Propanc Biopharma, Inc. 10-K

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is quoted under the ticker symbol “PPCB” on the OTCQB. Only a limited market exists for our common stock. There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a stockholder may be unable to resell his securities in our Company. On September 14, 2020, the last reported sales price per share of our common stock on the OTCQB was $0.0019. Penny Stock The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation. The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities. Number of Holders As of September 28, 2020, we had 74 record holders of our common stock holding 688,670,618 shares, one holder of our Series A Preferred Stock holding 500,000 shares and one holder of our Series B Preferred Stock holding one share. 61 Dividends We have not paid any cash dividends to our stockholders. The declaration of any future cash dividends is at the discretion of our Board and depends upon our earnings, if any, our capital requirements and financial position, and general economic conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations. Recent Sales of Unregistered Securities There were no unregistered sales of the Company’s equity securities during the year ended June 30, 2020 that were not previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q. Issuance of Shares of Common Stock upon Conversion Fiscal Year 2017 During our first quarter ended September 30, 2016, we issued 124 shares of our common stock at an average conversion price of $1,240 as a result of the conversion of principal and interest in the aggregate amount of $153,610 underlying certain convertible notes converted during such period. During our second quarter ended December 31, 2016, we issued 511 shares of our common stock at an average conversion price of $865 as a result of the conversion of principal and interest in the aggregate amount of $424,374 underlying certain convertible notes converted during such period. During our third quarter ended March 31, 2017, we issued 457 shares of our common stock at an average conversion price of $760 as a result of the conversion of principal and interest in the aggregate amount of $356,257 underlying certain convertible notes converted during such period. 62 During our fourth quarter ended June 30, 2017, we issued 1,378 shares of our common stock at an average conversion price of $345 as a result of the conversion of principal and interest in the aggregate amount of $472,495 underlying certain convertible notes converted during such period. Fiscal Year 2018 During our first quarter ended September 30, 2017, we issued 3,536 shares of our common stock at an average conversion price of $135 as a result of the conversion of principal and interest in the aggregate amount of $432,791 underlying certain convertible notes converted during such period. During our second quarter ended December 31, 2017, we issued 22,664 shares of our common stock at an average conversion price of $45 as a result of the conversion of principal and interest in the aggregate amount of $945,137 underlying certain convertible notes converted during such period. During our third quarter ended March 31, 2018, we issued 24,845 shares of our common stock at an average conversion price of $35 as a result of the conversion of principal and interest in the aggregate amount of $796,772 underlying certain convertible notes converted during such period. During our fourth quarter ended June 30, 2018, we issued 30,750 shares of our common stock at an average conversion price of $20 as a result of the conversion of principal and interest in the aggregate amount of $595,488 underlying certain convertible notes converted during such period. Fiscal Year 2019 During our first quarter ended September 30, 2018, we issued 258,285 shares of our common stock at an average conversion price of $5 as a result of the conversion of principal and interest in the aggregate amount of $1,413,317 underlying certain convertible notes converted during such period. During our second quarter ended December 31, 2018, we issued 127,684 shares of our common stock at an average conversion price of $10 as a result of the conversion of principal and interest in the aggregate amount of $1,095,100 underlying certain outstanding convertible notes converted during such period. During our third quarter ended March 31, 2019, we issued 140,673 shares of our common stock at an average conversion price of $4.20, as a result of the conversion of principal and interest in the aggregate amount of $583,331 underlying certain outstanding convertible notes converted during such period. During our fourth quarter ended June 30, 2019, we issued 177,615 shares of our common stock at an average conversion price of $1.46, as a result of the conversion of principal and interest in the aggregate amount of $259,034 underlying certain outstanding convertible notes converted during such period. We had 3,409,692 shares of our common stock reserved for future issuances based on lender note conversion requirements pursuant to underlying financing documents at June 30, 2019. Fiscal Year 2020 During our first quarter ended September 30, 2019, we issued 181,939 shares of our common stock at an average conversion price of $0.68 as a result of the conversion of principal and interest in the aggregate amount of $123,712 underlying certain convertible notes converted during such period. During our second quarter ended December 31, 2012, we issued 1,064,920 shares of our common stock at an average conversion price of $0.206 as a result of the conversion of principal and interest in the aggregate amount of $219,466 underlying certain outstanding convertible notes converted during such period. During our third quarter ended March 31, 2020, we issued 16,096,509 shares of our common stock at an average conversion price of $0.053, as a result of the conversion of principal and interest in the aggregate amount of $856,338 underlying certain outstanding convertible notes converted during such period. 63 During our fourth quarter ended June 30, 2020, we issued 230,275,879 shares of our common stock at an average conversion price of $0.004, as a result of the conversion of principal and interest in the aggregate amount of $925,658 underlying certain outstanding convertible notes converted during such period. We had 735,747,157 shares of our common stock reserved for future issuances based on lender note conversion requirements pursuant to underlying financing documents at June 30, 2020. Other Issuance of Shares of Common Stock On October 5, 2018, we issued 7,701 shares of our common stock to L2 Capital as the commitment fee under the L2 Equity Purchase Agreement. On July 19, 2019, we issued 20,000 shares of our common stock to Regal Consulting LLC for services rendered under a Consulting Agreement entered into between the Company and Regal Consulting LLC. On March 3, 2020 we issued 150,000 shares of our common stock to Sylva International LLC for services rendered under a Consulting Agreement entered into between the Company and Sylva International LLC. On April 6, 2020 we issued 804,518 shares of our common stock to Ionic Ventures LLC pursuant to a Securities Purchase Agreement. On April 8, 2020 we issued 1,151,682 shares of our common stock to Sylva International LLC for services rendered under a Consulting Agreement entered into between the Company and Sylva International LLC. On June 26, 2020 we issued 7,406,892 shares of our common stock to Sylva International LLC for services rendered under a Consulting Agreement entered into between the Company and Sylva International LLC. Issuance of Restricted Stock Units On May 14, 2019, our board of directors approved a grant of an aggregate of 78,000 restricted stock units (“RSUs”) to Mr. Nathanielsz, our Chief Executive Officer, Chairman, acting Chief Financial Officer and a director. 39,000 of such RSUs shall vest on the one-year anniversary of the date of the grant, subject to Mr. Nathanielsz being employed by us on such vesting date. The remaining 39,000 RSUs shall vest based on the Company achieving certain milestones as set forth in Mr. Nathanielsz’s Amended and Restated Employment Agreement and summarized elsewhere in this Annual Report. The fair value of the granted RSUs at such grant date was $4.25 per RSU or $331,500 in total based on the closing price of the shares of our common stock on the date of the grant. On May 14, 2019, our board of directors also approved a grant of an aggregate of 39,000 RSUs to Dr. Kenyon, our Chief Scientific Officer and a director. 19,500 of such RSUs shall vest on the one-year anniversary of the date of the grant, subject to Dr. Kenyon being employed by us on such vesting date. The remaining 19,500 RSUs shall vest based on the Company achieving certain milestones as set forth in Dr. Kenyon’s Amended and Restated Services Agreement and summarized elsewhere in this Annual Report. The fair value of the granted RSUs at such grant date was $4.25 per RSU or $165,750 in total based on the closing price of the shares of our common stock on the date of the grant. Issuance of Options As of June 30, 2020, the Company had outstanding agreements to grant options to purchase 59,644 shares of its common stock, with a weighted average exercise price per share of $76.37. On May 14, 2019, our board of directors approved a grant of 39,000 stock options to Mr. Nathanielsz, with an exercise price of $4.675 per share, which shall vest annually over a period of three years from the date of the grant, provided, that on each such vesting date Mr. Nathanielsz is employed by us and subject to the other provisions of his Amended and Restated Employment Agreement. On May 14, 2019, our board of directors also approved a grant of 19,500 stock options to Dr. Kenyon, with an exercise price of $4.25 per share, which shall vest annually over a period of three years from the date of the grant, provided, that on each such vesting date Dr. Kenyon is employed by us and subject to the other provisions of his Amended and Restated Services Agreement. 64 On April 14, 2016, our board of directors approved a grant of 572 stock options, with an exercise price of $3,750 (market value of the shares of our common stock on such grant date), to each of Mr. Nathanielsz, our Chief Executive Officer, Chief Financial Officer and a director, and Dr. Kenyon, our non-executive director. 191 of such options vested on such grant date and expire on April 14, 2021, 191 of such options vested on April 14, 2017 (first anniversary of such grant date) and expire on April 14, 2021 and 191 of such options vested on April 14, 2018 (second anniversary of such grant date) and expire on April 14, 2021. The fair value of each grant of the 572 options at such grant date was $1,962,440 (aggregate total of $3,924,880). No stock options were issued during the fiscal year ended June 30, 2020. Issuance of Warrants In connection with the consulting agreement, dated May 7, 2015, we issued to a consultant 5-year warrants to purchase 27 shares of our common with an exercise price of $3,750 per share. In connection with the consulting agreement, dated May 21, 2015, we issued to a consultant 5-year warrants to purchase 8 shares of our common stock with an exercise price of $8,750 per share. On October 28, 2015, pursuant to a convertible debenture, we issued 4-year warrants to purchase 210 shares of our common stock with an exercise price of $75,000 per share. In connection with the consulting agreement, dated November 11, 2015, on February 22, 2016, we issued to a consultant 5-year warrants to purchase 32 shares of our common stock with an exercise price of $5,625 per share. On July 8, 2016, the 2015 Warrant to purchase 210 shares of our common stock issued to Delafield Limited Investments (“Delafield”) was fully exercised at a price of $1,500 per share for a total of $314,286 in connection with the Letter Agreement, dated July 1, 2016, entered into with Delafield. On August 3, 2016, pursuant to the Letter Agreement, dated August 3, 2016 (the “August Letter Agreement”), entered into with Delafield we issued warrants to purchase 1,920 shares of our common stock. 1,600 of these warrants had exercise prices ranging from $1,500 to $2,500 per share and expired five months from the date of issuance. 320 of these warrants had an exercise price of $12,500 per share and expired two years from the date of issuance. These warrants were subsequently cancelled. On August 18, 2016, pursuant to the August Letter Agreement, warrants to purchase 100 shares of our common stock issued to Delafield were exercised at a price of $1,500 per share under the first tranche of the Five Month Warrant or $150,000 in the aggregate. These shares were subsequently cancelled. On November 9, 2016, we entered into an agreement (the “November Agreement”) to adjust the exercise price of a warrant, issued on September 30, 2013, to purchase 24 shares of our common stock. Under the terms of the November Agreement, the exercise price for the shares underlying the warrant was reduced to $1,440 per share. The November Agreement did not affect the remaining terms of the warrant. On December 12, 2016, pursuant to the December Letter Agreement, dated December 2, 2016, entered into with Delafield, we issued a 2-year warrant to purchase 208 shares of our common stock with an exercise price of $6,250 per share. As of June 30, 2019, there were 59 warrants outstanding and exercisable with expiration dates commencing May 2020 and continuing through November 2020, with a weighted average exercise price per share of $4,765. On August 30, 2019, pursuant to a Securities Purchase Agreement, we issued to Auctus Fund LLC (i) a Common Stock Purchase Warrant permitting the holder to purchase 450,000 shares of common stock of the Company for an exercise price of $2.25, (ii) a Common Stock Purchase Warrant permitting the holder to purchase 300,000 shares of common stock of the Company for an exercise price of $3.33, and (iii) a Common Stock Purchase Warrant permitting the holder to purchase 225,000 shares of common stock of the Company for an exercise price of $4.50. 65 On September 10, 2019, the Company entered into an agreement with a certain consultant to provide services over a three-month period beginning September 10, 2019 and ending December 10, 2019 in exchange for 1,000,000 warrants to purchase the Company’s common stock at $2.00 per share with an expiry date of September 10, 2022. The Fair Market Value of the warrants was $984,810 on the date of grant as calculated under the Black Scholes Option Pricing model. The Company recorded $984,810 of share based compensation expenses with respect to the grant of such warrants during the six months ended December 31, 2019. On March 30, 2020, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) whereby an investor (the “Investor”) purchased from the Company, 7,500,000 units (the “Units”), each consisting of (i) 1.5 shares of the Company’s common stock (the “Common Stock”), or pre-funded warrants (the “Prefunded Warrants”) and (ii) 1.5 warrants to purchase one share of Common Stock (“Series A Warrants”, and collectively with the Common Stock the “Units”). In addition to the Units, the Investor was issued 63,750,000 warrants to purchase one share of Common Stock (the “Series B Warrants”) and an additional 63,750,000 warrants to purchase one share of Common Stock, subject to a vesting schedule (the “Series C Warrants” and, together with the Prefunded Warrants, the Series A Warrants, and the Series B Warrants, the “Warrants”). The aggregate purchase price for the Units, the Series A Warrants, the Series B Warrants and the Series C Warrants of $450,000 was paid at closing (the “Purchase Price”). The 11,250,000 shares of Common Stock underlying the Units issuable at closing of the Securities Purchase Agreement are comprised of 804,518 shares of restricted Common Stock and 10,445,482 Prefunded Warrants. As of June 30, 2020, there were 151,170,514 warrants outstanding and exercisable with expiration dates commencing August 2020 and continuing through August 2024, with a weighted average exercise price per share of $0.15. Except as otherwise noted, the securities in the transactions describe above were sold in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act for transactions not involving any public offering. Each of the persons acquiring the foregoing securities was an accredited investor (as defined in Rule 501(a) of Regulation D) and confirmed the foregoing and acknowledged, in writing, that the securities must be acquired and held for investment. All certificates evidencing the shares sold bore a restrictive legend. No underwriter participated in the offer and sale of these securities, and no commission or other remuneration was paid or given directly or indirectly in connection therewith. The proceeds from these sales were used for general corporate purposes. Item 6. Selected Financial Data. Not applicable to smaller reporting companies. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our business and results of operations in conjunction with the information set forth under Part I, Item 1A “Risks Factors,” and our consolidated financial statements and notes thereto appearing under Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. See “Forward-Looking Statements” on page 3 of this Annual Report. As used herein, references to the “Company,” “Propanc,” “we,” “our,” and “us” refer to Propanc Biopharma, Inc. and its consolidated subsidiary, unless otherwise indicated. U.S. Dollars are denoted herein by “USD,” “$” and “dollars”. Overview We were incorporated in the state of Delaware as Propanc Health Group Corporation on November 23, 2010. In January 2011, to reorganize our Company, we acquired all of the outstanding shares of Propanc PTY LTD, an Australian corporation, on a one-for-one basis and Propanc PTY LTD became our wholly-owned subsidiary. Effective April 20, 2017, we changed our name to “Propanc Biopharma, Inc.” to better reflect our current stage of operations and development. 66 We are a development-stage healthcare company that is currently focused on developing new cancer treatments for patients suffering from pancreatic, ovarian and colorectal cancer. Utilizing our scientific and oncology consultants, we have developed a rational, composite formulation of anti-cancer compounds, which together exert a number of effects designed to control or prevent tumors from recurring and spreading through the body. Our lead product candidate, PRP, is a variation upon our novel formulation and involves pro-enzymes, the inactive precursors of enzymes. As a result of positive early indications of the anti-cancer effects of our technology over the last 12-24 months we have conducted successful pre-clinical studies on PRP and also commenced preparation for a clinical study in advanced cancer patients. Subject to us receiving sufficient financing, we plan to begin our Investigational Medicinal Product Dossier, study proposal and Investigator’s Brochure in the second half of 2020 calendar year. Our plan is to then commence our study preparation process with the contract research organization, analytical lab and trial site(s) selection and to begin our clinical trial application for PRP (“CTA”) compilation in the third calendar quarter of 2020 and complete the CTA compilation and submit the CTA in the first calendar quarter of 2021. In first or second quarter of 2021, we plan to begin the preparation of logistics and trial site initiation visits. Subject to raising additional sufficient capital, we subsequently plan to commence a First-In-Human (FIH), Phase Ib study in patients with advanced solid tumors, evaluating the safety, pharmacokinetics and anti-tumor efficacy of PRP in the first half of 2021 calendar year, which study we hope to complete within twelve months thereafter. We intend to develop our PRP to treat early-stage cancer and pre-cancerous diseases and as a preventative measure for patients at risk of developing cancer based on genetic screening. To date, we have generated no revenue, have no cancer treatment products available to market and have no products which have reached the clinical trial stage. We require substantial additional financing to continue to test and commercialize PRP. Recent Developments Business Developments Appointment of our Chief Financial Officer - In July 2019, we appointed Mr. Carlo Campiciano as Chief Financial Officer. Mr. Campiciano brings significant experience to the Company across a broad range of financial disciplines in the healthcare sector, including taxation, finance, operations, planning and financial strategy. Mr. Campiciano will assist with the transformational stage into a clinical development company, along with the goal of up-listing to a U.S. national stock exchange. Certificate for Advance Overseas Finding – In January 2020, we announced that a Certificate for Advance Overseas Finding was received from the Board of Innovation and Science Australia to receive up to a 43.5% “cash back” benefit from overseas R&D expenses. The finding relates to the planned Phase 1 clinical trial – Multiple Ascending Dose Studies of proteolytic proenzymes for the treatment of pancreatic cancer, for 2018/19 and the two following financial years. Overseas activities to be undertaken include the development of an analytical assay for the quantification of active pharmaceutical ingredients in the Company’s lead product candidate, PRP, and its manufacture of the finished product for the Phase 1 clinical trial. The finding from the Board agreed there is a significant link between the two supporting activities and the planned Phase 1 clinical trial, and the two activities cannot be conducted solely in Australia. The Phase 1 clinical trial is planned to be conducted at the Peter Mac Center, one of the world’s leading cancer research, education and treatment centers, globally and is Australia’s only public hospital solely dedicated to caring for people affected by cancer. Initiation of Development of a Bio-Analytical Assay ― In March 2019, we announced that we have initiated development of a bio-analytical assay intended to quantify the active ingredients of our lead product candidate, PRP, in preparation for human trials, planned for the beginning of the 2020 calendar year. The work will be conducted by a specialist Contract Research Organization with extensive knowledge in the development of functional assays for different bio-therapeutics. PRP is a solution of two proenzymes, trypsinogen and chymotrypsinogen, administered by I.V. injection. Development of the bio-analytical assay will be an important step towards the clinical development of PRP, as we consider the possible sites to conduct a First-In-Human study in advanced cancer patients, possibly in Europe, specifically the UK, or at a prominent cancer hospital in Australia, with significant experience in early stage clinical development. Attractive R&D tax incentive benefits could be gained by undertaking the trial in Australia, as well as utilizing world-class facilities dedicated to treating and caring for people with cancer. We will investigate selected clinical trial sites more thoroughly as we commence preparation of a clinical trial application for PRP. USPTO Notice of Allowance ― In March 2019, we announced that we have received a Notice of Allowance from the United States Patent and Trademark Office (the “USPTO”) confirming composition of matter claims involving trypsinogen and chymotryosinogen have been allowed. The additional composition claims are a continuation from the original foundation patent in the U.S. and as a result, both method of treatment and composition claims will protect PRP, our lead product candidate. A Notice of Allowance is issued by the USPTO to indicate that it believes an invention qualifies for a patent. The reasons for allowance stipulated by the USPTO examiner stated that the scientific declarations presented establishes that compositions comprising trypsinogen and chymotrypsinogen exhibit a synergistic ability to inhibit the growth of various cancer cell lines, and that this effect would be unexpected to one of ordinary skill in the art, thus concluding the claims were patentable. Reverse Stock Split ― In March 2019, our board of directors and stockholders holding majority of the outstanding voting power of our capital stock approved for the following actions to be taken by our Company: (i) at the discretion of our Board, to carry out a reverse stock split of our common stock at a reverse stock split ratio in the range of between 1-for-150 and 1-for-500 (the “Reverse Stock Split”), which specific ratio will be determined by our Board at its sole discretion, with a corresponding pro-rata decrease of the authorized number of shares of our Common Stock; and (ii) (2) to fix the number of authorized shares of our common stock after the Reverse Stock Split at 100,000,000 shares, which change will effected in connection with the consummation of the Reverse Stock Split. Our Board has the authority, but not the obligation, in its sole discretion and without further action on the part of our stockholders, to select the ratio for the Reverse Stock Split (not to exceed 1-for-500) and to effect the Reverse Stock Split. On May 25, 2019, our Board determined that the reverse stock split ratio should be 1-for-500. The Reverse Stock Split, at a ratio of 1-for-500, occurred on June 24, 2019. 