number of

shares of Class A common stock, par value $ 0.0001 per share (common stock), outstanding during the period.

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 restricted stock units.

For the three and nine months ended

March 31, 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 period.

table below shows the number of outstanding stock options, warrants and restricted stock units as of March 31, 2023 and 2022:

condensed financial statements furnished reflect all adjustments (consisting of normal recurring accruals) that are, in the opinion

of management, considered necessary for a fair presentation of the results for the interim periods presented.

Interim results are

not necessarily indicative of the results for the full year.

The condensed balance sheet at June 30, 2023 was derived from audited

annual financial statements but does not contain all the footnote disclosures from the annual financial statements.

These unaudited

interim condensed financial statements should be read in conjunction with the Company’s audited financial statements for the

fiscal years ended June 30, 2023 and 2022 in our Annual Report on Form 10-K filed with the SEC on August 16, 2023 (the “2023 Form

A summary of significant accounting policies can also be found in those audited financial statements in the 2023 Form

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, par value $ 0.0001

per share (“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 restricted stock units.

For the three months ended September 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 September 30, 2023 and 2022:

Schedule of dilutive securities were excluded from the computation of diluted loss per share

March 31, 2023

March 31, 2022

September 30, 2023

September 30, 2022

Number of Shares

2 unchanged sentences

Restricted Stock Units

Accounting Pronouncements

Company considers the applicability and impact of all Accounting Standards Updates (ASUs).

There have been no recent ASUs

that are expected to have a material impact on the Companys balance sheets or statements of operations since the 2022 Form 10-K.

and cash equivalents

and cash equivalents consisted of cash deposits and money market funds held at a bank and funds held in a brokerage account which included

Recent Accounting Pronouncements

The Company considers the applicability and impact

of all Accounting Standards Updates (“ASUs”).

There have been no recent ASUs that are expected to have a material impact on

the Company’s balance sheets or statements of operations and comprehensive loss since the 2023 Form 10-K.

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 3 months or less.

Developments Affecting the Financial Services Industry and Concentration of Risk

of March 31, 2023 and December 31, 2022, the Company had cash deposited in certain financial institutions in excess of federally insured

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 Companys operations, if further

liquidity and financial stability concerns arise with respect to banks and financial institutions, either nationally or in specific regions,

the Companys 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.

Treasury Bills with original maturities of three months or less.

Investments in U.S.

Treasury Bills

Investments in U.S.

Treasury Bills with

maturities greater than 3 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 the statements of operations and other comprehensive income.

value measurement of assets and liabilities

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

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:

1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

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.

3 - Inputs are unobservable inputs based on our assumptions.

Treasury Bills with maturities

greater than three months, are accounted for as available for sale and are recorded at fair value.

Unrealized gain were included in other

comprehensive income in the accompanying statements of operations and comprehensive loss.

Upon the maturity and settlement of these investments,

realized gains were recorded as a component of interest income on the accompanying condensed statement of operations and comprehensive loss.

Concentration of Credit Risk in the Financial

Service Industry

As of September 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.

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, notes payable and other derivative liabilities (see Note 9).

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.

Investments in U.S.

Treasury Bills Available for Sale

following is a summary of the U.S.

Treasury Bills held at March 31, 2023:

The following is a summary of the U.S.

Bills held at June 30, 2023:

Schedule of U.S.

treasury bills held

Amortized Cost

Gross Unrealized

Total Accumulated

Unrealized Gain

Unrealized loss

Other Comprehensive Income

Comprehensive

Treasury Bills due is 3 - 6 months

Companys intangible assets consist of intellectual property acquired from LAT Pharma.

and are amortized over their estimated useful

following is a summary of the Companys intangible assets as of March 31, 2023 and June 30, 2022:

During the fiscal year ended June 30, 2023, the Company purchased a

total of approximately $ 46 million of U.S.

Treasury Bills during the year ended June 30, 2023.

All outstanding investments in U.S.

Bills available for sale held at June 30, 2023 matured during the three months ended September 30, 2023 and were settled, resulting in

a realized gain of $ 223,865 recorded as a component of interest income on the accompanying condensed statement of operations and comprehensive loss.

Intangible Assets

The Company’s intangible assets consist

of intellectual property acquired from LAT Pharma and are amortized over their estimated useful lives.

The following is a summary of the Company’s intangible assets:

Schedule of intangible assets

March 31, 2023

September 30, 2023

June 30, 2023

4 unchanged sentences

Intellectual Property, Net

expense was $ 57,344 in each of the three-month periods ended March 31, 2023 and 2022.

Amortization expense was $ 172,033 and $ 172,032

in each of the nine-month periods ended March 31, 2023 and 2022, respectively.

The Company amortizes intellectual property over the expected,

original useful lives of 10 years.

future amortization expense is as follows:

Amortization expense was $ 57,344 in each of the

three-month periods ended September 30, 2023 and 2022.

