What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-15 compared with 2023-02-10 · 184 added, 216 removed, 156 unchanged (72% of the section changed)

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Note Regarding Forward-Looking Information

following discussion and analysis of the results of operations and financial condition of Propanc Biopharma, Inc., and its wholly-owned

Australian subsidiary, Propanc PTY LTD (“Propanc” or the “Company”) as of December 31, 2022 and for the six months

ended December 31, 2022 and 2021 should be read in conjunction with our unaudited financial statements and the notes to those unaudited

financial statements that are included elsewhere in this Quarterly Report on Form 10-Q.

References in this Management’s Discussion

and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms

following discussion and analysis of the results of operations and financial condition of Propanc Biopharma, Inc., and its

wholly-owned Australian subsidiary, Propanc PTY LTD (collectively, “Propanc” or the “Company”) as of March

31, 2023 and for the nine months ended March 31, 2023 and 2022 should be read in conjunction with our unaudited financial statements

and the notes to those unaudited financial statements that are included elsewhere in this Quarterly Report on Form 10-Q for the

period ended March 31, 2023 (this “Quarterly Report”).

References in this Management’s Discussion and Analysis of

Financial Condition and Results of Operations section to “us”, “we”, “our” and similar terms

refer to Propanc.

This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws.

events described in forward-looking statements contained in this Quarterly Report may not occur.

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act

of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

described in forward-looking statements contained in this Quarterly Report may not occur.

Generally, these statements relate to

business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated

benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating

The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,”

“plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions,

are intended to identify forward-looking statements.

We caution you that these statements are not guarantees of future performance or

events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence

the accuracy of the statements and the projections upon which the statements are based.

business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or

anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of

our operating results.

The words “aim”, “anticipate”, “believe”, “continue”,

“could”, “estimate”, “expect”, “feel”, “forecast”, “intend”,

“may,”, “outlook”, “plan”, “potential”, “predict”,

“project,”, “seek”, “should”, “will”, “would” and their opposites and similar expressions, are intended

to identify forward-looking statements.

We caution you that these statements are not guarantees of future performance or events and

are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the

accuracy of the statements and the projections upon which the statements are based.

actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements.

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whether from new information, future events or otherwise.

Propanc, our highest priority remains the safety, health and well-being of our employees, their families and our communities.

pandemic is a highly fluid situation and it is not currently possible for us to reasonably estimate the impact it may have on our financial

and operating results.

We will continue to evaluate the impact of the COVID-19 pandemic on our business as we learn more and the impact

of COVID-19 on our industry becomes clearer.

We are complying health guidelines regarding safety procedures, including, but are not limited

to, social distancing, remote working, and teleconferencing.

The extent of the future impact of the COVID-19 pandemic on our business

is uncertain and difficult to predict.

Adverse global economic and market conditions as a result of COVID-19 could also adversely affect

our business.

If the pandemic continues to cause significant negative impacts to economic conditions, our results of operations, financial

condition and liquidity could be adversely impacted.

Dollars are denoted herein by “USD,” “$” and “dollars”.

were incorporated in the state of Delaware as Propanc Health Group Corporation on November 23, 2010.

In January 2011, to reorganize our

Company, we acquired all of the outstanding shares of Propanc PTY LTD, an Australian corporation, on a one-for-one basis and Propanc

The Company was originally formed in Melbourne, Victoria, Australia on

October 15, 2007 as Propanc PTY LTD.

On November 23, 2010, Propanc Health Group Corporation was incorporated in the State of Delaware and in January 2011, to reorganize our

Company, we acquired all of the outstanding shares of Propanc PTY LTD on a one-for-one basis, whereby Propanc

PTY LTD became our wholly-owned subsidiary.

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inactive precursors of enzymes.

July 19, 2022, successful production of a synthetic recombinant version of the proenzyme trypsinogen was completed via the Proenzyme

Optimization Project 1 (POP1) joint research and drug discovery program.

The program is designed to produce a backup clinical compound

to the Company’s lead product candidate, PRP, which is targeting metastatic cancer from solid tumors.

On August 23, 2022, the initial

success of producing trypsinogen synthetically has now advanced to the stage where optimization of protein production is underway;

purification and yield of chymotrypsinogen is currently the focus of research.

August 3, 2022, a Joint Research Collaboration Agreement was established with the University of Jaén and the University of Granada,

Since late 2020, Mrs.

Belén Toledo Cutillas MSc, has been investigating an important experimental thesis on the effects

of proenzyme therapy and the tumor microenvironment, which is the key to the development, invasion, metastatic spread and recurrence

of solid tumors.

The work is being conducted at the laboratory of Professor Macarena Perán PhD, who is the lead researcher on

the project and is the second Joint Research and Collaboration Agreement currently in progress with the two Spanish Universities.

September 8, 2022, proenzyme therapy was shown to have a favorable impact inhibiting, slowing, or reversing tumor development by acting

as an anti-tumor agent, decreasing tumor cell proliferation, developing a non-malignant phenotype (observable characteristics) and promoting

cell adhesion (sticking close to one another) and differentiation (cell specialization rather than stem cell like).

It was concluded

that proenzyme therapy could have a significant impact on the tumor microenvironment as a potential clinical application.

August 16, 2022, a Notice of Allowance has been received from the European Patent Office (EPO) for claims involving compositions of proenzymes

to treat cancer.

This is the second patent application allowed in this jurisdiction and expires in November 2036.

A third patent application

is currently under examination at the EPO for a method to treat cancer stem cells, which was allowed in March this year by the US Patent

and Trademark Office (USPTO).

The field of the invention covers future dosing in planned clinical studies for the Company’s lead

product candidate, PRP.

November 9 and 10, 2022, Mr.

James Nathanielsz, Propanc’s Chief Executive Officer and Co-Founder, conducted investor meetings and

presented at the Sidoti & Company’s upcoming Micro-Cap Virtual Investor Conference.

The Sidoti & Company Micro-Cap Investor

Conference is a virtual event featuring micro-cap companies interacting with a number of institutional investors from across the United

December 17, 2022, on behalf of the University of Jaén and the University of Granada, and Propanc Biopharma, Mrs.

Toledo Cutillas MSc, Joint Researcher, presented at the recent 43 rd Meeting of the European Organization of Research and Treatment

of Cancer (EORTC), Pharmacology and Molecular Mechanisms (PAMM) group.

Toledo Cutillas discussed novel approaches to hampering tumor

support of key components within the tumor microenvironment.

Specifically, she described how “a protein-based treatment (PRP) re-educates”

certain tumor cells that play a key role in the tumor microenvironment, decreasing the tumor microenvironment influence on tumorigenesis

and increasing drug uptake of standard therapies that are often rendered ineffective due to chemoresistance.

On May 1, 2023, the Company filed a certificate of amendment (the “Certificate

of Amendment”) to its certificate of incorporation, as amended (the “Certificate of Incorporation”), to effect a one-for-one

thousand reverse stock split (the “Reverse Stock Split”) of its outstanding shares of common stock, par value $0.001 per share

(the “Common Stock”), effective as of May 1, 2023.

In connection with the Reverse Stock Split, the Company submitted an issuer

company-related action notification form to the Financial Industry Regulatory Authority, Inc.

(“FINRA”) notifying FINRA of

the Reverse Stock Split.

The processing of the effects of the Reverse Stock Split by FINRA on the reported price of the Common Stock on

the Pink® Open Market operated by the OTC Markets Group Inc.

will occur at the time that the Reverse Stock Split is announced by FINRA

on its over-the-counter daily list, which has not occurred as of the date of this Quarterly Report.

of Operations

following discussion should be read in conjunction with the Company’s unaudited consolidated financial statements and notes thereto

included elsewhere in this Report.

The results discussed below are of the Company and its wholly-owned Australian subsidiary, Propanc

the Three and Six months ended December 31, 2022, as compared to the Three and Six months ended December 31, 2021.

the three and six months ended December 31, 2022 and 2021, we generated no revenue because we are currently undertaking research and

development activities for market approval and no sales were generated in this period.

following discussion should be read in conjunction with the Company’s unaudited condensed consolidated financial statements

and notes thereto included elsewhere in this Quarterly Report.

The results discussed below are of the Company and its wholly-owned

Australian subsidiary, Propanc PTY LTD.

the Three and Nine months ended March 31, 2023, as compared to the Three and Nine months ended March 31, 2022.

the three and nine months ended March 31, 2023 and 2022, we generated no revenue because we are currently undertaking research and development

activities for market approval and no sales were generated in this period.

Administration

expense increased to $525,620 for the three months ended December 31, 2022 as compared to $346,164 for the three months ended

December 31, 2021.

This increase of approximately $179,000 is primarily attributable to an increase of approximately $145,000 in

employee remuneration expense, increase in stock-based expenses of approximately $31,000, increase in accounting fees of

approximately $5,000 offset by a decrease in general consulting, legal and investor relation fees of approximately

expense decreased to $311,824 for the three months ended March 31, 2023, as compared to $443,629 for the three months ended March

This decrease of approximately $132,000 is primarily attributable to a decrease of approximately $90,000 in stock-based

expenses, a decrease in accounting fees of approximately $11,000, a decrease in general consulting, legal and investor relation fees

of approximately $56,000, offset by increases in employee remuneration expense of approximately $22,000, and general consulting,

legal and investor relation fees of approximately $3,000.

Administration

expense increased to $990,752 for the six months ended December 31, 2022 as compared to $777,904 for the six months ended December 31,

This increase of approximately $213,000 is primarily attributable to an increase of approximately $151,000 in general consulting,

legal and investor relation fees, increase in accounting fees of approximately $9,000, increase of approximately $164,000 in employee

remuneration expense, increase in marketing expenses of $7,000, offset by decrease in stock-based expenses of approximately $116,000

and decrease in other general and administrative expenses of approximately $2,000.

expenses increased to $7,506 for the three months ended December 31, 2022 as compared to $6,550 for the three months ended December 31,

expense increased to $1,302,576 for the nine months ended March 31, 2023, as compared to $1,221,533 for the nine months ended March

This increase of approximately $81,000 is primarily attributable to an increase of approximately $95,000 in general

consulting, legal and investor relation fees, an increase in other general and administrative expenses of approximately $7,000, an

increase of approximately $185,000 in employee remuneration expense, an increase in marketing expenses of $7,000, offset by

decrease in stock-based expenses of approximately $211,000 and a decrease in accounting fees of approximately $2,000.

expenses increased to $8,365 for the three months ended March 31, 2023, as compared to $8,157 for the three months ended March 31, 2022.

This increase of $208 is primarily attributable to exchange rate movements over the period when compared to the same period in 2022.

expenses decreased to $13,879 for the six months ended December 31, 2022 as compared to $14,286 for the six months ended December 31,

expenses decreased to $22,244 for the nine months ended March 31, 2023, as compared to $22,443 for the nine months ended March 31, 2022.

This decrease of $199 is primarily attributable to exchange rate movements over the period when compared to the same period in 2022.

and Development Expenses

and development expenses were increased to $74,878 for the three months ended December 31, 2022 as compared to $50,753 for the three

months ended December 31, 2021.

Research and development expenses were increased to $176,203 for the six months ended December 31, 2022

as compared to $97,307 for the six months ended December 31, 2021.

The increase in research and development expenses is primarily attributable

to the two-year collaboration agreement with University of Jaén which was executed in October 2020 to provide certain research

services to the Company.

Additionally, on July 27, 2022, the Company entered into another two-year research agreement with the University

of Jaén to provide certain research and experiment services to the Company.

expense decreased to $98,619 for the three months ended December 31, 2022, as compared to $177,905 for the three months ended December

Interest expense is primarily comprised of approximately $81,000 of debt discount amortization and accretion of put premium

and interest expense from accrual of interest expense and other financing fees for a total of approximately $18,000 for the three months

ended December 31, 2022.

and development expenses increased to $66,020 for the three months ended March 31, 2023, as compared to $50,395 for the three months ended

March 31, 2022.

Research and development expenses increased to $242,223 for the nine months ended March 31, 2023, as compared to $147,702

for the nine months ended March 31, 2022.

The increase in research and development expenses is primarily attributable to the two-year

collaboration agreement with University of Jaén, which was executed in October 2020 to provide certain research services to the

Additionally, on July 27, 2022, the Company entered into another two-year research agreement with the University of Jaén

to provide certain research and experiment services to the Company.

expense decreased to $157,208 for the three months ended March 31, 2023, as compared to $167,375 for the three months ended March 31,

Interest expense primarily comprised approximately $142,000 of debt discount amortization and accretion of put premium and

interest expense from accrual of interest expense and other financing fees for a total of approximately $15,000 for the three months

ended March 31, 2023.

This decrease in interest expense of $10,167 is primarily attributable to the decrease of approximately $50,000

in accretion of put premium offset by increase in amortization of debt discount of approximately $40,000.

expense decreased to $261,371 for the six months ended December 31, 2022, as compared to $287,758 for the six months ended December 31,

Interest expense is primarily comprised of approximately $229,000 of debt discount amortization and accretion of put premium and

interest expense from accrual of interest expense and other financing fees for a total of approximately $32,000 for the six months ended

December 31, 2022.

This decrease in interest expense of $26,387 is primarily attributable to the decrease of approximately $99,000 in

accretion of put premium offset by increase in amortization of debt discount of approximately $73,000.

expense decreased to $418,579 for the nine months ended March 31, 2023, as compared to $455,133 for the nine months ended March 31, 2022.

Interest expense primarily comprised approximately $371,000 of debt discount amortization and accretion of put premium and interest

expense from accrual of interest expense and other financing fees for a total of approximately $47,000 for the nine months ended March

This decrease in interest expense of $36,554 is primarily attributable to the decrease of approximately $149,000 in accretion

of put premium offset by increase in amortization of debt discount of approximately $113,000.

in Fair Value of Derivative Liabilities

in fair value of derivative liabilities were increased to a gain of $62,335 for the three months ended December 31, 2022 as compared

to a loss of $163,853 for the three months ended December 31, 2021.

Change in fair value of derivative liabilities were increased to

a gain of $127,508 for the six months ended December 31, 2022 as compared to a loss of $167,757 for the six months ended December 31,

This increase in gain during the three and six months ended December 31, 2022 of approximately $226,000 and $295,000, respectively,

is primarily attributable to a decrease in fair value of the principal amount of convertible notes with bifurcated embedded conversion

option derivatives as a result of the decrease in stock prices during the six months ended December 31, 2022.

in fair value of derivative liabilities were decreased to a loss of $(238,367) for the three months ended March 31, 2023, as compared to

a gain of $165,365, for the three months ended March 31, 2022.

Change in fair value of derivative liabilities were increased to a loss

of $(110,859) for the nine months ended March 31, 2023, as compared to a loss of $(2,392) for the nine months ended March 31, 2022.

This increase

in loss during the three and nine months ended March 31, 2023 of approximately $404,000 and $108,000, respectively, is primarily attributable

to an increase in fair value of the principal amount of convertible notes with bifurcated embedded conversion option derivatives as a

result of the decrease in the conversion prices of such notes during the nine months ended March 31, 2023.

from Settlement of Accounts Payable

from settlement of accounts payable was $17,499 for the six months ended December 31, 2022, as compared to $0 for the six months ended

December 31, 2021.

from settlement of accounts payable was $17,499 for the nine months ended March 31, 2023, as compared to $0 for the nine months ended

March 31, 2022.

On August 16, 2022, the Company and a third-party investor relations consultant agreed to settle an outstanding payable

of $23,050 in exchange for 2,305,000 warrants to purchase the Company’s common stock at $0.01 per share with an expiry date of

of $23,050 in exchange for 2,305,000 warrants to purchase Common Stock at $0.01 per share with an expiry date of

August 16, 2025 and fair market value of $5,551.

Accordingly, the Company recognized gain from settlement of accounts payable of $17,499

during the six months ended December 31, 2022.

during the nine months ended March 31, 2023.

on Extinguishment of Debt, net

the six months ended December 31, 2022, notes with principal amounts totaling $79,000 and accrued interest of $9,543 contained bifurcated

embedded conversion option derivatives.

Accordingly, the fair market value of the shares issued was $195,952, resulting in a loss on

extinguishment at the time of conversion of $107,409 and $106,799 of derivative fair value liability was recorded as a gain on extinguishment

at the time of conversion, resulting in a net loss of $610.

the nine months ended March 31, 2023, the principal aggregate amount of convertible notes of $122,000 and accrued interest of

$12,488 which contained bifurcated embedded conversion option derivatives were converted into common stock.

Accordingly, the fair market value of the shares issued

upon conversion was $369,110, resulting in a loss on extinguishment at the time of conversion of $234,622 and $223,288 of derivative

fair value was recorded as a gain on extinguishment at the time of conversion, resulting in a net loss of $11,334.

Additionally,

during the six months ended December 31, 2022, the Company recognized the remaining put premium of $43,520 related to a convertible note

into gain on extinguishment of debt during the six months ended December 31, 2022.

The lender of such convertible note agreed to surrender

all conversion rights in its currently held convertible notes due to violation of Section 15(a)(1) of the Securities Exchange Act of

during the nine months ended March 31, 2023, the Company recognized the remaining put premium of $43,520 related to a convertible

note into gain on extinguishment of debt.

The holder of such convertible note agreed to surrender all conversion rights in its

currently held convertible notes due to violation of Section 15(a)(1) of the Exchange Act, which resulted in a net gain on

extinguishment of debt of $32,186 for the nine months ended March 31, 2023.

Currency Transaction Gain (Loss)

currency transaction gain decreased to a loss of $13,988 for the three months ended December 31, 2022, as compared to a loss of $110,215

for the three months ended December 31, 2021.

Foreign currency transaction gain increased to a gain of $22,235 for the six months ended

December 31, 2022 as compared to a loss of $1,086 for the six months ended December 31, 2021.

The increase of approximately $96,000 and

$23,000 is partially attributable to the increase in exchange rates during the three and six months ended December 31, 2022.

loss decreased to $485,418 for the three months ended December 31, 2022, as compared to a net loss of $799,977 for the three months ended

December 31, 2021.

Net loss decreased to $1,102,713 for the six months ended December 31, 2022 as compared to a net loss of $1,290,635

for the six months ended December 31, 2021.

currency transaction decreased to a loss of $19,025 for the three months ended March 31, 2023, as compared to a gain of $41,717 for

the three months ended March 31, 2022.

Foreign currency transaction decreased to a gain of $3,210 for the nine months ended March

31, 2023, as compared to a gain of $40,631 for the nine months ended March 31, 2022.

The decrease of approximately $60,000 and

$37,000 for such three and nine month periods, respectively, is partially attributable to the decrease in exchange rates during the

three and nine months ended March 31, 2023.

loss increased to $809,809 for the three months ended March 31, 2023, as compared to a net loss of $462,687 for the three months ended

March 31, 2022.

Net loss increased to $1,912,522 for the nine months ended March 31, 2023, as compared to a net loss of $1,753,322 for

the nine months ended March 31, 2022.

The change relates to the factors discussed above.

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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 dividends of $19,322 and $93,398 during the three months ended December 31, 2022 and 2021,

respectively, and a corresponding reduction of income available to common stockholders upon the alternate cashless exercise of these

warrants during the three months ended December 31, 2022 and 2021, respectively.

The Company recognized deemed dividend of $408,557 and

$208,242 during the six months ended December 31, 2022 and 2021, respectively, and a corresponding reduction of income available to common

stockholders upon the alternate cashless exercise of these warrants during the six months ended December 31, 2022 and 2021, respectively.

Accordingly, the Company recognized deemed dividends of $0 and $237,389 during the three months ended March 31, 2023 and 2022, respectively,

and a corresponding reduction of income available to common stockholders upon the alternate cashless exercise of these warrants during

the three months ended March 31, 2023 and 2022, respectively.

The Company recognized deemed dividend of $408,557 and $445,631 during

the nine months ended March 31, 2023 and 2022, respectively, and a corresponding reduction of income available to common stockholders

upon the alternate cashless exercise of these warrants during the nine months ended March 31, 2023 and 2022, respectively.

loss available to common stockholders

loss available to common stockholders decreased to $504,740 for the three months ended December 31, 2022 as compared to a net loss available

to common stockholders of $893,375 for the three months ended December 31, 2021.

Net loss available to common stockholders increased

to $1,511,270 for the six months ended December 31, 2022 as compared to a net loss available to common stockholders of $1,498,877 for

the six months ended December 31, 2021.

decrease and increase during the three- and six-months period are primarily attributable to the change relates to the factors discussed

loss available to common stockholders increased to $809,809 for the three months ended March 31, 2023, as compared to a net loss available

to common stockholders of $700,076 for the three months ended March 31, 2022.

Net loss available to common stockholders increased to

$2,321,079 for the nine months ended March 31, 2023, as compared to a net loss available to common stockholders of $2,198,953 for the

nine months ended March 31, 2022.

increase during the three and nine months periods are primarily attributable to the change relates to the factors discussed above.

and Capital Resources

Financial Condition

of December 31, 2022, we had total assets of $108,022, comprised primarily of cash of $24,476, GST tax receivable of $4,543, prepaid

expenses and other current assets of $25,207, security deposit of $2,042, operating lease ROU asset, net of $50,671, and property and

equipment, net of $1,083.

As compared to June 30, 2022, we had total assets of $81,651, comprised primarily of cash of $4,067, GST tax

receivable of $2,342, prepaid expenses and other current assets of $8,621, property and equipment, net, of $2,023, operating lease ROU

asset, net of $62,523, and security deposit of $2,075.

had current liabilities of $2,992,554, primarily comprised of net convertible debt of $633,740, note payable, net of $72,404, loan payable

of $65,280, accrued interest of $59,733, accounts payable and accrued expenses of $1,470,605, employee benefit liability of $578,453,

and embedded conversion option liabilities of $10,623 as of December 31, 2022.

As compared to June 30, 2022, we had current liabilities

of $3,062,981, primarily comprised of net convertible debt of $926,438, accrued interest of $57,822, accounts payable and accrued expenses

of $1,409,138, employee benefit liability of $415,799, and embedded conversion option liabilities of $151,262.

of March 31, 2023, we had total assets of $143,742, comprised primarily of cash of $93,241, GST tax receivable of $3,334, security deposits

of $2,009, operating lease ROU asset, net of $44,524, and property and equipment, net of $634.

As compared to June 30, 2022, we had total

assets of $81,651, comprised primarily of cash of $4,067, GST tax receivable of $2,342, prepaid expenses and other current assets of

$8,621, property and equipment, net, of $2,023, operating lease ROU asset, net of $62,523, and security deposit of $2,075.

had current liabilities of $3,060,217, primarily comprising net convertible debt of $519,718, loan payable of $65,280, accrued interest

of $56,661, accounts payable and accrued expenses of $1,605,649, employee benefit liability of $579,888, and embedded conversion option

liabilities of $132,501 as of March 31, 2023.

As compared to June 30, 2022, we had current liabilities of $3,062,981, primarily comprising

net convertible debt of $926,438, accrued interest of $57,822, accounts payable and accrued expenses of $1,409,138, employee benefit

liability of $415,799, and embedded conversion option liabilities of $151,262.

have funded our operations primarily through the issuance of equity and/or convertible debt securities for cash.

1 unchanged sentence

for payments for research and development, administration expenses, occupancy expenses, professional fees, consultants and travel.

the six months ended December 31, 2022 we received proceeds from exercise of warrants of $200,000, proceeds from issuance of convertible

notes and note payable of $495,750, proceeds from sale of shares of our Common Stock of $24,711 and proceeds from collection of subscription

receivables of $23,758.

During the nine months ended March 31, 2023, we received proceeds from

the exercise of warrants of $375,000, proceeds from the issuance of convertible notes and notes payable of $590,250, proceeds from the

sale of shares of our Common Stock of $24,711 and proceeds from the collection of subscription receivables of $23,758.

have substantial capital resource requirements and have incurred significant losses since inception.

As of December 31, 2022, we had

$24,476 in cash.

As of March 31, 2023, we had $93,241

We depend upon debt and/or equity financing to fund our ongoing operations and to execute our current business plan.

Such capital requirements are in excess of what we have in available cash and for which we currently have commitments.

Therefore, we

presently do not have enough available cash to meet our obligations over the next 12 months.

If continued funding and capital resources

are unavailable at reasonable terms, we may curtail our plan of operations.

We will be required to obtain alternative or additional financing

from financial institutions, investors or otherwise, in order to maintain and expand our existing operations.

The failure by us to obtain

such financing would have a material adverse effect upon our business, financial condition and results of operations, and adversely affecting

our ability to complete ongoing activities in connection with our research and development programs.

requirements are in excess of what we have in available cash and for which we currently have commitments.

Therefore, we presently do

not have enough available cash to meet our obligations over the next 12 months.

If continued funding and capital resources are unavailable

at reasonable terms, we may curtail our plan of operations.

We will be required to obtain alternative or additional financing from financial

institutions, investors or otherwise, in order to maintain and expand our existing operations.

The failure by us to obtain such financing

would have a material adverse effect upon our business, financial condition and results of operations, and adversely affecting our ability

to complete ongoing activities in connection with our research and development programs.

and Uses of Cash

the Six months ended

cash used in operating activities

cash provided by financing activities

of exchange rate changes on cash

the Nine Months Ended

Net cash used in operating activities

$ (1,025,306 )

Net cash provided by financing activities

Effect of exchange rate changes on cash

Cash Flow from Operating Activities

cash used in operating activities was $734,542 for the six months ended December 31, 2022, due to our net loss of $1,102,713, offset

primarily by non-cash charges of amortization of debt discount of $83,903, stock-based compensation of $59,219, accretion of put premium

of $144,711, change in fair value of derivatives of $127,508, gain on extinguishment of debt of $42,910 and gain from settlement of accounts

payable of $17,499.

Net changes in operating assets and liabilities totaled $278,737, which are primarily attributable to increase in

prepaid expenses and other assets $16,724, employee benefit liability of $169,268, increase accrued interest of $31,433, increase in

accrued expenses and other payables of $97,414, and increase in accounts payable of $9,520.

cash used in operating activities was $711,093 for the six months ended December 31, 2021, due to our net loss of $1,290,635, offset

primarily by non-cash charges of amortization of debt discount of $11,295, stock-based compensation of $41,436, accretion of put premium

of $245,000, change in fair value of derivatives of $167,757 and issuance and amortization of common stock for services of $133,422.

Net changes in operating assets and liabilities totaled ($23,717), which is primarily attributable to increase in employee benefit liability

of $12,882, increase accrued interest of $28,264 offset by decrease in accounts payable of $51,037 and decrease in accrued expenses of

Net cash used in operating activities was $927,278 for the nine months

ended March 31, 2023, due to our net loss of $1,912,522, offset primarily by non-cash charges of amortization of debt discount of $138,014,

stock-based compensation of $59,219, accretion of put premium of $232,674, change in fair value of derivatives of $110,859, gain on extinguishment

of debt of $32,186 and gain from settlement of accounts payable of $17,499.

Net changes in operating assets and liabilities totaled $479,999,

which are primarily attributable to a decrease in prepaid expenses and other assets $8,348, an increase in employee benefit liabilities

of $177,198, an increase in accrued interest of $46,347, an increase in accrued expenses and other payables of $236,034, and an increase

in accounts payable of $27,953.