67 Partnership with University of Jaén ― In January 2019, we announced that a cooperation agreement has been entered into between the University of Jaén and our Company to commence the POP1 joint drug discovery program to be co-funded by both parties. The agreement coincides with the appointment of research scientist, Mr. Aitor González, to lead the drug discovery and research activities over the next 3 to 4 years. The objective of the program is to identify and develop suitable backup compounds to our lead product candidate, PRP.As part of the agreement, Macarena Perán, Ph.D. and Julian Kenyon, M.D. have been appointed as joint supervisors, representing the University and our Company, respectively. The program involves advancing new compounds through a drug screening process, followed by preclinical and early stage clinical development. As the drug candidate progresses along the development pathway, the collaboration will also involve the Universities of Granada and Jaén, as well as Granada and Almeria Hospitals, which are members of FIBAO, a Public Health Foundation, based in Granada, Spain, committed to assisting commercial partners with the development and commercialization of innovative technologies designed to benefit humankind. In December 2018, we announced that our foundation patent application has been granted by the Office of the Controller General of Patents, Design and Trademarks, India. The foundation patent, which covers our lead product candidate, PRP, pioneers the discovery of a pharmaceutical composition for treating cancer via a combination of trypsinogen and/or chymotrypsinogen pancreatic proenzymes. As of June 30, 2020, the foundation patent has been granted in the USA, Europe (including Belgium, Czech Republic, Denmark, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden, Switzerland/Liechtenstein, Turkey and the United Kingdom), China, Japan, Indonesia, Malaysia, Israel, Australia, New Zealand, Singapore, South Africa, Mexico, Republic of Korea, Hong Kong and more recently, India. It is presently under examination in Canada and Brazil. Financing Activities In February 2019, we entered into the Equity Purchase Agreement (the “Equity Purchase Agreement”) with Oasis Capital, LLC, an institutional accredited investor (“Oasis Capital”) pursuant to which Oasis Capital committed to purchase up to $10,000,000 worth of shares of our common stock (the “Equity Line”). Effective May 23, 2019, we entered into a securities purchase agreement with Redstart Holdings Corp. (“Redstart”), pursuant to which Redstart purchased a convertible promissory note (the “May 2019 Redstart Note”) from us in the aggregate principal amount of $133,000, such principal and the interest thereon convertible into shares of our common stock at the option of Redstart. The transactions contemplated by the securities purchase agreement closed on or about May 30, 2019. We intend to use the net proceeds ($130,000) from this financing for general working capital purposes. On April 3, 2020, the Company closed on a transaction related to a Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into on March 30, 2020, whereby an investor (the “Investor”) purchased from the Company, 7,500,000 units (the “Units”), each consisting of (i) 1.5 shares of the Company’s common stock (the “Common Stock”), or pre-funded warrants (the “Prefunded Warrants”) upon Investor’s election due to the 4.99% blocker provision as discussed below and (ii) 1.5 warrants to purchase one share of Common Stock (“Series A Warrants”), along with such purchaser’s pro-rata portion of the Series B Warrants and Series C Warrants (“the Units”). In aggregate the Investor was issued 63,750,000 warrants to purchase one share of Common Stock (the “Series B Warrants”) and an additional 63,750,000 warrants to purchase one share of Common Stock, subject to a vesting schedule based on the Investors exercise of the Series B Warrants (the “Series C Warrants” and, together with the Prefunded Warrants, the Series A Warrants, and the Series B Warrants referred to herein as, the “Warrants”). See discussion of warrant terms under “Warrants” below. The aggregate purchase price for the Units, the Series A Warrants with exercise price of $0.20 per share, the Series B Warrants with exercise price of $0.04 per share and the Series C Warrants with exercise price of $0.20 per share, of $450,000 was paid at closing (the “Purchase Price”) or $0.06 per unit purchase price. The Securities Purchase Agreement contains a blocker provision whereby the Investor or any of its affiliates would not beneficially own in excess of 4.99% of the outstanding number of shares of Common Stock (“Beneficial Ownership Limitation”). As such, the Investor may elect to purchase Prefunded Warrants equal to the same number of shares of Common Stock that the Company would have been issued. Due to the Beneficial Ownership Limitation, the 11,250,000 shares of Common Stock underlying the Units issuable at closing of the Securities Purchase Agreement are comprised of 804,518 shares of restricted Common Stock and 10,445,482 Prefunded Warrants with exercise price of $0.0001 (but can be less than par value). The Prefunded Warrants shall be exercisable immediately and shall expire when exercised in full. The Securities Purchase Agreement contains such representations, warranties and covenants as are typical for a transaction of this nature. Series A Warrants Pursuant to the Securities Purchase Agreement, the Investor purchased Series A Warrants to purchase up to 11,250,000 shares of Common Stock, subject to adjustment as provided therein. The Series A Warrants have a cash exercise price of $0.20 per share and are immediately exercisable and expire in 3 years. The Series A Warrants contain a provision for cashless exercise in the event there is no effective registration statement registering the shares