Special Note Regarding Forward-Looking Information
The following discussion and analysis of the results of operations and financial
condition of Propanc Biopharma, Inc., and its wholly-owned Australian
subsidiary, Propanc PTY LTD ("Propanc" or the "Company") as of December 31, 2022
and for the six months ended December 31, 2022 and 2021 should be read in
conjunction with our unaudited financial statements and the notes to those
unaudited financial statements that are included elsewhere in this Quarterly
Report on Form 10-Q. References in this Management's Discussion and Analysis of
Financial Condition and Results of Operations to "us", "we", "our" and similar
terms refer to Propanc. This Quarterly Report contains forward-looking
statements as that term is defined in the federal securities laws. The events
described in forward-looking statements contained in this Quarterly Report may
not occur. Generally, these statements relate to business plans or strategies,
projected or anticipated benefits or other consequences of our plans or
strategies, projected or anticipated benefits from acquisitions to be made by
us, or projections involving anticipated revenues, earnings or other aspects of
our operating results. The words "may," "will," "expect," "believe,"
"anticipate," "project," "plan," "intend," "estimate," and "continue," and their
opposites and similar expressions, are intended to identify forward-looking
statements. We caution you that these statements are not guarantees of future
performance or events and are subject to a number of uncertainties, risks and
other influences, many of which are beyond our control, which may influence the
accuracy of the statements and the projections upon which the statements are
based.
Our actual results, performance and achievements could differ materially from
those expressed or implied in these forward-looking statements. Except as
required by federal securities laws, we undertake no obligation to publicly
update or revise any forward-looking statements, whether from new information,
future events or otherwise.
At Propanc, our highest priority remains the safety, health and well-being of
our employees, their families and our communities. The COVID-19 pandemic is a
highly fluid situation and it is not currently possible for us to reasonably
estimate the impact it may have on our financial and operating results. We will
continue to evaluate the impact of the COVID-19 pandemic on our business as we
learn more and the impact of COVID-19 on our industry becomes clearer. We are
complying health guidelines regarding safety procedures, including, but are not
limited to, social distancing, remote working, and teleconferencing. The extent
of the future impact of the COVID-19 pandemic on our business is uncertain and
difficult to predict. Adverse global economic and market conditions as a result
of COVID-19 could also adversely affect our business. If the pandemic continues
to cause significant negative impacts to economic conditions, our results of
operations, financial condition and liquidity could be adversely impacted.
U.S. Dollars are denoted herein by "USD," "$" and "dollars".
Overview
We were incorporated in the state of Delaware as Propanc Health Group
Corporation on November 23, 2010. In January 2011, to reorganize our Company, we
acquired all of the outstanding shares of Propanc PTY LTD, an Australian
corporation, on a one-for-one basis and Propanc PTY LTD became our wholly-owned
subsidiary. Effective April 20, 2017, we changed our name to "Propanc Biopharma,
Inc." to better reflect our current stage of operations and development.
We are a development-stage healthcare company that is currently focused on
developing new cancer treatments for patients suffering from pancreatic, ovarian
and colorectal cancer. Utilizing our scientific and oncology consultants, we
have developed a rational, composite formulation of anti-cancer compounds, which
together exert a number of effects designed to control or prevent tumors from
recurring and spreading through the body. Our lead product candidate, PRP, is a
variation upon our novel formulation and involves pro-enzymes, the inactive
precursors of enzymes.
Recent Developments
On July 19, 2022, successful production of a synthetic recombinant version of
the proenzyme trypsinogen was completed via the Proenzyme Optimization Project 1
(POP1) joint research and drug discovery program. The program is designed to
produce a backup clinical compound to the Company's lead product candidate, PRP,
which is targeting metastatic cancer from solid tumors. On August 23, 2022, the
initial success of producing trypsinogen synthetically has now advanced to the
stage where optimization of protein production is underway; whereas,
purification and yield of chymotrypsinogen is currently the focus of research.
On August 3, 2022, a Joint Research Collaboration Agreement was established with
the University of Jaén and the University of Granada, Spain. Since late 2020,
Mrs. Belén Toledo Cutillas MSc, has been investigating an important experimental
thesis on the effects of proenzyme therapy and the tumor microenvironment, which
is the key to the development, invasion, metastatic spread and recurrence of
solid tumors. The work is being conducted at the laboratory of Professor
Macarena Perán PhD, who is the lead researcher on the project and is the second
Joint Research and Collaboration Agreement currently in progress with the two
Spanish Universities. On September 8, 2022, proenzyme therapy was shown to have
a favorable impact inhibiting, slowing, or reversing tumor development by acting
as an anti-tumor agent, decreasing tumor cell proliferation, developing a
non-malignant phenotype (observable characteristics) and promoting cell adhesion
(sticking close to one another) and differentiation (cell specialization rather
than stem cell like). It was concluded that proenzyme therapy could have a
significant impact on the tumor microenvironment as a potential clinical
application.
On August 16, 2022, a Notice of Allowance has been received from the European
Patent Office (EPO) for claims involving compositions of proenzymes to treat
cancer. This is the second patent application allowed in this jurisdiction and
expires in November 2036. A third patent application is currently under
examination at the EPO for a method to treat cancer stem cells, which was
allowed in March this year by the US Patent and Trademark Office (USPTO). The
field of the invention covers future dosing in planned clinical studies for the
Company's lead product candidate, PRP.
On November 9 and 10, 2022, Mr. James Nathanielsz, Propanc's Chief Executive
Officer and Co-Founder, conducted investor meetings and presented at the Sidoti
& Company's upcoming Micro-Cap Virtual Investor Conference. The Sidoti & Company
Micro-Cap Investor Conference is a virtual event featuring micro-cap companies
interacting with a number of institutional investors from across the United
States.
3
On December 17, 2022, on behalf of the University of Jaén and the University of
Granada, and Propanc Biopharma, Mrs. Belén Toledo Cutillas MSc, Joint
Researcher, presented at the recent 43rd Meeting of the European Organization of
Research and Treatment of Cancer (EORTC), Pharmacology and Molecular Mechanisms
(PAMM) group. Mrs. Toledo Cutillas discussed novel approaches to hampering tumor
support of key components within the tumor microenvironment. Specifically, she
described how "a protein-based treatment (PRP) re-educates" certain tumor cells
that play a key role in the tumor microenvironment, decreasing the tumor
microenvironment influence on tumorigenesis and increasing drug uptake of
standard therapies that are often rendered ineffective due to chemoresistance.
Results of Operations
The following discussion should be read in conjunction with the Company's
unaudited consolidated financial statements and notes thereto included elsewhere
in this Report. The results discussed below are of the Company and its
wholly-owned Australian subsidiary, Propanc PTY LTD.
For the Three and Six months ended December 31, 2022, as compared to the Three
and Six months ended December 31, 2021.
Revenue
For the three and six months ended December 31, 2022 and 2021, we generated no
revenue because we are currently undertaking research and development activities
for market approval and no sales were generated in this period.
Administration Expense
Administration expense increased to $525,620 for the three months ended December
31, 2022 as compared to $346,164 for the three months ended December 31, 2021.
This increase of approximately $179,000 is primarily attributable to an increase
of approximately $145,000 in employee remuneration expense, increase in
stock-based expenses of approximately $31,000, increase in accounting fees of
approximately $5,000 offset by a decrease in general consulting, legal and
investor relation fees of approximately $2,000.
Administration expense increased to $990,752 for the six months ended December
31, 2022 as compared to $777,904 for the six months ended December 31, 2021.
This increase of approximately $213,000 is primarily attributable to an increase
of approximately $151,000 in general consulting, legal and investor relation
fees, increase in accounting fees of approximately $9,000, increase of
approximately $164,000 in employee remuneration expense, increase in marketing
expenses of $7,000, offset by decrease in stock-based expenses of approximately
$116,000 and decrease in other general and administrative expenses of
approximately $2,000.
Occupancy Expense
Occupancy expenses increased to $7,506 for the three months ended December 31,
2022 as compared to $6,550 for the three months ended December 31, 2021. This
increase of $956 is primarily attributable to exchange rate movements over the
period when compared to the same period in 2021.
Occupancy expenses decreased to $13,879 for the six months ended December 31,
2022 as compared to $14,286 for the six months ended December 31, 2021. This
decrease of $407 is primarily attributable to exchange rate movements over the
period when compared to the same period in 2021.
Research and Development Expenses
Research and development expenses were increased to $74,878 for the three months
ended December 31, 2022 as compared to $50,753 for the three months ended
December 31, 2021. Research and development expenses were increased to $176,203
for the six months ended December 31, 2022 as compared to $97,307 for the six
months ended December 31, 2021. The increase in research and development
expenses is primarily attributable to the two-year collaboration agreement with
University of Jaén which was executed in October 2020 to provide certain
research services to the Company. Additionally, on July 27, 2022, the Company
entered into another two-year research agreement with the University of Jaén to
provide certain research and experiment services to the Company.
Interest Expense
Interest expense decreased to $98,619 for the three months ended December 31,
2022, as compared to $177,905 for the three months ended December 31, 2021.
Interest expense is primarily comprised of approximately $81,000 of debt
discount amortization and accretion of put premium and interest expense from
accrual of interest expense and other financing fees for a total of
approximately $18,000 for the three months ended December 31, 2022. This
decrease in interest expense of $79,286 is primarily attributable to the
decrease of approximately $126,000 in accretion of put premium offset by
increase in amortization of debt discount of approximately $47,000.
Interest expense decreased to $261,371 for the six months ended December 31,
2022, as compared to $287,758 for the six months ended December 31, 2021.
Interest expense is primarily comprised of approximately $229,000 of debt
discount amortization and accretion of put premium and interest expense from
accrual of interest expense and other financing fees for a total of
approximately $32,000 for the six months ended December 31, 2022. This decrease
in interest expense of $26,387 is primarily attributable to the decrease of
approximately $99,000 in accretion of put premium offset by increase in
amortization of debt discount of approximately $73,000.
Change in Fair Value of Derivative Liabilities
Change in fair value of derivative liabilities were increased to a gain of
$62,335 for the three months ended December 31, 2022 as compared to a loss of
$163,853 for the three months ended December 31, 2021. Change in fair value of
derivative liabilities were increased to a gain of $127,508 for the six months
ended December 31, 2022 as compared to a loss of $167,757 for the six months
ended December 31, 2021. This increase in gain during the three and six months
ended December 31, 2022 of approximately $226,000 and $295,000, respectively, is
primarily attributable to a decrease in fair value of the principal amount of
convertible notes with bifurcated embedded conversion option derivatives as a
result of the decrease in stock prices during the six months ended December 31,
2022.
4
Gain from Settlement of accounts payable
Gain from settlement of accounts payable was $17,499 for the six months ended
December 31, 2022, as compared to $0 for the six months ended December 31, 2021.
On August 16, 2022, the Company and a third-party investor relations consultant
agreed to settle an outstanding payable of $23,050 in exchange for 2,305,000
warrants to purchase the Company's common stock at $0.01 per share with an
expiry date of August 16, 2025 and fair market value of $5,551. Accordingly, the
Company recognized gain from settlement of accounts payable of $17,499 during
the six months ended December 31, 2022.
Gain on Extinguishment of Debt, net
During the six months ended December 31, 2022, notes with principal amounts
totaling $79,000 and accrued interest of $9,543 contained bifurcated embedded
conversion option derivatives. Accordingly, the fair market value of the shares
issued was $195,952, resulting in a loss on extinguishment at the time of
conversion of $107,409 and $106,799 of derivative fair value liability was
recorded as a gain on extinguishment at the time of conversion, resulting in a
net loss of $610.
Additionally, during the six months ended December 31, 2022, the Company
recognized the remaining put premium of $43,520 related to a convertible note
into gain on extinguishment of debt during the six months ended December 31,
2022. The lender of such convertible note agreed to surrender all conversion
rights in its currently held convertible notes due to violation of Section
15(a)(1) of the Securities Exchange Act of 1934.
Foreign Currency Transaction Gain (Loss)
Foreign currency transaction gain decreased to a loss of $13,988 for the three
months ended December 31, 2022, as compared to a loss of $110,215 for the three
months ended December 31, 2021. Foreign currency transaction gain increased to a
gain of $22,235 for the six months ended December 31, 2022 as compared to a loss
of $1,086 for the six months ended December 31, 2021. The increase of
approximately $96,000 and $23,000 is partially attributable to the increase in
exchange rates during the three and six months ended December 31, 2022.
Net loss
Net loss decreased to $485,418 for the three months ended December 31, 2022, as
compared to a net loss of $799,977 for the three months ended December 31, 2021.
Net loss decreased to $1,102,713 for the six months ended December 31, 2022 as
compared to a net loss of $1,290,635 for the six months ended December 31, 2021.
