Propanc Biopharma, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. The following audited consolidated financial statements of Propanc Biopharma, Inc. are included in this Annual Report: 32 PROPANC BIOPHARMA, INC. INDEX TO FINANCIAL STATEMENTS Page Consolidated Financial Statements for the Fiscal Years Ended June 30, 2022 and 2021 Report of Independent Registered Public Accounting Firm (PCAOB Firm ID. 106 ) F-2 Consolidated Balance Sheets as of June 30, 2022 and 2021 F-4 Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended June 30, 2022 and 2021 F-5 Consolidated Statements of Changes in Stockholders’ Deficit for the years ended June 30, 2022 and 2021 F-6 Consolidated Statements of Cash Flows for the years ended June 30, 2022 and 2021 F-7 Notes to Consolidated Financial Statements F-8 F- 1 Report of Independent Registered Public Accounting Firm To the Stockholders’ and the Board of Directors of: Propanc Biopharma, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Propanc Biopharma, Inc. and Subsidiary (the “Company”) as of June 30, 2022 and 2021, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ deficit, and cash flows, for each of the two years in the period ended June 30, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2022 and 2021, and the consolidated results of its operations and its cash flows for each of the two years in the period ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has a net loss of $2,658,087 and net cash used in operating activities of $1,436,304 for the fiscal year ended June 30, 2022. The Company has a working capital deficit, stockholder’s deficit, and accumulated deficit of $3,047,951, $3,023,649, and $61,557,893 respectively, at June 30, 2022. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s Plan regarding these matters is also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 2295 NW Corporate Blvd., Suite 240 • Boca Raton, FL 33431-7328 Phone: (561) 995-8270 • Toll Free: (866) CPA-8500 • Fax: (561) 995-1920 www.salbergco.com • info@salbergco.com Member National Association of Certified Valuation Analysts • Registered with the PCAOB Member CPAConnect with Affiliated Offices Worldwide • Member AICPA Center for Audit Quality F- 2 Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Derivative Liabilities As noted in footnote 1 “Derivative Instruments” and as described in Footnote 12 “Derivative Financial Instruments and Fair Value Measurements” to the consolidated financial statements, the Company recorded derivative transactions that resulted primarily in a net derivative expense in fiscal 2022 from change in fair value of derivative liabilities of $99,111, and derivative liabilities of $151,262 at June 30, 2022. We identified the evaluation of instruments and contracts to determine whether there are derivatives to be recorded, the analysis of the accounting treatment and presentation for derivative transactions and the valuation of derivatives as critical audit matters. Auditing management’s analysis of the above critical audit matters was complex and involved a high degree of subjectivity. The primary procedures we performed to address these critical audit matters included (a) Reviewed and tested management’s conclusions as to whether certain instruments or contracts qualified for derivative treatment by comparing management’s analysis and conclusions to authoritative and interpretive literature, (b) Compared the accounting treatment and presentation to that described by the authoritative and interpretive literature, (c) Tested management’s process for valuing derivatives by comparing it to generally accepted methodologies for valuing derivatives, (d) Tested management’s valuation of the derivatives by testing assumptions and data used in the valuation model including the term, volatility and interest rate, and (e) Recomputed the derivative valuations. /s/ Salberg & Company, P.A. SALBERG & COMPANY, P.A . We have served as the Company’s auditor since 2011 Boca Raton, Florida September 28, 2022 F- 3 PROPANC BIOPHARMA, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS June 30, 2022 June 30, 2021 ASSETS CURRENT ASSETS: Cash $ 4,067 $ 2,255 GST tax receivable 2,342 4,341 Prepaid expenses and other current assets 8,621 - TOTAL CURRENT ASSETS 15,030 6,596 Security deposit - related party 2,075 2,250 Operating lease right-of-use assets, net - related party 62,523 - Property and equipment, net 2,023 4,255 TOTAL ASSETS $ 81,651 $ 13,101 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES: Accounts payable $ 943,023 $ 1,002,335 Accrued expenses and other payables 466,115 892,151 Convertible notes and related accrued interest, net of discounts and premiums 984,260 624,583 Operating lease liability - related party, current portion 20,605 - Embedded conversion option liabilities 151,262 54,220 Due to former director - related party 30,746 33,347 Loan from former director - related party 51,171 55,500 Employee benefit liability 415,799 418,538 TOTAL CURRENT LIABILITIES 3,062,981 3,080,674 NON-CURRENT LIABILITIES: Operating lease liability - long-term portion - related party 42,319 - TOTAL NON-CURRENT LIABILITIES 42,319 - TOTAL LIABILITIES $ 3,105,300 $ 3,080,674 Commitments and Contingencies (See Note 9) - - STOCKHOLDERS’ DEFICIT: Preferred stock, 1,500,005 shares authorized, $ 0.01 par value: Series A preferred stock, $ 0.01 par value; 500,000 shares authorized; 500,000 shares issued and outstanding as of June 30, 2022 and 2021 $ 5,000 $ 5,000 Series B preferred stock, $ 0.01 par value; 5 shares authorized; 1 share issued and outstanding as of June 30, 2022 and 2021 - - Preferred stock value Common stock, $ 0.001 par value; 3,000,000,000 shares authorized; 220,350,921 and 14,055,393 shares issued and outstanding as of June 30, 2022 and 2021, respectively 220,351 14,056 Common stock issuable ( 19,597,024 and 59 shares as of June 30, 2022 and 2021, respectively) 19,597 - Additional paid-in capital 57,124,982 54,074,110 Subscription receivable ( 23,758 ) - Accumulated other comprehensive income 1,234,549 1,085,204 Accumulated deficit ( 61,557,893 ) ( 58,199,466 ) Treasury stock ( 1 share) ( 46,477 ) ( 46,477 ) TOTAL STOCKHOLDERS’ DEFICIT ( 3,023,649 ) ( 3,067,573 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 81,651 $ 13,101 The accompanying notes are an integral part of these consolidated financial statements. F- 4 PROPANC BIOPHARMA, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the years ended June 30, 2022 2021 REVENUE Revenue $ - $ - OPERATING EXPENSES Administration expenses 1,706,452 1,553,075 Occupancy expenses – related party 28,366 28,112 Research and development 256,052 230,956 TOTAL OPERATING EXPENSES 1,990,870 1,812,143 LOSS FROM OPERATIONS ( 1,990,870 ) ( 1,812,143 ) OTHER INCOME (EXPENSE) Interest expense ( 568,798 ) ( 449,457 ) Interest income 5,613 1 Change in fair value of derivative liabilities ( 99,111 ) ( 8,186 ) Gain from settlement of debt, net - 49,319 Gain (loss) on extinguishment of debt, net ( 17,503 ) 50,607 Foreign currency transaction gain (loss) ( 42,395 ) 30,497 TOTAL OTHER EXPENSE, NET ( 722,194 ) ( 327,219 ) LOSS BEFORE TAXES ( 2,713,064 ) ( 2,139,362 ) Tax benefit 54,977 113,415 NET LOSS $ ( 2,658,087 ) $ ( 2,025,947 ) Deemed Dividend ( 700,340 ) ( 391,749 ) NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ ( 3,358,427 ) $ ( 2,417,696 ) BASIC AND DILUTED NET LOSS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS $ ( 0.05 ) $ ( 0.80 ) BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 68,218,701 3,032,612 NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ ( 3,358,427 ) $ ( 2,417,696 ) OTHER COMPREHENSIVE INCOME (LOSS) Unrealized foreign currency translation gain (loss) 149,345 ( 182,467 ) TOTAL OTHER COMPREHENSIVE INCOME (LOSS) 149,345 ( 182,467 ) TOTAL COMPREHENSIVE LOSS $ ( 3,209,082 ) $ ( 2,600,163 ) The accompanying notes are an integral part of these consolidated financial statements. F- 5 PROPANC BIOPHARMA, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE YEARS ENDED JUNE 30, 2022 AND 2021 No. of Shares Value No. of Shares Value No. of Shares Value No. of Shares Value Paid-in Capital Subscription Receivable Accumulated Deficit Comprehensive Income Treasury Stock Stockholders’ Deficit Preferred Stock Common Stock Accumulated Series A Series B Common Stock Issuable Additional Other Total No. of Shares Value No. of Shares Value No. of Shares Value No. of Shares Value Paid-in Capital Subscription Receivable Accumulated Deficit Comprehensive Income Treasury Stock Stockholders’ Deficit Balance at June 30, 2020 500,000 $ 5,000 1 $ - 258,120 $ 258 - $ - $ 50,913,893 $ - $ ( 55,781,770 ) $ 1,267,671 $ ( 46,477 ) $ ( 3,641,425 ) Issuance of common stock for conversion of convertible debt and accrued interest - - - - 8,786,113 8,787 - - 1,230,288 - - - - 1,239,075 Reversal of common stock issuable due to cancellation of conversions of convertible debt and accrued interest - - - - ( 24,427 ) ( 24 ) - - ( 19,992 ) - - - - ( 20,016 ) Issuance of common stock for services - - - - 805,646 806 - - 124,766 - - - - 125,572 Issuance of common stock for exercise of warrants - - - - 29,820 29 - - 776,015 - - - - 776,044 Issuance of common stock for cashless exercise of warrants - - - - 4,199,979 4,200 ( 4,200 ) - - - - Reclassification of put premium upon debt conversion - - - - - - - - 590,504 - - - - 590,504 Reversal of put premium upon cancellation of conversions of convertible debt - - - - - - - - ( 11,785 ) - - - - ( 11,785 ) Stock based compensation in connection with stock option grants - - - - - - - - 82,872 - - - - 82,872 Vested restricted stock units - - - - - - 59 - - - - - - - Fractional difference due to the reverse stock-split - - - - 142 - - - - - - - - - Foreign currency translation loss - - - - - - - - - - - ( 182,467 ) - ( 182,467 ) Deemed dividend upon alternate cashless exercise of warrants - - - - - - - - 391,749 - ( 391,749 ) - - - Net loss for the fiscal year ended June 30, 2021 - - - - - - - - - - ( 2,025,947 ) - - ( 2,025,947 ) Balance at June 30, 2021 500,000 $ 5,000 1 $ - 14,055,393 $ 14,056 59 $ - $ 54,074,110 $ - $ ( 58,199,466 ) $ 1,085,204 $ ( 46,477 ) $ ( 3,067,573 ) Issuance of common stock for cash - - - - 25,663,288 25,663 - - 97,380 ( 23,758 ) - - - 99,285 Issuance of common stock for offering cost - - - - 1,000,000 1,000 - - ( 1,000 ) - - - - - Issuance of common stock for conversion of convertible debt, conversion fee and accrued interest - - - - 96,959,620 96,960 7,326,007 7,326 552,839 - - - - 657,125 Issuance of common stock for services and accrued expenses - - - - 25,857,279 25,857 12,270,958 12,271 724,937 - - - - 763,065 Issuance of common stock for exercise of warrants - - - - 15,625 15 - - 624,986 - - - - 625,001 Issuance of common stock for alternate cashless exercise of warrants - - - - 56,799,716 56,800 - - ( 56,800 ) - - - - - Reclassification of put premium upon debt conversion - - - - - - - - 335,677 - - - - 335,677 Stock based compensation in connection with stock option grants - - - - - - - - 72,513 - - - - 72,513 Foreign currency translation gain - - - - - - - - - - - 149,345 - 149,345 Deemed dividend upon alternate cashless exercise of warrants - - - - - - - - 700,340 - ( 700,340 ) - - - Net loss for the fiscal year ended June 30, 2022 - - - - - - - - - - ( 2,658,087 ) - - ( 2,658,087 ) Balance at June 30, 2022 500,000 $ 5,000 1 $ - 220,350,921 $ 220,351 19,597,024 $ 19,597 $ 57,124,982 $ ( 23,758 ) $ ( 61,557,893 ) $ 1,234,549 $ ( 46,477 ) $ ( 3,023,649 ) The accompanying notes are an integral part of these consolidated financial statements. F- 6 PROPANC BIOPHARMA, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended June 30, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 2,658,087 ) $ ( 2,025,947 ) Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: Issuance and amortization of common stock for services 314,626 125,572 Foreign currency transaction (gain) loss 42,395 ( 30,497 ) Depreciation expense 1,993 1,993 Amortization of debt discounts 47,971 136,527 Change in fair value of derivative liabilities 99,111 8,186 (Gain) loss on extinguishment of debt, net 17,503 ( 50,607 ) Gain from settlement of debt, net - ( 49,319 ) Stock option and restricted stock expense 72,513 82,872 Non-cash interest expense 2,250 16,500 Amortization of right-of-use assets 3,678 - Accretion of put premium 452,308 200,410 Changes in Assets and Liabilities: GST receivable 1,660 ( 2,147 ) Prepaid expenses and other assets ( 8,620 ) - Accounts payable 18,870 178,311 Deferred rent - ( 3,695 ) Employee benefit liability 29,907 33,134 Accrued expenses and other payables 65,017 152,861 Accrued interest 63,878 80,582 Operating lease liability ( 3,277 ) - NET CASH USED IN OPERATING ACTIVITIES ( 1,436,304 ) ( 1,145,264 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from convertible promissory notes, net of original issue discounts and issue costs 766,500 325,000 Repayments of convertible promissory notes - ( 43,000 ) Proceeds from the sale of common stock 99,285 - Proceeds from the exercise of warrants 625,001 776,044 NET CASH PROVIDED BY FINANCING ACTIVITIES 1,490,786 1,058,044 Effect of exchange rate changes on cash ( 52,670 ) 22,468 NET INCREASE (DECREASE) IN CASH 1,812 ( 64,752 ) CASH AT BEGINNING OF YEAR 2,255 67,007 CASH AT END OF YEAR $ 4,067 $ 2,255 Supplemental Disclosure of Cash Flow Information Cash paid during the year: Interest $ 2,392 $ 13,621 Income Tax $ - $ - Supplemental Disclosure of Non-Cash Investing and Financing Activities Common stock issued for offering cost applied against proceeds received $ 20,000 $ - Subscription receivable $ 23,758 $ - Reduction of put premium related to conversions of convertible notes $ 335,677 $ 590,504 Conversion of convertible notes and accrued interest to common stock $ 635,303 $ 1,142,205 Discounts related to derivative liability $ - $ - Operating lease right-of-use asset and operating lease liability recorded pursuant to ASC 842 $ 66,201 $ - Reversal of common stock issuable and put premium due to cancellation of conversions of convertible debt and accrued interest $ - $ 31,801 Accounts payable reclass to convertible notes $ - $ 25,000 Common stock issued for accrued services $ 448,440 $ - Deemed dividend upon alternate cashless exercise of warrants $ 700,340 $ 391,749 The accompanying notes are an integral part of these consolidated financial statements. F- 7 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Nature of Operations Propanc Biopharma, Inc. (the “Company,” “we,” “us” or “our”) was originally incorporated in Melbourne, Victoria Australia on October 15, 2007 as Propanc PTY LTD, and continues to be based in Camberwell, Victoria Australia. Since its inception, substantially all of the operations of the Company have been focused on the development of new cancer treatments targeting high-risk patients, particularly cancer survivors, who need a follow-up, non-toxic, long-term therapy designed to prevent the cancer from returning and spreading. The Company anticipates establishing global markets for its technologies. Our lead product candidate, which we refer to as PRP, is an enhanced pro-enzyme formulation designed to enhance the anti-cancer effects of multiple enzymes acting synergistically. It is currently in the preclinical phase of development. On November 23, 2010, the Company was incorporated in the state of Delaware as Propanc Health Group Corporation. In January 2011, to reorganize the Company, we acquired all of the outstanding shares of Propanc PTY LTD on a one-for-one basis making it a wholly-owned subsidiary of the Company. On 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 to the European Medicines Agency as a small and medium-sized enterprise. As of June 30, 2022, there has been no activity within this entity. Effective April 20, 2017, the Company changed its name to “Propanc Biopharma, Inc.” to better reflect the Company’s stage of operations and development. In July 2020, a world first patent was granted in Australia for the cancer treatment method patent family. Presently, there are 43 granted, allowed, or accepted patents and 22 patents filed, or under examination in key global jurisdictions relating to the use of proenzymes against solid tumors, covering the lead product candidate PRP. The Company hopes to capture and protect additional patentable subject matter based on the Company’s field of technology relating to pharmaceutical compositions of proenzymes for treating cancer by filing additional patent applications as it advances its lead product candidate, PRP, through various stages of development. On November 17, 2020, the Company effected a one-for-one thousand (1:1,000) reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”). 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. On May 18, 2022, the board of directors of the Company approved and authorized, and the holders of a majority in interest of the Company’s voting capital stock approved by written consent, in accordance with Section 228 of the Delaware General Corporation Law, for the Company to file a Certificate of Amendment to its Certificate of Incorporation (the “Certificate”) with the Secretary of State of the State of Delaware, which increased the Company’s authorized capital stock. The Certificate increased the number of authorized shares of the Company’s common stock, par value $ 0.001 per share, from 1,000,000,000 to 3,000,000,000 . The number of authorized shares of preferred stock remains at 1,500,005 , such that the total number of shares of all classes and series the Company is authorized to issue is 3,001,500,005 shares. The Certificate was filed and became effective on July 6, 2022. This increase is presented retroactively on the consolidated balance sheet. Principles of Consolidation The consolidated financial statements include the accounts of Propanc Biopharma, Inc., the parent entity, and its wholly-owned subsidiary, Propanc PTY LTD. All inter-company balances and transactions have been eliminated in consolidation. Propanc (UK) Limited was an inactive wholly-owned subsidiary through June 30, 2022. Use of Estimates The preparation of financial statements in conformity with the accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates in the accompanying consolidated financial statements include the estimates of useful lives for depreciation, valuation of the operating lease liability and related right-of-use asset, valuation of derivatives, 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. F- 8 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Foreign Currency Translation and Other Comprehensive Income (Loss) The Company’s wholly owned subsidiary’s functional currency is the Australian dollar (AUD). For financial reporting purposes, the Australian dollar has been translated into the Company’s reporting currency which is the United States dollar ($) and/or (USD). Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Equity transactions are translated at each historical transaction date spot rate. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity (deficit) as “Accumulated other comprehensive income (loss).” Gains and losses resulting from foreign currency transactions are included in the statements of operations and comprehensive income (loss) as a component of other comprehensive income (loss). There have been no significant fluctuations in the exchange rate for the conversion of Australian dollars to USD after the balance sheet date. Other Comprehensive Income (Loss) for all periods presented includes only foreign currency translation gains (losses). Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the consolidated balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the consolidated results of operations as incurred. Effective fiscal year 2021, the parent company determined that the intercompany loans will not be repaid in the foreseeable future and thus, per ASC 830-20-35-3, gains and losses from measuring the intercompany balances are recorded within cumulative translation adjustment, a component of accumulated other comprehensive income (loss). Prior to July 1, 2020, the Company recorded the foreign currency transaction gains and losses from measuring the intercompany balances as a component of other income (expenses) titled foreign currency transaction gain (loss). For the year ended June 30, 2022 and 2021, the Company recognized an exchange gain (loss) of approximately $ 1,289,000 and $ 1,005,000 , on intercompany loans made by the parent to the subsidiary which have not been repaid as of June 30, 2022. As of June 30, 2022 and 2021, the exchange rates used to translate amounts in Australian dollars into USD for the purposes of preparing the consolidated financial statements were as follows: SCHEDULE OF TRANSLATION EXCHANGE RATES June 30, 2022 June 30, 2021 Exchange rate on balance sheet dates USD : AUD exchange rate 0.6915 0.7500 Average exchange rate for the period USD : AUD exchange rate 0.7253 0.7473 Change in Accumulated Other Comprehensive Income (Loss) by component during the years ended June 30, 2022 and 2021 were as follows: SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME LOSS Foreign Currency Items: Beginning balance, June 30, 2020 $ 1,267,671 Foreign currency translation gain 182,467 Balance, June 30, 2021 1,085,204 Foreign currency translation gain 149,345 Ending balance, June 30, 2022 $ 1,234,549 Fair Value of Financial Instruments and Fair Value Measurements The Company measures its financial assets and liabilities in accordance with US GAAP. For certain financial instruments, including cash and cash equivalents, receivables, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities. Amounts recorded for notes payable, net of discount, and loans payable also approximate fair value because current interest rates available for debt with similar terms and maturities are substantially the same. The Company follows accounting guidance for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). F- 9 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Also see Note 12 - Derivative Financial Instruments and Fair Value Measurements. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity of three months or less with financial institutions, and bank overdrafts. Bank overdrafts, as applicable, are reflected as a current liability on the balance sheets. There were no cash equivalents as of June 30, 2022 or June 30, 2021. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals, and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the declining balance method. The depreciable amount is the cost less its residual value. The estimated useful lives are as follows: SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVE Machinery and equipment - 5 years Furniture - 7 years Patents Patents are stated at cost and amortized on a straight-line basis over the estimated future periods if and once the patent has been granted by a regulatory agency. However, the Company will expense any patent costs as long as we are in the startup stage. Accordingly, as the Company’s products are not currently approved for market, all patent costs incurred from 2013 through June 30, 2022 were expensed immediately. This practice of expensing patent costs immediately ends when a product receives market authorization from a government regulatory agency. Impairment of Long-Lived Assets In accordance with ASC 360-10, “Long-lived assets,” which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Employee Benefit/Liability Liabilities arising in respect of wages and salaries, accumulated annual leave, accumulated long service leave and any other employee benefits expected to be settled within twelve months of the reporting date are measured based on the employee’s remuneration rates applicable at the reporting date. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. All employee liabilities are owed within the next twelve months. F- 10 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Australian Goods and Services Tax (“GST”) Revenues, expenses and balance sheet items are recognized net of the amount of GST, except payable and receivable balances which are shown inclusive of GST. The GST incurred is payable on revenues to, and recoverable on purchases from, the Australian Taxation Office. Cash flows are presented in the statements of cash flow on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. As of June 30, 2022 and 2021, the Company was owed $ 2,342 and $ 4,341 , respectively, from the Australian Taxation Office. These amounts were fully collected subsequent to the balance sheet reporting dates. Derivative Instruments ASC Topic 815, Derivatives and Hedging (“ASC Topic 815”), establishes accounting and reporting standards for derivative instruments and for hedging activities by requiring that all derivatives be recognized in the balance sheet and measured at fair value. Gains or losses resulting from changes in the fair value of derivatives are recognized in earnings. On the date of conversion or payoff of debt, the Company records the fair value of the conversion shares, removes the fair value of the related derivative liability, removes any discounts and records a net gain or loss on debt extinguishment. On July 1, 2019 the Company adopted ASU 2017-11 under which down-round Features in Financial Instruments will no longer cause derivative treatment. The Company applied the modified prospective method of adoption. There were no cumulative effects on adoption. Convertible Notes With Variable Conversion Options The Company has entered into convertible notes, some of which contain variable conversion options, whereby the outstanding principal and accrued interest may be converted, by the holder, into common shares at a fixed discount to the price of the common stock at or around the time of conversion. The Company treats these convertible notes as stock settled debt under ASC 480, “ Distinguishing Liabilities from Equity ” and measures the fair value of the notes at the time of issuance, which is the result of the share price discount at the time of conversion and records the put premium as interest expense. Income Taxes The Company is governed by Australia and United States income tax laws, which are administered by the Australian Taxation Office and the United States Internal Revenue Service, respectively. The Company follows ASC 740 “ Accounting for Income Taxes ,” when accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. The Company follows ASC 740, Sections 25 through 60, “ Accounting for Uncertainty in Income Taxes .” These sections provide detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a “more-likely-than-not” recognition threshold at the effective date to be recognized upon the adoption of ASC 740 and in subsequent periods. Research and Development Costs and Tax Credits In accordance with ASC 730-10, “Research and Development-Overall,” research and development costs are expensed when incurred. Total research and development costs for the fiscal years ended June 30, 2022 and 2021 were $ 256,052 and $ 230,956 , respectively. The Company may apply for research and development tax concessions with the Australian Taxation Office on an annual basis. Although the amount is possible to estimate at year end, the Australian Taxation Office may reject or materially alter the claim amount. Accordingly, the Company does not recognize the benefit of the claim amount until cash receipt since collectability is not certain until such time. The tax concession is a refundable credit. If the Company has net income, then the Company can receive the credit which reduces its income tax liability. If the Company has net losses, then the Company may still receive a cash payment for the credit, however, the Company’s net operating loss carryforwards are reduced by the gross equivalent loss that would produce the credit amount when the income tax rate is applied to that gross amount. The concession is recognized as tax benefit, in operations, upon receipt. F- 11 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 During each of the fiscal years ended June 30, 2022 and 2021, the Company applied for, and received from the Australian Taxation Office, a research and development tax credit in the amount of $ 54,977 and $ 113,415 , respectively, which is reflected as a tax benefit in the accompanying consolidated statements of operations and comprehensive income (loss). Stock Based Compensation The Company records stock-based compensation in accordance with ASC 718, “ Stock Compensation ”. ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the shorter of the service period or the vesting period. The Company values employee and non-employee stock-based compensation at fair value using the Black-Scholes Option Pricing Model. The Company adopted ASU 2018-07 and accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC 718 and recognizes the fair value of such awards over the service period. The Company used the modified prospective method of adoption. Revenue Recognition The Company applies ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. Subject to these criteria, the Company intends to recognize revenue relating to royalties on product sales in the period in which the sale occurs and the royalty term has begun. Legal Expenses All legal costs for litigation are charged to expense as incurred. Leases The Company follows ASC Topic 842, Leases (Topic 842) and applies the package of practical expedients, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less. Operating lease right of use assets (“ROU”) represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses. Basic and Diluted Net Loss Per Common Share Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as stock options, warrants and convertible debt instruments. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As a result, the basic and diluted per share amounts for all periods presented are identical. Each holder of the 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. SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE June 30, 2022 June 30, 2021 Stock Options 59 59 Stock Warrants 105,420 121,329 Unvested restricted stock 59 59 Convertible Debt 127,062,326 12,416,972 Total 127,167,864 12,538,419 F- 12 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Recent Accounting Pronouncements We have reviewed the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. We have carefully considered the new pronouncements that alter previous generally accepted accounting principles and do not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term with the exception of those disclosed below. The applicability of any standard is subject to the formal review of the Company’s financial management. In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock as well as amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company is currently assessing the impact of the new guidance will have on our consolidated financial statements. NOTE 2 – GOING CONCERN The accompanying consolidated financial statements have been prepared in conformity with US GAAP, which contemplate continuation of the Company as a going concern. For the fiscal year ended June 30, 2022, the Company had no revenues, had a net loss of $ 2,658,087 and had net cash used in operations of $ 1,436,304 . Additionally, as of June 30, 2022, the Company had a working capital deficit, stockholders’ deficit and accumulated deficit of $ 3,047,951 , $ 3,023,649 , and $ 61,557,893 , respectively. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the date of this filing. The consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty. Successful completion of the Company’s development program and, ultimately, the attainment of profitable operations are dependent upon future events, including obtaining adequate financing to fulfill its development activities, acceptance of the Company’s patent applications, obtaining additional sources of suitable and adequate financing and ultimately achieving a level of sales adequate to support the Company’s cost structure and business plan. The Company’s ability to continue as a going concern is also dependent on its ability to further develop and execute on its business plan. However, there can be no assurances that any or all of these endeavors will be successful. In March 2020, the outbreak of COVID-19 (coronavirus) caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the United States, Europe and Australia, including in each of the areas in which the Company operates. The COVID-19 (coronavirus) outbreak has had a notable impact on general economic conditions, including but not limited to the temporary closures of many businesses, “shelter in place” and other governmental regulations, reduced business and consumer spending due to both job losses, reduced investing activity and M&A transactions, among many other effects attributable to the COVID-19 (coronavirus), and there continue to be many unknowns. While to date the Company has not been required to stop operating, management is evaluating its use of its office space, virtual meetings and the like. The Company continues to monitor the impact of the COVID-19 (coronavirus) outbreak closely. The extent to which the COVID-19 (coronavirus) outbreak will impact our operations, ability to obtain financing or future financial results is uncertain. NOTE 3 – PROPERTY AND EQUIPMENT Property and equipment consist of the following as of June 30: SCHEDULE OF PROPERTY PLANT AND EQUIPMENT 2022 2021 Office equipment at cost $ 28,623 $ 28,623 Less: Accumulated depreciation ( 26,600 ) ( 24,368 ) Total property, plant, and equipment $ 2,023 $ 4,255 Depreciation expense for the years ended June 30, 2022 and 2021 were $ 1,993 and $ 1,993 , respectively. F- 13 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 NOTE 4 – DUE TO FORMER DIRECTOR - RELATED PARTY Due to former director - related party represents unsecured advances made primarily by a former director for operating expenses on behalf of the Company such as intellectual property and formation expenses. The expenses were paid for on behalf of the Company and are due upon demand. The Company is currently not being charged interest under these advances. The total amount owed to the former director at June 30, 2022 and 2021 is $ 30,746 and $ 33,347 , respectively. The Company plans to repay the advances as its cash resources allow (see Note 10). NOTE 5 – LOANS AND NOTES PAYABLE Loan from Former Director - Related Party Loan from the Company’s former director at June 30, 2022 and 2021 were $ 51,171 and $ 55,500 , respectively. The loan bears no interest and is payable on demand. The Company did not repay any amount on this loan during the years ended June 30, 2022 and 2021, respectively, (see Note 10). NOTE 6 – CONVERTIBLE NOTES The Company’s convertible notes outstanding at June 30, 2022 and 2021 were as follows: SCHEDULE OF CONVERTIBLE NOTES June 30, 2022 June 30, 2021 Convertible notes and debenture $ 644,980 $ 400,128 Unamortized discounts ( 31,669 ) ( 6,139 ) Accrued interest 57,822 34,098 Premium, net 313,127 196,496 Convertible notes, net $ 984,260 $ 624,583 Eagle Equities Financing Agreements August 29, 2018 Securities Purchase Agreement Effective August 29, 2018, the Company entered into a securities purchase agreement with Eagle Equities, pursuant to which Eagle Equities purchased a convertible promissory note (the “August 2018 Eagle Note”) from the Company in the aggregate principal amount of $ 105,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Eagle Equities any time after the six-month anniversary of the August 2018 Eagle Note. The transactions contemplated by the agreement closed on August 30, 2018. The maturity date of the August 29, 2018 Eagle Note was August 29, 2019 . The August 2018 Eagle Note bore interest at a rate of 8 % per annum, which interest was 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. In April 2020, Eagle Equities agreed to waive the 24 % default interest on this note. The note was fully converted to common stock in fiscal 2021. December 24, 2018 Securities Purchase Agreement Effective December 24, 2018, the Company entered into a securities purchase agreement with Eagle Equities, pursuant to which Eagle Equities purchased a convertible promissory note (the “December 2018 Eagle Note”) from the Company in the aggregate principal amount of $ 126,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Eagle Equities any time after the six-month anniversary of the December 2018 Eagle Note. The transactions contemplated by the purchase agreement closed on December 24, 2018. Pursuant to the terms of the purchase agreement, Eagle Equities deducted $ 6,000 from the principal payment due under the December 2018 Eagle Note, at the time of closing, to be applied to its legal expenses. The Company used the net proceeds from the December 2018 Eagle Note to repay an outstanding convertible promissory note before such note became convertible. The maturity date of the December 2018 Eagle Note was December 24, 2019 . The December 2018 Eagle Note bore interest at a rate of 8 % per annum, which interest was 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 December 2018 Eagle Note. Upon an event of default, principal and accrued interest would become immediately due and payable under the notes. Additionally, upon an event of default, both notes would accrue interest at a default interest rate of 24 % per annum or the highest rate of interest permitted by law. In April 2020, Eagle Equities agreed to waive the 24 % default interest on this note. F- 14 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Eagle Equities had the option to convert all or any amount of the principal amount of the notes issued to Eagle Equities above, at any time, for shares of the Company’s common stock at a price ranging from 60 % to 61 % of the lowest closing bid price (the “Closing Bid Price”) of the Company’s common stock as reported on the OTC Markets Group, Inc. quotation system for the ten prior trading days, including the day upon which the Company receives a notice of conversion from Eagle Equities (the “Conversion Price”). However, in the event that the Company’s common stock was restricted by the Depository Trust Company for any reason, the Conversion Price was to be lowered to from 50 % to 51 % of the lowest Closing Bid Price for the duration of such restriction. If the Company failed to maintain a reserve of shares of its common stock at least two and a half times the number of shares issuable upon conversion of all the Eagle Notes for at least 60 days after the issuance of the notes issued to Eagle Equities, the conversion discount was to be increased by 10 %. Notwithstanding the foregoing, Eagle Equities was restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by Eagle Equities and its affiliates, exceeds 4.99 % of the outstanding shares of the Company’s common stock. The above notes issued to Eagle Equities were treated as stock settled debt under ASC 480 and accordingly, the Company recorded a total of $ 357,688 put premium, of which $ 133,557 were released to additional paid in capital following conversion of principal during the fiscal year to June 30, 2021. There were $ 0 outstanding principal and accrued interest under the above Eagle Equities financing agreements as of June 30, 2021 as a result of the fiscal 2021 conversions. Convertible Note Issued with Consulting Agreement August 10, 2017 Consulting Agreement On August 10, 2017, the Company entered into a consulting agreement, retroactive to May 16, 2017, with a certain consultant, pursuant to which the consultant agreed to provide certain consulting and business advisory services in exchange for a $ 310,000 junior subordinated convertible note. The maturity date of the August 10, 2017 Convertible Note was August 2019 and is currently past due (see Note 9). 