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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, 2024
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, 2024, there were 789,899,183 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, 2024 | | |
June 30, 2024 | |
| |
(Unaudited) | | |
| |
ASSETS | |
| | | |
| | |
| |
| | | |
| | |
CURRENT ASSETS: | |
| | | |
| | |
Cash | |
$ | 9,268 | | |
$ | 21,085 | |
GST tax receivable | |
| 3,309 | | |
| 2,950 | |
Prepaid expenses and other current assets | |
| 8,957 | | |
| 1,406 | |
| |
| | | |
| | |
TOTAL CURRENT ASSETS | |
| 21,534 | | |
| 25,441 | |
| |
| | | |
| | |
Deferred offering costs | |
| 27,117 | | |
| 27,117 | |
Security deposit - related party | |
| 2,081 | | |
| 2,008 | |
Operating lease right-of-use assets, net - related party | |
| 12,912 | | |
| 17,799 | |
| |
| | | |
| | |
TOTAL ASSETS | |
$ | 63,644 | | |
$ | 72,365 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
| |
| | | |
| | |
CURRENT LIABILITIES: | |
| | | |
| | |
Accounts payable | |
$ | 1,238,589 | | |
$ | 1,213,335 | |
Accrued expenses and other payables | |
| 875,199 | | |
| 792,190 | |
Accrued interest | |
| 111,652 | | |
| 94,612 | |
Loans payable | |
| 145,091 | | |
| 145,091 | |
Loans payable - related parties | |
| 227,328 | | |
| 71,629 | |
Notes payable, net of discount | |
| 213,109 | | |
| 204,694 | |
Convertible notes, net of discounts and including put premiums | |
| 381,789 | | |
| 399,325 | |
Operating lease liability - related party, current portion | |
| 14,185 | | |
| 19,362 | |
Embedded conversion option liabilities | |
| 134,234 | | |
| 133,886 | |
Due to former director - related party | |
| 30,840 | | |
| 29,759 | |
Loan from former director - related party | |
| 51,326 | | |
| 49,528 | |
Employee benefit liability | |
| 677,902 | | |
| 639,371 | |
| |
| | | |
| | |
TOTAL CURRENT LIABILITIES | |
| 4,101,244 | | |
| 3,792,782 | |
| |
| | | |
| | |
NON-CURRENT LIABILITIES: | |
| | | |
| | |
Loan payable - long-term - related party, net of discount | |
| 70,485 | | |
| 58,642 | |
| |
| | | |
| | |
TOTAL NON-CURRENT LIABILITIES | |
| 70,485 | | |
| 58,642 | |
| |
| | | |
| | |
TOTAL LIABILITIES | |
$ | 4,171,729 | | |
$ | 3,851,424 | |
| |
| | | |
| | |
Commitments and Contingencies (See Note 8) | |
| - | | |
| - | |
| |
| | | |
| | |
STOCKHOLDERS’ DEFICIT: | |
| | | |
| | |
Preferred stock, 1,500,005 shares authorized, $0.01 par value: | |
| | | |
| | |
Series B preferred stock, $0.01 par value; 5 shares authorized; 1 share issued and outstanding as of September 30, 2024 and June 30, 2024 | |
| - | | |
| - | |
Preferred stock, value | |
| - | | |
| - | |
Common stock, $0.001 par value; 10,000,000,000 shares authorized; 688,022,017 and 478,802,488 shares issued and outstanding as of September 30, 2024 and June 30, 2024, respectively | |
| 688,022 | | |
| 478,802 | |
Additional paid-in capital | |
| 61,132,262 | | |
| 61,217,255 | |
Accumulated other comprehensive income | |
| 1,170,638 | | |
| 1,269,581 | |
Accumulated deficit | |
| (67,052,530 | ) | |
| (66,698,220 | ) |
Treasury stock ($0.001 share) | |
| (46,477 | ) | |
| (46,477 | ) |
| |
| | | |
| | |
TOTAL STOCKHOLDERS’ DEFICIT | |
| (4,108,085 | ) | |
| (3,779,059 | ) |
| |
| | | |
| | |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
$ | 63,644 | | |
$ | 72,365 | |
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)
| |
2024 | | |
2023 | |
| |
For the three months ended September 30, | |
| |
2024 | | |
2023 | |
| |
| | |
| |
REVENUE | |
| | | |
| | |
Revenue | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
OPERATING EXPENSES | |
| | | |
| | |
Administration expenses | |
| 220,759 | | |
| 393,828 | |
Occupancy expenses - related party | |
| 8,317 | | |
| 7,149 | |
Research and development | |
| 61,714 | | |
| 16,242 | |
TOTAL OPERATING EXPENSES | |
| 290,790 | | |
| 417,219 | |
| |
| | | |
| | |
LOSS FROM OPERATIONS | |
| (290,790 | ) | |
| (417,219 | ) |
| |
| | | |
| | |
OTHER INCOME (EXPENSE) | |
| | | |
| | |
Interest expense | |
| (86,230 | ) | |
| (178,234 | ) |
Interest income | |
| 1 | | |
| 17 | |
Derivative expense | |
| (27,182 | ) | |
| (77,721 | ) |
Change in fair value of derivative liabilities | |
| 52,787 | | |
| 303,929 | |
Gain (loss) on extinguishment of debt, net | |
| (11,319 | ) | |
| 34,310 | |
Foreign currency transaction gain (loss) | |
| 8,423 | | |
| (15,948 | ) |
TOTAL OTHER INCOME (EXPENSE), NET | |
| (63,520 | ) | |
| 66,353 | |
| |
| | | |
| | |
| |
| | | |
| | |
Tax benefit | |
| - | | |
| - | |
| |
| | | |
| | |
NET LOSS | |
$ | (354,310 | ) | |
$ | (350,866 | ) |
| |
| | | |
| | |
Deemed Dividend | |
| - | | |
| (142,575 | ) |
| |
| | | |
| | |
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | |
$ | (354,310 | ) | |
$ | (493,441 | ) |
| |
| | | |
| | |
BASIC AND DILUTED NET LOSS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS | |
$ | (0.00 | ) | |
$ | (0.04 | ) |
| |
| | | |
| | |
BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | |
| 590,937,498 | | |
| 10,989,681 | |
| |
| | | |
| | |
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | |
$ | (354,310 | ) | |
$ | (493,441 | ) |
| |
| | | |
| | |
OTHER COMPREHENSIVE INCOME (LOSS) | |
| | | |
| | |
Unrealized foreign currency translation gain (loss) | |
| (98,943 | ) | |
| 73,674 | |
| |
| | | |
| | |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | |
| (98,943 | ) | |
| 73,674 | |
| |
| | | |
| | |
TOTAL COMPREHENSIVE LOSS | |
$ | (453,253 | ) | |
$ | (419,767 | ) |
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, 2024 AND 2023
(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 | | |
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 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
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 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
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 | ) |
| |
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 | | |
Accumulated Deficit | | |
Comprehensive Income | | |
Treasury Stock | | |
Stockholders’ Deficit | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Balance at June 30, 2024 | |
| - | | |
$ | - | | |
| 1 | | |
$ | - | | |
| 478,802,488 | | |
$ | 478,802 | | |
| - | | |
$ | - | | |
$ | 61,217,255 | | |
$ | (66,698,220 | ) | |
$ | 1,269,581 | | |
$ | (46,477 | ) | |
$ | (3,779,059 | ) |
Balance | |
| - | | |
$ | - | | |
| 1 | | |
$ | - | | |
| 478,802,488 | | |
$ | 478,802 | | |
| - | | |
$ | - | | |
$ | 61,217,255 | | |
$ | (66,698,220 | ) | |
$ | 1,269,581 | | |
$ | (46,477 | ) | |
$ | (3,779,059 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock for conversion of convertible debt, conversion fee and accrued interest | |
| - | | |
| - | | |
| - | | |
| - | | |
| 194,219,529 | | |
| 194,220 | | |
| - | | |
| - | | |
| (94,329 | ) | |
| - | | |
| - | | |
| - | | |
| 99,891 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock for services | |
| - | | |
| - | | |
| - | | |
| - | | |
| 15,000,000 | | |
| 15,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 15,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Reclassification of put premium upon debt conversion | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 9,336 | | |
| - | | |
| - | | |
| - | | |
| 9,336 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (98,943 | ) | |
| - | | |
| (98,943 | ) |
Foreign currency translation gain (loss) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (98,943 | ) | |
| - | | |
| (98,943 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss for the three months ended September 30, 2024 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (354,310 | ) | |
| - | | |
| - | | |
| (354,310 | ) |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (354,310 | ) | |
| - | | |
| - | | |
| (354,310 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance at September 30, 2024 | |
| - | | |
$ | - | | |
| 1 | | |
$ | - | | |
| 688,022,017 | | |
$ | 688,022 | | |
| - | | |
$ | - | | |
$ | 61,132,262 | | |
$ | (67,052,530 | ) | |
$ | 1,170,638 | | |
$ | (46,477 | ) | |
$ | (4,108,085 | ) |
Balance | |
| - | | |
$ | - | | |
| 1 | | |
$ | - | | |
| 688,022,017 | | |
$ | 688,022 | | |
| - | | |
$ | - | | |
$ | 61,132,262 | | |
$ | (67,052,530 | ) | |
$ | 1,170,638 | | |
$ | (46,477 | ) | |
$ | (4,108,085 | ) |
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)
| |
2024 | | |
2023 | |
| |
For the three months ended September 30, | |
| |
2024 | | |
2023 | |
| |
| | |
| |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| | |
Net loss | |
$ | (354,310 | ) | |
$ | (350,866 | ) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | |
| | | |
| | |
Issuance of common stock for services | |
| 7,500 | | |
| - | |
Foreign currency transaction loss (gain) | |
| (8,423 | ) | |
| 15,948 | |
Depreciation expense | |
| - | | |
| 134 | |
Amortization of debt discounts | |
| 56,983 | | |
| 69,457 | |
Amortization of right-of-use assets | |
| 5,534 | | |
| 5,128 | |
Change in fair value of derivative liabilities | |
| (52,787 | ) | |
| (303,929 | ) |
Derivative expense | |
| 27,182 | | |
| 77,721 | |
Loss (gain) on extinguishment of debt, net | |
| 11,319 | | |
| (34,310 | ) |
Non-cash interest expense | |
| 2,548 | | |
| 1,437 | |
Accretion of put premium | |
| - | | |
| 88,846 | |
Changes in Assets and Liabilities: | |
| | | |
| | |
GST receivable | |
| (251 | ) | |
| 132 | |
Prepaid expenses and other assets | |
| - | | |
| (14,468 | ) |
Refundable advance deposit | |
| - | | |
| (116,169 | ) |
Accounts payable | |
| (18,797 | ) | |
| 148,834 | |
Employee benefit liability | |
| 15,317 | | |
| 12,275 | |
Accrued expenses and other payables | |
| 54,457 | | |
| 55,693 | |
Accrued interest | |
| 24,093 | | |
| 15,712 | |
Operating lease liability | |
| (5,880 | ) | |
| (5,032 | ) |
NET CASH USED IN OPERATING ACTIVITIES | |
| (235,515 | ) | |
| (333,457 | ) |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Proceeds from convertible promissory notes, net of original issue discounts and issue costs | |
| 60,000 | | |
| 220,000 | |
Repayment of convertible note | |
| - | | |
| (142,909 | ) |
Proceeds from note payable | |
| - | | |
| 120,000 | |
Proceeds from loans payable - related parties | |
| 155,699 | | |
| 153,256 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | |
| 215,699 | | |
| 350,347 | |
| |
| | | |
| | |
Effect of exchange rate changes on cash | |
| 7,999 | | |
| (20,312 | ) |
| |
| | | |
| | |
NET DECREASE IN CASH | |
| (11,817 | ) | |
| (3,422 | ) |
| |
| | | |
| | |
CASH AT BEGINNING OF PERIOD | |
| 21,085 | | |
| 10,047 | |
| |
| | | |
| | |
CASH AT END OF PERIOD | |
$ | 9,268 | | |
$ | 6,625 | |
| |
| | | |
| | |
Supplemental Disclosure of Cash Flow Information | |
| | | |
| | |
| |
| | | |
| | |
Cash paid during the year: | |
| | | |
| | |
Interest | |
$ | 2,606 | | |
$ | 2,713 | |
Income Tax | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | |
| | | |
| | |
| |
| | | |
| | |
Reduction of put premium related to conversions of convertible notes | |
$ | 9,336 | | |
$ | 34,838 | |
Conversion of convertible notes and accrued interest to common stock | |
$ | 51,978 | | |
$ | 114,131 | |
Debt discounts related to derivative liability | |
$ | 60,000 | | |
$ | 70,000 | |
Relative fair value of warrant granted in connection with a loan payable - related party | |
$ | - | | |
$ | 141,084 | |
Deemed dividend upon alternate cashless exercise of warrants | |
$ | - | | |
$ | 142,575 | |
Issuance of common stock for prepaid service | |
$ | 7,500 | | |
$ | - | |
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, 2024
(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 September 30, 2024,
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 84 granted,
allowed, or accepted patents and 6 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, 2024 and 2023
and cash flows for the three months ended September 30, 2024 and 2023 and our consolidated financial position at September 30, 2024 have
been made. The Company’s results of operations for the three months ended September 30, 2024 are not necessarily indicative of
the operating results to be expected for the full fiscal year ending June 30, 2025.
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, 2024. The June 30, 2024 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, 2024 and still remains inactive.
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 of long-lived assets,
valuation of the collectability of a refundable advance deposit, present value of the operating lease liability and related right-of-use
asset, valuation of derivatives, 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, 2024
(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 translations 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 Accounting Standards Codification (“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). As of
September 30, 2024 and 2023, the Company recognized a cumulative exchange gain (loss) of approximately $677,000
and $669,000,
respectively, on intercompany loans made by the parent to the subsidiary that have not been repaid as of September 30, 2024, which
is included as a component of accumulated other comprehensive income on the accompanying condensed consolidated balance
sheets.
As
of September 30, 2024 and June 30, 2024, 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, 2024 | | |
June 30, 2024 | |
Exchange rate on balance sheet dates | |
| | | |
| | |
USD : AUD exchange rate | |
| 0.6936 | | |
| 0.6693 | |
Average exchange rate for the period | |
| | | |
| | |
USD : AUD exchange rate | |
| 0.6668 | | |
| 0.6557 | |
The
change in Accumulated Other Comprehensive Income by component during the three months ended September 30, 2024 was as follows:
SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME
| |
Foreign Currency Items: | |
Balance, June 30, 2024 | |
$ | 1,269,581 | |
Unrealized foreign currency translation loss | |
| (98,943 | ) |
Ending balance, September 30, 2024 | |
$ | 1,170,638 | |
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, 2024
(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, 2024 or June 30, 2024.
Refundable
Advance Deposit
In
August 2023, the Company paid a refundable advance deposit of $120,958 which consisted primarily of a 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. During fiscal year 2024, the Company recorded
an allowance for the recoverability of this refundable advance deposit of $120,958.
Deferred
Offering Costs
The
Company complies with the requirements of ASC 340, Other Assets and Deferred Costs, with regards to offering costs. Prior to the completion
of an offering, offering costs are capitalized and consist principally of professional, underwriting and other expenses incurred through
the balance sheet date that are directly related to the Company’s proposed public offering. The deferred offering costs are charged
to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering
is not completed. As of September 30, 2024 and June 30, 2024, the Company had recorded $27,117 in deferred offering costs for both periods.
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 LIVES
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, 2024 were expensed immediately.
This practice of expensing patent costs immediately ends when a product receives market authorization from a government regulatory agency.
Impairment
of Long-Lived Assets
In
accordance with ASC 360-10, “Long-lived assets,” which include property and equipment and intangible assets, are reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability
of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted
future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future
cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the
assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily
determinable.
Employee
Benefit/Liability
Liabilities
arising in respect of wages and salaries, accumulated annual leave, accumulated long service leave and any other employee benefits expected
to be settled within twelve months of the reporting date are measured based on the employee’s remuneration rates applicable at
the reporting date. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to
be made in respect of services provided by employees up to the reporting date. All employee liabilities are owed within the next twelve
months.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
Australian
Goods and Services Tax (“GST”)
Revenues,
expenses and balance sheet items are recognized net of the amount of GST, except payable and receivable balances which are shown inclusive
of GST. The GST incurred is payable on revenues to, and recoverable on purchases from, the Australian Taxation Office.
Cash
flows are presented in the statements of cash flow on a gross basis, except for the GST component of investing and financing activities,
which are disclosed as operating cash flows.
As
of September 30, 2024 and June 30, 2024, the Company was owed $3,309 and $2,950, respectively, from the Australian Taxation Office. These
amounts were fully collected subsequent to the balance sheet reporting dates.
Derivative
Instruments
ASC
Topic 815, Derivatives and Hedging (“ASC Topic 815”), establishes accounting and reporting standards for derivative
instruments and for hedging activities by requiring that all derivatives be recognized in the balance sheet and measured at fair value.
Gains or losses resulting from changes in the fair value of derivatives are recognized in earnings. On the date of conversion or payoff
of debt, the Company records the fair value of the conversion shares, removes the fair value of the related derivative liability, removes
any discounts and records a net gain or loss on debt extinguishment.
Convertible
Notes With Variable Conversion Options
The
Company has entered into convertible notes, some of which contain variable conversion options, whereby the outstanding principal and
accrued interest may be converted, by the holder, into shares of the Company’s common stock, par value $0.001 per share (“common
stock”) at a fixed discount to the price of the common stock at or around the time of conversion. The Company treats these convertible
notes as stock settled debt under ASC 480, “Distinguishing Liabilities from Equity” and measures the fair value of
the notes at the time of issuance, which is the result of the share price discount at the time of conversion and records the put premium
as interest expense.
Income
Taxes
The
Company is governed by Australia and United States income tax laws, which are administered by the Australian Taxation Office and the
United States Internal Revenue Service, respectively. The Company follows ASC 740 “Accounting for Income Taxes,” when
accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred
income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets
and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or
minus the change during the period in deferred tax assets and liabilities.
The
Company follows ASC 740, Sections 25 through 60, “Accounting for Uncertainty in Income Taxes.” These sections provide
detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial
statements. Tax positions must meet a “more-likely-than-not” recognition threshold at the effective date to be recognized
upon the adoption of ASC 740 and in subsequent periods.
Research
and Development Costs and Tax Credits
In
accordance with ASC 730-10, “Research and Development-Overall,” research and development costs are expensed when incurred.
Total research and development costs for the three months ended September 30, 2024 and 2023 were $61,714 and $16,242, respectively.
The
Company may apply for research and development tax concessions with the Australian Taxation Office on an annual basis. Although the amount
is possible to estimate at year end, the Australian Taxation Office may reject or materially alter the claim amount. Accordingly, the
Company does not recognize the benefit of the claim amount until cash receipt since collectability is not certain until such time. The
tax concession is a refundable credit. If the Company has net income, then the Company can receive the credit which reduces its income
tax liability. If the Company has net losses, then the Company may still receive a cash payment for the credit, however, the Company’s
net operating loss carryforwards are reduced by the gross equivalent loss that would produce the credit amount when the income tax rate
is applied to that gross amount. The concession is recognized as a tax benefit, in operations, upon receipt.
Stock
Based Compensation
The
Company records stock-based compensation in accordance with ASC 718, “Stock Compensation”. ASC 718 requires the fair
value of all stock-based employee compensation awarded to employees to be recorded as an expense over the shorter of the service period
or the vesting period. The Company values employee and non-employee stock-based compensation at fair value using the Black-Scholes Option
Pricing Model.
The
Company adopted ASU 2018-07 and accounts for non-employee share-based awards in accordance with the measurement and recognition criteria
of ASC 718 and recognizes the fair value of such awards over the service period. The Company used the modified prospective method of
adoption.
Revenue
Recognition
The
Company applies ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a single comprehensive
model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue
recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also
requires certain additional disclosures. Subject to these criteria, the Company intends to recognize revenue relating to royalties on
product sales in the period in which the sale occurs and the royalty term has begun.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
Legal
Expenses
All
legal costs for litigation are charged to expense as incurred.
Leases
The
Company follows ASC Topic 842, Leases (Topic 842) and applies the package of practical expedients, which permit it not to reassess under
the new standard its prior conclusions about lease identification, lease classification and initial direct costs. In addition, the Company
elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less. Operating lease right of use assets (“ROU”)
represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value
of future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company
uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future
payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general
and administrative expenses.
Basic
and Diluted Net Loss Per Common Share
Basic
net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period.
Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for
the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental
common shares issuable upon exercise of common stock equivalents such as stock options, warrants and convertible debt instruments. Potentially
dilutive securities are excluded from the computation if their effect is anti-dilutive. As a result, the basic and diluted per share
amounts for all periods presented are identical. Each holder of the convertible notes has agreed to a 4.99% beneficial ownership conversion
limitation (subject to certain noteholders’ ability to increase such limitation to 9.99% upon 60 days’ notice to the Company),
and each note may not be converted during the first six-month period from the date of issuance. The Company’s CEO holds Series
B Preferred Stock that, when combined, confers upon him a majority vote, including regarding authorization of additional common shares
and/or the authorization of a reverse split the stock as considered necessary. Such securities are considered dilutive securities which
were excluded from the computation since the effect is anti-dilutive.
SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS
| |
September 30, 2024 | | |
September 30, 2023 | |
| |
(Unaudited) | | |
(Unaudited) | |
Stock Options | |
| 0.06 | | |
| 0.06 | |
Stock Warrants with no designations | |
| 15,003,306 | | |
| 15,003,306 | |
Series A Warrants as if converted at alternate cashless exercise price | |
| 1,990,353,990 | | |
| 1,994,343,990 | |
Series B Warrants | |
| 16 | | |
| 16 | |
Series C Warrants as if converted at alternate cashless exercise price * | |
| 9,175,999,954 | | |
| 9,175,999,954 | |
Unvested restricted stock | |
| 0.06 | | |
| 0.06 | |
Convertible Debt | |
| 1,823,504,274 | | |
| 210,849,945 | |
Total | |
| 13,004,861,540.12 | | |
| 11,396,197,211.12 | |
Recent
Accounting Pronouncements
We
have reviewed the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)
accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods.
We have carefully considered the new pronouncements that alter previous generally accepted accounting principles and do not believe that
any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near
term. The applicability of any standard is subject to the formal review of the Company’s financial management.
In
August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic
470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40), which eliminates the beneficial conversion
and cash conversion accounting models for convertible instruments, amends the accounting for certain contracts in an entity’s own
equity that are currently accounted for as derivatives because of specific settlement provisions, and modifies how particular convertible
instruments and certain contracts that may be settled in cash or shares impact the diluted EPS calculation. The standard is effective
for annual periods beginning after December 15, 2023 for smaller reporting companies, and interim periods within those reporting periods.
Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those
reporting periods. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial
statements or disclosures.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
NOTE
2 – GOING CONCERN
The
accompanying unaudited condensed consolidated financial statements have been prepared in conformity with US GAAP, which contemplate continuation
of the Company as a going concern. For the three months ended September 30, 2024, the Company had no revenues, had a net loss of $354,310,
and had net cash used in operations of $235,515. Additionally, As of September 30, 2024, the Company had a working capital deficit, stockholders’
deficit and accumulated deficit of $4,079,710, $4,108,085, and $67,052,530, respectively. It is management’s opinion that these
conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months
from the issue date of this Quarterly Report.
The
unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability
and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty.
Successful
completion of the Company’s development program and, ultimately, the attainment of profitable operations are dependent upon future
events, including obtaining adequate financing to fulfill its development activities, acceptance of the Company’s patent applications,
obtaining additional sources of suitable and adequate financing and ultimately achieving a level of sales adequate to support the Company’s
cost structure and business plan. The Company’s ability to continue as a going concern is also dependent on its ability to further
develop and execute on its business plan. However, there can be no assurances that any or all of these endeavors will be successful.
NOTE
3 – PROPERTY AND EQUIPMENT
Property
and equipment consist of the following As of September 30, 2024 and June 30, 2024.
SCHEDULE OF PROPERTY PLANT AND EQUIPMENT
| |
September 30, 2024 | | |
June 30, 2024 | |
| |
(Unaudited) | | |
| |
Office equipment at cost | |
$ | 26,471 | | |
$ | 25,543 | |
Less: Accumulated depreciation | |
| (26,471 | ) | |
| (25,543 | ) |
| |
| | | |
| | |
Total property, plant, and equipment | |
$ | - | | |
$ | - | |
Depreciation
expense for the three months ended September 30, 2024 and 2023 were $0 and $134, respectively.
NOTE
4 – DUE TO FORMER DIRECTOR - RELATED PARTY
Due
to former director – related party represents unsecured advances made primarily by a former director for operating expenses on
behalf of the Company, such as intellectual property and formation expenses. The expenses were paid for on behalf of the Company and
are due upon demand. The Company is currently not being charged interest under these advances. The total amount owed the former director
at September 30, 2024 and June 30, 2024 were $30,840 and $29,759, respectively. The Company plans to repay the advances as its cash resources
allow (see Note 9).
NOTE
5 – LOANS
Loan
from Former Director - Related Party
Loan
from the Company’s former director at September 30, 2024 and June 30, 2024 were $51,326 and $49,528, respectively. The loan bears
no interest and is payable on demand. The Company did not repay any amount on this loan during the three months ended September 30, 2024
and 2023, respectively (see Note 9).
Loans
payable - Related Parties
Between
November 2023 and May 2024, an institutional investor affiliated with one of our directors, Josef Zelinger, loaned the Company an aggregate
of $71,629. Additionally, in August 2024, the same affiliated institutional investor loaned the Company an amount of 85,000 AUD ($57,639
USD). These loans bear no interest and are payable on demand.
Effective
August 1, 2024, the Company entered into and closed a loan agreement (the “Loan”) with an institutional investor
affiliated with one of our directors, Josef Zelinger, pursuant to which the investor loaned the Company an aggregate principal
amount of $150,000
AUD ($98,060
USD). The Company used the net proceeds for general working capital purposes. The maturity date of the Loan is November
1, 2024, or sooner at the discretion of the Company, and the Loan bears an interest rate of 12%
per annum and default interest rate of 18%
per annum. The Company has the right to prepay in full at any time with no prepayment penalty. By mutual consent the amount can be
repaid via the issuance of common stock of the Company (upon uplisting on NASDAQ) and the strike price shall be at a 35%
discount to lowest daily balance of the five preceding trading days. As of the date of filing this report, such Loan is past due and currently in default.
The
loans payable – related parties amounted to $227,328 and $71,629 as of September 30, 2024 and June 30, 2024, respectively.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
Loan
payable -long-term- Related Party
On
July 5, 2023, the Company and an institutional investor affiliated with one of our directors, Josef Zelinger, entered into a letter agreement,
pursuant to which such investor loaned the Company an aggregate of $230,000 AUD ($153,256 USD). Pursuant to such agreement, the term
of such loan is three (3) years, ending on July 5, 2026, with an interest rate of 10% to be paid monthly in arrears. In connection with
such loan, the Company issued 15,000,000 warrants to purchase common stock to such investor immediately exercisable at an initial exercise
price of $0.01 per share (subject to certain adjustments such as stock dividend, stock splits, subsequent right offering and pro-rata
distribution) with an expiry date of July 5, 2026. The Company accounted for the 15,000,000 warrants issued with this loan payable as
debt discount by using the relative fair value method. The total debt discount which is equivalent to the relative fair value of the
warrants of $141,084 was based on a fair value determination using a Black-Scholes model with the following assumptions: stock price
at valuation date of $0.119 based on the closing price of common stock at date of grant, exercise price of $0.01, dividend yield of zero,
expected term of 3.00, a risk-free rate of 4.59%, and expected volatility of 268%. The debt discount shall be amortized over the term
of this loan. A portion of the proceeds of such loan were used to repay an outstanding balance of approximately $143,000 due on a convertible
note held by a third-party investor and which had been in default.
Accrued
interest from this loan amounted to $15,158 as of June 30, 2024. Amortization of debt discount from this loan for fiscal year 2024 was
$46,470. The total principal outstanding under this loan was $153,256 and remaining unamortized debt discount of $94,614 as of June 30,
2024 as reflected in the accompanying condensed consolidated balance sheet as loan payable – long-term – related party, net
of discount of $58,642.
Accrued
interest from this loan amounted to $19,020 as of September 30, 2024. Amortization of debt discount for the three months ended September
30, 2024 was $11,843. The total principal outstanding under this loan was $153,256 and remaining debt discount of $82,771 as of September
30, 2024 as reflected in the accompanying condensed consolidated balance sheet as loan payable – long-term – related party,
net of discount of $70,485.
Loan
Payable
Crown
Bridge Securities Purchase Agreement
Effective
October 3, 2019, the Company entered into a securities purchase agreement with Crown Bridge Partners, LLC (“Crown
Bridge”), pursuant to which Crown Bridge purchased a convertible promissory note from the Company (the “Crown Bridge
Note”), which had a remaining principal balance of $65,280
as of June 30, 2024. The maturity date of the Crown Bridge Note was October 3, 2020 and is currently past due. The Crown Bridge Note
bore interest at a default interest rate of 15%
per annum. In August 2022, the SEC filed a complaint against Crown Bridge due to its violation of Section 15(a)(1) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). Crown Bridge agreed to surrender all conversion rights in its
currently held convertible notes, including the Crown Bridge Note. Consequently, during fiscal year 2023, the Company reclassified
the remaining principal balance of $65,280
from a convertible note into a loan payable which is the principal balance at September 30, 2024 and June 30, 2024.
Additionally, the Company recorded the remaining put premium of $43,520
into gain on extinguishment of debt during fiscal year 2023. The total accrued interest from this loan amounted to $48,009
and $45,541
as of September 30, 2024 and June 30, 2024, respectively.
Loans
Payable - others
In
June 2024, the Company entered into loan agreements with two investors who loaned the Company an aggregate of $120,000 AUD ($79,811 USD).
The maturity dates of these loans are both in June 2025. These loans bear interest at a rate of 12% per annum. As of September 30, 2024
and June 30, 2024, the total balance of these loans amounted to $79,811 for both periods and accrued interest of $3,079 and $665, respectively.
The
aggregate principal outstanding on the above loans was $145,091 as of September 30, 2024 and June 30, 2024.
Loan
in default
The
Crown Bridge Note is currently past due and in default, consisting of $65,280 principal and $48,009 accrued interest, which includes
interest accruing at the default interest rate at 15%.
NOTE
6 – NOTES PAYABLE AND CONVERTIBLE NOTES
Promissory
Note
On
August 15, 2023, the Company issued to an institutional investor (the “August 2023 Lender”) a 10%
original issue discount promissory note (the “Promissory Note”) in consideration for $120,000,
which has a principal face amount of $132,000,
matured on November
15, 2023 and accrued interest at a rate of 10%
per annum, and was increased to 18%
due to the event of a default. The
Company had the right to prepay the principal and accrued but unpaid interest due under the Promissory Note, together with any other
amounts that the Company may owe the August 2023 Lender under the terms of the Promissory Note, on or before September 14, 2023 at a
110% premium of the face amount plus accrued and unpaid interest and any other amounts owed to the August 2023 Lender, which increases
to (i) 120% if prepaid after such date, but on or before October 14, 2023, and (ii) 130% if prepaid after October 14, 2023 (including
on the maturity date), unless the Company and the Lender agree to otherwise effect repayment. The
Promissory Note contains certain customary events of default set forth in the Promissory Note, including, among others, breach of covenants,
representations or warranties, insolvency, bankruptcy, liquidation and failure by the Company to pay the principal and interest due under
the Promissory Note. On May 7, 2024, the August 2023 Lender notified the Company that the 130%
default repayment plus interest will be waived and shall extend the maturity of the Promissory Note to September 30, 2024. As of the
date of filing this report, such Promissory Note is past due and currently in default.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
Accrued
interest from this note amounted to $18,863 and $15,536 as of September 30, 2024 and June 30, 2024, respectively. Amortization of debt
discount from the promissory note for fiscal year 2024 was $12,000. The total principal outstanding under this note was $132,000 and
remaining debt discount of $0 as of September 30, 2024 and June 30, 2024 as reflected in the accompanying condensed consolidated balance
sheet as note payable of $132,000.
1800
Diagonal Lending Promissory Notes
On
May 24, 2024, the Company entered into a 15% promissory note in the amount of $49,200 less original issue discount of $8,200 and legal
and financing costs of $6,000 for net proceeds of $35,000 with 1800 Diagonal Lending, LLC. The principal and accrued interest is payable
on or before March 30, 2025. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate
of twenty two percent (22%) per annum from the due date thereof until the same is paid. Accrued, unpaid interest and outstanding principal,
subject to adjustment, shall be paid on November 30, 2024 in the amount of $28,290 and 4 payments each in the amount of $7,072.50 (a
total payback to the Holder of $56,580). The first payment of $7,072.50 shall be due on December 30, 2024 with 3 subsequent payments
each month thereafter. The Company shall have a five (5) day grace period with respect to each payment.
On
June 10, 2024, the Company entered into a 15% promissory note in the amount of $49,200 less original issue discount of $8,200 and legal
and financing costs of $6,000 for net proceeds of $35,000 with 1800 Diagonal Lending, LLC. The principal and accrued interest is payable
on or before April 15, 2025. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate
of twenty two percent (22%) per annum from the due date thereof until the same is paid. Accrued, unpaid interest and outstanding principal,
subject to adjustment, shall be paid on December 15, 2024 in the amount of $28,290 and 4 payments each in the amount of $7,072.50 (a
total payback to the Holder of $56,580). The first payment of $7,072.50 shall be due on January 15, 2025 with 3 subsequent payments each
month thereafter. The Company shall have a five (5) day grace period with respect to each payment.
The
Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. At any time following an event of
default, the noteholder shall have the right, to convert all or any part of the outstanding and unpaid amount of these notes into shares
of common stock. The conversion price of the above notes shall mean 65% multiplied by the lowest trading price for the common stock during
the 10 trading days prior to the conversion date (representing a discount rate of 35%) subject to a 4.99% beneficial ownership limitations.
Upon the occurrence of any event of defaults, these notes shall be immediately due and payable in an amount equal to 150% default percentage
multiplied by the sum of the outstanding principal balances plus accrued interest and default interest.
As
of September 30, 2024 and June 30, 2024 the total balance of these 1800 Diagonal Lending promissory notes amounted to $98,400 for both
periods and accrued interest of $4,913 and $1,193, respectively.
The
total balance of the above three promissory notes, net of unamortized discount of $17,291 was $213,109 at September 30, 2024. The total
balance of the above three promissory notes, net of unamortized discount of $25,706 was $204,694 at June 30, 2024.
Convertible
Notes
The
Company’s convertible notes outstanding at September 30, 2024 and June 30, 2024 were as follows:
SCHEDULE OF CONVERTIBLE NOTES
| |
September 30, 2024 (Unaudited) | | |
June 30, 2024 | |
Convertible notes and debenture | |
$ | 334,625 | | |
$ | 313,550 | |
Unamortized discounts | |
| (68,129 | ) | |
| (38,854 | ) |
Premium, net | |
| 115,293 | | |
| 124,629 | |
Convertible notes, net | |
$ | 381,789 | | |
$ | 399,325 | |
ONE44
Capital Securities Purchase Agreements
August
15, 2022 Securities Purchase Agreement
On
August 15, 2022, the Company entered into a securities purchase agreement with ONE44, pursuant to which ONE44 purchased a convertible
redeemable note (the “August 15, 2022 ONE44 Note”) from the Company in the aggregate principal amount of $110,000, such principal
and the interest thereon were convertible into shares of the common stock at the option of ONE44 any time after the six-month anniversary
of the August 15, 2022 ONE44 Note. The transaction contemplated by such purchase agreement closed on August 16, 2022. The August 15,
2022 One44 Note contained an original issue discount amount of $10,000. Pursuant to the terms of such purchase agreement, the Company
paid $5,500 for ONE44’s legal fees. The Company used the net proceeds from the August 15, 2022 ONE44 Note for general working capital
purposes. The maturity date of the August 15, 2022 One44 Note was August 15, 2023. The August 15, 2022 ONE44 Note bore interest at a
rate of 10% per annum, which was payable in shares of common stock, but was not payable until the maturity date or upon acceleration
or by prepayment of such note. The August 15, 2022 ONE44 Note was fully converted in fiscal year 2024.
February
14, 2023 Securities Purchase Agreement
On
February 14, 2023, the Company entered into a securities purchase agreement with ONE44, pursuant to which ONE44 purchased a convertible
redeemable note (the “February 14, 2023 ONE44 Note”) from the Company in the aggregate principal amount of $111,111,
such principal and the interest thereon were convertible into shares of the common stock at the option of ONE44 any time after the six-month
anniversary of the February 14, 2023 ONE44 Note. The transaction contemplated by such purchase agreement closed on February 14, 2023.
The February 14, 2023 One44 Note contained an original issue discount amount of $11,111.
Pursuant to the terms of such purchase agreement, the Company paid $5,500
for ONE44’s legal fees. The Company used
the net proceeds from the February 14, 2023 ONE44 Note for general working capital purposes. The maturity date of the February 14, 2023
One44 Note was February 14, 2024. The February 14, 2023 ONE44 Note bore interest at a rate of 10%
per annum, which interest was payable in shares of common stock, but was not payable until the maturity date or upon acceleration or
by prepayment of such note. The February 14, 2023 One44 Note was fully converted in fiscal year 2024.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
December
8, 2023 Securities Purchase Agreement
On
December 8, 2023, the Company entered into a securities purchase agreement with ONE44, pursuant to which ONE44 purchased a convertible
redeemable note (the “December 8, 2023 ONE44 Note”) from the Company in the aggregate principal amount of $150,000, such
principal and the interest thereon are convertible into shares of the common stock at the option of ONE44 any time after the six-month
anniversary of the December 8, 2023 ONE44 Note. The transaction contemplated by such purchase agreement closed on December 8, 2023. The
December 8, 2023 One44 Note contains an original issue discount amount of $15,000. Pursuant to the terms of such purchase agreement,
the Company paid $7,500 for ONE44’s legal fees. The Company used the net proceeds from the December 8, 2023 ONE44 Note for general
working capital purposes. The maturity date of the December 8, 2023 One44 Note is December 8, 2024. The December 8, 2023 ONE44 Note bears
interest at a rate of 10% per annum, which interest is payable in shares of common stock, but is not payable until the maturity date
or upon acceleration or by prepayment of such note.
The
following terms shall apply to all of the above ONE44 note:
During
the first 60 to 180 days following the date of these notes, the Company has the right to prepay the principal and accrued but unpaid
interest due under the above notes issued to ONE44, together with any other amounts that the Company may owe ONE44 under the terms of
the note, at a premium ranging from 120% to 135% as defined in the relevant note. After this initial 180-day period, the Company does
not have a right to prepay such note.
The
conversion price for the above ONE44 notes ranges from 60% to 65% (representing a 35% to 40% discount) of the market price of the common
stock, which is based on the lowest closing bid prices of the common stock between ten and fifteen trading days immediately prior to
the delivery of a notice of conversion. Notwithstanding the foregoing, such notes are subject to 4.99% beneficial ownership limitations.
All of the above ONE44 notes are treated as stock settled debt under ASC 480 and accordingly the Company recorded a total debt premium
of $133,305 during the year ended June 30, 2023 and recorded a total debt premium of $100,000 was recorded during the year ended June
30, 2024.
The
above ONE44 notes contain certain events of default, upon which principal and accrued interest will become immediately due and payable.
In addition, upon an event of default, interest on the outstanding principal shall accrue at a default interest rate of 24% per annum,
or if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. Further, certain
events of default may trigger penalty and liquidated damage provisions. In the event that the Company fails to deliver to ONE44 shares
of common stock issuable upon conversion of principal or interest under a ONE44 note, it will incur a penalty of $250 per day the shares
are not issued beginning on the 4th day after the conversion notice was delivered to the Company. This penalty increases to
$500 per day beginning on the 10th day. In the event that the Company loses the bid price of its common stock on OTC, such
ONE44 note does not incur penalty and instead the outstanding principal amount increases by 20%.
The
total principal amount outstanding under the above ONE44 financing agreements was $119,300 and accrued interest was $6,726 as of June
30, 2024 following conversion of $148,811 of the principal balance and $9,909 accrued interest during the year ended June 30, 2024. Accordingly,
$98,311 of the put premium was released to additional paid in capital in respect to the ONE44 financing agreements during the year ended
June 30, 2024 following conversion of the principal balance.
The
total principal amount outstanding under the above ONE44 financing agreements was $105,800 and accrued interest was $8,645 as of September
30, 2024 following conversion of $13,500 of the principal balance and $841 accrued interest during the three months ended September 30,
2024. Accordingly, $9,000 of the put premium was released to additional paid in capital in respect to the ONE44 financing agreements
during the three months ended September 30, 2024 following conversion of the principal balance.
GS
Capital Partners Securities Purchase Agreements
August
23, 2023 Securities Purchase Agreement
On
August 23, 2023, the Company entered into a securities purchase agreement with GS Capital Partners, LLC, pursuant to which GS Capital
purchased a convertible redeemable note from the Company in the aggregate principal amount of $77,500, such principal and the interest
thereon are convertible into shares of the Company’s common stock at the option of GS Capital. The GS Capital Note contains a $5,000
original issue discount. Pursuant to the terms of the GS Purchase Agreement, the Company paid GS Capital’s legal fees of $2,500.
The Company used the net proceeds from the GS Capital Note for general working capital purposes.
The
maturity date of the GS Capital Note was February 23, 2024 and is currently in default. The GS Capital Note bore an interest at a rate
of 8% per annum and was increased to 24% due to the event of a default, which interest may be paid by the Company to GS Capital in shares
of common stock but shall not be payable until the GS Capital Note becomes payable, whether at the Maturity Date or upon acceleration
or by prepayment. The GS Capital Note is exchangeable for an equal aggregate principal amount of notes of different authorized denominations,
as requested by GS Capital surrendering the same. The initial conversion price for the GS Capital Note is equal to $0.04 per share, provided
that the fixed price will be reduced to $0.02 per share in the event that the market price of the Common Stock trades below $0.03 per
share for five consecutive trading days. In the event of a default under the note and unless the fixed price is lower, such conversion
price will equal the lowest trading price of the Common Stock for the ten trading days immediately preceding such default, which price
is subject to re-adjustment every thirty calendar days during the period in which the Company remains in default.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
October
12, 2023 Securities Purchase Agreement
On
October 12, 2023, the Company entered into a securities purchase agreement with GS Capital Partners, LLC, pursuant to which GS Capital
purchased a convertible redeemable note from the Company in the aggregate principal amount of $61,000, such principal and the interest
thereon are convertible into shares of the Company’s common stock at the option of GS Capital. The GS Capital Note contains a $3,500
original issue discount. Pursuant to the terms of the GS Purchase Agreement, the Company paid GS Capital’s legal fees of $2,500.
The Company intends to use the net proceeds from the GS Capital Note for general working capital purposes.
The
maturity date of the GS Capital Note was April 12, 2024 and is currently in default. The GS Capital Note bore interest at a rate of 8%
per annum and was increased to 24% due to the event of a default, which interest may be paid by the Company to GS Capital in shares of
common stock but shall not be payable until the GS Capital Note becomes payable, whether at the Maturity Date or upon acceleration or
by prepayment. The GS Capital Note is exchangeable for an equal aggregate principal amount of notes of different authorized denominations,
as requested by GS Capital surrendering the same. The initial conversion price for the GS Capital Note is equal to $0.015 per share,
provided that the fixed price will be reduced to $0.01 per share in the event that the market price of the Common Stock trades below
$0.0075 per share for ten consecutive trading days. In the event of a default under the note and unless the fixed price is lower, such
conversion price will equal the lowest trading price of the Common Stock for the ten trading days immediately preceding such default,
which price is subject to re-adjustment every thirty calendar days during the period in which the Company remains in default.
April
12, 2024 Securities Purchase Agreement
On
April 12, 2024, the Company entered into a securities purchase agreement with GS Capital Partners, LLC, pursuant to which GS Capital
purchased a convertible redeemable note from the Company in the aggregate principal amount of $27,500, such principal and the interest
thereon are convertible into shares of the Company’s common stock at the option of GS Capital. The GS Capital Note contains a $2,500
original issue discount. The Company intends to use the net proceeds from the GS Capital Note for general working capital purposes.
The
maturity date of the GS Capital Note is October
12, 2024. The GS Capital Note shall bear interest
at a rate of 8%
per annum, which interest may be paid by the Company to GS Capital in shares of common stock but shall not be payable until the GS Capital
Note becomes payable, whether at the Maturity Date or upon acceleration or by prepayment. The
GS Capital Note is exchangeable for an equal aggregate principal amount of notes of different authorized denominations, as requested
by GS Capital surrendering the same. The initial conversion price for the GS Capital Note is equal to $0.0017 per share, provided that
the fixed price will be reduced to $0.001 per share in the event that the market price of the Common Stock trades below $0.0014 per share
for five consecutive trading days. In the event of a default under the note and unless the fixed price is lower, such conversion price
will equal the lowest trading price of the Common Stock for the ten trading days immediately preceding such default, which price is subject
to re-adjustment every thirty calendar days during the period in which the Company remains in default. As of the date of filing this
report, such GS Capital Note is past due and currently in default.
August
2, 2024 Securities Purchase Agreement
On
August 2, 2024, the Company entered into a securities purchase agreement with GS Capital Partners, LLC, pursuant to which GS Capital
purchased a convertible redeemable note from the Company in the aggregate principal amount of $33,000, such principal and the interest
thereon are convertible into shares of the Company’s common stock at the option of GS Capital. The GS Capital Note contains a $3,000
original issue discount. The Company used the net proceeds from the GS Capital Note for general working capital purposes.
The
maturity date of the GS Capital Note is February 2, 2025. The GS Capital Note shall bear interest at a rate of 8% per annum, which interest
may be paid by the Company to GS Capital in shares of common stock but shall not be payable until the GS Capital Note becomes payable,
whether at the Maturity Date or upon acceleration or by prepayment. The GS Capital Note is exchangeable for an equal aggregate principal
amount of notes of different authorized denominations, as requested by GS Capital surrendering the same. The initial conversion price
for the GS Capital Note is equal to $0.0017 per share, provided that the fixed price will be reduced to $0.001 per share in the event
that the market price of the Common Stock trades below $0.0014 per share for five consecutive trading days. In the event of a default
under the note and unless the fixed price is lower, such conversion price will equal the lowest trading price of the Common Stock for
the ten trading days immediately preceding such default, which price is subject to re-adjustment every thirty calendar days during the
period in which the Company remains in default.
September
20, 2024 Securities Purchase Agreement
On
September 20, 2024, the Company entered into a securities purchase agreement with GS Capital Partners, LLC, pursuant to which GS Capital
purchased a convertible redeemable note from the Company in the aggregate principal amount of $33,000, such principal and the interest
thereon are convertible into shares of the Company’s common stock at the option of GS Capital. The GS Capital Note contains a $3,000
original issue discount. The Company used the net proceeds from the GS Capital Note for general working capital purposes.
The
maturity date of the GS Capital Note is March 20, 2025. The GS Capital Note shall bear interest at a rate of 8% per annum, which interest
may be paid by the Company to GS Capital in shares of common stock but shall not be payable until the GS Capital Note becomes payable,
whether at the Maturity Date or upon acceleration or by prepayment. The GS Capital Note is exchangeable for an equal aggregate principal
amount of notes of different authorized denominations, as requested by GS Capital surrendering the same. The initial conversion price
for the GS Capital Note is equal to $0.0003 per share, provided that the fixed price will be reduced to $0.0001 per share in the event
that the market price of the Common Stock trades below $0.0003 per share for five consecutive trading days. In the event of a default
under the note and unless the fixed price is lower, such conversion price will equal the lowest trading price of the Common Stock for
the ten trading days immediately preceding such default, which price is subject to re-adjustment every thirty calendar days during the
period in which the Company remains in default.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
The
following terms shall apply to all of the above GS Capital notes:
Pursuant
to the above GS Capital notes, in the event that such conversion price is below the par value of the Common Stock, the Company has agreed
to take all steps to reduce such par value or conduct a reverse split of its Common Stock, as applicable. Notwithstanding the foregoing,
such conversion price and lookback periods are subject to adjustment in favor of the Investor in the event the Company issues securities
to another party with more favorable conversion terms, and such conversions are subject to a 4.99% beneficial ownership limitation (which
may be increased to 9.9% upon 60 days’ prior written notice from the holder of the Note) and adjustments for mergers, consolidations,
reorganizations and similar events set forth in the Note, other than a transfer or sale of all or substantially all Company assets. Pursuant
to the Note, the Company is required to maintain an initial reserve of at least 400% of the number of Conversion Shares, subject to any
increase of such reserved amount to reflect the Company’s obligations under the Note.
Additionally,
the conversion prices of the above GS Capital notes will be adjusted in favor of the note holder if the Company issues securities with
more favorable conversion terms. The effective conversion price of the outstanding GS Capital notes are 60% (representing a 40% discount)
of the market price, which means the lowest closing bid prices of the Common Stock for the ten trading days immediately prior to the
delivery of a Notice of Conversion.
The
above GS Capital notes were bifurcated from the embedded conversion option which was recorded as derivative liabilities at fair value.
During
the first 60 to 180 days following the date of the above GS Capital notes, the Company has the right to prepay the principal and accrued
but unpaid interest due under the above notes issued to GS Capital, together with any other amounts that the Company may owe GS Capital
under the terms of the notes, at a premium ranging from 110% to 125% of the principal amount and interest of such note. After this initial
180-day period, the Company does not have a right to prepay such notes.
Upon
the occurrence and during the continuation of certain events of default, interest accrues at a default interest rate of 24% per annum
or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. In the event that
the Company fails to deliver to GS Capital shares of common stock issuable upon conversion of principal or interest under the above GS
Capital notes, the penalty becomes $250 per day for each day that the shares are not issued beginning on the 4th day after
the conversion notice was delivered to the Company. This penalty increases to $500 per day beginning on the 10th day. In the
event that the Company loses the bid price of its common stock on OTC, such GS Capital note does not incur penalty and instead the outstanding
principal amount increases by 20%.
The
total principal outstanding and accrued interest under the above GS Capital notes were $110,500 and $8,364, respectively, as of June
30, 2024, following conversion of $130,800 of the principal balance, $8,700 accrued interest (including $1,254 at default interest rate)
and $3,832 conversion fees during the year ended June 30, 2024. During fiscal year 2024, an aggregate total of $110,500 of the above
GS Capital notes were bifurcated with the embedded conversion option which were recorded as derivative liabilities at fair value as of
June 30, 2024 (see Note 11).
The
total principal outstanding and accrued interest under the above GS Capital notes were $145,700 and $7,902, respectively, as of September
30, 2024, following conversion of $30,800 of the principal balance and $2,212 accrued interest during the three months ended September
30, 2024. During the three months ended September 30, 2024, an aggregate total of $66,000 of the above GS Capital notes were bifurcated
with the embedded conversion option which were recorded as derivative liabilities at fair value (see Note 11).
One
GS Capital note with principal amount of $52,200 is currently in default and accrues at a default interest rate of 24% per annum.
104
LLC Securities Purchase Agreement
March
5, 2024 Securities Purchase Agreement
Effective
March 5, 2024, the Company entered into and closed a securities purchase agreement (the “Purchase Agreement”) with 104 LLC
(“104”), pursuant to which 104 agreed to purchase a convertible promissory note from the Company in the aggregate principal
amount of $50,000, for a purchase price of $46,875, after an original issue discount of $3,125. The Company paid legal and financing
costs of $7,500. The Company used the net proceeds therefrom for general working capital purposes. The maturity date of the note is March
1, 2025 and the note bears interest at a rate of eight percent (8%) per annum, which may be increased to sixteen percent (16%) in the
event of a default.
June
20, 2024 Securities Purchase Agreement
Effective
June 20, 2024, Company entered into and closed a securities purchase agreement with 104 LLC, pursuant to which 104 agreed to purchase
a convertible promissory note from the Company in the aggregate principal amount of $33,750, for a purchase price of $30,375, after an
original issue discount of $3,375. The Company paid legal and financing costs of $5,200. The Company used the net proceeds therefrom
for general working capital purposes. The maturity date of the note is June 20, 2025 and the note bears interest at a rate of eight percent
(8%) per annum, which may be increased to sixteen percent (16%) in the event of a default.
The
principal and interest on the notes are convertible into shares of common stock of the Company at the option of 104 at any time following
the issuance date of the notes (the “Conversion Shares”) at a price per share equal to 65% of the lowest closing trade price
of the common stock during the ten (10) trading days prior to conversion (representing a discount of 35%). Notwithstanding the foregoing,
such conversions are subject to a 4.99% beneficial ownership limitation and adjustments for mergers, consolidations, reorganizations
and similar events set forth in the notes, other than a transfer or sale of all or substantially all Company assets. Pursuant to the
notes, the Company is required to maintain an initial reserve of at least 500% of the number of conversion shares, subject to any increase
of such reserved amount to reflect the Company’s obligations under the notes. The above 104 notes treated as stock settled debt
under ASC 480 and accordingly the Company recorded a total of $45,096 was recorded as a put premium during the year ended June 30, 2024.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
During
the first 60 days following the date of the notes, the Company has the right to prepay the principal and accrued but unpaid interest
due under the notes, at a one hundred ten percent (110%) premium of the face amount plus accrued and unpaid interest, which increases
to (i) one hundred fifteen percent (115%) if prepaid after 60 days, but less than 91 days from the issuance date, (ii) one hundred twenty
percent (120%) if prepaid after 90 days, but less than 121 days from the issuance date, (iii) one hundred twenty five percent (125%)
if prepaid after 120 days, but less than 181 days from the issuance date. After this initial 180-day period, the Company does not have
a right to prepay the notes.
The
104 notes contain certain events of default, including failure to pay principal and interest when due, failure to timely issue the conversion
shares, failure to maintain the listing of the common stock on at least one of the OTC markets (which specifically includes the quotation
platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, failure to comply with its reporting requirements
with the U.S. Securities and Exchange Commission, a breach of certain covenants in the purchase agreement, default by the Company under
any other note issued to the Investor, as well as certain customary events of default set forth in the notes, including, among others,
breach of covenants, representations or warranties, insolvency, bankruptcy, and liquidation. Upon an event of default, the notes will
become immediately due and payable by the Company.
The
total principal amount outstanding under the above 104 financing agreements was $83,750 and accrued interest was $1,429 as of June 30,
2024. The total principal outstanding and accrued interest under the above 104 financing agreements were $83,125 and $0, respectively,
as of September 30, 2024, following conversion of $625 of the principal balance and $4,000 accrued interest during the three months ended
September 30, 2024.
Outstanding
convertible notes in default
Outstanding
convertible notes for total principal amount of $83,000 with maturity dates between February 23, 2024 and April 12, 2024 are currently
in default as of the date of this filing.
Amortization
of debt discounts
The
Company recorded $66,000 and $92,500 of debt discounts related to the above note issuances during the three months ended September 30,
2024 and 2023, respectively. The Company recorded $0 and $88,846 of put premiums related to the above note issuances during the three
months ended September 30, 2024 and 2023, respectively. The debt discounts are being amortized over the term of the debt and the put
premiums are expensed on issuance of the debt with the liability released to additional paid in capital on conversion of the principal.
Amortization
of all debt discounts for the three months ended September 30, 2024 and 2023 was $56,983 and $69,457, respectively.
The
Company reclassified $9,336 and $34,838 in put premiums to additional paid in capital following conversions during the three months ended
September 30, 2024 and 2023, respectively.
NOTE
7 – STOCKHOLDERS’ DEFICIT
Increase
in Authorized Shares of Common Stock and Reverse Stock Split
On
May 18, 2022, the board of directors of the Company approved and authorized, and the holders of a majority-in-interest of the Company’s
voting capital stock approved by written consent for the Company to file a certificate of amendment to its certificate of incorporation,
as amended (the “Certificate of Incorporation”), which increased the Company’s authorized capital stock. Such certificate
of amendment increased the number of authorized shares of common stock from 1,000,000,000 to 3,000,000,000 shares. The number of authorized
shares of preferred stock remained at 1,500,005 shares, such that the total number of authorized shares of capital stock increased to
3,001,500,005 shares. Such certificate of amendment was filed and became effective on July 6, 2022.
On
September 21, 2022, the board of directors of the Company approved and authorized, and the holders of a majority-in-interest of the Company’s
voting capital stock approved by written consent for the Company to file a certificate of amendment to its Certificate of Incorporation,
which increased the Company’s authorized capital stock. The Certificate increased the number of authorized shares of common stock
from 3,000,000,000 to 10,000,000,000 shares. The number of authorized shares of preferred stock remained at 1,500,005, such that the
total number of shares of authorized capital stock increased to 10,001,500,005 shares. Such certificate of amendment was filed and became
effective on November 4, 2022.
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 condensed consolidated financial statements
to reflect the Reverse Stock Split.
Preferred
Stock
The
total number of shares of preferred stock that the Company is authorized to issue is 1,500,005, $0.01 par value per share. These preferred
shares have no rights to dividends, profit sharing or liquidation preferences, subject to any such rights provided for such shares in
any certificate of designation filed by the Company with the State of Delaware.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
Of
the total preferred shares authorized, 500,000 had been designated as Series A Preferred Stock (“Series A Preferred Stock”),
pursuant to the Certificate of Designation for the Series A Preferred Stock filed with the Secretary of State of the State of Delaware
on December 9, 2014. James Nathanielsz, the Company’s Chief Executive Officer and Chief Financial Officer and a director, beneficially
owned all of the outstanding shares of Series A Preferred Stock indirectly through North Horizon Pty Ltd., which entitled him, as a holder
of Series A Preferred Stock, to vote on all matters submitted or required to be submitted to a vote of the Company’s stockholders,
except election and removal of directors, and each share of Series A Preferred Stock entitled him to a total of 1 vote. North Horizon
Pty Ltd. is a Nathanielsz Family Trust. Mr. Nathanielsz had voting and investment power over these shares.
On
March 15, 2023, the Company filed a certificate with the Secretary of State of Delaware (the “Certificate of Retirement”),
effecting the retirement and cancellation of the Series A Preferred Stock to eliminate such Series A Preferred Stock. No shares of Series
A Preferred Stock are currently outstanding as they were redeemed by the Company in March 2023. There were no shares of Series A Preferred
Stock issued and outstanding as of September 30, 2024 and June 30, 2024 for both periods.
Pursuant
to a certificate of designation filed with the Secretary of State of the State of Delaware on June 16, 2015, five shares of preferred
stock have been designated as Series B Preferred Stock, par value $0.01 per share, of the Company (“Series B Preferred Stock”).
Each holder of shares of Series B Preferred Stock is entitled to voting power equivalent to the number of votes equal to the total number
of shares of common stock outstanding as of the record date for the determination of stockholders entitled to vote at each meeting of
stockholders of the Company and entitled to vote on all matters submitted or required to be submitted to a vote of the stockholders of
the Company. One share of Series B Preferred Stock is issued and outstanding as of September 30, 2024 and June 30, 2024. Mr. Nathanielsz,
the Company’s Chief Executive Officer, directly beneficially owns such one share of Series B Preferred Stock.
No
additional shares of Series A Preferred Stock or Series B Preferred Stock were issued during three months ended September 30, 2024 and
fiscal year 2024.
Common
Stock:
Shares
issued for conversion of convertible debt
From
July 1, 2024 through September 30, 2024, the Company issued an aggregate of 194,219,529 shares of its common stock at an average contractual
conversion price of $0.0002 as a result of the conversion of principal of $44,925, interest of $7,053 and conversion fees $2,548 underlying
certain outstanding convertible notes converted during such period.
Included
in the above conversion during the three months ended September 30, 2024, were principal aggregate amount of convertible notes of $30,800,
accrued interest of $2,212 and conversion fees of $798 containing bifurcated embedded conversion option derivatives were converted into
common stock. Accordingly, the fair market value of the shares issued upon conversion was $79,176, resulting in a loss on extinguishment
at the time of conversion of $45,365 and $34,046 of derivative liability fair value was recorded as a gain on extinguishment at the time
of conversion, resulting in a net loss of $11,319 which is included in gain (loss) on extinguishment of debt in the accompanying condensed
consolidated statements of operations.
The
Company reclassified $9,336 from put premium liabilities to additional paid in capital following conversions during the three months
ended September 30, 2024.
The
Company has 7,100,870,280 shares of its common stock reserved for future issuances based on lender reserve requirements pursuant to underlying
financing agreements at September 30, 2024.
Shares
issued for services
On
August 12, 2024, the Company entered into a consulting agreement with two consultants to provide investor relation services from August
12, 2024 to October 12, 2024 for a total fee of $7,500 for each consultant. In August 2024, the Company issued an aggregate of 15,000,000
shares of common stock to the consultants related to this consulting agreement. Those shares were valued at approximately $0.001 per
share or $15,000, being the closing price of the stock on the date of grant to such consultants. During the three months ended September
30, 2024, the Company recorded stock-based compensation of $7,500 and prepaid stock-based expense of $7,500 as of September 30, 2024.
Restricted
Stock Units
Pursuant
to employment agreements dated in May 2019, the Company granted an aggregate of 0.078 and 0.039 restricted stock unit to the Company’s
Chief Executive Officer and Chief Scientific Officer, respectively. The total 0.117 restricted stock units are subject to vesting terms
as defined in the employment agreements. The 0.117 restricted stock units were valued at the fair value of approximately $4,250,000 per
unit or $497,240 based on the quoted trading price on the date of grant. There were $248,620 unrecognized restricted stock units expense
as of September 30, 2024 and June 30, 2024. There are 0.06 unvested restricted stock units which are subject to various performance conditions
which have not yet been met and such restricted stock units have not yet vested as of September 30, 2024 to which the $248,620 relates
to.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
Stock
Warrants:
The
following table summarizes warrant activity for the three months ended September 30, 2024:
SUMMARY OF WARRANT ACTIVITY
| |
| | |
Weighted | |
| |
Number of | | |
Average | |
| |
Shares | | |
Price Per Share | |
Outstanding at June 30, 2024 | |
| 15,003,396 | | |
$ | 1.24 | |
Granted | |
| - | | |
| - | |
Exercised | |
| - | | |
| - | |
Forfeited | |
| - | | |
| - | |
Expired | |
| - | | |
| - | |
Outstanding at September 30, 2024 | |
| 15,003,396 | * | |
$ | 1.24 | |
| |
| | | |
| | |
Exercisable at September 30, 2024 | |
| 15,003,378 | | |
$ | 1.24 | |
Outstanding and Exercisable: | |
| | | |
| | |
| |
| | | |
| | |
Weighted average remaining contractual term | |
| 1.76 | | |
| | |
Aggregate intrinsic value
| |
$ | - | | |
| | |
SCHEDULE
OF WARRANT OUTSTANDING AND EXERCISABLE
| |
Number of Warrants | | |
Exercisable | |
Series A warrants | |
| 10 | | |
| 10 | |
Series B warrants | |
| 16 | | |
| 16 | |
Series C warrants | |
| 64 | | |
| 46 | |
Warrants with no class designation | |
| 15,003,306 | | |
| 15,003,306 | |
Total | |
| 15,003,396 | | |
| 15,003,378 | |
Stock
Options:
A
summary of the Company’s option activity during the three months ended September 30, 2024 is presented below:
SUMMARY
OF STOCK OPTION ACTIVITY
| |
| | |
Weighted | |
| |
Number of | | |
Average Exercise | |
| |
Shares | | |
Price Per Share | |
Outstanding at June 30, 2024 | |
| 0.059 | | |
$ | 4,533,000 | |
Granted | |
| - | | |
| - | |
Exercised | |
| - | | |
| - | |
Forfeited | |
| - | | |
| - | |
Expired | |
| - | | |
| - | |
Outstanding at September 30, 2024 | |
| 0.059 | | |
$ | 4,533,000 | |
| |
| | | |
| | |
Exercisable at September 30, 2024 | |
| 0.059 | | |
$ | 4,533,000 | |
Outstanding and Exercisable: | |
| | | |
| | |
| |
| | | |
| | |
Weighted average remaining contractual term | |
| 4.62 | | |
| | |
Weighted average fair value of options granted during the period | |
$ | - | | |
| | |
Aggregate intrinsic value | |
$ | - | | |
| | |
On
the Effective Date, the Company’s board of directors approved and adopted the Company’s 2019 Equity Incentive Plan (the “2019
Plan”), which reserves a total of 234 shares of the Company’s common stock for issuance under the 2019 Plan. Incentive awards
authorized under the 2019 Plan include, but are not limited to, incentive stock options, non-qualified stock options, restricted stock
awards and restricted stock units.
During
the three months ended September 30, 2024 and 2023, the Company recognized stock-based compensation of $0 for both periods from vested
stock options. There was $0 of unvested stock options expense as of September 30, 2024. No stock options were granted during the three
months ended September 30, 2024.
PROPANC
BIOPHARMA, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
Proposed
Reverse Stock Split (Unaudited)
On
August 7, 2024, the Company received written consent in lieu of a meeting by the holders of a majority of the voting power of the
Company’s outstanding capital stock as of August 7, 2024 and the Company’s Board of Directors approving such actions as
are necessary for the Company to proceed to, and the Company accordingly intends to, effectuate and execute a reverse
stock split of the Company’s issued and outstanding shares of common stock at a ratio of one post-split share per sixty
thousand pre-split shares (1:60,000) (the “Reverse Stock Split”). Proportional adjustments for the Reverse Stock
Split will be made to the Company’s outstanding stock options, warrants and equity incentive plans. The Company is awaiting
the approval of Financial Industry Regulatory Authority (“FINRA”) for the market effectiveness of the Reverse Stock
Split.
The
unaudited pro forma tables below show the losses per share prior to the reverse split and following the reverse split. A key assumption
to the loss per share calculation is that post-reverse split price is equal to the pre-reverse split times the number of shares from
the ratio.
SCHEDULE OF LOSS PER SHARE BASIS OF REVERSE
STOCK SPLIT
Historical per share data – (Pre- Split basis) | |
Three months
Ended September 30, 2024 | | |
Three months Ended September 30, 2023 | |
| |
| | |
| |
Net loss available to Common Stockholders | |
$ | 354,310 | | |
$ | 493,441 | |
Basic and diluted weighted average shares outstanding | |
| 590,937,498 | | |
| 10,989,681 | |
Basic and diluted net loss per share | |
$ | 0.00 | | |
$ | 0.04 | |
The
table below reflects the reverse split of 1:60,000.
Historical per share data – (Post- Split basis) | |
Three months
Ended September 30, 2024 | | |
Three months Ended September 30, 2023 | |
| |
| | |
| |
Net loss available to Common Stockholders | |
$ | 354,310 | | |
$ | 493,441 | |
Basic and diluted weighted average shares outstanding | |
| 9,849 | | |
| 183 | |
Basic and diluted net loss per share | |
$ | 35.97 | | |
$ | 2,696.40 | |
NOTE
8 – COMMITMENTS AND CONTINGENCIES
Legal
Matters
From
time to time, the Company may be subject to litigation and claims arising in the ordinary course of business. The Company is not currently
a party to any material legal proceedings and the Company is not aware of any pending or threatened legal proceeding against the Company
that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.
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, 2024 and
June 30, 2024 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, 2024
(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 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 int