The Company amortizes intellectual property over the expected, original useful

lives of 10 years.

Estimated future amortization expense is as follows:

Schedule of future amortization expense

Year ending June 30, 2023 (Remaining three months)

Intellectual Property, Net

Party Transactions

Transactions with Acuitas

July 15, 2022, the Company entered into a securities purchase agreement with Acuitas Group Holdings, LLC (Acuitas), the Companys

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 Companys 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

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.

Acquisition with NeurMedix

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

On June 10, 2021, and pursuant to the terms of the APA, the Company issued to Acuitas (as NeurMedixs assignee) 8,361,308

shares of the Companys 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.

the Company was obligated to deliver contingent stock consideration to NeurMedix (or its successor) consisting of shares of the Companys

common stock having an aggregate value of up to $3.0 billion, subject to the achievement of certain clinical, regulatory and commercial

milestones related to the drug candidates to be acquired by the Company from NeurMedix, and subject to a cap limiting each issuance of

shares if such issuance would result in the beneficial ownership of NeurMedix and its affiliates exceeding 89.9999% of the Companys

issued and outstanding common stock.

Subject to the terms and conditions of the APA, as amended, the Company may now be obligated to

deliver contingent stock consideration to NeurMedix (or its successor) consisting of up to 18 million shares of the Companys common

stock, with 4.5 million shares issuable upon the achievement of each of the four milestones set forth in the APA, subject to a cap limiting

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

Companys issued and outstanding common stock.

current portion of other liabilities at March 31, 2023 and June 30, 2022 were $ 193,542 and $ 1.3 million, and included $ 193,542 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.

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,

(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 Companys 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 March 31, 2023 was 8.0 %.

The Loan is secured

by a lien upon and security interest in all of the Companys assets, including intellectual property, subject to agreed exceptions.

Year ending June 30, 2024 (Remaining 9 months)

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.

Other Liabilities

The current portion of other liabilities at June

30, 2023 was approximately $ 48,000 and represented the remaining balance of a retention bonus payable for arrangements with certain employees,

which was paid in July 2023.

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 September 30, 2023 was 8.50 % .

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.

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 Loans 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 Loans 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.

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 Companys common stock at a conversion price of $6.98 per share.

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 Loan Agreement required monthly interest-only

payments during the first eighteen months of the term of the Loan.

Following the interest-only period, on July 1, 2023, the Company pays

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

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.

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

The total interest expense of approximately $ 1.1 million for the three months ended March 31, 2023, was recognized in the accompanying

statements of operations and included the interest only payments totaling approximately $ 547,000 , the amortization of financing costs

of approximately $ 43,000 , unearned discount of approximately $ 400,000 and the accretion of loan premium of approximately $93,000.

total interest expense of approximately $ 3.2 million for the nine- months ended March 31, 2023, was recognized in the accompanying statements

of operations and included interest only payments totaling approximately $ 1.5 million, the amortization of financing costs of approximately

$128,000, unearned discount of approximately $ 1.2 million and the accretion of loan premium of approximately $ 329,000 .

carrying value of notes payable at March 31, 2022 was approximately $ 11.6 million, net of unearned discount of approximately $ 3.1 million,

unamortized direct costs of approximately $ 333,000 and accreted premium of approximately $ 94,000 in the accompanying balance sheets.

The total interest expense of approximately $ 919,000 and $ 1.2 million for the three and nine months ended March 31, 2022, respectively;

was recognized in the accompanying statements of operations.

The amortization of financing costs was approximately $ 43,000 and $ 57,000

for the three and nine months ended March 31, 2022, respectively.

The accretion of loan premium was approximately $ 71,000 and $ 94,000

for the three and nine months ended March 31, 2022, respectively.

of March 31, 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.

following is a summary of the Notes Payable as of March 31, 2023 and June 30, 2022:

portion of Notes Payable

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 $ 3.6 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 $ 1 million for the three months ended September 30, 2023, was recognized in the accompanying condensed statements

of operations and comprehensive loss and included the interest only payments totaling approximately $ 525,000 , the amortization of financing costs of approximately

$ 38,000 , unearned discount of approximately $ 356,000 and the accretion of loan premium of approximately $ 82,000 .

The total interest expense of approximately $ 1.1

million for the three months ended September 30, 2022;

was recognized in the accompanying condensed statements of operations and comprehensive loss and included

the interest payments totaling approximately $ 470,000 , the amortization of financing costs of approximately $ 43,000 , unearned discount

of approximately $ 400,000 and the accretion of loan premium totaled of approximately $ 144,000 .

As of September 30, 2023, the remaining principal

balance of $12.5 million under the Loan is payable in 15 monthly equal installments.

For the three months ended September 30, 2023, the

Company paid back $2.5 million of the original loan of $15 million.