The change relates to the factors discussed above.
Deemed dividend
The Company recognized the value of the effect of a down round feature related
to our Series A 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 dividends of $19,322 and $93,398 during the three
months ended December 31, 2022 and 2021, respectively, and a corresponding
reduction of income available to common stockholders upon the alternate cashless
exercise of these warrants during the three months ended December 31, 2022 and
2021, respectively. The Company recognized deemed dividend of $408,557 and
$208,242 during the six months ended December 31, 2022 and 2021, respectively,
and a corresponding reduction of income available to common stockholders upon
the alternate cashless exercise of these warrants during the six months ended
December 31, 2022 and 2021, respectively.
Net loss available to common stockholders
Net loss available to common stockholders decreased to $504,740 for the three
months ended December 31, 2022 as compared to a net loss available to common
stockholders of $893,375 for the three months ended December 31, 2021. Net loss
available to common stockholders increased to $1,511,270 for the six months
ended December 31, 2022 as compared to a net loss available to common
stockholders of $1,498,877 for the six months ended December 31, 2021.
The decrease and increase during the three- and six-months period are primarily
attributable to the change relates to the factors discussed above.
Liquidity and Capital Resources
Current Financial Condition
As of December 31, 2022, we had total assets of $108,022, comprised primarily of
cash of $24,476, GST tax receivable of $4,543, prepaid expenses and other
current assets of $25,207, security deposit of $2,042, operating lease ROU
asset, net of $50,671, and property and equipment, net of $1,083. As compared to
June 30, 2022, we had total assets of $81,651, comprised primarily of cash of
$4,067, GST tax receivable of $2,342, prepaid expenses and other current assets
of $8,621, property and equipment, net, of $2,023, operating lease ROU asset,
net of $62,523, and security deposit of $2,075.
We had current liabilities of $2,992,554, primarily comprised of net convertible
debt of $633,740, note payable, net of $72,404, loan payable of $65,280, accrued
interest of $59,733, accounts payable and accrued expenses of $1,470,605,
employee benefit liability of $578,453, and embedded conversion option
liabilities of $10,623 as of December 31, 2022. As compared to June 30, 2022, we
had current liabilities of $3,062,981, primarily comprised of net convertible
debt of $926,438, accrued interest of $57,822, accounts payable and accrued
expenses of $1,409,138, employee benefit liability of $415,799, and embedded
conversion option liabilities of $151,262.
We have funded our operations primarily through the issuance of equity and/or
convertible debt securities for cash. The cash was used primarily for payments
for research and development, administration expenses, occupancy expenses,
professional fees, consultants and travel.
5
During the six months ended December 31, 2022 we received proceeds from exercise
of warrants of $200,000, proceeds from issuance of convertible notes and note
payable of $495,750, proceeds from sale of shares of our Common Stock of $24,711
and proceeds from collection of subscription receivables of $23,758.
We have substantial capital resource requirements and have incurred significant
losses since inception. As of December 31, 2022, we had $24,476 in cash. We
depend upon debt and/or equity financing to fund our ongoing operations and to
execute our current business plan. Such capital requirements are in excess of
what we have in available cash and for which we currently have commitments.
Therefore, we presently do not have enough available cash to meet our
obligations over the next 12 months. If continued funding and capital resources
are unavailable at reasonable terms, we may curtail our plan of operations. We
will be required to obtain alternative or additional financing from financial
institutions, investors or otherwise, in order to maintain and expand our
existing operations. The failure by us to obtain such financing would have a
material adverse effect upon our business, financial condition and results of
operations, and adversely affecting our ability to complete ongoing activities
in connection with our research and development programs.
Sources and Uses of Cash
For the Six months ended
December 31,
2022 2021
Net cash used in operating activities $ (734,542 ) $ (711,093 )
Net cash provided by financing activities $ 744,219 $ 789,500
Effect of exchange rate changes on cash $ 10,732 $ (7,046 )
Net Cash Flow from Operating Activities
Net cash used in operating activities was $734,542 for the six months ended
December 31, 2022, due to our net loss of $1,102,713, offset primarily by
non-cash charges of amortization of debt discount of $83,903, stock-based
compensation of $59,219, accretion of put premium of $144,711, change in fair
value of derivatives of $127,508, gain on extinguishment of debt of $42,910 and
gain from settlement of accounts payable of $17,499. Net changes in operating
assets and liabilities totaled $278,737, which are primarily attributable to
increase in prepaid expenses and other assets $16,724, employee benefit
liability of $169,268, increase accrued interest of $31,433, increase in accrued
expenses and other payables of $97,414, and increase in accounts payable of
$9,520.
Net cash used in operating activities was $711,093 for the six months ended
December 31, 2021, due to our net loss of $1,290,635, offset primarily by
non-cash charges of amortization of debt discount of $11,295, stock-based
compensation of $41,436, accretion of put premium of $245,000, change in fair
value of derivatives of $167,757 and issuance and amortization of common stock
for services of $133,422. Net changes in operating assets and liabilities
totaled ($23,717), which is primarily attributable to increase in employee
benefit liability of $12,882, increase accrued interest of $28,264 offset by
decrease in accounts payable of $51,037 and decrease in accrued expenses of
$6,772.
Net Cash Flow from Financing Activities
Net cash provided by financing activities for the six months ended December 31,
2022 were $744,219, as compared to $789,500 for the six months ended December
31, 2021. During the six months ended December 31, 2022, we received proceeds
from the exercise of warrants of $200,000, proceeds from sale of shares of our
Common Stock of $24,711, collections of subscription receivable of $23,758, and
net proceeds from issuance of convertible notes and a note payable of $495,750.
Net cash provided by financing activities for the six months ended December 31,
2021 were $789,500 as compared to $358,044 for the six months ended December 31,
2020. During the six months ended December 31, 2021, we received proceeds from
the exercise of warrants of $375,000 and net proceeds from issuance of
convertible notes of $414,500.
Effect of Exchange Rate
The effect of the exchange rate on cash resulted in a $10,732 positive
adjustment to cash flows in the six months ended December 31, 2022, as compared
to a $7,046 negative adjustment to cash flows in the six months ended December
31, 2021. The reason for the fluctuation is due to the application of currency
translation rates throughout the cash flow statement, the volume of transactions
within each period and the daily fluctuation in exchange rates.
Critical Accounting Estimates
Below is a discussion of our more subjective accounting estimation processes for
purposes of explaining (i) the methodology used in calculating the estimates,
(ii) the inherent uncertainties pertaining to such estimates, and (iii) the
possible effects of a significant variance in actual experience, from that of
the estimate, on our financial condition. Estimates involve numerous assumptions
that, if incorrect, could create a material adverse impact on the Company's
results of operations and financial condition.
Reference is frequently made herein to the Financial Accounting Standards Board
(the "FASB") Accounting Standards Codification ("ASC"). This is the source of
authoritative US GAAP recognized by the FASB to be applied to non-governmental
entities. Each ASC reference in this filing is presented with a three-digit
number, which represents its Topic. As necessary for explanation and as
applicable, an ASC topic may be followed with a two-digit subtopic, a two-digit
section or a two-or-three-digit paragraph.
6
Foreign Currency Translation and Comprehensive Income (Loss): The Company's
wholly-owned subsidiary's functional currency is the AUD. For financial
reporting purposes, the Australian Dollar ("AUD") has been translated into USD
as the Company's reporting currency. Assets and liabilities are translated at
the exchange rate in effect at the balance sheet date. Revenues and expenses are
translated at the average rate of exchange prevailing during the reporting
period. Equity transactions are translated at each historical transaction date
spot rate. Translation adjustments arising from the use of different exchange
rates from period to period are included as a component of stockholders' equity
(deficit) as "accumulated other comprehensive income (loss)." Gains and losses
resulting from foreign currency transactions are included in the statement of
operations and comprehensive loss as other income (expense). Effective fiscal
year 2021, the parent company determined that intercompany loans will not be
repaid in the foreseeable future and thus, per ASC 830-20-35-3, gains and losses
from measuring the intercompany balances are recorded within cumulative
translation adjustment, a component of other comprehensive income.
Accounting for Income Taxes: We are governed by Australian income tax laws and
United States income tax laws, which are administered by the Australian Taxation
Office and the United States Internal Revenue Service, respectively. We follow
ASC 740, "Accounting for Income Taxes," which requires an asset and liability
approach to financial accounting and reporting for income taxes. Deferred income
tax assets and liabilities are computed annually for temporary differences
between the financial statements and tax bases of assets and liabilities that
will result in taxable or deductible amounts in the future based on enacted tax
laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established when necessary,
to reduce deferred tax assets to the amount expected to be realized. Income tax
expense is the tax payable or refundable for the period plus or minus the change
during the period in deferred tax assets and liabilities.
The Company adopted provisions of ASC 740, Sections 25 through 60, "Accounting
for Uncertainty in Income Taxes." These sections provide detailed guidance for
the financial statement recognition, measurement and disclosure of uncertain tax
positions recognized in the financial statements. Tax positions must meet a
"more-likely-than-not" recognition threshold at the effective date to be
recognized upon the adoption of ASC 740 and in subsequent periods.
Accounting for Stock Based Compensation: We record stock-based compensation in
accordance with ASC 718, "Stock Compensation" and Staff Accounting Bulletin No.
107 issued by the SEC in March 2005 regarding its interpretation of ASC 718. ASC
718 requires the fair value of all stock-based employee compensation awarded to
employees to be recorded as an expense over the related requisite service
period. The statement also requires the recognition of compensation expense for
the fair value of any unvested stock option awards outstanding at the date of
adoption. We value any employee or non-employee stock-based compensation at fair
value using the Black-Scholes Option Pricing Model.
We account for non-employee share-based awards in accordance with the
measurement and recognition criteria of ASC 718.
Derivative Instruments: ASC 815, "Derivatives and Hedging," establishes
accounting and reporting standards for derivative instruments and for hedging
activities by requiring that all derivatives be recognized in the balance sheet
and measured at fair value. Gains or losses resulting from changes in the fair
value of derivatives are recognized in earnings. On the date of conversion, or
payoff, of debt, we record the fair value of the conversion shares, remove the
fair value of the related derivative liability, remove any discounts and record
a net gain or loss on debt extinguishment.
Convertible Notes with Variable Conversion Options: We have entered into
convertible notes, some of which contain variable conversion options, whereby
the outstanding principal and accrued interest may be converted, by the holder,
into common shares at or around a fixed discount to the price of the common
stock at the time of conversion. We treat these convertible notes as stock
settled debt under ASC 480 and measure the fair value of the notes at the time
of issuance, which is the result of the share price discount at the time of
conversion, and record the put premium as accretion to interest expense.
Research and Development Tax Credits: We may apply for Research and Development
tax concessions with the Australian Taxation Office on an annual basis. Although
the amount is possible to estimate at year end, the Australian Taxation Office
may reject or materially alter the claim amount. Accordingly, we do not
recognize the benefit of the claim amount until cash receipt since
collectability is not certain until such time. The tax concession is a
refundable credit. If we have net income then we can receive the credit which
reduces its income tax liability. If we have net losses, then we may still
receive a cash payment for the credit, however, our net operating loss carry
forwards are reduced by the gross equivalent loss that would produce the credit
amount when the income tax rate is applied to that gross amount. The concession
is recognized as an income tax benefit, in operations, upon receipt.
Recent Accounting Pronouncements
Please see section captioned "Recent Accounting Pronouncements" in Note 1 to our
unaudited condensed consolidated financial statements included in this Quarterly
Report for a discussion of recently issued and adopted accounting
pronouncements.
Going Concern Qualification
We did not generate any revenue for the six months ended December 31, 2022 and
2021 and have incurred significant losses and cash used in operations, and such
losses and use of cash are expected to continue. Our independent registered
public accounting firm has included a "Going Concern Qualification" in its audit
report for each of the fiscal years ended June 30, 2022 and 2021. In addition,
we have negative working capital and convertible debt that is past maturity that
we are currently negotiating with lenders in order to amend the maturity dates.
The foregoing raises substantial doubt about our ability to continue as a going
concern for a period of 12 months from the issue date of this report. Our
ability to continue as a going concern is dependent on our ability to execute
our strategy and on our ability to raise additional funds and/or to consummate a
public offering. Management is currently seeking additional funds, primarily
through the issuance of equity and/or debt securities for cash to operate our
business. No assurance can be given that any future financing will be available
or, if available, that it will be on terms that are satisfactory to us. Even if
we are able to obtain additional financing, it may contain undue restrictions on
our operations, in the case of debt financing or cause substantial dilution for
our stockholders, in case of equity and/or convertible debt financing. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty. The "Going Concern Qualification"
might make it substantially more difficult to raise capital.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources.
7
© Edgar Online, source Glimpses
PROPANC BIOPHARMA, INC. 