Form 10-Q ALTEROLA BIOTECH INC. For: Mar 31
28 min readGet inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
| [X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the quarterly period ended March 31, 2020 | |
| [ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the transition period from __________ to __________ | |
| Commission File Number: 333-156091 |
Alterola
Biotech, Inc.
(Exact name of Registrant as specified in its
charter)
| Nevada | TBA |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
|
47 Hamilton Square Birkenhead Merseyside CH41 5AR United Kingdom |
| (Address of principal executive offices) |
| +44 151 601 9477 |
| (Registrant’s telephone number) |
| _______________________________________________________________ |
| (Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days
[ ] Yes [X] No
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
| [ ] Large accelerated filer | [ ] Accelerated filer |
| [X] Non-accelerated filer | [X] Smaller reporting company |
| [ ] Emerging growth company |
If an emerging growth company, indicate by
check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
[X] Yes [ ] No
State the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable date: 754,280,000 shares as of March 17, 2021.
|
TABLE OF CONTENTS |
Page |
|
|
PART I – FINANCIAL INFORMATION
|
||
| Item 1: | Financial Statements | 3 |
| Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
| Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 7 |
| Item 4: | Controls and Procedures | 7 |
|
PART II – OTHER INFORMATION
|
||
| Item 1: | Legal Proceedings | 8 |
| Item 1A: | Risk Factors | 8 |
| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 8 |
| Item 3: | Defaults Upon Senior Securities | 8 |
| Item 4: | Mine Safety Disclosure | 8 |
| Item 5: | Other Information | 8 |
| Item 6: | Exhibits | 8 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Our financial statements included in this Form 10-Q are as follows:
| F-1 | Balance Sheets as of March 31, 2020 and September 30, 2019 (unaudited); |
| F-2 | Statements of Operations for the three and six months ended March 31, 2020 and 2019 (unaudited); |
| F-3 | Statement of Stockholders’ Deficit for the period ended March 31, 2020 |
| F-4 | Statements of Cash Flow for the six months ended March 31, 2020 and 2019 (unaudited); |
| F-5 | Notes to Financial Statements. |
These financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for interim financial information and the Securities Exchange
Commission (“SEC”) instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary
for a fair presentation have been included. Operating results for the interim period ended March 31, 2020 are not necessarily
indicative of the results that can be expected for the full year.
ALTEROLA
BIOTECH, INC.
BALANCE
SHEETS
AS
OF MARCH 31, 2020 AND SEPTEMBER 30, 2019
| March 31, 2020 (unaudited) |
September 30, 2019 |
|||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Funds held in attorney trust |
$ | 15,274 | $ | 14,742 | ||||
| Total Current Assets |
15,274 | 14,742 | ||||||
| TOTAL ASSETS | $ | 15,274 | $ | 14,742 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT |
||||||||
| Current Liabilities | ||||||||
| Accounts payable |
$ | 39,235 | $ | 35,202 | ||||
| Accrued directors fees |
240,000 | 180,000 | ||||||
| Advances from related party |
2,250 | 2,250 | ||||||
| Total Current Liabilities |
281,485 | 217,452 | ||||||
| Total Liabilities |
281,485 | 217,452 | ||||||
| Stockholders’ Deficit |
||||||||
| Preferred Stock, $.001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding |
— | — | ||||||
| Common Stock, $.001 par value, 140,000,000 shares authorized, 116,980,000 shares issued and outstanding |
116,980 | 116,980 | ||||||
| Additional paid-in capital |
651,587 | 651,587 | ||||||
| Deficit accumulated |
(1,034,778 | ) | (971,277 | ) | ||||
| Total Stockholders’ Deficit |
(266,211 | ) | (202,710 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
