0001520138-17-000347.txt : 20171108 0001520138-17-000347.hdr.sgml : 20171108 20171108162121 ACCESSION NUMBER: 0001520138-17-000347 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 44 CONFORMED PERIOD OF REPORT: 20170930 FILED AS OF DATE: 20171108 DATE AS OF CHANGE: 20171108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOVIE INC. CENTRAL INDEX KEY: 0001580149 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 462510769 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55292 FILM NUMBER: 171186841 BUSINESS ADDRESS: STREET 1: 100 CUMMINGS CENTER, STREET 2: SUITE 247-C CITY: BEVERLY STATE: MA ZIP: 01915 BUSINESS PHONE: 312-283-5793 MAIL ADDRESS: STREET 1: 100 CUMMINGS CENTER, STREET 2: SUITE 247-C CITY: BEVERLY STATE: MA ZIP: 01915 FORMER COMPANY: FORMER CONFORMED NAME: NANOANTIBIOTICS, INC. DATE OF NAME CHANGE: 20130625 10-Q 1 bivi-20170930_10q.htm FORM 10-Q FOR PERIOD ENDED SEPTEMBER 30, 2017
 
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

Form 10-Q

(Mark One) 

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2017

 

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________to _____________

Commission File Number: 333-190635

 

BIOVIE INC.

(Exact name of registrant as specified in its charter)

Nevada   46-2510769

(State or other jurisdiction of incorporation or organization)

  (I.R.S. Employer Identification No.)

 

100 Cummings Center, Suite 247-C
Beverly, MA 01915
(Address of principal executive offices, Zip Code)
 
(312)-283-5793
(Registrant's telephone number, including area code)
 

 
(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report)

   

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ☒                                          No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

Yes ☒                                          No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

  

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

  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes                                           No ☒

 

The number of shares outstanding of each of the issuer’s classes of common equity, as of September 30, 2017 was 94,594,091.

 

 
 
 
 

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements (unaudited) 2
  Balance Sheets as of September 30, 2017 (unaudited) and June 30, 2017 (audited) 2
  Statements of Operations (unaudited) for the three months ended September 30, 2017 and 2016 3
  Statement of Changes in Shareholders’ Equity for the period to September 30, 2017 4
  Statements of Cash Flows (unaudited) for the three months ended September 30, 2017 and 2016 5
  Notes to Financial Statements (unaudited) 6
Item 2. Management’s Discussion and Analysis of Financial Condition of and Results of Operations 17
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
Item 4. Controls and Procedures 21

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings 22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Mine Safety Disclosures   22
Item 5. Other Information   22
Item 6. Exhibits  
     
SIGNATURES 23

 

 
 

FORWARD-LOOKING STATEMENTS

 

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.

 

-1-

Part 1.  Financial Information

Item 1.  Financial Statements

 

BIOVIE INC.

BALANCE SHEETS

 

   September 30,  June 30,
   2017  2017
ASSETS  (unaudited)  (audited)
       
CURRENT ASSETS:          
Cash   21,705    5,140 
Total Current Assets   21,705    5,140 
           
OTHER  ASSETS:          
Intangible Assets (Net of Amortization)   1,956,013    2,013,357 
Goodwill   345,711    345,711 
Total Other Assets   2,301,724    2,359,068 
           
TOTAL ASSETS   2,323,430    2,364,209 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
           
CURRENT LIABILITIES:          
Accounts Payable and accrued expenses   467,783    470,973 
Related Party Loan   10,000    35,000 
Accrued Payroll   187,500    125,000 
Total Current Liabilities   665,283    630,973 
           
LONG-TERM LIABILITIES:          
Accrued Expenses   173,333    173,334 
Accrued Payroll   402,584    402,584 
Total Long-Term Liabilities   575,917    575,918 
           
TOTAL LIABILITIES   1,241,200    1,206,891 
           
STOCKHOLDERS' EQUITY (DEFICIT)          
Preferred stock; $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding   —      —   
Common stock, $0.0001 par value; 300,000,000 shares authorized; shares issued and 94,594,091 and 91,925,000 shares issued and outstanding, respectively   9,459    9,192 
Additional paid in capital   4,070,619    3,483,134 
Accumulated deficit   (2,997,849)   (2,335,009)
Total Stockholders' Equity (Deficit)   1,082,229    1,157,318 
           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)   2,323,430    2,364,209 

 

See accompanying notes to financial statement

-2-

BIOVIE INC.

STATEMENT OF OPERATIONS (UNAUDITED)

 

   For the Three Months  For the Three Months
   Ended  Ended
   September 30,  September 30,
   2017  2016
   (Unaudited)  (Unaudited)
REVENUE:      
Sales  $—     $—   
    —      —   
           
COST OF GOODS SOLD   —      —   
           
GROSS MARGIN   —      —   
           
OPERATING EXPENSES          
Amortization   57,344    57,344 
Research and development expenses   41,854    127,270 
Payroll expenses   71,348    71,348 
Professional fees   453,611    93,165 
Selling, general and administrative expenses   38,075    2,226 
TOTAL OPERATING EXPENSES   662,231    351,353 
           
LOSS FROM OPERATIONS   (662,231)   (351,353)
           
OTHER EXPENSE (INCOME)          
Interest expense   611    —   
Interest income   (1)   (11)
TOTAL OTHER EXPENSE (INCOME)   609    (11)
           
NET LOSS  $(662,841)  $(351,342)
           
NET LOSS PER COMMON SHARE, BASIC AND DILUTED  $(0.01)  $(0.00)
           
WEIGHTED AVERAGE NUMBER OF          
COMMON  SHARES OUTSTANDING, BASIC AND DILUTED   93,301,583    87,205,550 

 

See accompanying notes to financial statement

-3-

BIOVIE INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

            Prepaid      
            Services      
         Additional  Paid with     Total
   Common Stock  Paid in  Common  Accumulated  Stockholders'
   Shares  Amount  Capital  Stock  Deficit  Deficit
                   
Balance, June 30, 2016   87,160,001    8,716    2,911,560    —      (1,004,337)   1,915,939 
                               
Issuance of Shares   4,764,999    477    479,523    —      —      479,999 
                               
Options Vested   —      —      92,051    —      —      92,051 
                               
Net loss   —      —      —      —      (1,330,672)   (1,330,672)
                               
Balance, June 30, 2017   91,925,000    9,193    3,483,134    —      (2,335,009)   1,157,318 
                               
Issuance of Shares (unaudited)   2,669,091    267    574,733    —      —      575,000 
                               
Options vested (unaudited)   —      —      12,752    —      —      12,752 
                               
Net loss (unaudited)   —      —      —      —      (662,841)   (662,841)
                               
Balance, September 30, 2017 (unaudited)   94,594,091    9,460    4,070,619    —      (2,997,850)   1,082,229 

 

See accompanying notes to financial statement

-4-

BIOVIE INC.

STATEMENT OF CASH FLOWS (UNAUDITED)

   For the Three Months  For the Three Months
   Ended September 30,  Ended September 30,
   2017  2016
   (Unaudited)  (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(662,841)  $(351,342)
Adjustments to reconcile net loss to net cash to cash used by operating activities:          
Services paid with common stock   330,000      
Amortization of intangible assets   57,344    57,344 
Share based compensation expense   12,751    8,848 
Changes in operating assets and liabilities          
Decrease in prepaid expenses   —      6,982 
Increase (decrease) in:          
Accounts Payable   (3,190)   87,656 
Accrued Payroll   62,500    62,500 
Net cash used by operating activities   (203,436)   (128,012)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Net cash used by investing activities   —      —   
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from loan payable   (25,000)   8,000 
Proceeds from issuance of common Stock   245,001    5,000 
Net cash provided by financing activities   220,001    13,000 
           
Net increase (decrease) in cash   16,565    (115,012)
           
Cash, beginning of period   5,140    123,757 
           
Cash, end of period  $21,705   $8,745 
           
SUPPLEMENTAL CASH FLOW INFORMATION:          
           
Cash paid for interest  $—     $—   
Cash paid for income tax  $—     $—   

 

See accompanying notes to financial statement

-5-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

 

1. Background Information

 

BioVie Inc. is a clinical-stage company pursuing the discovery, development, and commercialization of innovative drug therapies. The Company is currently focused on developing and commercializing BIV201, a novel approach to the treatment of ascites due to chronic liver cirrhosis. In March 2017, BioVie received notification from the FDA that it could initiate a Phase 2a US clinical trial. In April the Company signed a Cooperative Research and Development Agreement (CRADA) with the McGuire Research Institute/VA in Richmond, VA, and began dosing patients with BIV201 in September 2017.

BIV201 has the potential to improve the health of thousands of patients suffering from life-threatening complications of liver cirrhosis due to hepatitis, NASH, and alcoholism. It has Orphan Drug designation for the most common of these complications, ascites, which represents a significant unmet medical need. The FDA has never approved any drug specifically for treating ascites. For more information about BioVie and BIV201, please visit our website: www.biovieinc.com.