The following is a summary of the Notes Payable as of September 30,

2023 and June 30, 2023:

Current portion of Notes Payable

Schedule of note payable

March 31, 2023

September 30, 2023

June 30, 2023

5 unchanged sentences

Current portion of Notes Payable, net of financing costs, unearned premiums and discount

portion of Notes Payable

March 31, 2023

Non-current portion of Notes Payable

September 30, 2023

June 30, 2023

2 unchanged sentences

Less unearned discount

( 2,735,802 )

Plus accretion of loan premium

Notes Payable, net of the current portion financing costs, unearned premiums and discount

future amortization expense and accretion of premium is as follows:

Estimated future amortization expense and accretion of premium is as

Schedule of estimated future amortization expense and accretion of premium

Unearned Discount

Debt Financing Costs

Loan accretion Premium

Debt Financing

Loan accretion

Year ending June 30, 2024 (Remaining 9 months)

Value Measurements

March 31, 2023 and June 30, 2022, the estimated fair value of derivative liabilities measured on a recurring basis are as follows:

Fair Value Measurements

At September 30, 2023 and June 30, 2023, 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

March 31, 2023

September 30, 2023

Derivative liability - Warrants

6 unchanged sentences

Total derivatives

following table presents the activity for liabilities measured at fair value using unobservable inputs for the nine months ended March

The following table presents the activity for

liabilities measured at fair value using unobservable inputs for the three months ended September 30, 2023:

Fair value, liabilities measured on recurring basis

Derivative liabilities - Warrants

Derivative liability - Conversion Option on Convertible Debenture

Balance at July 1, 2022

Derivative liabilities

Derivative liability -

Conversion Option

on Convertible

Balance at June 30, 2023

Additions to level 3 liabilities

1 unchanged sentence

Transfer in and/or out of Level 3

Balance at March 31, 2023

following table presents the activity for liabilities measured at fair value using unobservable inputs for the nine months ended March

Derivative liabilities - Warrants

Derivative liability - Conversion Option on Convertible Debenture

Balance at July 1, 2021

Balance at September 30, 2023

The following table presents the activity for

liabilities measured at fair value using unobservable inputs for the three months ended September 30, 2022:

Derivative liabilities

Derivative liability -

Conversion Option

on Convertible

Balance at June 30, 2022

Additions to level 3 liabilities

Change in fair value of level 3 liability

Change in in fair value of level 3 liability

Transfer in and/or out of Level 3

Balance at March 31, 2022

fair values of derivative liabilities for the Avenue Warrants and conversion option at March 31, 2023 in the accompanying balance sheet,

were approximately $2.0 million and approximately $2.6 million, respectively.

The total change in the fair value of the derivative liabilities

totaled approximately $366,000 and $4.2 million for the three and nine months ended March 31, 2023, respectively;

and accordingly, was

recorded in the accompanying statement of operations.

The assumptions used in the Black Scholes model to value the derivative liabilities

at March 31, 2023 included the closing stock price of $ 8.08 per share;

for the Avenue Warrants, the exercise price of $ 5.82 , remaining

term 3.7 year, risk free rate of 3.7 % and volatility of 83.7 %;

and for the embedded derivative liability of the conversion option, the

conversion price of $ 6.98 ;

remaining term 1.7 years, risk free rate of 4.35 % and volatility of 76.24 %.

liability – Avenue Warrants

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 Companys

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 Companys own

stock, and accordingly, were recorded as a derivative liability at fair value in the accompany balance sheet at March 31, 2023.

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 March 31,

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 ;

a risk free rate of 1.14 % and volatility of 74.4 %.

derivative liability – Conversion Option

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.

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 ;

Balance at September 30, 2022

The fair values of derivative liabilities for

the Avenue Warrants and the conversion option at September 30, 2023 in the accompanying condensed balance sheet, were approximately $622,000

and approximately $490,000, respectively.

The total change in the fair value of the derivative liabilities totaled approximately $708,000

for the three months ended September 30, 2023;

and accordingly, was recorded in the accompanying condensed statement of operations and comprehensive loss.

assumptions used in the Black Scholes model to value the derivative liabilities at September 30, 2023 included the closing stock price

of $ 3.41 per share;

for the Avenue Warrants, the exercise price of $ 5.82 , remaining term 3.2 years, risk free rate of 4.8 % and volatility

and for the embedded derivative liability of the conversion option, the conversion price of $ 6.98 ;

remaining term 1.17 years,

risk free rate of 5.39 % and volatility of 93.0 % .

of March 31, 2023, investments in U.S.

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 condensed balance sheet at September 30, 2023.

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 September 30, 2023.

Embedded derivative liability – Conversion

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 Avenue

Loan amount funded.

Financial assets

As of September 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.

The following table presents information about

our assets that are measured at fair value on a recurring basis.

