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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 September 30, 2023
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 November 14, 2023, there were 22,258,941 shares of the registrant’s common stock, $0.001 par value per share, issued and outstanding.
PROPANC
BIOPHARMA INC.
Table
of Contents
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
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
CONDENSED
CONSOLIDATED BALANCE SHEETS
| |
September
30, 2023 | | |
June
30, 2023 | |
| |
(Unaudited) | | |
| |
ASSETS | |
| | | |
| | |
| |
| | | |
| | |
CURRENT ASSETS: | |
| | | |
| | |
Cash | |
$ | 6,625 | | |
$ | 10,047 | |
GST tax receivable | |
| 2,634 | | |
| 2,867 | |
Prepaid expenses and other
current assets | |
| 20,376 | | |
| 6,125 | |
Refundable advance deposit | |
| 116,169 | | |
| - | |
| |
| | | |
| | |
TOTAL CURRENT ASSETS | |
| 145,804 | | |
| 19,039 | |
| |
| | | |
| | |
Security deposit - related
party | |
| 1,928 | | |
| 1,999 | |
Operating lease right-of-use
assets, net - related party | |
| 32,479 | | |
| 38,988 | |
Property and equipment,
net | |
| 160 | | |
| 302 | |
| |
| | | |
| | |
TOTAL ASSETS | |
$ | 180,371 | | |
$ | 60,328 | |
| |
| | | |
| | |
LIABILITIES
AND STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
| |
| | | |
| | |
CURRENT LIABILITIES: | |
| | | |
| | |
Accounts payable | |
$ | 1,081,316 | | |
$ | 966,718 | |
Accrued expenses and other
payables | |
| 614,870 | | |
| 579,707 | |
Accrued interest | |
| 52,743 | | |
| 44,709 | |
Loan payable | |
| 65,280 | | |
| 65,280 | |
Note payable, net of discount | |
| 126,000 | | |
| - | |
Convertible notes, net
of discounts and including put premiums | |
| 397,443 | | |
| 390,539 | |
Operating lease liability
- related party, current portion | |
| 21,161 | | |
| 21,505 | |
Embedded conversion option
liabilities | |
| 119,069 | | |
| 423,209 | |
Due to former director
- related party | |
| 28,581 | | |
| 29,630 | |
Loan from former director
- related party | |
| 47,567 | | |
| 49,314 | |
Loan payable | |
| 47,567 | | |
| 49,314 | |
Employee benefit liability | |
| 579,083 | | |
| 587,618 | |
| |
| | | |
| | |
TOTAL CURRENT LIABILITIES | |
| 3,133,113 | | |
| 3,158,229 | |
| |
| | | |
| | |
NON-CURRENT LIABILITIES: | |
| | | |
| | |
Loan payable - long-term
- related party, net of discount | |
| 23,371 | | |
| - | |
Operating lease liability
- long-term portion - related party | |
| 13,146 | | |
| 19,278 | |
| |
| | | |
| | |
TOTAL NON-CURRENT LIABILITIES | |
| 36,517 | | |
| 19,278 | |
| |
| | | |
| | |
TOTAL LIABILITIES | |
$ | 3,169,630 | | |
$ | 3,177,507 | |
| |
| | | |
| | |
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 previously authorized; 0 shares issued and outstanding as of September 30, 2023 and June 30, 2023 | |
$ | - | | |
$ | - | |
Series B preferred stock, $0.01 par value;
5 shares authorized; 1 share issued and outstanding as of September 30, 2023 and June 30, 2023 | |
| - | | |
| - | |
Preferred stock, value | |
| - | | |
| - | |
Common stock, $0.001 par value; 10,000,000,000
shares authorized; 14,833,210 and 6,031,250 shares issued and outstanding as of September 30, 2023 and June 30, 2023, respectively | |
| 14,833 | | |
| 6,031 | |
Common stock issuable (626,229 and 1,621,653
shares as of September 30, 2023 and June 30, 2023, respectively) | |
| 626 | | |
| 1,621 | |
Additional paid-in capital | |
| 60,851,382 | | |
| 60,311,502 | |
Accumulated other comprehensive
income | |
| 1,368,550 | | |
| 1,294,876 | |
Accumulated deficit | |
| (65,178,173 | ) | |
| (64,684,732 | ) |