The BIV201 development program began at LAT Pharma LLC. On April 11, 2016, the Company acquired LAT Pharma LLC and the rights to its BIV201 development program. We currently own all development and marketing rights to our drug candidate, except as noted previously, the Company and PharmaIN have exchanged small (low single-digit) ownership rights to each other’s ascites drug development programs. The Company has an issued US Patent covering the use of BIV201 for the treatment of ascites patients in the outpatient setting using ambulatory pump infusion, and has filed a patent application for its drug candidate in Japan, as well as a PCT in Europe.

The Company’s activities are subject to significant risks and uncertainties including failure to secure additional funding to properly execute the company’s business plan.

 

2. Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the three months ended September 30, 2017, the Company had a net loss of $662,841.  As of September 30, 2017, the Company has not earned any revenues. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of public equity securities. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

-6-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

  

3. Significant Accounting Policies

 

Unaudited Interim Financial Statements

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading.  The results of operations for such interim periods are not necessarily indicative of operations for a full year.

 

Basis of Presentation

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 

Cash

Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. All of our cash balances were fully insured at September 30, 2017. 

Financial Instruments

The Company’s financial instruments include cash and accounts payable. The carrying amounts of cash and accounts payable approximate their fair value, due to the short-term nature of these items. 

Research and Development

Research and development costs are charged to operations when incurred and are included in operating expenses. The Company expensed $41,854 for research and development for the quarter ended September 30, 2017. 

Income Taxes

Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending on the classification of the assets or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. 

-7-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

  

3. Significant Accounting Policies (continued)

 

The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10), January 1, 2007. The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there are no unrecognized benefits at September 30, 2017 and since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. 

Earnings (Loss) per Share

Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed by dividing net income by the weighted average number of shares of common stock outstanding and dilutive options outstanding during the year. For the quarter ended September 30, 2017 all outstanding options have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive.

Stock-based Compensation

The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).  

Fair Value Measurements

In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2013 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures” (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: 

-8-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

  

3. Significant Accounting Policies (continued)

 

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. 

Level 3 - Inputs that are both significant to the fair value measurement and unobservable. 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued payroll.

Recent accounting pronouncements

The Company has reviewed recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC and did not or are not believed by management to have a material impact on the Company’s financial statements.

4. Related Party Loan

LAT Pharma was given a zero-interest bearing loan by the company’s General Partner, Jonathan Adams in the amount of $5,000 in August 2015 and $5,000 in November 2015.  The total of $10,000 was outstanding when the Company merged with LAT Pharma. On June 16th, 2017, the Company was given an additional $25,000 zero-interest bearing loan by Jonathan Adams.  As of September 30th, 2017, the Company repaid $25,000 and has an outstanding loan of $10,000 payable. The loan is due on demand without interest to the CEO, Jonathan Adams. 

 

5. Commitments and Contingencies 

Office Lease 

On January 1, 2014 the Company executed a lease agreement with Cummings Properties for the company’s office of 270 square feet at 100 Cummings Center, Suite 247-C, Beverly, MA 01915. The lease is for a term of five years from January 1, 2014 to December 30, 2018 and requires monthly payments of $369. 

Employment Agreements 

On April 11, 2016 the Company entered into employment agreement with CEO Jonathan Adams. The Company’s agreement provides for a three-year term with minimum annual base salary of $250,000 per year. Effective April 11, 2016, the (previous) CEO/CFO resigned.

On September 24, 2017, the Board of Directors of BioVie Inc. appointed R. Richard Wieland II as an interim Chief Financial Officer of BioVie.  Mr. Wieland is an experienced executive in the healthcare field, having previously served as Chief Financial Officer of several other biopharmaceutical companies.

-9-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

 

6. Income Taxes

 

Deferred taxes are recorded for all existing temporary differences in the Company’s assets and liabilities for income tax and financial reporting purposes. Due to the valuation allowance for deferred tax assets, as noted below, there were no net deferred tax benefit or expense for the quarter ended September 30, 2017. 

 

There is no current or deferred income tax expense or benefit allocated to continuing operations for the quarter ended September 30, 2017. 

The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows: 

   September 30, 2017  June 30, 2017
Tax expense (benefit) at U.S. statutory rate  $(69,168)  $(528,229)
State income tax expense (benefit), net of federal benefit  $(10,172)  $(42,074)
Effect of non-deductible expenses  $—     $—   
Other  $—     $—   
Change in valuation allowance  $79,340   $570,303 
   $—     $—   

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at September 30, 2017 were as follows:

 

Deferred tax assets (liability), noncurrent:   
Net operating loss  $1,041,491 
Valuation allowance   (1,041,491)
   $—   

 

Change in valuation allowance:

 

Balance, June 30, 2017  $962,151 
Increase in valuation allowance   79,340 
Balance, September 30, 2017   1,041,491 

 

Since management of the Company believes that it is more likely than not that the net deferred tax assets will not provide future benefit, the Company has established a 100 percent valuation allowance on the net deferred tax assets as of September 30, 2017. 

As of September 30, 2017, the Company had federal and state net operating loss carry-forwards totaling approximately $1,800,000 which begin expiring in 2022.

-10-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

 

7. Purchase of LAT Pharma

On April 11, 2016, the Company entered into and consummated an Agreement and Plan of Merger (the “Merger Agreement”), with LAT Acquisition Corp., a Nevada corporation and wholly-owned subsidiary of the Company (“Acquisition”) and LAT Pharma, LLC an Illinois limited liability company (“LAT”). Pursuant to the terms of the Merger Agreement, Acquisition merged with and into LAT in a statutory triangular merger (the “Merger”) with LAT surviving as a wholly-owned subsidiary of the Company. As consideration for the Merger, the Company issued the interest holders of LAT (the “LAT Holders”) an aggregate of 39,820,000 shares of our Common Stock issued to the LAT Holders in accordance with their pro rata ownership of LAT membership interests prior to the Merger. Following the Merger, the Registrant will continue the development of LAT’s lead clinical therapeutic candidate Continuous low-dose Infusion (CI) Terlipressin.

 

Immediately prior to the Merger, the Company had 87,210,000 shares of Common Stock issued and outstanding. In connection with the Merger, certain shareholders of the Company collectively agreed to retire and cancel an aggregate of 39,869,999 shares of Common Stock. Following the consummation of the Merger, the issuance of the Merger Shares of the 39,820,000 shares of Common Stock, the Company had 87,160,001 shares of Common Stock issued and outstanding and the LAT Holders beneficially own 39,820,000 shares or approximately forty-six percent (46%) of such issued and outstanding Common Stock.

 

Under the purchase method of accounting, the transaction was valued for accounting purposes at $2,389,200, which was the estimated fair value of the consideration paid by the Company. The estimate was based on the consideration paid of 39,820,000 shares of common stock valued based on the closing price on 04/11/2016 of $0.06 per share.

 

The assets and liabilities of LAT Pharma, Inc. were recorded at their respective fair values as of the closing date of the Merger Agreement, and the following table summarizes these values based on the balance sheet at April 11, 2016. 

 

$ 2,303,682     Assets Purchased
  260,193     Liabilities Assumed
  2,043,489     Net Assets Purchased
  2,389,200     Purchase Price
$ 345,711     Goodwill from Purchase

 

 Intangible asset detail 

 

$ 2,293,770     Intangible Intellectual Property
  345,711     Goodwill
  2,639,481     Intangible Asset from Purchase

 

Under the 338(h)(10) election, intangibles related to the acquisition of LAT Pharma will be fully deductible for tax purposes.

 

The intangible intellectual property is amortized over 10 years.

 

   September 2017  September 2016
Intangible Assets subject to Amortization  $2,293,770   $2,293,770 
Amortization Expense for Quarter  $57,344   $57,344 
Accumulated Amortization at Quarter end  $337,757   $108,380 

 

The estimated Amortization expense for each of the five succeeding fiscal years will be approximately $229,300 per year.

 

-11-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

 

8. Stock Options

 

In connection with the employment agreement signed with the Chief Executive Officer on April 11, 2016, Jonathan Adams received options to acquire 3 million shares exercisable at $0.06 per share, the closing price on that date. These Options Group A shall become vested and exercisable (i) as to 1 million shares on April 11, 2017, (ii) as to 1 million shares on April 11, 2018, and (iii) as to 1 million shares on April 11, 2019.

 

The fair market value of the stock options is estimated using the Black Scholes valuation model and the Company uses the following methods to determine its underlying assumptions: expected volatilities are based on the historical volatilities of 3 comparable companies of the daily closing price of their respective common stock; the expected term of options granted is based on the average time outstanding method; and the risk free interest rate is based on the US Treasury bonds issued with similar life terms to the expected life of the grant.