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. On March 15, 2021, the Company entered into a Settlement and Mutual Release Agreement (the “Settlement Agreement”) with the consultant whereby both parties agreed to settle all claims and liabilities under the August 10, 2017 Convertible note for a total of $ 100,000 in the form of a convertible note. All other terms of the August 10, 2017 Convertible Note shall remain in full force and effect. Both parties agree that all future penalties under this note are waived unless the Company fails to authorize to distribute the requested shares upon conversion. The Company has the right to pay off the balance of any remaining amounts dues under this note in cash at any time more than 60 days after March 15, 2021. Prior to the Settlement Agreement, the Company recorded total liabilities $ 56,762 consisting of remaining principal amount of $ 8,500 , accrued interest of $ 23,262 and accrued expenses of $ 25,000 . Accordingly, the Company recognized loss from settlement of debt of $ 43,238 during the year ended June 30, 2021 which is included in gain from settlement of debt, net in the accompanying consolidated statements of operations. The total principal and accrued interest outstanding after adjustment due to the above mentioned March 15, 2021 settlement agreement under the August 10, 2017 Convertible Note was $ 80,000 and $ 3,738 , respectively, as of June 30, 2021 following conversion of $ 20,000 of principal during the year ended June 30, 2021. The total principal and accrued interest outstanding under the August 10, 2017 Convertible Note was $ 79,000 and $ 10,185 , respectively, as of June 30, 2022 following conversion of $ 1,000 of principal and $ 8,000 accrued interest during the year ended June 30, 2022. GS Capital Financing Agreements January 22, 2020 GS Capital Securities Purchase Agreements Effective January 22, 2020, the Company entered into a securities purchase agreement with GS Capital, pursuant to which GS Capital purchased a convertible promissory note (the “January 22, 2020 GS Note”) from the Company in the aggregate principal amount of $ 58,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of GS Capital any time after the six-month anniversary of the January 22, 2020 GS Capital Note. The January 22, 2020 GS Note contained an original discount of $ 3,500 . The transactions contemplated by the GS Capital Securities Purchase Agreement closed on January 22, 2020. Pursuant to the terms of the GS Capital Securities Purchase Agreement, GS Capital deducted $ 2,500 from the principal payment due under the January 22, 2020 GW Note, at the time of closing, to be applied to its legal expenses and received net cash proceeds of $ 52,000 on January 28, 2020. The Company used the net proceeds from the January 22, 2020 GW Note for general working capital purposes. The maturity date of the January 22, 2020 GS Capital was January 22, 2021 . The January 22, 2020 GS Capital Note bore interest at a rate of 10 % per annum, which interest may be paid by the Company to GS Capital in shares of the Company’s common stock; but was not payable until the January 22, 2020 GS Capital Note became payable, whether at the maturity date or upon acceleration or by prepayment. The conversion price for the January 22, 2020 GS Capital Note was equal to a 40 % discount of the lowest closing bid price (“Lowest Trading Price”) of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion, including the day upon which a Notice of Conversion is received. F- 15 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Additionally, GS Capital had 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 or the date the Default Amount was 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. The January 22, 2020 GS Note contained certain events of default, upon which principal and accrued interest would become immediately due and payable. In addition, upon an event of default, interest on the outstanding principal would accrue at a default interest rate of 24 % per annum. The note issued to GS capital above was treated as stock settled debt under ASC 480 and accordingly the Company recorded $ 38,667 put premium which was expensed in fiscal 2020 of which $ 38,667 was released to additional paid in capital following conversion of principal during the year ended June 30, 2021. The total remaining principal outstanding and accrued interest under the above GS Capital financing agreements was $ 0 as of June 30, 2021 following conversion of $ 58,000 of principal and $ 8,508 of accrued interest during the year ended June 30, 2021. Power Up Lending Group Financing Agreements January 7, 2020 Power Up Lending Group Securities Purchase Agreement Effective January 7, 2020, the Company entered into a securities purchase agreement with Power Up Lending Group Ltd. (“Power Up”), pursuant to which Power Up purchased a convertible promissory note (the “January 7, 2020 Power Up Note”) from the Company in the aggregate principal amount of $ 75,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Power Up. The transaction closed on January 7, 2020 and the Company received payment on January 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. The maturity date of the January 7, 2020 Power Up Note was January 7, 2021 . The January 7, 2020, Power Up Note bore interest at a rate of 8 % per annum, which interest was paid by the Company to Power Up in shares of the Company’s common stock, but not payable until the January 7, 2020 Power Up Note became payable, whether at the maturity date or upon acceleration or by prepayment. March 12, 2020 Power Up Lending Group Securities Purchase Agreement Effective March 12, 2020, the Company entered into a securities purchase agreement with Power Up Lending Group Ltd. (“Power Up”), pursuant to which Power Up purchased a convertible promissory note (the “March 12, 2020 Power Up Note”) from the Company in the aggregate principal amount of $ 43,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Power Up. The transaction closed on March 12, 2020 and the Company received payment on March 5, 2020 in the amount of $ 40,000 , net of $ 2,500 paid directly toward legal fees and $ 500 to Power Up for due diligence fees. The maturity date of the March 12, 2020 Power Up Note was March 12, 2021 . The March 12, 2020, 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 was not payable until the March 12, 2020 Power Up Note became payable, whether at the maturity date or upon acceleration or by prepayment. All the notes issued above to Power Up contained certain events of default, upon which principal and accrued interest would become immediately due and payable. In addition, upon an event of default, interest on the outstanding principal would accrue at a default interest rate of 22 % per annum. Additionally, Power Up had the option to convert all or any amount of the principal face amount of the notes issued to Power Up, starting on certain dates as defined in the note agreements 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 notes plus any interest accrued, for shares of the Company’s common stock at the then-applicable conversion price. F- 16 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The conversion price for the above Power Up notes was $3,050, subject to certain Market Price (as defined below) adjustment. If the Market Price was greater than or equal to $5,000, the conversion price was to be the greater of 65 % of the Market Price (“Variable Conversion Price”) and $3,050. In the event Market Price was less than $5,000, the conversion price was to be the Variable Conversion Price. As defined in the note agreements, the “Market Price” was 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 Power Up 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 Power Up. Notwithstanding the foregoing, Power Up was restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by Power Up and its affiliates, exceeds 4.99 % of the outstanding shares of the Company’s common stock. An aggregate initial total of $ 422,557 of these notes were bifurcated with the embedded conversion option recorded as derivative liabilities at fair value. The total principal amount outstanding under the above Power Up financing agreement, specifically the January 7, 2020 and March 12, 2020 Power Up Notes, was $ 0 and accrued interest of $ 0 as of June 30, 2021 following repayment in cash of $ 43,000 of the principal balance and $ 1,816 of accrued interest and conversions into common stock during the year ended June 30, 2021. Accordingly, there was no outstanding principal balance as of June 30, 2021. Auctus Fund Financing Agreements August 30, 2019 Securities Purchase Agreement Effective August 30, 2019, the Company entered into a securities purchase agreement with Auctus Fund, LLC (“Auctus”), pursuant to which Auctus purchased a convertible promissory note (the “August 30, 2019 Auctus Note”) from the Company in the aggregate principal amount of $ 550,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Auctus. The transaction closed on August 30, 2019 and the Company received payment on September 4, 2019 in the amount of $ 550,000 , of which $ 5,000 was paid directly toward legal fees and $ 40,000 to Auctus for due diligence fees resulting in net cash proceeds of $ 505,000 . The maturity date of the August 30, 2019 Auctus Note was August 30, 2020 . The August 30, 2019 Auctus Note bore interest at a rate of 10 % per annum, but not payable until the August 30, 2019 Auctus Note became payable, whether at the maturity date or upon acceleration or by prepayment. The note was 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 was not paid when due shall bear interest at the rate of 24 % per annum. Additionally, Auctus had 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 or the date of payment of the Default Amount if an event of default occurs, which was 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, if any. The conversion price for the August 30, 2019 Auctus Note was a Variable Conversion Price, being 60 % of the Market Price on the date of conversion. Notwithstanding the foregoing, Auctus was 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. In connection with the issuance of the August 2019 Auctus Note, the Company issued common stock purchase warrants to Auctus to purchase 450 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” of $ 2,250 . In connection with the issuance of the Note, the Company shall issue a common stock purchase warrant to Buyer to purchase 300 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” of $ 3,330 . In connection with the issuance of the Note, the Company shall issue a common stock purchase warrant to Buyer to purchase 225 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” of $ 4,500 . The First Warrant, Second Warrant, and Third Warrant shall collectively be referred as the “Warrants”. The Warrants have an “Exercise Period” of five years from the date of issuance being August 30, 2019. Under the terms of the Purchase Agreement and the Warrants, the Selling Security Holder may not either convert the Notes nor exercise the Warrants to the extent (but only to the extent) that the Selling Security Holder or any of its affiliates would beneficially own a number of shares of our Common Stock which would exceed 4.99 % of our outstanding shares. 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 $ 375,905 using a simple binomial lattice model. In connection with the Purchase Agreement, the Company and the Purchaser entered into a Registration Rights Agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company agreed to register the shares of Common Stock underlying the Securities in a Registration Statement with the SEC as well as the Commitment Shares (as defined herein). The Registration Rights Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties. F- 17 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The Note was subject to customary default provisions and also includes a cross-default provision which provides that a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements (as defined therein), after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements. Upon occurrence of any such event, the Holder was entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreements or the Note. The August 30, 2019 Auctus Note contained certain events of default, upon which principal and accrued interest were to become immediately due and payable. In addition, upon an event of default, interest on the outstanding principal shall accrue at a default interest rate of 24 % per annum. The total principal amount outstanding under the above Auctus financing agreement, specifically the August 30, 2019 Auctus Note, was $ 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. The total principal amount outstanding under the above Auctus financing agreement, specifically the August 30, 2019 Auctus Note, was $ 32,848 and accrued interest of $ 0 as of June 30, 2021 following conversion of $ 326,117 of the principal balance and $ 39,536 of accrued interest during the year ended June 30, 2021. Accordingly, $ 217,411 of the put premium was released in respect of the August 30, 2019 Auctus Note during the year ended June 30, 2021 following conversion of the principal balance. The total principal amount outstanding under the above Auctus financing agreement, specifically the August 30, 2019 Auctus Note, was $ 0 and accrued interest of $ 0 as of June 30, 2022 following conversion of $ 32,848 of the principal balance and $ 716 of accrued interest during the year ended June 30, 2022. Accordingly, $ 21,899 of the put premium was released in respect of the August 30, 2019 Auctus Note during the year ended June 30, 2022 following conversion of the principal balance. Accordingly, there was no outstanding principal balance as of June 30, 2022. Crown Bridge Securities Purchase Agreements Effective October 3, 2019, the Company entered into a securities purchase agreement with Crown Bridge Partners, pursuant to which Crown Bridge purchased a convertible promissory note (the “October 3, 2019 Crown Bridge Note”) from the Company in the aggregate principal amount of $ 108,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Crown Bridge any time from the of issuance of the of the October 3, 2019 Crown Bridge Note. The transactions contemplated by the Crown Bridge Securities Purchase Agreement closed on October 3, 2019. Pursuant to the terms of the Crown Bridge Securities Purchase Agreement, Crown Bridge deducted $ 3,000 from the principal payment due under the October 3, 2019 Crown Bridge Note, at the time of closing, to be applied to its legal expenses, and there was a $ 5,000 original issuance discount resulting in $ 100,000 net proceeds to the Company. The Company used the net proceeds from the October 3, 2019 Crown Bridge Note for general working capital purposes. The maturity date of the October 3, 2019 Crown Bridge was October 3, 2020 and is currently past due. The October 3, 2019 Crown Bridge Note currently bears interest at a default interest rate of 15 % per annum, which interest may be paid by the Company to Crown Bridge in shares of the Company’s common stock. Additionally, 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 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. The conversion price for the October 3, 2019 Crown Bridge Note shall be equal to a 40% discount of the lowest closing bid price (“Lowest Trading Price”) of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion, including the day upon which a Notice of Conversion is received. Notwithstanding the foregoing, Crown Bridge shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by Crown Bridge and its affiliates, exceeds 4.99 % of the outstanding shares of the Company’s common stock which may be increased up to 9.99 % upon 60 days prior written notice by the Crown Bridge to the Company. The note is treated as stock settled debt under ASC 480 and accordingly the Company recorded a $ 72,000 put premium. The October 3, 2019 Crown Bridge 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 15 % 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. The total principal amount outstanding under the above Crown Bridge financing agreement 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. F- 18 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 There were 15,000 unissued shares which were considered issuable for accounting purposes during the 1 st quarter of fiscal 2021 related to a conversion notice dated and received on September 16, 2020. In November 2020, the Company was notified by the note holder of the cancellation of this conversion notice as a result of the reverse stock split and as such the Company reversed the effects of this transaction thereby increasing the principal balance by $ 9,600 and put premium by $ 6,400 and a corresponding decrease in equity of $ 16,000 . The total principal amount outstanding under the above Crown Bridge financing agreement was $ 65,280 and accrued interest of $ 16,138 as of June 30, 2021. The total principal amount outstanding under the above Crown Bridge financing agreement was $ 65,280 and accrued interest of $ 25,930 as of June 30, 2022. GW Holdings Securities Purchase Agreements October 1, 2019 Securities Purchase Agreement Effective October 1, 2019, the Company entered into a securities purchase agreement with GW Holdings, pursuant to which GW Holdings purchased a convertible promissory note (the “October 1, 2019 GW Note”) from the Company in the aggregate principal amount of $ 131,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of GW Holdings any time after the six-month anniversary of the October 1, 2019 GW Holdings Note. The transactions contemplated by the GW Holdings Securities Purchase Agreement closed on October 1, 2019. Pursuant to the terms of the GW Holdings Securities Purchase Agreement, the lender deducted $ 6,000 from the principal payment due under the October 1, 2019 GW Note, at the time of closing, to be applied to its legal expenses. The Company used the net proceeds of $ 125,000 from the October 1, 2019 GW Note for general working capital purposes. The maturity date of the October 1, 2019 GW Holdings was October 1, 2020 . The October 1, 2019 GW Holdings Note bore interest at a rate of 8 % per annum, which interest was paid by the Company to GW Holdings in shares of the Company’s common stock; but was not payable until the October 1, 2019 GW Holdings Note became payable, whether at the maturity date or upon acceleration or by prepayment. December 10, 2020 Securities Purchase Agreement Effective December 10, 2020, the Company entered into a securities purchase agreement with GW Holdings, pursuant to which GW Holdings purchased a convertible promissory note (the “December 10, 2020 GW Note”) from the Company in the aggregate principal amount of $ 131,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of GW Holdings anytime from the issuance of the December 10, 2020 GW Holdings Note. The transactions contemplated by the GW Holdings Securities Purchase Agreement closed on December 10, 2020. Pursuant to the terms of the GW Holdings Securities Purchase Agreement, the lender deducted $ 6,000 from the principal payment due under the December 10, 2020 GW Note, at the time of closing, to be applied to its legal expenses. The Company used the net proceeds of $ 125,000 from the December 10, 2020 GW Note for general working capital purposes. The maturity date of the December 10, 2020 GW Holdings was December 10, 2021 . The December 10, 2020 GW Holdings Note bore interest at a rate of 8 % per annum, which interest may be paid by the Company to GW Holdings in shares of the Company’s common stock; but shall not be payable until the December 10, 2020 GW Holdings Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. The above notes issued to GW Holdings contain certain events of default, upon which principal and accrued interest were to become immediately due and payable. In addition, upon an event of default, interest on the outstanding principal shall accrue at a default interest rate of 24 % per annum, or if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. Further, certain events of default may trigger penalty and liquidated damage provisions. Additionally, GW Holdings had the option to convert all or any amount of the principal face amount of the notes issued to GW Holdings 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 such notes plus any interest accrued, for shares of the Company’s common stock at the then-applicable conversion price. The conversion price for the above GW Holdings notes was equal to a 40% discount of the lowest closing bid price (“Lowest Trading Price”) of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion, including the day upon which a Notice of Conversion was received. Notwithstanding the foregoing, GW Holdings shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by GW Holdings and its affiliates, exceeds 4.99 % of the outstanding shares of the Company’s common stock which may be increased up to 9.99 % upon 60 days prior written notice by the GW Holdings to the Company. These notes were treated as stock settled debt under ASC 480 and accordingly the Company recorded a total of $ 174,666 put premium. F- 19 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The total principal amount outstanding under the above October 1, 2019 GW Holdings financing agreement 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. The total principal amount and accrued interest outstanding under the above October 1, 2019 GW Holdings financing agreement was $ 0 as of June 30, 2021 following conversion of $ 30,000 of the principal balance and $ 3,877 of accrued interest during the year ended June 30, 2021. Accordingly, $ 67,333 and $ 20,000 of the put premium was reclassed to additional paid in capital during the year ended June 30, 2020 and 2021, respectively, following conversion of the principal balance. This note was fully converted into common stock in fiscal 2021. The total principal amount outstanding under the above December 10, 2020 GW Holdings