Measured at fair value on a recurring basis

Fair Value Measurements at

March 31, 2023

Cash and cash equivalent

Treasury Bills due in 3 months or less

Treasury Bills due in 3 - 6 months

September 30, 2023

Treasury Bills due in 3 months or less at purchase

Treasury Bills due in 3 - 6 months at purchase

Fair Value Measurements at

June 30, 2023

Cash and cash equivalent

Treasury Bills due in 3 months or less

Treasury Bills due in 3 - 6 months

following table summarizes the activity relating to the Companys stock options for the nine months ended March 31, 2023:

Schedule of summarizes the activity relating to the Company’s stock options

Weighed-Average Exercise Price

Weighted Remaining Average Contractual Term

Aggregate Intrinsic Value

Outstanding at June 30, 2022

Options Expired

Options Canceled

Options Exercised

Outstanding at March 31, 2023

Exercisable at March 31, 2023

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 nine months ended March 31, 2023 and 2022:

Schedule of assumptions used

life of options (In years)

free interest rate

volatility is based on the historical volatilities of the daily closing price of the common stock of three comparable companies 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.

total stock option-based compensation expense for three-month ended March 31, 2023 and 2022 was of $ 888,998 and $ 930,334 , respectively

and for the nine months ended March 31,2023 and 2022 was $ 3,480,425 and $ 4,004,718 , respectively.

following is a summary of stock options outstanding and exercisable by exercise price as of March 31, 2023:

Schedule of summary of stock options outstanding and exercisable

Exercise Price

Weighted Average Contract Life

of common stock for cash

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.

September 24, 2021, the Company issued 92,000 of its Class A common stock at $ 8.00 per share in connection with the underwriters

exercise of its over-allotment option in for the August 2021 registered public offering, resulting in net proceeds to the Company of

approximately $ 707,000 , net of issuance cost of approximately $ 29,000 .

August 31, 2022, the Company entered into a Controlled Equity Offering Sales Agreement (the Sales Agreement) with Cantor

Fitzgerald & Co.

Riley Securities, Inc.

(collectively, the Agents), pursuant to which the Company may issue

and sell from time-to-time shares of the Companys common stock through the Agents, subject to the terms and conditions of the

Sales Agreement.

Treasury Bills due in 3 months or less at purchase

Treasury Bills due in 3 - 6 months at purchase

Equity Transactions

Issuance of common stock for cash

On August 31, 2022, the Company entered into a

Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co.

Riley Securities,

(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.

Securities, Inc.

mutually agreed to terminate B.

Riley Securities,

Inc.’s role as a sales agent under the Sales Agreement.

During the three months ended March 31, 2023, the Company sold 1,515,078

shares of common stock under the Sales Agreement for total net proceeds of $ 9.8

million after 3 %

commissions and expenses of approximately $ 339,000 .

During the nine months ended March 31, 2023, the Company sold 7,372,691

shares of common stock under the Sales Agreement for total net proceeds of $ 48.2

million after 3 %

commissions and expenses of approximately $ 1.9

of common stock through exercise of stock options and warrants

the three months ended December 31, 2022, the Company issued 21,882 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 .

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.

October, 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 .

of restricted stock units for services

August 20, 2021, the Company awarded 58,759 restricted stock units (RSUs) to the Companys President and CEO under

the Companys 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 Companys 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 .

June 21, 2022, the Company awarded 124,520 RSUs to the President and CEO under the Companys 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 over three

years on the anniversary grant date.

The grant date fair value was $ 1.69 per share of the Companys common stock.

The stock-based

compensation expense related to these RSUs was $ 17,536 and $ 52,610 for the three and nine months ended March 31, 2023, respectively.

November 23, 2022, the Company awarded 506,496 RSUs to certain employees and a consultant, with a grant date fair value of $ 6.12 per

Twenty-five percent of these RSU 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 three months ended December 31, 2022, the stock-based compensation expense

related to these RSUs was $ 584,424 .

On February 16, 2023, the Company delivered the vested portion of the RSUs and issued 72,612

shares of common stock net of 25 % withholding.

22,800 shares issued to employees were withheld in Treasury stock in exchange for payment

of withholding tax on behalf of the employees.

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 three months ended December 31, 2022.

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 three months ended December 31, 2022.

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 Companys 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 39,089 shares of common stock.

of Stock Options

August 20, 2021, the Company granted, under the 2019 Omnibus Plan, stock options to purchase 1,365,835 shares of common stock to the

executive management team.

Twenty percent 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.

February 1, 2022, the Company granted stock options to purchase 124,167 shares of common stock to a new employee.

Twenty percent ( 20 %)

of the shares underlying the options awarded vested on the grant date, and the remaining 80 % vest equally over a 5 -year period, on the

first, second, third, fourth and fifth anniversary of the grant date.

The exercise price is $ 3.20 per share, the grant date fair value,

and the options terminate on the tenth anniversary of the grant date.

the three months ended March 31, 2022, the Company granted, stock options to purchase shares of common stock totaling 273,167 to four

new employees.

to a former employee Separation Agreement, dated April 11, 2022, the Company modified a former employees 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.

December 6, 2022, stock options to purchase 10,000 shares of common stock were granted to new employees as part of their compensation

Twenty percent (20%) of the shares underlying the options awarded vest on the one-year anniversary of the grant date, and the

remaining 80% vest in equal monthly installments over 48 months.

The exercise price is $ 5.21 per share, the grant date fair value, and

the options terminate on the tenth anniversary of the grant date.

April 4, 2023, stock options to purchase 124,167 shares of common stock were granted to new employees as part of their compensation package.

Twenty percent ( 20 %) of the shares underlying the options awarded vest on the one-year anniversary of the grant date, and the remaining

80 % vest in equal monthly installments over 48 months.

The exercise price is $7.36 per share, the grant date fair value, and the options

terminate on the tenth anniversary of the grant date.

following table summarizes warrant activity during the nine months ended March 31, 2023:

Riley Securities, Inc.’s role as a sales agent under the Sales Agreement.

the three months ended September 30, 2023, the Company sold 432,201 shares of common stock under the Sales Agreement for total net proceeds

of $ 1.9 million after 3 % commissions and expenses of approximately $ 119,000 .

During the three months ended September 30, 2022, the Company

sold 1,544,872 shares of common stock under the Sales Agreement for total net proceeds of $ 5.9 million after 3 % commissions and expenses

of approximately $ 400,000 .

Stock Options

The following table summarizes the activity relating

to the Company’s stock options for the three months ended September 30, 2023:

Schedule of summarizes the activity relating to the Company’s stock options

Outstanding at June 30, 2023

Outstanding at September 30, 2023

Exercisable at September 30, 2023

The fair value of each option grant on the date

of grant is estimated using the Black-Scholes option.

No stock options were issued, expired, canceled or exercised during the three months ended September 30, 2023.

The total stock option-based compensation expense

for three-months ended September 30, 2023 and 2022 was of $ 808,027 and $ 878,640 , respectively.

Issuance of restricted stock units and options :

On November 23, 2022, the Company issued equity

awards for the board of directors’ annual compensation.

Four directors received restricted stick units (“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 three months ended December 31, 2022.

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 three months ended December 31, 2022.

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’

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 August 9, 2023,

the Company delivered the vested portion and issued 38,730 shares of common stock.

The following table summarizes vesting of restricted

common stock:

Schedule of vesting of restricted common stock

Unvested at June 30, 2023

Unvested at September 30, 2023

The total stock based compensation – restricted

stock expense for three-months ended September 30, 2023 and 2022 was of $ 380,834 and $ 17,537 , respectively.

Issuance of Stock Options under the 2019 Omnibus Plan.

On October 3, 2023, the Company granted stock

options to purchase 211,167 shares of Common Stock to new hire employees.

20 % of the shares underlying the options awarded vest on the

one-year anniversary of the grant date, and the remaining 80 % will vest in equal monthly installments over 48 months each month thereafter.

The exercise price of the options is $ 3.41 per share and the options terminate on the earlier of the tenth grant date anniversary or the

date of which the options are fully exercised.

Stock Warrants

The following table summarizes warrant activity during the three months

ended September 30, 2023:

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, 2023

Outstanding and exercisable at March 31, 2023

the above warrants, 101,380 expire in the fiscal year ending June 30, 2025, 35,175 expire in the fiscal year ending June 30, 2026, and

7,633,730 expire in the fiscal year ending June 30, 2027.

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.

February 26, 2022, the Companys 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 begins June 1, 2022, with annual increases of

three percent.

operating lease costs recognized in our statement of operations were approximately $ 13,000 and $ 23,000 for the three months ended March

31, 2023, and 2022, respectively;

and approximately $ 36,900 and $ 76,500 for the nine months ended March 31, 2023 and 2022, respectively.

following table provides balance sheet information related to leases as of March 31, 2023 and June 30, 2022:

Schedule of balance sheet information related to leases

March 31, 2023

Outstanding and exercisable at September 30, 2023

Of the above warrants, 101,380 expire in the fiscal

year ending June 30, 2025, 35,175 expire in the fiscal year ending June 30, 2026, and 7,633,730 expire in the fiscal year ending June

No warrants were granted, expired, or were exercised during the three months ended September 30, 2023.

The Company pays an annual rent of $2,200 for

its headquarters at 680 W Nye Lane, Suite 201, Carson City Nevada 897603.

The rental agreement was for a one-year term and commenced on

October 1, 2022 and has been subsequently renewed for another year at the same rate.

On February 26, 2022,

the Company’s San Diego office relocated to 5090 Shoreham Place, San Diego, CA 92122.

The term for the office lease is 38 months

and commenced on March 1, 2022.

The monthly base rate currently is $4,300, with annual increases of three percent.