 

The following key assumptions were used in the valuation model to value stock option grants for each respective period:

Valuation Date   4/11/2016 4/11/2016 4/11/2016
Stock Price   $ 0.06   $ 0.06   $ 0.06  
Exercise Price   $ 0.06   $ 0.06   $ 0.06  
Term (expected term for options)     1.00     2.00     3.00  
Volatility     56.49 %   58.45 %   97.82 %
Annual Rate of Quarterly Dividends     0.00 %   0.00 %   0.00 %
Discount Rate - Bond Equivalent Yield     0.53 %   0.70 %   0.85 %
Call Option Value ($Millions)   $ 0.01   $ 0.02   $ 0.04  
Fair Value   $ 13,467   $ 19,523   $ 36,489  

 

The Company issued stock options to consultants and board of directors for services provided to the company. The following key assumptions were used in the valuation model to value stock option grants for each respective period:

Valuation Date 11/16/2016 12/18/2016 03/14/2017 05/02/2017 09/21/2017
           
Stock Price  $                 0.25  $                 0.21  $                 0.22  $                 0.23  $             0.20
Exercise Price  $                 0.25  $                 0.21  $                 0.22  $                 0.23  $             0.20
Term (expected term for options) 2.000 2.000 2.000 2.000 2.000
Volatility 43.12% 43.12% 40.02% 36.76% 32.75%
Annual Rate of Quarterly Dividends 0.00% 0.00% 0.00% 0.00% 0.00%
Discount Rate - Bond Equivalent Yield 1.02% 1.15% 1.40% 1.27% 1.45%
Call Option Value ($Millions)  $               0.06  $               0.05  $               0.05  $               0.05  $            0.39
Fair Value  $           30,919  $           15,646  $             5,143  $             4,951  $          3,903

 

-12-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

 

8. Stock Options (continued)

 

Stock option transactions under the Company’s plans for the period ended September 30, 2017 is summarized below:

 

      Weighted  
    Weighed- Average Aggregate
    Average Remaining Intrinsic
  Shares Exercise Contractual Value
Options (Thousands) Price Term (Thousands)
Outstanding at July 1, 2016 3,000 0.06 2 -
Granted 1,000 0.24 2 -
Exercised - - - -
Forfeited - - - -
Outstanding at June 30, 2017 4,000 0.10 2 -
Granted 100 0.20 2 -
Exercised - - - -
Forfeited - - - -
Outstanding at September 30, 2017 4,100 0.11 2 -

 

The compensation expense for the quarter ended September 30, 2017 includes $8,848 related to the stock options described above. The legal and professional expenses for the quarter ended September 30, 2017 includes $3,903 related to the stock options described above.

 

Offerings of Common Stock and Warrants

 

In September 2016, the Company sold and issued an aggregate of 49,999 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $5,000. The purchase price for the common stock was $0.10 per share.

 

In October 2016, the Company sold and issued an aggregate of 225,000 shares of common stock and warrants to purchase 112,500 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $45,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance.

In November 2016, the Company sold and issued an aggregate of 250,000 shares of common stock and warrants to purchase 125,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $50,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance.

In December 2016, the Company sold and issued an aggregate of 100,000 shares of common stock and warrants to purchase 50,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $20,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance.

-13-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

 

8. Stock Options (continued)

 

In January 2017, the Company, entered into a common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital Fund, LLC, an Illinois limited liability company (“Aspire Capital”) which provides that, on the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $12.0 million of shares of the Company’s common stock over the 30-month term of the Purchase Agreement (the “Aspire Equity Line”). On execution of the Purchase Agreement, the Company agreed to sell to Aspire Capital 1,000,000 shares of common stock and warrants to purchase 500,000 shares of common stock for proceeds of $200,000. The Warrant Shares will each have a five-year term and will be exercisable at $0.50 per share. Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the “Registration Rights Agreement”), in which the Company agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, as amended (the “Securities Act”), registering the sale of the shares of the Company’s common stock that have been and may be issued to Aspire Capital under the Purchase Agreement.

 

Under the Purchase agreement, after the Securities and Exchange Commission (the “SEC”) has declared effective the registration statement referred to above, on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 100,000 shares of the Company’s common stock per business day, up to $12.0 million of the Company’s common stock in the aggregate at a per share price (the “Purchase Price”) equal to the lesser of:

 

  • the lowest sale price of the Company’s common stock on the purchase date; or
  • the arithmetic average of the three (3) lowest closing sale prices for the Company’s common stock during the twelve (12) consecutive trading days ending on the trading day immediately preceding the purchase date.

In addition, on any date on which the Company submits a Purchase Notice to Aspire Capital in an amount equal to 100,000 shares and the closing sale price of our stock is equal to or greater than $0.30 per share, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date.

 

The Purchase Price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has been completed.

 

-14-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

 

8. Stock Options (continued)

 

The Purchase Agreement provides that the Company and Aspire Capital shall not affect any sales under the Purchase Agreement on any purchase date where the closing sale price of the Company’s common stock is less than $0.10. There are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of sales of the Company’s common stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, the Company issued to Aspire Capital 2,400,000 shares of the Company’s common stock (the “Commitment Shares”). The Purchase Agreement may be terminated by the Company at any time, at its discretion, without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of the Company’s common stock during any time prior to the termination of the Purchase Agreement. Any proceeds that the Company receives under the Purchase Agreement are expected to be used for working capital and general corporate purposes.

 

In March 2017, the Company sold and issued an aggregate of 500,000 shares of common stock and warrants to purchase 250,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $100,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance.

In May 2017, the Company sold and issued an aggregate of 240,000 shares of common stock and warrants to purchase 120,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $60,000. The purchase price for the common stock and warrants was $0.25 per share. The warrants are exercisable at an exercise price of $0.75 at any time from date of issuance until 5 years from the date of issuance.

In August 2017, the Company sold and issued an aggregate of 886,364 shares of common stock and warrants to purchase 443,182 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $195,000. The purchase price for the common stock and warrants was $0.22 per share. The warrants are exercisable at an exercise price of $0.60 at any time from date of issuance until 5 years from the date of issuance.

In August 2017, the Company issued 1,500,000 shares of common stock to Aspire Capital in a private placement transaction in exchange for services. The shares were valued at $0.22 per share, and the value of the services were $330,000.

Between July 2017 and September 2017, the Company sold an aggregate of 250,000 shares of common stock in transactions under the Aspire Equity Line for aggregate gross proceeds of $50,000. The average purchase price for the common stock was $0.20 per share.

In August 2017, the Company issued an aggregate of 32,727 shares of common stock to compensate certain initial investors who purchased common stock at a $0.25 share price in a Series C offering prior to a reduction in the offering price to $0.22 per share.

The following table summarizes the warrants that have been issued:

Aggregate Number of Warrants Issued Exercise Price Issue Date Expiration Date
5,000,000 $0.50 April 2013 April 2018
112,500 $0.50 October 2016 October 2021
125,000 $0.50 November 2016 November 2021
50,000 $0.50 December 2016 December 2021
500,000 $0.50 January 2017 January 2022
250,000 $0.50 March 2017 March 2022
120,000 $0.60 May 2017 May 2022
79,545 $0.60 July 2017 July 2022
363,636 $0.60 August 2017 August 2022

 

-15-

BIOVIE INC.

Notes to Financial Statements

For the Three Months Ended September 30, 2017 and 2016

(unaudited)

 

9. Renegotiated Debt

 

On March 23, 2017, Barrett Ehrlich agreed to defer the payment of his consulting fee debt of $173,333.33 until December 31, 2019, through the issuance of a Promissory note.  The promissory note does not carry any interest charge as long as the amount is paid in full before December 31, 2019.  The consulting fee debt has thereby been reclassified from a current liability to a long-term liability on the balance sheet. Any portion of the balance due under the note that remains unpaid after December 31, 2019 will accrue interest at a rate of 5% per annum until paid in full.

 

On March 23, 2017, Elliot Ehrlich agreed to forgive 50% of his salary debt of $444,056.25.  The adjusted salary debt is $222,028.13.  Elliot Ehrlich also agreed to defer the payment of his salary debt of $222,028.13 until December 31, 2019, through the issuance of a Promissory note.  The promissory note does not carry any interest charge as long as the amount is paid in full before December 31, 2019.  The salary debt has thereby been reclassified from a current liability to a long-term liability on the balance sheet and the salary debt forgiven has been reflected on the income statement as other income. Any portion of the balance due under the note that remains unpaid after December 31, 2019 will accrue interest at a rate of 5% per annum until paid in full.

 

On March 23, 2017, Jonathan Adams agreed to defer the payment of his salary debt of $180,555.64 until December 31, 2019, through the issuance of a Promissory note.  The promissory note does not carry any interest charge as long as the amount is paid in full before December 31, 2019.  The salary debt has thereby been reclassified from a current liability to a long-term liability on the balance sheet. Any portion of the balance due under the note that remains unpaid after December 31, 2019 will accrue interest at a rate of 5% per annum until paid in full.

 

10. Subsequent Event

 

In October 2017, the Company sold and issued an aggregate of 227,273 shares of common stock and warrants to purchase 113,636 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $50,000. The purchase price for the common stock and warrants was $0.22 per share. The warrants are exercisable at an exercise price of $0.60 at any time from date of issuance until 5 years from the date of issuance.

 

-16-

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

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 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.

 

We are a clinical stage biotechnology company engaged in the discovery, development and commercialization of 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.

 

-17-

We have incurred $662,231 of operating expenses for the quarter ended September 30, 2017.  We are now engaged in organizational activities and sourcing compounds and materials. We anticipate incurring other costs associated with equipment purchases and general and administrative expenses, including employee salaries and benefits, legal expenses, and other costs associated with an early stage, publicly-traded company.  

The amounts that we actually spend for any specific purpose may vary significantly, and will depend on a number of factors including, but not limited to, the pace of progress of our research and development, market conditions, and our ability to qualify vendors. In addition, we may use a portion of any net proceeds to acquire complementary compounds; however, we do not have plans for any acquisitions at this time. We will have significant discretion in the use of any net proceeds. Investors will be relying on the judgment of our management regarding the application of the proceeds of any sale of our Common Stock.

