What changed in this filing

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Item 1. Financial Statements

2024-11-13 compared with 2024-05-14 · 403 added, 591 removed, 408 unchanged (71% of the section changed)

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Condensed Balance Sheets

September 30,

CURRENT ASSETS:

Cash and cash equivalents

Investments in U.S.

Treasury Bills

Prepaids and other current assets

Prepaid and other current assets

Total current assets

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Accounts payable and accrued expenses

Other current liabilities

Current portion of operating lease liabilities

Current portion of note payable, net of financing cost, unearned premium and discount of $ 492,905 at March 31, 2024 and $ 894,926 at June 30, 2023

Warrant liabilities

Embedded derivative liability

Current portion of note payable, net of financing cost, unearned premium and discount of $ 820,242 at September 30, 2024 and $ 701,210 at June 30, 2024

Warrant liability

Total current liabilities

Operating lease liabilities, net of current portion

Note payable, net of current portion, financing cost, unearned premium and discount of $ 0 and $ 227,270 at March 31, 2024 and June 30, 2023, respectively.

TOTAL LIABILITIES

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Common stock, $ 0.0001 par value;

800,000,000 shares authorized at March 31, 2024 and June 30, 2023, respectively;

61,018,606 shares issued of which 60,969,846 shares are outstanding at March 31, 2024;

800,000,000 shares authorized at September 30, 2024 and June 30, 2024, respectively;

7,982,986 shares issued of which 7,956,660 shares are outstanding at September 30, 2024;

and 6,216,398 shares issued of which 6,190,072 shares outstanding at June 30, 2024

Additional paid in capital

Accumulated other comprehensive income

Accumulated deficit

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Three Months Ended

Nine Months Ended

March 31, 2024

March 31, 2023

March 31, 2024

March 31, 2023

September 30, 2024

September 30, 2023

OPERATING EXPENSES:

Amortization of intangible assets

Research and development expenses

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( 10,875,821 )

( 27,389,285 )

( 34,103,655 )

OTHER (INCOME) EXPENSE:

OTHER EXPENSE (INCOME):

Change in fair value of derivative liabilities

( 1,799,339 )

Interest expense

Interest income

TOTAL OTHER (INCOME) EXPENSE, NET

$ ( 8,067,830 )

$ ( 15,041,163 )

TOTAL OTHER EXPENSE (INCOME), NET

$ ( 4,152,032 )

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$ ( 10,710,464 )

$ ( 28,066,162 )

$ ( 41,143,876 )

NET LOSS PER COMMON SHARE

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$ ( 10,710,464 )

$ ( 28,066,162 )

$ ( 41,143,876 )

Other comprehensive (loss) income

Unrealized gain on investments for available-for-sale

Other comprehensive loss

Unrealized gain on available-for-sale investments

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

Total other comprehensive (loss) income

Total other comprehensive loss

Comprehensive loss

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$ ( 10,887,055 )

$ ( 28,242,753 )

$ ( 41,127,371 )

See accompanying notes to unaudited condensed financial

Condensed Statements of Cash Flows

Nine Months Ended

March 31, 2024

March 31, 2023

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 27,179,739 )

$ ( 41,143,876 )

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of intangible assets

Stock based compensation - restricted stock units

Stock based compensation expense - stock options

Amortization of financing costs

Accretion of unearned loan discount

Accretion of loan premium

Realized gain on maturity of available-for sale

Change in operating lease right-of-use assets

Gain on termination of operating lease

Change in fair value of derivative liabilities

( 1,799,339 )

Changes in operating assets and liabilities:

Prepaids and other assets

Accounts payable and accrued expenses

Operating lease liabilities

Other current liabilities

( 1,159,768 )

Net cash used in operating activities

( 23,938,485 )

( 28,965,321 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from (purchases of) U.S.

Treasury Bills

( 12,504,943 )

Net cash provided by (used in) investing activities

( 12,504,943 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from issuance of common stock

Payment of note payable

( 7,500,000 )

Proceeds from exercise of stock options

Net proceeds from issuance of common stock - Related Party

Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:

Right of use assets obtained in exchange for lease obligations

Unrealized gain on U.S.

Treasury Bills

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

Deemed dividend of ratchet adjustment to warrants

See accompanying notes to unaudited condensed financial

Condensed Statements of Changes in Stockholders’

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$ ( 301,225,705 )

Stock option based compensation

Stock-based compensation - stock options

Stock-based compensation - restricted stock units

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

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

Issuance of common stock from vesting of - restricted stock units

( 10,710,464 )

Relcassification of unrealized gains on available for sale investments upon settlement

Balance, September 30, 2023

$ 319,480,452

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

$ ( 311,936,169 )

( 15,687,002 )

Balance, December 31, 2022

( 277,072,603 )

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 $338,846

( 15,041,163 )

Unrealized gain on available-for-sale securities

Balance, March 31, 2023

$ 313,811,910

$ ( 292,113,766 )

Balance, June 30, 2024

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Stock-based compensation - restricted stock units

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

Issuance of common stock from vesting of - restricted stock units

Stock-based compensation - issuance of common stock for services rendered

Proceeds from issuance of common stock, net of costs of $747,408

Issuance of additional shares for fractional shares effected by the reverse split

Deemed dividend for ratchet adjustment to warrants

( 4,152,032 )

Reclassification of unrealized gains on available for sale investments upon settlement

Balance, September 30, 2024

$ 352,770,440

Stock - based compensation - stock options

Stock-based compensation - restricted stock units

Proceeds from issuance of common stock, net of costs of $258,254

Issuance of common stock from vesting of - restricted stock units

$ ( 338,709,734 )

See accompanying notes to unaudited condensed financial

Condensed Statements of Cash Flows

Three Months Ended

September 30, 2024

September 30, 2023

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 4,152,032 )

Balance, December 31, 2023

$ ( 10,710,464 )

Stock - based compensation - stock options

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of intangible assets

Stock based compensation - restricted stock units

Issuance of common stock from vesting of - restricted stock units

Proceeds from issuance of common stock, net of costs of $2,530,996

Deemed dividend for ratchet adjustment to warrants

Stock based compensation expense - stock options

Stock based compensation expense - issuance of common stock for services rendered

Amortization of financing costs

Accretion of unearned loan discount

Accretion of loan premium

Realized gain on maturity of available-for sale

Non-cash lease expense from right-of-use assets

Change in fair value of derivative liabilities

Changes in operating assets and liabilities:

Prepaid and other current assets

( 1,446,761 )

Accounts payable and accrued expenses

Operating lease liabilities

Other current liabilities

Net cash used in operating activities

( 3,579,456 )

Balance, March 31, 2024

( 12,177,049 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from (purchases of) U.S.

Treasury Bills (available-for-sale)

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from issuance of common stock

Payments of note payable

( 2,500,000 )

Net cash used in financing activities

Net change in cash and cash equivalents

( 3,820,393 )

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:

Reclassification of unrealized gains on U.S.

Treasury Bills (available-for-sale investments) upon settlement

Deemed dividend for ratchet adjustment to warrants

See accompanying notes to unaudited condensed financial

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

For the Three Months Ended September 30, 2024 and

Background Information

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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 by U.S.

and Parkinson’s disease (“PD”), and NE3107 could, if approved by the U.S.

Food and Drug Administration (“FDA”),

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In neurodegenerative disease, the Company’s

drug candidate NE3107 inhibits activation of inflammatory actions extracellular single-regulated kinase (“ERK”) and nuclear

factor kappa-light-chain-enhancer of activated B cells (“NFκB”) (including interactions with tumor necrosis factor (“TNF”)

signaling and other relevant inflammatory pathways) that lead to neuroinflammation and insulin resistance.

NE3107 does not interfere with

their homeostatic functions (e.g., insulin signaling and neuron growth and survival).

Both inflammation and insulin resistance are drivers

of AD and PD.

Alzheimer’s Disease (NCT05083260)

drug candidate Bezisterim (NE3107) inhibits activation of inflammatory actions extracellular single-regulated kinase (“ERK”)

and nuclear factor kappa-light-chain-enhancer of activated B cells (“NFκB”) (including interactions with tumor necrosis

factor (“TNF”) signaling and other relevant inflammatory pathways) that lead to neuroinflammation and insulin resistance.

NE3107 does not interfere with their homeostatic functions (e.g., insulin signaling and neuron growth and survival).

Both inflammation

and insulin resistance are drivers of AD and PD.

Alzheimer’s Disease

On November 29, 2023, the Company announced the analysis

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led the Company to exclude all patients from these sites and to refer the sites to the FDA Office of Scientific Investigations (“OSI”)

for further action.

After the patient exclusions, 81 patients remained in the Modified Intent to Treat population, 57 of whom were in

the Per-Protocol population which included those who completed the trial and were verified to take study drug from pharmacokinetic data.

for potential further action.

After the patient exclusions, 81 patients remained in the Modified Intent to Treat population, 57 of whom

were in the Per-Protocol population which included those who completed the trial and were verified to take study drug from pharmacokinetic

The trial was originally designed to be 80% powered

with 125 patients in each of the treatment and placebo arms.

The unplanned exclusion of so many patients has left the trial underpowered

for the primary endpoints.

In the Per-Protocol population, which included those patients who completed the trial and who were further

verified to have taken the study drug (based on pharmacokinetic data), an observed descriptive change from baseline appeared to suggest

a slowing of cognitive loss;

The unplanned exclusion of so many patients left the trial underpowered for

the primary endpoints.

In the Per-Protocol population, which included those patients who completed the trial and who were further verified

to have taken the study drug (based on pharmacokinetic data), an observed descriptive change from baseline appeared to suggest a slowing

of cognitive loss;

these same patients experienced an advantage in age deceleration vs.

placebo as measured by DNA epigenetic

Age deceleration is used by longevity researchers to measure the difference between the patient’s biological age, in this

case as measured by the Horvath DNA methylation Skin Blood Clock, relative to the patient’s actual chronological age.

was a non-primary/secondary endpoint, other-outcome measure, done via blood test collected at week 30 (end of study).

Additional DNA methylation

data continues to be collected and analyzed.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Background Information (continued)

Parkinson’s Disease (NCT05083260)

placebo as measured by DNA epigenetic change.

Age deceleration is used by longevity researchers to measure the difference between the patient’s biological age, in this case as

measured by the Horvath DNA methylation Skin Blood Clock, relative to the patient’s actual chronological age.

This test was a non-primary/secondary

endpoint, other-outcome measure, done via blood test collected at week 30 (end of study).

Additional DNA methylation data continues to

be collected and analyzed.

Parkinson’s Disease

The Phase 2 study of bezisterim (NE3107) for the treatment

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Department of Defense (“DOD”), awarded through the Peer Reviewed

Medical Research Program (“PRMRP”) of the Congressionally Directed Medical Research Programs (“CDMRP”).

can provide up to 2 years of non-dilutive funding for a Phase 2b clinical trial that will assess bezisterim (NE3107) for the treatment

of neurological symptoms that are associated with long COVID.

Medical Research Program of the Congressionally Directed Medical Research Programs.

In August 2024, U.S.

Army Medical Research and Development

Command, Office of Human Research Oversight (“OHRO”) approved the Company’s plan to evaluate bezisterim (NE3107) for

the treatment of neurological symptoms that are associated with long COVID.

and the FDA authorized our Investigational New Drug (“IND”)

application for bezisterim (NE3107) allowing us to study a novel, anti-inflammatory approach or the treatment of the debilitating neurocognitive

symptoms associated with long covid.

The Company anticipates the trial to commence by early 2025.

Long COVID is a condition in which symptoms of COVID-19,

the acute respiratory disease caused by the SARS-CoV-2 virus, persist for an extended period of time, generally three months or more.

The Centers for Disease Control recently reported that 6.8% of adults in the United States (more than 17 million individuals) currently

or previously had long COVID.

Symptoms, which include fatigue, cognitive dysfunction and sleep disturbances, are debilitating.

in quality of life and earnings and increased medical costs has an enormous economic impact estimated to be 3.7 trillion dollars.

there are no therapies proven effective for treatment.

Chronic inflammation is one of the main hypotheses

that researchers have proposed to explain the persistence of symptoms in long COVID.

Specifically in individuals with “brain fog,”

sustained systemic inflammation and persistent localized blood-brain-barrier (“BBB”) dysfunction are key physiological features.

Bezisterim (NE3107) permeates the BBB and has been shown to modulate inflammation via the activation of NF-kB, thus representing a novel

oral treatment targeting an underlying cause of long COVID symptoms.

Neuroinflammation, insulin resistance, and oxidative stress are common

features in the major neurodegenerative diseases, including AD, PD, frontotemporal lobar dementia, and Amyotrophic lateral sclerosis.

Bezisterim (NE3107) is an investigational 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.

(NE3107) potential to inhibit neuroinflammation and insulin resistance forms the basis for the Company’s work testing the molecule

in AD, PD, and long COVID patients.

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

The Company has been reimbursed approximately

$325,000 for the trial during the three months ended September 30, 2024.

Liver Disease Program

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of ascites due to chronic liver cirrhosis.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Background Information (continued)

While the active agent, terlipressin, is approved

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

The BIV201 development program was initiated by LAT

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on net sales of BIV201 (continuous infusion terlipressin) to be shared among LAT Pharma Members, PharmaIn Corporation, and The Barrett

Liquidity and Going Concern

The Company’s operations are subject to a number

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continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of

As of March 31, 2024, the Company had working capital of approximately $ 18.1 million, cash and cash equivalents of approximately

As of September 30, 2024, the Company had working capital of approximately $ 13.3 million, cash and cash equivalents of approximately

$ 20.0 million, stockholders’ equity of approximately $ 14.1 million, and an accumulated deficit of approximately $ 338.7 million.

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additional financing as needed.

Although our cash balance is projected to sustain operations over the next nine months from the balance

Projected cash flows could be extended beyond that period of time, if further measures are taken to delay planned expenditures in our research protocols and slow the progress in the Company’s

development and launch of next phase clinical programs, the Company’s current planned operations to meet certain goals and objectives.

Projected cash flows could be extended if further measures are taken to delay planned expenditures on

our research protocols and slow the progress in the Company’s development and launch of next phase clinical programs.

The future viability of the Company is largely dependent

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as a going concern.

The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Significant Accounting Policies

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audited financial statements for the fiscal years ended June 30, 2024 and 2023 in our Annual Report on Form 10-K filed with the SEC on

August 16, 2023 (the “2023 Form 10-K”).

A summary of significant accounting policies can also be found in those audited financial

statements in the 2023 Form 10-K.

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 and nine months ended March 31, 2024 and 2023, 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 March 31, 2024 and 2023:

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

March 31, 2024

March 31, 2023

Number of Shares

Stock Options

Restricted Stock Units

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.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Significant Accounting Policies (continued)

September 30, 2024 (the “2024 Form 10-K”).

A summary of significant accounting policies can also be found in those audited

financial statements in the 2024 Form 10-K.

Cash and cash equivalents

Cash and cash equivalents consisted of cash deposits

and money market funds held at banks and funds held in brokerage accounts which included a U.S.

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.

Bills with original maturities of three months or less.

Treasury Bills with original maturities of three months or less.

Investments in U.S.

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Investments in U.S.

Treasury Bills with

maturities greater than three months on the date of purchase, are accounted for as available for sale and are recorded at fair

Unrealized gains were included in other comprehensive (loss) income in the accompanying condensed 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.

Treasury Bills with maturities

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

Realized gains were included in the

accompanying condensed statements of operations and comprehensive loss from the settlement of available-for-sale investments during the

three months ended September 30, 2023.

The Company had no outstanding investment securities with original maturities of greater than three

months at the time of purchase as of and during the three months ended September 30, 2024.

Concentration of Credit Risk in the Financial Service

As of March 31, 2024, the Company had cash deposited

As of September 30, 2024, the Company had cash deposited

in certain financial institutions in excess of federally insured levels.

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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 and other current 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.

However, if 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

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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.

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

The carrying amounts of cash and accounts payable approximate their fair value, due to the short-term nature of these items.

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.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Investments in U.S.

Treasury Bills Available for Sale

The following is a summary of the U.S.

Treasury Bills

held at June 30, 2023:

Schedule of U.S.

treasury bills held

Amortized Cost Basis

Gross Unrealized Gain

Total Accumulated Other Comprehensive Income

Treasury Bills due in 3 - 6 months

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

purchased a total of approximately $ 46 million of U.S.

Treasury Bills.

All outstanding investments in U.S.

Treasury 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.

cash, accounts payable, the carrying value of the operating lease liabilities and notes payable.

The carrying amounts of cash and accounts

payable approximate their fair value, due to the short-term nature of these items.

The carrying amounts of notes payable and operating

lease liabilities approximate their fair values since they bear interest at rates which approximate market rates for similar debt instruments.

Net Loss per Common Share

Basic net loss per common share is computed by dividing

the net loss attributable to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the period.

Diluted net loss per common share is computed by dividing the net loss attributable to Common Stockholders by the weighted average number

of shares of Common Stock outstanding and potentially outstanding shares of Common Stock during the period to reflect the potential dilution

that could occur from common shares issuable through stock options, warrants, and convertible debentures.

For the three months ending

September 30, 2024 and 2023, such amounts were excluded from the diluted loss since their effect was considered anti-dilutive due to the

net loss for the periods presented.

The weighted average number of common shares outstanding

at September 30, 2024 of 6,398,360 includes the weighted average effect of the pre-funded warrants issued in connection with the September

2024 Offering, the exercise of which requires nominal consideration for the delivery of the shares of common stock (see Note 8).

The table below shows the potential shares of common

stock, presented based on amounts outstanding at each year end, which were excluded from the computation of diluted net loss per share

attributable to common stockholders because including them would have had an anti-dilutive effect:

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

September 30, 2024

September 30, 2023

Number of Shares

Stock Options

Restricted Stock Units

Notes payable conversion option

Reverse stock split

The company effected a 1:10 reverse split of the issued

and outstanding shares of its Class A commons stock which was approved by the board of directors after the approval obtained from shareholders

at a special meeting on July 29, 2024 which became effective on Nasdaq on August 6, 2024, 5 trading days after the shareholders’

approval was obtained.

All historical share and earnings per share amounts have been retroactively adjusted to reflect the split.

Grant program

The Company records

expenses related to the DOD long Covid Program as such expenses are incurred.

The reimbursement of such expenses is recognized upon receipt

of the reimbursement as a credit against the respective expense account.

Recent Accounting

Pronouncements

In November 2024, the

FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“DISE”), which will require additional disclosure of

the nature of expenses included in the income statement in response to longstanding requests from investors for more information about

an entity’s expenses.

The new standard requires disclosures about specific types of expenses included in the expense captions presented

on the face of the income statement as well as disclosures about selling expenses.

The new standard will be effective for public companies

for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

The requirements

will be applied prospectively with the option for retrospective application.

Early adoption is permitted.

The Company is currently evaluating

the impact of this accounting standard update on its financial statements.

Intangible Assets

The Company’s intangible assets consist of intellectual

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

The Company’s intangible assets consist of intellectual property

acquired from LAT Pharma, Inc.

and are amortized over their estimated useful lives.

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

Schedule of intangible assets

March 31, 2024

September 30, 2024

June 30, 2024

Intellectual Property

Less Accumulated Amortization

Accumulated Amortization

( 1,943,396 )

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Amortization expense was $ 57,344 in each of the three-month

periods ended March 31, 2024 and 2023.

Amortization expense was $ 172,033 in each of the nine-month periods ended March 31, 2024 and 2023.

periods ended September 30, 2024 and 2023.

The Company amortizes intellectual property over the expected original useful lives of 10 years.

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Year ending June 30, 2025 (Remaining 9 months)

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

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’s down round feature reduced the exercise price of the warrant to $1.00 per share on March

6, 2024 in connection with the offering further described in Note 10 as the Company sold stock at a price lower than the initial exercise price of the warrant.

The Company calculated the difference in fair value of the

warrants between the stated exercise price and the reduced exercise price and recorded $ 886,423

as a deemed dividend.

The fair value of the warrants were estimated using the Black Scholes Method with the following inputs, the

stock price of $ 1.07 ,

exercise price of $ 1.82

remaining term 3.4

years, risk free rate of 4.4 %

and volatility of 95.0 % .

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.

On July 15, 2022, the Company entered into a securities

purchase agreement with Acuitas Group Holdings, LLC (“Acuitas”), the Company’s largest stockholder, pursuant to which

Acuitas agreed to purchase from the Company, in a private placement, (i) an aggregate of 363,636 shares of the Company’s Common

Stock, at a price of $16.50 per share (the “PIPE Shares”), and (ii) a warrant to purchase 727,273 shares of Common Stock (“PIPE

Warrant Shares”), at an exercise price of $18.20, with a term of exercise of five years.

The down round feature reduced the exercise

price of the PIPE Warrant Shares to $10.00 per share on March 6, 2024 and again to $1.53 per share on September 25, 2024 in connection

with the offering further described in Note 8 as the Company sold stock at a price lower than its initial exercise price.

calculated the difference in fair value of the PIPE Warrant Shares between the stated exercise price and the reduced exercise price and

recorded $ 325,041 as a deemed dividend in the accompanying condesnsed statement of changes in stockholders’ equity.

The fair value

of the PIPE Warrant Shares were estimated using the Black Scholes Method with the following inputs, the stock price of $ 1.20 , exercise

price of $ 1.53 and $ 10.00 , remaining term of 2.9 years, risk free rate of 3.5 % and volatility of 93.0 % .

Notes Payable

11 unchanged sentences

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, 2024 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 prime rate on September 30, 2024, 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.

10 unchanged sentences

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

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Notes Payable (continued)

Tranche 2, which amounts to $850,000 (the “Loan Premium”).

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.

Common Stock at a conversion price of $69.80 per share (the “Conversion Option”).

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.

warrants to purchase 36,101 shares of Common Stock of the Company (the “Avenue Warrants”) at an exercise price per share equal

The Avenue Warrants are exercisable until November 30, 2026.

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 being recognized

on an effective interest method over the term of the Loan.

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 the Loan Premium of $ 850,000

are being amortized using the effective interest method over the term of the Loan.

The adjusted effective interest rate is 24%.

The total interest expense of approximately $ 629,000

and $ 1.1 million for the three months ended March 31, 2024 and 2023, respectively, was recognized in the accompanying condensed statements

of operations and comprehensive loss.

Interest expense for the three months ended March 31, 2024 and 2023 included the interest payments

totaling approximately $ 327,000 and $ 547,000 , the amortization of financing costs of approximately $ 24,000 and $ 43,000 , unearned discount

of approximately $ 222,000 and $ 400,000 and the accretion of loan premium of approximately $ 52,000 and $ 93,000 , respectively.

interest expense of approximately $ 2.5 million and $ 3.2 million for the nine months ended March 31, 2024 and 2023, respectively, was recognized

in the accompanying condensed statements of operations and comprehensive loss.

Interest expense for the nine months ended March 31, 2024

and 2023 included interest payments totaling approximately $ 1.3 million and $ 1.5 million, the amortization of financing costs of approximately

$ 92,000 and $ 128,000 , unearned discount of approximately $ 867,000 and $ 1.2 million and the accretion of loan premium of approximately

$ 201,000 and $ 329,000 , respectively.

As of March 31, 2024, the remaining principal balance

of $7.5 million under the Loan is payable in 9 monthly equal installments.

For the three and nine months ended March 31, 2024, the Company

paid back $2.5 million and $7.5 million respectively, of the original loan of $15 million.

The following is a summary of the Notes Payable as of March 31, 2024 and

June 30, 2023:

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Notes Payable (continued)

Total interest expense associated with this loan was approximately $ 252,000 , which is reflected as a component of interest expense on the accompanying

condensed statements of operations and comprehensive loss for the three months ended September 30, 2024.

Interest expense associated with

this loan was comprised of interest incurred on the outstanding principal of the loan of approximately $ 132,000 , amortization of financing

costs of approximately $ 9,500 , amortization of the unearned discount of $ 89,000 , and the accretion of the Loan Premium of approximately

Total interest expense for the three months ended

September 30, 2023 was approximately $ 1 million on the accompanying condensed statements of operations and comprehensive loss.

expense was comprised of interest incurred on the outstanding principal of the loan of approximately $ 525,000 , amortization of financing

costs of approximately $ 38,000 , amortization of the unearned discount of approximately $ 356,000 and the accretion of Loan Premium of approximately

As of September 30, 2024, the remaining principal

balance of $ 2.5 million under the Loan is payable in 3 monthly equal installments.

For the three months ended September 30, 2024, 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, 2024

and June 30, 2024:

Current portion of Notes Payable

Schedule of note payable

March 31, 2024

September 30, 2024

June 30, 2024

Current portion of Notes Payable

Less debt financing costs

Less unearned discount

( 1,023,145 )

Plus accretion of loan premium

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

Non-current portion of Notes Payable

March 31, 2024

June 30, 2023

Notes Payable

Less debt financing costs

Less unearned discount

Plus accretion of loan premium

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

Estimated future amortization expense and accretion of premium and discount

is as follows:

debt financing costs

unearned discount

accretion of Loan Premium

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

Estimated future amortization expense and accretion of Loan Premium are

Schedule of estimated future amortization expense and accretion of premium

1 unchanged sentence

Debt Financing Costs

Loan accretion Premium

Year ending June 30, 2025 (Remaining 9 months)

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Fair Value Measurements

At March 31, 2024 and June 30, 2023, the estimated

fair value of derivative liabilities measured on a recurring basis are as follows:

At September 30, 2024 and June 30, 2024, 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, 2024

September 30, 2024

Derivative liability - Warrants

Derivative liability - Conversion option on note payable

Total derivatives

Derivative liability - Conversion Option

Total derivative liabilities

Fair Value Measurements at

1 unchanged sentence

Derivative liability - Warrants

Derivative liability - Conversion option on note payable

Total derivatives

The following table presents the activity for liabilities

measured at fair value using unobservable inputs for the nine months ended March 31, 2024:

Derivative liability - Conversion option

Total derivative liabilities

The following table presents the activity for level 3 liabilities measured

at fair value using unobservable inputs for the three months ended September 30, 2024:

Fair value, liabilities measured on recurring basis

5 unchanged sentences

Additions to level 3 liabilities

Change in in fair value of level 3 liabilities

Change in fair value of level 3 liabilities

Transfer in and/or out of Level 3

Balance at March 31, 2024

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Fair Value Measurements (continued)

The following table presents the activity for liabilities

measured at fair value using unobservable inputs for the nine months ended March 31, 2023:

Derivative liabilities -

Balance at September 30, 2024

The following table presents the activity for level 3 liabilities measured

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

Derivative liability -

Conversion Option on

Convertible Debenture

Derivative liability -

Conversion Option

Balance at June 30, 2023

Additions to level 3 liabilities

Change in in fair value of level 3 liabilities

Change in fair value of level 3 liabilities

Transfer in and/or out of level 3

Balance at March 31, 2023

Balance at September 30, 2023

The fair values of derivative liabilities for the

Avenue Warrants and the conversion option of the Note at March 31, 2024 in the accompanying condensed balance sheet, were approximately

$21,000 and approximately zero, respectively.

The total change in the fair value of the derivative liabilities totaled approximately $109,000

and $1.8 million for the three and nine months ended March 31, 2024, respectively;

and accordingly, was recorded in the accompanying condensed

statement of operations and comprehensive loss.

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

March 31, 2024 included the closing stock price of $ 0.53 per share;

Avenue Warrants and Conversion Option at September 30, 2024, in the accompanying condensed balance sheets, were approximately $1,300 and

approximately zero, respectively.

The total change in the fair value of the derivative liabilities totaled approximately $2,500 and $708,000

for the three months ended September 30, 2024 and 2023, respectively;

and accordingly, was recorded in the accompanying condensed statements

of operations and comprehensive loss.

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

30, 2024 included the closing stock price of $ 1.20 per share;

for the Avenue Warrants, the exercise price of $ 58.20 , remaining term 2.2

2.7 years, risk free rate of 4.5 % and volatility of 93.0 % ;

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

price of $ 6.98 ;

remaining term 0.67 years, risk free rate of 5.3 % and volatility of 104.0 % .

year, risk free rate of 3.7 % and volatility of 91.0 % ;

and for the Conversion Option, the conversion price of $ 69.80 ;

remaining term of

2 months, risk free rate of 4.8 % and volatility of 75.0 % .

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 accompanying condensed balance sheets at March 31, 2024 and June 30, 2023.

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 accompanying condensed

balance sheets at September 30, 2024 and June 30, 2024, respectively.

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 March 31, 2024 and June 30, 2023.

fair value of the derivative warrant to bifurcate the amount from the Avenue Loan amount funded.

The Avenue Warrants are recorded at their

fair values at the date of issuance and remeasured at each subsequent reporting period end date.

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.

The Conversion Option is accounted for as an embedded

derivative liability and required bifurcation from the Loan amount.

The Black Scholes model was used to calculate the fair value of the

Conversion Option to bifurcate it from the Loan.

Financial assets

As of March 31, 2024, investments in U.S.

As of September 30, 2024, investments in U.S.

Bills were valued through use of quoted prices and are classified as Level 1.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Fair Value Measurements (continued)

The following table presents information about our

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

The following table presents information about our assets

that are measured at fair value on a recurring basis using the above input categories.

Measured at fair value on a recurring basis

Fair Value Measurements at

March 31, 2024

September 30, 2024

Treasury Bills due in 3 months or less at purchase

2 unchanged sentences

Treasury Bills due in 3 months or less at purchase

Treasury Bills due in 3 - 6 months at purchase

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Equity Transactions

11 unchanged sentences

During the three

months ended March 31, 2024, the Company sold 4,384 shares of common stock under the Sales Agreement for total net proceeds of approximately

months ended September 30, 2024, the Company sold 2,143 shares of common stock under the Sales Agreement for total net proceeds of $ 6,400

after 3 % commissions and expenses of approximately $ 200 .

During the nine months ended March 31, 2024, the Company sold 3,337,487

shares of common stock under the Sales Agreement for total net proceeds of $ 9.3 million after 3 % commissions and expenses of approximately

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 million.

On March 6, 2024, the Company closed a best efforts

public offering (the “Offering”) of 15,000,000 shares (the “Shares”) of its common stock, par value $ 0.0001 per

share (the “Common Stock”), pre-funded warrants (the “Pre-funded Warrants”) to purchase 6,000,000 shares of Common

Stock, and warrants to purchase up to 10,500,000 shares of Common Stock (the “Common Warrants”) at a combined public offering

price of $ 1.00 per Share, or Pre-funded Warrant, and the associated Common Warrant.

The Common Warrants

have an exercise price of $1.50 per share and are immediately exercisable upon issuance for a period of five years following the date

The gross proceeds to the Company from the Offering were approximately $21.0 million, before deducting placement agent

fees and offering expenses of approximately $2.5 million.

Additionally, upon closing the Company issued the placement agent warrants (“Placement

Agent’s warrants”) to purchase 1,050,000 shares of Common Stock exercisable at a per share price of $1.25, which was equal

to 125% of the public offering price per share.

The Placement Agent’s Warrants are exercisable during a five-year period commencing

180 days from March 6, 2024.

During the three months ended September 30, 2023, the Company sold 43,220 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 .

On September 25, 2024, the Company closed a best

efforts public offering (the “September 2024 Offering”) of 1,360,800

shares of its common stock, par value $ 0.0001

per share, pre-funded warrants (the “September Pre-funded Warrants”) to purchase 600,000

shares of Common Stock, and warrants to purchase up to 1,960,800

shares of Common Stock (the “September Common Warrants”) at a combined public offering price of $ 1.53

per Share, or September Pre-funded Warrant, and the associated September Common Warrant.

265,000 September Pre-funded Warrants were

exercised in the three months ended September 30, 2024 and reflected on the condensed statement of changes in stockholders’ equity as a component of proceeds

from issuance of common stock.

The September Common Warrants have an

exercise price of $ 1.53

per share and are immediately exercisable upon issuance and will expire on the fifth anniversary date of the original issuance date.

gross proceeds to the Company from the September 2024 Offering were approximately $ 3.0

million, before deducting placement agent fees and offering expenses of approximately $747,000.

Additionally, upon closing, the

Company issued the placement agent warrants (“September Placement Agent’s Warrants”) to purchase 98,040

shares of Common Stock exercisable at a per share price of $1.91, which was equal to 125 %

of the public offering price per share.

The September Placement Agent’s Warrants are exercisable during a five-year period

commencing 180 days from September 25, 2024.

Issuance of common stock for services

On August 12, 2024, the Company awarded 15,000 shares

of Common Stock to a vendor as part of their fees in exchange for services.

The fair value of the Common Stock at the date of issuance

was $ 2.23 per share.

The stock-based compensation expense related to this Common Stock issuance was $ 33,450 .

Stock Options

The following table summarizes the activity relating

to the Company’s stock options for the nine months ended March 31, 2024:

The following table summarizes the activity relating to the Company’s

stock options for the three months ended September 30, 2024:

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

6 unchanged sentences

Options Expired

Options Canceled

Outstanding at March 31, 2024

Exercisable at March 31, 2024

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Equity Transactions (continued)

The fair value of each option grant on the date of

grant is estimated using the Black-Scholes option pricing model.

The pricing model reflects the following weighted-average assumptions

for the nine months ended March 31, 2024 and 2023:

Schedule of assumptions used

March 31, 2024

June 30, 2023

Expected life of options (in years)

Expected volatility

Risk free interest rate

Dividend Yield

The total stock based compensation expense from stock

options for the three-months ended March 31, 2024 and 2023 was of $ 690,921 and $ 888,998 , respectively and for nine-months ended March

31, 2024 and 2023 was of $ 2,118,649 and $ 3,480,425 , respectively.

Issuance and modification 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 stock 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 was 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 total stock compensation cost of these stock options of $ 791,700 was recognized as

stock compensation in the three months ended December 31, 2022.

The equity awards vest quarterly over the annual service period from November

9, 2023 to the next annual shareholders’ meeting.

While the agreements contain certain contractual vesting terms, there are circumstances

where the vesting can be accelerated that is not within the Company’s control and as a result, for accounting purposes, the awards

are assumed to have been fully vested on the grant date, accordingly, the Company recognized the total compensation cost of $ 1,744,192

on November 23, 2022.

Outstanding at September 30, 2024

Exercisable at September 30, 2024

The Company recorded stock based compensation expense

relating to the vesting of stock options of approximately $ 119,000 and $ 808,000 for the three months ended September 30, 2024 and 2023,

respectively.

Restricted stock units:

On November 9, 2023, the Company issued equity awards

for the board of directors’ annual compensation.

Four directors received restricted stock units (“RSUs”) to purchase

a total of 182,696 shares of common stock at the grant date fair value of $ 3.01 per share, a total cost of $ 137,479 and $ 215,383 was recognized

as stock compensation in the three and nine months ended March 31, 2024, respectively.

Two directors received stock options to purchase

183,250 shares of common stock at an exercise price of $ 3.01 per share.

The total stock compensation cost related to these stock options

of $ 83,837 and $ 118,303 was recognized in the three months and nine ended March 31, 2024 and 2023, respectively.

The equity awards vest

quarterly over the annual service period from November 9, 2023, on February 9, 2024, May 9, 2024, August 9, 2024 and earlier of November

9, 2024 or the next annual shareholders’ meeting.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Equity Transactions (continued)

In December 2023, the Company terminated five employees

and as part of their severance agreement modified their equity awards that had been granted pursuant to the 2019 Omnibus Plan.

The modifications

included the acceleration of certain tranche vesting of stock option awards to purchase a total of 56,233 shares of common stock (“Accelerated

Options”), effective on the December Separation Date, as defined in severance agreement (“Separation Date”);

the expiration date for one year from the Separation Date for both the Accelerated Options and any vested and unexercised stock options

held by the terminated employees as of the Separation Date.

Accordingly, the Company remeasured the modified awards based on the stock

price of $1.54 per share at the close on the Separation Date and a one-year life.

The net adjustment for both stock option modifications

was a net credit of $127,199 and was recognized as adjustment to stock compensation expense for the three months ended December 31, 2023.

The modification also included the acceleration of

an additional tranche vesting of 10,302 Restricted Stock Units, (“RSUs”) as of the Separation date.

The modified RSUs were

remeasured based on the stock price of $1.54 per share at close on the Separation Date and totaled $15,865, representing an additional

in stock-based compensation for the three months ended December 31, 2023.

The Company canceled 171,556 unvested stock options and 10,303

unvested RSUs.

Four directors received 18,270 RSUs with a grant date fair value of $ 30.10 per

In addition, two directors received stock options to purchase 18,325 shares of common stock at an exercise price of $ 30.10 per

share with a grant date fair value of $18.30 per share.

The equity awards vest quarterly on February 9, 2024, May 9, 2024, August 9, 2024

and earlier of November 9, 2024 or the next annual shareholders’ meeting.

During the three months ended September 30, 2024, 3,409

of these RSUs vested.

On July 25, 2024, Mr.

Gorlin resigned from the Board of Directors, and as a result, 1,159 of his RSUs were cancelled.

The following table summarizes vesting of restricted

4 unchanged sentences

Unvested at June 30, 2024

Unvested at March 31, 2024

Unvested at September 30, 2024

The total stock-based compensation expense from restricted

stock units for the three-months ended March 31, 2024 and 2023 was of $ 336,376 and $ 17,537 , respectively, and for the nine-months ended

March 31, 2024 and 2023 was $ 1,020,383 and $ 1,589,527 , respectively.

There were 45,675 RSU that vested on February 9, 2024

and the related shares of common stock were issued and delivered by March 31, 2024.

There were 101,833 RSUs that vested on the second

anniversary date of RSUs that were awarded on November 23, 2022 and 25,880 shares of common stock were withheld for federal income

tax withholdings;

and delivered on February 15, 2024.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Equity Transactions (continued)

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.

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 units for the three months ended September 30, 2024 and 2023 was approximately $ 301,000 and $ 381,000 , respectively.

Stock Warrants

The following table summarizes warrant activity during the nine months

ended March 31, 2024:

The following table summarizes the warrants activity during the three months

ended September 30, 2024:

Summary of warrants activity

4 unchanged sentences

Outstanding and exercisable at June 30, 2024

Outstanding and exercisable at March 31, 2024

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

2027 and 11,550,000 expire in the fiscal year ending June 30, 2029.

On March 6, 2024, the Company issued 11,550,000 warrants

at a weighted average exercise price of $1.48 as part of the Offering (see Note 10).

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

headquarters at 680 W Nye Lane, Suite 201, Carson City Nevada 89703.

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.

Outstanding and exercisable at September 30, 2024

Of the above warrants outstanding at September 30,

2024, 271 expire in the fiscal year ending June 30, 2025, 3,518 expire in the fiscal year ending June 30, 2026, 763,373 expire in the

fiscal year ending June 30, 2027, 1,155,000 expire in the fiscal year ending June 30, 2029 and 2,393,840 expire in the fiscal year ending

June 30, 2030.

As of September 30, 2024, the Company had 335,000

prefunded warrants, 3,882,962 warrants and 98,040 placement agent warrants outstanding.

Office Leases

The Company pays an annual rent of $ 2,200

for its headquarters at 680 W Nye Lane, Suite 201, Carson City Nevada 89703.

The rental agreement was for a 1 one-year term,

commenced on October 1, 2023, and has been subsequently renewed for another year at the same rate.

The Company’s San Diego office lease at 5090

Shoreham Place Suite 212, San Diego, CA 92122 which commenced on March 1, 2022, was for a term of 38 months with a base rate of $4,300,

and annual increases of three percent.

In February 2024, the Company amended the lease agreement which allowed the Company to vacate the

then current space and move to a larger space at Suite 206.

The current monthly base rate for the new office space is $9,685, with an

annual increase of four percent.

The term for the new office lease is 60 months and commenced on February 12, 2024.

The lease that was

in place for the 5090 Shoreham Place Suite 212 office was effectively extinguished upon the commencement of the new office space lease

on February 12, 2024, resulting in the write off of the corresponding remaining right-of-use asset and operating lease liability of $ 56,909

and $ 62,124 , respectively, and a gain to selling, general and administrative expenses of $ 5,215 for the three months ending March 31,

Shoreham Place Suite 212, San Diego, CA 92122 commenced in February 2024.

The current monthly base rate for the office space is $ 9,685 ,

with an annual increase of four percent.

The term for the office lease is 60 months.

Total operating lease expense for the three months

ended March 31, 2024 and 2023 of approximately $ 20,000 and $ 13,000 , respectively;

and for the nine months ended March 31, 2024 and 2023,

of approximately $ 46,000 and $ 37,000 respectively were included in the accompanying condensed statements of operations and comprehensive

loss as a component of selling, general and administrative expenses.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Leases (continued)

ended September 30, 2024 and 2023 of approximately $ 32,000 and $ 13,000 , 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:

portion of the operating lease liabilities included in the accompanying condensed balance sheets are as follows:

Schedule of deferred tax assets

March 31, 2024

September 30, 2024

June 30, 2024

Operating lease right-of-use asset, net

Current portion of operating lease liabilities

Operating lease liabilities, net of current portion

Total operating lease liabilities

At March 31, 2024, the future estimated minimum lease payments under non-cancelable

operating leases are as follows:

Current portion of operating lease liability

Operating lease liability, net of current portion

Total operating lease liability

At September 30, 2024, 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

3 unchanged sentences

Present value of future minimum lease payments

Less current portion of operating lease liabilities

Operating lease liabilities, net of current portion

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

liabilities for the three months ended March 31, 2024 and 2023, were $ 23,670 and $ 12,650 , respectively, and for the nine months ended

March 31, 2024 and 2023 were $ 49,470 and $ 37,700 , respectively.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Leases (continued)

Less current portion of operating lease liability

Operating lease liability, net of current portion

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

were $ 29,055 and $ 12,900 for the three months ended September 30, 2024 and 2023, respectively.

The weighted average remaining lease term and discount

rate as of March 31, 2024 and June 30, 2023 were as follows:

rate as of September 30, 2024 and June 30, 2024 were as follows:

Schedule of weighted average remaining lease term and discount rate

March 31, 2024

September 30, 2024

June 30, 2024

Weighted average remaining lease term (Years)

Operating leases

Operating lease

Weighted average discount rate

Operating leases

Operating lease

Commitments and Contingencies

13 unchanged sentences

3:24-cv-00035, was filed in the U.S.

District Court for the

District of Nevada, naming the Company and certain of its officers and/or directors as defendants.

On April 15, 2024 the court ordered

the motion to consolidate the six pending motions, appointed the lead plaintiff and approved selection of the lead counsel, now captioned

BioVie Inc., et al., Case 3:24-cv-0035 LRH-CSD and Way v.

BioVie Inc., et al., Case No.

2:24-cv-00361-LRH-CSD.

alleges that the Company made material misrepresentations and/or omissions of material fact relating to the Company’s business,

operations, compliance, and prospects, including information related to the study and trial of bezisterim (NE3107), in

violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder.

action is on behalf of purchasers of the Company’s securities during the period from August 5, 2021 through November 29, 2023 and

seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including attorney’s fees.

District Court for

the District of Nevada, naming the Company and certain of its officers as defendants.

On February 22, 2024, a second, related putative

securities class action was filed in the same court asserting similar claims against the same defendants, captioned Way v.

2:24-cv-00361.

On April 15, 2024, the court consolidated these two actions under the caption In re BioVie Inc.

Litigation , No.

3:24-cv-00035, appointed the lead plaintiff, and approved selection of the lead counsel.

On June 21, 2024, the lead

plaintiff filed an amended complaint, alleging that the defendants made material misrepresentations and/or omissions of material fact

relating to the Company’s business, operations, compliance, and prospects, including information related to the NM101 Phase 3 study

and trial of bezisterim (NE3107) in mild to moderate probable AD, in violation of Sections

10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder.

The class action is on behalf of purchasers

of the Company’s securities during the period from December 7, 2022 through November 28, 2023, and seeks unspecified monetary damages

on behalf of the putative class and an award of costs and expenses, including attorney’s fees.

The defendants filed a motion to

dismiss the amended complaint on August 21, 2024 , and plaintiffs filed their opposition

on October 21, 2024 .

The defendant’s reply brief is due December 5, 2024.

The Company believes the lawsuit is without merit

3 unchanged sentences

No adjustment or accruals have been reflected in the accompanying condensed financial statements.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended March 31, 2024

Employee Benefit Plan

4 unchanged sentences

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 for the three months ended

March 31, 2024 and 2023 of approximately $ 53,915 and $ 16,000 , respectively;

and for the nine months ended March 31, 2024 and 2023 of approximately

$ 105,000 and $ 80,100 , respectively.

match 5% of the first 5% of an employee’s contributions to the 401K Plan.

The Company made contributions into the plan of approximately

$ 34,500 and $ 30,900 , for the three months ended September 30, 2024 and 2023, respectively.

Subsequent Events

In October 2024, the Company closed three

registered direct offerings totaling 8,256,000

shares of its common stock, par value $ 0.0001 per

share, and two concurrent private placements of warrants to purchase up to 8,256,000 shares

of Common Stock (the “October Common Warrants”) priced at-the-market under Nasdaq rules at prices ranging from $ 1.50 to

share (the “October Offerings”) .

The October Common Warrants have exercise prices

ranging from $ 1.37 to

share and are exercisable beginning six months following issuance and will expire on the fifth anniversary date of the original

issuance dates.

The gross proceeds to the Company from the October Offerings totaled approximately $ 15.9 million,

before deducting placement agent fees and offering expenses of approximately $ 2.8 million.

Additionally, upon closing of the October Offerings the Company issued placement agent warrants (the “October Placement

Agent’s Warrants”) to purchase 412,800 shares of Common Stock in the aggregate exercisable at a per share price ranging

from $ 1.88 to

which was equal to 125% of the offering price per share in the applicable October Offering.

The October Placement Agent’s

Warrants are exercisable during a five-year period commencing 180 days from each of the respective closing dates of the October

Additionally in October, 1,216,300 of the common warrants from the September 2024 Offering were exercised at

$ 1.53 per share for proceeds totaling approximately $ 1.9 million.

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