Treasury stock (0.001 share) | |
| (46,477 | ) | |
| (46,477 | ) |
| |
| | | |
| | |
TOTAL STOCKHOLDERS’
DEFICIT | |
| (2,989,259 | ) | |
| (3,117,179 | ) |
| |
| | | |
| | |
TOTAL LIABILITIES AND STOCKHOLDERS’
DEFICIT | |
$ | 180,371 | | |
$ | 60,328 | |
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)
| |
2023 | | |
2022 | |
| |
For
the three months ended September 30, | |
| |
2023 | | |
2022 | |
| |
| | |
| |
REVENUE | |
| | | |
| | |
Revenue | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
OPERATING EXPENSES | |
| | | |
| | |
Administration
expenses | |
| 393,828 | | |
| 465,132 | |
Occupancy expenses - related
party | |
| 7,149 | | |
| 6,373 | |
Research and development | |
| 16,242 | | |
| 101,325 | |
TOTAL OPERATING EXPENSES | |
| 417,219 | | |
| 572,830 | |
| |
| | | |
| | |
LOSS FROM OPERATIONS | |
| (417,219 | ) | |
| (572,830 | ) |
| |
| | | |
| | |
OTHER INCOME (EXPENSE) | |
| | | |
| | |
Interest expense | |
| (178,234 | ) | |
| (162,752 | ) |
Interest income | |
| 17 | | |
| 2 | |
Derivative expense | |
| (77,721 | ) | |
| - | |
Change in fair value of
derivative liabilities | |
| 303,929 | | |
| 65,173 | |
Gain from settlement of
accounts payable | |
| - | | |
| 17,499 | |
Gain (loss) on extinguishment
of debt, net | |
| 34,310 | | |
| (610 | ) |
Foreign currency transaction
gain (loss) | |
| (15,948 | ) | |
| 36,223 | |
TOTAL OTHER INCOME (EXPENSE),
NET | |
| 66,353 | | |
| (44,465 | ) |
| |
| | | |
| | |
| |
| | | |
| | |
Tax benefit | |
| - | | |
| - | |
| |
| | | |
| | |
NET LOSS | |
$ | (350,866 | ) | |
$ | (617,295 | ) |
| |
| | | |
| | |
Deemed Dividend | |
| (142,575 | ) | |
| (389,235 | ) |
| |
| | | |
| | |
NET LOSS AVAILABLE TO COMMON
STOCKHOLDERS | |
$ | (493,441 | ) | |
$ | (1,006,530 | ) |
| |
| | | |
| | |
BASIC AND DILUTED NET LOSS
PER SHARE AVAILABLE TO COMMON STOCKHOLDERS | |
$ | (0.04 | ) | |
$ | (2.13 | ) |
| |
| | | |
| | |
BASIC AND DILUTED WEIGHTED AVERAGE SHARES
OUTSTANDING | |
| 10,989,681 | | |
| 473,589 | |
| |
| | | |
| | |
NET LOSS AVAILABLE TO COMMON
STOCKHOLDERS | |
$ | (493,441 | ) | |
$ | (1,006,530 | ) |
| |
| | | |
| | |
OTHER COMPREHENSIVE INCOME
(LOSS) | |
| | | |
| | |
Unrealized foreign currency
translation gain (loss) | |
| 73,674 | | |
| 126,396 | |
| |
| | | |
| | |
TOTAL OTHER COMPREHENSIVE
INCOME (LOSS) | |
| 73,674 | | |
| 126,396 | |
| |
| | | |
| | |
TOTAL COMPREHENSIVE LOSS | |
$ | (419,767 | ) | |
$ | (880,134 | ) |
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 MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
| |
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 | |
| |
Preferred
Stock | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| |
Series
A | | |
Series
B | | |
Common
Stock | | |
Common
Stock Issuable | | |
Additional | | |
| | |
| | |
Accumulated
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, 2022 | |
| 500,000 | | |
$ | 5,000 | | |
| 1 | | |
$ | - | | |
| 220,351 | | |
$ | 220 | | |
| 19,598 | | |
$ | 20 | | |
$ | 57,364,690 | | |
$ | (23,758 | ) | |
$ | (61,557,893 | ) | |
$ | 1,234,549 | | |
$ | (46,477 | ) | |
$ | (3,023,649 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock for
cash | |
| - | | |
| - | | |
| - | | |
| - | | |
| 14,337 | | |
| 14 | | |
| - | | |
| - | | |
| 24,697 | | |
| 23,758 | | |
| - | | |
| - | | |
| - | | |
| 48,469 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock for
conversion of convertible debt, conversion fee and accrued interest | |
| - | | |
| - | | |
| - | | |
| - | | |
| 264,493 | | |
| 264 | | |
| - | | |
| - | | |