Requirement for Additional Capital

 

The Company has engaged in limited research and development activities. We currently do not have sufficient funds to meet our planned drug development for the next twelve (12) months and we may not be able to obtain the necessary financing on terms and conditions acceptable to the Company. Assuming that we are successful in raising additional financing, we plan to incur the following expenses over the next twelve (12) months:

 

Research and Development of $3,000,000, which includes planned clinical trial costs for the development of BIV201;

 

Corporate overhead of $500,000, which includes budgeted legal, accounting and other costs expected to be incurred; and

 

Staffing costs of $500,000.

 

The Company had approximately $21,705 of cash on hand at September 30, 2017 and will be unable to proceed with its planned drug development, meet its administrative expense requirements, capital costs, or staffing costs without obtaining additional net financing of approximately $250,000 to $500,000 to meet its near-term budgetary needs. 

The Company has limited experience with pharmaceutical drug development. As such these budget estimates may not be accurate. In addition, the actual work to be performed can only be broadly projected, as is normal with any scientific work. As further work is performed, additional work may become necessary or change in plans or workload may occur. Such changes may have an adverse impact on our estimated budget. Such changes may also have an adverse impact on our projected timeline of drug development.

 

Management intends to use capital and debt financing, as required, to fund the Company's operations. There can be no assurance that the Company will be able to obtain the additional capital resources necessary to fund its anticipated obligations for the next twelve (12) months.

 

-18-

Capital Resources and Liquidity

 

As of September 30, 2017, we had $21,705 of cash on hand in our corporate bank account. The Company is considered to be a development stage company and will continue in the development stage until generating revenues from the sales of its products or services. As a result, the report of the independent registered public accounting firm on our financial statements as of June 30, 2017, contains an explanatory paragraph regarding a substantial doubt about our ability to continue as a going concern.

We do not have sufficient funds for the next (12) twelve months and must raise cash to implement our strategy and stay in business. If we are unable to raise additional funds to develop our compounds, we may be required to scale back our development plans by reducing expenditures for employees, consultants, business development, and other envisioned expenditures. This could reduce our ability to develop BIV201, our drug candidate, and implement our business plan. In that event, investors should anticipate that their entire investment may be lost and there may be no ability to profit from this investment.

We cannot assure you that our drug candidate will be developed, work, or receive regulatory approval; that we will ever earn revenues sufficient to support our operations or that we will ever be profitable. Furthermore, since we have no committed source of financing, we cannot assure you that we will be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to severely curtail, or even to cease, our operations.

If we are unable to raise additional funds, we will need to do one or more of the following

  ·         delay, scale-back or eliminate some or all of our research and product development programs;
  ·         provide licenses to third parties to develop and commercialize products or technologies that we would otherwise seek to develop and commercialize ourselves;
  ·         seek strategic alliances or business combinations;
  ·         attempt to sell our company;
  ·         cease operations; or
  ·         declare bankruptcy.

We believe that our existing cash and cash equivalents will not be sufficient to meet our operating and capital requirements through June 30, 2018. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to secure additional debt or equity financing in a timely manner, or at all, which could require us to scale back our business plan and operations. 

-19-

The above conditions raise substantial doubt about our ability to continue as a going concern.  The financial statements included elsewhere herein were prepared under the assumption that we would continue our operations as a going concern.  Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.  Without additional funds from debt or equity financing, sales of our intellectual property or technologies, or from a business combination or a similar transaction, we will soon exhaust our resources and will be unable to continue operations.  If we cannot continue as a viable entity, our stockholders may lose some or all of their investment in us.

 

Our management intends to attempt 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.  If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that could result in our stockholders losing some or all of their investment in us.

 

Emerging Growth Company

 

We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards.

 

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. 

 

-20-

Results of Operations

 

Research and Development

 

Research and development expenses were $41,854 for the three months ended September 30, 2017, a decrease of $85,416 compared to $127,270 for the three months ended September 30, 2016. For the prior year, research and development expenses were $466,354. The research and development expenses were primarily due to the expenses incurred for clinical development activities.

 

Selling, General and Administrative

 

Selling, general and administrative expenses were $38,075 for the three months ended September 30, 2017, an increase of $35,849 compared to $2,226 for the three months ended September 30, 2016. For the prior year, selling, general and administrative expenses were $69,122. The increase in selling, general and administrative expenses was primarily due to travel and conference expenses associated with financing activities.

 

Professional Fees

 

Professional fees were $453,611 for the three months ended September 30, 2017, an increase of $360,446 compared to $93,165 for the three months ended September 30, 2016. For the prior year, professional fees were $503,369. The increase in professional fees related to a large expense for financial and strategic advisory services paid in BioVie common stock.

 

Payroll Expenses

 

Payroll expenses were $71,348 for the three months ended September 30, 2017, the same amount as the three months ended September 30, 2016. For the prior year, professional fees were $285,392. Payroll expenses were related to accrued salary for the chief executive officer, Jonathan Adams.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable

 

Item 4.  Controls and Procedures

 

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2016 covered by this Quarterly Report on Form 10-Q.  Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This conclusion by the Company’s Chief Executive Officer and Chief Financial Officer does not relate to reporting periods after September 30, 2017.

 

Changes in Internal Control over Financial Reporting

 

No change in the Company’s internal control over financial reporting occurred during the quarter ended September 30, 2017, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

-21-

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

To our knowledge, neither the Company nor any of our officers or directors is a party to any material legal proceeding or litigation and such persons know of no material legal proceeding or contemplated or threatened litigation. There are no judgments against us or our officers or directors. None of our officers or directors has been convicted of a felony or misdemeanor relating to securities or performance in corporate office.

 

Item 2. Unregistered sales of equity securities

 

None

 

Item 3. Defaults Upon Senior Securities

 

None

 

Item 4.  Mine Safety Disclosures

 

None

 

Item 5.  Other Information

 

None

 

Item 6. Exhibits

 

(a) Exhibit index

 

Exhibit 
 
31.1   Certification of Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.
   
32.1   Certification of Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.

              

 (b)  Reports on Form 8-K

 

None.

 

-22-

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BioVie, INC.

         
Signature   Titles   Date
/s/ Jonathan Adams    
Jonathan Adams   Chief Executive Officer, Principal Executive Officer, Principal Accounting Officer   November 8, 2017
         
         
     
         
         

 

-23-

EX-31.1 2 bivi-20170930_10qex31z1.htm EXHIBIT 31.1

Exhibit 31.1

 

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

AND RULE 13-A14 OF THE EXCHANGE ACT OF 1934

 

CERTIFICATION

     

I, Jonathan Adams, 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.

 

Signature   Titles     Date  
/s/ Jonathan Adams            
Jonathan Adams   Chief Executive Officer, Chief Financial Officer, Principal Executive Officer and Principal Financial and Accounting Officer, Treasurer and Chairman of the Board     November 8, 2017  
             

  

 

EX-32.1 3 bivi-20170930_10qex32z1.htm EXHIBIT 32.1

Exhibit 32.1

 

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S. C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Biovie, Inc., (the “Company”) on Form 10-Q for the period ended September, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan Adams, Chief Executive Officer, Chief Financial Officer, Principal Executive Officer and Principal Financial and Accounting Officer, Corporate Secretary, Treasurer and Chairman of the Board of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, that, to my knowledge:

 

(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.

 

Signature   Titles     Date  
/s/ Jonathan Adams            
Jonathan Adams   Chief Executive Officer, Chief Financial Officer, Principal Executive Officer and Principal Financial and Accounting Officer, Treasurer and Chairman of the Board     November 8, 2017  
             

 

 