financing agreement, was $ 90,000 and accrued interest of $ 4,636 as of June 30, 2021 following conversion of $ 41,000 of the principal balance and $ 1,084 of accrued interest during the year ended June 30, 2021. Accordingly, $ 27,333 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, 2021 following conversion of the principal balance. The total principal amount outstanding and accrued interest under the above December 10, 2020 GW Holdings financing agreement, was $ 0 as of June 30, 2022 following conversion of $ 90,000 of the principal balance, $ 7,885 of accrued interest and $ 4,000 default penalty during the year ended June 30, 2022. Accordingly, $ 60,000 of the put premium was reclassed to additional paid in capital in respect of the December 10, 2020 GW Holdings Note during the year ended June 30, 2022 following conversion of the principal balance. Ader Alef Securities Purchase Agreements Effective January 13, 2020, the Company entered into a securities purchase agreement with Ader Alef, pursuant to which Ader Alef purchased a convertible promissory note (the “January 13, 2020 Ader Alef Note”) from the Company in the aggregate principal amount of $ 110,250 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Ader Alef any time after the six-month anniversary of the January 13, 2020 Ader Alef Note. The January 13, 2020 Ader Alef Note contained an original discount of $ 5,250 . The transactions contemplated by the Ader Alef Securities Purchase Agreement closed on January 13, 2020. Pursuant to the terms of the Ader Alef Securities Purchase Agreement, Ader Alef deducted $ 5,000 from the principal payment due under the January 13, 2020 Ader Alef Note at the time of closing, to be applied to its legal expenses and the Company received net cash proceeds of $ 100,000 on January 15, 2020. The Company used the net proceeds from the January 13, 2020 Ader Alef Note for general working capital purposes. The maturity date of the January 13, 2020 Ader Alef was January 13, 2021. The January 13, 2020 Ader Alef Note bore interest at a rate of 8 % per annum, which interest may be paid by the Company to Ader Alef in shares of the Company’s common stock; but was not payable until the January 13, 2020 Ader Alef Note became payable, whether at the maturity date or upon acceleration or by prepayment. Additionally, Ader Alef had 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 or the date the Default Amount was paid if an event of default occurs, which was 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. The conversion price for the January 13, 2020 Ader Alef Note during the first 6 months the January 13, 2020 Ader Alef Note was fixed at $2.50 and thereafter would be equal to a 35 % discount of the lowest closing bid price (“Lowest Trading Price”) of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion, including the day upon which a Notice of Conversion was received. Notwithstanding the foregoing, Ader Alef was restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by Ader Alef and its affiliates, exceeds 4.99 % of the outstanding shares of the Company’s common stock which may be increased up to 9.99 % upon 60 days prior written notice by the Ader Alef to the Company. The note was treated as stock settled debt under ASC 480 and accordingly the Company recorded a $ 59,365 put premium. The January 13, 2020 Ader Alef Note contained certain events of default, upon which principal and accrued interest would become immediately due and payable. In addition, upon an event of default, interest on the outstanding principal would accrue at a default interest rate of 24 % per annum, or if such rate was 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. The total principal amount outstanding under the above Ader Alef financing agreement was $ 110,250 and accrued interest of $ 4,073 as of June 30, 2020. The total principal amount outstanding and accrued interest under the above Ader Alef financing agreement was $ 0 as of as of June 30, 2021 following conversion of $ 110,250 of the principal balance and $ 7,493 accrued interest during the year ended June 30, 2021. Accordingly, $ 59,365 of the put premium was released in respect of the Ader Alef Note during the year ended June 30, 2021 following conversion of the principal balance. This note was fully converted into common stock in fiscal 2021. F- 20 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 LG Capital Securities Purchase Agreements Effective February 19, 2020, the Company entered into a securities purchase agreement with LG Capital Funding, LLC (“LG Capital”), pursuant to which LG Capital purchased a convertible promissory note (the “February 19, 2020 LG Capital Note”) from the Company in the aggregate principal amount of $ 75,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of LG Capital any time after the six month anniversary of the February 19, 2020 LG Capital Note. The February 19, 2020 LG Capital Note contained an original discount of $ 3,750 . The transactions contemplated by the LG Capital Securities Purchase Agreement closed on March 4, 2020. Pursuant to the terms of the LG Capital Securities Purchase Agreement, LG Capital deducted $ 2,500 from the principal payment due under the February 19, 2020 LG Capital Note at the time of closing, to be applied to its legal expenses and the Company received net cash proceeds of $ 71,250 on March 25, 2020. The Company used the net proceeds from the February 19, 2020 LG Capital Note for general working capital purposes. The maturity date of the February 19, 2020 LG Capital Note was February 19, 2021 . The February 19, 2020 LG Capital Note bore interest at a rate of 8 % per annum, which interest was paid by the Company to LG Capital in shares of the Company’s common stock; but was not payable until the February 19, 2020 LG Capital Note became payable, whether at the maturity date or upon acceleration or by prepayment. During the first 60 to 180 days following the date of the note, the Company had the right to prepay the principal and accrued but unpaid interest due under the February 19, 2020 LG Capital Note, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium ranging from 112 % to 135 % as defined in the note agreement. After this initial 180-day period, the Company did not have a right to prepay the February 19, 2020 LG Capital Note. The conversion price for the February 19, 2020 LG Capital Note during the first 6 months the February 19, 2020 LG Capital Note was fixed at $500 and thereafter was equal to a 35% discount of the lowest closing bid price (“Lowest Trading Price”) of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion, including the day upon which a Notice of Conversion was received. Notwithstanding the foregoing, LG Capital was restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by LG Capital and its affiliates, exceeds 9.99 % of the outstanding shares of the Company’s common stock. The note was treated as stock settled debt under ASC 480 and accordingly the Company recorded a $ 40,385 put premium. The February 19, 2020 LG Capital Note contained certain events of default, upon which principal and accrued interest would become immediately due and payable. In addition, upon an event of default, interest on the outstanding principal would accrue at a default interest rate of 24 % per annum, or if such rate was 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. The total principal amount outstanding under the above LG Capital financing agreement was $ 75,000 and accrued interest of $ 2,164 as of June 30, 2020. The total principal amount outstanding and accrued interest under the above LG Capital financing agreement was $ 0 as of June 30 2021 following conversion of $ 75,000 of the principal balance and $ 5,421 accrued interest during the year ended June 30, 2021. Accordingly, $ 40,385 of the put premium was released in respect of the February 19, 2020 LG Capital Note during the year ended June 30, 2021 following conversion of the principal balance. This note was fully converted into common stock in fiscal 2021. There were 9,427 unissued shares which were considered issuable for accounting purposes during the first quarter of fiscal 2021 related to a conversion notice dated and received on September 9, 2020. In November 2020, the Company was notified by the note holder of the cancellation of this conversion notice as a result of the reverse stock split and as such the Company reversed the effects of this transaction thereby increasing the principal balance by $ 10,000 , accrued interest of $ 416 and put premium by $ 5,385 and a corresponding decrease in equity of $ 15,801 . Geneva Roth Remark Securities Purchase Agreements December 2, 2020 Securities Purchase Agreement Effective December 2, 2020, the Company entered into a securities purchase agreement with Geneva Roth Remark Holdings, Inc.(“Geneva Roth”), pursuant to which Geneva Roth purchased a convertible promissory note (the “December 2, 2020 Geneva Roth”) from the Company in the aggregate principal amount of $ 78,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Geneva Roth any time after the six month anniversary of the December 2, 2020 Geneva Roth. The December 2, 2020 Geneva Roth contained an original discount of $ 3,000 . The Company used the net proceeds from the December 2, 2020 Geneva Roth for general working capital purposes. The maturity date of the December 2, 2020 Geneva Roth Note was December 2, 2021 . The December 2, 2020 Geneva Roth Note bore interest at a rate of 8 % per annum, which interest may be paid by the Company to Geneva Roth in shares of the Company’s common stock; but shall not be payable until the December 2, 2020 Geneva Roth Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. January 5, 2021 Securities Purchase Agreement Effective January 5, 2021, the Company entered into a securities purchase agreement with Geneva Roth Remark Holdings, Inc., pursuant to which Geneva Roth purchased a convertible promissory note (the “January 5, 2021 Geneva Roth”) from the Company in the aggregate principal amount of $ 68,500 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Geneva Roth any time after the six-month anniversary of the January 5, 2021 Geneva Roth. The January 5, 2021 Geneva Roth contained an original issue discount of $ 3,500 . The Company used the net proceeds from the January 5, 2021 Geneva Roth for general working capital purposes. The maturity date of the January 5, 2021 Geneva Roth Note was January 5, 2022 . The January 5, 2021 Geneva Roth Note bore interest at a rate of 8 % per annum, which interest may be paid by the Company to Geneva Roth in shares of the Company’s common stock; but shall not be payable until the January 5, 2021 Geneva Roth Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. F- 21 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 March 16, 2021 Securities Purchase Agreement Effective March 16, 2021, the Company entered into a securities purchase agreement with Geneva Roth Remark Holdings, Inc., pursuant to which Geneva Roth purchased a convertible promissory note (the “March 16, 2021 Geneva Roth”) from the Company in the aggregate principal amount of $ 63,500 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Geneva Roth any time after the six-month anniversary of the March 16, 2021 Geneva Roth. The March 16, 2021 Geneva Roth contained an original discount of $ 3,500 . The Company used the net proceeds from the March 16, 2021 Geneva Roth for general working capital purposes. The maturity date of the March 16, 2021 Geneva Roth Note was March 16, 2022 . The March 16, 2021 Geneva Roth Note bore interest at a rate of 8 % per annum, which interest may be paid by the Company to Geneva Roth in shares of the Company’s common stock; but shall not be payable until the March 16, 2021 Geneva Roth Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. August 19, 2021 Securities Purchase Agreement Effective August 19, 2021, the Company entered into a securities purchase agreement with Geneva Roth Remark Holdings, Inc., pursuant to which Geneva Roth purchased a convertible promissory note (the “August 19, 2021 Geneva Roth”) from the Company in the aggregate principal amount of $ 103,750 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Geneva Roth any time after the six-month anniversary of the August 19, 2021 Geneva Roth. The August 19, 2021 Geneva Roth contained an original discount of $ 3,750 . The Company used the net proceeds from the August 19, 2021 Geneva Roth for general working capital purposes. The maturity date of the August 19, 2021 Geneva Roth Note was August 19, 2022 . The August 19, 2021 Geneva Roth Note bore interest at a rate of 8 % per annum, which interest may be paid by the Company to Geneva Roth in shares of the Company’s common stock; but shall not be payable until the August 19, 2021 Geneva Roth Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. September 22, 2021 Securities Purchase Agreement Additionally, effective September 22, 2021, the Company entered into a securities purchase agreement with Geneva Roth Remark Holdings, Inc., pursuant to which Geneva Roth purchased a convertible promissory note (the “September 22, 2021 Geneva Roth”) from the Company in the aggregate principal amount of $ 63,750 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Geneva Roth any time after the six-month anniversary of the September 22, 2021 Geneva Roth. The September 22, 2021 Geneva Roth contains an original discount of $3,750. The Company intends to use the net proceeds from the September 22, 2021 Geneva Roth for general working capital purposes. The maturity date of the September 22, 2021 Geneva Roth Note is September 22, 2022 . The September 22, 2021 Geneva Roth Note bears interest at a rate of 8 % per annum, which interest may be paid by the Company to Geneva Roth in shares of the Company’s common stock; but shall not be payable until the September 22, 2021 Geneva Roth Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. During the first 60 to 180 days following the date of these notes, the Company had the right to prepay the principal and accrued but unpaid interest due under the above notes issued to Geneva Roth, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium ranging from 110 % to 129 % as defined in the note agreement. After this initial 180-day period, the Company does not have a right to prepay such notes. The conversion price for the above Geneva Roth notes was equal to a 35 % discount of the market price based on the average of the lowest three trading prices of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion. Notwithstanding the foregoing, Geneva Roth shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by Geneva Roth and its affiliates, exceeds 9.99 % of the outstanding shares of the Company’s common stock. These notes were treated as stock settled debt under ASC 480 and accordingly the Company recorded a total of $ 203,269 put premium for the five notes. The above Geneva Roth notes 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. The total principal amounts outstanding under the above Geneva Roth financing agreements were $ 132,000 and accrued interest of $ 3,477 as of June 30, 2021 following conversion of $ 78,000 of the principal balance and $ 3,120 accrued interest during the year ended June 30, 2021. Accordingly, $ 42,000 of the put premium was released in respect of the Geneva Roth financing agreements during the year ended June 30, 2021 following conversion of the principal balance. F- 22 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The total principal amounts outstanding under the above Geneva Roth financing agreements were $ 0 as of June 30, 2022 following conversion of $ 299,500 of the principal balance and $ 11,980 accrued interest during the year ended June 30, 2022. Accordingly, $ 161,269 of the put premium was released to additional paid in capital in respect of the Geneva Roth financing agreements during the year ended June 30, 2022 following conversion of the principal balance. 1800 Diagonal Lending (formerly known as Sixth Street Lending) Securities Purchase Agreements October 21, 2021 Securities Purchase Agreement Effective October 21, 2021, the Company entered into a securities purchase agreement with Sixth Street Lending LLC (“Sixth Street”), pursuant to which Sixth Street purchased a convertible promissory note (the “October 21, 2021 Sixth Street”) from the Company in the aggregate principal amount of $ 63,750 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Sixth Street any time after the six-month anniversary of the October 21, 2021 Sixth Street. The October 21, 2021 Sixth Street contained debt issue costs of $ 3,750 . The Company used the net proceeds from the October 21, 2021 Sixth Street for general working capital purposes. The maturity date of the October 21, 2021 Sixth Street Note is October 21, 2022 . The October 21, 2021 Sixth Street Note bore interest at a rate of 8 % per annum, which interest may be paid by the Company to Sixth Street in shares of the Company’s common stock; but shall not be payable until the October 21, 2021 Sixth Street Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. November 26, 2021 Securities Purchase Agreement Effective November 26, 2021, the Company entered into a securities purchase agreement with Sixth Street Lending LLC pursuant to which Sixth Street purchased a convertible promissory note (the “November 26, 2021 Sixth Street”) from the Company in the aggregate principal amount of $ 53,750 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Sixth Street any time after the six-month anniversary of the November 26, 2021 Sixth Street. The November 26, 2021 Sixth Street contained debt issue costs of $ 3,750 . The Company used the net proceeds from the November 26, 2021 Sixth Street for general working capital purposes. The maturity date of the November 26, 2021 Sixth Street Note is November 26, 2022 . The November 26, 2021 Sixth Street Note bore interest at a rate of 8 % per annum, which interest may be paid by the Company to Sixth Street in shares of the Company’s common stock; but shall not be payable until the November 26, 2021 Sixth Street Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. January 4, 2022 Securities Purchase Agreement Additionally, effective January 4, 2022, the Company entered into a securities purchase agreement with Sixth Street Lending LLC pursuant to which Sixth Street purchased a convertible promissory note (the “January 4, 2022 Sixth Street”) from the Company in the aggregate principal amount of $ 63,750 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Sixth Street any time after the six-month anniversary of the January 4, 2022 Sixth Street. The January 4, 2022 Sixth Street contains debt issue costs of $ 3,750 . The Company intends to use the net proceeds from the January 4, 2022 Sixth Street for general working capital purposes. The maturity date of the January 4, 2022 Sixth Street Note is January 4, 2023 . The January 4, 2022 Sixth Street Note bears interest at a rate of 8 % per annum, which interest may be paid by the Company to Sixth Street in shares of the Company’s common stock; but shall not be payable until the January 4, 2022 Sixth Street Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. March 7, 2022 Securities Purchase Agreement Additionally, effective March 7, 2022, the Company entered into a securities purchase agreement with Sixth Street Lending LLC pursuant to which Sixth Street purchased a convertible promissory note (the “March 7, 2022 Sixth Street”) from the Company in the aggregate principal amount of $ 68,750 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Sixth Street any time after the six-month anniversary of the March 7, 2022 Sixth Street. The March 7, 2022 Sixth Street contains debt issue costs of $ 3,750 . The Company intends to use the net proceeds from the March 7, 2022 Sixth Street for general working capital purposes. The maturity date of the March 7, 2022 Sixth Street Note is March 7, 2023 . The March 7, 2022 Sixth Street Note bears interest at a rate of 8 % per annum, which interest may be paid by the Company to Sixth Street in shares of the Company’s common stock; but shall not be payable until the March 7, 2022 Sixth Street Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. April 12, 2022 Securities Purchase Agreement Effective April 12, 2022, the Company entered into a securities purchase agreement with Sixth Street Lending LLC, pursuant to which Sixth Street purchased a convertible promissory note (the “April 12, 2022 Sixth Street”) from the Company in the aggregate principal amount of $ 68,750 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of