$ | 15,274 | $ | 14,742 | ||||
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
STATEMENTS
OF OPERATIONS (unaudited)
FOR
THE THREE MONTHS AND SIX MONTHS ENDED MARCH 31, 2020 AND 2019
| Three months ended March 31, 2020 |
Three months ended March 31, 2019 |
Six months ended March 31, 2020 |
Six months ended March 31, 2019 |
|||||||||||||
| REVENUES | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Stock based compensation |
0 | 9,000 | 0 | 36,000 | ||||||||||||
| Accounting and audit fees |
3,750 | 250 | 14,000 | 500 | ||||||||||||
| Legal fees |
0 | 0 | 4,034 | 929 | ||||||||||||
| Directors fees |
30,000 | 30,000 | 60,000 | 60,000 | ||||||||||||
| Consulting fees |
0 | 0 | 60,000 | 0 | ||||||||||||
| General and administrative expenses |
10 | 114 | 4,467 | 459 | ||||||||||||
| TOTAL OPERATING EXPENSES |
33,760 | 39,364 | 142,501 | 96,959 | ||||||||||||
| LOSS FROM OPERATIONS | (33,760 | ) | (39,364 | ) | (142,501 | ) | (96,959 | ) | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Miscellaneous sale |
0 | 0 | 79,000 | 0 | ||||||||||||
| Interest expense |
(0 | ) | (0 | ) | 0 | (249 | ) | |||||||||
| TOTAL OTHER INCOME (EXPENSE) |
(0 | ) | (0 | ) | 79,000 | (249 | ) | |||||||||
| PROVISION FOR INCOME TAXES |
0 | 0 | 0 | 0 | ||||||||||||
| NET INCOME (LOSS) |
$ | (33,760 | ) | $ | (39,364 | ) | $ | (63,501 | ) | $ | (97,208 | ) | ||||
| NET INCOME (LOSS) PER SHARE: BASIC AND DILUTED |
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED |
116,980,000 | 116,146,667 | 116,980,000 | 116,313,333 | ||||||||||||
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
STATEMENT
OF STOCKHOLDERS’ DEFICIT (unaudited)
FOR
THE PERIOD ENDED MARCH 31, 2020
| Common stock |
|
|||||||||||||||||||
| Shares | Amount | Additional paid-in Capital |
Deficit | Total | ||||||||||||||||
| Balance, September 30, 2018 |
115,980,000 | $ | 115,980 | $ | 541,028 | $ | (712,575 | ) | $ | (55,567 | ) | |||||||||
| Capital contribution from forgiveness of debt |
21,559 | 21,559 | ||||||||||||||||||
| Common stock issued for services |
1,000,000 | 1,000 | 89,000 | 90,000 | ||||||||||||||||
| Net loss for the period ended September 30, 2019 |
(258,702 | ) | (258,702 | ) | ||||||||||||||||
| Balance, September 30, 2019 |
116,980,000 | $ | 116,980 | $ | 651,587 | $ | (971,277 | ) | $ | (202,710 | ) | |||||||||
| Net loss for the period ended March 31, 2020 |
(63,501 | ) | (63,501 | ) | ||||||||||||||||
| Balance, March 31, 2020 |
116,980,000 | $ | 116,980 | $ | 651,587 | $ | (1,034,778 | ) | $ | (266,211 | ) | |||||||||
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
STATEMENTS
OF CASH FLOWS (unaudited)
FOR
THE SIX MONTHS ENDED MARCH 31, 2020 AND 2019
| Six months ended |
|||||||
| March 31, 2020 |
March 31, 2019 |
||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
|||||||
| Net income (loss) for the period |
$ | (63,501 | ) | $ | (97,208) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
|||||||
| Stock based compensation |
0 | 36,000 | |||||
| Changes in assets and liabilities: |
|||||||
| Increase (decrease) in accrued expenses |
64,033 | 59,459 | |||||
| Increase (decrease) in accrued interest |
0 | 249 | |||||
| Increase (decrease) in advance from related party |
0 | 1,500 | |||||
| (Increase) decrease in due from attorney |
(532 | ) | 0 | ||||
| Net Cash Used by Operating Activities |
0 | 0 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES |
|||||||
| Acquisition of intellectual property |
0 | 0 | |||||
| Website development |
0 | 0 | |||||
| Net Cash Used by Investing Activities |
0 | 0 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES |
|||||||
| Proceeds from notes payable |
0 | 0 | |||||
| Net Cash Provided by Financing Activities |
0 | 0 | |||||
| Net Increase (Decrease) in Cash and Cash Equivalents |
0 | 0 | |||||
| Cash and cash equivalents, beginning of period |
0 | 0 | |||||
| Cash and cash equivalents, end of period |
$ | 0 | $ | 0 | |||
| SUPPLEMENTAL CASH FLOW INFORMATION |
