What changed in this filing

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Item 1. Financial Statements

2020-11-16 compared with 2020-05-15 · 1235 added, 1511 removed, 1190 unchanged (70% of the section changed)

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TO FINANCIAL STATEMENTS

Consolidated Balance Sheets at March 31, 2020 (unaudited) and June 30, 2019

Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended March 31, 2020 and

2019 (unaudited)

Consolidated Statement of Changes in Stockholders’

Deficit for each of the three and nine months in the period ended

March 31, 2020 and 2019 (unaudited)

Consolidated Statements of Cash Flows for the nine months ended March 31, 2020 and 2019 (unaudited)

to the condensed consolidated financial statements (unaudited)

Condensed Consolidated Balance Sheets at September 30, 2020 (unaudited) and June 30, 2020

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended September 30, 2020 and 2019 (unaudited)

Condensed Consolidated Statement of Changes in Stockholders’

Deficit for each of the three months in the period ended September 30, 2020 and 2019 (unaudited)

Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2020 and 2019 (unaudited)

Notes to the condensed consolidated financial statements (unaudited)

BIOPHARMA, INC.

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CONSOLIDATED BALANCE SHEETS

tax receivable

CURRENT ASSETS

GST tax receivable

expenses and other current assets

TOTAL CURRENT ASSETS

Security deposit

- related party

Operating lease

right-of-use assets, net - related party

deposit - related party

lease right-of-use assets, net - related party

and equipment, net

AND STOCKHOLDERS’

CURRENT LIABILITIES:

Accounts payable

Accrued expenses

and other payables

Convertible notes

and related accrued interest, net of discounts and premiums

Operating lease

liability - current portion - related party

Embedded conversion

option liabilities

Due to former director

- related parties

Loans from directors

and officer - related parties

expenses and other payables

notes and related accrued interest, net of discounts and premiums

lease liability - related party

conversion option liabilities

to former director - related party

from directors and officer - related parties

benefit liability

CURRENT LIABILITIES

NON-CURRENT LIABILITIES:

lease liability - long-term portion - related party

NON-CURRENT LIABILITIES

Commitments and Contingencies

and Contingencies (See Note 8)

STOCKHOLDERS’

Preferred stock, 1,500,005 shares

authorized, $0.01 par value:

Series A preferred

stock, $0.01 par value;

stock, 1,500,005 shares authorized, $0.01 par value:

A preferred stock, $0.01 par value;

500,000 shares authorized;

500,000 and 500,000 shares issued and outstanding as of March 31, 2020

and June 30, 2019, respectively

Series B preferred

stock, $0.01 par value;

500,000 shares issued and outstanding as of September 30, 2020

and June 30, 2020

B preferred stock, $0.01 par value;

5 shares authorized;

1 and 1 share issued and outstanding as of March 31, 2020 and June 30, 2019,

Common stock, $0.001 par value;

1,000,000,000

1 share issued and outstanding as of September 30, 2020 and June

stock, $0.001 par value;

1,000,000,000 shares authorized;

18,481,459 and 968,042 shares issued;

18,481,410 and 967,993 outstanding as of March 31, 2020 and June

30, 2019, respectively

Additional paid-in

Accumulated other

comprehensive income

Accumulated deficit

715,597,215 and 258,120,381 shares issued and issuable;

and 258,120,332 outstanding as of September 30, 2020 and June 30, 2020, respectively

paid-in capital

other comprehensive income

(56,207,315 )

(55,781,770 )

Treasury stock

stock (49 shares)

STOCKHOLDERS’

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Months Ended March 31,

OPERATING EXPENSES

Months Ended September 30,

Administration

Occupancy expenses

and development

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FROM OPERATIONS

OTHER INCOME (EXPENSE)

Interest expense

Interest income

Change in fair value

of derivative liabilities

Gain (loss) on debt

settlements, net

Gain (loss) on extinguishment

INCOME (EXPENSE)

in fair value of derivative liabilities

on extinguishment of debt, net

currency transaction gain (loss)

OTHER INCOME (EXPENSE)

LOSS BEFORE TAXES

(EXPENSE) BENEFIT

$ (2,585,662 )

$ (5,944,711 )

OTHER EXPENSE, NET

$ (1,491,940 )

AND DILUTED NET LOSS PER SHARE

BASIC AND DILUTED

WEIGHTED AVERAGE SHARES OUTSTANDING

$ (2,585,662 )

$ (5,944,711 )

AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING

$ (1,491,940 )

OTHER COMPREHENSIVE

INCOME (LOSS)

COMPREHENSIVE INCOME (LOSS)

foreign currency translation gain (loss)

OTHER COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE INCOME (LOSS)

$ (3,728,949 )

$ (3,637,902 )

COMPREHENSIVE LOSS

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

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

DEFICIT FOR EACH OF THE THREE AND NINE MONTHS ENDED MARCH 31, 2020

DEFICIT FOR EACH OF THE THREE MONTHS ENDED SEPTEMBER 30, 2020 and 2019

Comprehensive

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at June 30, 2019

$ (45,282,678 )

$ (6,751,920 )

Issuance of common stock

for conversion of convertible debt and accrued interest

Reclassification of

premium upon debt conversion

Extinguishment of derivative

liability associated with convertible notes

Exercise of warrants

Foreign currency translation

Net loss for the

three months ended September 30, 2018

Balance at September

(47,407,614 )

Issuance of common stock

for conversion of convertible debt and accrued interest

Issuance of common stock

under put premium

Reclassification of

put premium upon debt conversion

Issuance of common stock

for offering costs

Issuance of common stock

Foreign currency translation

Net loss for the

three months ended December 31, 2018

Balance at December

(48,857,652 )

Issuance of common stock

for conversion of convertible debt and accrued interest

Issuance of common stock

under put premium

Reclassification of

put premium upon debt conversion

Amortization of offering

Issuance of common stock

Foreign currency translation

Net loss for the

three months ended March 31, 2019

at March 31, 2019

$ (49,439,508 )

$ (3,413,022 )

Balance at June 30,

$ (51,041,047 )

$ (4,301,236 )

Issuance of common stock

for conversion of convertible debt and accrued interest

Reclassification of

put premium upon debt conversion

Relative fair value

of warrants issued with convertible debt

Issuance of common stock

Stock based compensation

in connection with stock option grants and restricted stock unit grants

Foreign currency translation

Net loss for the

three months ended September 30, 2019

Balance at September

(52,532,987 )

Issuance of common stock

for conversion of convertible debt and accrued interest

Reclassification of

put premium upon debt conversion

Stock based compensation

in connection with stock option grants and restricted stock unit grants

Stock based compensation

in connection with fair value of warrants issued for services

Foreign currency translation

Net loss for the

three months ended December 31, 2019

Balance at December

(54,400,096 )

Issuance of common stock

for conversion of convertible debt and accrued interest

Reclassification of

put premium upon debt conversion

Issuance of common stock

Stock based compensation

in connection with stock option grants and restricted stock unit grants

Foreign currency translation

Net loss for the

three months ended March 31, 2020

at March 31, 2020

$ (56,985,758 )

$ (4,846,908 )

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

of common stock for conversion of convertible debt and accrued interest

Reclassification

of put premium upon debt conversion

fair value of warrants issued with convertible debt

of common stock for services

based compensation in connection with stock option grants and restricted stock unit grants

currency translation gain

loss for the three months ended September 30, 2019

at September 30, 2019

at June 30, 2020

of common stock for conversion of convertible debt and accrued interest

Reclassification

of put premium upon debt conversion

of common stock for exercise of warrants

based compensation in connection with stock option grants

currency translation loss

loss for the three months ended September 30, 2020

at September 30, 2020

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

BIOPHARMA, INC.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Months Ended March 31,

CASH FLOWS FROM OPERATING

$ (5,944,711 )

Months Ended September 30,

FLOWS FROM OPERATING ACTIVITIES:

$ (1,491,940 )

to Reconcile Net Loss to Net Cash Used in Operating Activities:

Issuance and amortization

of common stock and warrants for services

(Gain) loss on settlements,

Foreign currency

transaction loss (gain)

Depreciation expense

Amortization of

debt discounts

Change in fair value

of derivative liabilities

Gain on extinguishment

Stock option and

restricted stock expense

Non-cash interest

Accretion of put

currency transaction loss (gain)

of debt discounts

in fair value of derivative liabilities

on extinguishment of debt, net

option and restricted stock expense

interest expense

of put premium

in Assets and Liabilities:

GST receivable

Prepaid expenses

and other assets

Accounts payable

Deferred rent

Employee benefit

Accrued expenses

expenses and other assets

benefit liability

CASH USED IN OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING

CASH USED IN INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING

Proceeds from convertible

promissory notes, net of original issue discounts and issue costs

Repayments of convertible

promissory notes

Proceeds from the

issuance of common stock

Fees associated

with offering costs

FLOWS FROM FINANCING ACTIVITIES:

from convertible promissory notes, net of original issue discounts and issue costs

of convertible promissory notes

issuance cost

from the exercise of warrants

CASH PROVIDED BY FINANCING ACTIVITIES

Effect of exchange rate changes on cash

NET INCREASE IN CASH

CASH AT BEGINNING

of exchange rate changes on cash

INCREASE (DECREASE) IN CASH

AT BEGINNING OF PERIOD

AT END OF PERIOD

Disclosure of Cash Flow Information

Cash paid during

paid during the period:

Disclosure of Non-Cash Investing and Financing Activities

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related to warrants issued with convertible notes

financing costs associated with equity purchase agreement

related to derivative liability

and amortization of common stock and warrants for services

lease right-of-use asset and operating lease liability recorded on adoption of ASC 842

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purpose of submitting an orphan drug application to the European Medicines Agency as a small and medium-sized enterprise.

March 31, 2020, there has been no activity within this entity.

September 30, 2020, there has been no activity within this entity.

April 20, 2017, the Company changed its name to “Propanc Biopharma, Inc.”

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The first application was filed in October 2010.

in each of the countries listed in the table below.

This application has been granted and remains in force in the United States,

Belgium, Czech Republic, Denmark, France, Germany, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, Switzerland, Liechtenstein,

Turkey, United Kingdom, Australia, China, Hong Kong, Japan, Indonesia, Israel, New Zealand, Singapore, Malaysia, South Africa,

Mexico, Republic of Korea and India.

In Brazil and Canada, the patent application remains under examination.

2016 and 2017 we filed other patent applications, as indicated below.

Three applications were filed under the Patent Cooperation

Treaty (the “PCT”).

The PCT assists applicants in seeking patent protection by filing one international patent application

under the PCT, which allows the applicants to seek protection for an invention in over 150 countries.

Once national or regional

applications are filed, the application is placed under the control of the national or regional patent offices, as applicable,

in what is called the national or regional phase.

This patent has been granted and remains in force in the United States, Belgium, Czech Republic, Denmark, France, Germany, Ireland,

Italy, Netherlands, Portugal, Spain, Sweden, Switzerland, Liechtenstein, Turkey, United Kingdom, Australia, China, Hong Kong,

Japan, Indonesia, Israel, New Zealand, Singapore, Malaysia, South Africa, Mexico, Republic of Korea and India.

In Brazil and Canada,

the patent application remains under examination.

2016 and 2017 we filed other patent applications.

Three applications were filed under the Patent Cooperation Treaty (the “PCT”).

The PCT assists applicants in seeking patent protection by filing one international patent application under the PCT, which allows

the applicants to seek protection for an invention in over 150 countries.

Once national or regional applications are filed, the

application is placed under the control of the national or regional patent offices, as applicable, in what is called the national

or regional phase.

One PCT application, filed in November 2016, entered the national phase in July 2018.

2018 in each of the countries listed in the table below.

A second application filed in January 2017 entered the national phase

commencing July 2018.

A second application

filed in January 2017 entered the national phase commencing July 2018.

A third application entered the national phase in October

pharmaceutical composition for treating cancer comprising trypsinogen and/or chymotrypsinogen and an active agent selected

from a selenium compound, a vanilloid compound and a cytoplasmic reduction agent.

Belgium, Czech Republic, Denmark, France, Germany, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, Switzerland, Liechtenstein,

Turkey, United Kingdom, Australia, China, Hong Kong, Japan, Indonesia, Israel, New Zealand, Malaysia, Singapore, Malaysia

South Africa, Mexico, Republic of Korea and India

applications filed and under examination in Mexico and China

application granted

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Canada, China, Europe, Hong Kong, India, Indonesia, Israel, Japan, Malaysia, New Zealand, Singapore, South Africa and USA

filed and pending

China, Europe, Hong Kong, Israel, Japan, Malaysia, New Zealand, Singapore and USA

filed and pending

of proenzymes for cancer treatment

China, Europe, Japan and USA

filed and pending

Company hopes to capture and protect additional patentable subject matter based on the Company’s field of technology relating

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product candidate, PRP, through various stages of development.

in Authorized Common Stock and Reverse Split

June 24, 2019, the Company effected a one-for-five hundred (1:500) reverse stock split whereby the Company (i) decreased the number

of authorized shares of common stock, $0.001 par value per share, to 100,000,000 and (ii) decreased by a ratio of one-for-five

hundred (1:500) the number of retroactively issued and outstanding shares of common stock.

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.

February 4, 2020 the Directors resolved to increase the Common Stock of the Company from 100,000,000 authorized shares to 1,000,000,000

authorized shares and believes that such number of authorized shares of Common Stock will be in the best interests of the Corporation

and its stockholders because the Board believes that the availability of more shares of Common Stock for issuance will allow the

Corporation greater flexibility in pursuing financing from investors, meeting business needs as they arise, taking advantage of

favorable opportunities and responding to a changing corporate environment.

The Company filed the necessary documents with the

Securities and Exchange Commission on February 6, 2020 and at the date of this filing the increase in authorized shares to

1,000,000,000 has been effected on March 13, 2020.

of Presentation

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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 results of operations for the three and nine months ended March

31, 2020 and 2019 and cash flows for the nine months ended March 31, 2020 and 2019 and our financial position at March 31, 2020

and non-recurring adjustments) necessary to present fairly our results of operations for the three months ended September 30,

2020 and 2019 and cash flows for the three months ended September 30, 2020 and 2019 and our financial position at September 30,

2020 have been made.

The Company’s results of operations for the three and nine months ended March 31, 2020 are not necessarily

The Company’s results of operations for the three months ended September 30, 2020 are not necessarily

indicative of the operating results to be expected for the full fiscal year ending June 30, 2021.

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 Quarterly Report 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

information and disclosures normally included in the notes to the Company’s annual audited consolidated financial statements

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of Consolidation

condensed consolidated financial statements include the accounts of Propanc Biopharma, Inc., the parent entity, and its wholly-owned

subsidiary, Propanc PTY LTD.

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 subsidiary at March 31, 2020.

Propanc (UK) Limited was an inactive subsidiary at September 30, 2020.

preparation of financial statements in conformity with the accounting principles generally accepted in the United States of America

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Significant estimates

in the accompanying unaudited condensed consolidated financial statements include the estimates of useful lives for depreciation,

valuation of the operating lease liability and related right-of-use asset, valuation of derivatives, valuation of beneficial conversion

features on convertible debt, allowance for uncollectable receivables, valuation of equity based instruments issued for other

than cash, the valuation allowance on deferred tax assets and foreign currency translation due to certain average exchange rates

applied in lieu of spot rates on transaction dates.

in the accompanying consolidated financial statements include the estimates of useful lives for depreciation, valuation of the

operating lease liability and related right-of-use asset, valuation of derivatives, valuation of beneficial conversion features

on convertible debt, allowance for uncollectable receivables, valuation of equity based instruments issued for other than cash,

the valuation allowance on deferred tax assets and foreign currency translation due to certain average exchange rates applied

in lieu of spot rates on transaction dates.

Currency Translation and Other Comprehensive Income (Loss)

Company’s functional currency is the Australian dollar (AUD).

For financial reporting purposes, the Australian dollar has

been translated into United States dollar ($) and/or (USD) as the 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’

(deficit) as “Accumulated other comprehensive income (loss).”

Gains and losses resulting from foreign currency transactions

are included in the statements of operations and comprehensive income (loss) as other comprehensive income (loss).

been no significant fluctuations in the exchange rate for the conversion of Australian dollars to USD after the balance sheet

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

Assets and liabilities are translated at the exchange rate in effect at the balance sheet date.

Revenues and expenses are

translated at the average rate of exchange prevailing during the reporting period.

Equity transactions are translated at each

historical transaction date spot rate.

Translation adjustments arising from the use of different exchange rates from period to

period are included as a component of stockholders’

equity (deficit) as “Accumulated other comprehensive income (loss).”

Gains and losses resulting from foreign currency transactions are included in the statements of operations and comprehensive income

(loss) as 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.

Comprehensive Income (Loss) for all periods presented includes only foreign currency translation gains (losses).

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denominated in a currency other than the functional currency included in the consolidated results of operations as incurred.

the nine months ended March 31, 2020, the Company recognized an exchange loss of approximately $1,959,000 on intercompany loans

made by the parent to the subsidiary which have not been repaid as at March 31, 2020.

of March 31, 2020 and June 30, 2019, the exchange rates used to translate amounts in Australian dollars into USD for the purposes

fiscal year 2021, the parent company determined that these intercompany loans will not be repaid in the foreseeable future and

thus, per ASC 830-20-35-3, gains and losses from measuring the intercompany balances are recorded within cumulative translation

adjustment, a component of other comprehensive income.

Accordingly, for the three months ended September 30, 2020, the

Company recognized an exchange loss of approximately $583,227 on intercompany loans made by the parent to the subsidiary which

have not been repaid as of September 30, 2020 and has been recorded within cumulative translation adjustment, a component of

other comprehensive income.

Prior to July 1, 2020, the Company recorded the foreign currency transaction gains and losses

from measuring the intercompany balances as a component of other income (expenses) as reflected in the condensed consolidated

statements of operations.

The Company recorded foreign currency transaction gain (loss) of $1,960 and $(535,150)

during the three months ended September 30, 2020 and 2019, respectively, as reflected in the condensed consolidated statements

of operations.

of September 30, 2020 and June 30, 2020, the exchange rates used to translate amounts in Australian dollars into USD for the purposes

of preparing the consolidated financial statements were as follows:

September 30, 2020

June 30, 2020

Exchange rate on balance sheet dates

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AUD exchange rate

exchange rates used to translate amounts in AUD into USD for the period ended March 31, 2019 are:

0.7104 as of the balance sheet

date and 0.7203 average exchange rate for that period.

in Accumulated Other Comprehensive Income (Loss) by component during the nine months ended March 31, 2020 was as follows:

in Accumulated Other Comprehensive Income (Loss) by component during the three months ended September 30, 2020 was as follows:

Currency Items:

Beginning balance, June 30, 2019

Foreign currency

translation loss

Ending balance, March 31, 2020

June 30, 2020

currency translation gain

balance, September 30, 2020

BIOPHARMA, INC.

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Bank overdrafts are reflected as a current liability on the balance sheets.

There were no cash equivalents as of March 31, 2020 or June 30, 2019.

are stated at cost and classified as intangible assets 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 product costs as long as

we are in the startup stage.

Accordingly, as the Company’s products were and are not currently approved for market, all

historical patent costs incurred through March 31, 2020 were expensed immediately.