Net cash used in operating activities was $1,025,306 for the nine months

ended March 31, 2022, due to our net loss of $1,753,322, offset primarily by non-cash charges of amortization of debt discount of $24,942,

stock-based compensation of $62,154, accretion of put premium of $380,962, change in fair value of derivatives of $2,392 and issuance

and amortization of common stock for services of $222,452.

Net changes in operating assets and liabilities totaled $71,992, which is primarily

attributable to an increase in employee benefit liability of $23,816, an increase accrued interest of $45,495, and an increase in accrued

expenses and other payables of $43,285, offset by a decrease in accounts payable of $34,319.

Cash Flow from Financing Activities

cash provided by financing activities for the six months ended December 31, 2022 were $744,219, as compared to $789,500 for the six months

ended December 31, 2021.

During the six months ended December 31, 2022, we received proceeds from the exercise of warrants of $200,000,

proceeds from sale of shares of our Common Stock of $24,711, collections of subscription receivable of $23,758, and net proceeds from

issuance of convertible notes and a note payable of $495,750.

cash provided by financing activities for the six months ended December 31, 2021 were $789,500 as compared to $358,044 for the six months

ended December 31, 2020.

During the six months ended December 31, 2021, we received proceeds from the exercise of warrants of $375,000

and net proceeds from issuance of convertible notes of $414,500.

cash provided by financing activities for the nine months ended March 31, 2023 was $1,013,719, as compared to $1,116,500 for the

nine months ended March 31, 2022.

During the nine months ended March 31, 2023, we received proceeds from the exercise of warrants of

$375,000, proceeds from the sale of shares of our Common Stock of $24,711, collections of subscription receivables of $23,758, and

net proceeds from the issuance of convertible notes and a note payable of $590,250.

cash provided by financing activities for the nine months ended March 31, 2022 was $1,116,500.

During the nine months ended March

31, 2022, we received proceeds from the exercise of warrants of $475,000 and net proceeds from the issuance of convertible notes of

of Exchange Rate

effect of the exchange rate on cash resulted in a $10,732 positive adjustment to cash flows in the six months ended December 31, 2022,

as compared to a $7,046 negative adjustment to cash flows in the six months ended December 31, 2021.

The reason for the fluctuation is

due to the application of currency translation rates throughout the cash flow statement, the volume of transactions within each period

and the daily fluctuation in exchange rates.

effect of the exchange rate on cash resulted in a $2,733 positive adjustment to our cash flows in the nine months ended March 31,

2023, as compared to a $40,436 positive adjustment to our cash flows in the nine months ended March 31, 2022.

The reason for the

fluctuation is due to the application of currency translation rates throughout our cash flow statement, the volume of transactions

within each period and the daily fluctuation in exchange rates.

Accounting Estimates

22 unchanged sentences

resulting from foreign currency transactions are included in the statement of operations and comprehensive loss as other income (expense).

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

Effective fiscal year 2021, the 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,

35 unchanged sentences

Notes with Variable Conversion Options :

We have entered into convertible notes, some of which contain variable conversion options,

whereby the outstanding principal and accrued interest may be converted, by the holder, into common shares at or around a fixed discount

to the price of the common stock at the time of conversion.

We treat these convertible notes as stock settled debt under ASC 480 and

measure the fair value of the notes at the time of issuance, which is the result of the share price discount at the time of conversion,

and record the put premium as accretion to interest expense.

We have entered into convertible notes, some of which contain variable conversion

options, whereby the outstanding principal and accrued interest may be converted, by the holder, into shares of Common Stock at or

around a fixed discount to the price of the Common Stock at the time of conversion.

We treat these convertible notes as stock

settled debt under ASC 480 and measure the fair value of the notes at the time of issuance, which is the result of the share price

discount at the time of conversion, and record the put premium as accretion to interest expense.

and Development Tax Credits :

15 unchanged sentences

Concern Qualification

did not generate any revenue for the six months ended December 31, 2022 and 2021 and have incurred significant losses and cash used in

did not generate any revenue for the nine months ended March 31, 2023 and 2022 and have incurred significant losses and cash used in

operations, and such losses and use of cash are expected to continue.

24 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis