Biovie Inc 10-Q for FY2020 Q2

Biovie Inc. (BIVI)

10-Q 2020-02-13 For: 2019-12-31

Added on April 09, 2026

About this 10-Q

Biovie Inc filed this 10-Q on February 13, 2020, covering the quarter ended December 31, 2019 (FY2020 Q2).

Headline figures

Quarter ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $6.67M; compared with a net loss of $500.51K a year earlier
Diluted EPS: $1.29; compared with -$0.20 a year earlier

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Nevada		46-2510769
(State or other jurisdiction of incorporation or organization)		(I.R.S. Empl. Ident. No.)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

Item 1.	Financial Statements	1
	Condensed Balance Sheets at December 31, 2019 (unaudited) and June 30, 2019	1
	Condensed Statements of Operations (unaudited) - for the three months and six months ended December 31, 2019 and 2018	2
	Condensed Statements of Cash Flows (unaudited) - for the six months ended December 31, 2019 and 2018	3
	Condensed Statements of Changes in Stockholders’ (Deficit) Equity (unaudited) - for the periods July 1, 2018 through December 31, 2018 and July 1, 2019 through December 31, 2019	4
	Notes to Unaudited Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20

Item 1.	Legal Proceedings	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	Mine Safety Disclosures	21
Item 5.	Other Information	21
Item 6.	Exhibits	22

SIGNATURES		23

	December 31,			June 30,
	2019			2019
ASSETS	(Unaudited)

CURRENT ASSETS:
Cash	$	3,108		$	339,923
Other assets		550,810			334,150
Total current assets		553,918			674,073

OTHER ASSETS:
Intangible assets, net		1,439,915			1,554,603
Goodwill		345,711			345,711
Total other assets		1,785,626			1,900,314

TOTAL ASSETS	$	2,339,544		$	2,574,387

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	1,085,177		$	443,480
Derivative liability - warrants		2,674,000			—
Derivative liability - conversion option on convertible debenture		573,200			—
Loan payable - related party		30,000
Convertible debenture - related party, net of discount $478,405 and $0 at December 31, 2019 and 2018, respectively		21,595			—
Total current liabilities		4,383,972			443,480

Commitments and contingencies (Note 8)

STOCKHOLDERS' (DEFICIT) EQUITY

Preferred stock; $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding		—			—
Common stock, $0.0001 par value; 800,000,000 shares authorized at December 31, 2019 and June 30, 2019, respectively; 5,183,724 and 4,058,724 shares issued and outstanding at December 31, 2019 and June 30, 2019, respectively		518			406
Additional paid in capital		19,472,373			9,392,573
Accumulated deficit		(21,517,319	)		(7,262,072	)
Total stockholders' (deficit) equity		(2,044,428	)		2,130,907

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	2,339,544		$	2,574,387

	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	December 31 2019			December 31, 2018			December 31 2019			December 31 2018

OPERATING EXPENSES:
Amortization		57,344		$	57,344			114,689		$	114,689
Research and development expenses		346,514			206,019			688,015			400,540
Selling, general and administrative expenses		306,589			237,507			613,961			477,069
TOTAL OPERATING EXPENSES		710,447			500,870			1,416,665			992,298

LOSS FROM OPERATIONS		(710,447	)		(500,870	)		(1,416,665	)		(992,298	)

OTHER (INCOME) EXPENSE :
Change in fair value of derivative liabilities		(7,396,192	)		—			(7,758,778	)		—
Gain on settlement of debt		—			—			—			(51,400	)
Interest expense		20,920			—			3,498,535			271
Interest income		(213	)		(360	)		(233	)		(788	)
TOTAL OTHER (INCOME) EXPENSE, NET		(7,375,485	)		(360	)		(4,260,476	)		(51,917	)


NET INCOME (LOSS)	$	6,665,038		$	(500,510	)	$	2,843,811		$	(940,381	)

Deemed dividends for commitment shares and rachet adjustments		—			—			17,099,058			48,659

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	6,665,038		$	(500,510	)	$	(14,255,247	)	$	(989,040	)

NET INCOME (LOSS) PER COMMON SHARE
- Basic	$	1.29		$	(0.20	)	$	(3.06	)	$	(0.40	)
- Diluted	$	1.29		$	(0.20	)	$	(3.06	)	$	(0.40	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
- Basic		5,183,724			2,520,429			4,661,183			2,497,457
- Diluted		5,183,724			2,520,429			4,661,183			2,497,457

	Six Months Ended			Six Months Ended
	December 31, 2019			December 31, 2018

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	2,843,811		$	(940,381	)
Adjustments to reconcile net loss to net cash to cash used in operating activities:
Amortization of intangible assets		114,689			114,689
Stock based compensation expense		11,162			19,697
Gain on settlement of debt		—			51,400
Interest expense from convertible debenture		3,497,264			—
Change in fair value of derivative liabilities		(7,758,778	)		—
Changes in operating assets and liabilities
Other assets		(216,660	)		—
Accounts payable and accrued expenses		641,697			(456,422	)
Net cash used in operating activities		(866,815	)		(1,211,017	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt		—			(244,300	)
Proceeds from issuance of preferred shares		—			3,040,000
Proceeds from loan payable - related party		30,000
Proceeds from convertible debenture - related party		500,000			—
Net cash provided by financing activities		530,000			2,795,700

Net (decrease) increase in cash		(336,815	)		1,584,683

Cash, beginning of period		339,923			45,800

Cash, end of period	$	3,108		$	1,630,483

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	1,272		$	—
Cash paid for taxes	$	—		$	—

SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
Conversion of preferred shares to common stock	$	—		$	3,200,000
Settlement of debt by issuance of common stock and forgiveness of debt	$	—		$	1,150,135
Cashless exercise of warrants	$	—		$	224
Deemed dividends for ratchet adjustments to warrants	$	—		$	48,659
Deemed dividends for commitment shares	$	17,099,058			—
Stock warrants classified as derivative liability	$	7,530,308			—

																	Total
											Additional						Stockholders’
	Preferred Stock						Common Stock				Paid in			Accumulated			Equity
	Shares			Amount			Shares		Amount		Capital			Deficit			(Deficit)

Balance, June 30, 2018		—		$	—			788,026	$	79	$	4,880,246		$	(4,769,126	)	$	111,199

Issuance of preferred stock in a private placement		2,133,332			3,200,000			—		—		3,200,000			—			3,200,000

Conversion of preferred stock to common stock		(2,133,332	)		(3,200,000	)		1,706,666		171		(171	)		—			—

Issuance of shares in exchange for debt settlement		—			—			7,804		1		1,150,134			—			1,150,135

Stock option compensation		—			—			—		—		3,412			—			3,412

Cashless exercise of warrants		—			—			17,935		2		(2	)		—			—

Deemed dividends for ratchet adjustment to warrants		—			—			—		—		48,659			(48,659	)		—

Net loss for the three months ended September 30, 2018		—			—			—		—		—			(439,871	)		(439,871	)

Balance, September 30, 2018		—			—			2,520,431		253		9,282,278			(5,257,656	)		4,024,875

Stock option compensation		—			—			—		—		16,285			—			16,285

Net loss for the three months ended December 31, 2018		—			—			—		—		—			(500,510	)		(500,510	)

Balance, December 31, 2018		—		$	—			2,520,431	$	253	$	9,298,563		$	(5,758,166	)	$	3,540,650



Balance June 30, 2019		—		$	—			4,058,724		406		9,392,573		$	(7,262,072	)	$	2,130,907

Issuance of commitment shares		—			—			1,125,000		112		10,068,638			—			10,068,750

Deemed dividend for commitment shares		—			—			—		—		—			(17,099,058	)		(17,099,058	)

Net loss for the three months ended September 30, 2019		—			—			—		—		—			(3,821,227	)		(3,821,227	)

Balance, September 30, 2019		—			—			5,183,724		518		19,461,211			(28,182,357	)		(8,720,628	)

Stock option compensation		—			—			—		—		11,162			—		$	11,162

Net income for the three months ended December 31, 2019		—			—			—		—		—			6,665,038			6,665,038

Balance, December 31, 2019		—		$	—			5,183,724	$	518	$	19,472,373		$	(21,517,319	)	$	(2,044,428	)

	December 31, 2019		December 31, 2018
	Number of Shares		Number of Shares
Stock Options		60,400		44,400
Warrants		1,374,667		1,731,525
Total		1,435,067		1,775,925

	December 31, 2019			June 30, 2019

Intellectual Property	$	2,293,770		$	2,293,770
Less Accumulated Amortization		(853,855	)		(739,167	)
Intellectual Property, Net	$	1,439,915		$	1,554,603

Year ending June 30, 2020 (Remaining six months)	$ 114,689
2021	229,377
2022	229,377
2023	229,377
2024	229,377
2025	229,377
Thereafter	178,341
	$ 1,439,915

	Fair Value Measurements at
	December 31, 2019
	Level 1		Level 2		Level 3		Total

Derivative liability - Warrants	$	—	$	—	$	2,674,000	$	2,674,000
Derivative liability -Conversion option on convertible debenture		—		—		573,200		573,200
Total derivatives	$	—	$	—	$	3,247,200	$	3,247,200

	Derivative liabilities - Warrants			Derivative liability - Conversion Option on Convertible Debenture

Beginning balance at July 1, 2019	$	—		$	—
Additions to level 3 liabilities		8,367,012			2,638,966
Change in in fair value of level 3 liability		(257,288	)		(105,298	)
Transfer in and/or out of Level 3		—			—
Balance at September 30, 2019		8,109,724			2,533,668
Additions to level 3 liabilities		—			—
Change in in fair value of level 3 liability		(5,435,724	)		(1,960,468	)
Transfer in and/or out of Level 3		—			—
Balance at December 31, 2019	$	2,674,000		$	573,200

	Options		Weighted-Average Exercise Price		Weighted Remaining Average Contractual Term		Aggregate Intrinsic Value
Outstanding at June 30, 2019		58,000	$	12.50		5.2	$	87,480
Granted		2,400		7.42		4.1		—
Options Exercised or Forfeited		—		—		—		—
Outstanding at December 31, 2019		60,400	$	12.29		4.5	$	2,100
Exercisable at December 31, 2019		60,400	$	12.29		4.5	$	2,100

	December 31 2019			December 31 2018
Expected life of options (In years)		5			5
Expected volatility		71.55	%		67.91	%
Risk free interest rate		1.61	%		2.98	%
Dividend Yield		0	%		0	%

Exercise Price		Outstanding		Weighted Average Contract Life		Exercisable
$	3.75		5,600		4.1		5,600
$	6.25		11,200		4.2		11,200
$	7.50		25,600		6.2		25,600
$	8.75		1,600		4.3		1,600
$	12.50		4,000		3.1		4,000
$	25.00		1,600		2.8		1,600
$	26.25		4,400		2.3		4,400
$	27.50		800		2.2		800
$	28.75		1,600		2.6		1,600
$	31.25		4,000		1.9		4,000

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Aggregate Intrinsic Value
Outstanding and exercisable at June 30, 2019		124,667	$	45.00		5.6	$	716,653
Granted		1,250,000	$	4.00		4.7	$	—
Expired		—	$	—		—	$	—
Outstanding and exercisable at December 31, 2019		1,374,667	$	7.72		4.7	$	139,498

Exhibit

10.1*		BioVie, Inc. Letter Agreement with Acuitas Group Holdings, LLC dated as of February 10, 2020
31.1*		Certification of Chief Executive Officer (Principal Executive Officer) required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.
31.2*		Certification of Chief Financial Officer (Principal Financial Officer) required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32.1**		Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Chief Financial Officer (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

*	Filed herewith.

**	Furnished herewith. This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filings of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.


Signature	Titles	Date

/s/ Terren Peizer ________________ Terren Peizer	Chairman and Chief Executive Officer (Principal Executive Officer)	February 13, 2020
/s/ Joanne Wendy Kim _________________ Joanne Wendy Kim	Chief Financial Officer (Principal Financial and Accounting Officer)	February 13, 2020

I, Terren Peizer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of BioVie Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.		The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

								/s/ Terren S. Peizer
								Terren S. Peizer Chief Executive Officer (Principal Executive Officer)

I, Joanne Wendy Kim, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of BioVie Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.		The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

(1)	The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.