underlying the Series A Warrants calculated based on the difference between the exercise price of the Series A Warrant and the trading price of the stock (the “Cashless Exercise”).Additionally, the Series A Warrants contain a provision for a cashless conversion at the Holder’s option should the trading price of the Common Stock fall below $0.20 per share calculated based on the difference between the exercise price of the Series A Warrant and 70% of the Market Price, as defined therein (the” Alternate Cashless Exercise”). Series B Warrants Pursuant to the Securities Purchase Agreement, the Investor purchased Series B Warrants to purchase up to 63,750,000 shares of Common Stock, subject to adjustment as provided therein; provided, however, commencing on the 90th day following the effective date, the Company may reduce the number of Warrant Shares issuable upon exercise thereof by 37,500,000 upon 10 Trading Days’ prior written notice to the Holder provided that the Company issues to the Holder 3,750,000 shares of Common Stock (or, at the election of the Holder, an equivalent number of pre-funded warrants) and Series A Warrants to purchase up to 3,750,000 shares of Common Stock, which shares shall be issued pursuant to a registration statement without restrictions on resale. The Series B Warrants have a cash exercise price of $0.04 per share and expire in 3 years. The Series B Warrants contain a provision for Cashless Exercise. Series C Warrants Pursuant to the Securities Purchase Agreement, the Investor purchased Series C Warrants to purchase up to 63,750,000 shares of Common Stock, subject to adjustment as provided therein and expire in 3 years. The Series C Warrants have a cash exercise price of $0.20 per share, subject to a vesting schedule, which is based on such Holder’s exercise of all the Series C Warrants. The Series C Warrants contain provisions for Cashless Exercise and Alternate Cashless Exercise. Critical Accounting Estimates Below is a discussion of our more subjective accounting estimation processes for purposes of explaining (i) the methodology used in calculating the estimates, (ii) the inherent uncertainties pertaining to such estimates, and (iii) the possible effects of a significant variance in actual experience, from that of the estimate, on our financial condition. Estimates involve numerous assumptions that, if incorrect, could create a material adverse impact on the Company’s results of operations and financial condition. Reference is frequently made herein to the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”). This is the source of authoritative US GAAP recognized by the FASB to be applied to non-governmental entities. Each ASC reference in this filing is presented with a three-digit number, which represents its Topic. As necessary for explanation and as applicable, an ASC topic may be followed with a two-digit subtopic, a two-digit section or a two-or-three digit paragraph. 68 Foreign Currency Translation and Comprehensive Income (Loss) : The Company’s wholly owned subsidiary’s functional currency is the AUD. For financial reporting purposes, the Australian Dollar (“AUD”) has been translated into USD as the Company’s reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Equity transactions are translated at each historical transaction date spot rate. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity (deficit) as “accumulated other comprehensive income (loss).” Gains and losses resulting from foreign currency transactions are included in the statement of operations and comprehensive loss as other income (expense). Accounting for Income Taxes: We are governed by Australian and United States income tax laws, which are administered by the Australian Taxation Office and the United States Internal Revenue Service, respectively. We follow ASC 740, “ 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 adopted provisions of 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. Accounting for Stock Based Compensation : We record stock based compensation in accordance with ASC 718, “ Stock Compensation ” and Staff Accounting Bulletin No. 107 issued by the SEC in March 2005 regarding its interpretation of ASC 718. ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related requisite service period. The statement also requires the recognition of compensation expense for the fair value of any unvested stock option awards outstanding at the date of adoption. We value any employee or non-employee stock based compensation at fair value using the Black-Scholes Option Pricing Model. We account for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC 718. Derivative Instruments: ASC 815, “ Derivatives and Hedging, ” 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, we record the fair value of the conversion shares, remove the fair value of the related derivative liability, remove any discounts and record a net gain or loss on debt extinguishment. Convertible Notes with Variable Conversion Options : We have 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 common shares at or around a fixed discount to the price of the common stock at the time of conversion. We treat these convertible notes as stock settled debt under ASC 480 and measure 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 record the put premium as accretion to interest expense. Research and Development Tax Credits : We 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, we do 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 we have net income then we can receive the credit which reduces its income tax liability. If we have net losses, then we may still receive a cash payment for the credit, however, our net operating loss carry forwards 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 an income tax benefit, in operations, upon receipt. 