Sixth Street any time after the six-month anniversary of the April 12, 2022 Sixth Street. The April 12, 2022 Sixth Street contains debt issue costs of $ 3,750 . The Company intends to use the net proceeds from the April 12, 2022 Sixth Street for general working capital purposes. The maturity date of the April 12, 2022 Sixth Street Note is April 12, 2023 . The April 12, 2022 Sixth Street Note bears interest at a rate of 8 % per annum, which interest may be paid by the Company to Sixth Street in shares of the Company’s common stock; but shall not be payable until the April 12, 2022 Sixth Street Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. F- 23 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 May 12, 2022 Securities Purchase Agreement Effective May 12, 2022, the Company entered into a securities purchase agreement with 1800 Diagonal Lending LLC (“1800 Diagonal”), pursuant to which 1800 Diagonal purchased a convertible promissory note (the “May 12, 2022 1800 Diagonal Note”) from the Company in the aggregate principal amount of $ 63,750 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of 1800 Diagonal any time after the six-month anniversary of the May 12, 2022 1800 Diagonal Note. The May 12, 2022 1800 Diagonal Note contains debt issue costs of $ 3,750 . The Company intends to use the net proceeds from the May 12, 2022 1800 Diagonal Note for general working capital purposes. The maturity date of the May 12, 2022 1800 Diagonal Note is May 12, 2023 . The May 12, 2022 1800 Diagonal Note bears interest at a rate of 8 % per annum, which interest may be paid by the Company to 1800 Diagonal in shares of the Company’s common stock; but shall not be payable until the May 12, 2022 1800 Diagonal Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. During the first 60 to 180 days following the date of the above listed notes, the Company has the right to prepay the principal and accrued but unpaid interest due under the above notes issued, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium ranging from 110 % to 129 % as defined in the note agreement. After this initial 180-day period, the Company does not have a right to prepay such notes. The conversion price for the above 1800 Diagonal notes shall be equal to a 35 % discount of the market price which means the average of the lowest three trading prices of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion. Notwithstanding the foregoing, 1800 Diagonal shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by 1800 Diagonal and its affiliates, exceeds 9.99 % of the outstanding shares of the Company’s common stock. These notes are treated as stock settled debt under ASC 480 and accordingly the Company recorded a total of $ 205,962 put premium. The above 1800 Diagonal notes contain certain events of default, upon which principal and accrued interest will become immediately due and payable. In addition, upon an event of default, interest on the outstanding principal shall accrue at a default interest rate of 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. Other than as described above, the above 1800 Diagonal notes contain certain events of default, including failure to timely issue shares upon receipt of a notice of conversion, as well as certain customary events of default, including, among others, breach of covenants, representations or warranties, insolvency, bankruptcy, liquidation and failure by the Company to pay the principal and interest due under the Note. Additional events of default shall include, among others: (i) failure to reserve at least five times the number of shares issuable upon full conversion of the Note; (ii) bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company or any subsidiary of the Company; provided, that in the event such event is triggered without the Company’s consent, the Company shall have sixty (60) days after such event is triggered to discharge such event, (iii) the Company’s failure to maintain the listing of the common stock on at least one of the OTC markets (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq Small Cap Market, the New York Stock Exchange, or the American Stock Exchange, (iv) The restatement of any financial statements filed by the Company with the SEC at any time after 180 days after the issuance date for any date or period until this note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have reasonably constituted a material adverse effect on the rights of 1800 Diagonal with respect to this note or the Purchase Agreement, and (v) the Company’s failure to comply with its reporting requirements of the Securities and Exchange Act of 1934 (the “Exchange Act”), and/or the Company ceases to be subject to the reporting requirements of the Exchange Act. In the event that the Company fails to deliver the shares of common stock issuable upon conversion of principal or interest under the above 1800 Diagonal notes within three business days of a notice of conversion by 1800 Diagonal, the Company shall incur a penalty of $ 1,000 per day, provided, however, that such fee shall not be due if the failure to deliver the shares is a result of a third party such as the transfer agent. Upon the occurrence and during the continuation of certain events of default, the above 1800 Diagonal notes will become immediately due and payable and the Company will pay 1800 Diagonal in full satisfaction of its obligations in the amount equal to 150 % of an amount equal to the then outstanding principal amount of the above 1800 Diagonal notes plus any interest accrued upon such event of default or prior events of default (the “Default Amount”). Further upon the occurrence and during the continuation of any event of default specified in section 3.2 as defined in the 1800 Diagonal note agreements and relates to the failure to issue shares of the Company’s common stock upon the conversion of 1800 Diagonal notes, such above 1800 Diagonal notes shall become immediately due and payable in an amount equal to the Default Amount multiplied by two. F- 24 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The total principal amount outstanding under the above Sixth Street financing agreements were $ 265,000 and accrued interest of $ 6,081 as of June 30, 2022 following conversion of $ 117,500 of the principal balance and $ 4,700 accrued interest during the year ended June 30, 2022. Accordingly, $ 63,269 of the put premium was released to additional paid in capital in respect to the Sixth Street financing agreements during the year ended June 30, 2022 following conversion of the principal balance. ONE44 Capital Securities Purchase Agreements December 7, 2021 Securities Purchase Agreement Effective December 7, 2021, the Company entered into a securities purchase agreement with ONE44 Capital LLC (“ONE44”), pursuant to which ONE44 purchased a convertible promissory note (the “December 7, 2021 ONE44”) from the Company in the aggregate principal amount of $ 170,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of ONE44 any time after the six-month anniversary of the December 7, 2021 ONE44. The December 7, 2021 ONE44 contains an original discount and debt issue cost for a total of $ 25,500 . The Company intends to use the net proceeds from the December 7, 2021 ONE44 for general working capital purposes. The maturity date of the December 7, 2021 ONE44 is December 7, 2022 . The December 7, 2021 ONE44 bears interest at a rate of 10 % per annum, which interest may be paid by the Company to ONE44 in shares of the Company’s common stock; but shall not be payable until the December 7, 2021 ONE44 Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. March 29, 2022 Securities Purchase Agreement Effective March 29, 2022, the Company entered into a securities purchase agreement with ONE44 Capital LLC, pursuant to which ONE44 purchased a convertible promissory note (the “March 29, 2022 ONE44”) from the Company in the aggregate principal amount of $ 120,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of ONE44 any time after the six-month anniversary of the March 29, 2022 ONE44. The December 7, 2021 ONE44 contains an original discount and debt issue cost for a total of $ 18,000 . The Company intends to use the net proceeds from the March 29, 2022 ONE44 for general working capital purposes. The maturity date of the March 29, 2022 ONE44 is March 29, 2023 . The March 29, 2022 ONE44 bears interest at a rate of 10 % per annum, which interest may be paid by the Company to ONE44 in shares of the Company’s common stock; but shall not be payable until the March 29, 2022 ONE44 Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. During the first 60 to 180 days following the date of these notes, the Company has the right to prepay the principal and accrued but unpaid interest due under the above notes issued to ONE44, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium ranging from 120 % to 135 % as defined in the note agreement. After this initial 180-day period, the Company does not have a right to prepay such notes. The conversion price for the above ONE44 notes shall be equal to a 65 % discount of the market price which means the average of the lowest three trading prices of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion. Notwithstanding the foregoing, ONE44 shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by ONE44 and its affiliates, exceeds 4.99 % of the outstanding shares of the Company’s common stock. These notes are treated as stock settled debt under ASC 480 and accordingly the Company recorded a total of $ 156,154 put premium. The above ONE44 notes contain certain events of default, upon which principal and accrued interest will become immediately due and payable. In addition, upon an event of default, interest on the outstanding principal shall accrue at a default interest rate of 24 % per annum, or if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. Further, certain events of default may trigger penalty and liquidated damage provisions. In the event that the Company fails to deliver to ONE44 shares of common stock issuable upon conversion of principal or interest under the ONE44 note, the penalty shall be $ 250 per day the shares are not issued beginning on the 4 th day after the conversion notice was delivered to the Company. This penalty shall increase to $ 500 per day beginning on the 10 th day. In an event of breach of section 8m as defined in the ONE44 note agreements, such ONE44 notes shall incur penalty and will increase the outstanding principal amounts by 20 %. The total principal amount outstanding under the above ONE44 financing agreements were $ 235,700 and accrued interest of $ 9,519 as of June 30, 2022 following conversion of $ 54,300 of the principal balance and $ 2,873 accrued interest during the year ended June 30, 2022. Accordingly, $ 29,238 of the put premium was released to additional paid in capital in respect to the ONE44 financing agreements during the year ended June 30, 2022 following conversion of the principal balance. Convertible notes in default There are two convertible notes that are currently past due and are in default, consisting of $ 144,280 principal and $ 33,930 accrued interest which includes interest accruing at the default interest rates ranging from 15 % to 18 % . Amortization of debt discounts The Company recorded $ 73,500 and $ 211,000 of debt discounts related to the above note issuances during the years ended June 30, 2022 and 2021, respectively. The Company recorded $ 452,308 and $ 498,160 of put premiums related to the above note issuances during the years ended June 30, 2022 and 2021, 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. F- 25 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Amortization of all debt discounts for the years ended June 30, 2022 and 2021 was $ 47,971 and $ 136,527 , respectively. The Company reclassified $ 335,677 and $ 590,504 in put premiums to additional paid in capital following conversions during the year ended June 30, 2022 and 2021, respectively. NOTE 7 – INCOME TAXES The Company follows ASC 740-10-10, under which an entity recognizes deferred tax assets and liabilities for future tax consequences or for events that were previously recognized in the Company’s financial statements or tax returns. The measurement of deferred tax assets and liabilities is based on enacted tax law provisions. The effects of future changes in tax laws or rates are not anticipated. Through June 30, 2010, the Company operated exclusively in Australia. The Company was wholly subject to Australian income tax laws and regulations, which are administered by the Australian Taxation Office for the years ended June 30, 2010 and all prior years. On November 23, 2010, the Company was incorporated in the state of Delaware. In January 2011, the Company acquired all of the outstanding shares of Propanc PTY LTD on a one-for-one basis with Propanc PTY LTD becoming a wholly owned subsidiary of the Company. As a result of these transactions, the Company is subject to the income tax laws of both the United States and Australia for the years ended June 30, 2013 through June 30, 2022. The reconciliation of income tax expense computed at the U.S. federal statutory rate of 21 % to the income tax provision for the years ended June 30, 2022 and 2021 is as follows: SCHEDULE OF INCOME TAX PROVISION Year Ended US June 30, 2022 June 30, 2021 Loss before Income taxes $ ( 2,658,087 ) $ ( 2,025,947 ) Taxes under statutory US tax rates $ ( 558,198 ) $ ( 425,449 ) Increase (decrease) in valuation allowance 339,334 1,146,001 Prior period adjustment - ( 1,063,710 ) Foreign tax rate differential ( 64,349 ) ( 51,169 ) Income tax rate change 272,008 392,767 Other 11,205 1,559 Income tax (expense) benefit $ - $ - The Company reflects a tax benefit on its consolidated statement of operations and comprehensive income (loss) in 2022 and 2021 of $ 54,977 and $ 113,415 , respectively. These amounts are research and development tax credits and are not considered income tax. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. F- 26 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities consist of the following: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES Year Ended June 30, 2022 June 30, 2021 Deferred tax assets Warrant Derivative Liability $ 7,403 $ 7,403 Accrued Expenses 363,873 342,464 Prepaid Investor Services 427,318 444,411 Non-cash interest 709,936 687,529 Intangibles (Intellectual Property and Patent Cost) 293,260 259,743 Deferred Rent 4,198 4,262 Formation Expense 6,553 6,815 Net Operating Loss carryforward 8,759,357 8,546,920 Foreign Exchange Loss (OCI) ( 39,379 ) ( 39,379 ) Revalue of derivative liability 460,772 439,958 Stock Based Compensation 84,028 51,481 Total Deferred tax assets $ 11,077,318 $ 10,751,607 Deferred tax liabilities R&D $ ( 170,435 ) $ ( 197,604 ) Gain on extinguishment of debt ( 259,470 ) ( 277,614 ) Capital Raising Costs ( 352,981 ) ( 321,291 ) Total deferred tax liabilities $ ( 782,886 ) $ ( 796,509 ) Net deferred tax assets $ 10,294,432 $ 9,955,098 Valuation allowance ( 10,294,432 ) ( 9,955,098 ) Net deferred tax assets $ - $ - At June 30, 2022, the Company had U.S. net operating loss carry forwards of approximately $ 10,183,947 that may be offset against future taxable income, subject to limitation under IRC Section 382. Of the approximately $ 10.2 million of net operating loss carryforwards, $ 7.2 million will begin to expire in 2024 and the remaining $ 3.0 million will not expire but is subject to annual usage limitations. The Australian tax rate changed from 26 % in 2021 to 25 % in 2022. At June 30, 2022, the Company had Australia net operating loss carry forwards of approximately $ 26,482,912 which can be carried forward without expiration. No tax benefit has been reported in the June 30, 2022 and 2021 consolidated financial statements due to the uncertainty surrounding the realizability of the benefit, based on a more likely than not criteria and in consideration of available positive and negative evidence. The Company applied the “more-likely-than-not” recognition threshold to all tax positions taken or expected to be taken in a tax return, which resulted in no unrecognized tax benefits as of June 30, 2022 and 2021, respectively. Management has determined that the realization of the net deferred tax asset is not assured and has created a valuation allowance for the entire amount of such benefits. The Company follows ASC 740-10, which provides guidance for the recognition and measurement of certain tax positions in an enterprise’s financial statements. Recognition involves a determination whether it is more likely than not that a tax position will be sustained upon examination with the presumption that the tax position will be examined by the appropriate taxing authority having full knowledge of all relevant information. The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the consolidated statement of operations. As of June 30, 2022, the Company had no unrecognized tax benefits. There were no changes in the Company’s unrecognized tax benefits during the years ended June 30, 2022 and 2021. The Company did not recognize any interest or penalties during fiscal 2022 or 2021 related to unrecognized tax benefits. The income tax returns filed for the tax years from inception will be subject to examination by the relevant taxing authorities. NOTE 8 – STOCKHOLDERS’ DEFICIT Increase in Authorized Shares of Common Stock and Reverse Stock Split On May 18, 2022, the board of directors of the Company approved and authorized, and the holders of a majority in interest of the Company’s voting capital stock approved by written consent, in accordance with Section 228 of the Delaware General Corporation Law, for the Company to file a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware, which increased the Company’s authorized capital stock. The Certificate increased the number of authorized shares of the Company’s common stock, par value $ 0.001 per share, from 1,000,000,000 to 3,000,000,000 . The number of authorized shares of preferred stock remains at 1,500,005 , such that the total number of shares of all classes and series the Company is authorized to issue is 3,001,500,005 shares. The Certificate was filed and became effective on July 6, 2022. F- 27 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 On November 17, 2020, the Company effected a one-for-one thousand (1:1,000) reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”). 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. Preferred Stock The total number of shares of preferred stock that the Company is authorized to issue is 1,500,005 , $ 0.01 par value per share. These preferred shares have no rights to dividends, profit sharing or liquidation preferences. Of the total preferred shares authorized, 500,000 have been designated as Series A Preferred Stock (“Series A Preferred Stock”), pursuant to the Certificate of Designation filed with the Secretary of State of the State of Delaware on December 9, 2014. James Nathanielsz, the Company’s Chief Executive Officer and Chief Financial Officer, 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. North Horizon Pty Ltd. is a Nathanielsz Family Trust. Mr. 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 June 30, 2022 and 2021. Of the total preferred shares authorized, pursuant to the Certificate of Designation filed with the Secretary of State of the State of Delaware on June 16, 2015, up to five shares have been designated as Series B Preferred Stock (“Series B Preferred Stock”). Each holder of outstanding shares of Series B Preferred Stock is entitled to voting power equivalent to the number of votes equal to the total number of shares of common stock outstanding as of the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company and entitled to vote on all matters submitted or required to be submitted to a vote of the stockholders of the Company. One share of Series B Preferred Stock is issued and outstanding as of June 30, 2022 and 2021. Mr. Nathanielsz directly beneficially owns such one share of Series B Preferred Stock. No additional shares of Series A Preferred Stock or Series B Preferred Stock were issued during fiscal year 2022 and 2021. Common Stock Shares issued under the Equity Line On November 30, 2021, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Dutchess Capital Growth Fund LP, a Delaware limited partnership, (“Dutchess”), providing for an equity financing facility (the “Equity Line”). The Purchase Agreement provides that upon the terms and subject to the conditions in the Purchase Agreement, Dutchess is committed to purchase up to Five Million Dollars ($ 5,000,000 ) of shares of the Company’s common stock (the “Common Stock”), over the 36 month term of the Purchase Agreement (the “Total Commitment”). Under the terms of the Purchase Agreement, Dutchess will not be obligated to purchase shares of Common Stock unless and until certain conditions are met, including but not limited to a Registration Statement on Form S-1 (the “Registration Statement”) becoming effective which registers Dutchess’ resale of any Common Stock purchased by Dutchess under the Equity Line. From time to time over the 36-month term of the Purchase Agreement, commencing on the trading day immediately following the date on which the Registration Statement becomes effective, the Company, in our sole discretion, may provide Dutchess with a draw down notice (each, a “Draw Down Notice”), to purchase a specified number of shares of Common Stock (each, a “Draw Down Amount Requested”), subject to the limitations discussed below. The actual amount of proceeds the Company will receive pursuant to each Draw Down Notice (each, a “Draw Down Amount”) is to be determined by multiplying the Draw Down Amount Requested by the applicable purchase price. The purchase price of each share of Common Stock equals 92 % of the lowest trading price of the Common Stock during the five (5) business days prior to the Closing Date. Closing Date shall mean the five (5) business days after the Clearing Date. Clearing Date shall mean the first business day that the Selling Shareholder holds the Draw Down Amount in its brokerage account and is eligible to trade the shares. The maximum number of shares of Common Stock requested to be purchased pursuant to any single Draw Down Notice cannot exceed the lesser of (i) 300 % of the average daily share volume of the Common Stock in the five (5) trading days immediately preceding the Draw Down Notice or (ii) an aggregate value of $ 250,000 . F- 28 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The Company agreed to pay to Dutchess a commitment fee for entering into the Purchase Agreement of 1,000,000 restricted shares of the Company’s common stock. The 1,000,000 shares of common stock were valued at approximately $ 0.02 per share or $ 20,000 , being the closing price of the stock on November 30, 2021, the date of grant. The shares were issued on December 10, 2021. The Company initially recorded deferred offering cost of $ 20,000 . The Company deferred these costs until such time that the associated financings were completed. Upon completion and recognition of the proceeds, any deferred offering costs will be reported as a direct deduction from the amount of the proceeds received as a charge to additional paid in capital. During the year ended June 30, 2022, the $ 20,000 deferred offering cost was directly deducted from the proceeds received below. Between April 5, 2022 and June 30, 2022, the Company issued an aggregate of 25,663,288 shares of its common stock at an average price per share of approximately $ 0.01 , as a result of delivering four draw down notices to the Investor. Consequently, the Company received gross aggregate proceeds of $ 99,285 and subscription receivable of $ 23,758 from such draw down notice. The Company collected the $ 23,758 subscription receivable in August 2022. Shares issued for conversion of convertible debt During the year ended June 30, 2021, the Company issued an aggregate of 8,786,113 shares of its common stock at an average contractual conversion price of $ 0.13 , ranging from $ 0.03 to $ 2.00 , as a result of the conversion of principal of $ 1,018,867 , interest of $ 103,321 and conversion fees $ 16,500 underlying certain outstanding convertible notes converted during such period. The total recorded to equity was $ 1,239,075 prior to the reversal of unissued shares. There were 24,427 unissued shares which were considered issuable for accounting purposes during the first quarter of fiscal 2021 related to conversion notices dated and received in September 2020. In November 2020, the Company was notified by the note holder of the cancellation of these conversion notices and as such the Company reversed the effects of these transactions thereby increasing the principal balance by $ 19,600 , accrued interest of $ 416 and put premium by $ 11,785 and a corresponding decrease in equity of $ 31,801 . During the year ended June 30, 2021, converted notes totaling principal amount of $ 95,000 and accrued interest of $ 3,000 contained bifurcated embedded conversion option derivatives. Accordingly, the fair market value of the shares issued was $ 178,368 resulting in a loss on extinguishment at the time of conversion of $ 80,368 and $ 130,975 of derivative fair value was recorded as a gain on extinguishment at the time of conversion. The Company reclassified $ 590,504 to additional paid in capital following conversions of notes accounted for as stock settled debt during the year ended June 30, 2021. During the year ended June 30, 2022, the Company issued an aggregate of 96,959,620 shares of its common stock and common stock issuable of 7,326,007 at average contractual conversion prices ranging from $ 0.01 to $ 0.04 , as a result of the conversion of principal of $ 599,148 , interest of $ 36,154 and conversion fees $ 2,250 underlying certain outstanding convertible notes converted during the year. The total recorded to equity was $ 657,125 including the $ 19,572 discussed below. The common stock issuable of 7,326,007 shares were issued on July 12, 2022. During the year ended June 30, 2022, converted notes - principal of $ 1,000 and accrued interest of $ 8,000 contained bifurcated embedded conversion option derivatives. Accordingly, the fair market value of the shares issued upon conversion was $ 28,572 resulting in a loss on extinguishment at the time of conversion of $ 19,572 and $ 2,069 of derivative fair value was recorded as a gain on extinguishment at the time of conversion. The Company reclassified $ 335,677 to additional paid in capital following conversions of notes accounted for as stock settled debt during the year ended June 30, 2022. The Company has 730,181,169 shares of its common stock reserved for future issuances based on lender reserve requirements pursuant to underlying financing agreements at June 30, 2022. Shares issued for services and accrued expenses On March 22, 2021, the Company issued an aggregate of 225,037 shares of the Company’s common stock to a consultant for services rendered from January 1, 2021 to March 22, 2021. The Company issued 225,037 shares of the Company’s common stock valued at $ 0.30 per share, being the closing price of the stock on the date of grant to such consultant, or $ 67,511 . The Company recorded $ 67,511 of consulting expense with respect to such shares of its common stock during the year ended June 30, 2021. Between March 2021 and June 2021, the Company issued an aggregate of 580,609 shares of the Company’s common stock to a consultant for services rendered from April 1, 2021 to June 30, 2021. The Company issued 580,609 shares of the Company’s common stock valued at $ 0.10 per share, being the closing price of the stock on the date of grant to such consultant, or $ 58,061 . The Company recorded $ 58,061 of consulting expense with respect to such shares of its common stock during the year ended June 30, 2021. F- 29 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 On August 12, 2021, the Board approved the issuance of 2,800,000 shares of the Company’s common stock for bonus payable of $ 84,000 as of June 30, 2021 to an employee who is the wife of the CEO of the Company. The 2,800,000 shares of common stock were valued at approximately $ 0.03 per share or $ 87,920 , being the closing price of the stock on the date of grant. The shares were issued on August 17, 2021. The Company recorded stock-based compensation of $ 3,920 during the year ended June 30, 2022 and reclassified bonus payable of $ 84,000 to additional paid in capital upon issuance. On August 12, 2021, the Board approved the issuance of 166,667 shares of the Company’s common stock for legal services rendered for the month of August 2021. The 166,667 shares of common stock were valued at approximately $ 0.05 per share or $ 7,883 , being the closing price of the stock on August 31, 2021, the date of grant. The shares were issued on September 3, 2021. The Company recorded stock-based compensation of $ 7,883 during the year ended June 30, 2022. In September 2021, the Company issued 2,819,712 shares of the Company’s common stock to a consultant for services rendered from July 2021 to September 2021 valued at approximately $ 0.04 per share or $ 104,611 , being the closing price of the stock on the date of grant to such consultant. The Company recorded stock-based compensation of $ 104,611 during the year ended June 30, 2022. On January 20, 2022, the Board approved the issuance of 666,667 shares of the Company’s common stock for legal services rendered in January 2022. The 666,667 shares of common stock were valued at approximately $ 0.03 per share or $ 20,000 , being the average closing prices of the stock for the month of January 2022, the date of grant. The Company recorded stock-based compensation of $ 20,000 during the year ended June 30, 2022. On January 24, 2022, the Company issued 2,274,224 shares of the Company’s common stock to a consultant for services rendered from October 2021 to December 2021. The Company issued 2,274,224 shares of the Company’s common stock valued at approximately $ 0.02 per share or $ 45,030 , being the closing price of the stock on the date of grant to such consultant. The Company recorded stock-based compensation of $ 45,030 during the year ended June 30, 2022. On February 17, 2022, the Board approved the issuance of 1,148,326 shares of the Company’s common stock to a consultant for services rendered upon the termination of the consulting agreement (see Note 9). The Company valued the shares at approximately $ 0.02 per share or $ 24,000 being the closing price of the stock on the date of grant to such consultant. The shares were issued on April 7, 2022. The Company recorded stock-based compensation of $ 24,000 during the year ended June 30, 2022. On April 13, 2022, the Company issued 3,833,683 shares of the Company’s common stock to a consultant for services rendered from January 2022 to March 2022. The Company issued 3,833,683 shares of the Company’s common stock valued at approximately $ 0.0122 per share or $ 46,771 , being the closing price of the stock on the date of grant to such consultant. The Company recorded stock-based compensation of $ 46,771 during the year ended June 30, 2022. On June 30, 2022, the Board approved the issuance of 12,270,958 shares of the Company’s common stock to a consultant for services rendered from April 2022 to June 2022. The 12,270,958 shares was reflected as common stock issuable and was valued at approximately $ 0.0037 per share or $ 45,403 , being the closing price of the stock on the date of grant to such consultant. The Company recorded stock-based compensation of $ 45,403 during the year ended June 30, 2022. The common stock issuable of 12,270,958 shares were issued on July 1, 2022. Nathanielsz Cancellation Agreement On August 12, 2021, the Company entered into a Cancellation Agreement with James Nathanielsz (“Nathanielsz”), Chief Executive Officer and Director of the Company, whereby Nathanielsz agreed to cancel his cash compensation bonus award for fiscal year 2021, ended June 30, 2021, in exchange for common stock of the Company. The Company and Nathanielsz entered into an Amended and Restated Employment Agreement dated May 14, 2019 (the “Agreement”). Pursuant to the terms of the Agreement, Nathanielsz was eligible to earn an annual fiscal year cash performance bonus for each fiscal year of his employment period with the Company with a target performance bonus of 200 % of his average annualized base salary during the fiscal year for which the performance bonus is earned. On July 20, 2021, Nathanielsz was awarded a “target” bonus of 78 %, or $ 177,840 USD (the “Debt”) for the fiscal year ended June 30, 2021, by the Company’s Board of Directors (the “Board”). Pursuant to the Cancellation Agreement, Nathanielsz agreed to cancel this Debt in exchange for 5,928,000 shares of the common stock of the Company (the “Shares”), valued at approximately $ 0.03 per share or $ 186,139 , being the closing price of the stock on the date of grant. The shares were issued on August 17, 2021. The Company recorded stock-based compensation of $ 8,299 during the year ended June 30, 2022 and reclassified bonus payable of $ 177,840 to additional paid in capital upon issuance. F- 30 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Kenyon Cancellation Agreement On August 12, 2021, the Company entered into a Cancellation Agreement with Dr. Julian Kenyon (“Kenyon”), Chief Scientific Officer and Director of the Company, whereby Kenyon agreed to cancel of $ 102,600 USD of accrued salary due him as of June 30, 2021, pursuant to that certain Amended and Restated Services Agreement by and between Kenyon and the Company, dated May 14, 2019, in exchange for 3,420,000 shares of common stock of the Company (the “Shares”), valued at approximately $ 0.03 per share or $ 107,388 , being the closing price of the stock on the date of grant. The shares were issued on August 17, 2021. The Company recorded stock-based compensation of $ 4,788 during the year ended June 30, 2022 and reclassified accrued expenses of $ 102,600 to additional paid in capital upon issuance. Zelinger Amended and Restated Director Agreement On August 12, 2021, the Company entered into an Amended and Restated Director Agreement (the “Director Agreement”) with Josef Zelinger (“Zelinger”). Pursuant to the terms of the Director Agreement, the Company shall pay Zelinger a base salary of $ 250.00 AUD ($ 184 USD) per month, payable on the first day of each month. In addition, the Company may compensate Zelinger additional consideration for advisory services performed by the Director, either in the form of cash or common stock, at the discretion of the Board. The Company issued 2,800,000 shares of common stock of the Company for accrued director services of $ 84,000 as of June 30, 2021. The 2,800,000 shares of common stock were valued at approximately $ 0.03 per share or $ 87,920 , being the closing price of the stock on the date of grant. The shares were issued on August 17, 2021. The Company recorded stock-based compensation of $ 3,920 during the year ended June 30, 2022 and reclassified accrued expenses of $ 84,000 to additional paid in capital upon issuance. Shares issued for exercise of warrants During the year ended June 30, 2021, the Company received aggregate gross proceeds of $ 776,044 from the exercise of 10,445 prefunded warrants and 19,375 Series B Warrants resulting in the issuance of 29,820 shares of common stock. During the year ended June 30, 2022, the Company received aggregate gross proceeds of $ 625,000 from the exercise of 15,625 Series B Warrants with an exercise price of $ 40 per share and issued 15,625 shares of common stock. Additionally, during the year ended June 30, 2021, the Company issued 4,199,979 shares of common stock from the alternate cashless exercise of 20 Series A and 1 Series C warrants. During the year ended June 30, 2022, the Company issued 56,799,716 shares of common stock from the alternate cashless exercise of 284 Series A warrants with an original exercise price of $ 200 and alternate cashless exercise price of $ 0.001 . The Alternate Cashless Exercise provision, for a cashless conversion at the holder’s option, is available should the trading price of the Company’s common stock fall below $ 200 per share calculated based on the difference between the exercise price of the Series A Warrant and 70 % of the market price. The Company recognized the value of the effect of a down round feature in such warrants when triggered. Upon the occurrence of the triggering event that resulted in a reduction of the strike price, the Company measured the value of the effect of the feature as the difference between the fair value of the warrants without the down round feature or before the strike price reduction and the fair value of the warrants with a strike price corresponding to the reduced strike price upon the down round feature being triggered. Accordingly, the Company recognized deemed dividend of $ 700,340 and $ 391,749 , during the years ended June 30, 2022 and 2021, respectively, and a corresponding reduction of income available to common stockholders upon the alternate cashless exercise of these warrants. Restricted Stock Units Pursuant to employment agreements dated in May 2019, the Company granted an aggregate of 78 and 39 restricted stock unit to the Company’s Chief Executive Officer and Chief Scientific Officer, respectively. The total 117 restricted stock units are subject to vesting terms as defined in the employment agreements. The 117 restricted stock units were valued at the fair value of $ 4,250 per unit or $ 497,240 based on the quoted trading price on the date of grant. There were $ 248,620 unrecognized restricted stock units expense as of June 30, 2022. There are 59 unvested restricted stock units which are subject to various performance conditions which have not yet been met and such restricted stock units have not yet vested as of June 30, 2022 and 2021 to which the $ 248,620 relates. F- 31 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Stock Options A summary of the Company’s stock option activity during the years ended June 30, 2022 and 2021 is presented below: SCHEDULE OF SHARE BASED COMPENSATION STOCK OPTIONS ACTIVITY Weighted Number of Average Options Price Per Share Outstanding at June 30, 2020 60 $ 76,370 Issued - - Exercised - - Expired ( 1 ) 3,750,000 Outstanding at June 30, 2021 59 $ 13,730 Issued - - Exercised - - Expired - - Outstanding at June 30, 2022 59 $ 4,533 Exercisable at June 30, 2022 59 $ 4,531 Outstanding and Exercisable: Weighted average remaining contractual term 6.88 Weighted average fair value of options granted during the period $ - Aggregate intrinsic value $ - On the Effective Date, the Company’s board of directors approved and adopted the Company’s 2019 Equity Incentive Plan (the “2019 Plan”), which reserves a total of 234 shares of the Company’s common stock for issuance under the 2019 Plan. Incentive awards authorized under the 2019 Plan include, but are not limited to, incentive stock options, non-qualified stock options, restricted stock awards and restricted stock units. During the years ended June 30, 2022 and 2021, the Company recognized stock-based compensation of $ 72,513 and $ 82,872 related to vested stock options. There was $ 0 of unvested stock options expense as of June 30, 2022. No stock options were granted during the years ended June 30, 2022 and 2021. Stock Warrants The following table summarizes common stock warrant activity for the years ended June 30, 2022 and 2021: SCHEDULE OF WARRANT ACTIVITY Weighted Number of Average Warrants Price Per Share Outstanding at June 30, 2020 151,170 $ 150.00 Issued - - Exercised ( 29,841 ) 26.15 Forfeited - - Expired - - Outstanding at June 30, 2021 121,329 $ 179.63 Issued - - Exercised ( 15,909 ) 42.86 Forfeited - - Expired - - Outstanding at June 30, 2022 105,420 * $ 200.27 Exercisable at June 30, 2022 76,671 $ 275.37 Outstanding and Exercisable: Weighted average remaining contractual term 0.77 Aggregate intrinsic value $ - * The total warrants of 105,420 above consisted of the following: SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE Number of Warrants Exercisable Series A warrants 10,946 10,946 Series B warrants 28,750 28,750 Series C warrants 63,749 35,000 Warrants with no class designation 1,975 1,975 Total 105,420 76,671 In connection with the issuance of shares on April 3, 2020, the Company closed on a transaction related to a Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into on March 30, 2020, whereby an investor purchased from the Company, 7,500 units, each consisting of (i) 1.5 shares of the Company’s common stock, or pre-funded warrants upon Investor’s election due to the 4.99% blocker provision 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 warrants to purchase one share of Common Stock (the “Series B Warrants”) and an additional 63,750 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”). F- 32 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Due to the Beneficial Ownership Limitation, the Company granted 10,445 Prefunded Warrants with exercise price of $ 0.10 (but can be less than par value). The Prefunded Warrants shall be exercisable immediately and shall expire when exercised in full. Series A Warrants Pursuant to the Securities Purchase Agreement entered into March 20, 2020 as discussed above, the Investor purchased Series A Warrants to purchase up to 11,250 shares of Common Stock, subject to adjustment as provided therein. The Series A Warrants have a cash exercise price of $ 200 per share and are immediately exercisable and expire in 3 years. The Series A Warrants contain a provision for cashless exercise in the event there is no effective registration statement registering the shares underlying the Series A Warrants calculated based on the difference between the exercise price of the Series A Warrant and the trading price of the stock (the “Cashless Exercise”).Additionally, the Series A Warrants contain a provision for a cashless conversion at the Holder’s option should the trading price of the Common Stock fall below $200 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”). The Alternate Cashless Exercise price is $0.001. See above “Shares issued for exercise of warrants” for discussion of deemed dividend related to alternate cashless exercise. Series B Warrants Pursuant to the Securities Purchase Agreement entered into March 20, 2020 as discussed above, the Investor purchased Series B Warrants to purchase up to 63,750 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 upon 10 Trading Days’ prior written notice to the Holder provided that the Company issues to the Holder 3,750 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 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 $ 40 per share and expire in 3 years. The Series B Warrants contain a provision for Cashless Exercise. Series C Warrants Pursuant to the Securities Purchase Agreement entered into March 20, 2020 as discussed above, the Investor purchased Series C Warrants to purchase up to 63,750 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 $ 200 per share, subject to a vesting schedule, which is based on such Holder’s exercise of the Series B Warrants (warrants shall be exercisable ratably upon exercise of Series B Warrants). The Series C Warrants contain provisions for Cashless Exercise and Alternate Cashless Exercise. See above “Shares issued for exercise of warrants” for discussion of deemed dividend related to alternate cashless exercise. Exercise of Warrants During the year ended June 30, 2021, the Company received aggregate gross proceeds of $ 776,044 from the exercise of 10,445 prefunded warrants and 19,375 Series B Warrants resulting in the issuance of 29,820 shares of common stock. Additionally, the Company issued 4,199,979 shares of common stock from the alternate cashless exercise of 20 Series A and 1 Series C warrants. During the year ended June 30, 2022, the Company received aggregate gross proceeds of $ 625,001 from the exercise of 15,625 Series B Warrants and issued 15,625 shares of common stock. During the year ended June 30, 2022, the Company issued 56,799,716 shares of common stock from the alternate cashless exercise of 284 Series A warrants. NOTE 9 – COMMITMENTS AND CONTINGENCIES Legal Matters On September 26, 2019, a complaint was filed against the Company with Supreme Court of the State of New York, County of New York, by Foley Shechter Ablovatskiy LLP (“Foley Shechter”), our former counsel, seeking $ 151,031 in professional fees allegedly owed, in addition to interest and costs of suit. The Company filed an answer, together with affirmative defenses and counterclaims. Certain amounts related to this claim were included in accounts payable and accrued expenses in the accompanying consolidated financial statements at June 30, 2020. On March 22, 2021, the Company entered into a settlement agreement with Foley Shechter whereby both parties agreed to settle all claims for professional fees owed for a total of $ 51,032 . The Company paid the settlement amount of $ 51,032 on March 22, 2021. Prior to the settlement agreement, the Company recorded total accounts payable and accrued expenses $ 142,660 . Accordingly, the Company recognized gain from settlement of debt of $ 92,556 during the year ended June 30, 2021. F- 33 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Regal Consulting, LLC (“Regal”) initiated litigation against the Company in Clark County District Court, Nevada on November 18, 2019. Regal was demanding approximately $ 400,000 and 60 shares of the Company’s common stock as payment for services that Regal purports to have performed. Regal additionally claimed that $ 106,500 remained due on a Convertible Note executed by the Company in May of 2017 and asserted that it was owed in excess of $ 100,000 in penalties in connection with the Company’s refusal to honor certain Conversion Notices. 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. On December 23, 2020, the parties mediated their dispute and negotiated a settlement agreement. On March 15, 2021, the Company entered into a Settlement and Mutual Release Agreement with Regal whereby both parties agreed to settle all claims and liabilities under the August 10, 2017 Convertible note (see Note 6) for a total of $ 100,000 . All other terms of the August 10, 2017 Convertible Note shall remain in full force and effect. Both parties agree that all future penalties under this convertible note are waived unless the Company fails to authorize the issuance of the requested shares upon conversion. The Company has the right to pay off the balance of any remaining amounts dues under this convertible note in cash at any time 61 days after March 15, 2021. Prior to the Settlement Agreement, the Company recorded total liabilities $ 56,762 consisting of remaining principal amount of $ 8,500 , accrued interest of $ 23,262 and accrued expenses of $ 25,000 . Accordingly, the Company recognized loss from settlement of debt of $ 43,238 during the year ended June 30, 2021. IRS Liability 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 June 30, 2022 and 2021 consolidated balance sheets. The Company recorded the penalties for all three years during the year ended June 30, 2018. The Company is current on all subsequent filings. Operating Agreements In November 2009, the Company entered into a commercialization agreement with the University of Bath (UK) (the “University”) whereby the Company and the University co-owned the intellectual property relating to the Company’s pro-enzyme formulations. In June 2012, the Company and the University entered into an assignment and amendment whereby the Company assumed full ownership of the intellectual property while agreeing to pay royalties of 2 % of net revenues to the University. Additionally, the Company agreed to pay 5 % of each and every license agreement subscribed for. The contract is cancellable at any time by either party. To date, no amounts are owed under the agreement. Operating Leases On May 5, 2016, the Company entered into a new five -year operating lease agreement with North Horizon Pty Ltd., a related party, of which Mr. Nathanielsz, our CEO, CFO and a director, and his wife are owners and directors, with monthly rent at $ 3,606 AUD or $ 2,469 USD (depending on exchange rate), inclusive of GST (see Note 10). The initial rental amount was $3,000 AUD and subject to 3% yearly escalation. Such lease expired in May 2021 and was renewed for another one-year term from May 2021 to May 2022. On May 4, 2022, the Company entered in a three-year lease agreement with North Horizon Pty Ltd. for a monthly rent of $ 3,000 AUD or $ 2,176 USD (depending on exchange rate) per month plus taxes. On May 4, 2022, the Company recorded right-of-use assets $ 66,201 and total lease liabilities of $ 66,201 based on an incremental borrowing rate of 8 %. ROU is summarized below: SCHEDULE OF RIGHT USE OF ASSET June 30, 2022 June 30, 2021 Office lease $ 66,201 $ 48,662 Less: accumulated amortization ( 3,678 ) ( 48,662 ) Right-of-use asset, net $ 62,523 $ - F- 34 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Operating Lease liabilities are summarized below: SCHEDULE OF OPERATING LEASE LIABILITY June 30, 2022 June 30, 2021 Office lease $ 66,201 $ 48,662 Reduction of lease liability ( 3,277 ) ( 48,662 ) Less: office lease, current portion ( 20,605 ) - Long term portion of lease liability $ 42,319 $ - Remaining future minimum lease payments under non-cancelable operating lease at June 30, 2022 are as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS Fiscal Year 2023 $ 24,894 Fiscal Year 2024 24,894 Fiscal Year 2025 20,745 Imputed interest ( 7,609 ) Total operating lease liability $ 62,924 The weighted average remaining lease term for the operating lease is 2.77 years. Collaboration Agreement On September 13, 2018, the Company entered into a two-year collaboration agreement with the University of Jaén (the “University”) to provide certain research services to the Company. In consideration of such services, the Company agreed to pay the University approximately 52,000 Euros ($ 59,508 USD) in year one and a maximum of 40,000 Euros ($ 45,775 USD) in year two. The Company paid 31,754 Euros ($ 36,117 USD) in 2019 and has accrued 28,493 Euros ($ 24,043 USD) as of June 30, 2021. 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 of Jaén 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. As of June 30, 2022, the Company has $0 balance due to the University. Consulting Agreement On October 1, 2021, the Company entered into a consulting agreement (the “Consulting Agreement”) with a consultant who will assist in the development of the Company’s business and financing activities. The consultant will serve initially as an independent contractor, and upon certain mutually agreed upon conditions being met, will be appointed Vice Chairman, President and Interim CFO. The term of the Consulting Agreement was for three years commencing on October 1, 2021 and can be terminated by either party upon 30 day written notice. The monthly payment per the Consulting Agreement was $ 7,000 . The Company was to issue shares of common stock equal to 1% of the total issued and outstanding shares at the end of each year of service and to be expensed upon date of grant. On February 17, 2022, the Board approved the issuance of 1,148,326 shares of the Company’s common stock to such consultant for services rendered upon the termination of the Consulting Agreement (see Note 8). The Company valued the shares at approximately $ 0.02 per share or $ 24,000 being the closing price of the stock on the date of grant to such consultant and recorded stock-based compensation of $ 24,000 during the year ended June 30, 2022 (see Note 8). NOTE 10 – RELATED PARTY TRANSACTIONS AND BALANCES Since its inception, the Company has conducted transactions with its directors and entities related to such directors. These transactions have included the following: As of June 30, 2022 and 2021, the Company owed its former director a total of $ 51,171 and $ 55,500 , respectively, for money loaned to the Company, throughout the years. The total loans balance owed at June 30, 2022 and 2021 is not interest bearing (see Note 5). F- 35 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 As of June 30, 2022 and 2021, the Company owed its former director a total of $ 30,746 and $ 33,347 , respectively, related to expenses paid on behalf of the Company related to corporate startup costs and intellectual property (see Note 4). Effective May 5, 2016, the Company entered into an agreement for the lease of its principal executive offices with North Horizon Pty Ltd., a related party, of which Mr. Nathanielsz, our CEO, CFO and a director, and his wife are owners and directors. The lease had a five -year term and provided 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. Such lease expired in May 2021 and was renewed for another one-year term from May 2021 to May 2022 . On May 4, 2022, the Company entered into a three -year lease agreement with North Horizon Pty Ltd. for a monthly rent of $ 3,000 AUD or $ 2,176 USD (depending on exchange rate) per month plus taxes (See Note 9). As of June 30, 2022 and 2021, total rent payable of $ 122,129 AUD ($ 84,452 USD) and $ 86,129 AUD ($ 64,597 USD), respectively, was included in accrued expenses in the accompanying consolidated balance sheet. Rent expense under those lease was $ 28,366 and $ 28,112 in fiscal 2022 and 2021, respectively and reflected as occupancy expenses in the accompanying consolidated statements of operations and comprehensive income (loss). Employment and Services Agreements with Management The Company and Mr. Nathanielsz entered into an employment agreement as of February 25, 2015 (the “Nathanielsz Employment Agreement”) setting forth the terms and conditions of Mr. Nathanielsz employment as the Company’s President and Chief Executive Officer. The Nathanielsz Employment Agreement was scheduled to expire on February 25, 2019 ; however, the term of the Nathanielsz Employment Agreement automatically renews for successive one-year periods unless either party provides 30 days’ prior written notice of its intent not to renew. The Nathanielsz Employment Agreement continues in effect as of June 30, 2021 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. Mr. 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. On August 1, 2022, the Company’s board of directors approved an increase of Mr. Nathanielsz’s annual base salary from $ 400,000 AUD ($ 276,600 USD) to $ 600,000 AUD ($ 414,900 USD), effective July 1, 2022. Mr. Nathanielsz’s wife, Sylvia Nathanielsz, is and has been a non-executive part-time employee of the Company since October 2015. Effective February 1, 2018, Mrs. Nathanielsz receives an annual salary of $ 120,000 AUD ($ 80,904 USD) and is entitled to customary benefits. Pursuant 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 year ended June 30, 2021, a total of $ 46,135 AUD ($ 34,476 USD) in payments have been made with respect to Mr. Nathanielsz’s car allowance. For the year ended June 30, 2022, a total of $ 7,689 AUD ($ 5,577 USD) in payments have been made with respect to Mr. Nathanielsz’s car allowance which expired in August 2022. Pursuant to the approval of the Company’s board of directors, on May 14, 2019, Mr. Nathanielsz was granted a $ 460,000 AUD ($ 315,376 USD) bonus for accomplishments achieved while serving as the Company’s Chief Executive Officer during the fiscal year ended June 30, 2019 with $ 200,000 AUD ($ 137,120 USD) of such bonus payable by the Corporation to the CEO throughout the Corporation’s 2019 fiscal year as the Corporation’s cash resources allow, with the remaining $ 260,000 AUD ($ 178,256 USD) of such bonus to be deferred by the CEO until a future date when the Corporation’s cash resources allow for such payment, as agreed to by the CEO. A total of $ 90,000 AUD ($ 64,377 USD) in payments were made in the year ended June 30, 2019. 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. A total of $ 202,620 AUD ($ 136,606 USD) in payments were made against the bonuses during the year ended June 30, 2020 which resulted to a remaining balance of $ 407,380 AUD ($ 280,726 USD) bonus payable as of June 30, 2020. On August 12, 2021, the Board approved a bonus of $ 177,840 USD. A total of $ 221,890 AUD ($ 166,418 USD) in payments were made against the bonuses during the year ended June 30, 2021 resulting in a remaining balance of $ 422,610 AUD ($ 316,957 USD) bonus payable as of June 30, 2021 which was included in accrued expenses in the accompanying consolidated balance sheet. On August 12, 2021, pursuant to the Cancellation Agreement, Mr. Nathanielsz agreed to cancel $ 177,840 of the bonus payable in exchange for 5,928,000 shares of the common stock of the Company (see Note 8). On August 1, 2022, the Board approved a bonus of $ 140,000 AUD or $ 96,810 USD. A total of $ 144,166 AUD ($ 99,691 USD) in payments were made against the bonuses during the year ended June 30, 2022 resulting in a remaining balance of $ 181,324 AUD ($ 125,386 USD) bonus payable as of June 30, 2022 which was included in accrued expenses in the accompanying consolidated balance sheet. F- 36 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 Amended and Restated Employment Agreement - 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 Officer, Chairman, acting Chief Financial Officer and a director, for a term of three years , subject to automatic one -year renewals, at an annual salary of $ 400,000 AUD. Pursuant to the Employment Agreement, Mr. Nathanielsz was granted options to purchase 39 shares of the Company’s common stock (the “Nathanielsz Options”), with an exercise price per share of $ 4,675 ( 110 % of the closing market price of the Company’s common stock on May 14, 2019 (or $ 4,250 ), the date of approval of such grant by the Company’s board of directors), (ii) 39 restricted stock units of the Company (the “Initial Nathanielsz RSUs”), and (iii) an additional 39 restricted stock units of the Company (the “Additional Nathanielsz RSUs”). 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. 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. Nathanielsz 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) 7.80 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) 7.80 of the Additional Nathanielsz RSUs shall vest upon the CTA being approved in an applicable jurisdiction, (iii) 7.80 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) 7.80 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 7.80 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. The 39 vested restricted stock unit are considered issuable as of June 30, 2022 and 2021. Amended and Restated Services Agreement - On May 14, 2019, the Company also entered into an Amended and Restated Services Agreement (the “Services Agreement”) with Dr. Kenyon, the Company’s Chief Scientific Officer and a director, for a term of three years, subject to automatic one -year renewals, at an annual salary of $ 54,000 AUD. In connection with the execution of the Services Agreement, Dr. Kenyon was designated as an executive officer of the Company and assumed a more active executive role with the Company. Pursuant to the Services Agreement, Dr. Kenyon was granted options to purchase 20 shares of the Company’s common stock (the “Kenyon Options”), with an exercise price per share of $ 4,250 ( 100 % of the closing market price of the Company’s common stock on May 14, 2019, the date of approval of such grant by the Company’s board of directors), (ii) 20 restricted stock units of the Company (the “Initial Kenyon RSUs”), and (iii) an additional 20 restricted stock units of the Company (the “Additional Kenyon RSUs”). 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 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 date: (i) 5 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) 5 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) 5 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 5 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 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 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. The 20 vested restricted stock unit are considered issuable as of June 30, 2022 and 2021. On August 12, 2021, p ursuant to the Cancellation Agreement, Mr. Kenyon agreed to cancel accrued salaries of $ 102,600 in exchange for 3,420,000 shares of the common stock of the Company (see Note 8). As of June 30, 2022 and 2021, total accrued salaries of $ 54,000 AUD ($ 37,341 USD) and $ 135,000 AUD ($ 101,250 USD) was included in accrued expenses in the accompanying consolidated balance sheet, respectively. Collaboration Agreement On October 1, 2020, the Company entered into a two-year collaboration agreement with the University of Jaén to provide certain research services to the Company (see Note 9). One of the Company’s Scientific Advisory Board is the lead joint researcher of University of Jaén. Additionally, on July 27, 2022, the Company entered into a two-year research agreement with the University of Jaén to provide certain research and experiment services to the Company (see Note 13). Further, the Company agreed to pay royalties of 1% of net revenues each to two members of the Scientific Advisory Board. Intercompany Loans All Intercompany loans were made by the parent to the subsidiary, Propanc PTY LTD, which have not been repaid as of June 30, 2022. 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 on the consolidated balance sheet as accumulated other comprehensive income. F- 37 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 NOTE 11 – CONCENTRATIONS AND RISKS Concentration of Credit Risk The Company maintains its cash in banks and financial institutions in Australia. Bank deposits in Australian banks are uninsured. The Company has not experienced any losses in such accounts through June 30, 2022. In fiscal year 2021, the Company primarily relied on funding from two convertible debt lenders and received net proceeds after deductions of $ 16,000 for original issue discounts and debt issue costs during the year ended June 30, 2021 from each of the two lenders of $ 125,000 and $ 200,000 , respectively, which represents approximately 39 %, and 61 %, respectively of total proceeds received by the Company during fiscal year 2021. In fiscal year 2022, the Company primarily relied on funding from three convertible debt lenders and received net proceeds after deductions of $ 73,500 for original issue discounts and debt issue costs from the lenders of $ 766,500 (from each of the three lenders of $ 160,000 , $ 360,000 and $ 246,500 , respectively) which represents approximately 21 %, 47 % and 32 %, respectively of total proceeds received by the Company during fiscal year 2022. Receivable Concentration As of June 30, 2022 and 2021, the Company’s receivables were 100 % related to reimbursements on GST taxes paid. Patent and Patent Concentration The Company has filed multiple patent applications relating to its lead product, PRP. The Company’s lead patent 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, Japan, Indonesia, Israel, New Zealand, Singapore, Malaysia, South Africa, Mexico, Republic of Korea, India and Brazil. In Canada, the patent application remains under examination. In 2016 and early 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, applicants can simultaneously seek protection for an invention in over 150 countries. Once filed, the application is placed under the control of the national or regional patent offices, as applicable, in what is called the national phase. One of the PCT applications filed in November 2016, entered national phase in July 2018 and another PCT application is currently entering national phase in August 2018. A third PCT application entered the national phase in October 2018. In July 2020, a world first patent was granted in Australia for the cancer treatment method patent family. Presently, there are 43 granted, allowed, or accepted patents and 22 patents filed, or under examination in key global jurisdictions relating to the use of proenzymes against solid tumors, covering the lead product candidate PRP. Further patent applications are expected to be filed 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. Foreign Operations As of June 30, 2022 and 2021, the Company’s operations are based in Camberwell, Australia, however the majority of research and development is being conducted in the European Union. On 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. As of June 30, 2022 and 2021, there has been no activity within this entity. NOTE 12 - DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Derivative Financial Instruments: The 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 change in fair value in operations on the issuance date. The Company had $ 79,000 (1 note) and $ 80,000 (1 note) of convertible debt, which is treated as derivative instruments outstanding at June 30, 2022 and 2021 respectively. F- 38 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The Company calculates the estimated fair values of the liabilities for derivative instruments using the Binomial Trees Method. The closing price of the Company’s common stock at June 30, 2022, the last trading day of the fiscal year ended June 30, 2022, was $ 0.0037 . Volatility, expected remaining term and risk-free interest rates used to estimate the fair value of derivative liabilities at June 30, 2022 and 2021 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. Convertible Debt SCHEDULE OF FAIR VALUE MEASUREMENTS, RECURRING AND NONRECURRING, VALUATION TECHNIQUES June 30, 2022 June 30, 2021 Volatility 228 % 222 % Expected remaining term 0.01 0.01 Risk-free interest rate 1.28 % 0.05 % Expected dividend yield None None Fair Value Measurements: 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 June 30, 2022: SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS Balance at June 30, 2022 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Embedded conversion option liabilities $ 151,262 $ — $ — $ 151,262 Total $ 151,262 $ — $ — $ 151,262 The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2021: Balance at June 30, 2021 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Embedded conversion option liabilities $ 54,220 $ — $ — $ 54,220 Total $ 54,220 $ — $ — $ 54,220 F- 39 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The following is a roll forward for the years ended June 30, 2022 and 2021 of the fair value liability of price adjustable derivative instruments: SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE Fair Value of Liability for Derivative Instruments Balance at June 30, 2020 $ 177,009 Gain on debt extinguishment ( 130,975 ) Change in fair value included in statements of operations 8,186 Balance at June 30, 2021 54,220 Gain on debt extinguishment ( 2,069 ) Change in fair value included in statements of operations 99,111 Balance at June 30, 2022 $ 151,262 NOTE 13 – SUBSEQUENT EVENTS Exercise of warrants On August 2, 2022, the Company received gross proceeds of $ 50,000 from the exercise of 1,250 Series B Warrants and issued 1,250 shares of common stock. Additionally, the Company issued an aggregate of 158,399,208 shares of common stock from the alternate cashless exercise of 792 Series A warrants. The Company recognized the value of the effect of a down round feature in such warrants when triggered. Upon the occurrence of the triggering event that resulted in a reduction of the strike price, the Company measured the value of the effect of the feature as the difference between the fair value of the warrants without the down round feature or before the strike price reduction and the fair value of the warrants with a strike price corresponding to the reduced strike price upon the down round feature being triggered. Accordingly, the Company recognized deemed dividend of $ 389,235 and a corresponding reduction of income available to common stockholders upon the alternate cashless exercise of these warrants Shares issued for conversion of convertible debt From July 1, 2022 through September 14, 2022, the Company issued an aggregate of 264,492,661 shares of its common stock at an average contractual conversion price of $ 0.001 as a result of the conversion of principal of $ 327,200 , and accrued interest of $ 22,330 underlying certain outstanding convertible notes converted during such period. The Company reclassified $ 133,646 in put premiums to additional paid in capital following these conversions. Shares issued under the Equity Line On July 13, 2022, the Company issued 14,336,712 shares of its common stock at an average price per share of approximately $ 0.002 , as a result of delivering one draw down notice to the Investor (see Note 8). Consequently, the Company received gross aggregate proceeds of $ 24,711 from such draw down notice. Issuance of convertible notes 1800 Diagonal Lending, LLC Securities Purchase Agreement On June 30, 2022, the Company entered into a securities purchase agreement with 1800 Diagonal Lending LLC (“1800 Diagonal”), which closed on July 11, 2022, pursuant to which 1800 Diagonal purchased a convertible promissory note (the “July 11, 2022 1800 Diagonal Note”) from the Company in the aggregate principal amount of $ 105,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of 1800 Diagonal any time after 180 days of the July 11, 2022 1800 Diagonal Note. The July 11, 2022 1800 Diagonal Note contains debt issue cost of $ 3,750 . The Company intends to use the net proceeds from the July 11, 2022 1800 Diagonal Note for general working capital purposes. The maturity date of the July 11, 2022 1800 Diagonal Note is June 30, 2023 . The 1800 Diagonal Note bears interest at a rate of 8 % per annum, which interest may be paid by the Company to 1800 Diagonal in shares of the Company’s common stock; but shall not be payable until the July 11, 2022 1800 Diagonal Note becomes payable, whether at the maturity date or upon acceleration or by prepayment. During the first 60 to 180 days following the date of these notes, the Company has the right to prepay the principal and accrued but unpaid interest due under the above note, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium ranging from 110 % to 129 % as defined in the note agreement. After this initial 180-day period, the Company does not have a right to prepay such note. F- 40 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The conversion price for the above note shall be equal to a 35 % discount of the market price which means the average of the lowest three trading prices of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion. Notwithstanding the foregoing, 1800 Diagonal shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by 1800 Diagonal and its affiliates, exceeds 9.99 % of the outstanding shares of the Company’s common stock. The Company treats this convertible note as stock settled debt under ASC 480. The above note contains 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. GS Capital Partners, LLC Securities Purchase Agreement dated August 12, 2022 On August 12, 2022, the Company entered into a securities purchase agreement (the “GS Capital Purchase Agreement”) with GS Capital Partners, LLC (“GS Capital”), pursuant to which GS Capital purchased a convertible redeemable note (the “GS Capital Note”) from the Company in the aggregate principal amount of $ 93,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of GS Capital. The transaction contemplated by the GS Capital Purchase Agreement closed on August 16, 2022. The GS Capital Note contains a $ 5,000 original issue discount. Pursuant to the terms of the GS Purchase Agreement, the Company paid GS Capital’s legal fees of $ 3,000 . The Company intends to use the net proceeds from the GS Capital Note for general working capital purposes. The maturity date of the GS Capital Note is April 12, 2023 . The GS Capital Note shall bear interest at a rate of 8 % per annum, which interest may be paid by the Company to GS Capital in shares of common stock but shall not be payable until the GS Capital Note becomes payable, whether at the Maturity Date or upon acceleration or by prepayment. The GS Capital Note is exchangeable for an equal aggregate principal amount of notes of different authorized denominations, as requested by GS Capital surrendering the same. GS Capital is entitled, at its option, at any time after cash payment, to convert all or any amount of the principal face amount of the GS Capital Note then outstanding into shares of the Company’s common stock at a price for each share of Common Stock (“Conversion Price”) of $0.0028 per share (the “Fixed Price”). However, in the event the Company’s common stock trades below $0.002 per share for more than five (5) consecutive trading days, then the Fixed Price shall be equal to $0.0013 per share. In the event of default, the Conversion Price shall be equal to 65 % of the lowest trading 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 may be traded in the future, for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company. GS Capital is restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by GS Capital, exceeds 4.99 % of the outstanding shares of the Company’s common stock. During the first 60 to 180 days following the date of this note, the Company has the right to prepay the principal and accrued but unpaid interest due under the above note issued to GS Capital, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium ranging from 110 % to 130 % as defined in the note agreement. After this initial 180-day period, the Company does not have a right to prepay such note. Upon the occurrence and during the continuation of certain events of default, interest shall accrue at a default interest rate of 24 % per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. In the event that the Company fails to deliver to GS Capital shares of common stock issuable upon conversion of principal or interest under the GS Capital Note, the penalty shall be $ 250 per day the shares are not issued beginning on the 4 th day after the conversion notice was delivered to the Company. This penalty shall increase to $ 500 per day beginning on the 10 th day. In an event of breach of section 8m as defined in the GS Capital note agreement, such GS Capital note shall incur penalty and will increase the outstanding principal amounts by 20 %. GS Capital Partners, LLC Securities Purchase Agreement dated September 21, 2022 On September 21, 2022, the Company entered into a securities purchase agreement with GS Capital Partners, LLC, pursuant to which GS Capital purchased a convertible redeemable note from the Company in the aggregate principal amount of $ 71,500 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of GS Capital. The transaction contemplated by the GS Capital Purchase Agreement closed on September 26, 2022. The GS Capital Note contains a $ 4,000 original issue discount. Pursuant to the terms of the GS Purchase Agreement, the Company paid GS Capital’s legal fees of $ 2,500 . The Company intends to use the net proceeds ($67,500) from the GS Capital Note for general working capital purposes. The maturity date of the GS Capital Note is March 21, 2023 . The GS Capital Note shall bear interest at a rate of 8 % per annum, which interest may be paid by the Company to GS Capital in shares of common stock, but shall not be payable until the GS Capital Note becomes payable, whether at the Maturity Date or upon acceleration or by prepayment. The GS Capital Note is exchangeable for an equal aggregate principal amount of notes of different authorized denominations, as requested by GS Capital surrendering the same. GS Capital is entitled, at its option, at any time after cash payment, to convert all or any amount of the principal face amount of the GS Capital Note then outstanding into shares of the Company’s common stock (the “Common Stock”) at a price for each share of Common Stock (“Conversion Price”) of $0.002 per share (the “Fixed Price”). However, in the event the Company’s Common Stock trades below $0.0014 per share for more than five (5) consecutive trading days, then the Fixed Price shall be equal to $0.0009 per share. In the event of default, the Conversion Price shall be equal to 65 % of the lowest trading 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 may be traded in the future, for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company. GS Capital is restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by GS Capital, exceeds 4.99 % of the outstanding shares of the Company’s Common Stock. During the first 60 to 180 days following the date of this note, the Company has the right to prepay the principal and accrued but unpaid interest due under the above note issued to GS Capital, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium ranging from 110 % to 125 % as defined in the note agreement. After this initial 180-day period, the Company does not have a right to prepay such note. Upon the occurrence and during the continuation of certain events of default, interest shall accrue at a default interest rate of 24 % per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. In the event that the Company fails to deliver to GS Capital shares of Common Stock issuable upon conversion of principal or interest under the GS Capital Note, the penalty shall be $ 250 per day the shares are not issued beginning on the 4 th day after the conversion notice was delivered to the Company. This penalty shall increase to $ 500 per day beginning on the 10 th day. In an event of breach of section 8m as defined in the GS Capital note agreement, such GS Capital note shall incur penalty and will increase the outstanding principal amounts by 20 %. ONE44 Capital LLC Securities Purchase Agreement On August 15, 2022, the Company entered into a securities purchase agreement (the “ONE44 Purchase Agreement”) with ONE44 Capital LLC, (“ONE44 Capital”), pursuant to which ONE44 Capital purchased a convertible redeemable note (the “ONE44 Note”) from the Company in the aggregate principal amount of $ 110,000 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of ONE44 Capital. The transaction contemplated by the ONE44 Purchase Agreement closed on August 16, 2022. The One44 Note contains an original issue discount amount of $ 10,000 . Pursuant to the terms of the ONE44 Purchase Agreement, the Company will pay ONE44 Capital’s legal fees of $ 5,500 . The Company intends to use the net proceeds from the ONE44 Note for general working capital purposes. F- 41 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 and 2021 The maturity date of the One44 Note is August 15, 2023 . The ONE44 Note shall bear interest at a rate of 10% per annum, which interest may be paid by the Company to ONE44 Capital in shares of common stock, but shall not be payable until the ONE44 Note becomes payable, whether at the Maturity Date or upon acceleration or by prepayment, as described below. The ONE44 Note is exchangeable for an equal aggregate principal amount of notes of different authorized denominations, as requested by ONE44 surrendering the same. ONE44 Capital has the option to convert all or any amount of the principal face amount of the ONE44 Note at any time after the 6 th monthly anniversary of the ONE44 Note. The “Conversion Price” shall mean 65 % multiplied by the lowest closing bid price of the Company’s 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 may be traded in the future, for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company. Notwithstanding the foregoing, ONE44 shall be restricted from effecting a conversion if such conversion, along with other shares of the Company’s common stock beneficially owned by ONE44 and its affiliates, exceeds 4.99 % of the outstanding shares of the Company’s common stock. The Company treats this convertible note as stock settled debt under ASC 480. During the first 60 to 180 days following the date of this note, the Company has the right to prepay the principal and accrued but unpaid interest due under the above note issued to GS Capital, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium ranging from 120 % to 135 % as defined in the note agreement. After this initial 180-day period, the Company does not have a right to prepay such note. Upon the occurrence and during the continuation of certain events of default, the ONE44 Note will accrue an interest rate of 24 %. In the event that the Company fails to deliver to ONE44 Capital shares of common stock issuable upon conversion of principal or interest under the ONE44 Capital Note, the penalty shall be $ 250 per day the shares are not issued beginning on the 4 th day after the conversion notice was delivered to the Company. This penalty shall increase to $ 500 per day beginning on the 10 th da y. In an event of breach of section 8m as defined in the ONE44 note agreement, such ONE44 note shall incur penalty and will increase the outstanding principal amounts by 20 %. Research Agreement On July 27, 2022, the Company entered into a two-year research agreement with the University of Jaén (the “University”) to provide certain research and experiment services to the Company. In exchange for full ownership of the intellectual property the Company agreed to pay royalties of 2 % of net revenues. In consideration of such services, the Company agreed to pay the University approximately 53,200 Euros ($ 53,806 USD) payable as follows: - 18,200 Euros ($ 18,407 USD) upon execution, - 8,000 Euros ($ 8,091 USD) in September 2022, - 7,000 Euros ($ 7,080 USD) in December 2022, - 10,000 Euros ($ 10,114 USD) in March 2023, and - 10,000 Euros ($ 10,114 USD) in July 2023. The commencement date for the experiments is on September 1, 2022, and the estimated length of time for completion is 24 months. Consulting Agreement On July 1, 2022, the Company and a consultant agreed to extend the term of a consulting agreement from July 1, 2022 to June 30, 2023 to provide media related services for a monthly fee of $ 50,000 . In addition, the Company shall pay a stock fee equal to 9.9 % of the outstanding common stock of the Company during the term of the agreement. The Company shall bring up the consultant’s diluted holdings back up to 9.9 % and accrue the value of the common stock at each reporting period until June 30, 2023. All service fees are non-refundable. F- 42 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure. None.