Propanc Biopharma, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. The following consolidated financial statements of Propanc Biopharma, Inc. are included in this Annual Report on Form 10-K: PROPANC BIOPHARMA, INC. INDEX TO FINANCIAL STATEMENTS Page Consolidated Financial Statements for the Fiscal Years Ended June 30, 2023 and 2022 Report of Independent Registered Public Accounting Firm (PCAOB Firm ID. 106 ) F-1 Consolidated Balance Sheets as of June 30, 2023 and 2022 F-3 Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended June 30, 2023 and 2022 F-4 Consolidated Statements of Changes in Stockholders’ Deficit for the years ended June 30, 2023 and 2022 F-5 Consolidated Statements of Cash Flows for the years ended June 30, 2023 and 2022 F-6 Notes to Consolidated Financial Statements F-7 35 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, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the consolidated results of its operations and its cash flows for each of the two years in the period ended June 30, 2023, 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 $2,660,566 and net cash used in operating activities of $1,105,251 for the fiscal year ended June 30, 2023. The Company has a working capital deficit, stockholder’s deficit, and accumulated deficit of $3,139,190, $3,117,179, and $64,684,732 respectively, at June 30, 2023. 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- 1 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 2023 from change in fair value of derivative liabilities of $530,330, and derivative liabilities of $423,209 at June 30, 2023. 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. We agreed with management’s conclusions. /s/ Salberg & Company, P.A. SALBERG & COMPANY, P.A . We have served as the Company’s auditor since 2011 Boca Raton, Florida September 28, 2023 F- 2 PROPANC BIOPHARMA, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS June 30, 2023 June 30, 2022 ASSETS CURRENT ASSETS: Cash $ 10,047 $ 4,067 GST tax receivable 2,867 2,342 Prepaid expenses and other current assets 6,125 8,621 TOTAL CURRENT ASSETS 19,039 15,030 Security deposit - related party 1,999 2,075 Operating lease right-of-use assets, net - related party 38,988 62,523 Property and equipment, net 302 2,023 TOTAL ASSETS $ 60,328 $ 81,651 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES: Accounts payable $ 966,718 $ 943,023 Accrued expenses and other payables 579,707 466,115 Accrued interest 44,709 57,822 Loan payable 65,280 - Convertible notes, net of discounts and including put premiums 390,539 926,438 Operating lease liability - related party, current portion 21,505 20,605 Embedded conversion option liabilities 423,209 151,262 Due to former director - related party 29,630 30,746 Loan from former director - related party 49,314 51,171 Employee benefit liability 587,618 415,799 TOTAL CURRENT LIABILITIES 3,158,229 3,062,981 NON-CURRENT LIABILITIES: Operating lease liability - long-term portion - related party 19,278 42,319 TOTAL NON-CURRENT LIABILITIES 19,278 42,319 TOTAL LIABILITIES $ 3,177,507 $ 3,105,300 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 previously authorized; 0 and 500,000 shares issued and outstanding as of June 30, 2023 and 2022, respectively $ - $ 5,000 Series B preferred stock, $ 0.01 par value; 5 shares authorized; 1 share issued and outstanding as of June 30, 2023 and 2022 - - Preferred stock, value - - Common stock, $ 0.001 par value; 10,000,000,000 shares authorized; 6,031,250 and 220,351 shares issued and outstanding as of June 30, 2023 and 2022, respectively 6,031 220 Common stock issuable ( 1,621,653 and 19,597 shares as of June 30, 2023 and 2022, respectively) 1,621 20 Additional paid-in capital 60,311,502 57,364,690 Subscription receivable - ( 23,758 ) Accumulated other comprehensive income 1,294,876 1,234,549 Accumulated deficit ( 64,684,732 ) ( 61,557,893 ) Treasury stock ( 0.001 share) ( 46,477 ) ( 46,477 ) TOTAL STOCKHOLDERS’ DEFICIT ( 3,117,179 ) ( 3,023,649 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 60,328 $ 81,651 The accompanying notes are an integral part of these consolidated financial statements. F- 3 PROPANC BIOPHARMA, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the years ended June 30, 2023 2022 REVENUE Revenue $ - $ - OPERATING EXPENSES Administration expenses 1,499,885 1,706,452 Occupancy expenses - related party 28,841 28,366 Research and development 247,919 256,052 TOTAL OPERATING EXPENSES 1,776,645 1,990,870 LOSS FROM OPERATIONS ( 1,776,645 ) ( 1,990,870 ) OTHER INCOME (EXPENSE) Interest expense ( 532,821 ) ( 568,798 ) Interest income 36 5,613 Change in fair value of derivative liabilities ( 530,330 ) ( 99,111 ) Gain from settlement of accounts payable 17,499 - Gain (loss) on extinguishment of debt, net 25,969 ( 17,503 ) Foreign currency transaction gain (loss) 5,885 ( 42,395 ) TOTAL OTHER EXPENSE, NET ( 1,013,762 ) ( 722,194 ) LOSS BEFORE TAXES ( 2,790,407 ) ( 2,713,064 ) Tax benefit 129,841 54,977 NET LOSS $ ( 2,660,566 ) $ ( 2,658,087 ) Deemed Dividend ( 466,273 ) ( 700,340 ) NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ ( 3,126,839 ) $ ( 3,358,427 ) BASIC AND DILUTED NET LOSS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS $ ( 1.80 ) $ ( 49.23 ) BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 1,738,802 68,219 NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ ( 3,126,839 ) $ ( 3,358,427 ) OTHER COMPREHENSIVE INCOME (LOSS) Unrealized foreign currency translation gain (loss) 60,327 149,345 TOTAL OTHER COMPREHENSIVE INCOME (LOSS) 60,327 149,345 TOTAL COMPREHENSIVE LOSS $ ( 3,066,512 ) $ ( 3,209,082 ) The accompanying notes are an integral part of these consolidated financial statements. F- 4 PROPANC BIOPHARMA, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE YEARS ENDED JUNE 30, 2023 AND 2022 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 Series A Series B Common Stock Common Stock Issuable Additional Accumulated 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, 2021 500,000 $ 5,000 1 $ - 14,055 $ 14 1 $ - $ 54,088,152 $ - $ ( 58,199,466 ) $ 1,085,204 $ ( 46,477 ) $ ( 3,067,573 ) Issuance of common stock for cash - - - - 25,663 26 - - 123,017 ( 23,758 ) - - - 99,285 Issuance of common stock for offering cost - - - - 1,000 1 - - ( 1 ) - - - - - Issuance of common stock for conversion of convertible debt, conversion fee and accrued interest - - - - 96,960 97 7,326 7 657,021 - - - - 657,125 Issuance of common stock for services and accrued expenses - - - - 25,857 26 12,271 12 763,027 - - - - 763,065 Issuance of common stock for exercise of warrants - - - - 16 - - - 625,001 - - - - 625,001 Issuance of common stock for alternate cashless exercise of warrants - - - - 56,800 57 - - ( 57 ) - - - - - 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 - 220,351 220 19,598 20 57,364,690 ( 23,758 ) ( 61,557,893 ) 1,234,549 ( 46,477 ) ( 3,023,649 ) Balance 500,000 5,000 1 - 220,351 220 19,598 20 57,364,690 ( 23,758 ) ( 61,557,893 ) 1,234,549 ( 46,477 ) ( 3,023,649 ) Issuance of common stock for cash - - - - 14,337 14 - - 24,697 23,758 - - - 48,469 Retirement of Series A Preferred Stock ( 500,000 ) ( 5,000 ) - - - - - - 5,000 - - - - - Issuance of common stock for conversion of convertible debt, conversion fee and accrued interest - - - - 5,061,180 5,061 807,230 807 1,381,855 - - - - 1,387,723 Issuance of common stock for services - - - - 79,412 79 608,423 608 138,261 - - - - 138,948 Issuance of common stock for exercise of Series B warrants - - - - 12 - 0 - 475,000 - - - - 475,000 Issuance of common stock for alternate cashless exercise of Series A warrants - - - - 559,999 560 206,000 206 ( 766 ) - - - - - Issuance of common stock in connection with a note payable - - - - 75,000 75 - - 37,425 - - - - 37,500 Issuance of common stock for issuable shares - - - - 19,598 20 ( 19,598 ) ( 20 ) - - - - - - Reclassification of put premium upon debt conversion - - - - - - - - 411,111 - - - - 411,111 Warrant grant for settlement of accounts payable - - - - - - - - 5,551 - - - - 5,551 Stock based compensation in connection with stock warrant grant - - - - - - - - 2,408 - - - - 2,408 Foreign currency translation gain - - - - - - - - - - - 60,327 - 60,327 Deemed dividend upon alternate cashless exercise of warrants - - - - - - - - 466,273 - ( 466,273 ) - - - Fractional shares due to reverse split - - - - 1,361 2 - - ( 2 ) - - - - - Net loss for the fiscal year ended June 30, 2023 - - - - - - - - - - ( 2,660,566 ) - - ( 2,660,566 ) Net loss - - - - - - - - - - ( 2,660,566 ) - - ( 2,660,566 ) Balance at June 30, 2023 - $ - 1 $ - 6,031,250 $ 6,031 1,621,653 $ 1,621 $ 60,311,502 $ - $ ( 64,684,732 ) $ 1,294,876 $ ( 46,477 ) $ ( 3,117,179 ) Balance - $ - 1 $ - 6,031,250 $ 6,031 1,621,653 $ 1,621 $ 60,311,502 $ - $ ( 64,684,732 ) $ 1,294,876 $ ( 46,477 ) $ ( 3,117,179 ) The accompanying notes are an integral part of these consolidated financial statements. F- 5 PROPANC BIOPHARMA, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS 2023 2022 For the years ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 2,660,566 ) $ ( 2,658,087 ) Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: Issuance and amortization of common stock for services 138,948 314,626 Stock option, stock warrants and restricted stock expense 2,408 72,513 Foreign currency transaction (gain) loss ( 5,885 ) 42,395 Depreciation expense 1,665 1,993 Amortization of debt discounts 202,952 47,971 Amortization of right-of-use assets 21,266 3,678 Change in fair value of derivative liabilities 530,330 99,111 (Gain) loss on extinguishment of debt, net ( 25,969 ) 17,503 Gain from settlement of accounts payable ( 17,499 ) - Non-cash interest expense 1,838 2,250 Accretion of put premium 232,674 452,308 Changes in Assets and Liabilities: GST receivable ( 610 ) 1,660 Prepaid expenses and other assets 2,182 ( 8,620 ) Accounts payable 80,975 18,870 Employee benefit liability 186,912 29,907 Accrued expenses and other payables 130,511 65,017 Accrued interest 92,474 63,878 Operating lease liability ( 19,857 ) ( 3,277 ) NET CASH USED IN OPERATING ACTIVITIES ( 1,105,251 ) ( 1,436,304 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from convertible promissory notes, net of original issue discounts and issue costs 590,250 766,500 Proceeds from the sale of common stock 24,711 99,285 Collection of subscription receivable 23,758 - Proceeds from the exercise of warrants 475,000 625,001 NET CASH PROVIDED BY FINANCING ACTIVITIES 1,113,719 1,490,786 Effect of exchange rate changes on cash ( 2,488 ) ( 52,670 ) NET INCREASE IN CASH 5,980 1,812 CASH AT BEGINNING OF YEAR 4,067 2,255 CASH AT END OF YEAR $ 10,047 $ 4,067 Supplemental Disclosure of Cash Flow Information Cash paid during the year: Interest $ 2,883 $ 2,392 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 $ 411,111 $ 335,677 Conversion of convertible notes and accrued interest to common stock $ 1,016,285 $ 635,303 Debt discounts related to derivative liability $ 93,668 $ - Operating lease right-of-use asset and operating lease liability pursuant to ASC 842 $ - $ 66,201 Debt discounts related to common stock issued with a note payable $ 37,500 $ - Warrant grant for settlement of accounts payable $ 5,551 $ - Common stock issued for accrued services $ - $ 448,440 Deemed dividend upon alternate cashless exercise of warrants $ 466,273 $ 700,340 The accompanying notes are an integral part of these consolidated financial statements. F- 6 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Nature of Operations Propanc Biopharma, Inc. (the “Company,” “we,” “us” or “our”) is based in Camberwell, Victoria Australia. Since its inception, substantially all of the operations of the Company have been focused on the development of new cancer treatments targeting high-risk patients, particularly cancer survivors, who need a follow-up, non-toxic, long-term therapy designed to prevent the cancer from returning and spreading. The Company anticipates establishing global markets for its technologies. Our lead product candidate, which we refer to as PRP, is an enhanced pro-enzyme formulation designed to enhance the anti-cancer effects of multiple enzymes acting synergistically. It is currently in the preclinical phase of development. The Company was originally formed in Melbourne, Victoria, Australia on October 15, 2007 as Propanc PTY LTD. On November 23, 2010, Propanc Health Group Corporation was incorporated in the State of Delaware, and in January 2011, to reorganize the Company, all of the outstanding shares of Propanc PTY LTD were acquired on a one-for-one basis by Propanc Health Group Corporation, with Propanc PTY LTD becoming a wholly-owned subsidiary of the Company. On July 22, 2016, the Company formed another wholly-owned subsidiary, Propanc (UK) Limited under the laws of England and Wales for the purpose of submitting an orphan drug application to the European Medicines Agency as a small and medium-sized enterprise. As of June 30, 2023, there has been no activity within this entity. Effective April 20, 2017, the Company changed its name to “Propanc Biopharma, Inc.” to reflect the Company’s stage of operations and development better. In July 2020, a world-first patent was granted in Australia for the cancer treatment method patent family. Presently, there are 62 granted, allowed, or accepted patents and 14 patents filed, or under examination in key global jurisdictions relating to the use of proenzymes against solid tumors, covering the lead product candidate PRP. On May 1, 2023, the Company filed a certificate of amendment to its certificate of incorporation, as amended, to effect a one-for-one thousand (1:1,000) Reverse Stock Split (the “Reverse Stock Split”), effective as of May 1, 2023. Proportional adjustments for the Reverse Stock Split were made to the Company’s outstanding stock options, warrants and equity incentive plans. All share and per-share data and amounts have been retroactively adjusted as of the earliest period presented in the consolidated financial statements to reflect the Reverse Stock Split. The Company hopes to capture and protect additional patentable subject matter based on the Company’s field of technology relating to pharmaceutical compositions of proenzymes for treating cancer by filing additional patent applications as it advances its lead product candidate, PRP, through various stages of development. 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, 2023. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates in the accompanying consolidated financial statements include the estimates of useful lives for depreciation, valuation of the operating lease liability and related right-of-use asset, valuation of derivatives, 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- 7 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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). As of June 30, 2023 and 2022, the Company recognized a cumulative exchange gain (loss) of approximately $ 648,000 and $ 1,289,000 , respectively, on intercompany loans made by the parent to the subsidiary that have not been repaid as of June 30, 2023, which is included as component of accumulated other comprehensive income on the accompanying consolidated balance sheet. As of June 30, 2023 and 2022, the exchange rates used to translate amounts in Australian dollars into USD for the purposes of preparing the consolidated financial statements were as follows: SCHEDULE OF TRANSACTION EXCHANGE RATES June 30, 2023 June 30, 2022 Exchange rate on balance sheet dates USD : AUD exchange rate 0.6664 0.6915 Average exchange rate for the period USD : AUD exchange rate 0.6732 0.7253 Change in Accumulated Other Comprehensive Income (Loss) by component during the years ended June 30, 2023 and 2022 were as follows: SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME LOSS Foreign Currency Items: Beginning balance, June 30, 2021 $ 1,085,204 Foreign currency translation gain 149,345 Balance, June 30, 2022 1,234,549 Foreign currency translation gain 60,327 Ending balance, June 30, 2023 $ 1,294,876 F- 8 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Fair Value of Financial Instruments and Fair Value Measurements The Company measures its financial assets and liabilities in accordance with US GAAP. For certain financial instruments, including cash and cash equivalents, receivables, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities. Amounts recorded for notes payable, net of discount, and loans payable also approximate fair value because current interest rates available for debt with similar terms and maturities are substantially the same. The Company follows accounting guidance for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. 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, 2023 and 2022. 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, 2023 were expensed immediately. This practice of expensing patent costs immediately ends when a product receives market authorization from a government regulatory agency. F- 9 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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. 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, 2023 and 2022, the Company was owed $ 2,867 and $ 2,342 , respectively, from the Australian Taxation Office. These amounts were fully collected subsequent to the balance sheet reporting dates. Derivative Instruments ASC Topic 815, Derivatives and Hedging (“ASC Topic 815”), establishes accounting and reporting standards for derivative instruments and for hedging activities by requiring that all derivatives be recognized in the balance sheet and measured at fair value. Gains or losses resulting from changes in the fair value of derivatives are recognized in earnings. On the date of conversion or payoff of debt, the Company records the fair value of the conversion shares, removes the fair value of the related derivative liability, removes any discounts and records a net gain or loss on debt extinguishment. Convertible Notes With Variable Conversion Options The Company has entered into convertible notes, some of which contain variable conversion options, whereby the outstanding principal and accrued interest may be converted, by the holder, into shares of the Company’s common stock, par value $ 0.001 per share (“common stock”) at a fixed discount to the price of the common stock at or around the time of conversion. The Company treats these convertible notes as stock settled debt under ASC 480, “ Distinguishing Liabilities from Equity ” and measures the fair value of the notes at the time of issuance, which is the result of the share price discount at the time of conversion and records the put premium as interest expense. F- 10 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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, 2023 and 2022 were $ 247,919 and $ 256,052 , 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. During each of the fiscal years ended June 30, 2023 and 2022, the Company applied for, and received from the Australian Taxation Office, a research and development tax credit in the amount of $ 129,841 and $ 54,977 , 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. F- 11 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Legal Expenses All legal costs for litigation are charged to expense as incurred. Leases The Company follows ASC Topic 842, Leases (Topic 842) and applies the package of practical expedients, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less. Operating lease right of use assets (“ROU”) represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassified amounts have no impact on the Company’s previously reported financial position or results of operations and relate to the presentation of accrued interest separately on the consolidated balance sheet, of which $ 57,822 was previously included in convertible notes, net of discounts and including premiums at June 30, 2022. Basic and Diluted Net Loss Per Common Share Basic net loss per share of common stock is computed by dividing the net loss by the weighted average number of common stock 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, restricted stock units 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 and warrants has agreed to a 4.99 % beneficial ownership conversion limitation (subject to certain noteholders’ abilities to increase such limitation to 9.99% upon 60 days’ notice to the Company), and certain notes may not be converted during the certain specified time period from the date of issuance . The Company’s CEO holds Series B Preferred Stock that, when combined, confers upon him a majority vote, including regarding authorization of additional common shares and/or the authorization of a reverse split the stock as considered necessary. Such securities are considered dilutive securities, which were excluded from the computation since the effect is anti-dilutive. SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS June 30, 2023 June 30, 2022 Stock Options 0.06 0.06 Warrants with no designations 90 105 Series A Warrants as if converted at alternate cashless exercise prices 1,996,625,990 - Series B Warrants 16 - Series C Warrants as if converted at alternate cashless exercise prices * 9,473,999,953 - Unvested restricted stock units 0.06 0.06 Convertible Debt 5,991,195 127,062 Total 11,476,617,244.12 127,167.12 * Only convertible ratably upon exercise of Series B Warrants F- 12 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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 Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40), which eliminates the beneficial conversion and cash conversion accounting models for convertible instruments, amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions, and modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS calculation. The standard is effective for annual periods beginning after December 15, 2023 for smaller reporting companies, and interim periods within those reporting periods. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those reporting periods. The Company is currently assessing the impact the new guidance will have on its 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, 2023, the Company had no revenues, had a net loss of $ 2,660,566 and had net cash used in operations of $ 1,105,251 . Additionally, as of June 30, 2023, the Company had a working capital deficit, stockholders’ deficit and accumulated deficit of $ 3,139,190 , $ 3,117,179 , and $ 64,684,732 , 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 its business plan. However, there can be no assurances that any or all of these endeavors will be successful. F- 13 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 3 – PROPERTY AND EQUIPMENT Property and equipment consist of the following as of June 30: SCHEDULE OF PROPERTY PLANT AND EQUIPMENT 2023 2022 Office equipment at cost $ 25,432 $ 28,623 Less: Accumulated depreciation ( 25,130 ) ( 26,600 ) Total property, plant, and equipment $ 302 $ 2,023 Depreciation expense for the years ended June 30, 2023 and 2022 were $ 1,665 and $ 1,993 , respectively. NOTE 4 – DUE TO FORMER DIRECTOR - RELATED PARTY Due to former director – related party represents unsecured advances made primarily by a former director for operating expenses on behalf of the Company, such as intellectual property and formation expenses. The expenses were paid for on behalf of the Company and are due upon demand. The Company is currently not being charged interest under these advances. The total amounts owed to the former director at June 30, 2023 and 2022 were $ 29,630 and $ 30,746 , respectively. The Company plans to repay the advances as its cash resources allow (see Note 10). NOTE 5 – LOANS Loan from Former Director - Related Party Loan from the Company’s former director at June 30, 2023 and 2022 was $ 49,314 and $ 51,171 , 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, 2023 and 2022, respectively, (see Note 10). Loan Payable Crown Bridge Securities Purchase Agreement Effective October 3, 2019, the Company entered into a securities purchase agreement with Crown Bridge Partners, LLC (“Crown Bridge”), pursuant to which Crown Bridge purchased a convertible promissory note from the Company (the “Crown Bridge Note”), which had a remaining principal balance of $ 65,280 as of June 30, 2023 (see Note 6). The maturity date of the Crown Bridge Note was October 3, 2020 and is currently past due. The Crown Bridge Note bore interest at a default interest rate of 15 % per annum. In August 2022, the SEC filed a complaint against Crown Bridge due to its violation of Section 15(a)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Crown Bridge agreed to surrender all conversion rights in its currently held convertible notes, including the Crown Bridge Note. Consequently, as of June 30, 2023, the Company reclassified the remaining principal balance of $ 65,280 from a convertible note into a loan payable. Additionally, the Company recorded the remaining put premium of $ 43,520 into gain on extinguishment of debt during the year ended June 30, 2023. The total accrued interest from this loan amounted to $ 35,722 as of June 30, 2023. Loan in default The Crown Bridge Note is currently past due and in default, consisting of $ 65,280 principal and $ 35,722 accrued interest, which includes interest accruing at the default interest rate at 15 %. F- 14 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 6 – CONVERTIBLE NOTES The Company’s convertible notes outstanding at June 30, 2023 and 2022 were as follows: SCHEDULE OF CONVERTIBLE NOTES June 30, 2023 June 30, 2022 Convertible notes and debenture $ 338,362 $ 644,980 Unamortized discounts ( 38,994 ) ( 31,669 ) Premium, net 91,171 313,127 Convertible notes, net $ 390,539 $ 926,438 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 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. The total principal and accrued interest outstanding under the August 10, 2017 Convertible Note was $ 0 as of June 30, 2023 following conversion of $ 79,000 of principal and $ 9,543 accrued interest during the year ended June 30, 2023 (see Note 8). F- 15 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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 $ 2,250,000 . 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 $ 3,330,000 . 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 $ 4,500,000 . 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- 16 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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, pursuant to which Crown Bridge purchased the Crown Bridge Note from the Company in the aggregate principal amount of $ 108,000 , such principal and the interest thereon convertible into shares of common stock at the option of Crown Bridge any time after issuance of such note. Pursuant to the terms of such securities purchase agreement, Crown Bridge deducted $ 3,000 from the principal payment due under the 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 Crown Bridge Note for general working capital purposes. The maturity date of the Crown Bridge Note was October 3, 2020 and is currently past due. The Crown Bridge Note bore interest at a default interest rate of 15 % per annum. Additionally, Crown Bridge had the option to convert all or any amount of the Crown Bridge Note at any time after issuance until the later of such note’s maturity date or the date on which the default amount was paid if an event of default occurs, which would be between 110 % and 150 % of the then outstanding principal amount of the Crown Bridge Note plus any interest accrued, for shares of the common stock at the then-applicable conversion price. The conversion price of the Crown Bridge Note was equal to 60% (representing a 40% discount) of the lowest closing bid price of the common stock for the ten trading days immediately prior to the delivery of a notice of conversion under such note, including the day upon which such notice was received. subject to 4.99 % or 9.99 % beneficial ownership limitations. The Crown Bridge Note was treated as stock settled debt under ASC 480 and accordingly the Company recorded a $ 72,000 put premium. The Crown Bridge 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 accrued 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. F- 17 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 The total principal amount outstanding under the Crown Bridge Note was $ 65,280 and accrued interest of $ 7,232 as of as of June 30, 2020 following conversion of $ 42,720 of the principal balance during the year ended June 30, 2020. Accordingly, $ 28,480 of the put premium was released in respect of the October 3, 2019 Crown Bridge Note during the year ended June 30, 2020 following partial conversion of the principal balance. There were 15 unissued shares of Common Stock that 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 Crown Bridge 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 Crown Bridge Note was $ 65,280 and accrued interest of $ 25,930 as of June 30, 2022. In August 2022, the SEC filed a complaint against Crown Bridge due to its violation of Section 15(a)(1) of the Exchange Act. Crown Bridge agreed to surrender all conversion rights in its currently held convertible notes, including the Crown Bridge Note. Consequently, as of June 30, 2023, the Company reclassified the remaining principal balance of $ 65,280 from a convertible note into a loan payable. Additionally, the Company recorded the remaining put premium of $ 43,520 into gain on extinguishment of debt during the year ended June 30, 2023. Therefore, the total principal amount outstanding under such agreement with Crown Bridge was $ 0 after the reclassification of principal to loan payable as of June 30, 2023 (see Note 5). 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. F- 18 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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. 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. 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. F- 19 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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. 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. F- 20 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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. 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 Note”) from the Company in the aggregate principal amount of $ 63,750 , such principal and the interest thereon convertible into shares of common stock at the option of Sixth Street any time after the six-month anniversary of the October 21, 2021 Sixth Street Note. The October 21, 2021 Sixth Street Note contained debt issue costs of $ 3,750 . The Company used the net proceeds from the October 21, 2021 Sixth Street Note for general working capital purposes. The maturity date of the October 21, 2021 Sixth Street Note was October 21, 2022 . The October 21, 2021 Sixth Street Note bore interest at a rate of 8 % per annum, which interest was payable in shares of common stock; but was not payable until the maturity date or upon acceleration or by prepayment of such note. F- 21 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 November 26, 2021 Securities Purchase Agreement Effective November 26, 2021, the Company entered into a securities purchase agreement with Sixth Street, pursuant to which Sixth Street purchased a convertible promissory note (the “November 26, 2021 Sixth Street Note”) from the Company in the aggregate principal amount of $ 53,750 , such principal and the interest thereon convertible into shares of common stock at the option of Sixth Street any time after the six-month anniversary of the November 26, 2021 Sixth Street Note. The November 26, 2021 Sixth Street Note contained debt issue costs of $ 3,750 . The Company used the net proceeds from the November 26, 2021 Sixth Street Note for general working capital purposes. The maturity date of the November 26, 2021 Sixth Street Note was November 26, 2022 . The November 26, 2021 Sixth Street Note bore interest at a rate of 8 % per annum, which interest was payable in shares of common stock; but was not payable until the maturity date or upon acceleration or by prepayment of such note. January 4, 2022 Securities Purchase Agreement Effective January 4, 2022, the Company entered into a securities purchase agreement with Sixth Street, pursuant to which Sixth Street purchased a convertible promissory note (the “January 4, 2022 Sixth Street Note”) from the Company in the aggregate principal amount of $ 63,750 , such principal and the interest thereon convertible into shares of common stock at the option of Sixth Street any time after the six-month anniversary of the January 4, 2022 Sixth Street Note. The January 4, 2022 Sixth Street Note contained debt issue costs of $ 3,750 . The Company used the net proceeds from the January 4, 2022 Sixth Street Note for general working capital purposes. The maturity date of the January 4, 2022 Sixth Street Note was January 4, 2023 . The January 4, 2022 Sixth Street Note bore interest at a rate of 8 % per annum, which interest was payable in shares of common stock; but was not payable until the maturity date or upon acceleration or by prepayment of such note (see conversions below). March 7, 2022 Securities Purchase Agreement Effective March 7, 2022, the Company entered into a securities purchase agreement with Sixth Street, pursuant to which Sixth Street purchased a convertible promissory note (the “March 7, 2022 Sixth Street Note”) from the Company in the aggregate principal amount of $ 68,750 , such principal and the interest thereon convertible into shares of common stock at the option of Sixth Street any time after the six-month anniversary of the March 7, 2022 Sixth Street Note. The March 7, 2022 Sixth Street Note contained debt issue costs of $ 3,750 . The Company used the net proceeds from the March 7, 2022 Sixth Street Note for general working capital purposes. The maturity date of the March 7, 2022 Sixth Street Note was March 7, 2023 . The March 7, 2022 Sixth Street Note bore interest at a rate of 8 % per annum, which interest was payable in shares of common stock; but was not payable until the maturity date or upon acceleration or by prepayment of such note (see conversions below). April 12, 2022 Securities Purchase Agreement Effective April 12, 2022, the Company entered into a securities purchase agreement with Sixth Street, pursuant to which Sixth Street purchased a convertible promissory note (the “April 12, 2022 Sixth Street Note”) from the Company in the aggregate principal amount of $ 68,750 , such principal and the interest thereon convertible into shares of common stock at the option of Sixth Street any time after the six-month anniversary of the April 12, 2022 Sixth Street Note. The April 12, 2022 Sixth Street Note contained debt issue costs of $ 3,750 . The Company used the net proceeds from the April 12, 2022 Sixth Street Note for general working capital purposes. The maturity date of the April 12, 2022 Sixth Street Note was April 12, 2023 . The April 12, 2022 Sixth Street Note bore interest at a rate of 8 % per annum, which interest was payable in shares of common stock; but was not payable until the maturity date or upon acceleration or by prepayment of such note. 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 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 contained debt issue costs of $ 3,750 . The Company used 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 bore interest at a rate of 8 % per annum, which interest is payable in shares of the common stock; but is not payable until the maturity date or upon acceleration or by prepayment of such note. F- 22 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 June 30, 2022 Securities Purchase Agreement On June 30, 2022, the Company entered into a securities purchase agreement with 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 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 contained debt issue cost of $ 3,750 . The Company used 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 was June 30, 2023 . The 1800 Diagonal Note bore interest at a rate of 8 % per annum, which interest was payable in shares of common stock; but was not payable until the maturity date or upon acceleration or by prepayment of such note. The following terms apply to all of the above 1800 Diagonal notes: 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 relevant note. After this initial 180-day period, the Company does not have a right to prepay such note. The conversion price for the above 1800 Diagonal notes is equal to 65 % (representing a 35% discount) of the market price of the common stock, which is 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 of such note. Notwithstanding the foregoing, such conversions are subject to 9.99 % beneficial ownership limitations. All of the above 1800 Diagonal notes are treated as stock settled debt under ASC 480 and accordingly the Company recorded a total of $ 262,500 put premium, of which $ 56,538 was recorded during the year ended June 30, 2023. 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 accrues 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. Such events of default include, among others, failure to timely issue shares upon receipt of a notice of conversion, breach of covenants, representations or warranties, insolvency, bankruptcy and liquidation (subject to cure periods), failure by the Company to pay the principal and interest due under such note, failure to reserve at least five times the number of shares issuable upon full conversion of such note, failure to maintain the listing of the common stock on at least one of the OTC markets or a national exchange, restatement of the Company’s financial statements at any time after 180 days after the issuance date of such note if such restatement would reasonably constitute a material adverse effect on 1800 Diagonal, the Company’s failure to comply with Exchange Act reporting requirements or the Company ceases to be subject to such reporting requirements. Failure to deliver shares of common stock upon conversion of the above 1800 Diagonal notes within three business days of a notice of conversion will result in the Company paying a penalty of $ 1,000 per day, subject to certain exceptions. Upon certain events of default, the above 1800 Diagonal notes will become immediately due and payable and the Company must pay 1800 Diagonal 150 % of 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 any event of default relating to the failure to issue shares of common stock upon the conversion of such notes, such notes become immediately due and payable in an amount equal to twice the Default Amount. F- 23 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 The total principal amount outstanding under the above 1800 Diagonal notes was $ 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 purchase agreements with 1800 Diagonal during the year ended June 30, 2022 following conversion of the principal balance. The total principal amount outstanding and accrued interest under the above 1800 Diagonal notes was $ 0 as of June 30, 2023 following conversion of $ 370,000 of the principal balance and $ 14,800 accrued interest during the year ended June 30, 2023. Accordingly, $ 199,230 of the put premium was released to additional paid in capital in respect of such purchase agreements with 1800 Diagonal during the year ended June 30, 2023 following conversion of the principal balance (see Note 8). 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 Note”) from the Company in the aggregate principal amount of $ 170,000 , such principal and the interest thereon convertible into shares of common stock at the option of ONE44 any time after the six-month anniversary of the December 7, 2021 ONE44 Note. The December 7, 2021 ONE44 Note contained an original discount and debt issue cost for a total of $ 25,500 . The Company used the net proceeds from the December 7, 2021 ONE44 Note for general working capital purposes. The maturity date of the December 7, 2021 ONE44 Note was December 7, 2022 . The December 7, 2021 ONE44 Note bore interest at a rate of 10 % per annum, which interest was payable in shares of common stock; but was not payable until the maturity date or upon acceleration or by prepayment of such note. March 29, 2022 Securities Purchase Agreement Effective March 29, 2022, the Company entered into a securities purchase agreement with ONE44, pursuant to which ONE44 purchased a convertible promissory note (the “March 29, 2022 ONE44 Note”) from the Company in the aggregate principal amount of $ 120,000 , such principal and the interest thereon convertible into shares of common stock at the option of ONE44 any time after the six-month anniversary of the March 29, 2022 ONE44 Note. The March 29, 2022 ONE44 Note contained an original discount and debt issue cost for a total of $ 18,000 . The Company used the net proceeds from the March 29, 2022 ONE44 Note for general working capital purposes. The maturity date of the March 29, 2022 ONE44 Note was March 29, 2023 . The March 29, 2022 ONE44 Note bore interest at a rate of 10 % per annum, which interest was payable in shares of common stock; but was not payable until the maturity date or upon acceleration or by prepayment of such note. August 15, 2022 Securities Purchase Agreement On August 15, 2022, the Company entered into a securities purchase agreement with ONE44, pursuant to which ONE44 purchased a convertible redeemable note (the “August 15, 2022 ONE44 Note”) from the Company in the aggregate principal amount of $ 110,000 , such principal and the interest thereon convertible into shares of the common stock at the option of ONE44 any time after the six-month anniversary of the August 15, 2022 ONE44 Note. The transaction contemplated by such purchase agreement closed on August 16, 2022. The August 15, 2022 One44 Note contains an original issue discount amount of $ 10,000 . Pursuant to the terms of such purchase agreement, the Company paid $ 5,500 for ONE44’s legal fees. The Company used the net proceeds from the August 15, 2022 ONE44 Note for general working capital purposes. The maturity date of the August 15, 2022 One44 Note is August 15, 2023 . The August 15, 2022 ONE44 Note bears interest at a rate of 10 % per annum, which is payable in shares of common stock, but is not payable until the maturity date or upon acceleration or by prepayment of such note. F- 24 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 February 14, 2023 Securities Purchase Agreement On February 14, 2023, the Company entered into a securities purchase agreement with ONE44, pursuant to which ONE44 purchased a convertible redeemable note (the “February 14, 2023 ONE44 Note”) from the Company in the aggregate principal amount of $ 111,111 , such principal and the interest thereon convertible into shares of the common stock at the option of ONE44 any time after the six-month anniversary of the February 14, 2023 ONE44 Note. The transaction contemplated by such purchase agreement closed on February 14, 2023. The February 14, 2023 One44 Note contains an original issue discount amount of $ 11,111 . Pursuant to the terms of such purchase agreement, the Company paid $ 5,500 for ONE44’s legal fees. The Company intends used the net proceeds from the February 14, 2023 ONE44 Note for general working capital purposes. The maturity date of the February 14, 2023 One44 Note is February 14, 2024 . The February 14, 2023 ONE44 Note bears interest at a rate of 10 % per annum, which interest is payable in shares of common stock, but is not payable until the maturity date or upon acceleration or by prepayment of such note. The following terms apply to all of the above ONE44 notes: During the first 60 to 180 days following the date of these notes, the Company has the right to prepay the principal and accrued but unpaid interest due under the above notes issued to ONE44, together with any other amounts that the Company may owe ONE44 under the terms of the note, at a premium ranging from 120 % to 135 % as defined in the relevant note. After this initial 180-day period, the Company does not have a right to prepay such note. The conversion price for the above ONE44 notes ranges from 60 % to 65 % (representing a 35% to 40% discount) of the market price of the common stock, which is based on the lowest closing bid prices of the common stock for the ten trading days immediately prior to the delivery of a notice of conversion. Notwithstanding the foregoing, such notes are subject to 4.99% beneficial ownership limitations. All of the above ONE44 notes are treated as stock settled debt under ASC 480 and accordingly the Company recorded a total of $ 289,459 put premium of which $ 133,305 was recorded during the year ended June 30, 2023. The above ONE44 notes contain certain events of default, upon which principal and accrued interest will become immediately due and payable. In addition, upon an event of default, interest on the outstanding principal shall accrue at a default interest rate of 24 % per annum, or if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. Further, certain events of default may trigger penalty and liquidated damage provisions. In the event that the Company fails to deliver to ONE44 shares of common stock issuable upon conversion of principal or interest under a ONE44 note, it will incur a penalty of $ 250 per day the shares are not issued beginning on the 4 th day after the conversion notice was delivered to the Company. This penalty increases to $ 500 per day beginning on the 10 th day. In the event that the Company loses the bid price of its common stock on OTC, such ONE44 note does not incur penalty and instead the outstanding principal amount increases by 20 % . The total principal amount outstanding under the above ONE44 notes was $ 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 notes during the year ended June 30, 2022 following conversion of the principal balance. The total principal amount outstanding under the above ONE44 notes was $ 118,111 and accrued interest of $ 4,726 as of June 30, 2023, following conversion of $ 338,700 of the principal balance and $ 24,255 accrued interest during the year ended June 30, 2023. Accordingly, $ 182,376 of the put premium was released to additional paid in capital in respect to the purchase agreements with ONE44 during the year ended June 30, 2023 following conversion of the principal balance (see Note 8). F- 25 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 GS Capital Partners Securities Purchase Agreements August 12, 2022 Securities Purchase Agreement 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 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 $ 3,000 for GS Capital’s legal fees. The Company used the net proceeds ($ 85,000 ) from the GS Capital Note for general working capital purposes. The maturity date of the GS Capital Note was April 12, 2023, but was extended to August 12, 2023 in April 2023. The GS Capital Note bears interest at a rate of 8 % per annum, which interest is payable in shares of common stock, but is not payable until the maturity date or upon acceleration or by prepayment of such note. The GS Capital Note is exchangeable for an equal aggregate principal amount of notes of different authorized denominations, as requested by GS Capital by 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 common stock at a price per share equal to $2.80 per share (the “Fixed Price”). However, in the event the common stock trades below $2 per share for more than five consecutive trading days, then the Fixed Price becomes $1.30 per share. In the event of default, such conversion price equals 65 % of the lowest trading price of the common stock reported on the OTC Markets or other exchange for the ten prior trading days, including the day upon which a notice of conversion is received by the Company. The GS Capital Note is subject to a 4.99 % beneficial ownership limitation. Additionally, such conversion price will be adjusted if the Company issues securities with more favorable conversion terms. Currently, the effective conversion price of this note is 60 % (representing a 40% discount) of the market price, which means the lowest closing bid prices of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion. September 21, 2022 Securities Purchase Agreement On September 21, 2022, the Company entered into a securities purchase agreement with GS Capital, 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 common stock at the option of GS Capital. The transaction contemplated by such purchase agreement closed on September 26, 2022. Such note contains a $ 4,000 original issue discount. Pursuant to the terms of such purchase agreement, the Company paid $ 2,500 for GS Capital’s legal fees. The Company used the net proceeds ($ 65,000 ) from such note for general working capital purposes. The maturity date of such note is March 21, 2023 but was extended to March 21, 2024 in April 2023. Such note bears interest at a rate of 8 % per annum, which interest is payable in shares of common stock, but is not payable until the maturity date or upon acceleration or by prepayment of such note. Such 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 common stock at a price per share equal to $2 (the “September Fixed Price”). However, in the event the common stock trades below $1.40 per share for more than five consecutive trading days, then the September Fixed Price becomes $0.90 per share. In the event of default under such note, such conversion price becomes 65 % of the lowest trading price of the common stock as reported on the OTC Markets or other exchange for the ten prior trading days, including the day upon which a notice of conversion is received by the Company. Such note is subject to 4.99 % beneficial ownership limitations. Additionally, the conversion price will be adjusted in favor of the note holder if the Company issues securities with more favorable conversion terms. Currently, the effective conversion price of this note is 60 % (representing a 40% discount) of the market price, which means the lowest closing bid prices of the Common Stock for the ten trading days immediately prior to the delivery of a Notice of Conversion. F- 26 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 During the first 60 to 180 days following the date of the above GS Capital notes, the Company has the right to prepay the principal and accrued but unpaid interest due under the above notes issued to GS Capital, together with any other amounts that the Company may owe GS Capital under the terms of the notes, at a premium ranging from 110 % to 125 % of the principal amount and interest of such note. After this initial 180-day period, the Company does not have a right to prepay such notes. Upon the occurrence and during the continuation of certain events of default, interest accrues at a default interest rate of 24 % per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. In the event that the Company fails to deliver to GS Capital shares of common stock issuable upon conversion of principal or interest under the above GS Capital notes, the penalty becomes $ 250 per day for each day that the shares are not issued beginning on the 4 th day after the conversion notice was delivered to the Company. This penalty increases to $ 500 per day beginning on the 10 th day. In the event that the Company loses the bid price of its common stock on OTC, such GS Capital note does not incur penalty and instead the outstanding principal amount increases by 20 % . The total principal outstanding and accrued interest under the above GS Capital notes were $ 75,300 and $ 4,263 , respectively, as of June 30, 2023, following conversion of $ 89,200 of the principal balance and $ 2,945 accrued interest during the year ended June 30, 2023. An aggregate total of $ 75,300 of the above GS Capital notes were bifurcated with the embedded conversion option which were recorded as derivative liabilities at fair value (see Note 12). Red Road Holdings Securities Purchase Agreement On October 6, 2022, the Company entered into a securities purchase agreement (the “Red Road Purchase Agreement”) with Red Road Holdings Corporation, a Virginia corporation (“Red Road”), pursuant to which Red Road purchased a convertible promissory note (the “Red Road Note”) from the Company in the aggregate principal amount of $ 53,750 , such principal and the interest thereon convertible into shares of common stock at the option of Red Road. The transaction contemplated by the Red Road Purchase Agreement closed on October 12, 2022. The Company used the net proceeds ($ 50,000 ) from the Red Road Note for general working capital purposes. The maturity date of the Note was October 6, 2023. The Red Road Note bore interest at a rate of 8 % per annum, which interest was payable in shares of common stock, but was not payable until the maturity date or upon acceleration or by prepayment of the Red Road Note, as described below. In addition, upon an event of default, interest on the outstanding principal accrued at a default interest rate of 22 % 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. Red Road had the option to convert all or any amount of the principal face amount of the Red Road Note, beginning one hundred eighty (180) days following the date of the Red Road Note and ending on the later of: (i) the maturity date of such note and (ii) the date of payment of the Default Amount (as defined in the Red Road Note), each in respect of the remaining outstanding amount of the Red Road Note, to convert all or any part of the outstanding and unpaid amount of the Note into common stock at the then-applicable conversion price. Pursuant to the terms of the Red Road Purchase Agreement, the Company paid Red Road’s legal fees and due diligence expenses in the aggregate amount of $ 3,750 which was recorded as a debt discount. The conversion price for the Red Road Note was equal to the Variable Conversion Price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events), which was defined as 65% of the Market Price (representing a discount rate of 35%) which was defined as the average of the lowest three (3) Trading Prices (as defined in the Red Road Note) for the common stock during the ten (10) trading days prior to the conversion date. The Red Road Note is subject to 4.99 % beneficial ownership limitations and was treated as stock settled debt under ASC 480, and accordingly the Company recorded a total of $ 28,942 put premium. The Red Road Note may be prepaid until 180 days from its issuance date, subject to the following: if prepaid within 60 days of the issuance date, the prepayment premium is 110% of the face amount of such note plus any accrued interest, if prepaid after 60 days but less than 91 days from the issuance date, then the prepayment premium is 115% of the face amount plus any accrued interest of such note., if prepaid after 90 days but less than 121 days from the issuance date, then the prepayment premium is 120% of the face amount plus any accrued interest of such note, if prepaid after 120 days but less than 151 days from the issuance date, then the prepayment premium shall be 125% of the face amount plus any accrued interest of such note, and if prepaid after 150 days but less than 181 days from the issuance date, then the prepayment premium shall be 129% of the face amount plus any accrued interest of such note. F- 27 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 In the event that the Company failed to deliver to Red Road shares of common stock upon conversion of the Red Road Note within three business days of a notice of conversion by Red Road, the Company would incur a penalty of $ 1,000 per day. Upon the occurrence and during the continuation of certain events of default, the Red Road Note will become immediately due and payable and the Company will pay Red Road in full satisfaction of its obligations in the Note an amount equal to 150% of the outstanding principal amount of the Red Road Note plus any interest accrued upon such event of default or prior events of default. The total principal amount outstanding and accrued interest under the above Red Road notes was $ 0 as of June 30, 2023 following conversion of $ 53,750 of the principal balance and $ 2,150 accrued interest during the year ended June 30, 2023. Accordingly, $ 28,942 of the put premium was released to additional paid in capital in respect of such purchase agreements with Red Road during the year ended June 30, 2023 following conversion of the principal balance (see Note 8). Coventry Enterprises, LLC Securities Purchase Agreement On November 3, 2022, the Company entered into a Securities Purchase Agreement with Coventry Enterprises, LLC (“Coventry”), pursuant to which the Company issued Coventry a promissory note from the Company in the aggregate principal amount of $ 125,000 , such principal and the interest thereon convertible into shares of the Company’s common stock following an event of default (the “Coventry Note”). The Coventry Note contains a $ 25,000 original issue discount. The Company used the net proceeds of $ 100,000 from the Coventry Note for general working capital purposes. The Coventry Note bears interest at a rate of 10 % per annum, with $ 12,500 in guaranteed interest. The principal amount and the guaranteed interest is due and payable in seven equal monthly payments of $ 19,643 , commencing on March 24, 2023 and continuing on the 24th day of each month thereafter until paid in full not later than October 24, 2023, or such earlier date as the Coventry Note is required or permitted to be repaid and to pay such other interest to Coventry on the aggregate unconverted and then-outstanding principal amount of the Coventry Note in accordance with the provisions thereof. Any or all of the principal amount and guaranteed interest may be pre-paid at any time and from time to time, in each case without penalty or premium. Additionally, in the event that the Company files with the SEC a qualified offering statement on Form 1-A and such note has been outstanding for four months since its issuance, Coventry has the right to convert all or portion of such note, including guaranteed interest, into shares of common stock at the offering price used in connection with such offering. At any time following an event of default under the Coventry Note, it becomes convertible, in whole or in part, into shares of Common Stock at the option of Coventry, at any time and from time to time thereafter (subject to the beneficial ownership limitations set forth therein). The conversion price of the Coventry Note is ninety percent (90%) per share of the lowest per-share VWAP during the twenty (20) trading-day period before the conversion (each, a “Calculated Conversion Price”). In the event that, within 30 calendar days either before or after any conversion, the conversion price of which is based upon a Calculated Conversion Price, the Company consummates (in whole or in part) any financing (whether such financing is equity, equity-equivalent, or debt or any combination thereof) or for any other reason issues any shares of common stock or any common stock equivalents at a price less than the most recent Calculated Conversion Price (the “Alternative Conversion Price”), regardless of when that note or instrument was originated, then, at the option of Coventry, (i) if the conversion has not yet occurred, then the Alternative Conversion Price will be substituted for the Calculated Conversion Price and (ii) if the conversion has occurred, then, within two trading days following Coventry’s written request, the Company is required to issue to Coventry that number of shares of Common Stock equivalent to the difference between the number of shares of Common Stock that had been issued using the Calculated Conversion Price and the number of shares of Common Stock that would have been issued using the Alternative Conversion Price. Accordingly, the Coventry note is treated as stock settled debt under ASC 480 and the Company recorded a total of $ 13,889 put premium during the year ended June 30, 2023. F- 28 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Upon the occurrence and during the continuation of certain events of default, interest on the Coventry Note accrues at a default interest rate equal to the lesser of (i) 18% per annum or (ii) the maximum rate permitted by law. Subject to the beneficial ownership limitation in the Coventry Note, if any event of default occurs, then the outstanding principal amount guaranteed interest plus accrued but unpaid default rate interest, liquidated damages and other amounts owing on the Coventry Note through the date of acceleration becomes immediately due and payable at Coventry’s option, in cash or in shares of common stock at the mandatory default amount, which is equal to 120% of all such amounts due on the Coventry Note. If the Company fails to deliver to Coventry such shares, the Company is required to pay in cash an amount equal to the amount that the value of such shares exceeds the principal amount and interest of the attempted conversion. As an additional inducement to Coventry entering into such agreement, the Company issued to Coventry 75,000 shares of common stock on the issuance date of the Coventry Note, which was valued using the relative fair value method at $ 37,500 and recognized as debt discount to be amortized over the term of such note. The Company failed to make the first installment payment due in March 2023 which is considered an event of default. The Company recorded a default penalty of $ 25,000 as additional principal as of June 30, 2023. The total principal amount outstanding and accrued interest under the above Coventry note was $ 144,951 including the default penalty as of June 30, 2023 following conversion of $ 5,049 of the principal balance and $ 22,749 accrued interest during the year ended June 30, 2023. Accordingly, $ 561 of the put premium was released to additional paid in capital in respect of such purchase agreements with Coventry during the year ended June 30, 2023 following conversion of the principal balance (see Note 8). In July 2023, the Company fully paid the remaining principal and accrued interest for a total of $ 142,908 (see Note 13). Convertible note in default The Coventry Note is currently past due and in default, consisting of $ 144,951 principal including default penalty and $ 22,749 accrued interest, which includes interest accruing at the default interest rate at 18 %. Amortization of debt discounts The Company recorded $ 210,278 and $ 73,500 of debt discounts related to the above note issuances during the years ended June 30, 2023 and 2022, respectively. The Company recorded $ 232,674 and $ 452,308 of put premiums related to the above note issuances during the years ended June 30, 2023 and 2022, respectively. The debt discounts are being amortized over the term of the debt and the put premiums are expensed on issuance of the debt with the liability released to additional paid in capital on conversion of the principal. Amortization of all debt discounts for the years ended June 30, 2023 and 2022 was $ 202,952 and $ 47,971 , respectively. The Company reclassified $ 411,111 and $ 335,677 in put premiums to additional paid in capital following conversions during the year ended June 30, 2023 and 2022, 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, 2023. F- 29 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 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, 2023 and 2022 is as follows: SCHEDULE OF INCOME TAX PROVISION US June 30, 2023 June 30, 2022 Year Ended US June 30, 2023 June 30, 2022 Loss before Income taxes $ ( 2,790,407 ) $ ( 2,658,087 ) Taxes under statutory US tax rates $ ( 585,986 ) $ ( 558,198 ) Increase (decrease) in valuation allowance 861,178 339,334 Prior period adjustment ( 218,947 ) - Foreign tax rate differential ( 60,316 ) ( 64,349 ) Income tax rate change - 272,008 Other 4,071 11,205 Income tax (expense) benefit $ - $ - The Company reflects a tax benefit on its consolidated statement of operations and comprehensive income (loss) in 2023 and 2022 of $ 129,841 and $ 54,977 , 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. 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 June 30, 2023 June 30, 2022 Year Ended June 30, 2023 June 30, 2022 Deferred tax assets Warrant Derivative Liability $ 7,403 $ 7,403 Accrued Expenses 478,273 363,873 Prepaid Investor Services 575,021 427,318 Non-cash interest 758,797 709,936 Intangibles (Intellectual Property and Patent Cost) 321,557 293,260 Deferred Rent 4,550 4,198 Formation Expense 6,553 6,553 Net Operating Loss carryforward 8,910,873 8,759,357 Foreign Exchange Loss (OCI) ( 39,379 ) ( 39,379 ) Revalue of derivative liability 572,141 460,772 Stock Based Compensation 84,028 84,028 Total Deferred tax assets $ 11,679,818 $ 11,077,318 Deferred tax liabilities Research and Development $ ( 202,568 ) $ ( 170,435 ) Gain on extinguishment of debt 47,393 ( 259,470 ) Capital Raising Costs ( 369,033 ) ( 352,981 ) Total deferred tax liabilities $ ( 524,208 ) $ ( 782,886 ) Net deferred tax assets $ 11,155,610 $ 10,294,432 Valuation allowance ( 11,155,610 ) ( 10,294,432 ) Net deferred tax assets $ - $ - F- 30 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 At June 30, 2023, the Company had U.S. net operating loss carry forwards of $ 10,369,271 that may be offset against future taxable income, subject to limitation under IRC Section 382. Of the approximately $ 10.4 million of net operating loss carryforwards, $ 7.3 million will begin to expire in 2024 and the remaining $ 3.1 million will not expire but is subject to annual usage limitations. The Australian tax rate changed from 26 % in 2021 to 25 % in 2022 and remained at 25 % during 2023. At June 30, 2023, the Company had Australia net operating loss carry forwards of $ 26,933,305 which can be carried forward without expiration. No tax benefit has been reported in the June 30, 2023 and 2022 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, 2023 and 2022, 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, 2023, the Company had no unrecognized tax benefits. There were no changes in the Company’s unrecognized tax benefits during the years ended June 30, 2023 and 2022. The Company did not recognize any interest or penalties during fiscal 2023 or 2022 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 for the Company to file a certificate of amendment to its certificate of incorporation, as amended (the “Certificate of Incorporation”), which increased the Company’s authorized capital stock. Such certificate of amendment increased the number of authorized shares of common stock from 1,000,000,000 to 3,000,000,000 shares. The number of authorized shares of preferred stock remained at 1,500,005 shares, such that the total number of authorized shares of capital stock increased to 3,001,500,005 shares. Such certificate of amendment was filed and became effective on July 6, 2022. On September 21, 2022, the board of directors of the Company approved and authorized, and the holders of a majority-in-interest of the Company’s voting capital stock approved by written consent for the Company to file a certificate of amendment to its Certificate of Incorporation, which increased the Company’s authorized capital stock. The Certificate increased the number of authorized shares of common stock from 3,000,000,000 to 10,000,000,000 shares. The number of authorized shares of preferred stock remained at 1,500,005 , such that the total number of shares of authorized capital stock increased to 10,001,500,005 shares. Such certificate of amendment was filed and became effective on November 4, 2022. On May 1, 2023, the Company filed a certificate of amendment to its certificate of incorporation, as amended, to effect a one-for-one thousand (1:1,000) Reverse Stock Split (the “Reverse Stock Split”), effective as of May 1, 2023. Proportional adjustments for the Reverse Stock Split were made to the Company’s outstanding stock options, warrants and equity incentive plans. All share and per-share data and amounts have been retroactively adjusted as of the earliest period presented in the consolidated financial statements to reflect the Reverse Stock Split. F- 31 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Preferred Stock The total number of shares of preferred stock that the Company is authorized to issue is 1,500,005 , $ 0.01 par value per share. These preferred shares have no rights to dividends, profit sharing or liquidation preferences, subject to any such rights provided for such shares in any certificate of designation filed by the Company with the State of Delaware. Of the total preferred shares authorized, 500,000 had been designated as Series A Preferred Stock (“Series A Preferred Stock”), pursuant to the Certificate of Designation for the Series A Preferred Stock filed with the Secretary of State of the State of Delaware on December 9, 2014. James Nathanielsz, the Company’s Chief Executive Officer and Chief Financial Officer and a director, beneficially owned all of the outstanding shares of Series A Preferred Stock indirectly through North Horizon Pty Ltd., which entitled him, as a holder of Series A Preferred Stock, to vote on all matters submitted or required to be submitted to a vote of the Company’s stockholders, except election and removal of directors, and each share of Series A Preferred Stock entitled him to a total of 1 vote. North Horizon Pty Ltd. is a Nathanielsz Family Trust. Mr. Nathanielsz had voting and investment power over these shares. On March 15, 2023, the Company filed a certificate with the Secretary of State of Delaware (the “Certificate of Retirement”), effecting the retirement and cancellation of the Series A Preferred Stock to eliminate such Series A Preferred Stock. No shares of Series A Preferred Stock are currently outstanding as they were redeemed by the Company in March 2023. There were none and 500,000 shares of Series A Preferred Stock issued and outstanding as of June 30, 2023 and 2022, respectively. Pursuant to a certificate of designation filed with the Secretary of State of the State of Delaware on June 16, 2015, five shares of preferred stock have been designated as Series B Preferred Stock, par value $ 0.01 per share, of the Company (“Series B Preferred Stock”). Each holder of shares of Series B Preferred Stock is entitled to voting power equivalent to the number of votes equal to the total number of shares of common stock outstanding as of the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company and entitled to vote on all matters submitted or required to be submitted to a vote of the stockholders of the Company. One share of Series B Preferred Stock is issued and outstanding as of June 30, 2023 and 2022. Mr. Nathanielsz, the Company’s Chief Executive Officer, directly beneficially owns such one share of Series B Preferred Stock. No additional shares of Series A Preferred Stock or Series B Preferred Stock were issued during fiscal year 2023 and 2022. Common Stock Shares issued under the Equity Lines Dutchess Capital Growth Fund LP 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. F- 32 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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 . The Company agreed to pay to Dutchess a commitment fee for entering into the Purchase Agreement of 1,000 restricted shares of the Company’s common stock. The 1,000 shares of common stock were valued at approximately $ 20 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 shares of its common stock at an average price per share of approximately $ 10 , 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. On July 13, 2022, the Company issued 14,337 shares of its common stock at an average price per share of approximately $ 2 , as a result of delivering one Dutchess Draw Down Notice to Dutchess. Consequently, the Company received gross aggregate proceeds of $ 24,711 from such Dutchess Draw Down Notice. The Company received $ 23,758 of a previously recorded subscription receivable during the year ended June 30, 2023. Coventry Enterprises, LLC On November 3, 2022, the Company entered into a Common Stock Purchase Agreement (the “Coventry Purchase Agreement”) with Coventry providing for an equity financing facility (the “Coventry Equity Line”). The Purchase Agreement provides that, upon the terms and subject to the conditions in the Purchase Agreement, Coventry is committed to purchase up to Five Million Dollars ($ 5,000,000 ) of shares of common stock over the 36 month term of the Purchase Agreement. Under the terms of the Coventry Purchase Agreement, Coventry 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 becoming effective which registers Coventry’s resale of any common stock purchased by Coventry under the Coventry Equity Line. From time to time over the 36-month term of the Coventry Purchase Agreement, commencing on the trading day immediately following the date on which such registration statement becomes effective, the Company, in its sole discretion, may provide Coventry with a draw down notice (each, a “Coventry Draw Down Notice”), to purchase a specified number of shares of common stock (each, a “Coventry Draw Down Amount Requested”), subject to the limitations discussed below. The actual amount of proceeds the Company will receive pursuant to each Coventry Draw Down Notice (each, a “Coventry Draw Down Amount”) is to be determined by multiplying the Coventry Draw Down Amount Requested by the applicable purchase price. The purchase price of each share of common stock equals 80% of the lowest volume weighted average price of the Common Stock during the 10 business days immediately preceding the Coventry Drawdown Notice date. The maximum number of shares of common stock requested to be purchased pursuant to any single Coventry Draw Down Notice cannot exceed the lesser of (i) 200 % of the average daily traded value of the common stock during the 10 business days immediately preceding the Coventry Draw Down Notice, (ii) $ 250,000 or (iii) an amount that would cause Coventry’s beneficial ownership to exceed 9.99 % of the outstanding number of shares of common stock immediately after giving effect to the issuance of the Coventry Draw Down Notice. During the year ended June 30, 2023, the Company has not received a Coventry Draw Down Notice. F- 33 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Shares issued for conversion of convertible debt During the year ended June 30, 2022, the Company issued an aggregate of 96,960 shares of its common stock and common stock issuable of 7,326 at average contractual conversion prices ranging from $ 10 to $ 40 , 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 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 liability 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. During the year ended June 30, 2023, the Company issued an aggregate of 5,061,180 shares of its common stock and common stock issuable of 807,230 at average contractual conversion price of $ 0.17 , as a result of the conversion of principal of $ 935,699 , interest of $ 80,586 and conversion fees $ 1,838 underlying certain outstanding convertible notes converted during the year. The total recorded to equity was $ 1,387,723 including the $ 19,572 discussed above. The common stock issuable of 807,230 shares were issued in July 2023. Included in the above conversion during the year ended June 30, 2023 were principal aggregate amount of convertible notes of $ 168,200 , accrued interest of $ 16,632 and conversion fees of $ 1,838 containing bifurcated embedded conversion option derivatives were converted into common stock. Accordingly, the fair market value of the shares issued upon conversion was $ 556,272 , resulting in a loss on extinguishment at the time of conversion of $ 369,602 and $ 352,051 of derivative liability fair value was recorded as a gain on extinguishment at the time of conversion, resulting in a net loss of $ 17,551 which is included in gain (loss) on extinguishment of debt in the accompanying consolidated statements of operations. The Company has 3,764,903,510 shares of its common stock reserved for future issuances based on lender reserve requirements pursuant to underlying financing agreements at June 30, 2023. Shares issued for services and accrued expenses On August 12, 2021, the Board approved the issuance of 2,800 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 shares of common stock were valued at approximately $ 30 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 167 shares of the Company’s common stock for legal services rendered for the month of August 2021. The 167 shares of common stock were valued at approximately $ 50 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 2,820 shares of the Company’s common stock to a consultant for services rendered from July 2021 to September 2021 valued at approximately $ 40 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 667 shares of the Company’s common stock for legal services rendered in January 2022. The 667 shares of common stock were valued at approximately $ 30 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. F- 34 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 On January 24, 2022, the Company issued 2,274 shares of the Company’s common stock to a consultant for services rendered from October 2021 to December 2021. The Company issued 2,274 shares of the Company’s common stock valued at approximately $ 20 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 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 $ 20 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 3,834 shares of the Company’s common stock to a consultant for services rendered from January 2022 to March 2022. The Company issued 3,834 shares of the Company’s common stock valued at approximately $ 12.2 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 12,271 shares of the Company’s common stock to a consultant for services rendered from April 2022 to June 2022. The 12,271 shares was reflected as common stock issuable and was valued at approximately $ 3.70 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 12,271 shares were issued on July 1, 2022. On October 25, 2022, the Company issued 6,111 shares of common stock to a consultant for services rendered in October 2022. The Company valued these shares based on quoted trading prices on the date of grant at $ 0.90 per share or $ 5,500 which was recorded as stock-based consulting expense during the year ended June 30, 2023. On November 16, 2022, the Company issued 73,301 shares of common stock to a consultant for services rendered from July 2022 to November 2022. Those shares were valued at approximately $ 0.07 per share or $ 51,311 , being the closing price of the stock on the date of grant to such consultant. The Company recorded stock-based compensation of $ 51,311 during the year ended June 30, 2023. On June 30, 2023, the Board approved the issuance of 608,423 shares of the Company’s common stock to a consultant for services rendered from April 2023 to June 2023. The 608,423 shares was reflected as common stock issuable and was valued at approximately $ 0.135 per share or $ 82,137 , being the closing price of the stock on the date of grant to such consultant. The Company recorded stock-based compensation of $ 82,137 during the year ended June 30, 2023. The common stock issuable of 608,423 shares were issued on July 10, 2023. 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 shares of the common stock of the Company (the “Shares”), valued at approximately $ 30 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- 35 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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 shares of common stock of the Company (the “Shares”), valued at approximately $ 30 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 shares of common stock of the Company for accrued director services of $ 84,000 as of June 30, 2021. The 2,800 shares of common stock were valued at approximately $ 30 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, 2022, the Company received aggregate gross proceeds of $ 625,000 from the exercise of 16 Series B Warrants with an exercise price of $ 40,000 per share and issued 16 shares of common stock. During the year ended June 30, 2023, the Company received aggregate gross proceeds of $ 475,000 from the exercise of approximately 12 Series B Warrants with an exercise price of $ 40,000 per share and issued 12 shares of common stock. During the year ended June 30, 2022, the Company issued 56,800 shares of common stock from the alternate cashless exercise of 0.284 Series A warrants with an original exercise price of $ 200,000 and alternate cashless exercise price of $ 0.001 or the par value of common stock. During the year ended June 30, 2023, the Company issued an aggregate of 559,999 shares of common stock and common stock issuable of 206,000 from the alternate cashless exercise of 0.97 Series A warrants with an original exercise price of $ 200,000 and alternate cashless exercise price of $ 0.001 or the par value of common stock. 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 $ 200,000 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 $ 466,273 and $ 700,340 , during the years ended June 30, 2023 and 2022, respectively, and a corresponding reduction of income available to common stockholders upon the alternate cashless exercise of these warrants. F- 36 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Shares issued in connection with a convertible note On November 3, 2022, the Company entered into a securities purchase agreement with Coventry, pursuant to which Coventry purchased a promissory note from the Company in the aggregate principal amount of $ 125,000 (see Note 6). As an additional inducement to the Coventry purchasing the note, the Company, as of the original issue date and for no additional consideration, issued to Coventry an aggregate of 75,000 shares of the common stock, which were valued using the relative fair value method at $ 37,500 and recognized as debt discount to be amortized over the term of the Coventry Note. Restricted Stock Units Pursuant to employment agreements dated in May 2019, the Company granted an aggregate of 0.078 and 0.039 restricted stock unit to the Company’s Chief Executive Officer and Chief Scientific Officer, respectively. The total 0.117 restricted stock units are subject to vesting terms as defined in the employment agreements. The 0.117 restricted stock units were valued at the fair value of approximately $ 4,250,000 per unit or $ 497,240 based on the quoted trading price on the date of grant. There were $ 248,620 unrecognized restricted stock units expense as of June 30, 2023 and 2022. There are 0.06 unvested restricted stock units which are subject to various performance conditions which have not yet been met and such restricted stock units have not yet vested as of June 30, 2023 and 2022 to which the $ 248,620 relates. Stock Options A summary of the Company’s stock option activity during the years ended June 30, 2023 and 2022 is presented below: SCHEDULE OF SHARE BASED COMPENSATION STOCK OPTIONS ACTIVITY Weighted Number of Average Options Price Per Share Outstanding at June 30, 2021 0.059 $ 13,730,000 Issued - - Exercised - - Expired - - Outstanding at June 30, 2022 0.059 $ 4,533,000 Issued - - Exercised - - Expired - - Outstanding at June 30, 2023 0.059 $ 4,533,000 Exercisable at June 30, 2023 0.059 $ 4,533,000 Outstanding and Exercisable: Weighted average remaining contractual term 5.88 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, 2023 and 2022, the Company recognized stock-based compensation of $ 0 and $ 72,513 related to vested stock options. There was $ 0 of unvested stock options expense as of June 30, 2023. No stock options were granted during the years ended June 30, 2023 and 2022. F- 37 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Stock Warrants The following table summarizes common stock warrant activity for the years ended June 30, 2023 and 2022: SCHEDULE OF WARRANT ACTIVITY Weighted Number of Average Warrants Price Per Share Outstanding at June 30, 2021 121 $ 179,630 Issued - - Exercised ( 16 ) 42,860 Forfeited - - Expired - - Outstanding at June 30, 2022 105 $ 200,270 Issued 3,305 10 Exercised ( 13 ) 52,081 Forfeited ( 1 ) 2,000,000 Expired - - Outstanding at June 30, 2023 3,396 * $ 5,440 Exercisable at June 30, 2023 3,379 $ 5,467 Outstanding and Exercisable: Weighted average remaining contractual term 2.14 Aggregate intrinsic value $ - * The total warrants of 3,396 above which are exercisable into common stock consisted of the following: SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE Number of Warrants Exercisable Series A warrants 10 10 Series B warrants 17 17 Series C warrants 64 47 Warrants with no class designation 3,305 3,305 Total 3,396 3,379 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, 7.5 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 64 warrants to purchase one share of Common Stock (the “Series B Warrants”) and an additional 64 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”). Due to the Beneficial Ownership Limitation, the Company granted 10 Prefunded Warrants with exercise price of $ 100 (but can be less than par value). The Prefunded Warrants shall be exercisable immediately and shall expire when exercised in full. F- 38 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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 shares of Common Stock, subject to adjustment as provided therein. The Series A Warrants have a cash exercise price of $ 200,000 per share and are immediately exercisable and expire in 3 years (see extension noted below). 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 $200,000, 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 64 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 38 upon 10 Trading Days’ prior written notice to the Holder provided that the Company issues to the Holder 4 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 4 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 $ 40,000 per share and expire in 3 years (see extension noted below). 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 64 shares of Common Stock, subject to adjustment as provided therein and expire in 3 years (see extension noted below). The Series C Warrants have a cash exercise price of $ 200,000 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. Letter Agreement to Extend Termination Dates. On March 8, 2023, the Company agreed with the holder of Series B Warrants (the “Holder”) pursuant to a letter agreement to exercise up to $ 250 of Series B Warrants currently held as follows: 1. Effective upon the execution of such letter agreement, the Holder will exercise 4 Series B Warrants for an aggregate exercise price of $ 150,000 , or 4 shares of common stock (the “Existing Warrants”) and; 2. Within 5 business days’ written notice to the Holder from the Company of receipt of approval by the Financial Industry Regulatory Authority, Inc. (“FINRA”) of the Company’s next anticipated reverse stock split, an additional $ 100,000 of Series B Warrants for 3 shares of common stock. As an inducement to exercise the Existing Warrants, the Company agreed to extend the termination date of the Existing Warrants and the Series A Warrants held by the Holder to March 27, 2025, and to extend the termination date of the Series C Warrants held by the Holder to the third anniversary of the last vesting date of such warrants, effective upon the exercise of the first $ 150,000 of Existing Warrants. In accordance with ASC 815-40-35-17(c), the effect of a modification or an exchange of an equity classified freestanding written call option shall be measured as the difference between the fair value of the modified instrument and the fair value of that instrument immediately before it is modified. The Company recognized the effect of the modifications of the warrants above that is directly attributable to an actual equity offering as an equity issuance cost which amount is not material. The modified warrants are determined to be equity classified, accordingly, the incremental fair value and equity issuance cost were both recognized in additional paid in capital and therefore, there was no effect in equity and such value is de minimis. F- 39 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Warrants Issued to Vendors On August 16, 2022, the Company entered into an agreement with a certain consultant to provide services over a three-month period in exchange for 1,000 warrants to purchase common stock at $ 10 per share with an expiry date of August 16, 2025 . The fair market value of the warrants was $ 2,408 on the date of grant as calculated under the Black Scholes Option Pricing model with the following assumptions: stock price at valuation date of $ 2.60 based on quoted trading price on date of grant, exercise price of $ 10 , dividend yield of zero , years to maturity of 3.00 , a risk-free rate of 3.19 % , and expected volatility 236% . The Company recorded $ 2,408 of stock-based compensation expenses with respect to the grant of such warrants during the year ended June 30, 2023. 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 warrants to purchase common stock at $ 10 per share with an expiry date of August 16, 2025. The fair market value of the warrants was $ 5,551 on the date of grant as calculated under the Black Scholes Option Pricing model with the following assumptions: stock price at valuation date of $ 2.60 based on quoted trading price on date of grant, exercise price of $ 10 , dividend yield of zero , years to maturity of 3.00 , a risk-free rate of 3.19 % , and expected volatility of 236% . Accordingly, the Company recognized gain from settlement of debt of $ 17,499 during the year ended June 30, 2023 as reflected in the accompanying consolidated statements of operations. Exercise of Warrants During the year ended June 30, 2022, the Company received aggregate gross proceeds of $ 625,001 from the exercise of 16 Series B Warrants and issued 16 shares of common stock. During the year ended June 30, 2022, the Company issued 56,800 shares of common stock from the alternate cashless exercise of 0.284 Series A warrants. During the year ended June 30, 2023, the Company received aggregate gross proceeds of $ 475,000 from the exercise of approximately 12 Series B Warrants with an exercise price of $ 40,000 per share and issued 12 shares of common stock. During the year ended June 30, 2023, the Company issued an aggregate of 559,999 shares of common stock and common stock issuable of 206,000 from the alternate cashless exercise of 0.97 Series A warrants with an original exercise price of $ 200,000 and alternate cashless exercise price of $ 0.001 or the par value of common stock. NOTE 9 – COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company may be subject to litigation and claims arising in the ordinary course of business. The Company is not currently a party to any material legal proceedings and the Company is not aware of any pending or threatened legal proceeding against the Company that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition. IRS Liability As part of its requirement for having a foreign operating subsidiary, the Company is required to file an informational Form 5471 to the Internal Revenue Service (the “IRS”), which is a form that explains the nature of the relationship between the foreign subsidiary and the parent company. From 2012 through the 2014, the Company did not file this form in a timely manner. As a result of the non-timely filings, the Company incurred a penalty from the IRS in the amount of $ 10,000 per year, or $ 30,000 in total, plus accrued interest, such penalty and interest having been accrued and is included in the accrued expenses and other payable figure on the June 30, 2023 and 2022 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. F- 40 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Operating Agreements In November 2009, the Company entered into a commercialization agreement with the University of Bath (UK) (the “UK University”), whereby the Company and the UK University co-owned the intellectual property relating to the Company’s pro-enzyme formulations. In June 2012, the Company and the UK University entered into an assignment and amendment whereby the Company assumed full ownership of the intellectual property, while agreeing to pay royalties of 2 % of net revenues to the UK University. Additionally, the Company agreed to pay 5 % of each and every license agreement subscribed for. The contract is cancellable at any time by either party. To date, no amounts are owed under the agreement. Collaboration Agreement On September 13, 2018, the Company entered into a two-year collaboration agreement with the University of Jaén (the “University”) to provide certain research services to the Company. In consideration of such services, the Company agreed to pay the University approximately 52,000 Euros ($ 59,508 USD) in year one and a maximum of 40,000 Euros ($ 45,775 USD) in year two. Additionally, in exchange for full ownership of the intellectual property, the Company agreed to pay royalties of 2 % of net revenues to the University. On October 1, 2020, the Company entered into another two-year collaboration agreement with the University to provide certain research services to the Company. In consideration of such services, the Company agreed to pay the University approximately 30,000 Euros ($ 35,145 USD), which were paid in four installment payment of 5,000 Euros in November 2020, 5,000 Euros ($ 5,858 ) in March 2021, 10,000 Euros ($ 11,715 ) in December 2021 and 10,000 Euros ($ 11,715 ) in September 2022. Additionally, the University agreed to hire and train a doctoral student for this project and the Company agreed to pay the University 25,837 Euros ($ 30,268 USD). In exchange for full ownership of the intellectual property, the Company agreed to pay royalties of 2 % of net revenues to the University. On July 27, 2022, the Company entered into a two-year research agreement with the University to provide certain research and experiment services to the Company. One of the Company’s Scientific Advisory Board is the lead joint researcher of the University. In exchange for full ownership of the intellectual property, the Company agreed to pay royalties of 1 % of net revenues each to two members of the Scientific Advisory Board. 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 (paid in August 2022), - 8,000 Euros ($ 8,091 USD) in September 2022 (unpaid), - 7,000 Euros ($ 7,080 USD) in December 2022 (unpaid), - 10,000 Euros ($ 10,114 USD) in March 2023 (unpaid), and - 10,000 Euros ($ 10,114 USD) in July 2023. The commencement date for the experiments was on September 1, 2022, and the estimated length of time for completion is 24 months. As of June 30, 2023 and 2022, the Company has $ 18,056 and $ 14,364 , respectively, balance due to the University for unreimbursed lab fees, which are included in accrued expenses and other liabilities in the accompanying consolidated balance sheets. As of June 30, 2023 and 2022, there are no royalty fees owed 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). 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 agreed to pay a stock fee equal to 9.9 % of the outstanding common stock of the Company during the term of the agreement. The Company agreed to increase the consultant’s diluted holdings back 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. In November 2022, the Company and the consultant agreed to discontinue the monthly cash portion fee. On November 16, 2022, the Company issued 73,301 shares of common stock to this consultant for services rendered from July 2022 to November 2022. Additionally, on June 30, 2023, the Board approved the issuance of 608,423 shares of the Company’s common stock to this consultant for services rendered from April 2023 to June 2023 (see Note 8). Accordingly, the Company has $ 0 balance owed to such consultant as of June 30, 2023. Operating Leases On May 4, 2022, the Company entered in a three -year lease agreement with North Horizon Pty Ltd., a related party, (see Note 10) 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 OF USE ASSET June 30, 2023 June 30, 2022 Office lease $ 66,201 $ 66,201 Less: accumulated amortization ( 27,213 ) ( 3,678 ) Right-of-use asset, net $ 38,988 $ 62,523 Operating lease liabilities are summarized below: SCHEDULE OF OPERATING LEASE LIABILITY June 30, 2023 June 30, 2022 Office lease $ 66,201 $ 66,201 Reduction of lease liability ( 25,418 ) ( 3,277 ) Less: office lease, current portion ( 21,505 ) ( 20,605 ) Long term portion of lease liability $ 19,278 $ 42,319 Remaining future minimum lease payments under the non-cancelable operating lease at June 30, 2023 are as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS Fiscal Year 2024 $ 23,990 Fiscal Year 2025 19,992 Imputed interest ( 3,199 ) Total operating lease liability $ 40,783 The weighted average remaining lease term for the operating lease is 1.77 years as of June 30, 2023. F- 41 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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, 2023 and 2022, the Company owed its former director a total of $ 29,630 and $ 30,746 , respectively, related to expenses paid on behalf of the Company related to corporate startup costs and intellectual property (see Note 4). As of June 30, 2023 and 2022, the Company owed its former director a total of $ 49,314 and $ 51,171 , respectively, for money loaned to the Company, throughout the years. The total loans balance owed at June 30, 2023 and 2022 is not interest bearing (see Note 5). 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, 2023 and 2022, total rent payable of $ 158,129 AUD ($ 105,377 USD) and $ 122,129 AUD ($ 84,452 USD), respectively, was included in accrued expenses in the accompanying consolidated balance sheet. Rent expense under those lease was $ 28,841 and $ 28,366 in fiscal 2023 and 2022, 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’s 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 his or its intent not to renew. The Nathanielsz Employment Agreement continues in effect as of June 30, 2023, as amended on October 26, 2022 (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 ($ 309,313 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 is 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, 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. No payments were made during the year ended June 30, 2023. 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 Company’s Common Stock. 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 in respect of 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. A total of $ 73,387 AUD ($ 48,905 USD) in payments were made in respect of the bonuses during the year ended June 30, 2023, resulting in a remaining balance of $ 107,937 AUD ($ 71,929 USD) bonus payable as of June 30, 2023 which was included in accrued expenses in the accompanying consolidated balance sheet. F- 42 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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 Mr. Nathanielsz for a term of three years, subject to automatic one-year renewals, at an annual salary of $ 400,000 AUD ($ 309,313 USD). Pursuant to the Employment Agreement, Mr. Nathanielsz was granted options to purchase 0.04 shares of common stock (the “Nathanielsz Options”), with an exercise price per share of $ 4,675,000 ( 110 % of the closing market price of the common stock on May 14, 2019 (or $ 4,250,000 ), the date of approval of such grant by the Board), (ii) 0.04 restricted stock units of the Company (the “Initial Nathanielsz RSUs”), and (iii) an additional 0.04 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 Board on the Effective Date. The Nathanielsz Options have a term of 10 years from the date of grant. The Nathanielsz Options and Additional Nathanielsz RSU’s are subject to vesting periods pursuant to the Employment Agreement. There are 0.04 vested options and 0.04 restricted stock units that are considered issuable as of June 30, 2023 and 2022. On October 26, 2022, the Company entered into an Amended and Restated Employment Agreement (the “Amended Agreement”) with Mr. Nathanielsz, effective as of July 1, 2022, (the “2022 Effective Date”). The Amended Agreement provides Mr. Nathanielsz with a base salary of $ 600,000 AUD ($ 414,900 USD) per annum. The Company has also agreed to pay Mr. Nathanielsz an annual discretionary bonus in an amount up to 100 % of his annual base salary, reduced from 200 % , which bonus shall be determined by the Board and based upon the performance of the Company. The Amended Agreement has a term of three (3) years from the 2022 Effective Date, with automatic one-year renewal periods unless either party elects not to renew. Amended and Restated Employment Agreement On May 14, 2019, the Company 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 ($ 41,580 USD). 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 0.02 shares of common stock (the “Kenyon Options”), with an exercise price per share of $ 4,250,000 ( 100 % of the closing market price of the common stock on May 14, 2019, the date of approval of such grant by the Board), (ii) 0.02 restricted stock units of the Company (the “Initial Kenyon RSUs”), and (iii) an additional 0.02 restricted stock units of the Company (the “Additional Kenyon RSUs”). Such options and restricted stock units were granted pursuant to the 2019 Plan. The Kenyon Options have a term of 10 years from the date of grant. The Kenyon Options and Additional Kenyon RSU’s are subject to vesting periods pursuant to the Services Agreement. There are 0.02 vested options and 0.02 vested restricted stock unit that are considered issuable as of June 30, 2023 and 2022. On August 12, 2021, pursuant to a Cancellation Agreement, Mr. Kenyon agreed to cancel accrued salaries of $ 102,600 in exchange for 3,420 shares of common stock of the Company. As of June 30, 2023 and 2022, total accrued salaries of $ 96,000 AUD ($ 64,627 USD) and $ 82,500 AUD ($ 56,050 USD), respectively, were included in accrued expenses in the accompanying consolidated balance sheets. Intercompany Loans All intercompany loans were made by the parent to the Company’s subsidiary, Propanc PTY LTD, none of which has been repaid as of June 30, 2023. 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- 43 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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, 2023. 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. In fiscal 2023, the Company primarily relied on funding from five convertible debt lenders and received net proceeds after deductions of $ 79,111 for original issue discounts and debt issue costs from each of the five lenders of $ 101,250 , $ 189,000 , $ 150,000 , $ 50,000 and $ 100,000 , respectively, which represents approximately 17 %, 32 %, 25 %, 8 % and 18 %, respectively, of total proceeds received by the Company during fiscal 2023. Receivable Concentration As of June 30, 2023 and 2022, 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, Republic of Korea, India and Brazil. In Canada and Mexico, the patent applications have been accepted as of this fiscal year 2023. In 2016 and early 2017, the Company 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 entered 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 62 granted, allowed, or accepted patents and 14 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, 2023 and 2022, 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, 2023 and 2022, there has been no activity within this entity. F- 44 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 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 $ 75,300 (2 notes) and $ 79,000 (1 note) of convertible debt, which were treated as derivative instruments outstanding at June 30, 2023 and 2022, respectively. 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, 2023, the last trading day of the period ended June 30, 2023, was $ 0.135 per share. The volatility, expected remaining term and risk-free interest rates used to estimate the fair value of derivative liabilities at June 30, 2023 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 Initial Valuations (on new derivative instruments entered into during the year ended June 30, 2023) Volatility 228.29 – 256.02 % Expected Remaining Term (in years) 0.22 – 0.28 Risk Free Interest Rate 3.13 – 4.42 % Expected dividend yield None June 30, 2023 June 30, 2022 Volatility 334.56 % 228 % Expected remaining term 0.01 - 0.73 0.01 Risk-free interest rate 5.24 % 1.28 % 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, 2023: SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS Balance at June 30, 2023 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 $ 423,209 $ — $ — $ 423,209 Total $ 423,209 $ — $ — $ 423,209 F- 45 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2022: 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 is a roll forward for the years ended June 30, 2023 and 2022 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, 2021 $ 54,220 Initial fair value of embedded conversion option derivative liability recorded as debt discount - Gain on debt extinguishment ( 2,069 ) Change in fair value included in statements of operations 99,111 Balance at June 30, 2022 151,262 Beginning balance 151,262 Initial fair value of embedded conversion option derivative liability recorded as debt discount 93,668 Gain on debt extinguishment ( 352,051 ) Change in fair value included in statements of operations 530,330 Balance at June 30, 2023 $ 423,209 Ending balance $ 423,209 NOTE 13 – SUBSEQUENT EVENTS Loans Payable July 5, 2023, the Company and an institutional investor affiliated with one of our directors, Josef Zelinger, entered into a letter agreement, pursuant to which such investor loaned the Company an aggregate of $ 230,000 AUD ($ 153,256 USD). Pursuant to such agreement, the term of such loan is three (3) years, ending on July 5, 2026 , with an interest rate of 10 % to be paid monthly in arrears. In connection with such loan, the Company issued 15,000,000 warrants to purchase common stock to such investor immediately exercisable at an initial exercise price of $ 0.01 per share (subject to certain adjustments such as stock dividend, stock splits, subsequent right offering and pro-rata distribution) with an expiry date of July 5, 2026. A portion of the proceeds of such loan were used to repay an outstanding balance of approximately $ 143,000 due on a convertible note (Coventry Note) held by a third-party investor and which had been in default (see Note 6). Promissory Note On August 15, 2023, the Company issued to an institutional investor (the “August 2023 Lender”) a 10% original issue discount promissory note (the “Promissory Note”) in consideration for $ 120,000 , which has a principal face amount of $ 132,000 , matures on November 15, 2023 and accrues interest at a rate of 10 % per annum, which may be increased to 18 % in the event of a default. The Company has the right to prepay the principal and accrued but unpaid interest due under the Promissory Note, together with any other amounts that the Company may owe the August 2023 Lender under the terms of the Promissory Note, on or before September 14, 2023 at a 110% premium of the face amount plus accrued and unpaid interest and any other amounts owed to the August 2023 Lender, which increases to (i) 120% if prepaid after such date, but on or before October 14, 2023, and (ii) 130% if prepaid after October 14, 2023, unless the Company and the Lender agree to otherwise effect repayment. The Promissory Note contains certain customary events of default set forth in the Promissory Note, including, among others, breach of covenants, representations or warranties, insolvency, bankruptcy, liquidation and failure by the Company to pay the principal and interest due under the Promissory Note. F- 46 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Issuance of convertible notes 1800 Diagonal Lending, LLC Securities Purchase Agreements On June 29, 2023, the Company entered into a securities purchase agreement with 1800 Diagonal Lending LLC (“1800 Diagonal”), which closed on July 6, 2023, pursuant to which 1800 Diagonal purchased a convertible promissory note (the “July 6, 2023 1800 Diagonal Note”) from the Company in the aggregate principal amount of $ 65,000 , 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 6, 2023 1800 Diagonal Note. The July 6, 2023 1800 Diagonal Note contains debt issue costs of $ 5,000 . The Company intends to use the net proceeds for general working capital purposes. The maturity date is June 29, 2024 . On July 19, 2023, the Company entered into a securities purchase agreement with 1800 Diagonal Lending LLC pursuant to which 1800 Diagonal purchased a convertible promissory note (the “July 19, 2023 1800 Diagonal Note”) from the Company in the aggregate principal amount of $ 45,000 , 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 19, 2023 1800 Diagonal Note. The July 19, 2023 1800 Diagonal Note contains debt issue costs of $ 5,000 . The Company intends to use the net proceeds for general working capital purposes. The maturity date is July 19, 2024 . On August 16, 2023, the Company entered into a securities purchase agreement with 1800 Diagonal Lending LLC pursuant to which 1800 Diagonal purchased a convertible promissory note (the “August 16, 2023 1800 Diagonal Note”) from the Company in the aggregate principal amount of $ 55,000 , 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 August 16, 2023 1800 Diagonal Note. The August 16, 2023 1800 Diagonal Note contains debt issue costs of $ 5,000 . The Company intends to use the net proceeds for general working capital purposes. The maturity date is August 16, 2024 . The 1800 Diagonal Notes bear 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 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. The conversion price for the above 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. The Company treats this convertible notes as stock settled debt under ASC 480. The above notes 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. Failure to deliver shares of common stock upon conversion of the above 1800 Diagonal notes within three business days of notice of conversion will result in the Company paying a penalty of $ 1,000 per day, subject to certain exceptions. F- 47 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Upon certain events of default, the above 1800 Diagonal notes will become immediately due and payable and the Company must pay 1800 Diagonal 150 % of 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 any event of default relating to the failure to issue shares of common stock upon the conversion of such notes, such notes become immediately due and payable in an amount equal to twice the Default Amount. GS Capital Partners, LLC Securities Purchase Agreement On August 23, 2023, the Company entered into a securities purchase agreement with GS Capital Partners, LLC, pursuant to which GS Capital purchased a convertible redeemable note (the “GS Capital Note”) from the Company in the aggregate principal amount of $ 77,500 , such principal and the interest thereon convertible into shares of the Company’s common stock at the option of GS Capital. The GS Capital Note contains a $ 5,000 original issue discount. Pursuant to the terms of the GS Purchase Agreement, the Company paid GS Capital’s legal fees of $ 2,500 . The Company 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 February 23, 2024 . The GS Capital Note shall bear interest at a rate of 8 % per annum, which interest may be paid by the Company to GS Capital in shares of common stock but shall not be payable until the GS Capital Note becomes payable, whether at the Maturity Date or upon acceleration or by prepayment. The GS Capital Note is exchangeable for an equal aggregate principal amount of notes of different authorized denominations, as requested by GS Capital surrendering the same. The initial conversion price for the GS Capital Note is equal to $0.04 per share (the “Fixed Price”), provided that the Fixed Price will be reduced to $0.02 per share in the event that the market price of the Common Stock trades below $0.03 per share for five consecutive trading days. In the event of a default under the Note and unless the Fixed Price is lower, such conversion price will equal the lowest trading price of the Common Stock for the ten trading days immediately preceding such default, which price is subject to re-adjustment every thirty calendar days during the period in which the Company remains in default. Pursuant to the Note, in the event that such conversion price is below the par value of the Common Stock, the Company has agreed to take all steps to reduce such par value or conduct a reverse split of its Common Stock, as applicable. Notwithstanding the foregoing, such conversion price and lookback periods are subject to adjustment in favor of the Investor in the event the Company issues securities to another party with more favorable conversion terms, and such conversions are subject to a 4.99% beneficial ownership limitation (which may be increased to 9.9% upon 60 days’ prior written notice from the holder of the Note) and adjustments for mergers, consolidations, reorganizations and similar events set forth in the Note, other than a transfer or sale of all or substantially all Company assets. Pursuant to the Note, the Company is required to maintain an initial reserve of at least 400% of the number of Conversion Shares, subject to any increase of such reserved amount to reflect the Company’s obligations under the Note. 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 %. The above GS Capital note will be bifurcated from the embedded conversion option which shall be recorded as derivative liabilities at fair value. F- 48 PROPANC BIOPHARMA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 Equity Line Agreement On July 20, 2023, the Company entered into a common stock purchase agreement (the “Equity Line Agreement”) with an institutional investor (the “Investor”) providing for an equity financing facility, pursuant to which Company has the option to request that the Investor commit to purchase up to $ 5,000,000 of the Company’s shares (the “Shares”) of common stock, par value $ 0.001 per share (the “Common Stock”), over a 24 -month term commencing on the date on which a registration statement filed by the Company to register the offer and resale of the Shares by the Investor (the “Registration Statement”) is declared effective by the U.S. Securities and Exchange Commission (the “SEC”). Pursuant to the Equity Line Agreement, the Company has the option to exercise this right by providing a notice (a “Drawdown Notice”) from the Company to the Investor setting forth the number of Shares that the Investor will purchase. The Company has agreed to use the proceeds from such issuances for the purpose of financing its research and product development activities, finished product manufacture for clinical studies, working capital requirements and general corporate purposes. Pursuant to the Equity Line Agreement, purchases of Shares cannot occur unless and until certain conditions are met, including but not limited to, the SEC declaring the Registration Statement effective, and the maximum number of Shares that may be purchased pursuant to a Drawdown Notice cannot exceed the lesser of (i) 200% of the average daily traded value of the Common Stock during the five (5) business days immediately preceding a Drawdown Notice or (ii) $200,000; provided that in no event may a Drawdown Notice be for less than $5,000, exceed 52,500,000 Shares or cause the Investor’s ownership to exceed 4.99% of the outstanding number of shares of Common Stock immediately prior to the issuance of such Shares. The actual amount of proceeds that the Company will receive in connection with each Drawdown Notice is determined under the Equity Line Agreement by multiplying the number of Shares to be sold by the applicable purchase price per share, which is equal to 85% of the lowest traded price of the Common Stock during the 7 business days immediately following the Clearing Date, less Clearing Costs (as each such term is defined in the Equity Line Agreement). Additionally, in connection with the Equity Line Agreement, the Company and the Investor entered into a registration rights agreement, dated July 20, 2023 (the “Registration Rights Agreement”), pursuant to which the Company agreed to register the maximum number of Shares within 45 days of the date of the Registration Rights Agreement, subject to any comments from the SEC and applicable laws, rules and regulations. Exercise of warrants The Company issued an aggregate of 2,282,000 shares of common stock from the alternate cashless exercise of 0.011 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 $ 142,575 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, 2023 through September 18, 2023, the Company issued an aggregate of 4,898,307 shares of its common stock at an average contractual conversion price of $ 0.02 as a result of the conversion of principal of $ 98,954 , accrued interest of $ 7,071 and conversion fees of $ 1,277 underlying certain outstanding convertible notes converted during such period. The Company reclassified $ 21,737 in put premiums to additional paid in capital following these conversions. F- 49 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure. None.