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line-height: 115%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Aggregate Number of Warrants Issued</u></b></font></td> <td style="width: 25%; text-align: center; line-height: 115%; padding-right: 5.4pt; padding-left: 5.4pt; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; text-decoration: underline"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Exercise Price</u></b></font></td> <td style="width: 25%; text-align: center; line-height: 115%; padding-right: 5.4pt; padding-left: 5.4pt; border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; text-decoration: underline"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Issue Date</u></b></font></td> <td style="width: 25%; text-align: center; line-height: 115%; padding-right: 5.4pt; padding-left: 5.4pt; border-top: black 1pt solid; border-right: black 1pt solid; 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Document and Entity Information
3 Months Ended
Sep. 30, 2017
shares
Document And Entity Information  
Entity Registrant Name BIOVIE INC.
Entity Central Index Key 0001580149
Document Type 10-Q
Document Period End Date Sep. 30, 2017
Amendment Flag false
Current Fiscal Year End Date --06-30
Is Entity a Well-known Seasoned Issuer? No
Is Entity a Voluntary Filer? No
Is Entity's Reporting Status Current? Yes
Entity Filer Category Smaller Reporting Company
Entity Common Stock, Shares Outstanding 94,594,091
Document Fiscal Period Focus Q1
Document Fiscal Year Focus 2017
XML 11 R2.htm IDEA: XBRL DOCUMENT v3.8.0.1
BALANCE SHEETS (Unaudited) - USD ($)
Sep. 30, 2017
Jun. 30, 2017
CURRENT ASSETS:    
Cash $ 21,705 $ 5,140
Total Current Assets 21,705 5,140
OTHER ASSETS:    
Intangible Assets (Net of Amortization) 1,956,013 2,013,357
Goodwill 345,711 345,711
Total Fixed Assets 2,301,724 2,359,068
TOTAL ASSETS 2,323,430 2,364,209
CURRENT LIABILITIES:    
Accounts Payable and accrued expenses 467,783 470,973
Related Party Loan 10,000 35,000
Accrued Payroll 187,500 125,000
Total Current Liabilities 665,283 630,973
LONG TERM LIABILITIES:    
Accrued Expenses 173,333 173,334
Accrued Payroll 402,584 402,584
Total Long Term Liabilities 575,917 575,918
TOTAL LIABILITIES 1,241,200 1,206,891
STOCKHOLDERS' EQUITY    
Preferred stock; $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding
Common stock, $0.0001 par value; 300,000,000 shares authorized; shares issued and 94,594,091 and 91,925,000 shares issued and outstanding, respectively 9,459 9,192
Additional paid in capital 4,070,619 3,483,134
Accumulated deficit (2,997,849) (2,335,009)
Total Stockholders' Equity 1,082,229 1,157,318
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,323,430 $ 2,364,209
XML 12 R3.htm IDEA: XBRL DOCUMENT v3.8.0.1
BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares
Sep. 30, 2017
Jun. 30, 2017
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred Stock, Shares Issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 300,000,000 300,000,000
Common Stock Shares Issued 94,594,091 91,925,000
Common stock, shares outstanding 94,594,091 91,925,000
XML 13 R4.htm IDEA: XBRL DOCUMENT v3.8.0.1
STATEMENTS OF OPERATION (Unaudited) - USD ($)
3 Months Ended
Sep. 30, 2017
Sep. 30, 2016
REVENUE:    
Sales
COST OF GOODS SOLD
GROSS MARGIN
OPERATING EXPENSES    
Amortization 57,344 57,344
Research and development expenses 41,854 127,270
Payroll expenses 71,348 71,348
Professional fees 453,611 93,165
Selling, general and administrative expenses 38,075 2,226
TOTAL OPERATING EXPENSES 662,231 351,353
LOSS FROM OPERATIONS (662,231) (351,353)
OTHER EXPENSE (INCOME)    
Interest Expense 611
Interest income (1) (11)
TOTAL OTHER EXPENSE (INCOME) 609 (11)
NET LOSS $ (662,841) $ (351,342)
NET LOSS PER COMMON SHARE, BASIC AND DILUTED $ (0.01) $ (0.00)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED 93,301,583 87,205,550
XML 14 R5.htm IDEA: XBRL DOCUMENT v3.8.0.1
STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($)
Common Stock
Capital in Excess of Par Value
Prepaid Services Paid with Common Sock
Accumulated Deficit
Total
Beginning Balance at Jun. 30, 2016 $ 8,716 $ 2,911,560 $ (1,004,337) $ 1,915,939
Beginning Balance (in shares) at Jun. 30, 2016 87,160,001        
Issuance of common stock for services $ 477 479,523 479,999
Issuance of common stock for services, (in shares) 4,764,999        
Option vested 92,051 92,051
Net Loss (1,330,672) (1,330,672)
Ending Balance at Jun. 30, 2017 $ 9,193 3,483,134 (2,335,009) 1,157,318
Ending Balance (in shares) at Jun. 30, 2017 91,925,000        
Issuance of common stock for services $ 267 574,733 575,000
Issuance of common stock for services, (in shares) 2,669,091        
Option vested 12,752 12,752
Net Loss (662,841) (662,841)
Ending Balance at Sep. 30, 2017 $ 9,460 $ 4,070,619 $ (2,997,850) $ 1,082,229
Ending Balance (in shares) at Sep. 30, 2017 94,594,091        
XML 15 R6.htm IDEA: XBRL DOCUMENT v3.8.0.1
STATEMENT OF CASH FLOWS (Unaudited) - USD ($)
3 Months Ended
Sep. 30, 2017
Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (662,841) $ (351,342)
Adjustments to reconcile net loss to net cash to cash used by operating activities:    
Services paid with common stock 330,000  
Amortization of intangible assets 57,344 57,344
Share based compensation expense 12,751 8,848
Changes in operating assets and liabilities:    
Increase in prepaid expenses 6,982
Accounts Payable (3,190) 87,656
Accrued Payroll 62,500 62,500
Net cash used by operating activities (203,436) (128,012)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Net cash used by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from loan payable (25,000) 8,000
Proceeds from issuance of common stock 245,001 5,000
Net cash provided by financing activities 220,001 13,000
Net increase (decrease) in cash 16,565 (115,012)
Cash, beginning of period 5,140 123,757
Cash, end of period 21,705 8,745
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid for interest
Cash paid for income tax
XML 16 R7.htm IDEA: XBRL DOCUMENT v3.8.0.1
Background Information
3 Months Ended
Sep. 30, 2017
Notes to Financial Statements  
Background Information
1. Background Information

 

BioVie Inc. is a clinical-stage company pursuing the discovery, development, and commercialization of innovative drug therapies. The Company is currently focused on developing and commercializing BIV201, a novel approach to the treatment of ascites due to chronic liver cirrhosis. In March 2017, BioVie received notification from the FDA that it could initiate a Phase 2a US clinical trial. In April the Company signed a Cooperative Research and Development Agreement (CRADA) with the McGuire Research Institute/VA in Richmond, VA, and began dosing patients with BIV201 in September 2017.

 

BIV201 has the potential to improve the health of thousands of patients suffering from life-threatening complications of liver cirrhosis due to hepatitis, NASH, and alcoholism. It has Orphan Drug designation for the most common of these complications, ascites, which represents a significant unmet medical need. The FDA has never approved any drug specifically for treating ascites. For more information about BioVie and BIV201, please visit our website: www.biovieinc.com.

 

The BIV201 development program began at LAT Pharma LLC. On April 11, 2016, the Company acquired LAT Pharma LLC and the rights to its BIV201 development program. We currently own all development and marketing rights to our drug candidate, except as noted previously, the Company and PharmaIN have exchanged small (low single-digit) ownership rights to each other’s ascites drug development programs. The Company has an issued US Patent covering the use of BIV201 for the treatment of ascites patients in the outpatient setting using ambulatory pump infusion, and has filed a patent application for its drug candidate in Japan, as well as a PCT in Europe.

 

The Company’s activities are subject to significant risks and uncertainties including failure to secure additional funding to properly execute the company’s business plan.

XML 17 R8.htm IDEA: XBRL DOCUMENT v3.8.0.1
Going Concern
3 Months Ended
Sep. 30, 2017
Notes to Financial Statements  
Going Concern
2. Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the three months ended September 30, 2017, the Company had a net loss of $662,841.  As of September 30, 2017, the Company has not earned any revenues. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of public equity securities. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.8.0.1
Significant Accounting Policies
3 Months Ended
Sep. 30, 2017
Accounting Policies [Abstract]  
Significant Accounting Policies
3. Significant Accounting Policies

 

Unaudited Interim Financial Statements

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading.  The results of operations for such interim periods are not necessarily indicative of operations for a full year.

 

Basis of Presentation

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 

 

Cash

 

Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. All of our cash balances were fully insured at September 30, 2017. 

 

Financial Instruments

 

The Company’s financial instruments include cash and accounts payable. The carrying amounts of cash and accounts payable approximate their fair value, due to the short-term nature of these items. 

 

Research and Development

 

Research and development costs are charged to operations when incurred and are included in operating expenses. The Company expensed $41,854 for research and development for the quarter ended September 30, 2017. 

 

Income Taxes

 

Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending on the classification of the assets or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. 

 

The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10), January 1, 2007. The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there are no unrecognized benefits at September 30, 2017 and since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. 

 

Earnings (Loss) per Share

 

Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed by dividing net income by the weighted average number of shares of common stock outstanding and dilutive options outstanding during the year. For the quarter ended September 30, 2017 all outstanding options have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive.

 

Stock-based Compensation

 

The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).  

 

Fair Value Measurements

 

In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2013 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures” (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: 

 

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. 

 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. 

 

Level 3 - Inputs that are both significant to the fair value measurement and unobservable. 

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued payroll.

 

Recent accounting pronouncements

 

The Company has reviewed recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC and did not or are not believed by management to have a material impact on the Company’s financial statements.

XML 19 R10.htm IDEA: XBRL DOCUMENT v3.8.0.1
Related Party Loan
3 Months Ended
Sep. 30, 2017
Related Party Transactions [Abstract]  
Related Party Loan
4.Related Party Loan

 

LAT Pharma was given a zero-interest bearing loan by the company’s General Partner, Jonathan Adams in the amount of $5,000 in August 2015 and $5,000 in November 2015.  The total of $10,000 was outstanding when the Company merged with LAT Pharma. On June 16th, 2017, the Company was given an additional $25,000 zero-interest bearing loan by Jonathan Adams.  As of September 30th, 2017, the Company repaid $25,000 and has an outstanding loan of $10,000 payable. The loan is due on demand without interest to the CEO, Jonathan Adams. 