|||||||
| Interest paid |
$ | 0 | $ | 0 | |||
| Income taxes paid |
$ | 0 | $ | 0 | |||
| NON-CASH INVESTING AND FINANCING INFORMATION |
|||||||
| Deferred financing costs related to notes payable |
$ | 0 | $ | 0 | |||
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2020
NOTE
1 – NATURE OF BUSINESS
After
formation, the Company was in the business of mineral exploration. On May 3, 2010, the Company sold its mineral exploration business
and entered into an Intellectual Property Assignment Agreement (“IP Agreement”) with Soren Nielsen pursuant to which
Mr. Nielsen transferred his right, title and interest in all intellectual property relating to certain chewing gum compositions
having appetite suppressant activity (the “IP”) to the Company for the issuance of 55,000,000 shares of the Company’s
common stock.
Following
the acquisition of the IP the Company changed its business direction to pursue the development of chewing gums for the delivery
of Nutraceutical/functional ingredients for applications such as appetite suppressant, cholesterol suppressant, vitamin delivery,
antioxidant delivery and motion sickness suppressant.
On
June 21, 2018, the Company signed an escrow agreement with Mr. Lauritsen to serve as its Chief Operating Officer and to contribute
the IP for the company’s chewing gum business. In that agreement, the Company compensated Mr. Lauritsen with 1,000,000 shares
of its common stock and cash in the amount of $90,000 USD. In March 2019, the Company issued 1,000,000 shares of common stock
to Mr. Lauritsen rendered with a deemed value of services provided of $ 90,000.
The
business plan of the company will no longer be focused on a chewing gum delivery system but it will re-focus its activities to
the development of cannabinoid, cannabinoid-like, and non-cannabinoid pharmaceutical active pharmaceutical ingredients (APIs),
pharmaceutical medicines made from cannabinoid, cannabinoid-like, and non-cannabinoid APIs and European novel food approval of
cannabinoid-based, cannabinoid-like and non-cannabinoid ingredients and products .In addition, the company plans to develop such
bulk ingredients for supply into the cosmetic sector.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting
Basis
The
Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP”
accounting). The Company has a September 30 fiscal year end.
Use
of Estimates
The
preparation of financial statements in conformity with 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 the financial statements
and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash
and Equivalents
For
purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of
three months or less to be cash equivalents.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2020
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Funds
held in attorney trust account
The
company does not have its own bank account. Funds held in attorney trust account represent funds held on behalf of the Company
in trust by its legal counsel.
Fair
Value of Financial Instruments
Alterola’s
financial instruments consist of cash and equivalents, accrued expenses, accrued interest and notes payable. The carrying amount
of these financial instruments approximates fair value (“FV”) due either to length of maturity or interest rates that
approximate prevailing market rates unless otherwise disclosed in these financial statements.
FV
is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction
between market participants at the measurement date and in the principal or most advantageous market for that asset or liability.
The FV should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on
assumptions specific to the entity. In addition, the FV of liabilities should include consideration of non-performance risk including
our own credit risk.
In
addition to defining FV, the disclosure requirements around FV establish a FV hierarchy for valuation inputs which is expanded.