This practice of expensing patent costs immediately

ends when a product receives market authorization from a government regulatory agency.

There were no cash equivalents as of September 30, 2020 or June 30, 2020.

and Equipment

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.

of property and equipment is provided using the declining balance method.

The depreciable amount is the cost less its residual

estimated useful lives are as follows:

and equipment

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.

as the Company’s products are not currently approved for market, all patent costs incurred from 2013 through September 30,

2020 were expensed immediately.

This practice of expensing patent costs immediately ends when a product receives market authorization

from a government regulatory agency.

of Long-Lived Assets

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discounted cash flows or market value, if readily determinable.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Benefit/Liability

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.

Goods and Services Tax (“GST”)

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which are disclosed as operating cash flows.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of March 31, 2020 and June 30, 2019, the Company was owed $4,543 and $5,439, respectively, from the Australian Taxation Office.

of September 30, 2020 and June 30, 2020, the Company was owed $2,852 and $2,015, respectively, from the Australian Taxation Office.

These amounts were fully collected subsequent to the balance sheet reporting dates.

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and accrued interest may be converted, by the holder, into common shares at a fixed discount to the price of the common stock

at the time of conversion.

at or around the time of conversion.

The Company treats these convertible notes as stock settled debt under ASC 480, “

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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 accretion to interest expense to the date of first

share price discount at the time of conversion and records the put premium as interest expense.

Company is governed by Australia and United States income tax laws, which are administered by the Australian Taxation Office and

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date to be recognized upon the adoption of ASC 740 and in subsequent periods.

December 22, 2017, the passage of legislation commonly referred to as the Tax Cuts and Jobs Act (“TCJA”) was enacted

and significantly revised the U.S.

income tax law.

The TCJA includes changes, which reduce the corporate income tax rate from

34% to 21% for fiscal years beginning after December 31, 2017.

On December 22, 2017, the SEC Staff Accounting Bulletin No.

(“SAB 118”) was issued, which allows a company to recognize provisional tax amounts when it does not have the necessary

information available, prepared or analyzed, including computations, in reasonable detail to complete its accounting for the change

SAB 118 provides for a measurement of up to one year from the date of enactment.

and Development Costs and Tax Credits

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when incurred.

Total research and development costs for the nine months ended March 31, 2020 and 2019 were $122,893 and $203,625,

Total research and development costs for the three months ended September 30, 2020 and 2019 were $50,846 and $65,372,

respectively.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company may apply for research and development tax concessions with the Australian Taxation Office on an annual basis.

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in operations, upon receipt.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

each of the nine months ended March 31, 2020 and 2019, the Company applied for, and received from the Australian Taxation Office,

a research and development tax credit in the amount of $135,068 and $116,244, respectively, which is reflected as a tax benefit

in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

each of the three months ended September 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 $0 and $108,894, respectively, which is reflected as a tax benefit

in the accompanying unaudited condensed consolidated statements of operations and comprehensive income (loss).

Based Compensation

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There was no cumulative effect of adoption on July 1, 2019.

and Diluted Net Loss Per Common Share

net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the

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.

As of March 31, 2020, there were

1,975,059 warrants outstanding, 59,644 stock options and 15 convertible notes payable, which notes are convertible into approximately

104,064,000 shares of the Company’s common stock (based on the closing price on the last trading day of the quarter ended

March 31, 2020).

Each holder of the 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.

Such securities are considered dilutive securities

which were excluded from the computation since the effect is anti-dilutive.

Company adopted and implemented on July 1, 2018, ASC 606 –

Revenue from Contracts with Customers (“ASC 606”).

ASC 606 did not have a material impact on the consolidated financial statements.

implementation of ASC 606, the Company recognizes revenue in accordance with that core principle by applying the following steps:

Identify the contract(s) with a customer.

Identify the performance obligations in the contract.

Determine the transaction price.

Allocate the transaction price to the performance obligations in the contract.

Recognize revenue when (or as) the entity satisfies a performance obligation.

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.

legal costs for litigation are charged to expense as incurred.

February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842).

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lease term and is included in general and administrative expenses in the condensed consolidated statements of operations.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

and Diluted Net Loss Per Common Share

net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the

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.

Each holder of the 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 securities for the period ended September 30, 2020 and 2019 were considered

dilutive securities which were excluded from the computation since the effect is anti-dilutive.

stock to be issued

Accounting Pronouncements

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of the Company’s financial management.

BIOPHARMA, INC.

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TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

GOING CONCERN

accompanying condensed consolidated financial statements have been prepared in conformity with US GAAP, which contemplate continuation

of the Company as a going concern.

For the nine months ended March 31, 2020, the Company had no revenues, had a net loss of $5,944,711

and had net cash used in operations of $1,349,931.

Additionally, as of March 31, 2020, the Company had a working capital deficit,

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, 2020, the Company had no revenues and

had net cash used in operations of $179,949.

Additionally, as of September 30, 2020, the Company had a working capital deficit,

stockholders’

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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 issuance date of this Quarterly Report.

of at least twelve months from the date of this Quarterly Report.

condensed consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability

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any or all of these endeavors will be successful.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 2020, the outbreak of COVID-19 (coronavirus) caused by a novel strain of the coronavirus was recognized as a pandemic by

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is uncertain.

PROPERTY AND EQUIPMENT

and equipment consist of the following as of September 30, 2020 and June 30, 2020.

equipment at cost

Accumulated depreciation

property, plant, and equipment

expense for the three months ended September 30, 2020 and 2019 were $438 and $636, respectively.

DUE TO FORMER DIRECTOR - RELATED PARTY

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The total amount owed the former director

at March 31, 2020 and June 30, 2019 is $27,131 and $31,164, respectively.

The Company plans to repay the notes as its cash resources

LOANS AND NOTES PAYABLE

from Directors and Officer - Related Parties

from the Company’s directors and officer at March 31, 2020 and June 30, 2019 were $45,155 and $51,867, respectively.

loans bear no interest and are all payable on demand.

The Company did not repay any amount on these loans during the nine months

ended March 31, 2020.

at September 30, 2020 and June 30, 2020 is $31,880 and $30,639, respectively.

The Company plans to repay the advances as its cash

resources allow (see Note 9).

LOANS FROM DIRECTORS AND OFFICER –

RELATED PARTY

from the Company’s directors and officer at September 30, 2020 and June 30, 2020 were $53,058 and $50,993, respectively.

The loans bear no interest and are all payable on demand.

The Company did not repay any amount on these loans during the three

months ended September 30, 2020 (see Note 9).

CONVERTIBLE NOTES

Company’s convertible notes outstanding at March 31, 2020 were as follows:

Convertible notes and

Unamortized discounts

Accrued interest

BIOPHARMA, INC.

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TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company’s convertible notes outstanding at September 30, 2020 and June 30, 2020 were as follows:

notes and debenture

Equities Financing Agreements

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The transactions closed on January

December 2017 Eagle Note contains an original issue discount of $25,354 such that the purchase price was $507,081.

BIOPHARMA, INC.

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December 2017 Eagle Note contained an original issue discount of $25,354 such that the purchase price was $507,081.

date of the December 2017 Eagle Note was December 29, 2018.

The Company is currently in discussions with Eagle Equities to extend

the maturity date.

The December 2017 Eagle Note bears interest at a rate of 8% per annum, which interest shall be paid by the

Company to Eagle Equities in shares of the Company’s common stock upon receipt of a notice of conversion by the Company

from Eagle Equities at any time.

The Company has recorded $0 of accrued interest for the December 2017 Eagle Note and total principal

outstanding as of March 31, 2020 under the December 2017 Eagle Note was $0 following conversion of $171,965 of principal and $24,751

of accrued interest during the nine months to March 31, 2020.

The balance was previously reduced by conversion in the prior year.

Equities has the option to convert all or any amount of the principal face amount of the December 2017 Eagle Note, at any time,

The Company was in discussions with Eagle Equities to extend the maturity

The December 2017 Eagle Note bore interest at a rate of 8% per annum, which interest were to be paid by the Company to Eagle

Equities in shares of the Company’s common stock upon receipt of a notice of conversion by the Company from Eagle Equities

Company recorded $0 of accrued interest for the December 2017 Eagle Note and total principal outstanding as of June 30, 2020 under

the December 2017 Eagle Note was $0 following conversion of the remaining principal $171,965 and $24,751 of accrued interest during

the fiscal year to June 30, 2020.

Accordingly, there was no outstanding balance as of June 30, 2020.

Equities had the option to convert all or any amount of the principal face amount of the December 2017 Eagle Note, at any time,

for shares of the Company’s common stock at a price equal to 60% of the lowest closing bid price of the Company’s

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of conversion from Eagle Equities.

The note is treated as stock settled debt under ASC 480 and accordingly the Company recorded

The note was treated as stock settled debt under ASC 480 and accordingly the Company recorded

a $354,956 put premium of which $240,313 was released to additional paid in capital following conversion of $360,470 of principal

during the fiscal year to June 30, 2019, and a further $114,643 was released to additional paid in capital following conversion

of $171,965 of principal during the nine months to March 31, 2020.

of the remaining principal of $171,965 during the fiscal year to June 30, 2020.

Accordingly, there was no outstanding balance

as of June 30, 2020.

an event of default, principal and accrued interest will become immediately due and payable under the notes.

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Additionally,

Eagle Equities has the option to convert all or any amount of the principal face amount of the July 2018 Eagle Note, at any time,

Eagle Equities had the option to convert all or any amount of the principal face amount of the July 2018 Eagle Note, at any time,

for shares of the Company’s common stock at a price equal to 60% of the lowest closing bid price of the Company’s

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outstanding shares of the Company’s common stock.

The July 2018 Eagle Note is treated as stock settled debt under ASC 480

and accordingly, the Company recorded a $50,000 put premium of which $50,000 was released to additional paid in capital following

the full conversion of the note.

The Company has recorded $0 of accrued interest and the total principal outstanding under the

July 2018 Eagle Note was $0 as of March 31, 2020 following conversion of $75,000 of principal and $9,300 of accrued interest during

the nine months to March 31, 2020.

The Company had the right to prepay the July 2018 Eagle Note with certain penalties until January

No prepayment was made as of such date.

The July 2018 Eagle Note was treated as stock settled debt under ASC 480

and accordingly, the Company recorded a $50,000 put premium of which $50,000 was released in fiscal 2020 to additional paid in

capital following the full conversion of the note.

Company recorded $0 of accrued interest and the total principal outstanding under the July 2018 Eagle Note was $0 as of June 30,

2020 following conversion of $75,000 of principal and $9,300 of accrued interest during the fiscal year ended June 30, 2020.

Company had the right to prepay the July 2018 Eagle Note with certain penalties until January 9, 2019.

No prepayment was made

as of such date.

As a result, the July 2018 Eagle Note was convertible.

Accordingly, there was no outstanding balance as of June

an event of default, principal and accrued interest will become immediately due and payable under the notes.

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maturity date of the August 29, 2018 Eagle Note was August 29, 2019.

The Company is currently in discussions with Eagle Equities to

extend the maturity date.

The August 2018 Eagle Note bears interest at a rate of 8% per annum, which interest shall be paid by

the Company to Eagle Equities in shares of the Company’s common stock upon receipt of a notice of conversion by the Company

The Company is currently in discussions with Eagle Equities

to extend the maturity date.

The August 2018 Eagle Note bears interest at a rate of 8% per annum, which interest shall be paid

by the Company to Eagle Equities in shares of the Company’s common stock upon receipt of a notice of conversion by the Company

from Eagle Equities at any time after the six-month anniversary of the August 2018 Eagle Note.

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shares of the Company’s common stock.

The August 2018 Eagle Note is treated as stock settled debt under ASC 480 and accordingly,

the Company recorded a $70,000 put premium.

The Company has recorded $13,371 of accrued interest and the total principal outstanding

under the August 2018 Eagle Note was $105,000 as of March 31, 2020.

The Company had the right to prepay the August 2018 Eagle

Note with certain penalties until February 25, 2019.

The Company had the right to prepay the August 2018 Eagle Note with certain penalties

until February 25, 2019.

No prepayment was made as of such date.

As a result, the August 2018 Eagle

Note is now convertible.

As a result, the August 2018 Eagle Note then became convertible.

The August 2018 Eagle Note is treated as stock settled debt under ASC 480 and accordingly, the Company recorded a $70,000 put

premium of which $17,000 and $53,000 were released to additional paid in capital following conversion of principal during the

fiscal year to June 30, 2020 and the three months ended September 30, 2020, respectively.

Company recorded $11,663 of accrued interest and the total principal outstanding under the August 2018 Eagle Note was $79,500

as of June 30, 2020 following conversion of $25,500 of principal and $3,788 of accrued interest during the fiscal year ended June

The Company recorded $0 of accrued interest and the total principal outstanding under the August 2018 Eagle Note was

$0 as of September 30, 2020 following conversion of $79,500 of principal and $12,035 of accrued interest during the three months

ended September 30, 2020.

Accordingly, there was no outstanding balance as of September 30, 2020.

an event of default, interest on the outstanding principal shall accrue at a default interest rate of 24% per annum or at the

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maturity date of the October 2018 Eagle Note was October 2, 2019.

The October 2018 Eagle Note shall bear interest at a rate of

The October 2018 Eagle Note shall bore interest at a rate of

8% per annum, which interest shall be paid by the Company to Eagle Equities in shares of common stock upon receipt of a notice

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Additionally,

Eagle Equities has the option to convert all or any amount of the principal amount of the October 2018 Eagle Note, at any time,

Eagle Equities had the option to convert all or any amount of the principal amount of the October 2018 Eagle Note, at any time,

for shares of the Company’s common stock at a price equal to 60% of the lowest closing bid price of the Company’s

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outstanding shares of the Company’s common stock.

The October 2, 2018 Eagle Note is treated as stock settled debt under

ASC 480 and accordingly, the Company recorded a $140,000 put premium of which $59,913 was released to additional paid in capital

following conversion of $89,870 of principal during the nine months to March 31, 2020.

The Company has recorded $14,271 of accrued

interest and the total principal outstanding under the October 2018 Eagle Note was $120,130 as of March 31, 2020 following conversion

of $89,870 of principal and $10,275 of accrued interest during the nine months to March 31, 2020.

The Company had the right to

prepay the October 2018 Eagle Note with certain penalties until March 31, 2019.

No prepayment has been made as of such date.

a result, the October 2018 Eagle Note is now convertible.

No prepayment was made as of such date.

As a result, the October 2018

Eagle Note then became convertible.

The October 2, 2018 Eagle Note was treated as stock settled debt under ASC 480 and accordingly,

the Company recorded a $140,000 put premium of which $140,000 was released to additional paid in capital following conversion

of principal during the year ended June 30, 2020.

Company recorded $12,473 of accrued interest and the total principal outstanding under the October 2018 Eagle Note was $210,000

as of June 30, 2019.

The Company recorded $0 of accrued interest and the total principal outstanding under the October 2018 Eagle

Note was $0 as of June 30, 2020 following conversion of $210,000 of principal and $25,725 of accrued interest during the year

ended June 30, 2020.

The Company had the right to prepay the October 2018 Eagle Note with certain penalties until March 31, 2019.

Accordingly, there was no outstanding balance as of June 30, 2020.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

an event of default, principal and accrued interest will become immediately due and payable under the notes.

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Equities agreed to waive the 24% default interest on this note.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

30, 2018 Securities Purchase Agreement

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maturity date of the November 2018 Eagle Note was November 30, 2019.

The November 2018 Eagle Note shall bear interest at a rate

of 8% per annum, which interest shall be paid by the Company to Eagle Equities in shares of common stock upon receipt of a notice

of conversion by the Company from Eagle Equities at any time after the six-month anniversary of the November 2018 Eagle Note.

The November 2018 Eagle Note bore interest at a rate of 8%

per annum, which interest shall be paid by the Company to Eagle Equities in shares of common stock upon receipt of a notice of

conversion by the Company from Eagle Equities at any time after the six-month anniversary of the November 2018 Eagle Note.

Additionally,

Eagle Equities has the option to convert all or any amount of the principal amount of the November 2018 Eagle Note, at any time,

Eagle Equities had the option to convert all or any amount of the principal amount of the November 2018 Eagle Note, at any time,

for shares of the Company’s common stock at a price equal to 61% of the lowest closing bid price (the “Closing Bid

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exceeds 4.99% of the outstanding shares of the Company’s common stock.

The November 2018 Eagle Note is treated as stock

settled debt under ASC 480 and accordingly, the Company recorded a $67,131 put premium.

The Company has recorded $11,208 of accrued

interest and the total principal outstanding under the November 2018 Eagle Note was $105,000 as of March 31, 2020.

2018 Eagle Note may be prepaid with certain penalties by the Company until May 29, 2019.

No prepayment has been made as of March

The November 2018 Eagle Note was treated as stock

settled debt under ASC 480 and accordingly, the Company recorded a $67,131 put premium of which $67,131 was released to additional

paid in capital following conversion of principal during the year ended June 30, 2020.

Company recorded $4,879 of accrued interest and the total principal outstanding under the November 2018 Eagle Note was $105,000

as of June 30, 2019.

The Company recorded $0 of accrued interest and the total principal outstanding under the November 2018 Eagle

Note was $0 as of June 30, 2020 following conversion of $105,000 of principal and $12,832 of accrued interest during the year

ended June 30, 2020.

The November 2018 Eagle Note may be prepaid with certain penalties by the Company until May 29, 2019.

prepayment was made as of such date.

Accordingly, there was no outstanding balance as of June 30, 2020.

an event of default, principal and accrued interest will become immediately due and payable under the notes.

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of conversion by the Company from Eagle Equities at any time after the six-month anniversary of the December 2018 Eagle Note.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Additionally,

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The December 2018 Eagle Note is treated as stock

settled debt under ASC 480 and accordingly, the Company recorded an $80,557 put premium.

The Company has recorded $12,814 of accrued

interest and the total principal outstanding under the November 2018 Eagle Note was $126,000 as of March 31, 2020.

2018 Eagle Note may be prepaid with certain penalties until June 22, 2019.

No prepayment has been made as of March 31, 2020.

BIOPHARMA, INC.

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settled debt under ASC 480 and accordingly, the Company recorded an $80,557 put premium of which $25,433 was released to additional

paid in capital following conversion of principal during the three months ended September 30, 2020.

Company has recorded $15,327 of accrued interest and the total principal outstanding under the December 2018 Eagle Note was $126,000

as of June 30, 2020.

The December 2018 Eagle Note may be prepaid with certain penalties until June 22, 2019.

No prepayment was

made as of such date.

The Company recorded $11,598 of accrued interest and the total principal outstanding under the December

2018 Eagle Note was $86,220 as of September 30, 2020 following conversion of $39,780 of principal and $5,123 of accrued interest

during the three months ended September 30, 2020.

Accordingly, there was $86,220 outstanding principal balance as of September

an event of default, principal and accrued interest will become immediately due and payable under the notes.

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In April 2020, Eagle

Equities agreed to waive the 24% default interest on this note.

total principal amount outstanding under the above Eagle Equities financing agreements, specifically the December 29, 2017, the

July 13, 2018, the August 29, 2018, the October 2, 2018, the November 30, 2018 and the December 24, 2018 agreements was $456,130

as of March 31, 2020 and accrued interest totaled $51,664.