XML 20 R11.htm IDEA: XBRL DOCUMENT v3.8.0.1
Commitments and Contingencies
3 Months Ended
Sep. 30, 2017
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
5.Commitments and Contingencies

 

Office Lease 

 

On January 1, 2014 the Company executed a lease agreement with Cummings Properties for the company’s office of 270 square feet at 100 Cummings Center, Suite 247-C, Beverly, MA 01915. The lease is for a term of five years from January 1, 2014 to December 30, 2018 and requires monthly payments of $369. 

 

Employment Agreements 

 

On April 11, 2016 the Company entered into employment agreement with CEO Jonathan Adams. The Company’s agreement provides for a three-year term with minimum annual base salary of $250,000 per year. Effective April 11, 2016, the (previous) CEO/CFO resigned.

 

On September 24, 2017, the Board of Directors of BioVie Inc. appointed R. Richard Wieland II as an interim Chief Financial Officer of BioVie.  Mr. Wieland is an experienced executive in the healthcare field, having previously served as Chief Financial Officer of several other biopharmaceutical companies.

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes
3 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
6. Income Taxes

 

Deferred taxes are recorded for all existing temporary differences in the Company’s assets and liabilities for income tax and financial reporting purposes. Due to the valuation allowance for deferred tax assets, as noted below, there were no net deferred tax benefit or expense for the quarter ended September 30, 2017. 

 

There is no current or deferred income tax expense or benefit allocated to continuing operations for the quarter ended September 30, 2017. 

 

The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows: 

 

   September 30, 2017  June 30, 2017
Tax expense (benefit) at U.S. statutory rate  $(69,168)  $(528,229)
State income tax expense (benefit), net of federal benefit  $(10,172)  $(42,074)
Effect of non-deductible expenses  $—     $—   
Other  $—     $—   
Change in valuation allowance  $79,340   $570,303 
   $—     $—   

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at September 30, 2017 were as follows:

 

Deferred tax assets (liability), noncurrent:   
Net operating loss  $1,041,491 
Valuation allowance   (1,041,491)
   $—   

 

Change in valuation allowance:

 

Balance, June 30, 2017  $962,151 
Increase in valuation allowance   79,340 
Balance, September 30, 2017   1,041,491 

 

Since management of the Company believes that it is more likely than not that the net deferred tax assets will not provide future benefit, the Company has established a 100 percent valuation allowance on the net deferred tax assets as of September 30, 2017. 

 

As of September 30, 2017, the Company had federal and state net operating loss carry-forwards totaling approximately $1,800,000 which begin expiring in 2022.

XML 22 R13.htm IDEA: XBRL DOCUMENT v3.8.0.1
Purchase of LAT Pharma
3 Months Ended
Sep. 30, 2017
Business Combinations [Abstract]  
Purchase of LAT Pharma
7.Purchase of LAT Pharma

 

On April 11, 2016, the Company entered into and consummated an Agreement and Plan of Merger (the “Merger Agreement”), with LAT Acquisition Corp., a Nevada corporation and wholly-owned subsidiary of the Company (“Acquisition”) and LAT Pharma, LLC an Illinois limited liability company (“LAT”). Pursuant to the terms of the Merger Agreement, Acquisition merged with and into LAT in a statutory triangular merger (the “Merger”) with LAT surviving as a wholly-owned subsidiary of the Company. As consideration for the Merger, the Company issued the interest holders of LAT (the “LAT Holders”) an aggregate of 39,820,000 shares of our Common Stock issued to the LAT Holders in accordance with their pro rata ownership of LAT membership interests prior to the Merger. Following the Merger, the Registrant will continue the development of LAT’s lead clinical therapeutic candidate Continuous low-dose Infusion (CI) Terlipressin.

 

Immediately prior to the Merger, the Company had 87,210,000 shares of Common Stock issued and outstanding. In connection with the Merger, certain shareholders of the Company collectively agreed to retire and cancel an aggregate of 39,869,999 shares of Common Stock. Following the consummation of the Merger, the issuance of the Merger Shares of the 39,820,000 shares of Common Stock, the Company had 87,160,001 shares of Common Stock issued and outstanding and the LAT Holders beneficially own 39,820,000 shares or approximately forty-six percent (46%) of such issued and outstanding Common Stock.

 

Under the purchase method of accounting, the transaction was valued for accounting purposes at $2,389,200, which was the estimated fair value of the consideration paid by the Company. The estimate was based on the consideration paid of 39,820,000 shares of common stock valued based on the closing price on 04/11/2016 of $0.06 per share.

 

The assets and liabilities of LAT Pharma, Inc. were recorded at their respective fair values as of the closing date of the Merger Agreement, and the following table summarizes these values based on the balance sheet at April 11, 2016. 

 

$2,303,682   Assets Purchased
 260,193   Liabilities Assumed
 2,043,489   Net Assets Purchased
 2,389,200   Purchase Price
$345,711   Goodwill from Purchase

 

 Intangible asset detail 

 

$2,293,770   Intangible Intellectual Property
 345,711   Goodwill
 2,639,481   Intangible Asset from Purchase

 

Under the 338(h)(10) election, intangibles related to the acquisition of LAT Pharma will be fully deductible for tax purposes.

 

The intangible intellectual property is amortized over 10 years.

 

   September 2017  September 2016
Intangible Assets subject to Amortization  $2,293,770   $2,293,770 
Amortization Expense for Quarter  $57,344   $57,344 
Accumulated Amortization at Quarter end  $337,757   $108,380 

 

The estimated Amortization expense for each of the five succeeding fiscal years will be approximately $229,300 per year.

XML 23 R14.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity
3 Months Ended
Sep. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stockholders' Equity
8.Stock Options

 

In connection with the employment agreement signed with the Chief Executive Officer on April 11, 2016, Jonathan Adams received options to acquire 3 million shares exercisable at $0.06 per share, the closing price on that date. These Options Group A shall become vested and exercisable (i) as to 1 million shares on April 11, 2017, (ii) as to 1 million shares on April 11, 2018, and (iii) as to 1 million shares on April 11, 2019.

 

The fair market value of the stock options is estimated using the Black Scholes valuation model and the Company uses the following methods to determine its underlying assumptions: expected volatilities are based on the historical volatilities of 3 comparable companies of the daily closing price of their respective common stock; the expected term of options granted is based on the average time outstanding method; and the risk free interest rate is based on the US Treasury bonds issued with similar life terms to the expected life of the grant.

 

The following key assumptions were used in the valuation model to value stock option grants for each respective period:

 

Valuation Date 4/11/2016 4/11/2016 4/11/2016
Stock Price $ 0.06   $ 0.06   $ 0.06  
Exercise Price $ 0.06   $ 0.06   $ 0.06  
Term (expected term for options)   1.00     2.00     3.00  
Volatility   56.49 %   58.45 %   97.82 %
Annual Rate of Quarterly Dividends   0.00 %   0.00 %   0.00 %
Discount Rate - Bond Equivalent Yield   0.53 %   0.70 %   0.85 %
Call Option Value ($Millions) $ 0.01   $ 0.02   $ 0.04  
Fair Value $ 13,467   $ 19,523   $ 36,489  

 

The Company issued stock options to consultants and board of directors for services provided to the company. The following key assumptions were used in the valuation model to value stock option grants for each respective period:

 

Valuation Date 11/16/2016 12/18/2016 03/14/2017 05/02/2017 09/21/2017
Stock Price  $                 0.25  $                 0.21  $                 0.22  $                 0.23  $             0.20
Exercise Price  $                 0.25  $                 0.21  $                 0.22  $                 0.23  $             0.20
Term (expected term for options) 2.000 2.000 2.000 2.000 2.000
Volatility 43.12% 43.12% 40.02% 36.76% 32.75%
Annual Rate of Quarterly Dividends 0.00% 0.00% 0.00% 0.00% 0.00%
Discount Rate - Bond Equivalent Yield 1.02% 1.15% 1.40% 1.27% 1.45%
Call Option Value ($Millions)  $               0.06  $               0.05  $               0.05  $               0.05  $            0.39
Fair Value  $           30,919  $           15,646  $             5,143  $             4,951  $          3,903

 

Stock option transactions under the Company’s plans for the period ended September 30, 2017 is summarized below:

 

      Weighted  
    Weighed- Average Aggregate
    Average Remaining Intrinsic
  Shares Exercise Contractual Value
Options (Thousands) Price Term (Thousands)
Outstanding at July 1, 2016 3,000 0.06 2 -
Granted 1,000 0.24 2 -
Exercised - - - -
Forfeited - - - -
Outstanding at June 30, 2017 4,000 0.10 2 -
Granted 100 0.20 2 -
Exercised - - - -
Forfeited - - - -
Outstanding at September 30, 2017 4,100 0.11 2 -

 

The compensation expense for the quarter ended September 30, 2017 includes $8,848 related to the stock options described above. The legal and professional expenses for the quarter ended September 30, 2017 includes $3,903 related to the stock options described above.

 

Offerings of Common Stock and Warrants

 

In September 2016, the Company sold and issued an aggregate of 49,999 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $5,000. The purchase price for the common stock was $0.10 per share.

 

In October 2016, the Company sold and issued an aggregate of 225,000 shares of common stock and warrants to purchase 112,500 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $45,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance.

 

In November 2016, the Company sold and issued an aggregate of 250,000 shares of common stock and warrants to purchase 125,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $50,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance.

 

In December 2016, the Company sold and issued an aggregate of 100,000 shares of common stock and warrants to purchase 50,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $20,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance.

 

In January 2017, the Company, entered into a common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital Fund, LLC, an Illinois limited liability company (“Aspire Capital”) which provides that, on the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $12.0 million of shares of the Company’s common stock over the 30-month term of the Purchase Agreement (the “Aspire Equity Line”). On execution of the Purchase Agreement, the Company agreed to sell to Aspire Capital 1,000,000 shares of common stock and warrants to purchase 500,000 shares of common stock for proceeds of $200,000. The Warrant Shares will each have a five-year term and will be exercisable at $0.50 per share. Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the “Registration Rights Agreement”), in which the Company agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, as amended (the “Securities Act”), registering the sale of the shares of the Company’s common stock that have been and may be issued to Aspire Capital under the Purchase Agreement.

 

Under the Purchase agreement, after the Securities and Exchange Commission (the “SEC”) has declared effective the registration statement referred to above, on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 100,000 shares of the Company’s common stock per business day, up to $12.0 million of the Company’s common stock in the aggregate at a per share price (the “Purchase Price”) equal to the lesser of:

 

the lowest sale price of the Company’s common stock on the purchase date; or
   
the arithmetic average of the three (3) lowest closing sale prices for the Company’s common stock during the twelve (12) consecutive trading days ending on the trading day immediately preceding the purchase date.

 

In addition, on any date on which the Company submits a Purchase Notice to Aspire Capital in an amount equal to 100,000 shares and the closing sale price of our stock is equal to or greater than $0.30 per share, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date.

 

The Purchase Price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has been completed.

 

The Purchase Agreement provides that the Company and Aspire Capital shall not affect any sales under the Purchase Agreement on any purchase date where the closing sale price of the Company’s common stock is less than $0.10. There are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of sales of the Company’s common stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, the Company issued to Aspire Capital 2,400,000 shares of the Company’s common stock (the “Commitment Shares”). The Purchase Agreement may be terminated by the Company at any time, at its discretion, without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of the Company’s common stock during any time prior to the termination of the Purchase Agreement. Any proceeds that the Company receives under the Purchase Agreement are expected to be used for working capital and general corporate purposes.

 

In March 2017, the Company sold and issued an aggregate of 500,000 shares of common stock and warrants to purchase 250,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $100,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance.

 

In May 2017, the Company sold and issued an aggregate of 240,000 shares of common stock and warrants to purchase 120,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $60,000. The purchase price for the common stock and warrants was $0.25 per share. The warrants are exercisable at an exercise price of $0.75 at any time from date of issuance until 5 years from the date of issuance.

 

In August 2017, the Company sold and issued an aggregate of 886,364 shares of common stock and warrants to purchase 443,182 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $195,000. The purchase price for the common stock and warrants was $0.22 per share. The warrants are exercisable at an exercise price of $0.60 at any time from date of issuance until 5 years from the date of issuance.

 

In August 2017, the Company issued 1,500,000 shares of common stock to Aspire Capital in a private placement transaction in exchange for services. The shares were valued at $0.22 per share, and the value of the services were $330,000.

 

Between July 2017 and September 2017, the Company sold an aggregate of 250,000 shares of common stock in transactions under the Aspire Equity Line for aggregate gross proceeds of $50,000. The average purchase price for the common stock was $0.20 per share.

 

In August 2017, the Company issued an aggregate of 32,727 shares of common stock to compensate certain initial investors who purchased common stock at a $0.25 share price in a Series C offering prior to a reduction in the offering price to $0.22 per share.

 

The following table summarizes the warrants that have been issued:

 

Aggregate Number of Warrants Issued Exercise Price Issue Date Expiration Date
5,000,000 $0.50 April 2013 April 2018
112,500 $0.50 October 2016 October 2021
125,000 $0.50 November 2016 November 2021
50,000 $0.50 December 2016 December 2021
500,000 $0.50 January 2017 January 2022
250,000 $0.50 March 2017 March 2022
120,000 $0.60 May 2017 May 2022
79,545 $0.60 July 2017 July 2022
363,636 $0.60 August 2017 August 2022
XML 24 R15.htm IDEA: XBRL DOCUMENT v3.8.0.1
Renegotiated Debt
3 Months Ended
Sep. 30, 2017
Notes to Financial Statements  
Renegotiated Debt

9. Renegotiated Debt

 

On March 23, 2017, Barrett Ehrlich agreed to defer the payment of his consulting fee debt of $173,333.33 until December 31, 2019, through the issuance of a Promissory note.  The promissory note does not carry any interest charge as long as the amount is paid in full before December 31, 2019.  The consulting fee debt has thereby been reclassified from a current liability to a long-term liability on the balance sheet. Any portion of the balance due under the note that remains unpaid after December 31, 2019 will accrue interest at a rate of 5% per annum until paid in full.

 

On March 23, 2017, Elliot Ehrlich agreed to forgive 50% of his salary debt of $444,056.25.  The adjusted salary debt is $222,028.13.  Elliot Ehrlich also agreed to defer the payment of his salary debt of $222,028.13 until December 31, 2019, through the issuance of a Promissory note.  The promissory note does not carry any interest charge as long as the amount is paid in full before December 31, 2019.  The salary debt has thereby been reclassified from a current liability to a long-term liability on the balance sheet and the salary debt forgiven has been reflected on the income statement as other income. Any portion of the balance due under the note that remains unpaid after December 31, 2019 will accrue interest at a rate of 5% per annum until paid in full.

 

On March 23, 2017, Jonathan Adams agreed to defer the payment of his salary debt of $180,555.64 until December 31, 2019, through the issuance of a Promissory note.  The promissory note does not carry any interest charge as long as the amount is paid in full before December 31, 2019.  The salary debt has thereby been reclassified from a current liability to a long-term liability on the balance sheet. Any portion of the balance due under the note that remains unpaid after December 31, 2019 will accrue interest at a rate of 5% per annum until paid in full.

XML 25 R16.htm IDEA: XBRL DOCUMENT v3.8.0.1
Subsequent Events
3 Months Ended
Sep. 30, 2017
Subsequent Events [Abstract]  
Subsequent Events

10. Subsequent Event

 

In October 2017, the Company sold and issued an aggregate of 227,273 shares of common stock and warrants to purchase 113,636 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $50,000. The purchase price for the common stock and warrants was $0.22 per share. The warrants are exercisable at an exercise price of $0.60 at any time from date of issuance until 5 years from the date of issuance.

XML 26 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
Significant Accounting Policies (Policies)
3 Months Ended
Sep. 30, 2017
Accounting Policies [Abstract]  
Unaudited Interim Financial Statements

Unaudited Interim Financial Statements

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading.  The results of operations for such interim periods are not necessarily indicative of operations for a full year.

Basis of Presentation

Basis of Presentation

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 

Cash

Cash

 

Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. All of our cash balances were fully insured at September 30, 2017. 

Financial Instruments

Financial Instruments

 

The Company’s financial instruments include cash and accounts payable. The carrying amounts of cash and accounts payable approximate their fair value, due to the short-term nature of these items.

Research and Development

Research and Development

 

Research and development costs are charged to operations when incurred and are included in operating expenses. The Company expensed $41,854 for research and development for the quarter ended September 30, 2017.

Income Taxes

Income Taxes

 

Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending on the classification of the assets or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. 

 

The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10), January 1, 2007. The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there are no unrecognized benefits at September 30, 2017 and since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

Earnings (Loss) per Share

Earnings (Loss) per Share

 

Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed by dividing net income by the weighted average number of shares of common stock outstanding and dilutive options outstanding during the year. For the quarter ended September 30, 2017 all outstanding options have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive.

Stock-based Compensation

Stock-based Compensation

 

The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

Fair Value Measurements

Fair Value Measurements

 

In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2013 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures” (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: 

 

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. 

 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. 

 

Level 3 - Inputs that are both significant to the fair value measurement and unobservable. 

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued payroll.

Recent accounting pronouncements

Recent accounting pronouncements

 

The Company has reviewed recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC and did not or are not believed by management to have a material impact on the Company’s financial statements.

XML 27 R18.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes (Tables)
3 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Reconciliation of the federal statutory income tax rate to income tax expense expense

The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows:

 

   September 30, 2017  June 30, 2017
Tax expense (benefit) at U.S. statutory rate  $(69,168)  $(528,229)
State income tax expense (benefit), net of federal benefit  $(10,172)  $(42,074)
Effect of non-deductible expenses  $—     $—   
Other  $—     $—   
Change in valuation allowance  $79,340   $570,303 
   $—     $—   
Schedule of gross amounts of deferred tax assets and deferred tax liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at September 30, 2017 were as follows:

 

Deferred tax assets (liability), noncurrent:   
Net operating loss  $1,041,491 
Valuation allowance   (1,041,491)
   $—   

 

Change in valuation allowance:

 

Balance, June 30, 2017  $962,151 
Increase in valuation allowance   79,340 
Balance, September 30, 2017   1,041,491 
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.8.0.1
Purchase of LAT Pharma (Tables)
3 Months Ended
Sep. 30, 2017
Purchase Of Lat Pharma Tables  
Schedule of Assets and Liabilities of LAT Pharma, Inc.

The assets and liabilities of LAT Pharma, Inc. were recorded at their respective fair values as of the closing date of the Merger Agreement, and the following table summarizes these values based on the balance sheet at April 11, 2016. 

 

$2,303,682   Assets Purchased
 260,193   Liabilities Assumed
 2,043,489   Net Assets Purchased
 2,389,200   Purchase Price
$345,711   Goodwill from Purchase

 

 Intangible asset detail 

 

$2,293,770   Intangible Intellectual Property
 345,711   Goodwill
 2,639,481   Intangible Asset from Purchase
Schedule of intangible intellectual property amortized

The intangible intellectual property is amortized over 10 years.

 

   September 2017  September 2016
Intangible Assets subject to Amortization  $2,293,770   $2,293,770 
Amortization Expense for Quarter  $57,344   $57,344 
Accumulated Amortization at Quarter end  $337,757   $108,380 
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity (Tables)
3 Months Ended
Sep. 30, 2017
Stockholders Equity Tables  
Schedule of Stock option grants for each respective period

The following key assumptions were used in the valuation model to value stock option grants for each respective period:

 

Valuation Date   4/11/2016 4/11/2016 4/11/2016
Stock Price   $ 0.06   $ 0.06   $ 0.06  
Exercise Price   $ 0.06   $ 0.06   $ 0.06  
Term (expected term for options)     1.00     2.00     3.00  
Volatility     56.49 %   58.45 %   97.82 %
Annual Rate of Quarterly Dividends     0.00 %   0.00 %   0.00 %
Discount Rate - Bond Equivalent Yield     0.53 %   0.70 %   0.85 %
Call Option Value ($Millions)   $ 0.01   $ 0.02   $ 0.04  
Fair Value   $ 13,467   $ 19,523   $ 36,489  

 

The Company issued stock options to consultants and board of directors for services provided to the company. The following key assumptions were used in the valuation model to value stock option grants for each respective period:

 

Valuation Date 11/16/2016 12/18/2016 03/14/2017 05/02/2017 09/21/2017
Stock Price  $                 0.25  $                 0.21  $                 0.22  $                 0.23  $             0.20
Exercise Price  $                 0.25  $                 0.21  $                 0.22  $                 0.23  $             0.20
Term (expected term for options) 2.000 2.000 2.000 2.000 2.000
Volatility 43.12% 43.12% 40.02% 36.76% 32.75%
Annual Rate of Quarterly Dividends 0.00% 0.00% 0.00% 0.00% 0.00%
Discount Rate - Bond Equivalent Yield 1.02% 1.15% 1.40% 1.27% 1.45%
Call Option Value ($Millions)  $               0.06  $               0.05  $               0.05  $               0.05  $            0.39
Fair Value  $           30,919  $           15,646  $             5,143  $             4,951  $          3,903

 

Stock option transactions under the Company’s plans for the period ended September 30, 2017 is summarized below:

 

      Weighted  
    Weighed- Average Aggregate
    Average Remaining Intrinsic
  Shares Exercise Contractual Value
Options (Thousands) Price Term (Thousands)
Outstanding at July 1, 2016 3,000 0.06 2 -
Granted 1,000 0.24 2 -
Exercised - - - -
Forfeited - - - -
Outstanding at June 30, 2017 4,000 0.10 2 -
Granted 100 0.20 2 -
Exercised - - - -
Forfeited - - - -
Outstanding at September 30, 2017 4,100 0.11 2 -

 

The following table summarizes the warrants that have been issued:

 

Aggregate Number of Warrants Issued Exercise Price Issue Date Expiration Date
5,000,000 $0.50 April 2013 April 2018
112,500 $0.50 October 2016 October 2021
125,000 $0.50 November 2016 November 2021
50,000 $0.50 December 2016 December 2021
500,000 $0.50 January 2017 January 2022
250,000 $0.50 March 2017 March 2022
120,000 $0.60 May 2017 May 2022
79,545 $0.60 July 2017 July 2022
363,636 $0.60 August 2017 August 2022
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.8.0.1
Going Concern (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Jun. 30, 2017
Notes to Financial Statements      
Net Loss $ 662,841 $ 351,342 $ 1,330,672
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.8.0.1
Related Party Loan (Details Narrative) - Jonathan Adams [Member] - USD ($)
1 Months Ended 3 Months Ended
Jun. 16, 2017
Nov. 30, 2015
Aug. 31, 2015
Sep. 30, 2017
Loan Received $ 25,000 $ 5,000 $ 5,000  
Loan Repaid       $ 2,500
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.8.0.1
Commitments and Contingencies (Details Narrative)
1 Months Ended
Jun. 30, 2017
USD ($)
Notes to Financial Statements  
Lease rental $ 369
Lease term (in years) 5 years
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes (Details) - USD ($)
3 Months Ended 12 Months Ended
Sep. 30, 2017
Jun. 30, 2016
Income Tax Disclosure [Abstract]    
Tax expense (benefit) at U.S. statutory rate $ (69,168) $ (146,889)
State income tax expense (benefit), net of federal benefit (10,172) (21,659)
Effect of non-deductible expenses
Other
Change in valuation allowance 79,340 168,548
Total
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes (Details 2) - USD ($)
Sep. 30, 2017
Jun. 30, 2017
Deferred tax assets (liability)    
Net operating loss $ 1,041,491  
Valuation allowance (1,041,491) $ (962,151)
Total  
Federal and State net operating loss carry-forwards $ 1,800,000  
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes (Details 3) - USD ($)
3 Months Ended 12 Months Ended
Sep. 30, 2017
Jun. 30, 2016
Change in valuation allowance:    
Beginning Balance $ 962,151  
Increase in valuation allowance 79,340 $ 168,548
Ending Balance $ 1,041,491  
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.8.0.1
Purchase of LAT Pharma (Details) - USD ($)
Sep. 30, 2017
Jun. 30, 2017
Dec. 31, 2016
Apr. 11, 2016
Goodwill $ 345,711 $ 345,711    
Intangible Intellectual Property   $ 2,293,710 $ 2,293,770  
LAT Pharma, Inc. [Member]        
Assets Purchased       $ 2,303,682
Liabilities Assumed       260,193
Net Assets Purchased       2,043,489
Purchase Price       2,389,200
Goodwill       345,711
Intangible Intellectual Property       2,293,770
Intangible Asset from Purchase       $ 2,639,481
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.8.0.1
Purchase of LAT Pharma (Details 2) - USD ($)
3 Months Ended 6 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Jun. 30, 2017
Purchase Of Lat Pharma Details 2        
Intangible Assets subject to Amortization     $ 2,293,770 $ 2,293,710
Amortization Expense $ 57,344 $ 57,344 57,344  
Accumulated Amortization     $ 108,380 $ 337,757
XML 38 R29.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity (Details) - $ / shares
3 Months Ended 12 Months Ended
Sep. 30, 2017
Jun. 30, 2016
Stockholders Equity Details    
Option Outstanding at beginning of year 4,000 3,000
Option Granted 100 1,000
Option Exercised
Option Forfeited
Option Outstanding at end of year 4,100 4,000
Outstanding Weighted Average Exercise Price at the beginning $ 0.10 $ .06
Weighted Average Exercise Price, Granted .20 .24
Outstanding Weighted Average Exercise Price at the end $ .11 $ .10
Weighted Average Remaining Contractual Term (in years) 2 years 2 years
XML 39 R30.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity (Details 2) - USD ($)
Sep. 21, 2017
May 02, 2017
Mar. 14, 2017
Dec. 18, 2016
Nov. 16, 2016
Apr. 11, 2016
Equity Option [Member]            
Stock Price $ .20 $ 0.23 $ 0.22 $ 0.21 $ 0.25 $ 0.06
Exercise Price $ .20 $ 0.23 $ 0.22 $ 0.21 $ 0.25 $ 0.06
Term 2 years 2 years 2 years 2 years 2 years 1 year
Volatility 32.75% 36.76% 40.02% 43.12% 43.12% 56.49%
Annual Rate of Quarterly Dividends 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Discount Rate - Bond Equivalent Yield 1.45% 1.27% 1.40% 1.15% 1.02% 0.53%
Call Option Value $ 390,000 $ 500,000 $ 500,000 $ 500,000 $ 600,000 $ 100,000
Fair Value $ 3,903 $ 4,951 $ 5,143 $ 15,646 $ 30,919 $ 13,467
StockOptionTwoMember            
Stock Price           $ 0.06
Exercise Price           $ 0.06
Term           3 years
Volatility           97.82%
Annual Rate of Quarterly Dividends           0.00%
Discount Rate - Bond Equivalent Yield           0.85%
Call Option Value           $ 400,000
Fair Value           $ 36,489
Stock Option [Member]            
Stock Price           $ 0.06
Exercise Price           $ 0.06
Term           2 years
Volatility           58.45%
Annual Rate of Quarterly Dividends           0.00%
Discount Rate - Bond Equivalent Yield           0.70%
Call Option Value           $ 200,000
Fair Value           $ 19,523
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