Total operating lease

expense of approximately $ 13,000 and $ 13,000 for the three months ended September 30, 2023 and 2022, respectively;

were included in the

accompanying condensed statements of operations and comprehensive loss as a component of selling, general and administrative expenses.

The right-of-use asset,

net and current and non current portion of the operating lease liabilities included in the accompany condensed balance sheets are as follows:

Schedule of deferred tax assets

September 30, 2023

June 30, 2023

3 unchanged sentences

Total operating lease liabilities

March 31, 2023, the future estimated minimum lease payments under non-cancelable operating leases are as follows:

At September 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

5 unchanged sentences

Operating lease liabilities, net of current portion

cash paid for amounts included in the measurement of lease liabilities were $ 12,650 and $ 37,700 for the three and nine months ended March 31, 2023, respectively.

weighted average remaining lease term and discount rate as of March 31, 2023 and June 30, 2022 were as follows:

Total cash paid for amounts included in the measurement of lease liabilities

were $ 12,900 and $ 12,525 for the three months ended September 30, 2023 and 2022, respectively.

The weighted average remaining lease term and

discount rate as of September 30, 2023 and June 30, 2023 were as follows:

Schedule of weighted average remaining lease term and discount rate

March 31, 2023

September 30, 2023

June 30, 2023

3 unchanged sentences

Operating leases

and Contingencies

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.

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 US patent no.

and any future foreign issuances, capped at a maximum of $200,000 per year.

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).

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 employees contributions to the 401K Plan., The Company

made contributions of approximately $ 16,000 and $ 28,700 , for the three months ended March 31, 2023 and 2022, respectively and approximately

$ 80,100 and $ 75,100 , for the nine months ended March 31, 2023 and 2022, respectively.

to March 31, 2023 the Company sold 162,767

shares of common stock for net proceeds of $ 1.3 million

net of 3% commission and expenses totaling approximately $ 40,000

under the Sales Agreement with the Agent.

Managements Discussion and Analysis of Financial Condition and Results of Operations

report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and

Section 27A of the Securities Act of 1933, as amended.

Any statements contained in this report that are not statements of historical

fact may be forward-looking statements.

When we use the words intends, estimates, predicts,

potential, continues, anticipates, plans, expects, believes,

should, could, may, will or the negative of these terms or other comparable terminology,

we are identifying forward-looking statements.

Forward-looking statements involve risks and uncertainties, which may cause our actual

results, performance or achievements to be materially different from those expressed or implied by forward-looking statements.

factors include, among others:

our research and development activities and distributor channel;

compliance with regulatory requirements;

and our ability to satisfy our capital needs Although we believe that the expectations reflected in the forward-looking statements are

reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

are cautioned not to place undue reliance on the forward-looking statements in this report, which speak only as of the date of this report.

Except as may be required by applicable law, we do not undertake or intend to update or revise our forward-looking statements, and we

assume no obligation to update any forward-looking statements contained in this report as a result of new information or future events

or developments, except as required by law.

Thus, you should not assume that our silence over time means that actual events are bearing

out as expressed or implied in such forward-looking statements.

You should carefully review and consider the various disclosures we make

in this report and our other reports filed with the Securities and Exchange Commission (the SEC) that attempt to advise

interested parties of the risks, uncertainties and other factors that may affect our business.

following discussion of the Companys financial condition and the results of operations should be read in conjunction with the

Financial Statements and Notes thereto appearing elsewhere in this report.

(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.

Company acquired the biopharmaceutical assets of NeurMedix, Inc.

(NeurMedix), a privately held clinical-stage pharmaceutical

company, in June 2021 (See Note 5 Related Party Transactions ).

The acquired assets included NE3107, a potentially selective inhibitor

of inflammatory extracellular single-regulated kinase(ERK) signaling that, based on animal studies, is believed to reduce

neuroinflammation.

NE3107 is a novel orally administered small molecule that is thought to inhibit inflammation-driven insulin resistance

and major pathological inflammatory cascades with a novel mechanism of action.

There is emerging scientific consensus that both inflammation

and insulin resistance may play fundamental roles in the development of Alzheimers Disease (AD) and Parkinsons 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.

In August 2021, the Company initiated the

FDA authorized potentially pivotal Phase 3 randomized, double-blind, placebo-controlled, parallel group, multicenter study to evaluate

NE3107 in subjects who have mild to moderate AD (NCT04669028).

The Company is targeting primary completion of this study in the fourth

quarter of calendar year 2023.

Phase 2 study of NE3107 in Parkinsons disease (PD (NCT05083260), completed in December was a double-blind, placebo-controlled,

safety, tolerability, and pharmacokinetics study in PD participants treated with carbidopa/levodopa and NE3107.

45 patients with a defined

L-dopa off state were randomized 1:1 to placebo:NE3107 20 mg twice daily for 28 days.

This trial was launched with two

design objectives:

1) the primary objectives are safety and a drug-drug interaction study as requested by the FDA to demonstrate the

absence of adverse interactions of NE3107 with levodopa;

and 2) the secondary objective is to determine if preclinical indications of

promotoric activity and apparent enhancement of levodopa activity can be seen in humans.

Both objectives were met.

The Company continues

to process its findings from its completed NM201 study as it prepares for the next round of clinical studies in PD.

Neuroinflammation,

insulin resistance, and oxidative stress are common features in the major neurodegenerative diseases, including AD, PD, frontotemporal

lobar dementia, and Amyotrophic lateral sclerosis (ALS).

NE3107 is an oral small molecule, blood-brain permeable, compound with potential

anti-inflammatory, insulin sensitizing, and ERK-binding properties that may allow it to selectively inhibit ERK-, NFκB- and TNF-stimulated

inflammation.

NE3107s potential to inhibit neuroinflammation and insulin resistance forms the basis for the Companys work

testing the molecule in AD and PD patients.

NE3107 is patented in the United States, Australia, Canada, Europe and South Korea.

Companys Orphan drug candidate BIV201 (continuous infusion terlipressin), with FDA Fast Track status, that is being evaluated

in a US Phase 2b study for the treatment of refractory ascites due to liver cirrhosis was paused in March 2023.

Data from the first

15 patients treated with BIV201 plus standard of care (SOC) resulted in a 34% reduction in ascites fluid during the 28 days after

treatment initiation compared to the 28 days prior to treatment (p=0.0046).

This improvement was significantly different from those

treated with SOC only who experienced a mean increase in ascites fluid of 3.1% (BIV201 vs.

Patients who completed the

treatment with BIV201 experienced a 53% reduction in ascites fluid (p=0.001), which was significantly different from those treated

with SOC (p=0.007).

This improvement was sustained in this group during the 3 months after treatment initiation as compared to the

3-month pre-treatment period (43% reduction, p=0.06).

Overall treatment appeared to be well tolerated.

There were no unexpected

serious adverse events and overall safety was consistent with the patient population.

The current trial (NCT04112199) evaluates the

efficacy of BIV201 combined with SOC, compared to SOC alone, for the treatment of refractory ascites.

Terlipressin was administered with a continuous low dose infusion via a portable pump in two 28-day treatment cycles.

endpoints are the incidence of complications of at least Grade 2 severity, and the change in cumulative ascites in the 12-week

period following randomization compared to a 12-week pre-treatment period.

The BIV201 trial planned to enroll 30 patients to be

treated in the home care setting.

The active agent is approved in the U.S.

and in about 40 countries for related complications of

advanced liver cirrhosis.

of the three months ended March 31, 2023 to the three months ended March 31, 2022

The net loss for the three months ended March 31, 2023, was approximately

$15.0 million as compared to $7.0 million for the three months ended March 31, 2022.

The increase in net loss of approximately $8.0 million

was primarily due to increased operating expenses primarily attributed to increased clinical activities.

operating expenses for the three months ended March 31, 2023, were approximately $13.8 million as compared to $5.7 million for the three

months ended March 31, 2022.

The net increase of approximately $8.1 million for the three months ended March 31, 2023 was

due to an increase in research and development expenses of approximately $7.6 million due to increased clinical activities and an increase

in selling general and administrative expenses of approximately $406,000.

and Development Expenses

and development expenses were approximately $11.2 million and $3.6 million for the three months ended March 31, 2023, and 2022,

respectively.

The net increase of approximately $7.6 million, was comprised of an increase in clinical study activities of

approximately $7.1 million, and an increase in the clinical team and consultants’ compensation expense of approximately

$676,000 to support such increased clinical activities over the three months ended March 31, 2022, offset by Chemistry,

Manufacturing and Control expenses of approximately $188,000 and other research of $122,000.

increase in research and development expenses of approximately $6.7 million was primarily due to the Neuroscience NE3107 studies,

which were significantly more active during the three months ended March 31, 2023, compared to the three months ended March 31,

The Parkinsons Phase 2 study initiated in January 2022 reported top results and the Alzheimer Phase 3 study reached full

Our Orphan drug candidate BIV201s Phase 2b study, which was initiated in June 2021, accounted for approximately

$124,000 of the net increase in research and development expenses for three months ended March 31, 2023.

General and Administrative Expenses

general and administrative expenses were approximately $2.5 million and $2.1 million for the three months ended March 31, 2023, and 2022,

respectively.

The net increase of approximately $400,000 was primarily attributed to increased legal fees of $156,000 and other business

development and promotions of approximately $100,000 and an increase in compensation expense of approximately $129,000.

Income and Expense

expense, net was $1.3 million for the three months ended March 31, 2023 was comparable to other expense, net of $1.3 million for the three

months ended March 31, 2022.