| 456,675 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 456,939 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock for
issuable shares | |
| - | | |
| - | | |
| - | | |
| - | | |
| 19,597 | | |
| 20 | | |
| (19,598 | ) | |
| (20 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock for
exercise of warrants | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1 | | |
| - | | |
| 1 | | |
| - | | |
| 100,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 100,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock for
alternate cashless exercise of warrants | |
| - | | |
| - | | |
| - | | |
| - | | |
| 158,399 | | |
| 158 | | |
| - | | |
| - | | |
| (158 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Reclassification of put premium
upon debt conversion | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 133,646 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 133,646 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Stock based compensation in
connection with stock warrant grant | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,408 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,408 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Warrant grant for settlement
of accounts payable | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 5,551 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 5,551 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation
gain | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 126,396 | | |
| - | | |
| 126,396 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Deemed dividend upon alternate
cashless exercise of warrants | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 389,235 | | |
| - | | |
| (389,235 | ) | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss for the three months ended September 30, 2022 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (617,295 | ) | |
| - | | |
| - | | |
| (617,295 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance at September 30, 2022 | |
| 500,000 | | |
$ | 5,000 | | |
| 1 | | |
$ | - | | |
| 677,178 | | |
$ | 677 | | |
| 1 | | |
$ | (0 | ) | |
$ | 58,476,743 | | |
$ | - | | |
$ | (62,564,423 | ) | |
$ | 1,360,945 | | |
$ | (46,477 | ) | |
$ | (2,767,535 | ) |
| |
Preferred
Stock | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| |
Series
A | | |
Series
B | | |
Common
Stock | | |
Common
Stock Issuable | | |
Additional | | |
| | |
| | |
Accumulated
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, 2023 | |
| - | | |
$ | - | | |
| 1 | | |
$ | - | | |
| 6,031,250 | | |
$ | 6,031 | | |
| 1,621,653 | | |
$ | 1,621 | | |
$ | 60,311,502 | | |
$ | - | | |
$ | (64,684,732 | ) | |
$ | 1,294,876 | | |
$ | (46,477 | ) | |
$ | (3,117,179 | ) |
Balance | |
| - | | |
$ | - | | |
| 1 | | |
$ | - | | |
| 6,031,250 | | |
$ | 6,031 | | |
| 1,621,653 | | |
$ | 1,621 | | |
$ | 60,311,502 | | |
$ | - | | |
$ | (64,684,732 | ) | |
$ | 1,294,876 | | |
$ | (46,477 | ) | |
$ | (3,117,179 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock for
conversion of convertible debt, conversion fee and accrued interest | |
| - | | |
| - | | |
| - | | |
| - | | |
| 4,898,307 | | |
| 4,899 | | |
| 626,229 | | |
| 626 | | |
| 223,665 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 229,190 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock for
alternate cashless exercise of warrants | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,282,000 | | |
| 2,282 | | |
| - | | |
| - | | |
| (2,282 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock for
issuable shares | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,621,653 | | |
| 1,621 | | |
| (1,621,653 | ) | |
| (1,621 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Reclassification of put premium
upon debt conversion | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 34,838 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 34,838 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Relative fair value of warrant
granted in connection with a loan payable - related party | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 141,084 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 141,084 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation
gain | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 73,674 | | |
| - | | |
| 73,674 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Deemed dividend upon alternate
cashless exercise of warrants | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 142,575 | | |
| - | | |
| (142,575 | ) | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss for the three months ended September 30, 2023 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (350,866 | ) | |
| - | | |
| - | | |
| (350,866 | ) |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (350,866 | ) | |
| - | | |
| - | | |
| (350,866 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance at September 30, 2023 | |
| - | | |
$ | - | | |
| 1 | | |
$ | - | | |
| 14,833,210 | | |
$ | 14,833 | | |
| 626,229 | | |
$ | 626 | | |
$ | 60,851,382 | | |
$ | - | | |
$ | (65,178,173 | ) | |
$ | 1,368,550 | | |
$ | (46,477 | ) | |
$ | (2,989,259 | ) |
Balance | |
| - | | |
$ | - | | |
| 1 | | |
$ | - | | |
| 14,833,210 | | |
$ | 14,833 | | |
| 626,229 | | |
$ | 626 | | |
$ | 60,851,382 | | |
$ | - | | |
$ | (65,178,173 | ) | |
$ | 1,368,550 | | |
$ | (46,477 | ) | |
$ | (2,989,259 | ) |
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 CASH FLOWS
(Unaudited)
| |
2023 | | |
2022 | |
| |
For
the three months ended September 30, | |
| |
2023 | | |
2022 | |
| |
| | |
| |
CASH FLOWS FROM OPERATING
ACTIVITIES: | |
| | | |
| | |
Net loss | |
$ | (350,866 | ) | |
$ | (617,295 | ) |
Adjustments
to Reconcile Net Loss to Net Cash Used in Operating Activities: | |
| | | |
| | |
Stock option, stock warrants
and restricted stock expense | |
| - | | |
| 2,408 | |
Foreign currency transaction
(gain) loss | |
| 15,948 | | |
| (36,223 | ) |
Depreciation expense | |
| 134 | | |
| 473 | |
Amortization of debt discounts | |
| 69,457 | | |
| 31,275 | |
Amortization of right-of-use
assets | |
| 5,128 | | |
| 5,131 | |
Change in fair value of
derivative liabilities | |
| (303,929 | ) | |
| (65,173 | ) |
Derivative expense | |
| 77,721 | | |
| - | |
(Gain) loss on extinguishment
of debt, net | |
| (34,310 | ) | |
| 610 | |
Gain from settlement of
accounts payable | |
| - | | |
| (17,499 | ) |
Non-cash interest expense | |
| 1,437 | | |
| - | |
Accretion of put premium | |
| 88,846 | | |
| 115,769 | |
Changes
in Assets and Liabilities: | |
| | | |
| | |
GST receivable | |
| 132 | | |
| (523 | ) |
Prepaid expenses and other
assets | |
| (14,468 | ) | |
| (7,747 | ) |
Refundable advance deposit | |
| (116,169 | ) | |
| - | |
Accounts payable | |
| 148,834 | | |
| 45,121 | |
Employee benefit liability | |
| 12,275 | | |
| 10,415 | |
Accrued expenses and other
payables | |
| 55,693 | | |
| 15,162 | |
Accrued interest | |
| 15,712 | | |
| 13,430 | |
Operating lease liability | |
| (5,032 | ) | |
| (4,649 | ) |
NET CASH USED IN OPERATING
ACTIVITIES | |
| (333,457 | ) | |
| (509,315 | ) |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING
ACTIVITIES: | |
| | | |
| | |
Proceeds from convertible
promissory notes, net of original issue discounts and issue costs | |
| 220,000 | | |
| 345,750 | |
Repayment of convertible
note | |
| (142,909 | ) | |
| - | |
Proceeds from the sale
of common stock | |
| - | | |
| 24,711 | |
Proceeds from note payable | |
| 120,000 | | |
| - | |
Proceeds from loan payable
- related party | |
| 153,256 | | |
| - | |
Collection of subscription
receivable | |
| - | | |
| 23,758 | |
Proceeds from the exercise
of warrants | |
| - | | |
| 100,000 | |
NET CASH PROVIDED BY FINANCING
ACTIVITIES | |
| 350,347 | | |
| 494,219 | |
| |
| | | |
| | |
Effect of exchange rate changes on cash | |
| (20,312 | ) | |
| 30,425 | |
| |
| | | |
| | |
NET INCREASE (DECREASE)
IN CASH | |
| (3,422 | ) | |
| 15,329 | |
| |
| | | |
| | |
CASH AT BEGINNING OF PERIOD | |
| 10,047 | | |
| 4,067 | |
CASH AT END OF PERIOD | |
$ | 6,625 | | |
$ | 19,396 | |
| |
| | | |
| | |
Supplemental
Disclosure of Cash Flow Information | |
| | | |
| | |
| |
| | | |
| | |
Cash paid during the period: | |
| | | |
| | |
Interest | |
$ | 2,713 | | |
$ | 2,277 | |
Income Tax | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Supplemental
Disclosure of Non-Cash Investing and Financing Activities | |
| | | |
| | |
| |
| | | |
| | |
Reduction of put premium
related to conversions of convertible notes | |
$ | 34,838 | | |
$ | 133,646 | |
Conversion of convertible
notes and accrued interest to common stock | |
$ | 114,131 | | |
$ | 349,530 | |
Debt discounts related
to derivative liability | |
$ | 70,000 | | |
$ | 93,668 | |
Relative fair value of
warrant granted in connection with a loan payable - related party | |
$ | 141,084 | | |
$ | - | |
Warrant grant for settlement
of accounts payable | |
$ | - | | |
$ | 23,050 | |
Warrants issued for accrued
services | |
$ | - | | |
$ | 5,551 | |
Deemed dividend upon alternate
cashless exercise of warrants | |
$ | 142,575 | | |
$ | 389,235 | |
The
accompanying unaudited condensed notes are an integral part of these unaudited condensed consolidated financial statements.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2023
(Unaudited)
NOTE
1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
Nature
of Operations
Propanc
Biopharma, Inc. (the “Company,” “we,” “us” or “our”) is based in Camberwell, Victoria
Australia. Since its inception, substantially all of the operations of the Company have been focused on the development of new cancer
treatments targeting high-risk patients, particularly cancer survivors, who need a follow-up, non-toxic, long-term therapy designed to
prevent the cancer from returning and spreading. The Company anticipates establishing global markets for its technologies. Our lead product
candidate, which we refer to as PRP, is an enhanced pro-enzyme formulation designed to enhance the anti-cancer effects of multiple enzymes
acting synergistically. It is currently in the preclinical phase of development.
The
Company was originally formed in Melbourne, Victoria, Australia on October 15, 2007 as Propanc PTY LTD. On November 23, 2010, Propanc
Health Group Corporation was incorporated in the State of Delaware, and in January 2011, to reorganize the Company, all of the outstanding
shares of Propanc PTY LTD were acquired on a one-for-one basis by Propanc Health Group Corporation, with Propanc PTY LTD becoming a wholly-owned
subsidiary of the Company.
On
July 22, 2016, the Company formed another wholly-owned subsidiary, Propanc (UK) Limited under the laws of England and Wales for the purpose
of submitting an orphan drug application to the European Medicines Agency as a small and medium-sized enterprise. As of June 30, 2023,
there has been no activity within this entity.
Effective
April 20, 2017, the Company changed its name to “Propanc Biopharma, Inc.” to reflect the Company’s stage of operations
and development better.
In
July 2020, a world-first patent was granted in Australia for the cancer treatment method patent family. Presently, there are 62 granted,
allowed, or accepted patents and 14 patents filed, or under examination in key global jurisdictions relating to the use of proenzymes
against solid tumors, covering the lead product candidate PRP.
On
May 1, 2023, the Company filed a certificate of amendment to its certificate of incorporation, as amended, to effect a one-for-one thousand
(1:1,000) Reverse Stock Split (the “Reverse Stock Split”), effective as of May 1, 2023. Proportional adjustments for the
Reverse Stock Split were made to the Company’s outstanding stock options, warrants and equity incentive plans. All share and per-share
data and amounts have been retroactively adjusted as of the earliest period presented in the consolidated financial statements to reflect
the Reverse Stock Split.
The
Company hopes to capture and protect additional patentable subject matter based on the Company’s field of technology relating to
pharmaceutical compositions of proenzymes for treating cancer by filing additional patent applications as it advances its lead product
candidate, PRP, through various stages of development.
Basis
of Presentation
The
Company’s interim unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (this “Quarterly
Report”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US
GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion
of the Company’s management, all adjustments (consisting of normal recurring adjustments and reclassifications and non-recurring
adjustments) necessary to present fairly our consolidated results of operations for the three months ended September 30, 2023 and 2022
and cash flows for the three months ended September 30, 2023 and 2022 and our consolidated financial position at September 30, 2023 have
been made. The Company’s results of operations for the three months ended September 30, 2023 are not necessarily indicative of
the operating results to be expected for the full fiscal year ending June 30, 2024.
Certain
information and disclosures normally included in the notes to the Company’s annual audited consolidated financial statements have
been condensed or omitted from the Company’s interim unaudited condensed consolidated financial statements included in this Quarterly
Report. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s
audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2023. The June 30, 2023 balance sheet
is derived from those statements.
Principles
of Consolidation
The
unaudited condensed consolidated financial statements include the accounts of Propanc Biopharma, Inc., the parent entity, and its wholly-owned
subsidiary, Propanc PTY LTD. All inter-company balances and transactions have been eliminated in consolidation. Propanc (UK) Limited
was an inactive wholly-owned subsidiary through September 30, 2023.
Use
of Estimates
The
preparation of financial statements in conformity with US GAAP 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 consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Significant estimates in the accompanying consolidated financial statements include the estimates of useful lives for depreciation, valuation
of the operating lease liability and related right-of-use asset, valuation of derivatives, allowance for uncollectable receivables, valuation
of equity based instruments issued for other than cash, the valuation allowance on deferred tax assets and foreign currency translation
due to certain average exchange rates applied in lieu of spot rates on transaction dates.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2023
(Unaudited)
Foreign
Currency Translation and Other Comprehensive Income (Loss)
The
Company’s wholly-owned subsidiary’s functional currency is the Australian dollar (AUD). For financial reporting purposes,
the Australian dollar has been translated into the Company’s reporting currency, which is the United States dollar ($) and/or (USD).
Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated
at the average rate of exchange prevailing during the reporting period. Equity transactions are translated at each historical transaction
date spot rate. Translation adjustments arising from the use of different exchange rates from period to period are included as a component
of stockholders’ equity (deficit) as “Accumulated other comprehensive income (loss).” Gains and losses resulting from
foreign currency transactions are included in the statements of operations and comprehensive income (loss) as a component of other comprehensive
income (loss). There have been no significant fluctuations in the exchange rate for the conversion of Australian dollars to USD after
the balance sheet date.
Other
Comprehensive Income (Loss) for all periods presented includes only foreign currency translation gains (losses).
Assets
and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the
consolidated balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated
in a currency other than the functional currency included in the consolidated results of operations as incurred. Effective fiscal year
2021, the parent company determined that the intercompany loans will not be repaid in the foreseeable future and thus, per ASC 830-20-35-3,
gains and losses from measuring the intercompany balances are recorded within cumulative translation adjustment, a component of accumulated
other comprehensive income (loss). Prior to July 1, 2020, the Company recorded the foreign currency transaction gains and losses from
measuring the intercompany balances as a component of other income (expenses) titled foreign currency transaction gain (loss). As of
September 30, 2023 and 2022, the Company recognized a cumulative exchange gain (loss) of approximately $669,000 and $1,226,000, respectively,
on intercompany loans made by the parent to the subsidiary that have not been repaid as of September 30, 2023, which is included as component
of accumulated other comprehensive income on the accompanying consolidated balance sheet.
As
of September 30, 2023 and June 30, 2023, the exchange rates used to translate amounts in Australian dollars into USD for the purposes
of preparing the consolidated financial statements were as follows:
SCHEDULE OF TRANSACTION EXCHANGE RATES
| |
September
30, 2023 | | |
June
30, 2023 | |
Exchange rate on balance sheet dates | |
| | | |
| | |
USD : AUD exchange rate | |
| 0.6428 | | |
| 0.6664 | |
| |
| | | |
| | |
Average exchange rate for the period | |
| | | |
| | |
USD : AUD exchange rate | |
| 0.6546 | | |
| 0.6732 | |
The
change in Accumulated Other Comprehensive Income by component during the three months ended September 30, 2023 was as follows:
SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME LOSS
| |
Foreign
Currency Items: | |
Balance, June 30, 2023 | |
$ | 1,294,876 | |
Unrealized foreign currency translation gain | |
| 73,674 | |
Ending balance, September 30, 2023 | |
$ | 1,368,550 | |
Fair
Value of Financial Instruments and Fair Value Measurements
The
Company measures its financial assets and liabilities in accordance with US GAAP. For certain financial instruments, including cash and
cash equivalents, receivables, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short
maturities. Amounts recorded for notes payable, net of discount, and loans payable also approximate fair value because current interest
rates available for debt with similar terms and maturities are substantially the same.
The
Company follows accounting guidance for financial assets and liabilities. This standard defines fair value, provides guidance for measuring
fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all
other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related
to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income
approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement
cost).
The
guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad
levels. The following is a brief description of those three levels:
Level
1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level
2: Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets
or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2023
(Unaudited)
Level
3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us,
which reflect those that a market participant would use.
Also
see Note 11 - Derivative Financial Instruments and Fair Value Measurements.
Cash
and Cash Equivalents
Cash
and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity of three months or less with financial
institutions, and bank overdrafts. Bank overdrafts are reflected as a current liability on the balance sheets. There were no cash equivalents
as of September 30, 2023 or June 30, 2023.
Refundable Advance Deposit
Refundable advance deposit of $116,169 and $0 at September 30, 2023 and June 30, 2023, respectively, consists primarily
of deposit paid to a potential lender to be used as payment for a loan insurance premium related to a future loan transaction with the
Company. In the event, the future loan transaction does not close, the potential lender shall return the refundable advance deposit. The Company and the potential lender are currently undergoing the loan process.
Property
and Equipment
Property
and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred;
additions, renewals, and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost
and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of
property and equipment is provided using the declining balance method. The depreciable amount is the cost less its residual value.
The
estimated useful lives are as follows:
SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVE
Machinery
and equipment |
|
-
5 years |
Furniture |
|
-
7 years |
Patents
Patents
are stated at cost and amortized on a straight-line basis over the estimated future periods if and once the patent has been granted by
a regulatory agency. However, the Company will expense any patent costs as long as we are in the startup stage. Accordingly, as the Company’s
products are not currently approved for market, all patent costs incurred from 2013 through September 30, 2023 were expensed immediately.
This practice of expensing patent costs immediately ends when a product receives market authorization from a government regulatory agency.