69 Recent Accounting Pronouncements For a discussion of recently issued and adopted accounting pronouncements, please see section captioned “Recent Accounting Pronouncements” in Note 1 to our consolidated financial statements included in this Annual Report. Reverse Stock Split Presentation The share and per share figures in this Management’s Discussion and Analysis of Financial Condition and Results of operations section, along with elsewhere in this annual report, have been adjusted to reflect the 1-for-500 Reverse Stock Split of our authorized and outstanding shares of common stock, which occurred on June 24, 2019. Results of Operations The following discussion should be read in conjunction with the Company’s consolidated financial statements and notes thereto included elsewhere in this Annual Report. The results discussed below are of the Company and its wholly-owned Australian subsidiary, Propanc PTY LTD. Fiscal Year Ended June 30, 2020, as compared to the Fiscal Year Ended June 30, 2019 Revenue For the fiscal years 2020 and 2019 we generated no revenue because we are currently undertaking research and development activities for market approval and no sales were generated in this period. Administration Expense Administration expense increased to $3,281,464 for the year ended June 30, 2020 as compared to $2,326,350 for the year ended June 30, 2019. This increase of approximately $955,000 is primarily attributable to an increase of approximately $1,154,000 in stock-based expenses for services, an increase of approximately $119,000 in capital raising costs, an increase in general consulting and accountancy fee of approximately $64,000, an increase in insurance expense of approximately $17,000, an increase of approximately $139,000 in marketing and market research expense, increase of approximately $3,000 of other general and administrative expenses and, offset by decrease of approximately $122,000 in employee remuneration expense as a result of a one off adjustment in employee leave liability of approximately $157,000 in the year ended June 30, 2019, decreases in in investor relations based expense of approximately $80,000, a decrease of approximately $69,000 in general legal and intellectual property legal expense, a decrease of approximately $42,000 in public company filing fees, a decrease of $45,000 in travel expense and a decrease of approximately $183,000 in employee leave accruals which is a result of an adjustment of approximately $176,000 to employee leave accruals during the year ended June 30, 2019 in order to comply with Australian leave entitlements. Occupancy Expense Occupancy expense increased by approximately $4,700 to $32,809 for the year ended June 30, 2020. The increase primarily relates to rent adjustment on under paid rent of $4,800 during the year ended June 30, 2020. Research and Development Expenses Research and development expenses were $179,987 for the year ended June 30, 2020, as compared to $260,335 for the year ended June 30, 2019. The decrease in research and development expenses is primarily attributable to completion of process development activities and preparation for commencement of the engineering run and subsequent full scale GMP manufacture of PRP for clinical trials, with the process, preparation and small scale manufacture having been completed in the period ended December 31, 2017, which the clinical trials we hope to commence in 2021 calendar year, if we raise sufficient proceeds by raising additional capital. Completed activities include raw material purification and stabilization process development, development of analytical quality assurance and control methods, reproduction runs for raw materials, and preparation of raw materials and finished product specifications for future full scale GMP manufacture of PRP. 70 Interest Expense/Income Interest expense increased to $1,748,381 for the year ended June 30, 2020, as compared to $1,314,539 for the year ended June 30, 2019. Interest expense is primarily comprised of approximately $734,130 of debt discount amortization and approximately $836,724 accretion of debt premium. This increase is primarily attributable to an increase in the issuance of debt containing embedded derivatives resulting in an increase amortization of debt discount, along with the increase in issuance of convertible notes with discounted debt features during the year ended June 30, 2020. Change in Fair Value of Derivative Liabilities Change in fair value of derivative liabilities changed by $2,857,439, to a gain of $385,293 for the year ended June 30, 2020, as compared to a loss of $(2,472,146) for the year ended June 30, 2019. This change is primarily attributable to an increase in the volatility of the prices of our shares of common stock along with a decrease in stock price during the year ended June 30, 2020, which resulted in the recognition of a smaller loss from change in fair value. Gain on Debt Settlements, Net There were no debt settlements during the year ended June 30, 2020 and as a result there were no gains or (losses) on settlement of debt during that period, as compared with a gain of $14,101 for the year ended June 30, 2019. Gain (loss) on Extinguishment of Debt, net During the year ended June 30, 2020, notes with principal amounts totaling $254,500 and accrued interest of $15,408 contained bifurcated embedded conversion option derivatives. Accordingly, the fair market value of the shares issued was $565,746 resulting in a loss on extinguishment at the time of conversion of $295,838 and $362,961 of derivative fair value was recorded as a gain on extinguishment at the time of conversion. During the year ended June 30, 2019, the Company repaid three convertible notes which were treated as derivative instruments, incurred penalties of $92,133 and recorded a gain on the removal of the derivatives of $936,650. Additionally, the Company issued shares of common stock with a value of $1,335,047 which resulted in a gain on extinguishment of $359,725 as the note and derivative fair value exceeded the fair value of shares converted. Foreign Currency Transaction Gain (Loss) Foreign currency transaction decreased to a loss of $(143,808) for the year ended June 30, 2020 as compared with a loss of $(690,748) for the year ended June 30, 2019. The decrease in foreign currency transaction loss is primarily attributable to fluctuation in exchange rates during the year ended June 30, 2020, as compared to during the year ended June 30, 2019, and 2020 having less intercompany loans. Income Tax Benefit During the years ended June 30, 2020 and 2019, the Company applied for and received from the Australian Taxation Office a research and development tax credit in the amount of $134,728 and $115,437, respectively. Net loss Net loss decreased to $(4,740,723) for the year ended June 30, 2020 as compared to a net loss of $(5,758,369) for the year ended June 30, 2019. The change relates to the factors discussed above. Liquidity and Capital Resources Current Financial Condition As of June 30, 2020, we had total assets of $98,518, comprised primarily of cash of $67,007, GST tax receivable of $2,015, property and equipment, net, of $5,747 and operating lease right of use asset, net, $21,682. This compares with total assets of $101,652 as of June 30, 2019, comprised primarily of cash of $2,394, GST tax receivable of $5,439, prepaid expenses and other current assets of $83,299 and property and equipment, net, of $8,417. We had current liabilities of $3,739,943, primarily comprised of net convertible debt of $1,557,734, accounts payable and accrued expenses of $1,544,387 and embedded conversion option liabilities of $354,109, as of June 30, 2020. This compares with current liabilities of $4,402,888, primarily comprised of net convertible debt of $1,657,377, accounts payable and accrued expenses of $1,640,379 and embedded conversion option liabilities of $698,264, as of June 30, 2019. 71 We have funded our operations primarily through the issuance of equity and/or convertible securities for cash. The cash was used primarily for payments for research and development, administration expenses, occupancy expenses, professional fees, consultants and travel. During the year ended June 30, 2020, we borrowed amounts of approximately $1,591,250 from the sale of convertible promissory notes during such period with various maturity dates ranging from July 3, 2020 to March 12, 2021. We have substantial capital resource requirements and have incurred significant losses since inception. As of June 30, 2020, we had $67,007 in cash. We depend upon debt and/or equity financing to fund our ongoing operations and to execute our current business plan. Such capital requirements are in excess of what we have in available cash and for which we currently have commitments. Therefore, we presently do not have enough available cash to meet our obligations over the next 12 months. If continued funding and capital resources are unavailable at reasonable terms, we may curtail our plan of operations. We will be required to obtain alternative or additional financing from financial institutions, investors or otherwise, in order to maintain and expand our existing operations. The failure by us to obtain such financing would have a material adverse effect upon our business, financial condition and results of operations, and adversely affecting our ability to complete ongoing activities in connection with our research and development programs. Sources and Uses of Cash For the Fiscal Year Ended June 30, 2020 2019 Net cash used in operating activities $ (1,849,589 ) $ (2,060,037 ) Net cash used in investing activities $ - $ (2,874 ) Net cash provided by financing activities $ 1,890,240 $ 2,118,560 Effect of exchange rate changes on cash $ 23,962 $ (73,176 ) Net cash used in operating activities was $1,849,589 for the fiscal year ended June 30, 2020 compared to $2,060,037 for the fiscal year ended June 30, 2019. This decrease is primarily due to a decrease in change in fair value of derivative liabilities of approximately $2,857,000, decrease in accrued expenses of approximately $21,000, decrease in employment related liabilities of approximately $153,000, changes in foreign currency transaction loss of approximately $547,000 offset by increases primarily due to increase in stock-based compensation of $1,154,000, amortization of debt discount of $344,000, accretion of put premium of $131,000, increase in gain on extinguishment of debt of approximately $1,229,000, increase in prepaid expenses and other assets of $166,000 and accounts payable of $105,000. Cash flows provided by financing activities for the fiscal year ended June 30, 2020 were $1,890,240 as compared to $2,118,560 for the fiscal year ended June 30, 2019. During the year ended June 30, 2020, we received net proceeds from the issuance of convertible promissory notes of $1,465,250 and net proceeds from sale of common stock of $424,990. During the year ended June 30, 2019, we received net proceeds from the issuance of convertible promissory notes of $1,305,150 and sale of common stock of $1,085,380 net, offset by repayments of convertible notes of $272,000. The effect of the exchange rate on cash resulted in a $23,962 positive adjustment to cash flows in the year ended June 30, 2020 as compared to a negative adjustment of $73,176 to cash flows in the year ended June 30, 2019. The reason for the fluctuation is due to the application of currency translation rates throughout the cash flow statement, the volume of transactions within each period and the daily fluctuation in exchange rates. Going Concern Qualification We did not generate any revenue for the fiscal years ended June 30, 2020 and 2019 and have incurred significant losses and cash used in operations, and such losses and use of cash are expected to continue. Our independent registered public accounting firm has included a “Going Concern Qualification” in their audit report for each of the fiscal years ended June 30, 2020 and 2019. In addition, we have negative working capital and convertible debt that is past maturity that we are currently negotiating with lenders in order to amend the maturity dates. The foregoing raises substantial doubt about our ability to continue as a going concern for a period of 12 months from the issue date of this report. Our ability to continue as a going concern is dependent on our ability to execute our strategy and on our ability to raise additional funds and/or to consummate a public offering. Management is currently seeking additional funds, primarily through the issuance of equity and/or debt securities for cash to operate our business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity and/or convertible debt financing. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The “Going Concern Qualification” might make it substantially more difficult to raise capital. 72 Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Not applicable to smaller reporting companies.