Other expense, net was comprised of the change in fair value of the derivative liabilities which totaled

$366,000 and $386,000 and net interest expense of approximately $1.1 million and $918,000 for the three months ended March 31, 2023,

and 2022, respectively.

of the nine months ended March 31, 2023, to the nine months ended March 31, 2022

The net loss for the nine months ended March 31, 2023, was approximately

$41.1 million as compared to $18.0 million for the nine months ended March 31, 2022.

The increase in net loss of approximately $23.1 million

was primarily due to increased administrative expenses of approximately $2.5 million, increased clinical activities of approximately $13.5

million, an increase in other expense of approximately $7.0 million primarily attributed to the change in fair value of derivative liabilities

of approximately $5.3 million.

operating expenses for the nine months ended March 31, 2023, were approximately $34.1 million as compared to $18.0 million for the nine

months ended March 31, 2022.

The net increase of approximately $16.1 million during the nine months ended March 31, 2023,

was due to an increase in research and development expenses of approximately $13.6 million due to our increased clinical activities,

and an increase in selling general and administrative expenses of approximately $2.5 million.

and Development Expenses

and development expenses were approximately $25.0 million and $11.4 million for the nine months ended March 31, 2023, and 2022, respectively.

The net increase of approximately $13.6 million, was comprised of a net increase of $12.3 million from increased clinical activities,

offset by a decline in other development activities of approximately $354,000 an increase in Chemistry, Manufacturing and Control expense

of approximately $237,000, and an increase in clinical promotion and publications of approximately $237,000 and an increase compensation

expense of approximately $557,000 for the clinical team and consultants.

increase in research and development expenses of approximately $12.3 million was primarily due to the Neuroscience NE3107 studies, which were

significantly more active during the nine months ended March 31, 2023 compared to the nine months ended March 31, 2022.

The Parkinsons

Phase 2 study initiated in January 2022, reported its top-line data results, and the Alzheimer Phase 3 study is reached full enrollment.

Our Orphan drug candidate BIV201s Phase 2b study, which was initiated in June 2021, accounted for approximately $63,000 of the

net increase in research and development expenses for nine months ended March 31, 2023.

General and Administrative Expenses

general and administrative expenses were approximately $8.9 million and $6.4 million for the nine months ended March 31, 2023, and 2022,

respectively.

The net increase of approximately $2.5 million was primarily attributed to increased stock compensation expense of approximately

$2.0 million related to the board of directors annual compensation;

a net increase in legal, investor relations and other professional

fees totaling approximately $787,000, offset by decreased management compensation expense of approximately $198,000.

Income and Expense

Other expense, net was

$7.0 million compared to other expense, net of $35,000, for the nine months ended March 31, 2023 and 2022, respectively.

increase in other expenses of $7.0 million represented an increase in interest expense of approximately $2.0 million and the

change in fair value of the related derivative liabilities of approximately $5.3 million.

Resources and Liquidity

of March 31, 2023, the Company had cash and cash equivalents and US treasury bills totaling of approximately $43.8 million, working

capital of approximately $28.0 million, stockholders equity of approximately $21.7 million, and an accumulated deficit of

approximately $292.1 million.

In the three months ended March 31, 2023, the Company sold approximately 1.5 million shares of its

common stock under its Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co for

total net proceeds of approximately $9.8 million after 3% commissions and cost totaling approximately $339,000.

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

The Companys future operations are

dependent on the success of the Companys ongoing development and commercialization efforts, as well as its ability to secure additional

Management expects that future sources of funding may include sales of equity, obtaining loans, or other strategic

transactions.

duration and spread of the COVID-19 pandemic and the long-term impact of COVID-19 and any variants on the financial markets and the overall

economy continue to be uncertain and cannot be predicted at this time.

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

for an extended period, the Companys ability to raise funds may be materially adversely affected.

management continues to pursue the Companys 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 Companys ability to continue as a going concern.

The financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

Accounting Policies and Estimates

the nine-month period ended March 31, 2023, there were no significant changes to the Companys critical accounting policies as

identified in the Annual Report Form 10-K for the fiscal year ended June 30, 2022.

Accounting Pronouncements

Company considered the applicability and impact of recent accounting pronouncements and determined those to be either not applicable

or expected to have minimal impact on our balance sheets or statement of operations.

Quantitative and Qualitative Disclosures About Market Risk

applicable to smaller reporting companies.

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 US patent no.

9,655,645 and any future foreign issuances, capped

at a maximum of $200,000 per year.

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

$ 30,900 and $ 45,500 , for the three months ended September 30, 2023 and 2022, respectively.

Subsequent Events

Subsequent to September 30, 2023, the Company sold 819,935 shares of common

stock for net proceeds of $ 3.5 million net of 3% commission and expenses totaling approximately $ 105,000 under the Sales Agreement with

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

What changed 10-Q

Item 1. Financial Statements