UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended December 31, 2022

 

or

 

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

 

Commission File Number: 000-54878

 

PROPANC BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		33-0662986
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

302, 6 Butler Street

Camberwell, VIC, 3124 Australia

(Address of principal executive offices) (Zip Code)

 

+61-03- 9882-0780

(Registrant’s telephone number, including area code)

 

n/a

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None		None		None

 

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 preceding 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 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 checkmark 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 ☒

 

As of February 9, 2023, there were 1,763,908,545 shares of the registrant’s common stock, $0.001 par value per share, issued and outstanding.

 

 

 

PROPANC BIOPHARMA INC.

 

Table of Contents

 

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	8
Item 4.	Controls and Procedures	8
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	9
Item 1A.	Risk Factors	9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3.	Defaults Upon Senior Securities	9
Item 4.	Mine Safety Disclosures	9
Item 5.	Other Information	9
Item 6.	Exhibits	9
	Signatures	10

 

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

The following unaudited interim condensed consolidated financial statements of Propanc Biopharma, Inc. are included in this Quarterly Report on Form 10-Q:

 

INDEX TO FINANCIAL STATEMENTS

 

	Page
Condensed Consolidated Balance Sheets at December 31, 2022 (unaudited) and June 30, 2022	F-2
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended December 31, 2022 and 2021 (unaudited)	F-3
Condensed Consolidated Statements of Changes in Stockholders’ Deficit for each of the three and six months in the periods ended December 31, 2022 and 2021 (unaudited)	F-4
Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2022 and 2021 (unaudited)	F-5
Notes to the Condensed Consolidated Financial Statements (unaudited)	F-6

 

 

PROPANC BIOPHARMA, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		December 31, 2022				June 30, 2022
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash		$	24,476			$	4,067
GST tax receivable			4,543				2,342
Prepaid expenses and other current assets			25,207				8,621
TOTAL CURRENT ASSETS			54,226				15,030
Security deposit - related party			2,042				2,075
Operating lease right-of-use assets, net - related party			50,671				62,523
Property and equipment, net			1,083				2,023
TOTAL ASSETS		$	108,022			$	81,651
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable		$	914,491			$	943,023
Accrued expenses and other payables			556,114				466,115
Accrued interest			59,733				57,822
Loan payable			65,280				-
Note payable, net of debt discount			72,404				-
Convertible notes, net of discounts and including premiums			633,740				926,438
Operating lease liability - related party, current portion			21,102				20,605
Embedded conversion option liabilities			10,623				151,262
Due to former director - related party			30,257				30,746
Loan from former director - related party			50,357				51,171
Employee benefit liability			578,453				415,799
TOTAL CURRENT LIABILITIES			2,992,554				3,062,981
NON-CURRENT LIABILITIES:
Operating lease liability - long-term portion - related party			30,885				42,319
TOTAL NON-CURRENT LIABILITIES			30,885				42,319
TOTAL LIABILITIES		$	3,023,439			$	3,105,300
Commitments and Contingencies (See Note 8)			-				-
STOCKHOLDERS’ DEFICIT:
Preferred stock, 1,500,005 shares authorized, $0.01 par value:
Series A preferred stock, $0.01 par value; 500,000 shares authorized; 500,000 shares issued and outstanding as of December 31, 2022 and June 30, 2022		$	5,000			$	5,000
Series B preferred stock, $0.01 par value; 5 shares authorized; 1 share issued and outstanding as of December 31, 2022 and June 30, 2022			-				-
Preferred stock value
Common stock, $0.001 par value; 10,000,000,000 shares authorized; 1,245,699,501 and 220,350,921 shares issued and outstanding as of December 31, 2022 and June 30, 2022, respectively			1,245,700				220,351
Common stock issuable (59 and 19,597,024 shares as of December 31, 2022 and June 30, 2022, respectively)			-				19,597
Additional paid-in capital			57,696,390				57,124,982
Subscription receivable			-				(23,758	)
Accumulated other comprehensive income			1,253,133				1,234,549
Accumulated deficit			(63,069,163	)			(61,557,893	)
Treasury stock (1 share)			(46,477	)			(46,477	)
TOTAL STOCKHOLDERS’ DEFICIT			(2,915,417	)			(3,023,649	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	108,022			$	81,651

 

The accompanying unaudited condensed notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

PROPANC BIOPHARMA, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

		2022				2021				2022				2021
		Three Months Ended December 31,								For the six months ended December 31,
		2022				2021				2022				2021
REVENUE
Revenue		$	-			$	-			$	-			$	-
OPERATING EXPENSES
Administration expenses			525,620				346,164				990,752				777,904
Occupancy expenses - related party			7,506				6,550				13,879				14,286
Research and development			74,878				50,753				176,203				97,307
TOTAL OPERATING EXPENSES			608,004				403,467				1,180,834				889,497
LOSS FROM OPERATIONS			(608,004	)			(403,467	)			(1,180,834	)			(889,497	)
OTHER INCOME (EXPENSE)
Interest expense			(98,619	)			(177,905	)			(261,371	)			(287,758	)
Interest income			17				-				19				-
Change in fair value of derivative liabilities			62,335				(163,853	)			127,508				(167,757	)
Gain from settlement of accounts payable			-				-				17,499				-
Gain on extinguishment of debt, net			43,520				-				42,910				-
Foreign currency transaction gain (loss)			(13,988	)			(110,215	)			22,235				(1,086	)
TOTAL OTHER EXPENSE, NET			(6,735	)			(451,973	)			(51,200	)			(456,601	)
LOSS BEFORE TAXES			(614,739	)			(855,440	)			(1,232,034	)			(1,346,098	)
Tax benefit			129,321				55,463				129,321				55,463
NET LOSS		$	(485,418	)		$	(799,977	)		$	(1,102,713	)		$	(1,290,635	)
Deemed Dividend			(19,322	)			(93,398	)			(408,557	)			(208,242	)
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS		$	(504,740	)		$	(893,375	)		$	(1,511,270	)		$	(1,498,877	)
BASIC AND DILUTED NET LOSS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS		$	(0.00	)		$	(0.02	)		$	(0.00	)		$	(0.04	)
BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING			960,470,651				49,373,565				718,360,144				38,318,783
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS		$	(504,740	)		$	(893,375	)		$	(1,511,270	)		$	(1,498,877	)
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized foreign currency translation gain (loss)			(107,812	)			(7,697	)			18,584				56,496
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)			(107,812	)			(7,697	)			18,584				56,496
TOTAL COMPREHENSIVE LOSS		$	(612,552	)		$	(901,072	)		$	(1,492,686	)		$	(1,442,381	)

 

The accompanying unaudited condensed notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

PROPANC BIOPHARMA, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2022 AND 2021

(Unaudited)

 

		Preferred Stock																								Common Stock																				Accumulated
		Series A								Series B								Common Stock								Issuable								Additional												Other								Total
		No. of Shares				Value				No. of Shares				Value				No. of Shares				Value				No. of Shares				Value				Paid-in Capital				Subscription Receivable				Accumulated Deficit				Comprehensive Income				Treasury Stock				Stockholders’ Deficit
Balance at June 30, 2021			500,000			$	5,000				1			$	-				14,055,393			$	14,056				59			$	-			$	54,074,110			$	-			$	(58,199,466	)		$	1,085,204			$	(46,477	)		$	(3,067,573	)
Issuance of common stock for conversion of convertible debt, conversion fee and accrued interest			-				-				-				-				9,445,009				9,445				-				-				190,741				-				-				-				-				200,186
Issuance of common stock for services and accrued expenses			-				-				-				-				17,934,379				17,934				-				-				563,927				-				-				-				-				581,861
Issuance of common stock for exercise of warrants			-				-				-				-				6,875				7				2,500				2				374,991				(100,000	)			-				-				-				275,000
Issuance of common stock for alternate cashless exercise of warrants			-				-				-				-				2,399,988				2,400				1,999,990				2,000				(4,400	)			-				-				-				-				-
Reclassification of put premium upon debt conversion			-				-				-				-				-				-				-				-				109,643				-				-				-				-				109,643
Stock based compensation in connection with stock option grants			-				-				-				-				-				-				-				-				20,718				-				-				-				-				20,718
Foreign currency translation gain			-				-				-				-				-				-				-				-				-				-				-				64,193				-				64,193
Deemed dividend upon alternate cashless exercise of warrants			-				-				-				-				-				-				-				-				114,844				-				(114,844	)			-				-				-
Net loss for the three months ended September 30, 2021			-				-				-				-				-				-				-				-				-				-				(490,658	)			-				-				(490,658	)
Balance at September 30, 2021			500,000				5,000				1				-				43,841,644				43,842				2,002,549				2,002				55,444,574				(100,000	)			(58,804,968	)			1,149,397				(46,477	)			(2,306,630	)
Issuance of common stock for conversion of convertible debt and accrued interest			-				-				-				-				1,818,097				1,818				-				-				24,908				-				-				-				-				26,726
Issuance of common stock for deferred offering cost			-				-				-				-				1,000,000				1,000				-				-				19,000				-				-				-				-				20,000
Issuance of common stock for exercise of warrants			-				-				-				-				2,500				2				(2,500	)			(2	)			-				100,000				-				-				-				100,000
Issuance of common stock for alternate cashless exercise of warrants			-				-				-				-				6,399,968				6,400				(1,999,990	)			(2,000	)			(4,400	)			-				-				-				-				-
Reclassification of put premium upon debt conversion			-				-				-				-				-				-				-				-				16,667				-				-				-				-				16,667
Stock based compensation in connection with stock option grants			-				-				-				-				-				-				-				-				20,718				-				-				-				-				20,718
Foreign currency translation loss			-				-				-				-				-				-				-				-				-				-				-				(7,697	)			-				(7,697	)