Equities agreed to waive the 24% default interest on this note, however, the note is currently past due.

total principal amount outstanding under the above Eagle Equities financing agreements, specifically the August 29, 2018 and the

December 24, 2018 agreements was $205,500 as of June 30, 2020 and accrued interest totaled $26,990.

The total principal amount

outstanding under the above Eagle Equities financing agreements, specifically the December 24, 2018 agreements was $86,220 as

of September 30, 2020 and accrued interest totaled $11,598.

Capital Financing Agreements

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a total $67,771 put premium for each note of which $44,690 was released in respect of the October 2018 GS Note in the fiscal year

ended June 30, 2019, and a further $22,901 was released in the nine months ended March 31, 2020 following full conversion of the

October 2018 GS Note resulting from conversion of the remaining principal balance of $35,820 and $2,434 in accrued interest.

of the put premium was released in respect of the October 2018 GS Back-End Note during the nine months ended March 31, 2020 following

conversion $106,000 of the principal balance.

total principal amount outstanding under the October 2018 GS Note, was $35,820 and accrued interest thereunder totaled $7,813

as of June 30, 2019 and was fully converted in fiscal year 2020 as of March 31, 2020 with $3,601 of accrued interest remaining

(see Note 6 –

Stockholders’

ended June 30, 2019, and a further $22,901 was released during the year ended June 30, 2020 following full conversion of the October

2018 GS Note resulting from conversion of the remaining principal balance of $35,820 and $2,434 in accrued interest.

the put premium was released in respect of the October 2018 GS Back-End Note during the year ended June 30, 2020 following conversion

$106,000 of the principal balance.

maturity date of the October 2, 2018 GS Back-Note was October 2019.

The total principal balance under the October 2018 GS Back-End

Note, was $106,000 and accrued interest thereunder totaled $5,715 as of June 30, 2019 and the principal balance was $0 and accrued

interest totaled $2,658 as of March 31, 2020 (see Note 6 –

Stockholders’

Note, was $0 and accrued interest totaled $2,658 as of June 30, 2020 and $0 principal balance and accrued interest of $0 as of

September 30, 2020.

Accordingly, there was no outstanding principal balance as of September 30, 2020.

October 2, 2018 GS Notes contain certain events of default, upon which principal and accrued interest will become immediately

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Further, certain events of default may trigger penalty and liquidated damage provisions.

BIOPHARMA, INC.

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TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

22, 2020 GS Capital Securities Purchase Agreements

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working capital purposes.

BIOPHARMA, INC.

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maturity date of the January 22, 2020 GS Capital is January 22, 2021.

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GS Capital has the option to convert all or any amount of the principal face amount of the January 22, 2020 GS Capital Note at

any time from the date of issuance and ending on the later of the maturity date and the date the Default Amount, which is an amount

between 112% and 130% of an amount equal to the then outstanding principal amount of the January 22, 2020 GS Capital Note plus

any interest accrued, is paid if an event of default occurs, for shares of the Company’s common stock at the then-applicable

any time from the date of issuance and ending on the later of the maturity date or the date the Default Amount is paid if an event

of default occurs, which is an amount between 112% and 130% of an amount equal to the then outstanding principal amount of the

January 22, 2020 GS Capital Note plus any interest accrued, for shares of the Company’s common stock at the then-applicable

conversion price.

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The note is treated as stock settled debt under

ASC 480 and accordingly the Company recorded a $38,667 put premium.

ASC 480 and accordingly the Company recorded a $38,667 put premium which was expensed in fiscal 2020 of which $4,408 was released

to additional paid in capital following conversion of principal during the three months ended September 30, 2020.

Company has recorded $2,542 of accrued interest and the total principal outstanding under the January 22, 2020 GS Note was $58,000

as of June 30, 2020.

The Company recorded $3,557 of accrued interest and the total principal outstanding under the January 22,

2020 GS Note was $51,388 as of September 30, 2020 following conversion of $6,612 of principal and $330 of accrued interest during

the three months ended September 30, 2020.

Accordingly, there was $51,388 outstanding principal balance as of September 30, 2020.

January 22, 2020 GS Note contain certain events of default, upon which principal and accrued interest will become immediately

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total principal amount outstanding under the above GS Capital financing agreement, specifically the January 22, 2020 GS Note,

was $58,000 and accrued interest of $1,096 as of March 31, 2020.

Convertible Note Issued with

was $58,000 and accrued interest of $2,542 as of June 30, 2020.

The remaining principal outstanding and accrued interest under

this note as of September 30, 2020 was $51,388 and $3,557, respectively.

Note Issued with Consulting Agreement

10, 2017 Consulting Agreement

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subordinated convertible note.

The maturity date of the August 10, 2017 Convertible Note is August 2019.The note accrues interest

at a rate of 10% per annum and is convertible into common stock at the lesser of $750 or 65% of the three lowest trades in the

ten trading days prior to the conversion.

The note was fully earned upon signing the agreement and matures on August 10, 2019.

The Company accrued $155,000 related to this expense at June 30, 2017 and recorded the remaining $155,000 related to this expense

in fiscal year 2018.

Upon an event of default, principal and accrued interest will become immediately due and payable under the

Additionally, upon an event of default, at the election of the holder, the note would accrue interest at a default interest

rate of 18% per annum or the highest rate of interest permitted by law.

The consulting agreement had a three-month term and expired

on August 16, 2017.

An aggregate total of $578,212 of this note was bifurcated with the embedded conversion option recorded as

a derivative liability at fair value.

During the year ended June 30, 2018, the consultant converted $140,000 of principal and

$10,764 of interest.

During the year ended June 30, 2019, the consultant converted an additional $161,000 of principal and $19,418

During the nine months ended March 31, 2020, the consultant converted an additional $500 of principal and $5,248

of interest such that the remaining principal outstanding and accrued interest under this note as of March 31, 2020 was $8,500

and $21,787, respectively.

Holdings Finance Agreements

23, 2019 Securities Purchase Agreement

May 23, 2019, the Company issued a convertible promissory note (the “May 23 Redstart Holdings Note”) to Redstart Holdings

Corp (“Redstart Holdings”) in the aggregate principal amount of $133,000, with principal and the interest thereon

convertible into shares of the Company’s common stock at the option of Redstart Holdings any time after 180 days of issuance.

At the time of closing on May 31, 2019, Redstart Holdings deducted $3,000 from the principal payment due under the May 2019 Redstart

Holdings Note to be applied to its legal expenses, such that the Company received aggregate net proceeds of $130,000 at closing.

maturity date of the May 2019 Redstart Holdings Note is May 23, 2020 and bears interest at a rate of 8% per annum.

The maturity date of the August 10, 2017 Convertible Note was August 2019 and is currently past

due (see Note 8).

The note accrues interest at a rate of 10% per annum and is convertible into common stock at the lesser of $750

or 65% of the three lowest trades in the ten trading days prior to the conversion.

The note was fully earned upon signing the

agreement and matures on August 10, 2019.

The Company accrued $155,000 related to this expense at June 30, 2017 and recorded the

remaining $155,000 related to this expense in fiscal year 2018.

Upon an event of default, principal and accrued interest will

become immediately due and payable under the note.

Additionally, upon an event of default, at the election of the holder, the

note would accrue interest at a default interest rate of 18% per annum or the highest rate of interest permitted by law.

The consulting

agreement had a three-month term and expired on August 16, 2017.

An aggregate total of $578,212 of this note was bifurcated with

the embedded conversion option recorded as a derivative liability at fair value.

During the year ended June 30, 2018, the consultant

converted $140,000 of principal and $10,764 of interest.

During the year ended June 30, 2019, the consultant converted an additional

$161,000 of principal and $19,418 of interest leaving a principal balance owed of $9,000 at June 30, 2019.

During the year ended

June 30, 2020, the consultant converted an additional $500 of principal and $5,248 of interest such that the remaining principal

outstanding and accrued interest under this note as of June 30, 2020 was $8,500 and $22,168, respectively.

The remaining principal

outstanding and accrued interest under this note as of September 30, 2020 was $8,500 and $22,567, respectively.

BIOPHARMA, INC.

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TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Additionally,

Redstart Holdings has the option to convert all or any amount of the principal face amount of the May 2019 Redstart Note, starting

on November 19, 2019 at a conversion price subject to certain Market Price (as defined below) adjustment.

If the Market Price

is greater than or equal to $50.00, the conversion price shall be the greater of 65% of the Market Price (“Variable Conversion

Price”) and $32.50.

In the event Market Price is less than $50.00, the conversion price shall be the Variable Conversion

As defined in the May 2019 Redstart Holdings Note, the “Market Price”

shall be the average of the lowest three

closing bid prices during the ten day trading period prior to and including the day the Company receives a notice of conversion

from Redstart Holdings on the electronic quotation system or applicable principal securities exchange or trading market or, if

no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any

market makers for such security that are listed in the “pink sheets”

during the ten prior trading days, including

the day upon which the Company receives a notice of conversion from Redstart Holdings.

Notwithstanding the foregoing, Redstart

Holdings shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s common

stock beneficially owned by Redstart Holdings and its affiliates, exceeds 4.99% of the outstanding shares of the Company’s

common stock.

An aggregate total of $166,564 of this note was bifurcated with the embedded conversion option recorded as a derivative

liability at fair value (See Note 10 - Derivative Financial Instruments and Fair Value Measurements).

Company had the right to prepay the May 2019 Redstart Holdings Note until November 19, 2019.

If the May 2019 Redstart Holdings

Note was prepaid within 90 days of the issuance date, then the prepayment premium shall be 115% of the face amount plus any accrued

if the May 2019 Redstart Holdings Note was prepaid after 91 days from the issuance date, but prior to 121 days from

the issuance date, then the prepayment premium shall be 120% of the face amount plus any accrued interest;

and if the May 2019

Redstart Holdings Note was prepaid after 121 days from the issuance date, but prior to 150 days from the issuance date, then the

prepayment premium shall be 125% of the face amount plus any accrued interest;

and if the May 2019 Redstart Holdings Note was

prepaid after 151 days from the issuance date, but prior to 180 days from the issuance date, then the prepayment premium shall

be 129% of the face amount plus any accrued interest.

May 23, 2019 Redstart Holdings Note 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 22% per annum, or if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted

Further, certain events of default may trigger penalty and liquidated damage provisions.

total principal amount outstanding and accrued interest under the above Redstart Holdings financing agreement, specifically the

May 23, 2019 agreement at June 30, 2019 was $133,000 and $1,137 respectively and as of March 31, 2020 total principal amount outstanding

and accrued interest totaled $0 and $0 respectively following conversion of $133,000 of the principal balance and $5,320 of accrued

interest during the nine months ended March 31, 2020.

The Company fully amortized the remaining debt discount related to the conversions

during the nine months ended March 31, 2020.

Up Lending Group Financing Agreements

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in net cash proceeds of $75,000.

maturity date of the July 3, 2019 Power Up Note is July 3, 2020.

The July 3, 2019, Power Up Note bears interest at a rate of 8%

maturity date of the July 3, 2019 Power Up Note was July 3, 2020.

The July 3, 2019, Power Up Note bore interest at a rate of 8%

per annum, which interest may be paid by the Company to Power Up in shares of the Company’s common stock, but shall not

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Additionally,

Power Up has the option to convert all or any amount of the principal face amount of the July 3, 2019 Power Up Note, starting

on December 30, 2019 and ending on the later of the maturity date or the date the Default Amount, which is an amount equal to

150% of an amount equal to the then outstanding principal amount of the July 3, 2019 Power Up Note plus any interest accrued,

is paid if an event of default occurs, for shares of the Company’s common stock at the then-applicable conversion price.

Power Up had the option to convert all or any amount of the principal face amount of the July 3, 2019 Power Up Note, starting

on December 30, 2019 and ending on the later of the maturity date or the date the Default Amount is paid if an event of default

occurs, which was an amount equal to 150% of an amount equal to the then outstanding principal amount of the July 3, 2019 Power

Up Note plus any interest accrued for shares of the Company’s common stock at the then-applicable conversion price.

conversion price for the July 3, 2019 Power Up Note shall be $3.25, subject to certain Market Price (as defined below) adjustment.

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its affiliates, exceeds 4.99% of the outstanding shares of the Company’s common stock.

An aggregate total of $155,904 of

this note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value (See Note 10 - Derivative

Financial Instruments and Fair Value Measurements).

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

An aggregate initial total of $155,904

of this note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value.

July 3, 2019 Power Up Note contain certain events of default, upon which principal and accrued interest will become immediately

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total principal amount outstanding under the above Power Up financing agreement, specifically the July 3, 2019 Power Up Note,

was $0 and accrued interest of $0 as of March 31, 2020 following conversion of $78,000 of the principal balance and $3,120 of

accrued interest during the nine months ended March 31, 2020.

was $0 and accrued interest of $0 as of June 30, 2020 following conversion of $78,000 of the principal balance and $3,120 of accrued

interest during the year ended June 30, 2020.

Accordingly, there was no outstanding principal balance as of June 30, 2020.

26, 2019 Securities Purchase Agreement

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3, 2019 in the amount of $40,000, net of $2,500 paid directly toward legal fees and $500 to Power Up for due diligence fees.

maturity date of the November 26, 2019 Power Up Note is November 26, 2020.

The November 26, 2019, Power Up Note bears interest

maturity date of the November 26, 2019 Power Up Note was November 26, 2020.

The November 26, 2019, Power Up Note bore interest

at a rate of 8% per annum, which interest may be paid by the Company to Power Up in shares of the Company’s common stock,

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or by prepayment.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Additionally,

Power Up has the option to convert all or any amount of the principal face amount of the November 26, 2019 Power Up Note, starting

on May 24, 2020 and ending on the later of the maturity date or the date the Default Amount, which is an amount equal to 150%

of an amount equal to the then outstanding principal amount of the November 26, 2019 Power Up Note plus any interest accrued,

is paid if an event of default occurs, for shares of the Company’s common stock at the then-applicable conversion price.

on May 24, 2020 and ending on the later of the maturity date or the date the Default Amount is paid if an event of default occurs,

which was an amount equal to 150% of an amount equal to the then outstanding principal amount of the November 26, 2019 Power Up

Note plus any interest accrued for shares of the Company’s common stock at the then-applicable conversion price.

conversion price for the November 26, 2019 Power Up Note shall be $3.05, subject to certain Market Price (as defined below) adjustment.

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its affiliates, exceeds 4.99% of the outstanding shares of the Company’s common stock.

An aggregate total of $52,222 of

this note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value (See Note 10 - Derivative

Financial Instruments and Fair Value Measurements).

An aggregate initial total of $52,222

of this note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value.

November 26, 2019 Power Up Note contain certain events of default, upon which principal and accrued interest will become immediately

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total principal amount outstanding under the above Power Up financing agreement, specifically the November 26, 2019 Power Up Note,

was $43,000 and accrued interest of $1,184 as of March 31, 2020.

was $0 and accrued interest of $0 as of June 30, 2020 following conversion of $43,000 of the principal balance and $1,720 of accrued

interest during the year ended June 30, 2020.

Accordingly, there was no outstanding principal balance as of June 30, 2020.

7, 2020 Power Up Lending Group Securities Purchase Agreement

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13, 2020 in the amount of $72,000, net of $2,500 paid directly toward legal fees and $500 to Power Up for due diligence fees.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

maturity date of the January 7, 2020 Power Up Note is January 7, 2021.

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Power Up has the option to convert all or any amount of the principal face amount of the January 7, 2020 Power Up Note, starting

on July 4, 2020 and ending on the later of the maturity date or the date the Default Amount, which is an amount equal to 150%

of an amount equal to the then outstanding principal amount of the January 7, 2020 Power Up Note plus any interest accrued, is

paid if an event of default occurs, for shares of the Company’s common stock at the then-applicable conversion price.

on July 4, 2020 and ending on the later of the maturity date or the date the Default Amount is paid if an event of default occurs,

which is an amount equal to 150% of an amount equal to the then outstanding principal amount of the January 7, 2020 Power Up Note

plus any interest accrued, for shares of the Company’s common stock at the then-applicable conversion price.

conversion price for the January 7, 2020 Power Up Note shall be $3.05, subject to certain Market Price (as defined below) adjustment.

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An aggregate total of $314,406 of

this note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value (See Note 10 - Derivative

Financial Instruments and Fair Value Measurements).

this note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value.

January 7, 2020 Power Up Note contain certain events of default, upon which principal and accrued interest will become immediately

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Further, certain events of default may trigger penalty and liquidated damage provisions.

PROPANC BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

total principal amount outstanding under the above Power Up financing agreement, specifically the January 7, 2020 Power Up Note,

was $75,000 and accrued interest of $1,377 as of March 31, 2020.

was $75,000 and accrued interest of $2,869 as of June 30, 2020.

The total principal amount outstanding under the above Power Up

financing agreement, specifically the January 7, 2020 Power Up Note, was $0 and accrued interest of $0 as of September 30, 2020

following conversion of $75,000 of the principal balance and $3,000 of accrued interest during the three months ended September

Accordingly, there was no outstanding principal balance as of September 30, 2020.

12, 2020 Power Up Lending Group Securities Purchase Agreement

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Power Up has the option to convert all or any amount of the principal face amount of the March 12, 2020 Power Up Note, starting

on September 4, 2020 and ending on the later of the maturity date or the date the Default Amount, which is an amount equal to

150% of an amount equal to the then outstanding principal amount of the March 12, 2020 Power Up Note plus any interest accrued,

is paid if an event of default occurs, for shares of the Company’s common stock at the then-applicable conversion price.

on September 4, 2020 and ending on the later of the maturity date or the date the Default Amount is paid if an event of default

occurs, which is an amount equal to 150% of an amount equal to the then outstanding principal amount of the March 12, 2020 Power

Up Note plus any interest accrued, for shares of the Company’s common stock at the then-applicable conversion price.

conversion price for the March 12, 2020 Power Up Note shall be $3.05, subject to certain Market Price (as defined below) adjustment.

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its affiliates, exceeds 4.99% of the outstanding shares of the Company’s common stock.

An aggregate total of $55,929 of

this note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value (See Note 10 - Derivative

Financial Instruments and Fair Value Measurements).

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

An aggregate initial total of $55,929

of this note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value.

March 12, 2020 Power Up Note contain certain events of default, upon which principal and accrued interest will become immediately

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total principal amount outstanding under the above Power Up financing agreement, specifically the March 12, 2020 Power Up Note,

was $43,000 and accrued interest of $178 as of March 31, 2020.

was $43,000 and accrued interest of $1,034 as of June 30, 2020.

The total principal amount outstanding under the above Power Up

financing agreement, specifically the March 12, 2020 Power Up Note, was $0 and accrued interest of $0 as of September 30, 2020

following repayment in cash of $43,000 of the principal balance and $1,816 of accrued interest during the three months ended September

Accordingly, there was no outstanding principal balance as of September 30, 2020.

Holdings Corp Financing Agreement

23, 2019 Securities Purchase Agreement

May 23, 2019, the Company issued a convertible promissory note (the “May 23 Redstart Holdings Note”) to Redstart Holdings

Corp (“Redstart Holdings”) in the aggregate principal amount of $133,000, with principal and the interest thereon

convertible into shares of the Company’s common stock at the option of Redstart Holdings any time after 180 days of issuance.

At the time of closing on May 31, 2019, Redstart Holdings deducted $3,000 from the principal payment due under the May 2019 Redstart

Holdings Note to be applied to its legal expenses, such that the Company received aggregate net proceeds of $130,000 at closing.

BIOPHARMA, INC.

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maturity date of the May 2019 Redstart Holdings Note was May 23, 2020 and bore interest at a rate of 8% per annum.

Additionally,

Redstart Holdings had the option to convert all or any amount of the principal face amount of the May 2019 Redstart Note, starting

on November 19, 2019 at a conversion price subject to certain Market Price (as defined below) adjustment.

If the Market Price

is greater than or equal to $50.00, the conversion price shall be the greater of 65% of the Market Price (“Variable Conversion

Price”) and $32.50.

In the event Market Price is less than $50.00, the conversion price shall be the Variable Conversion

As defined in the May 2019 Redstart Holdings Note, the “Market Price”

shall be the average of the lowest three

closing bid prices during the ten day trading period prior to and including the day the Company receives a notice of conversion

from Redstart Holdings on the electronic quotation system or applicable principal securities exchange or trading market or, if

no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any

market makers for such security that are listed in the “pink sheets”

during the ten prior trading days, including

the day upon which the Company receives a notice of conversion from Redstart Holdings.

Notwithstanding the foregoing, Redstart

Holdings shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s common

stock beneficially owned by Redstart Holdings and its affiliates, exceeds 4.99% of the outstanding shares of the Company’s

common stock.

An aggregate total of $166,564 of this note was bifurcated with the embedded conversion option recorded as a derivative

liability at fair value.

Company had the right to prepay the May 2019 Redstart Holdings Note until November 19, 2019.

If the May 2019 Redstart Holdings

Note was prepaid within 90 days of the issuance date, then the prepayment premium shall be 115% of the face amount plus any accrued

if the May 2019 Redstart Holdings Note was prepaid after 91 days from the issuance date, but prior to 121 days from

the issuance date, then the prepayment premium shall be 120% of the face amount plus any accrued interest;

and if the May 2019

Redstart Holdings Note was prepaid after 121 days from the issuance date, but prior to 150 days from the issuance date, then the

prepayment premium shall be 125% of the face amount plus any accrued interest;

and if the May 2019 Redstart Holdings Note was

prepaid after 151 days from the issuance date, but prior to 180 days from the issuance date, then the prepayment premium shall

be 129% of the face amount plus any accrued interest.

May 23, 2019 Redstart Holdings Note contained 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 22% 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.

total principal amount outstanding and accrued interest under the above Redstart Holdings financing agreement, specifically the

May 23, 2019 agreement at June 30, 2020 total principal amount outstanding and accrued interest totaled $0 and $0 respectively

following conversion of $133,000 of the principal balance and $5,320 of accrued interest during the year ended June 30, 2020.

Accordingly, there was no outstanding principal balance as of June 30, 2020.

Capital Financing Agreements

30, 2019 Securities Purchase Agreement

July 30, 2019, the Company entered into a securities purchase agreement with Odyssey Capital Funding LLC,.

(“Odyssey”),

July 30, 2019, the Company entered into a securities purchase agreement with Odyssey Capital Funding LLC, (“Odyssey”),

pursuant to which Odyssey purchased a convertible promissory note (the “July 30, 2019 Odyssey Note”) from the Company

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directly toward legal fees, resulting in net cash proceeds of $285,000.

maturity date of the July 30, 2019 Odyssey Note is July 30, 2020.

The July 2019 Odyssey Note bears interest at a rate of 10% per

maturity date of the July 30, 2019 Odyssey Note was July 30, 2020.

The July 2019 Odyssey Note bore interest at a rate of 10% per

annum, which interest may be paid by the Company to Odyssey in shares of the Company’s common stock, but shall not be payable

until the July 30, 2019 Odyssey Note becomes payable, whether at the maturity date or upon acceleration or by prepayment.

note is treated as stock settled debt under ASC 480 and accordingly the Company recorded a $172,308 put premium.

note was treated as stock settled debt under ASC 480 and accordingly the Company recorded a $172,308 put premium.

Additionally,

Odyssey has the option to convert all or any amount of the principal face amount of the July 30, 2019 Odyssey Note, starting on

January 31, 2020 and ending on the later of the maturity date and the date the Default Amount, which is an amount equal to 120%

of an amount equal to the then outstanding principal amount of the July 30, 2019 Odyssey Note plus any interest accrued from July

30, 2019 at the default interest rate of 24% per annum, is paid if an event of default occurs, for shares of the Company’s

common stock at the then-applicable conversion price.

Odyssey had the option to convert all or any amount of the principal face amount of the July 30, 2019 Odyssey Note, starting on

January 31, 2020 and ending on the later of the maturity date or the date the Default Amount is paid if an event of default occurs,

which was an amount equal to 120% of an amount equal to the then outstanding principal amount of the July 30, 2019 Odyssey Note

plus any interest accrued from July 30, 2019 at the default interest rate of 24% per annum for shares of the Company’s common

stock at the then-applicable conversion price.

conversion price for the July 30, 2019 Odyssey Note shall be equal to 65% of the lowest closing bid price of the Common Stock

as reported on the OTC Markets on which the Company’s shares are then traded or any exchange upon which the Common Stock

as reported on the OTC Markets on which the Company’s shares were then traded or any exchange upon which the Common Stock

may be traded in the future, for the ten prior trading days including the day upon which a Notice of Conversion is received by

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prior written notice by the Holder to the Company).

July 30, 2019 Odyssey Note contain certain events of default, upon which principal and accrued interest will become immediately

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

July 30, 2019 Odyssey Note contained certain events of default, upon which principal and accrued interest will become immediately

due and payable.

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total principal amount outstanding under the above Odyssey financing agreement, specifically the July 30, 2019 Odyssey Note, was

$204,000 and accrued interest of $13,686 as of March 31, 2020 following conversion of $116,000 of the principal balance and $6,787

of accrued interest during the nine months ended March 31, 2020.

$0 and accrued interest of $0 as of June 30, 2020 following conversion of $320,000 of the principal balance and $23,220 of accrued

interest during the year ended June 30, 2020 resulting in full repayment of the note and a full reduction of the put premium.

Accordingly, there was no outstanding principal balance as of June 30, 2020.

Fund Financing Agreements

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fees resulting in net cash proceeds of $505,000.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

maturity date of the August 30, 2019 Auctus Note is August 30, 2020.

The August 30, 2019 Auctus Note bears interest at a rate

of 10% per annum, but shall not be payable until the August 30, 2019 Auctus Note becomes payable, whether at the maturity date

or upon acceleration or by prepayment.

The note is treated as stock settled debt under ASC 480 and accordingly the Company recorded

a $366,667 put premium.

The August 30, 2019 Auctus Note may not be prepaid without the written consent of Auctus.

Any amount of

principal or interest which is not paid when due shall bear interest at the rate of 24% per annum.

maturity date of the August 30, 2019 Auctus Note was August 30, 2020 and is past due as of the date of this filing.

30, 2019 Auctus Note bears interest at a rate of 10% per annum, but shall not be payable until the August 30, 2019 Auctus Note

becomes payable, whether at the maturity date or upon acceleration or by prepayment.

The note is treated as stock settled debt

under ASC 480 and accordingly the Company recorded a $366,667 put premium.

The August 30, 2019 Auctus Note may not be prepaid

without the written consent of Auctus.

Any amount of principal or interest which is not paid when due shall bear interest at the

rate of 24% per annum.

Additionally,

Auctus has the option to convert all or any amount of the principal face amount and accrued interest of the August 30, 2019 Auctus

Note, at any time following the issue date and ending on the later of the maturity date and the date of payment of the Default

Amount, which is an amount equal to 125% of an amount equal to the then outstanding principal amount of the August 30, 2019 Auctus

Note (but not less than $15,000) plus any interest accrued from August 30, 2019 at the default interest rate of 24% per annum,

is paid if an event of default occurs, for shares of the Company’s common stock at the then-applicable conversion price.

Upon the holder’s election to convert accrued interest, default interest or any penalty amounts as stipulated, the Company

may elect to pay those amounts in cash.

The note may also be prepaid by the Company at any time between the date of issuance and

August 13, 2020 at 135% multiplied by the sum of (a) the then outstanding principal amount plus (b) accrued and unpaid interest

plus (c) default interests, if any.

conversion price for the August 30, 2019 Auctus Note shall be the Variable Conversion Price, being 60% of the Market Price.

Notwithstanding

the foregoing, Auctus shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s

common stock beneficially owned by Auctus and its affiliates, exceeds 4.99% of the outstanding shares of the Company’s common

Note, at any time following the issue date and ending on the later of the maturity date or the date of payment of the Default

Amount if an event of default occurs, which is an amount equal to 125% of an amount equal to the then outstanding principal amount

of the August 30, 2019 Auctus Note (but not less than $15,000) plus any interest accrued from August 30, 2019 at the default interest

rate of 24% per annum, for shares of the Company’s common stock at the then-applicable conversion price.

Upon the holder’s

election to convert accrued interest, default interest or any penalty amounts as stipulated, the Company may elect to pay those

amounts in cash.

The note may also be prepaid by the Company at any time between the date of issuance and August 13, 2020 at 135%

multiplied by the sum of (a) the then outstanding principal amount plus (b) accrued and unpaid interest plus (c) default interests,

conversion price for the August 30, 2019 Auctus Note shall be the Variable Conversion Price, being 60% of the Market Price on

the date of conversion.

Notwithstanding the foregoing, Auctus shall be restricted from effecting a conversion if such conversion,

along with other shares of the Company’s common stock beneficially owned by Auctus and its affiliates, exceeds 4.99% of

the outstanding shares of the Company’s common stock.

connection with the issuance of the August 2019 Auctus Note, the Company issued common stock purchase warrants to Auctus to purchase

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The Company accounted for the warrants by using the relative fair value method and recorded debt discount from the relative fair

value of the warrants of $375,904 using a simple binomial lattice model (see Note 6).

value of the warrants of $375,905 using a simple binomial lattice model.

connection with the Purchase Agreement, the Company and the Purchaser entered into a Registration Rights Agreement (the “Registration

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Rights Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the

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Note is subject to customary default provisions and also includes a cross-default provision which provides that a breach or default

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Further, certain events of default may trigger penalty and liquidated damage provisions.

In October 2020, Eagle Equities

agreed to waive the 24% default interest on this note.

total principal amount outstanding under the above Auctus financing agreement, specifically the August 30, 2019 Auctus Note, was

$541,757 and accrued interest of $1,108 as of March 31, 2020 following conversion of $8,243 of the principal balance and $31,041

of accrued interest during the nine months ended March 31, 2020.

$5,495 of the put premium was released in respect of the August

30, 2019 Auctus Note during the nine months ended March 31, 2020 following conversion $8,243 of the principal balance.

BIOPHARMA, INC.

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1, 2019 GW Holdings Securities Purchase Agreements

$358,965 and accrued interest of $486 as of June 30, 2020 following conversion of $191,035 of the principal balance and $43,176

of accrued interest during the year ended June 30, 2020.

Accordingly, $127,356 of the put premium was released in respect of the

August 30, 2019 Auctus Note during the year ended June 30, 2020 following conversion of the principal balance.

total principal amount outstanding under the above Auctus financing agreement, specifically the August 30, 2019 Auctus Note, was

$236,141 and accrued interest of $8,185 as of September 30, 2020 following conversion of $122,825 of the principal balance and

$3,687 of accrued interest during the three months ended September 30, 2020.

Accordingly, $81,883 of the put premium was released

in respect of the August 30, 2019 Auctus Note during the three months ended September 30, 2020 following conversion of the principal

Holdings Securities Purchase Agreements

October 1, 2019, the Company entered into a securities purchase agreement with GW Holdings, pursuant to which GW Holdings purchased

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GW Holdings has the option to convert all or any amount of the principal face amount of the October 1, 2019 GW Holdings Note at

any time from the date of issuance and ending on the later of the maturity date and the date the Default Amount, which is an amount

between 110% and 150% of an amount equal to the then outstanding principal amount of the October 1, 2019 GW Holdings Note plus

any interest accrued, is paid if an event of default occurs, for shares of the Company’s common stock at the then-applicable

any time from the date of issuance and ending on the later of the maturity date or the date the Default Amount is paid if an event

of default occurs, which is an amount between 110% and 150% of an amount equal to the then outstanding principal amount of the

October 1, 2019 GW Holdings Note plus any interest accrued, for shares of the Company’s common stock at the then-applicable

conversion price.

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total principal amount outstanding under the above GW Holdings financing agreement, specifically the October 1, 2019 GW Holdings

Note, was $131,000 and accrued interest of $5,211 as of March 31, 2020.

3, 2019 Crown Bridge Securities Purchase Agreements

Note, was $30,000 and accrued interest of $1,776 as of June 30, 2020 following conversion of $101,000 of the principal balance

and $5,082 of accrued interest during the year ended June 30, 2020.

Accordingly, $67,333 of the put premium was reclassed to additional

paid in capital in respect of the October 1, 2019 GW Holdings Note during the year ended June 30, 2020 following conversion of

the principal balance.

BIOPHARMA, INC.

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total principal amount outstanding under the above GW Holdings financing agreement, specifically the October 1, 2019 GW Holdings

Note, was $12,600 and accrued interest of $989 as of September 30, 2020 following conversion of $17,400 of the principal balance

and $1,144 of accrued interest during the three months ended September 30, 2020.

Accordingly, $11,600 of the put premium was reclassed

to additional paid in capital in respect of the October 1, 2019 GW Holdings Note during the three months ended September 30, 2020

following conversion of the principal balance.

Bridge Securities Purchase Agreements

October 3, 2019, the Company entered into a securities purchase agreement with Crown Bridge Partners, pursuant to which Crown

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Crown Bridge has the option to convert all or any amount of the principal face amount of the October 3, 2019 Crown Bridge Note

at any time from the date of issuance and ending on the later of the maturity date and the date the Default Amount, which is an

amount between 110% and 150% of an amount equal to the then outstanding principal amount of the October 3, 2019 Crown Bridge Note

plus any interest accrued, is paid if an event of default occurs, for shares of the Company’s common stock at the then-applicable

at any time from the date of issuance and ending on the later of the maturity date or the date the Default Amount is paid if an

event of default occurs, which is an amount between 110% and 150% of an amount equal to the then outstanding principal amount

of the October 3, 2019 Crown Bridge Note plus any interest accrued, for shares of the Company’s common stock at the then-applicable

conversion price.

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Further, certain events of default may trigger penalty and liquidated damage provisions.

BIOPHARMA, INC.

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total principal amount outstanding under the above Crown Bridge financing agreement, specifically the October 3, 2019 Crown Bridge

Note, was $108,000 and accrued interest of $5,311 as of March 31, 2020.

13, 2020 Ader Alef Securities Purchase Agreements

Note, was $65,280 and accrued interest of $7,232 as of as of June 30, 2020 following conversion of $42,720 of the principal balance

during the year ended June 30, 2020.

Accordingly, $28,480 of the put premium was released in respect of the October 3, 2019 Crown

Bridge Note during the year ended June 30, 2020 following conversion of the principal balance.

The total principal amount outstanding under

the above Crown Bridge financing agreement, specifically the October 3, 2019 Crown Bridge Note, was $55,680 and accrued interest

of $8,841 as of as of September 30, 2020 following conversion of $9,600 of the principal balance during the three months ended

September 30, 2020.

These shares are considered issuable for accounting purposes.

Accordingly, $6,400 of the put premium

was released in respect of the October 3, 2019 Crown Bridge Note during the three months ended September 30, 2020 following conversion

of the principal balance.

Alef Securities Purchase Agreements

January 13, 2020, the Company entered into a securities purchase agreement with Ader Alef, pursuant to which Ader Alef purchased

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January 13, 2020 Ader Alef Note for general working capital purposes.

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maturity date of the January 13, 2020 Ader Alef is January 13, 2021.

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Ader Alef has the option to convert all or any amount of the principal face amount of the January 13, 2020 Ader Alef Note at any

time from the date of issuance and ending on the later of the maturity date and the date the Default Amount, which is an amount

between 120% and 150% of an amount equal to the then outstanding principal amount of the January 13, 2020 Ader Alef Note plus

any interest accrued, is paid if an event of default occurs, for shares of the Company’s common stock at the then-applicable

time from the date of issuance and ending on the later of the maturity date or the date the Default Amount is paid if an event

of default occurs, which is an amount between 120% and 150% of an amount equal to the then outstanding principal amount of the

January 13, 2020 Ader Alef Note plus any interest accrued, for shares of the Company’s common stock at the then-applicable

conversion price.

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total principal amount outstanding under the above Ader Alef financing agreement, specifically the January 13, 2020 Ader Alef

Note, was $110,250 and accrued interest of $1,880 as of March 31, 2020.

19, 2020 LG Capital Securities Purchase Agreements

Note, was $110,250 and accrued interest of $4,073 as of June 30, 2020.

total principal amount outstanding under the above Ader Alef financing agreement, specifically the Ader Alef Note, was $79,032

and accrued interest of $5,763 as of as of September 30, 2020 following conversion of $31,218 of the principal balance during

the three months ended September 30, 2020.

Accordingly, $16,810 of the put premium was released in respect of the Ader Alef Note

during the three months ended September 30, 2020 following conversion of the principal balance.

Capital Securities Purchase Agreements

February 19, 2020, the Company entered into a securities purchase agreement with LG Capital Funding, LLC (“LG Capital”),

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period, the Company does not have a right to prepay the February 19, 2020 LG Capital Note.

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conversion price for the February 19, 2020 LG Capital Note during the first 6 months the February 19, 2020 LG Capital Note is

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Further, certain events of default may trigger penalty and liquidated damage provisions.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

total principal amount outstanding under the above LG Capital financing agreement, specifically the February 19, 2020 LG Capital

Note, was $75,000 and accrued interest of $672 as of March 31, 2020.

Note, was $75,000 and accrued interest of $2,164 as of June 30, 2020.

The total principal amount outstanding under

the above LG Capital financing agreement, specifically the February 19, 2020 LG Capital Note, was $65,000 and accrued interest

of $3,214 as of as of September 30, 2020 following conversion of $10,000 of the principal balance during the three months ended

September 30, 2020.

These shares are considered issuable for accounting purposes.

Accordingly, $5,385 of the put premium

was released in respect of the February 19, 2020 LG Capital Note during the three months ended September 30, 2020 following conversion

of the principal balance.

of debt discounts

Company recorded approximately $729,000 of debt discounts and $837,000 of put premiums related to the above note issuances during

the nine months ended March 31, 2020.

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.

of all debt discounts for the nine months ended March 31, 2020 and 2019 was $537,868 and $363,420, respectively.

Note 11 –

Subsequent Events for information about financing arrangements post March 31, 2020.

Company recorded $0 and $534,000 of debt discounts (including warrants, derivatives, debt issue costs and original issue discounts)

related to the above note issuances during the three months ended September 30, 2020 and 2019, respectively.

The Company recorded

$0 and $539,000 of put premiums related to the above note issuances during the three months ended September 30, 2020 and 2019,

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.

of all debt discounts for the three months ended September 30, 2020 and 2019 was $121,281 and $104,406, respectively.

Company reclassified $204,919 and $73,235 in put premiums to additional paid in capital following conversions during the three

months ended September 30, 2020 and 2019, respectively.

STOCKHOLDERS’

June 24, 2019, the Company effected a one-for-five hundred (1:500) reverse stock split whereby the Company (i) decreased the number

of authorized shares of common stock, $0.001 par value per share, to 100,000,000 and (ii) decreased by a ratio of one-for-five

hundred (1:500) the number of retroactively issued and outstanding shares of common stock.

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.

in Authorized Common Stock

February 4, 2020 the Directors resolved to increase the Common Stock of the Company from 100,000,000 authorized shares to 1,000,000,000

authorized shares and believes that such number of authorized shares of Common Stock will be in the best interests of the Corporation

and its stockholders because the Board believes that the availability of more shares of Common Stock for issuance will allow the

Corporation greater flexibility in pursuing financing from investors, meeting business needs as they arise, taking advantage of

favorable opportunities and responding to a changing corporate environment.

The Company filed the necessary documents with the

Securities and Exchange Commission on February 6, 2020 and with the amendment to the authorized shares being approved by

the State of Delaware on March 13, 2020.

total number of shares of preferred stock that the Company is authorized to issue is 1,500,005, $0.01 par value per share.

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pursuant to the Certificate of Designation filed with the Secretary of State of the State of Delaware on December 9, 2014.

Nathanielsz, the Company’s Chief Executive Officer beneficially owns all of the shares of Series A Preferred Stock via North

Horizon Pty Ltd., which entitles 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 entitles him to two votes per share of Series A Preferred Stock.

North Horizon Pty Ltd.

is a Nathanielsz Family

James Nathanielsz, the Chief Executive Officer and a director of our Company, has voting and investment power over

these shares.

500,000 shares of Series A Preferred Stock are issued and outstanding as of March 31, 2020.

Nathanielsz, the Company’s Chief Executive Officer and Chief Financial Officer, beneficially owns all of the outstanding

shares of Series A Preferred Stock via North Horizon Pty Ltd., which entitles 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 entitles him to two votes per share of Series A Preferred Stock.

Horizon Pty Ltd.

is a Nathanielsz Family Trust.

James Nathanielsz, the Chief Executive Officer, Chief Financial Officer and

a director of our Company, has voting and investment power over these shares.

500,000 shares of Series A Preferred Stock are issued

and outstanding as of September 30, 2020 and June 30, 2020.

the total preferred shares authorized, pursuant to the Certificate of Designation filed with the Secretary of State of the State

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to a vote of the stockholders of the Company.

One share of Series B Preferred Stock is issued and outstanding as of March 31,

One share of Series B Preferred Stock is issued and outstanding as of September

30, 2020 and June 30, 2020.

Nathanielsz directly beneficially owns such one share of Series B Preferred Stock.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

shares of Series A Preferred Stock or Series B Preferred Stock were issued during the three months ended September 30, 2020 and

in the fiscal year 2020.

issued for conversion of convertible debt

the nine months ended March 31, 2020, the Company issued 17,343,368 shares of its common stock at an average contractual conversion

price of $0.0532, ranging from $0.014 to $0.906, as a result of the conversion of principal and interest in the aggregate amount

of $922,754 underlying certain outstanding convertible notes converted during such period.

From July 1, 2020 through September 30, 2020,

the Company issued an aggregate of 442,031,352 shares of its common stock (24,426,642 are considered issuable) at an average

contractual conversion price of $0.00096, ranging from $0.00056 to $0.0020, as a result of the conversion of principal of $391,935,

interest of $25,735 and conversion fees $6,750 underlying certain outstanding convertible notes converted during such period.

The total recorded to equity was $480,575.

Notes totaling $75,000 contained bifurcated embedded conversion option derivatives.

Accordingly, the fair market value of the

shares issued was $446,950 resulting in a loss on extinguishment at the time of conversion of $227,510 and $308,522 of derivative

fair value was recorded as a gain on extinguishment at the time of conversion.

The Company reclassified $383,186 in put premiums

to additional paid in capital following conversions during the nine months ended March 31, 2020.

Accordingly, the fair market value of the shares issued was $134,155 resulting in a loss on extinguishment at the time of conversion

of $56,155 and $106,141 of derivative fair value was recorded as a gain on extinguishment at the time of conversion.

reclassified $204,919 in put premiums to additional paid in capital following conversions during the three months ended September

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company has 282,421,876 shares of its common stock reserved for future issuances based on lender reserve requirements pursuant

to underlying financing agreements at March 31, 2020.

issued for services

July 19, 2019, the Company entered into an agreement with a certain consultant to provide services over a two-month period beginning

July 1, 2019 and ending September 1, 2019 in exchange for 20,000 shares of the Company’s common stock.

On July 19, 2019,

the Company issued the 20,000 shares of the Company’s common stock valued at $1.99 per share;

being the closing price of

the stock on the date of the agreement, to such consultant, or $39,800, which will be amortized over the term of the agreement.

The Company recorded $39,800 of consulting expense with respect to such shares of its common stock during the nine months ended

March 31, 2020.

February 3, 2020, the Company issued 150,000 shares of the Company’s common stock to a consultant for services rendered

pursuant to an engagement agreement dated on September 10, 2019 which agreement was later amended in February 2020.

3, 2020, the Company issued the 150,000 shares of the Company’s common stock valued at $0.14 per share;

being the closing

price of the stock on the date of the agreement, to such consultant, or $21,000.

The Company recorded $21,000 of consulting expense

with respect to such shares of its common stock during the nine months ended March 31, 2020.

to employment agreements dated in May 2019 (see Note 8), the Company granted an aggregate of 78,000 and 39,000 restricted stock

unit to the Company’s Chief Executive Officer and Chief Scientific Officer, respectively.

The total 117,000 restricted stock

units are subject to vesting terms as defined in the employment agreements.

The 117,000 restricted stock units were valued at

the fair value of $4.25 per unit or $497,240 based on the quoted trading price on the date of grant.

During the nine months ended

March 31, 2020, the Company recognized stock-based compensation of $163,157 related to vested restricted stock units.

$303,006 unrecognized restricted stock units expense as of March 31, 2020.

connection with the issuance of the August 2019 Auctus Note, the Company issued common stock purchase warrants to Auctus to purchase

450,000 shares of the Company’s common stock (the “First Warrant”) as a commitment fee upon the terms and subject

to the limitations and conditions set forth in such First Warrant at an “Exercise Price”

In connection with

the issuance of the Note, the Company shall issue a common stock purchase warrant to Buyer to purchase 300,000 shares of the Company’s

common stock (the “Second Warrant”) as a commitment fee upon the terms and subject to the limitations and conditions

set forth in such Second Warrant at an “Exercise Price”

In connection with the issuance of the Note, the

Company shall issue a common stock purchase warrant to Buyer to purchase 225,000 shares of the Company’s common stock (the

“Third Warrant”) as a commitment fee upon the terms and subject to the limitations and conditions set forth in such

Third Warrant at an “Exercise Price”

The First Warrant, Second Warrant, and Third Warrant shall collectively

be referred as the “Warrants”.

The Warrants have an “Exercise Period”

of five years form the date of issuance

being August 30, 2019 (see Note 5).

to underlying financing agreements at September 30, 2020.

issued for exercise of warrants

the three months ended September 30, 2020, the Company received aggregate gross proceeds of $201,044 from the exercise of 10,445,482

prefunded warrants and 5,000,000 Series B Warrants.

following table summarizes warrant activity for the three months ended September 30, 2020:

Price Per Share

Outstanding at June 30, 2020

(15,445,482 )

Outstanding at September 30, 2020

Exercisable at September 30, 2020

Outstanding and Exercisable:

Weighted average remaining contractual term

Aggregate intrinsic value

the three months ended September 30, 2020, the Company received aggregate gross proceeds of $201,044 from the exercise of 10,445,482

prefunded warrants and 5,000,000 Series B Warrants.

summary of the Company’s option activity during the three months ended September 30, 2020 is presented below:

at June 30, 2020

at September 30, 2020

and Exercisable:

average remaining contractual term

average fair value of options granted during the period

intrinsic value

BIOPHARMA, INC.

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TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 nine months ended March 31, 2020.

of March 31, 2020, there were 1,975,059 warrants outstanding and exercisable with expiration dates commencing May 2020 and continuing

through August 2024, with a weighted average exercise price per share of $2.69.

of March 31, 2020, the Company had entered into agreements to grant options to purchase 59,644 shares of its common stock, with

a weighted average exercise price per share of $76.37.

to employment agreements dated in May 2019 (see Note 8), the Company granted options to purchase 39,000 and 19,500 shares of the

Company’s common stock to the Company’s Chief Executive Officer and Chief Scientific Officer, respectively.

58,500 options have a term of 10 years from the date of grant and exercise price ranging from $4.25 to $4.675 per share.

of these options shall vest every successive one-year anniversary, provided, that on each such vesting date, the Chief Executive

Officer and Chief Scientific Officer are employed by the Company and subject to the other provisions of the employment agreement.

The 58,500 stock options were valued using a Black-Scholes model with the following assumptions:

stock price at valuation date

of $4.25 based on quoted trading price on date of grant, exercise price of $4.65, dividend yield of zero, years to maturity of

10.00, a risk free rate of 2.42%, and expected volatility 268% for a total value of $248,620.

the nine months ended March 31, 2020, the Company recognized stock-based compensation of $62,155 related to vested stock options.

There was $176,106 of unvested stock options expense as of March 31, 2020 that will be recognized in future periods.

stock options were issued during the nine months ended March 31, 2020.

the three months ended September 30, 2020, the Company recognized stock-based compensation of $20,718 related to vested stock

There was $134,669 of unvested stock options expense as of September 30, 2020 that will be recognized through May 2022

or 1.62 years.

stock options were granted during the three months ended September 30, 2020.

COMMITMENTS AND CONTINGENCIES

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to be unfounded and is vigorously defending itself.

To that end, on November 20, 2019 the Company filed a motion to dismiss

certain counts of the complaint, with prejudice.

That motion remains pending with the Supreme Court of the State of New York,

County of New York.

Upon resolution of the motion, the Company shall file an answer, together with affirmative defenses and counterclaims.

The counterclaims shall include, without limitation, malpractice claims, arising out of Foley Shechter’s grossly negligent

mishandling of certain transactions and excessive billing related thereto.

Certain amounts related to this claim are included

in accounts payable and accrued expenses in the accompanying Financial Statements.

If our motion to dismiss is granted, our

potential liability would be reduced to $51,031.51 plus interest and attorney’s fees.

Regal Consulting, LLC (“Regal”)

initiated litigation against the Company in Clark County District Court, Nevada.

Regal is demanding approximately $400,000 and

60,000 shares of the Company’s common stock as payment for services that Regal purports to have performed.

The Company filed

an Answer and Counterclaim, denying liability and alleging that Regal procured by fraud the Company’s execution of a July

2019 Consulting Agreement and thereafter failed to provide the consulting services contemplated by said Agreement.

respect to unpled claims, Regal claims that $106,500 remains due on a Convertible Note executed by the Company in May of 2017

(the “2017 Note”).

Regal additionally claims that it is owed $98,000 in penalties in connection with the Company’s

To that end, on November 20, 2019 the Company filed a motion to dismiss certain

counts of the complaint, with prejudice.

That motion remains pending with the Supreme Court of the State of New York, County of

Oral argument is scheduled for November 5, 2020.

Upon resolution of the motion, the Company shall file an answer, together

with affirmative defenses and counterclaims.

The counterclaims shall include, without limitation, malpractice claims, arising

out of Foley Shechter’s grossly negligent mishandling of certain transactions and excessive billing related thereto.

amounts related to this claim are included in accounts payable and accrued expenses in the accompanying Consolidated Financial

If our motion to dismiss is granted, our potential liability would be reduced to $51,031.51 plus interest and attorney’s

Consulting, LLC (“Regal”) initiated litigation against the Company in Clark County District Court, Nevada.

demanding approximately $400,000 and 60,000 shares of the Company’s common stock as payment for services that Regal purports

to have performed.

Regal additionally claims that $106,500 remains due on a Convertible Note executed by the Company in May of

2017 (the “2017 Note”), and asserts that it is owed in excess of $100,000 in penalties in connection with the Company’s

refusal to honor certain Conversion Notices.

The Company disputes these allegations and plans to vigorously defend itself should

Regal institute litigation.

The Company notes that the 2017 Note constituted the payment mechanism prescribed by a Consulting

Agreement executed contemporaneously therewith.

Regal failed to comply with its obligations under the Consulting Agreement and

thereby obviated the Company’s payment obligation thereunder.

part of its requirement for having a foreign operating subsidiary, the Company’s parent U.S.

entity 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 in the Balance Sheet.

The Company recorded the penalties for all three years during the year

ended June 30, 2018 and is negotiating a payment plan.

The Company filed an Answer and Counterclaim, denying liability and alleging that

Regal procured by fraud the Company’s execution of various consulting agreements and additionally failed to provide the

consulting services contemplated by said agreements.

discovery process is ongoing.

In addition, the parties have agreed to mediate their dispute and are in the process of selecting

a mediator and scheduling their mediation.

As part of its requirement for having a foreign

operating subsidiary, the Company’s parent U.S.

entity 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 in the consolidated

balance sheet.

The Company recorded the penalties for all three years during the year ended June 30, 2018 and is negotiating a

payment plan.

The Company is current on all subsequent filings.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s tax advisor is awaiting a response from

the IRS on this matter.

November 2009, the Company entered into a commercialization agreement with the University of Bath (UK) (the “University”)

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May 5, 2016, the Company entered into a new five-year operating lease agreement with a Horizon Pty Ltd., a related party, of which

Nathanielsz, our CEO, CFO and a director, and his wife are owners and directors, with monthly rent of $3,606 AUD or $2,469

USD, inclusive of GST (See Note 8 –

Nathanielsz, our CEO, CFO and a director, and his wife are owners and directors, with monthly rent currently at $3,606 AUD

or $2,431 USD, inclusive of GST (See Note 9 –

Related Party Transactions).

In adopting ASC Topic 842, Leases (Topic 842), the Company

has elected 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 month or less.

On July 1, 2019, upon adoption of ASC Topic 842, the

Company recorded right-of-use assets $46,696 and total lease liabilities of $46,696 based on an incremental borrowing rate of

The initial rental amount was $3,000 AUD subject

to a 3% yearly escalation.

In adopting ASC Topic 842, Leases (Topic 842), the Company has elected 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 month or less.

On July 1, 2019, upon adoption of ASC Topic 842, the Company recorded right-of-use assets $48,662 and

total lease liabilities of $48,662 based on an incremental borrowing rate of 6%.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

is summarized below:

Office lease ROU

Less accumulated

Balance of ROU asset as of March

accumulated reduction

of ROU asset as of September 30, 2020

lease liability related to the ROU asset is summarized below:

Office lease liability

lease liability

Long term portion of lease liability

as of March 31, 2020

Minimum lease payments under non-cancelable operating lease at March 31, 2020 are as follows:

Remainder Fiscal Year 2020

Imputed interest

Total operating

lease liability

of lease liability

Minimum lease payments under non-cancelable operating lease at September 30, 2020 are as follows:

operating lease liability

Company entered into a Manufacturing Services Agreement (the “MSA”) and Quality Assurance Agreement (the “QAA”),

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The Company has

spent a total of $1,689,146 of costs to date under this contract of which $1,689,146 was expensed in prior years.

The MSA shall

continue for a term of three years unless extended by mutual agreement in writing with a possible extension currently under consideration.

The Company can terminate the MSA early for any reason upon the required notice period, however, in such event, the pre-payment

paid upon signing the MSA is considered non-refundable.

Each party to the MSA shall have the right to terminate the MSA by written

notice to the other party if the other party commits a material breach of the MSA (subject to a 30-day cure period).

forth the parties respective obligations and responsibilities relating to the manufacturing and testing of the products under

The agreements with Amatsigroup contain certain customary representations, warranties and limitations of liabilities,

and confidentiality and indemnity obligations.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

spent a total of $1,689,146 of costs to date under this contract of which $49,854 was expensed in fiscal 2019, $701,973 in fiscal

2018 and $937,319 in fiscal 2017.

The MSA expired in 2019 and may be extended by mutual agreement in writing with a possible extension

currently under consideration.

The Company can terminate the MSA early for any reason upon the required notice period, however,

in such event, the pre-payment paid upon signing the MSA is considered non-refundable.

Each party to the MSA shall have the right

to terminate the MSA by written notice to the other party if the other party commits a material breach of the MSA (subject to

a 30-day cure period).

The QAA sets forth the parties’

respective obligations and responsibilities relating to the manufacturing

and testing of the products under the MSA.

The agreements with Amatsigroup contain certain customary representations, warranties

and limitations of liabilities, and confidentiality and indemnity obligations.

The MSA expired in 2019 and may be extended by

mutual agreement in writing with a possible extension currently under consideration.

Collaboration

On September 13, 2018, the Company entered

into a two-year collaboration agreement with the University of Jaen (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 which was paid in fiscal 2019 and a maximum of 40,000 Euros ($45,775 USD) in year two which

will be paid in fiscal 2020.

Additionally, in exchange for full ownership of the intellectual property the Company agreed

to pay royalties of 2% of net revenues to the University.

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, which agreement will be extended.

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.

The Company paid 31,754 Euros ($36,117 USD) in 2019 and has accrued 21,050 Euros ($24,660 USD) as of September

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 (see Note 12).

RELATED PARTY TRANSACTIONS

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have included the following:

of March 31, 2020 and June 30, 2019, the Company owed a current and a former director a total of $45,155 and $51,867, respectively,

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of September 30, 2020 and June 30, 2020, the Company owed a current and a former director a total of $53,058 and $50,993, respectively,

for money loaned to the Company throughout the years.

The total loans balance owed at March 31, 2020 and June 30, 2019 is not

interest bearing (See Note 4 –

Loans and Notes Payable).

of March 31, 2020 and June 30, 2019, the Company owed its former director a total of $27,131 and $31,164, respectively, related

The total loans balance owed at September 30, 2020 and June 30, 2020 is

not interest bearing (See Note 5 –

Loans from Directors and Officer –

Related Party).

of September 30, 2020 and June 30 2020, the Company owed its former director a total of $31,880 and $30,639, respectively, related

to expenses paid on behalf of the Company related to corporate startup costs and intellectual property (See Note 4 –

5 unchanged sentences

The lease has a

five-year term and provides for annual rental payments of $42,048 AUD or $28,790 USD, which includes $3,823 AUD or $2,618 USD

of goods and service tax for total payments of $210,242 AUD or $143,953 USD during the term of the lease.

As of March 31, 2020,

total payments of $43,796 AUD or $29,602 USD remain on the lease.

five-year term expiring May 2021 and provides for annual rental payments of $39,600 AUD or $28,325 USD, which includes $3,600

AUD or $2,575 USD of goods and service tax for total payments of $198,000 AUD or $141,629 USD during the term of the lease.

of September 30, 2020, total payments of $27,834 AUD or $19,957 USD remain on the lease.

(See Note 8 –

Commitments and Contingencies)

and Services Agreements with Management

Company and Mr.

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of its intent not to renew.

The Nathanielsz Employment Agreement continues in effect as of March 31, 2020.

The Nathanielsz Employment

Agreement provides Mr.

Nathanielsz with a base salary of $25,000 AUD per month ($300,000 AUD annually or $205,680 USD) and a monthly

contribution to Mr.

The Nathanielsz Employment Agreement continues in effect as of September 30, 2020 as amended May 14,

2019 (see below).

The Nathanielsz Employment Agreement provides Mr.

Nathanielsz with a base salary of $25,000 AUD per month ($300,000

AUD annually or $205,680 USD) and a monthly contribution to Mr.

Nathanielsz’s pension equal to 9.5% of his monthly salary.

Nathanielsz has the ability to convert

any accrued but unpaid salary into common stock at the end of each fiscal year at a conversion price to be determined by Mr.

and the Company, which will in no event be lower than par value or higher than the closing bid price on the date of conversion.

Nathanielsz has the ability to convert any accrued but unpaid salary into common stock at the end of each fiscal year at a

conversion price to be determined by Mr.

Nathanielsz and the Company, which will in no event be lower than par value or higher

than the closing bid price on the date of conversion.

Pursuant to the Nathanielsz Employment Agreement, Mr.

Nathanielsz is entitled to an annual discretionary bonus in an amount up

to 200% of his annual base salary, which bonus shall be determined by the Company’s board of directors based upon the performance

of the Company.

On March 16, 2018, the Company’s board of directors approved an increase of Mr.

Nathanielsz’s annual

base salary from $300,000 AUD ($205,680 USD) to $400,000 AUD ($274,240 USD), effective February 2018.

Nathanielsz is entitled

to an annual discretionary bonus in an amount up to 200% of his annual base salary, which bonus shall be determined by the Company’s

board of directors based upon the performance of the Company.

On March 16, 2018, the Company’s board of directors approved

an increase of Mr.

Nathanielsz’s annual base salary from $300,000 AUD ($205,680 USD) to $400,000 AUD ($274,240 USD), effective

February 2018.

Nathanielsz’s wife, Sylvia Nathanielsz, is and has been a non-executive part-time employee of the Company since October

Effective February 1, 2018.

Nathanielsz receives an annual salary of $82,272 and is entitled to customary benefits.

Nathanielsz receives an annual salary of $120,000 AUD ($80,904 USD) and is entitled to

customary benefits.

to a February 25, 2016 board resolution, James Nathanielsz shall be paid $4,481 AUD ($3,205 USD), on a monthly basis for the purpose

of acquiring and maintaining an automobile.

For the nine months ended March 31, 2020, a total of $32,562 AUD ($19,869 USD) in

payments have been made with respect to Mr.

For the three months ended September 30, 2020, a total of $11,533 AUD ($8,247 USD)

in payments have been made with respect to Mr.

Nathanielsz’s car allowance.

to the approval of the Company’s board of directors, on March 16, 2018, Mr.

Nathanielsz was granted a $300,000 AUD ($210,090

USD) bonus for accomplishments achieved while serving as the Company’s Chief Executive Officer during the fiscal year ended

June 30, 2018.

A total of $80,046 AUD ($56,056 USD) in payments were made in the year ended June 30, 2018.

During the nine months

ended March 31, 2019, an additional $219,954 AUD ($150,602 USD) was paid.

Such bonus was fully paid to Mr.

Nathanielsz as of June

to the approval of the Company’s board of directors, on May 14, 2019, Mr.

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A total of $90,000 AUD ($64,377 USD) in payments were made in the year ended June 30, 2019.

A total of $202,620 AUD

($138,162 USD) in payments were made in the nine months ended March 31, 2020, with $167,380 AUD ($102,135 USD) remaining due and

On July 13, 2020 the Board

approved a bonus of $240,000 AUD being equal to 60% of Mr.

Nathanielsz base salary which was accrued as of June 30, 2020.

of $202,620 AUD ($136,606 USD) in payments were made in during the year ended June 30, 2020, with $407,380 AUD ($280,726 USD)

remaining due and payable.

A total of $40,000 AUD ($55,936 USD) in payments were made in during the three months ended September

30, 2020, with $367,380 AUD ($226,138 USD) remaining due and payable.

BIOPHARMA, INC.

1 unchanged sentence

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Employment and Services Agreements with Management

and Restated Employment Agreement ― On May 14, 2019 (the “Effective Date”), the Company entered into an Amended

and Restated Employment Agreement &horbar;

On May 14, 2019 (the “Effective Date”), the Company entered into an Amended

and Restated Employment Agreement (the “Employment Agreement”) with James Nathanielsz, the Company’s Chief Executive

7 unchanged sentences

RSUs”), and (iii) an additional 39,000 restricted stock units of the Company (the “Additional Nathanielsz RSUs”).

Such options and restricted stock units were granted pursuant to the 2019 Plan (as defined below) approved by the Company’s

board of directors on the Effective Date.

Such options and restricted stock units were granted pursuant to the 2019 Plan approved by the Company’s board of directors

on the Effective Date.

The Nathanielsz Options have a term of 10 years from the date of grant.

Nathanielsz Options shall vest every successive one-year anniversary following the Effective Date, provided, that on each such

vesting date Mr.

Nathanielsz is employed by the Company and subject to the other provisions of the Employment Agreement.

Nathanielsz RSUs shall vest on the one-year anniversary of the Effective Date, subject to Mr.

Nathanielsz’s continued employment

with the Company through such vesting date.

1/3rd of the Nathanielsz Options

shall vest every successive one-year anniversary following the Effective Date, provided, that on each such vesting date Mr.

is employed by the Company and subject to the other provisions of the Employment Agreement.

The Initial Nathanielsz RSUs shall

vest on the one-year anniversary of the Effective Date, subject to Mr.

Nathanielsz’s continued employment with the Company

through such vesting date.

The Additional Nathanielsz RSUs will vest as follows, subject to Mr.

Nathanielsz’s

continued employment with the Company through the applicable vesting date:

(i) 7,800 of the Additional Nathanielsz RSUs shall

vest upon the Company submitting Clinical Trial Application (the “CTA”) for PRP, the Company’s lead product

candidate (“PRP”), for a First-In-Human study for PRP (the “Study”) in an applicable jurisdiction to be

selected by the Company, (ii) 7,800 of the Additional Nathanielsz RSUs shall vest upon the CTA being approved in an applicable

jurisdiction, (iii) 7,800 of the Additional RSUs shall vest upon the Company completing an equity financing in the amount of at

least $4,000,000 in gross proceeds, (iv) 7,800 of the Additional Nathanielsz RSUs shall vest upon the shares of the Company’s

Common Stock being listed on a senior stock exchange (NYSE, NYSEMKT or NASDAQ), and (v) the remaining 7,800 of the Additional

Nathanielsz RSUs shall vest upon the Company enrolling its first patient in the Study.

Each vested restricted stock unit shall

be settled by delivery to Mr.

Nathanielsz of one share of the Company’s common stock and/or the fair market value of one

share of common stock in cash, at the sole discretion of the Company’s board of directors and subject to the 2019 Plan,

on the first to occur of:

(i) the date of a Change of Control (as defined in the Employment Agreement), (ii) the date that is

ten business days following the vesting of such restricted stock unit, (iii) the date of Mr.

Nathanielsz’s death or Disability

(as defined in the Employment Agreement), and (iv) Mr.

Nathanielsz’s employment being terminated either by the Company without

Cause or by Mr.

Nathanielsz for Good Reason (each as defined in the Employment Agreement).

In the event of a Change of Control,

any unvested portion of the Nathanielsz Options and such restricted stock units shall vest immediately prior to such event.

78,000 restricted stock units were valued at the fair value of $4.25 per unit or $331,500 based on the quoted trading price on

the date of grant.

The 39,000 stock options were valued using a Black-Scholes model with the following assumptions:

at valuation date of $4.25 based on quoted trading price on date of grant, exercise price of $4.65, dividend yield of zero, years

to maturity of 10.00, a risk free rate of 2.42%, and expected volatility 268% for a total value of $165,747 (see Note 6 –

Stockholders’

and Restated Services Agreement ― On the Effective Date, the Company also entered into an Amended and Restated Services

Nathanielsz’s continued

employment with the Company through the applicable vesting date:

(i) 7,800 of the Additional Nathanielsz RSUs shall vest upon

the Company submitting Clinical Trial Application (the “CTA”) for PRP, the Company’s lead product candidate

(“PRP”), for a First-In-Human study for PRP (the “Study”) in an applicable jurisdiction to be selected

by the Company, (ii) 7,800 of the Additional Nathanielsz RSUs shall vest upon the CTA being approved in an applicable jurisdiction,

(iii) 7,800 of the Additional RSUs shall vest upon the Company completing an equity financing in the amount of at least $4,000,000

in gross proceeds, (iv) 7,800 of the Additional Nathanielsz RSUs shall vest upon the shares of the Company’s Common Stock

being listed on a senior stock exchange (NYSE, NYSEMKT or NASDAQ), and (v) the remaining 7,800 of the Additional Nathanielsz RSUs

shall vest upon the Company enrolling its first patient in the Study.

Each vested restricted stock unit shall be settled by delivery

Nathanielsz of one share of the Company’s common stock and/or the fair market value of one share of common stock

in cash, at the sole discretion of the Company’s board of directors and subject to the 2019 Plan, on the first to occur

(i) the date of a Change of Control (as defined in the Employment Agreement), (ii) the date that is ten business days following

the vesting of such restricted stock unit, (iii) the date of Mr.

Nathanielsz’s death or Disability (as defined in the Employment

Agreement), and (iv) Mr.

Nathanielsz’s employment being terminated either by the Company without Cause or by Mr.

for Good Reason (each as defined in the Employment Agreement).

In the event of a Change of Control, any unvested portion of the

Nathanielsz Options and such restricted stock units shall vest immediately prior to such event.

and Restated Services Agreement &horbar;

On the Effective Date, the Company also entered into an Amended and Restated Services

Agreement (the “Services Agreement”) with Dr.

12 unchanged sentences

Such options and restricted stock units

were granted pursuant to the 2019 Plan (as defined below) approved by the Company’s board of directors on the Effective

The Kenyon Options have a term of 10 years from the date of grant.

1/3rd of the Kenyon Options shall vest every successive

one-year anniversary following the Effective Date, provided, that on each such vesting date Dr.

Kenyon is employed by the Company

and subject to the other provisions of the Services Agreement.

The Initial Kenyon RSUs shall vest on the one-year anniversary

of the Effective Date, subject to Dr.

were granted pursuant to the 2019 Plan approved by the Company’s board of directors on the Effective Date.

The Kenyon Options

have a term of 10 years from the date of grant.

1/3rd of the Kenyon Options shall vest every successive one-year anniversary following

the Effective Date, provided, that on each such vesting date Dr.

Kenyon is employed by the Company and subject to the other provisions

of the Services Agreement.

The Initial Kenyon RSUs shall vest on the one-year anniversary of the Effective Date, subject to Dr.

Kenyon’s continued employment with the Company through such vesting date.

The Additional

Kenyon RSUs will vest as follows, subject to Dr.

Kenyon’s continued employment with the Company through the applicable vesting

(i) 4,875 of the Additional Kenyon RSUs shall vest upon the Company submitting the CTA for PRP for the Study in an applicable

jurisdiction to be selected by the Company, (ii) 4,875 of the Additional Kenyon RSUs shall vest upon the Company completing an

equity financing in the amount of at least $4,000,000 in gross proceeds, (iii) 4,875 of the Additional Kenyon RSUs shall vest

upon the shares of the Company’s Common Stock being listed on a senior stock exchange (NYSE, NYSEMKT or NASDAQ), and (iv)

the remaining 4,875 of the Additional Kenyon RSUs shall vest upon the Company enrolling its first patient in the Study.

Kenyon RSU shall be settled by delivery to Mr.

Kenyon of one share of the Company’s common stock and/or the fair market

value of one share of common stock in cash, at the sole discretion of the Company’s board of directors and subject to the

Plan, on the first to occur of:

(i) the date of a Change of Control (as defined in the Services Agreement), (ii) the date that

is ten business days following the vesting of such Kenyon RSU, (iii) the date of Dr.

Kenyon’s death or Disability (as defined

in the Services Agreement), and (iv) Dr.

Kenyon’s employment being terminated either by the Company without Cause or by

Kenyon for Good Reason (as defined in the Services Agreement).

In the event of a Change of Control (as defined in the Services

Agreement), 50% of any unvested portion of the Kenyon Options and the Kenyon RSUs shall vest immediately prior to such event.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

39,000 restricted stock units were valued at the fair value of $4.25 per unit or $165,750 based on the quoted trading price on

the date of grant.

The 19,500 stock options were valued using a Black-Scholes model with the following assumptions:

at valuation date of $4.25 based on quoted trading price on date of grant, exercise price of $4.25, dividend yield of zero, years

to maturity of 10.00, a risk free rate of 2.42%, and expected volatility 268% for a total value of $82,873 (see Note 6 –

Stockholders’

The Additional Kenyon RSUs will vest as follows,

subject to Dr.

Kenyon’s continued employment with the Company through the applicable vesting date:

(i) 4,875 of the Additional

Kenyon RSUs shall vest upon the Company submitting the CTA for PRP for the Study in an applicable jurisdiction to be selected

by the Company, (ii) 4,875 of the Additional Kenyon RSUs shall vest upon the Company completing an equity financing in the amount

of at least $4,000,000 in gross proceeds, (iii) 4,875 of the Additional Kenyon RSUs shall vest upon the shares of the Company’s

Common Stock being listed on a senior stock exchange (NYSE, NYSEMKT or NASDAQ), and (iv) the remaining 4,875 of the Additional

Kenyon RSUs shall vest upon the Company enrolling its first patient in the Study.

Each vested Kenyon RSU shall be settled by delivery

Kenyon of one share of the Company’s common stock and/or the fair market value of one share of common stock in cash,

at the sole discretion of the Company’s board of directors and subject to the Plan, on the first to occur of:

of a Change of Control (as defined in the Services Agreement), (ii) the date that is ten business days following the vesting of

such Kenyon RSU, (iii) the date of Dr.

Kenyon’s death or Disability (as defined in the Services Agreement), and (iv) Dr.

Kenyon’s employment being terminated either by the Company without Cause or by Dr.

Kenyon for Good Reason (as defined in

the Services Agreement).

In the event of a Change of Control (as defined in the Services Agreement), 50% of any unvested portion

of the Kenyon Options and the Kenyon RSUs shall vest immediately prior to such event.

Intercompany loans were made by the parent to the subsidiary, Propanc PTY LTD, which have not been repaid as of September 30,

Effective fiscal year 2021, the parent company determined that intercompany loans will not be repaid in the foreseeable

future and thus, per ASC 830-20-35-3, gains and losses from measuring the intercompany balances are recorded within cumulative

translation adjustment, a component of other comprehensive income.

Prior to July 1, 2020, the Company recorded the foreign currency

transaction gains and losses from measuring the intercompany balances as a component of other income (expenses) as reflected in

the condensed consolidated statements of operations.

CONCENTRATIONS AND RISKS

3 unchanged sentences

Bank deposits in Australian banks are uninsured.

The Company has not experienced any losses in such accounts through March 31, 2020.

The Company has not experienced any losses in such accounts through September 30, 2020.

Company did not receive any funding from lenders during the three months ended September 30, 2020.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company primarily relies on funding from three convertible debt lenders and received proceeds during the three months ended September

30, 2019 from each of the three lenders were $75,000, $285,000, and $505,000, respectively, which represents approximately 9%,

33% and 58%, respectively of total proceeds received by the Company during the three months ended September 30, 2019.

Concentration

of March 31, 2020 and June 30, 2019, the Company’s receivables were 100% related to reimbursements on GST taxes paid.

of September 30, 2020 and June 30, 2020, the Company’s receivables were 100% related to reimbursements on GST taxes paid.

and Patent Concentration

18 unchanged sentences

field of technology relating to pharmaceutical compositions of proenzymes for treating cancer.

of March 31, 2020 and June 30, 2019, the Company’s operations are based in Camberwell, Australia, however the majority of

research and development is being conducted in the European Union.

of September 30, 2020 and June 30, 2020, the Company’s operations are based in Camberwell, Australia, however the majority

of research and development is being conducted in the European Union.

July 22, 2016, the Company formed a wholly owned subsidiary, Propanc (UK) Limited under the laws of England and Wales for the

purpose of submitting an orphan drug application with the European Medicines Agency as a small and medium-sized enterprise.

of March 31, 2020, there has been no activity within this entity.

of September 30, 2020 and June 30, 2020, there has been no activity within this entity.

11 - DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Financial Instruments:

Company had $169,500 of convertible debt, that contain embedded conversion options and is treated as derivative instruments outstanding

at March 31, 2020.

Company applies the provisions of ASC 815-40, Contracts in Entity’s Own Equity , under which convertible instruments

and warrants, which contain terms that protect holders from declines in the stock price (reset provisions), may not be exempt

from derivative accounting treatment.

As a result, warrants and embedded conversion options in convertible debt are recorded as

a liability and are revalued at fair value at each reporting date.

If the fair value of the warrants exceeds the face value of

the related debt, the excess is recorded as derivative expense in operations on the issuance date.

The Company had $8,500 (1 note)

and $126,500 (3 notes) of convertible debt, which have embedded conversion options bifurcated and is treated as derivative instruments

outstanding at September 30, 2020 and June 30, 2020, respectively.

Company calculates the estimated fair values of the liabilities for derivative instruments using the Binomial Trees Method.

closing price of the Company’s common stock at March 31, 2020, the last trading day of the quarter ended March 31, 2020,

Volatility, expected remaining term and risk-free interest rates used to estimate the fair value of derivative liabilities

at March 31, 2020 are indicated in the table that follows.

The expected term is equal to the remaining term of the warrants or

convertible instruments and the risk-free rate is based upon rates for treasury securities with the same term.

closing price of the Company’s common stock at September 30, 2020, the last trading day of the period ended September 30,

2020, was $0.0019.

Volatility, expected remaining term and risk-free interest rates used to estimate the fair value of derivative

liabilities at September 30, 2020 are indicated in the table that follows.

The expected term is equal to the remaining term of

the warrants or convertible instruments and the risk-free rate is based upon rates for treasury securities with the same term.

BIOPHARMA, INC.

3 unchanged sentences

instruments entered

during the nine

March 31, 2020)

227.82-279.44

during the three

September 30, 2020)

Remaining Term (in years)

2 unchanged sentences

Value Measurements:

Company measures and reports at fair value the liability for derivative instruments.

The fair value liabilities for price adjustable

warrants and embedded conversion options have been recorded as determined utilizing the Binomial Trees model.

The following tables

summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2020:

March 31, 2020

The Company measures

and reports at fair value the liability for derivative instruments.

The fair value liabilities for price adjustable warrants and

embedded conversion options have been recorded as determined utilizing the Binomial Trees model.

The following tables summarize

the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and

June 30, 2020:

at September 30, 2020

Prices in Active Markets for Identical Assets

conversion option liabilities

following is a roll forward for the nine months ended March 31, 2020 of the fair value liability of price adjustable derivative

Balance at June 30, 2019

Initial fair value of embedded conversion

option derivative liability recorded as debt discount

Initial fair value of embedded conversion

option derivative liability recorded as expense

Reductions due to conversions

Change in fair

value included in statements of operations

Balance at March

at June 30, 2020

Prices in Active Markets for Identical Assets

Other Observable Inputs

Unobservable Inputs

conversion option liabilities

following is a roll forward for the three months ended September 30, 2020 of the fair value liability of price adjustable derivative

at June 30, 2020

fair value of embedded conversion option derivative liability recorded as debt discount

fair value of embedded conversion option derivative liability recorded as expense

on debt extinguishment

in fair value included in statements of operations

at September 30, 2020

SUBSEQUENT EVENTS

issued for services

April 8, 2020, the Company issued 1,151,682 shares of the Company’s common stock to a consultant for services to be rendered

in fourth quarter of fiscal year 2020 pursuant to an engagement agreement dated on September 10, 2019 which agreement was amended

again in April 2020.

On April 8, 2020, the Company issued the 1,151,682 shares of the Company’s common stock valued at $0.02

being the closing price of the stock on the date of the agreement, to such consultant, or $23,955.

BIOPHARMA, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 1, 2020 through April 30, 2020 , the Company issued an aggregate of 26,648,787 shares of its common stock at an average

contractual conversion price of $0.009, ranging from $0.005 to $0.014, as a result of the conversion of principal of $210,371,

interest of $16,638 and conversion fees $3,750 underlying certain outstanding convertible notes converted during such period.

The Company reclassified $133,965 in put premiums to additional paid in capital following conversions in April 2020.

Purchase Agreement

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”,

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 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.

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 $0.001 (but can be less than par value).

The Prefunded Warrants shall be exercisable immediately and shall expire

when exercised in full.

Securities Purchase Agreement contains such representations, warranties and covenants as are typical for a transaction of this

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

The Series A Warrants have a cash exercise price of $0.20 per share and are immediately exercisable and expire in

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”).

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

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.

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.

Collaboration

October 1, 2020, 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 30,000 Euros ($35,145 USD) which shall be 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 shall hire and train a doctoral student for this project and as such the Company shall 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.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

used herein, “Propanc,”

the “Company,”

“our,”

“we”

or “us”

terms include Propanc Biopharma, Inc.

and its wholly owned subsidiary Propanc PTY LTD, unless the context indicates otherwise.

The following discussion and analysis of our business and results of operations for the three and nine months ended March 31,

2020, and our financial conditions at that date, should be read in conjunction with the condensed consolidated financial statements

and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”).US Dollars

are denoted herein by “USD,”

“$”

and “dollars.”

Forward-Looking

statements contained in this Quarterly Report (or otherwise made by us or on our behalf from time to time in other reports, filings

with the SEC, news releases, conferences, internet postings or otherwise) that are not statements of historical fact constitute

“forward-looking statements”

within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section

21E of the Securities Exchange Act of 1934, as amended, notwithstanding that such statements are not specifically identified.

These forward-looking statements relate to expectations or forecasts for future events, including without limitation our earnings,

revenues, expenses or other future financial or business performance or strategies, or the impact of legal or regulatory matters

on our business, results of operations or financial condition.

These statements may be preceded by, followed by or include the

words such as “may,”

Note Regarding Forward-Looking Information

The following

discussion and analysis of the results of operations and financial condition of Propanc Biopharma, Inc., and its wholly-owned

Australian subsidiary, Propanc PTY LTD (“Propanc”

or the “Company”) as of September 30, 2020 for the

three months ended September 30, 2020 and 2019 should be read in conjunction with our unaudited financial statements

and the notes to those unaudited financial statements that are included elsewhere in this Quarterly Report on Form

References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to

“us”, “we”, “our”

and similar terms refer to Propanc.

This Quarterly Report contains

forward-looking statements as that term is defined in the federal securities laws.

The events described in forward-looking

statements contained in this Quarterly Report may not occur.

Generally, these statements relate to business plans or

strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated

benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our

operating results.

The words “may,”

“will,”

2 unchanged sentences

“anticipate,”

“intent,”

“could,”

“would,”

“should,”

“estimate,”

“might,”

“project,”

“plan,”

“predict”

or “continue”

or the negative or other variations thereof or comparable terminology are intended

to identify forward-looking statements.

These forward-looking statements are not guarantees of future performance and are based

on information available to us as of the date of this Quarterly Report and on our current expectations, forecasts and assumptions,

and involve substantial risks and uncertainties.

Actual results may vary materially from those expressed or implied by the forward-looking

statements herein due to a variety of factors, including:

Quarterly Report contains forward-looking statements, including statements regarding, among other things:

ability to continue as a going concern;

anticipated needs for working capital;

ability to successfully develop PRP, our lead product candidate;

ability to reach research and development milestones as planned and within proposed budgets;

current reliance on the equity line and substantial debt financing;

ability to repay current debt in cash and obtain adequate new financing;

dependence on third parties for services;

dependence on key executives;

ability to control costs;

ability to successfully implement our expansion strategies;

ability to successfully develop and market our technologies;

ability to obtain and maintain patent protection;

ability to recruit employees with regulatory, accounting and finance expertise;

impact of government regulations, including United States Food and Drug Administration (the “FDA”) regulations;

impact of any future litigation;

availability of capital;

in economic, business and competitive conditions.

events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including,

without limitation, the risks and uncertainties discussed in Item 1A.

Risk Factors of this Quarterly Report, section captioned

“intend,”

“estimate,”

“continue,”

and their opposites and similar expressions, are intended to identify forward-looking statements.

caution you that these statements are not guarantees of future performance or events and are subject to a number of

uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the

statements and the projections upon which the statements are based.

Factors that may affect our results include, but are not

limited to, the risks and uncertainties set forth under Item 1A.

Risk Factors in the Company’s section captioned

“Risk Factors”

of our Registration Statement on Form S-1, filed with the U.S.

Securities and Exchange Commission (the

“SEC”) on May 13, 2020, and matters described in this Quarterly Report generally.

In light of these risks and

uncertainties, there can be no assurance that the forward-looking statements contained in this Quarterly Report will in fact occur.

We caution you not to place undue reliance on these forward-looking statements.

In addition to the information expressly required

to be included in this Quarterly Report, we will provide such further material information, if any, as may be necessary to make

the required statements, in light of the circumstances under which they are made, not misleading.

All subsequent written and oral

forward-looking statements attributable to our Company or to persons acting on our behalf are expressly qualified in their entirety

by these cautionary statements.

All forward-looking statements included in this Quarterly Report are made only as of the date

of this report or as indicated.

Except as required by law, we do not intend to update or revise any forward-looking statements,

whether as a result of new information, future events or otherwise.

of our Registration Statement on Form S-1, filed with the United States Securities and Exchange

Commission (“SEC”) on November 3, 2020, and matters described in this Quarterly Report generally.

Propanc, our highest priority remains the safety, health and well-being of our employees, their families and our communities and

we remain committed to serving the needs of our customers.

The Covid-19 pandemic is a highly fluid situation and it is not currently

possible for us to reasonably estimate the impact it may have on our financial and operating results.

We will continue to evaluate

the impact of the Covid-19 pandemic on our business as we learn more and the impact of Covid-19 on our industry becomes clearer.

We are maintaining regular contact, via telephone and other electronic means, with our customers and suppliers and do not currently

expect any material change in overall demand for our products.

We are complying with federal, state and local health guidelines

regarding safety procedures.

These procedures include, but are not limited to, social distancing, remote working and teleconferencing.

The extent of the future impact of the COVID-19 pandemic on our business is uncertain and difficult to predict.

Capital markets

economy have also been significantly impacted by the pandemic and it is possible that it could result in an economic

Adverse economic and market conditions as a result of COVID-19 could also adversely affect the demand for our products

and services and may also impact the ability of our customers to satisfy their obligations to us.

If the pandemic continues to

cause significant negative impacts to economic conditions, our results of operations, financial condition and liquidity could

be adversely impacted.

See Part II, Item 1A –

“Risk Factors”.

were incorporated in the state of Delaware as Propanc Health Group Corporation on November 23, 2010.

11 unchanged sentences

involves pro-enzymes, the inactive precursors of enzymes.

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 proenzymes, the inactive precursors of enzymes.

As a result of positive early indications of the anti-cancer effects

of our technology, over the last 24 months we have conducted successful pre-clinical studies on PRP.

Subject to us receiving sufficient

financing, we plan to begin our Investigational Medicinal Product Dossier, study proposal and Investigator’s Brochure in

the first 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 fourth calendar quarter of 2020, and complete the CTA compilation and submit the CTA in the first calendar quarter of 2021.

In January 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 second calendar quarter of 2021, which 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.

As a result of positive

early indications of the anti-cancer effects of our technology, over the last 24 months we have conducted successful pre-clinical

studies on PRP.

Subject to us receiving sufficient financing, we plan to begin our Investigational Medicinal Product Dossier,

study proposal and Investigator’s Brochure in the 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 first calendar quarter of 2021, and complete the CTA compilation

and submit the CTA in the second calendar quarter of 2021.

In the third 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 third calendar quarter of 2021, 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.

date, we have generated no revenue, have no cancer treatment products available to market and have no products which have reached

1 unchanged sentence

We require substantial additional financing to continue to test and commercialize PRP.

August 2019, we announced that we have developed a method to quantify the active ingredients of our lead product candidate, PRP,

in preparation for the company’s First-In-Human (“FIH”) study, planned for 2020.

The work was conducted by Propanc’s

research partner based in Berlin, Germany, who has extensive experience in the development of functional assays for unique bio-therapeutics.

This bioanalytical method development and validation plays a significant role in evaluation and interpretation of the systemic

absorption of PRP in clinical studies including its distribution, and clinical effects throughout the body.

The development of

the bioanalytical assay is also an important step for the clinical development of PRP, as Propanc evaluates sites to conduct the

FIH study in advanced cancer patients, such as the Peter Mac Center, Australia’s largest cancer hospital, which has significant

experience in early stage clinical development.

Validation of the bioanalytical method will be undertaken in 2020.

November 2019, we announced today that our POP1 research and drug discovery program has made significant advancements towards

producing synthetic versions of the two proenzymes, trypsinogen and chymotrypsinogen.

With the aim of producing large quantities

of trypsinogen and chymotrypsinogen for commercial use, exhibiting minimal variation between lots and without sourcing the proenzymes

from animals, the Company is undertaking a challenging research project in collaboration with the universities of Jaén

The two active ingredients are currently naturally derived from animal sources, which combine to form our lead product

candidate, PRP.

Our vision is to produce a backup product candidate to PRP which can further stabilize and enhance the effects

of the proenzymes when administered to patients.

At the research laboratories at the universities of Jaén and Granada,

scientific researchers are in the process of optimizing conditions to achieve high titers of recombinant trypsinogen and chymotrypsinogen

with this expression system.

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

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

Redeemable Promissory Notes

Company entered into a Securities Purchase Agreement whereby an investor (the “First Investor”) purchased from the

Company, for a purchase price of $75,000 (the “First Investor Purchase Price”) a Convertible Redeemable Promissory

Note, in the principal amount of $75,000 (the “First Note”).

The First Investor Purchase Price was funded to the Company

on January 13, 2020.

The First Note is due and payable on January 6, 2021 (the “First Investor Maturity Date”) and

entitles the holder to 8% interest per annum.

The First Note may be converted into shares of the Company’s common stock

at any time during the period beginning on the date that is one hundred eighty (180) days following the date of issuance and ending

on the later of (i) the First Investor Maturity Date and (ii) the date of payment of the default amount, as defined therein.

Company entered into a Securities Purchase Agreement whereby a second investor (the “Second Investor”) purchased from

the Company, for a purchase price of $105,000 (the “Second Purchase Price”) a Convertible Redeemable Promissory Note,

in the principal amount of $110,250 (the “Second Note”).

The Second Purchase Price was funded to the Company on January

The Second Note is due and payable on January 13, 2021 (the “Second Maturity Date”) and entitles the holder

to 8% interest per annum.

The Second Note may be converted into shares of the Company’s common stock at any time during

the period beginning on the date of issuance and ending on the later of (i) the Second Maturity Date and (ii) the date of payment

of the default amount, as defined therein.

Company entered into a Securities Purchase Agreement whereby a third investor (the “Third Investor”) purchased from

the Company, for a purchase price of $54,500 (the “Third Purchase Price”) a Convertible Redeemable Promissory Note,

in the principal amount of $58,000 (the “Third Note”).

The Third Purchase Price was funded to the Company on January

The Third Note is due and payable on January 22, 2021 (the “Third Maturity Date”) and entitles the holder

to 10% interest per annum.

The Third Note may be converted into shares of the Company’s common stock at any time during

the period beginning on the date of issuance and ending on the later of (i) the Third Maturity Date and (ii) the date of payment

of the default amount, as defined therein.

Company entered into a Securities Purchase Agreement whereby a fourth investor (the “Fourth Investor”) purchased from

the Company, for a purchase price of $75,000 (the “Fourth Purchase Price”) a Convertible Redeemable Promissory Note,

in the principal amount of $75,000 (the “Fourth Note”).

The Fourth Purchase Price was funded to the Company on March

The Fourth Note is due and payable on February 19, 2021 (the “Fourth Maturity Date”) and entitles the holder

to 8% interest per annum.

The Fourth Note may be converted into shares of the Company’s common stock at any time during

the period beginning on the date of issuance and ending on the later of (i) the Fourth Maturity Date and (ii) the date of payment

of the default amount, as defined therein.

Company entered into a Securities Purchase Agreement whereby a fourth investor (the “Fifth Investor”) purchased from

the Company, for a purchase price of $43,000 (the “Fifth Purchase Price”) a Convertible Redeemable Promissory Note,

in the principal amount of $43,000 (the “Fifth Note”).

The Fifth Purchase Price was funded to the Company on March

The Fifth Note is due and payable on March 12, 2021 (the “Fifth Maturity Date”) and entitles the holder

to 8% interest per annum.

The Fifth Note may be converted into shares of the Company’s common stock at any time during the

period beginning on the date of issuance and ending on the later of (i) the Fourth Maturity Date and (ii) the date of payment

of the default amount, as defined therein.

Purchase Agreement

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”) 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”).

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”) 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.

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 $0.001 (but can be less than par value).

The Prefunded Warrants shall be exercisable immediately and shall expire

when exercised in full.

Securities Purchase Agreement contains such representations, warranties and covenants as are typical for a transaction of this

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.

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”).

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.

The Series B Warrants contain a provision for Cashless Exercise.

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.

The Series C Warrants have a cash exercise price of $0.20 per share, subject to the

vesting schedule set forth therein, which is based on such Holder’s exercise of the Series B Warrants.

The Series C Warrants

contain provisions for Cashless Exercise and Alternate Cashless Exercise.

and Products in Development

Product Candidate - PRP

is a pharmaceutical composition consisting of two pancreatic proenzymes trypsinogen and chymotrypsinogen for treating cancer.

PRP is a novel approach to prevent recurrence and metastasis of solid tumors by using pancreatic proenzymes that target and eradicate

cancer stem cells in patients suffering from pancreatic, ovarian and colorectal cancers.

PRP is a novel therapy based on the science

that enzymes stimulate biological reactions in the body, especially enzymes secreted by the pancreas and could represent the body’s

primary defense against cancer.

date, preclinical development has been completed for PRP, including pharmacology and safety toxicology studies, process development

activities and bioanalytical method development.

The full-scale GMP (Good Manufacturing Practice) finished product manufacture

of PRP will be completed in preparation for the FIH Phase Ib study.

Validation of the bioanalytical method will also be completed

prior to lodging our first clinical trial application (CTA) which we plan to undertake at the Peter Mac Center in Melbourne, Victoria,

Australia’s biggest cancer hospital.

Propanc Biopharma is currently collaborating with contract research organizations,

manufacturing partners and its consultants to complete the activities prior to preparing the CTA for the Phase Ib study.

Research and Drug Discovery Program –

POP1 joint research and drug discovery program is designed to produce a backup clinical compound to the lead product candidate,

With the aim of producing large quantities of trypsinogen and chymotrypsinogen for commercial use, exhibiting minimal variation

between lots and without sourcing the proenzymes from animals, Propanc Biopharma is undertaking a challenging research project

in collaboration with the Universities of Jaén and Granada, led by research scientist Mr.

Aitor González, supported

Macarena Perán, Ph.D.

Julian Kenyon, M.D.

as joint supervisors, representing the Universities and Propanc,

respectively.

specific objective of the project will be to synthesize by an in vivo system both proenzymes to produce crystalized

proteins that could be maintained for long periods without suffering degradation, even in absence of refrigeration.

be particularly useful for a longer shelf life as well as global distribution of the drug product, particularly in warmer climates

and developing regions where refrigeration may not be available.

POP1 joint research and drug discovery program has produced synthetic recombinant versions of the two proenzymes, trypsinogen

and chymotrypsinogen.

Propanc Biopharma’s joint scientific researchers developed a novel expression system and are in the

process of optimizing conditions to achieve high titers of recombinant trypsinogen and chymotrypsinogen.

Further, the anticancer

effects of the synthetic versions will be tested against the naturally derived proenzymes from bovine origin.

Biopharma recently entered into a second two-year joint research and collaboration agreement with the University of Jaén

who are undertaking the research activities for the POP1 program.

Property Portfolio

Biopharma’s intellectual property portfolio consists of four patent families and sixty-five patents either in force, or

The portfolio covers important discoveries regarding the use of proenzymes and their anti-cancer effects against solid

Another two patent applications are in preparation covering composition of matter and method of use claims.

portfolio covers pharmaceutical compositions for treating cancer comprising trypsinogen and/or chymotrypsinogen and a cancer treatment

method for eradicating cancer stem cells.

In 2018, three patent families entered national phase in key global jurisdictions, which

means the application is under control of the national or regional patent offices for examination as the final step towards receiving

a granted patent in that jurisdiction.

July 2020, a world first patent was granted in Australia for the cancer treatment method patent family.

Presently, there are 29

granted patents and 36 patents under examination in key global jurisdictions relating to the use of proenzymes against solid tumors,

covering the lead product candidate PRP.

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.

On August 22, 2020, the

Company submitted a Form 14C to FINRA to affect a reverse stock split of our common stock at a reverse stock split ratio in the

range of between 1-for-10 and 1-for-1,000 (the “Reverse Stock Split”), which specific ratio will be determined by

our board of directors at its sole discretion prior to the filing the Certificate of Amendment to our Certificate of Incorporation.

The board of directors of the Company and the majority stockholders of the Company approved and authorized the Reverse Stock Split

however it has yet to be effected.

to the period ended, September 30, 2020, the Company, on October 1, 2020, 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 30,000 Euros ($35,145 USD) which shall be paid in four

installment payments 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 shall hire and train a doctoral student for this

project and as such the Company shall 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.

of Operations

following discussion should be read in conjunction with the Company’s unaudited consolidated financial statements

and notes thereto included elsewhere in this Report.

