Annual Report for Fiscal Year Ending JUNE 30, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 report.

Overview

BioVie Inc. (the "Company" or "we" or "our") is a clinical-stage company developing innovative drug therapies for the treatment of neurological and neurodegenerative disorders and advanced liver disease.

Neurodegenerative Disease Program

The Company acquired the biopharmaceutical assets of NeurMedix, Inc. ("NeurMedix") a privately held clinical-stage pharmaceutical company and a related party in June 2021. The acquired assets included NE3107 (or "bezisterim"). Bezisterim, the approved generic name for NE3107 is an investigational, novel, orally administered small molecule that is thought to inhibit inflammation-driven insulin resistance and major pathological inflammatory cascades with a novel mechanism of action. There is emerging scientific consensus that both inflammation and insulin resistance may play fundamental roles in the development of Alzheimer's disease ("AD") and Parkinson's disease ("PD"), and bezisterim could, if approved by the U.S. Food and Drug Administration ("FDA"), represent an entirely new medical approach to treating these devastating conditions affecting an estimated 6 million Americans suffering from AD, 1 million Americans suffering from PD and Long COVID affects approximately 20 million adults in the US, and millions more worldwide.

In neurodegenerative disease, bezisterim (NE3107) inhibits activation of inflammatory ERK and nuclear factor kappa-light-chain-enhancer of activated B cells ("NFκB") (including interactions with TNF signaling and other relevant inflammatory pathways) that lead to neuroinflammation and insulin resistance. Bezisterim (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.

Chronic 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. Bezisterim's (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.

Parkinson's Disease

PD is driven in large part by neuroinflammation and activation of brain microglia, leading to increased proinflammatory cytokines (particularly TNF). Multiple daily administrations of levodopa (converted to dopamine in the brain) is the current standard of care treatment for this movement disorder. However, levodopa effectiveness diminishes over time necessitating increased dosage and prolonged daily administration leads to side effects of uncontrolled movements called levodopa-induced dyskinesia, commonly referred to as LID, which is exacerbated by high dose levodopa. Although levodopa provides symptomatic benefit, it does not slow PD progression.

The Phase 2 study of bezisterim (NE3107) for the treatment of PD (NCT05083260), completed in December 2022, was a double-blind, placebo-controlled, safety, tolerability, and pharmacokinetics study in PD participants treated with carbidopa/levodopa and bezisterim (NE3107). Forty-five patients with a defined L-dopa "off state" were randomized 1:1 to placebo: bezisterim (NE3107) 20 mg twice daily for 28 days. This trial was launched with two design objectives: 1) the primary objective was safety and a drug-drug interaction study as requested by the FDA to measure the potential for adverse interactions of bezisterim (NE3107) with carbidopa/ levodopa; and 2) the secondary objective was to determine if preclinical indications of promotoric activity and apparent enhancement of levodopa activity could be seen in humans. Both objectives were met.

To extend this Phase 2 data in progressed patients, the Company has designed a new Phase 2 study of bezisterim (NE3107) as a potential first line therapy to treat patients with new onset PD. In July 2024, the Company submitted the new protocol and received a response from the FDA which permitted the Company to proceed with the study. The trial commenced in April 2025.

Long COVID Program

In April 2024, the Company was awarded a clinical trial grant of $13.1 million from the U.S. Department of Defense ("DOD"), awarded through the Peer Reviewed Medical Research Program of the Congressionally Directed Medical Research Programs. In August 2024, the FD&A and the U.S. Army Medical Research and Development Command, Office of Human Research Oversight ("OHRO") approved the Company's plan, including the FDA approving the associated Investigation New Drug Application ("IND"), to evaluate bezisterim for the treatment of neurological symptoms that are associated with long COVID. The trial commenced in May 2025.

Liver Disease Program

In liver disease, our investigational drug candidate BIV201 (continuous infusion terlipressin), which has been granted both FDA Fast Track designation status and FDA Orphan Drug status, is being evaluated as a treatment option for patients suffering from ascites and other life-threatening complications of advanced liver cirrhosis caused by non-alcoholic steatohepatitis (NASH), hepatitis, and alcoholism. The initial target for BIV201 therapy was refractory ascites. These patients 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.

After receiving guidance from the FDA regarding the design of Phase 3 clinical testing of BIV201 for the treatment of patients with cirrhosis and ascites, the Company is now targeting a broader ascites patient population. The Company is currently finalizing the protocol design for the Phase 3 study of BIV201 with a focus on demonstrating clinical benefit through a composite primary endpoint of complications and disease progression in patients with cirrhosis and ascites who have recently recovered from acute kidney injury ("AKI"). This patient population is not limited to those having refractory ascites. BIV201 is administered as a patent-pending liquid formulation with patents issued in US, China, Japan, Chile and India to date.

C. Alzheimer's Disease (NCT05083260)

On November 29, 2023, the Company announced the analysis of its unblinded, topline efficacy data from its Phase 3 clinical trial (NCT04669028) of bezisterim in the treatment of mild to moderate AD. The study had co-primary endpoints looking at cognition using the Alzheimer's Disease Assessment Scale-Cognitive Scale (ADAS-Cog 12) and function using the Clinical Dementia Rating-Sum of Boxes (CDR-SB). Patients were randomly assigned, 1:1 versus placebo, to receive sequentially 5 mg of bezisterim orally twice a day for 14 days, then 10 mg orally twice a day for 14 days, followed by 26 weeks of 20 mg orally twice daily.

Upon trial completion, as the Company began the process of unblinding the trial data, the Company found significant deviation from protocol and current good clinical practices ("cGCPs") violations at 15 study sites (virtually all of which were from one geographic area). This highly unusual level of suspected improprieties led the Company to exclude all patients from these sites and to refer the sites to the FDA Office of Scientific Investigations ("OSI") 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 data.

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 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 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.

Results of Operations

Comparison of the Year Ended June 30, 2025 to the Year Ended June 30, 2024

Net loss

The net loss for the year ended June 30, 2025, was approximately $17.5 million as compared to the net loss of $32.1 million for the year ended June 30, 2024. The net decrease of $14.6 million was primarily attributed to decline in research and development expenses of $13.8 million, and a net increase in other income, net of approximately $465,000.

Total operating expenses for the years ended June 30, 2025 and 2024 were approximately $18.1 million and $32.2, respectively. The net decrease of approximately $14.1 million was primarily due to the decrease in research and development expenses as a result of the completion of clinical trials in the prior fiscal year.

Research and Development Expenses

Research and development expenses were approximately $9.3 million and $23.1 million for the years ended June 30, 2025 and 2024, respectively. The $13.8 million reduction was primarily attributed to the completion of the clinical studies in the prior fiscal year and comprised of a declines in direct study costs of approximately $7.4 million, and the related expenses such as the clinical team payroll of approximately $1.4 million, and consultants expenses of approximately $3.0 million, reflecting a declining use of consultants and a reduction in the use of regulatory and other consultants totaling approximately $496,000. Other decreases included a decrease in Chemistry, Manufacturing and Controls ("CMC") and new drug discovery totaling approximately $1.2 million, and a decrease in travel & conferences of approximately $123,000, as well as publications of approximately $166,000.

The decrease in clinical studies of approximately $7.4 million represented the net decrease in clinical trial studies expense of approximately $10.8 million due to the completion of the clinical trials in the prior fiscal year offset primarily by the planning, development and launch of the two new clinical studies, Sunrise PD Phase 2 and Long Covid Program, totaling approximately $3.3 million. The table below summarizes the approximate expense amounts for the years ended June 30, 2025 and 2024 by study:

		For the Year Ended				For the Year Ended				Increase
		June 30, 2025				June 30, 2024				(Decrease)
Current Studies
Sunrise PD Phase 2		$	3,343,000			$	181,000			$	3,162,000
Liver Program Phase 3			173,000				45,000				128,000
Long COVID Program, net of $5.3 million reimbursement			146,000				106,000				40,000
Investigator-Initiated studies			25,000				23,000				2,000
		$	3,687,000			$	355,000			$	3,332,000
Completed Studies
Ascites BIV201 Phase 2b		$	(63,000	)		$	554,000			$	(617,000	)
AD mild to moderate pivotal Phase 3			18,000				7,888,000				(7,870,000	)
PD NM201 Phase 2			-				612,000				(612,000	)
Investigator-Initiated studies			-				73,000				(73,000	)
Other studies in development/canceled			18,000				1,600,000				(1,582,000	)
		$	(27,000	)		$	10,727,000			$	(10,754,000	)

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the year ended June 30, 2025, was approximately $8.6 million and was comparable to approximately $8.8 million for the year ended June 30, 2024. The net fluctuations in expenses were primarily comprised of decreases in stock-based compensation for the executive team and directors of approximately $436,000 and $595,000, respectively, and investor and public relation fees of $210,000, offset by increases in directors' cash compensation of approximately $101,000, other professional and consultancy fees of approximately $582,000, legal fees of approximately $468,000, and audit and accounting fees of approximately $82,000.

Other Income and Expense

Other income, net was approximately $524,000 for the year ended June 30, 2025, compared to approximately $59,000 for the year ended June 30, 2024. The net increase in other income of approximately $465,000 was comprised of a decrease in the change in fair value of the related derivative liabilities of approximately $1.8 million, offset by the decline in interest expense, net $2.6 million due to the payoff of the notes payable on December 1, 2024 and decline in interest income of approximately $284,000.

Capital Resources and Liquidity

As of June 30, 2025, the Company had working capital of approximately $18.4 million, cash and cash equivalents of approximately $17.5 million, stockholders' equity of approximately $19.0 million, and an accumulated deficit of approximately $352.1 million. Additionally, the Company had a net loss of approximately $17.5 million and net cash used in operating activities of approximately $19.0 million during the year ended June 30, 2025. The Company has not generated any revenues to date and no revenues are expected in the foreseeable future. The Company's future operations are dependent on the success of the Company's ongoing development and commercialization efforts, as well as its ability to secure additional financing as needed.

The future viability of the Company is largely dependent upon its ability to raise additional capital to finance its operations. Management expects that future sources of funding may include sales of equity, obtaining loans, or other strategic transactions.

Although management continues to pursue the Company's strategic plans, there is no assurance that the Company will be successful in obtaining sufficient financing on terms acceptable to the Company, if at all, to fund continuing operations. These circumstances raise substantial doubt on the Company's ability to continue as a going concern. The financial statements included elsewhere in this Form 10-K do not include any adjustments that might result from the outcome of this uncertainty.

Registered Direct Offerings

On September 25, 2024, the Company closed a best efforts public offering (the "September 2024 Offering") of 136,080 shares of its common stock, par value $0.0001 per share, pre-funded warrants (the "September Pre-funded Warrants") to purchase 60,000 shares of Common Stock, and warrants to purchase up to 196,080 shares of Common Stock (the "September Common Warrants") at a combined public offering price of $15.30 per share, or September Pre-funded Warrant, and the associated September Common Warrant. 26,500 September Pre-funded Warrants were exercised shortly thereafter and reflected on the 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 $15.30 per share and were immediately exercisable upon issuance and will expire on the fifth anniversary date of the original issuance date. The gross proceeds to the Company from the September 2024 Offering was 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 9,809 shares of Common Stock exercisable at a per share price of $19.10, 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. Subsequently, 189,630 of common warrants from the September 2024 Offering were exercised at $15.30 per share for proceeds totaling approximately $2.9 million, and 33,500 September Pre-funded Warrants were also exercised. In addition, 667 September Placement Agent's Warrants were exercised on a cashless exercise basis and 422 common shares were issued.

In October 2024, the Company closed three registered direct offerings totaling 825,600 shares of its common stock, par value $0.0001 per share, and two concurrent private placements of warrants to purchase up to 711,000 shares of Common Stock (the "October Common Warrants") priced at-the-market under Nasdaq rules at prices ranging from $15.00 to $28.30 per share (the "October Offerings"). The October Common Warrants have exercise prices ranging from $13.70 to $21.20 per 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 $2.5 million. Additionally, upon closing of the October Offerings, the Company issued placement agent warrants (the "October Placement Agent's Warrants") to purchase 41,321 shares of Common Stock in the aggregate exercisable at a per share price ranging from $18.80 to $35.40, 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 Offerings.

Off-Balance Sheet Arrangements

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. 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.

Critical Accounting Policies and Estimates

Research and Development

Research and development expenses and corresponding accrued expenses, consist primarily of costs associated with the preclinical and/or clinical trials of drug candidates, compensation and other expenses for research and development, personnel, supplies and development materials, costs for consultants and related contract research costs.

Stock-based Compensation

The Company follows the provision of Accounting Standards Codification ("ASC") Topic 718 - Stock Compensation ("ASC 718"), which requires the measurement of compensation expense for all share-based payment awards made to employees and non-employee director, including employee stock options. Share-based compensation expense is based on the grant date fair value estimated in accordance with the provisions of ASC 718 and is generally recognized as an expense over the requisite service period, net of forfeitures which are recorded as they occur.