The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring FV are observable
in the market. Each FV measurement is reported in one of the three levels which is determined by the lowest level input that is
significant to the FV measurement in its entirety. These levels are:
Level
1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
Level
2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices
for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant
assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the
assets or liabilities.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUIDTED FINANCIAL STATEMENTS
MARCH
31, 2020
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fair
Value of Financial Instruments (continued)
Level
3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants
would use in pricing the asset or liability. The FV are therefore determined using model-based techniques that include option
pricing models, discounted cash flow models, and similar techniques.
The
carrying value of the Company’s financial assets and liabilities which consist of cash, accounts payable and accrued liabilities,
and notes payable are valued using level 1 inputs. The Company believes that the recorded values approximate their FV due to the
short maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to
significant interest, exchange or credit risks arising from these financial instruments.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and
liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and
are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized.
Foreign
Currency Translation
The
financial statements are presented in US Dollars. Transactions with foreign subsidiaries where US dollars are not the functional
currency will be recorded in accordance with Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) Topic 830 Foreign Currency Transaction. According to Topic 830, all assets and liabilities are translated
at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of
operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are
reported under other comprehensive income (loss) in accordance with ASC Topic 220, Comprehensive Income . Gains and losses
resulting from the translations of foreign currency transactions and balances are reflected in the statement of operations and
comprehensive income (loss
Revenue
Recognition
On
January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified
retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods
beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported
in accordance with our historic accounting under ASC 605. As of and for the year ended September 30, 2018, the financial statements
were not materially impacted as a result of the application of Topic 606 compared to Topic 605.
Loss
Per Common Share
Basic
loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted
loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as
the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting
period. The Company does not have any potentially dilutive instruments.
Stock-Based
Compensation
Stock-based
compensation is accounted for at FV in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan
and has not granted any stock options
During
the year ended September 30, 2018, the Company issued 1,000,000 shares of common stock to an officer for services rendered with
a deemed value of services provided of $90,000 for services rendered from April 1, 2018 to January 31, 2019.
During
the year ended September 30, 2019, the Company issued 1,000,000 shares of common stock to an officer for services rendered with
a deemed value of services provided of $90,000.
Recent
Accounting Pronouncements
Alterola
does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s
results of operations, financial position or cash flow.
Risks
and Uncertainties
On
January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International
Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the
spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types
of public places and business. The Coronavirus and actions taken to mitigate it have had an are expected to have an adverse
impact on the economies and financial markets of many countries, including the geographical area in which the Company plans to
operate.”
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2020
NOTE
3 – ACCOUNTS PAYABLE
Accounts
payable consisted of the following at March 31, 2020 and September 30, 2019:
| March | September | |||||||
| Audit fees | $ | 13,500 | $ | 10,000 | ||||
| Accounting | 6,100 | 5,600 | ||||||
| Legal fees and transfer agent | 19,635 | 19,602 | ||||||
| Total Accrued Expenses | $ | 39,235 | $ | 35,202 | ||||
NOTE
4 – CAPITAL STOCK
The
Company has 140,000,000 shares of $0.001 par value common stock authorized and 10,000,000 shares of $0.001 par value preferred
stock authorized.
On
April 10, 2017, a former director of the Company surrendered for voluntary cancellation, 37,000,000 shares of common stock with
a deemed value of $ 37,000.
On
April 10,2017, the Company issued 37,000,000 shares of common stock to its director for services with a deemed value of $ 37,000.
On
June 28, 2018 the company issued one million common shares for consulting services with a deemed value of $90,000..
The
Company has 116,980,000 and 116,980,000 shares of common stock issued and outstanding as of March 31, 2020 and September 30, 2019
respectively. There are no shares of preferred stock issued and outstanding.
NOTE
5 – RELATED PARTY TRANSACTIONS
Alterola
neither owns nor leases any real or personal property. An officer has provided office space without charge. There is no obligation
for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected
herein. The officers and directors are involved in other business activities and most likely will become involved in other business
activities in the future.
During
the period ended March 31, 2020, the Company accrued director’s fees payable of $240,000.