The results discussed below are of the Company and its wholly-owned Australian

subsidiary, Propanc PTY LTD.

Months Ended September 30, 2020, as compared to the Three Months Ended September 30, 2019

the three months ended September 30, 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 decreased to $323,111 for the three months ended September 30, 2020 as compared to $833,414 for the three months ended

September 30, 2019.

This decrease of approximately $510,000 is primarily attributable to a decrease of approximately $94,000 in

stock-based expenses for services, decrease of approximately $107,000 in capital raising costs, decrease in general consulting,

accountancy fee, investor relation fees of approximately $216,000, decrease in insurance expense of approximately $37,000, decrease

of approximately $51,000 in marketing and market research expense, decrease in travel expenses of approximately $26,000, decrease

of approximately $4,000 of other general and administrative expenses and, offset by increase of approximately $25,000 in employee

remuneration expense.

expense decreased by approximately $1,400 to $9,204 for the three months ended September 30, 2020.

The decrease primarily relates

to exchange rate movements over the period when compared to the same period in 2019.

and Development Expenses

and development expenses were $50,846 for the three months ended September 30, 2020, as compared to $65,372 for the three months

ended September 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

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.

Expense/Income

expense decreased to $159,281 for the three months ended September 30, 2020, as compared to $675,225 for the three months ended

September 30, 2019.

Interest expense is primarily comprised of approximately $121,281 of debt discount amortization for the three

months ended September 30, 2020.

This decrease is primarily attributable to a decrease in the issuance of debt containing embedded

derivatives along with the decrease in issuance of convertible notes with discounted debt features which resulted to a decrease

in accretion of put premium of $538,974 during the three months ended September 30, 2020.

Interest expense was further

reduced due to the conversion and repayment of convertible notes during the three months ended September 30, 2020.

in Fair Value of Derivative Liabilities

in fair value of derivative liabilities changed by $454,004, to a gain of $64,952 for the three months ended September 30, 2020,

as compared to a gain of $518,956 for the three months ended September 30, 2019.

This change is primarily attributable to a decrease

in convertible notes with bifurcated embedded conversion option derivatives due to notes conversion and repayment during the three

months ended September 30, 2020.

(loss) on Extinguishment of Debt, net

the three months ended September 30, 2020, notes were converted with principal amounts totaling $75,000 and accrued interest of

$3,000 contained bifurcated embedded conversion option derivatives.

Accordingly, the fair market value of the shares issued was

$134,155 resulting in a loss on extinguishment at the time of conversion of $56,155 and $106,140 of derivative fair value was

recorded as a gain on extinguishment at the time of conversion.

Currency Transaction Gain (Loss)

currency transaction increased to a gain of $1,960 for the three months ended September 30, 2020 as compared with a loss of $(535,150)

for the three months ended September 30, 2019.

The increase in foreign currency transaction gain is primarily attributable to

the increase in exchange rates during the three months ended September 30, 2020, as compared to during the three months ended

September 30, 2019.

Additionally, effective fiscal year 2021, the parent company determined that intercompany loans will not be

repaid in the foreseeable future and thus, per ASC 830-20-35-3, gains and losses from measuring the intercompany balances are

recorded within cumulative translation adjustment, a component of other comprehensive income.

the three months ended September 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 $0 and $108,894, respectively.

loss decreased to $(425,545) for the three months ended September 30, 2020 as compared to a net loss of $(1,491,940) for the three

months ended September 30, 2019.

The change relates to the factors discussed above.

and Capital Resources

Financial Condition

of September 30, 2020, we had total assets of $77,554, comprised primarily of cash of $51,218, GST tax receivable of $2,852, property

and equipment, net, of $5,541 and operating lease right of use asset, net, $15,792.

As compared to 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.

had current liabilities of $3,313,023, primarily comprised of net convertible debt of $1,029,688, accounts payable and accrued

expenses of $1,793,534 and embedded conversion option liabilities of $5,916, as of September 30, 2020.

As compared to June 30,

2020, 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.

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

the three months ended September 30, 2020 we received proceeds from exercise of warrants of $201,044.

have substantial capital resource requirements and have incurred significant losses since inception.

As of September 30, 2020,

we had $51,218 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

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.

and Uses of Cash

For the Three Months

Ended September 30,

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash

Cash Flow from Operating Activities

Net cash used in operating

activities was $179,949 for the three months ended September 30, 2020, due to our net loss of $425,545 offset primarily by

non-cash charges of amortization of debt discount of $121,281, stock-based compensation of $20,718, non-cash interest expense

of $6,750 addback $64,952 of change in fair value of derivatives and $49,985 gain on extinguishment of debt.

Net changes in operating

assets and liabilities totaled $213,306, which is primarily attributable to increase in accounts payable of $53,576, employee

benefit liability of $10,544, accrued expenses of $133,046, and accrued interest of $16,262.

cash used in operating activities was $726,331 for the three months ended September 30, 2019, due to our net loss of $1,491,940

offset primarily by non-cash charges of amortization of debt discount of $104,406, stock-based compensation of $114,904, accretion

of put premium of $538,974, foreign currency transaction loss of $535,150 addback $518,956 of change in fair value of derivatives.

Net changes in operating assets and liabilities totaled $(9,505), which is primarily attributable to increase in accounts payable

of $77,057, employee benefit liability of $9,453, accrued interest of $29,180 offset by decrease in prepaid expenses and other

assets of $37,145 and accrued expenses of $162,676.

Net Cash Flow from Financing Activities

flows provided by financing activities for the three months ended September 30, 2020 were $158,044 as compared to $865,000 for

the three months ended September 30, 2019.

During the three months ended September 30, 2020 we received proceeds from the

exercise of warrants of $201,044 offset by repayments of convertible notes of $43,000.

During the three months ended September

30, 2019, we received proceeds from the sale of convertible promissory notes of $865,000.

Effect of Exchange Rate

effect of the exchange rate on cash resulted in a $6,116 positive adjustment to cash flows in the three months ended September

30, 2020 as compared to a negative adjustment of $(44,940) to cash flows in the three months ended September 30, 2019.

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.

Accounting Estimates

11 unchanged sentences

Currency Translation and Comprehensive Income (Loss) :

Our functional currency is the AUD.

For financial reporting purposes,

the Australian Dollar (“AUD”) has been translated into USD as the 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.

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).

The Company’s wholly owned subsidiary’s functional currency

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.

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).

Effective fiscal year 2021, the parent company determined that intercompany loans will not be

repaid in the foreseeable future and thus, per ASC 830-20-35-3, gains and losses from measuring the intercompany balances are

recorded within cumulative translation adjustment, a component of other comprehensive income.

for Income Taxes:

42 unchanged sentences

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 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 records the put premium as accretion to interest expense to the date of first 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.

and Development Tax Credits :

12 unchanged sentences

The concession is recognized as an income tax benefit, in operations, upon receipt.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic

The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases.

the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue

guidance in ASC 606.

This guidance is effective for interim and annual reporting periods beginning after December 15, 2018.

Company adopted this guidance effective July 1, 2019.

July 1, 2019, the Company adopted ASU No.

2016-02, applying the package of practical expedients to leases that commenced before

the effective date whereby the Company elected to not reassess the following:

(i) whether any expired or existing contracts contain

(ii) initial direct costs for any existing leases.

For contracts entered into on or after the effective date, at the

inception of a contract the Company assessed whether the contract is, or contains, a lease.

The Company’s assessment is

(1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially

all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of

The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone

price to determine the lease payments.

lease ROU assets 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 use 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 in the condensed consolidated statements of operations.

Accounting Pronouncements

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statements included in this Quarterly Report for a discussion of recently issued and adopted accounting pronouncements.

of Operations

the Three Months Ended March 31, 2020, as compared to the Three Months Ended March 31, 2019

the three months ended March 31, 2020 and 2019 we did not generate any revenue because we are a development-stage healthcare company

and are currently undertaking research and development activities in preparation to begin our clinical trials and no sales were

generated in this period.

Administration

expenses increased by $30,271 to $542,093 for the three months ended March 31, 2020, as compared to $511,822 for the three months

ended March 31, 2019.

This increase is primarily attributable to an increase of approximately $32,000 in general consulting and

accountancy fee, increase of approximately $114,000 in marketing expense, increase of approximately $36,000 of in general legal

and intellectual property legal expense, increase of approximately $24,000 in employee remuneration expense as a result of a new

employee and increases in salaries, offset by decreases in stock-based expenses of approximately $44,000, decrease in investor

relation expenses of approximately $49,000, decrease in insurance expense of approximately $21,000, decrease in public company

filing fees of approximately $23,000, decrease in travel and entertainment of approximately $27,000, decrease of approximately

$8,000 employee leave accruals and decrease of approximately $4,000 of other general and administrative expenses.

expenses increased by approximately $343 to $7,591 for the three months ended March 31, 2020, as compared to $7,248 for the three

months ended March 31, 2019.

The increase primarily relates to rent adjustment on under paid rent of $1,100 in the three months

ended March 31, 2020.

and Development Expenses

and development expenses increased by approximately $4,829 to $57,484 for the three months ended March 31, 2020, as compared to

$52,655 for the three months ended March 31, 2019.

The increase 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.

Expense/Income

expense has increased by approximately $194,995 to $384,804 for the three months ended March 31, 2020, as compared to $189,809

for the three months ended March 31, 2019.

Interest expense is primarily comprised of approximately $230,783 of debt discount

amortization and approximately $138,417 accretion of debt premium.

This increase is primarily attributable to a decrease in the

issuance of debt containing embedded derivatives resulting in lower amortization of debt discount, along with a decrease

in issuance of convertible notes with discounted debt features during the three months ended March 31, 2020.

in Fair Value of Derivative Liabilities

in fair value of derivative liabilities increased by approximately $437,776 to a gain of $454,442 for the three months ended March

31, 2020, as compared to a gain of $16,666 for the three months ended March 31, 2019.

This increase in gain is primarily attributable

to an increase in the volatility of the prices of our shares of common stock along with the continuous decrease in stock prices

during the three months ended March 31, 2020, which resulted in the recognition of gain from change in fair value.

(loss) on Debt Settlements, Net

were no debt settlements during the three months ended March 31, 2020 and as a result there were no gains or (losses) on settlement

of debt during that period, as compared with a loss of $(89) for the three months ended March 31, 2019.

(loss) on Extinguishment of Debt, net

During the three months

ended March 31, 2020, notes totaling $164,400 which contained bifurcated embedded conversion option derivatives plus

accrued interest of $8,440 were converted.

Accordingly, the fair market value of the shares issued was $375,939 resulting

in a loss on extinguishment at the time of conversion of $203,099, $263,934 of derivative fair value was recorded as a gain on

extinguishment at the time of conversion for a net gain of $60,835.

During the three months ended March 31, 2019, the Company

repaid a convertible note which were treated as derivative instruments, incurred penalties of $22,048 and recorded a gain on the

removal of the derivatives of $38,726.

Currency Transaction Gain (Loss)

currency transaction gain (loss) decreased by approximately $2,260,520 to a loss of $(2,135,421) for the three months ended March

31, 2020, as compared to a gain of $125,099 for the three months ended March 31, 2019.

The increase in foreign currency transaction

loss is primarily attributable to greater fluctuation in exchange rates in the three months ended March 31, 2020, as compared

to the three months ended March 31, 2019.

The decrease was also due to the recognition of an exchange loss of approximately

$1,959,000 on intercompany loans made by the parent to the subsidiary which have not been repaid as at March 31, 2020.

loss increased by approximately $2,003,806 to $2,585,662 for the three months ended March 31, 2020, as compared to a net loss

of $581,856 for the three months ended March 31, 2019.

The increase is primarily attributable to foreign currency transaction

the Nine months ended March 31, 2020, as compared to the Nine Months Ended March 31, 2019

the nine months ended March 31, 2020 and 2019 we did not generate any revenue because we are a development-stage healthcare company

and are currently undertaking research and development activities in preparation to begin our clinical trials and no sales were

generated in this period.

Administration

expenses increased by $1,198,462 to $2,751,478 for the nine months ended March 31, 2020, as compared to $1,553,016 for the nine

months ended March 31, 2019.

This increase is primarily attributable to an increase of approximately $1,074,000 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 $71,000, an increase in insurance expense of approximately $50,000, an increase of approximately $152,000

in marketing and market research expense, and an increase of approximately $49,000 in employee remuneration expense as a result

of a new employee and increases in salaries, offset by decreases in in investor relations based expense of approximately $19,000,

a decrease of approximately $50,000 in general legal and intellectual property legal expense, a decrease of approximately $46,000

in public company filing fees, a decrease of $18,000 in travel expense and a decrease of approximately $176,000 in employee leave

accruals which is a result of an adjustment of approximately $176,000 to employee leave accruals in the nine months ended March

31, 2019 in order to comply with Australian leave entitlements and decrease of approximately $8,000 of other general and administrative

expenses increase by approximately $4,040 to $25,815 for the nine months ended March 31, 2020, as compared to $21,775 for the

nine months ended March 31, 2019.

The increase primarily relates to rent adjustment on under paid rent of $2,200 and property

taxed of $1,500 in the nine months ended March 31, 2020.

and Development Expenses

and development expenses decreased by approximately $80,732 to $122,893 for the nine months ended March 31, 2020, as compared

to $203,625 for the nine months ended March 31, 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.

Expense/Income

expense has increased by approximately $196,775 to $1,506,111 for the nine months ended March 31, 2020, as compared to $1,309,336

for the nine months ended March 31, 2019.

Interest expense is primarily comprised of approximately $537,868 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 nine months ended March 31, 2020.

in Fair Value of Derivative Liabilities

in fair value of derivative liabilities decrease by approximately $2,213,354 to a gain of $298,374 for the nine months ended March

31, 2020, as compared to a loss of $(1,914,980) for the nine months ended March 31, 2019.

This decrease 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 nine

months ended March 31, 2020, which resulted in the recognition of a smaller loss from change in fair value.

(loss) on Debt Settlements, Net

were no debt settlements during the nine months ended March 31, 2020 and as a result there were no gains or (losses) on settlement

of debt during that period, as compared with a gain of $14,200 for the nine months ended March 31, 2019.

(loss) on Extinguishment of Debt, net

During the nine months ended March 31, 2020,

notes totaling $211,000 which contained bifurcated embedded conversion option derivatives plus accrued interest of $8,440.

Accordingly, the fair market value of the shares issued was $446,950 resulting in a loss on extinguishment at the time of

conversion of $227,511, $308,522 of derivative fair value was recorded as a gain on extinguishment at the time of conversion for

a net gain of $81,011.

During the nine months ended March 31, 2019, the Company repaid three convertible notes which were treated

as derivative instruments, incurred penalties of $92,134 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 $359,726 as

the note and derivative fair value exceeded the fair value of shares converted.

Currency Transaction Gain (Loss)

currency transaction gain (loss) increased by approximately $1,564,197 to a loss of $(2,053,010) for the nine months ended March

31, 2020, as compared to a loss of $(488,813) for the nine months ended March 31, 2019.

The increase in foreign currency transaction

loss is primarily attributable to greater fluctuation in exchange rates in the nine months ended March 31, 2020, as compared to

the nine months ended March 31, 2019.

This transaction loss includes the loss from intercompany balances.

loss increased by approximately $1,787,881 to $5,944,711 for the nine months ended March 31, 2020, as compared to a net loss of

$4,156,830 for the nine months ended March 31, 2019.

The increase is primarily attributable an increase in operating loss of approximately

$1,122,000 and a decrease in the gain on extinguishment of debt of approximately $1,123,000 and a decrease in the loss

for change in fair value of derivative of approximately $2,213,000.

and Capital Resources

Financial Condition

of March 31, 2020, we had total assets of $63,938, comprised primarily of cash of $26,957, GST tax receivable of $4,543, prepaid

expenses and other current assets of $0, property and equipment, net, of $5,648, and operating lease right of use asset, net,

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.

had current liabilities of $4,890,800, primarily comprised of net convertible debt of $2,711,173, accounts payable and accrued

expenses of $1,476,547 and embedded conversion option liabilities of $318,368, as of March 31, 2020.

This compares with current

liabilities as of June 30, 2019, of $4,402,888, primarily comprised of net convertible debt of $1,657,377, accounts payable and

accrued expenses of $1,640,379, employee benefit liability of $323,837 and embedded conversion option liabilities of $698,264.

had non-current liabilities of $20,045, comprised of operating lease liability as of March 31, 2020.

This compares with non-current

liabilities as of June 30, 2019, of $Nil.

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

the nine months ended March 31, 2020, we borrowed net amounts of approximately $1,465,000 from the sale of convertible promissory

notes during such period with various maturity dates ranging from July 3, 2020 to March 12, 2021.

have substantial capital resource requirements and have incurred significant losses since inception.

As of March 31, 2020, we

had $26,957 in cash.

We depend upon debt and/or equity financing to fund our ongoing operations and to execute our current business

Such capital requirements are in excess of what we have in available cash and for which we currently have commitments.

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

and Uses of Cash

the Nine months ended

Net cash used in operating

$ (1,349,931 )

$ (1,793,805 )

Net cash used in investing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash

cash used in operating activities was $1,349,931 for the nine months ended March 31, 2020, as compared to $1,793,805 for the nine

months ended March 31, 2019.

This decrease is primarily due to a decrease in change in fair value of derivative liabilities of

approximately $2,213,000, decrease in accrued expenses of approximately $150,000, decrease in employment related liabilities of

approximately $162,000 offset by increases primarily due to increase in stock-based compensation of $1,074,000, changes in foreign

currency transaction loss of approximately $1,564,000, and increase in gain on extinguishment of debt of approximately

flows provided by financing activities for the nine months ended March 31, 2020 were $1,465,250, as compared to $1,920,159 for

the nine months ended March 31, 2019.

The $1,465,250 resulted from the issuance of $1,591,250 of convertible notes net of $126,000

in issue costs.

During the nine months ended March 31, 2019, we received net proceeds from the sale of convertible promissory

notes of $1,175,150 and sale of common stock of $1,016,979 offset by repayments of convertible notes of $272,000.

effect of the exchange rate on cash resulted in a $90,756 negative adjustment to cash flows in the nine months ended March 31,

2020, as compared to a negative adjustment of $36,191 to cash flows in the nine months ended March 31, 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.

Concern Qualification

We did not generate any revenue for the nine months ended March

31, 2020 and 2019 and have incurred significant losses and cash used in operations, and such losses and use of cash are expected

did not generate any revenue for the three months ended September 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

In addition, we have negative working capital and convertible debt that is past maturity that we are currently negotiating

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The foregoing raises substantial doubt about our ability to continue as a going

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.

Management is currently seeking additional funds to operate our business, primarily through the issuance of equity

and/or debt securities for cash.

No assurance can be given that financing will be available or, if available, that it will be in

amounts or 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 condensed consolidated financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

The “Going Concern Qualification”

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.

is currently seeking additional funds, primarily through the issuance of equity and/or debt securities for cash to operate our

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.

“Going Concern Qualification”

might make it substantially more difficult to raise capital.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements