NOTE 6 – COMMITMENTS AND CONTINGENCIES

Legal Matters

On December 9, 2025, the Company was served with a complaint (the “Complaint”) filed in the Superior Court of the State Delaware by an investment firm (the “Investment Firm”). In the Complaint, the Investment Firm alleges breach of an engagement agreement dated August 3, 2025 (the “Engagement Agreement”) between the Company and the Investment Firm and argued that the Company owed the Investment Firm a $15,000 deal deposit fee for entering into the Engagement Agreement and a $250,000 break fee for not completing an equity financing with the Investment Firm. On January 15, 2026, the Company filed an answer to the Complaint with the Superior Court of the State of Delaware and intended to vigorously defend the action. Other than as described above, there is no other action, suit, or proceeding by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or our subsidiary, threatened against or affecting our Company, our Common Stock, our subsidiary or of our companies or our subsidiary’s officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

On June 30, 2026, the Company entered into a settlement agreement and release with the Investment Firm pursuant to which the both parties agreed to resolve the disputed claims above, in exchange for dismissal and complete release of all claims, the Company agrees to: (i) make a cash payment of $75,000 to the Investment Firm; and (ii) issue common shares to the Investment Firm shares which, on the date of issuance, have an aggregate value of $75,000 (the “Settlement Payment”) During fiscal year 2026, the Company recorded $150,000 in settlement expenses. In July 2026, the Company paid $75,000 and issued 5,129 shares of the Company’s common stock valued at $75,000.

IRS Liability

As part of its requirement for having a foreign operating subsidiary, the Company is required to file an informational Form 5471 to the Internal Revenue Service (the “IRS”), which is a form that explains the nature of the relationship between the foreign subsidiary and the parent company. From 2012 through the 2014, the Company did not file this form in a timely manner. As a result of the non-timely filings, the Company incurred a penalty from the IRS in the amount of $10,000 per year, or $30,000 in total, plus accrued interest, such penalty and interest having been accrued and is included in the accrued expenses and other payable figure on the September 30, 2026 and June 30, 2026 consolidated balance sheets. The Company recorded the penalties for all three years during the year ended June 30, 2018. The Company is current on all subsequent filings.

PROPANC BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2026

(Unaudited)

Operating Agreements

In November 2009, the Company entered into a commercialization agreement with the University of Bath (UK) (the “UK University”), whereby the Company and the UK University co-owned the intellectual property relating to the Company’s pro-enzyme formulations. In June 2012, the Company and the UK University entered into an assignment and amendment whereby the Company assumed full ownership of the intellectual property, while agreeing to pay royalties of 2% of net revenues to the UK University. Additionally, the Company agreed to pay 5% of each and every license agreement subscribed for. The contract is cancellable at any time by either party. To date, no amounts are owed under the agreement.

Collaboration Agreement

On September 13, 2018, the Company entered into a two-year collaboration agreement with the University of Jaén (the “University”) to provide certain research services to the Company. In consideration of such services, the Company agreed to pay the University approximately 52,000 Euros ($59,508 USD) in year one and a maximum of 40,000 Euros ($45,775 USD) in year two. Additionally, in exchange for full ownership of the intellectual property, the Company agreed to pay royalties of 2% of net revenues to the University.

On October 1, 2020, the Company entered into another two-year collaboration agreement with the University to provide certain research services to the Company. In consideration of such services, the Company agreed to pay the University approximately 30,000 Euros ($35,145 USD), which were paid in four installment payment of 5,000 Euros in November 2020, 5,000 Euros ($5,858) in March 2021, 10,000 Euros ($11,715) in December 2021 and 10,000 Euros ($11,715) in September 2022. Additionally, the University agreed to hire and train a doctoral student for this project and the Company agreed to pay the University 25,837 Euros ($30,268 USD). In exchange for full ownership of the intellectual property, the Company agreed to pay royalties of 2% of net revenues to the University.

On July 27, 2022, the Company entered into a two-year research agreement with the University to provide certain research and experiment services to the Company. One of the Company’s Scientific Advisory Board is the lead joint researcher of the University. In exchange for full ownership of the intellectual property, the Company agreed to pay royalties of 1% of net revenues each to two members of the Scientific Advisory Board. In consideration of such services, the Company agreed to pay the University approximately 53,200 Euros ($53,806 USD) payable as follows:

- 18,200 Euros ($18,407 USD) upon execution (paid in August 2022),

- 8,000 Euros ($8,091 USD) in September 2022 (paid in September 2025),

- 7,000 Euros ($7,080 USD) in December 2022 (paid in September 2025),

- 10,000 Euros ($10,114 USD) in March 2023 (paid in October 2025), and

- 10,000 Euros ($10,114 USD) in July 2023 (paid in October 2025).

The commencement date for the experiments was on September 1, 2022, and the length of time for completion was 24 months. A doctoral thesis was completed in December 2024.

In March 2026, the Company entered into another two-year collaboration agreement with the University of Jaén and the University of Granada (the “Universities”) to provide certain research services to the Company. In consideration of such services, the Company agreed to pay the Universities for research services of approximately 100,000 Euros ($115,900 USD) in year one and 102,800 Euros ($119,145 USD) in year two, as well as, personnel compensation of approximately 80,000 Euros or $92,720 USD (40,000 Euros paid in February 2026, 20,000 Euros payable in December 2026, and 20,000 Euros in June 2027). In exchange for full ownership of the intellectual property, the Company agreed to pay royalties of 5% of net revenues to each University.

In consideration for the research services, the Company agreed to pay the Universities 202,800 Euros ($235,045 USD) payable as follows:

- 34,000 Euros ($39,406 USD) 3^rd Month from date of execution in June 2026 (paid in April 2026),

- 41,800 Euros ($48,446 USD) in July 2026 (paid in September 2026),

- 30,000 Euros ($34,770 USD) in September 2026,

- 40,000 Euros ($46,360 USD) in January 2027,

- 30,000 Euros ($34,770 USD) in May 2027, and

- 27,000 Euros ($31,293 USD) in September 2027.

As of September 30, 2026 and June 30, 2026, the Company has $0 balance due to the University for unreimbursed lab fees for both periods. As of September 30, 2026 and June 30, 2026, there are no royalty fees owed to the University.

Consulting Agreements

On August 14, 2025, the Company entered into an underwriting agreement with D. Boral Capital, LLC, as representative (the “Representative”) of the underwriters in connection with a public offering of the Company’s common stock. On January 23, 2026, the Company entered into a settlement agreement and release with the Representative pursuant to which the Company agreed that, during the 360-day period following the public offering (the “Lock-up Period”), it would not, without the prior consent of the Representative, offer or sell any securities or file any registration statement with the Commission relating to the offering of any shares (as defined in the Lock-up Agreement executed with the Representative). Under the terms of the settlement agreement, the Company agreed to pay the Representative an initial settlement amount of $50,000, as well as 4% of the gross proceeds received from any additional closings. During the three months ended September 30, 2026 and 2025, the Company paid $20,000, as part of the 4% obligation, and $0, respectively, and has been recorded in settlement expenses.

PROPANC BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2026

(Unaudited)

Operating Leases

On May 4, 2025, the Company entered in a 1one-year lease agreement with North Horizon Pty Ltd., a related party, for a monthly rent of $3,300 AUD or $2,127 USD (depending on exchange rate) per month plus taxes with an option to renew the lease for an additional two-year term. On May 4, 2025, the Company recorded right-of-use assets of $62,126 and total lease liabilities of $62,126 based on an incremental borrowing rate of 12%.

ROU is summarized below:

SCHEDULE OF RIGHT OF USE ASSET

Operating Lease liabilities are summarized below:

SCHEDULE OF OPERATING LEASE LIABILITY

Remaining future minimum lease payments under non-cancelable operating lease at September 30, 2026 are as follows:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

The weighted average remaining lease term for the operating lease is 1.52 years as of September 30, 2026.