v3.26.1
DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
 6 Months Ended 12 Months Ended
Dec. 31, 2025
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]    
DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

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 $55,000 (1 note) and $291,650 (9 notes) of convertible debt, which were treated as derivative instruments outstanding at December 31, 2025 and June 30, 2025, 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 December 31, 2025, the last trading day of the period ended December 31, 2025, was $0.54. The volatility, expected remaining term and risk-free interest rates used to estimate the fair value of derivative liabilities at December 31, 2025 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

 

  

Initial Valuations
(on new derivative
instruments entered

into during the three
months ended
December 31, 2025)

   December 31, 2025 
Volatility   -    413%
Expected Remaining Term (in years)   -    0.002 
Risk Free Interest Rate   -    4.40%
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 December 31, 2025 and June 30, 2025:

 SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS

   Balance at
December 31, 2025		  

Quoted Prices

in Active

Markets for

Identical
Assets

  

Significant

Other

Observable
Inputs

  

Significant

Unobservable Inputs

 
       (Level 1)   (Level 2)   (Level 3) 
Warrant liability  $288,635   $—   $—   $288,635 
Embedded conversion option liabilities   32,128    —    —    32,128 
Total  $320,763   $—   $—   $320,763 

 

 

PROPANC BIOPHARMA, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Unaudited)

 

   Balance at
June 30, 2025		  

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  $403,892   $—   $—   $403,892 
Total  $403,892   $—   $—   $403,892 

 

The following is a roll forward for the six months ended December 31, 2025 of the fair value liability of price adjustable derivative instruments:

 

 

   Fair Value of 
   Liability for 
   Derivative 
   Instruments 
Balance at June 30, 2025  $403,892 
Gain on debt extinguishment   (303,742)
Change in fair value included in statements of operations   (68,022)
Balance at December 31, 2025  $32,128 

 

The following table sets forth a summary of the changes in the fair value of the Level 3 warrant liability for the six months ended December 31, 2025:

   Warrant
Liability		 
Fair value as of June 30, 2025  $- 
Initial fair value of warrant liability upon issuance   882,345 
Change in fair value of warrant liability   (593,710)
Fair value as of December 31, 2025  $288,635 

 

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 $291,650 (9 notes) and $110,500 (3 notes) of convertible debt, which were treated as derivative instruments outstanding at June 30, 2025 and 2024, 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, 2025 was $4.15 per share. The volatility, expected remaining term, and risk-free interest rates used to estimate the fair value of derivative liabilities at June 30, 2025 and 2024 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.

 

 

PROPANC BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025 and 2024

 

Convertible Debt

 

  

Initial Valuations
(on new derivative
instruments entered

into during the year ended June 30, 2025)

  

Initial Valuations
(on new derivative
instruments entered

into during the year ended June 30, 2024)

 
Volatility   344-414%   323.40 – 333.45%
Expected remaining term   0.66-1.00    0.50 
Risk-free interest rate   4.21-4.29%   5.42 - 5.55%
Expected dividend yield   None    None 

 

 

   June 30, 2025   June 30, 2024 
Volatility   413.55%   323.40%
Expected remaining term   0.01 - 0.95    0.01 - 0.28 
Risk-free interest rate   4.21 – 4.45%   5.45 - 5.47%
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, 2025:

 

   Balance at
June 30, 2025		  

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  $403,892   $—   $—   $403,892 
Total  $403,892   $—   $—   $403,892 

 

 

The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024:

 

   Balance at
June 30, 2024		  

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  $133,886   $—   $—   $133,886 
Total  $133,886   $—   $—   $133,886 

 

The following is a roll forward for the years ended June 30, 2025 and 2024 of the fair value liability of price adjustable derivative instruments:

 

   Fair Value of 
   Liability for 
   Derivative 
   Instruments 
Balance at June 30, 2023  $423,209 
Initial fair value of embedded conversion option derivative liability recorded as debt discount   150,000 
Initial fair value of embedded conversion option derivative liability recorded as derivative expense   141,012 
Gain on debt extinguishment   (263,798)
Change in fair value included in statements of operations   (316,537)
Balance at June 30, 2024   133,886 
Initial fair value of embedded conversion option derivative liability recorded as debt discount   222,500 
Initial fair value of embedded conversion option derivative liability recorded as derivative expense   333,596 
Gain on debt extinguishment   (73,640)
Change in fair value included in statements of operations   (212,450)
Balance at June 30, 2025  $403,892 

 

 

PROPANC BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025 and 2024