This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, and Section 27A of the Securities Act of 1933. Any statements contained in this report that are not statements of historical fact may be forward-looking statements. When we use the words "intends," "estimates," "predicts," "potential," "continues," "anticipates," "plans," "expects," "believes," "should," "could," "may," "will" or the negative of these terms or other comparable terminology, we are identifying forward-looking statements. Forward-looking statements involve risks and uncertainties, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by forward-looking statements. These factors include our; research and development activities, distributor channel; compliance with regulatory impositions; and our capital needs. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Except as may be required by applicable law, we do not undertake or intend to update or revise our forward-looking statements, and we assume no obligation to update any forward-looking statements contained in this report as a result of new information or future events or developments. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. You should carefully review and consider the various disclosures we make in this report and our other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business.

All statements other than statements of historical fact are statements that could be deemed forward-looking statements. The Company assumes no obligation and does not intend to update these forward-looking statements, except as required by law. When used in this report, the terms "BioVie", "Company", "we", "our", and "us" refer to BioVie Inc.

The following discussion of the Company's financial condition and the results of operations should be read in conjunction with the Financial Statements and Notes thereto appearing elsewhere in this document.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that in addition to the description of historical facts contained herein, this report contains certain forward-looking statements that involve risks and uncertainties as detailed herein and from time to time in the Company's other filings with the Securities and Exchange Commission and elsewhere. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those, described in the forward-looking statements. These factors include, among others: (a) the Company's fluctuations in sales, expenses and operating results; (b) risks associated with international operations; (c) regulatory, competitive and contractual risks; (d) product development risks; (e) the ability to achieve strategic initiatives, including but not limited to the ability to achieve sales growth across the business segments through a combination of enhanced sales force, new products, and customer service; and (f) pending litigation.

Management's Discussion

BioVie is a clinical-stage company pursuing the discovery, development, and commercialization of innovative drug therapies targeting life-threatening complications of liver cirrhosis. Our initial disease target is ascites, a serious medical condition affecting about 100,000 Americans and many times more worldwide. Our therapeutic drug candidate BIV201 is based on a drug that is approved in about 40 countries to treat related complications of liver cirrhosis (part of the same disease pathway as ascites), but not yet available in the US. The active agent in BIV201, terlipressin, is a potent vasoconstrictor which is in use for various medical conditions around the world. The goal is for BIV201 to interrupt the ascites disease pathway, thereby halting the cycle of accelerating fluid generation in ascites patients.


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Comparison of the three months ended December 31, 2020 to the three months ended December 31, 2019





Net income (loss)

The net loss for the three months ended December 31, 2020 was approximately $3.1 million as compared to a net income of $6.7 million for the three months ended December 31, 2019. The increase in loss of approximately $9.8 million was primarily due to a change in fair value of derivative liabilities of approximately $7.4 million, a decrease in interest expense of approximately $21,000 and increase in operating expenses of approximately $2.4 million.

Total operating expenses for the three months ended December 31, 2020 were approximately $3 million as compared to $710,000 for the three months ended December 31, 2019. The net increase of approximately $2.4 million during the three months ended December 31, 2020, was primarily due to an increase in research and development activities after the Company's public offering of registered common stock which occurred on September 22, 2020 and the related expense of $1.5 million directors' compensation related to stock options issued to the Board of Directors in December 31, 2020.

Research and Development Expenses

Research and development expenses were approximately $938,000 for the three months ended December 31, 2020, a net increase of approximately $591,000, from $347,000 for the three months ended December 31, 2019. Research and development activities increased after the Company raised funds in the public offering on September 22, 2020 and the funds were used for preparing for the 2B trials.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were approximately $2.1 million for the three months ended December 31, 2020 compared to $307,000 for the three months ended December 31, 2019. The net increase of approximately $1.8 million was primarily attributed to directors' compensation of $1.5 million related to stock options issued to Board of Directors in December 2020 and approximately $220,000 professional consulting fees related to researching new business development pursuits.

Comparison of the six months ended December 31, 2020 to the six months ended December 31, 2019





Net income (loss)

The net income for the six months ended December 31, 2020 was $4.3 million as compared to a net income of $2.8 million for the six months ended December 31, 2019. The increase in net income of $1.5 million was due to a decrease in fair value of derivative liabilities of $521,000 and decrease in interest expense of $2.9 million related to the embedded derivative liability warrants offset by an increase in operating expenses of $1.9 million.

Total operating expenses for the six months ended December 31, 2020 were approximately $3.5 million compared to $1.4 million for the six months ended December 31, 2019. The net increase of approximately $2.1 million was primarily due to increase in research and development activities after the Company raised funds in the public offering on September 22, 2020 and an increase in selling, general and administrative expenses attributed to directors' compensation of $1.5 million related to stock options issued to the Board of Directors in December 2020.

Research and Development Expenses

Research and development expenses were approximately $1.1 million for the six months ended December 31, 2020, an increase of $375,000, from $688,000 for the six months ended December 31, 2019. Research and development activities increased after the Company raised funds in the public offering on September 22, 2020 and the funds were used for preparing for the 2B trials.


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Selling, General and Administrative Expenses

Selling, general and administrative expenses were approximately $2.3 million for the six months ended December 31, 2020, a net increase of approximately $1.7 million, from $614,000 for the six months ended December 31, 2019. The net increase was primarily attributed to directors' compensation of $1.5 million related to stock options issued to Board of Directors in December 2020 and payments to professional consultants researching new business development pursuits of approximately $220,000 offset by a reduction in legal expenses of $63,000 and reduction in travel expenses of $25,000, that related to the capital raise in the previous six month period ended December 31, 2019.

Capital Resources and Liquidity

On September 22, 2020, the Company closed a registered public offering (the "Offering") issuing 1,799,980 of its Class A common stock, par value $0.0001 per share (the "Common Stock") at $10 per share, resulting in net proceeds to the Company of approximately $15.6 million, net of issuance costs of approximately $2.4 million; and of which approximately $1.8 million was used to satisfy all amounts owing in respect of a 10% OID Convertible Delayed Draw Debenture (the "Debenture") due September 24, 2020 held by the Company's controlling stockholder, Acuitas Group Holdings, LLC ("Acuitas").

Concurrently with the closing of the Offering and repayment of the Debenture, the Company issued an aggregate of 6,909,582 shares of Common Stock to Acuitas, representing (i) shares issuable pursuant to Acuitas' rights under the Purchase Agreement dated July 3, 2018 with the Company resulting from a 50% adjustment of the purchase price applicable to its initial investment in the Company and the exercise price of the warrants received in such transaction and the price per share should it exercise certain rights to purchase additional securities in the event of certain reductions in the useful life of the Company's intellectual property rights, and (ii) the automatic exercise of warrants issued to Acuitas in connection with the Debenture financing at the par value of the Common Stock. (See Note 5 Related Party Transactions in the accompanying interim condensed financial statements.)

On September 17, 2020, the Company's Common Stock was approved for listing on The NASDAQ Capital Market ("Nasdaq") under the symbol "BIVI" and began trading on September 18, 2020.

As of December 31, 2020, stockholders' equity was approximately $13.1 million and its accumulated deficit was approximately $90.4 million. As a development stage enterprise, the Company expects substantial losses in future periods. The accompanying interim condensed financial statements were prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Based on the Company's plans, management believes it has sufficient funds to fund its operations through our next round of clinical trials through February 2022.

The Company's future operations will be dependent on the success of the Company's ongoing development and commercialization effort, and management intends to continue to secure additional required funding primarily through additional equity or debt financings. We may also seek to secure required funding through sales or out-licensing of intellectual property assets, seeking partnerships with other pharmaceutical companies or third parties to co-develop and fund research and development efforts, or similar transactions. However, there can be no assurance that we will be able to obtain required funding. If we are unsuccessful in securing funding from any of these sources, we will defer, reduce, or eliminate certain planned expenditures in our research protocols.


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The emergence of widespread health emergencies or pandemics of the coronavirus ("Covid-19"), may lead to continued regional quarantines, business shutdowns, labor shortages, disruptions to supply chains, and overall economic instability, including the duration and spread of the outbreak and restrictions and the impact of Covid-19 on the financial markets and the overall economy, all of which are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company's ability to raise funds may be materially adversely affected.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the Company's financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Critical Accounting Policies and Estimates

For the six-month period ended December 31, 2020, there were no significant changes to the Company's critical accounting policies as identified in the Annual Report Form 10-K for the fiscal year ended June 30, 2020.

New Accounting Pronouncements

The Company considered the applicability and impact of recent accounting pronouncements and determined those to be either not applicable or expected to have minimal impact on our balance sheets or statement of operations.

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