NOTE
6- INCOME TAX
Due
to uncertainties surrounding the Company’s ability to generate future taxable income to realize these assets, a full valuation
allowance has been established to offset the net deferred tax asset. The income tax effects of the Tax Cuts and Jobs Act have
been completed in accordance with FASB ASC 740.
The
provision for income tax consists of the following components at March 31, 2020 and 2019:
| 2020 | 2019 | |||||||
| Current: | ||||||||
| Federal income taxes (benefit) | (20,400 | ) | $ | (31,280 | ) | |||
| State income taxes | — | — | ||||||
| Deferred Benefit from net operating loss | 20,400 | 31,280 | ||||||
| $ | — | $ | (0 | ) | ||||
The
following reconciles income taxes reported in the financial statements to taxes that would be obtained by applying regular tax
rates to income before taxes:
| 2020 | 2019 | |||||||
| Expected tax expense (benefit) using regular rates | $ | 20,400 | $ | 31,280 | ||||
| State minimum tax | ||||||||
| Valuation allowance | (20,400 | ) | (31,280 | ) | ||||
| Tax Provision | $ | — | $ | — | ||||
The
Company has loss carry forwards totaling $1,067,386 that may be offset against future federal income taxes. If not used, the carry
forwards will expire between 2028 and 2039.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2020
NOTE
6- INCOME TAX (Continued)
At
March 31, 2020 and March 31, 2019, the significant components of the deferred tax assets are summarized below:
| March 31, 2020 | March 31, 2019 | |||||||
| Deferred income tax asset | ||||||||
| Net operation loss carryforwards | 362,911 | 291,319 | ||||||
| Total deferred income tax asset | 362,911 | 291,319 | ||||||
| Less: valuation allowance | (362,911 | ) | (291,319 | ) | ||||
| Total deferred income tax asset | $ | — | $ | — | ||||
The
federal income tax returns of the Company for 2019 and 2018 are subject to examination by the IRS, generally for three years after
they were filed.
NOTE
7 – LIQUIDITY & GOING CONCERN
Alterola has negative working capital of $266,211,
has incurred losses since inception of $1,034,778, and has not received revenues from sales of products or services. These factors
create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include
any adjustment that might be necessary if the Company is unable to continue as a going concern.
The ability of Alterola to continue as a going
concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining
future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing to fund
its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.
NOTE 8 – OTHER INCOME
Other income of $ 79,000 consists of payments received from third
parties for effecting a change in stock symbol.
NOTE 9 – SUBSEQUENT EVENTS
In accordance with ASC Topic 855-10, the Company
analyzed its operations subsequent to December 31, 2019 to the date these financial statements were issued, and determined it does
not have any material subsequent events to disclose in these financial statements.
On July
20, 2020, the Company appointed certain directors and officers. As part of the appointment, each individual received issuance of
1,000,000 shares of common stock, respectfully, valued at $10,000 per individual.
On September
4, 2020, the Company issued 6,000,000 shares of common stock to the newly appointed Chief Executive Officer and Director, as compensation
for services to the Company, valued at $60,000.
On September
18, 2020, the Company issued 200,000,000 shares of common stock to Amsterdam Café Holdings Ltd, at a price of $0.001 per
share, for total proceeds of $200,000.
On January 19, 2021, the Company entered into
an Stock Transfer Agreement (the “Agreement”) with ABTI Pharma Limited, a company registered in England and Wales (“ABTI
Pharma”), pursuant to which the Company will acquire all of the outstanding shares of capital stock of ABTI Pharma from its
shareholders in exchange for 600,000,000 shares of the Company pro rata to the ABTI Pharma shareholders. The shares have been issued
in anticipation of the closing and the transaction will close upon the ABTI Pharma Limited Shares being transferred to the Company
which will occur upon the filing by the Company of its outstanding annual report and form 10-K for 2019, and its quarterly reports
for 2020, that are anticipated to be filed by March 30th2021.
Pursuant to the Agreement, the Company will
provide funding to ABTI Pharma to pay for operating expenses including salaries, office expenses and additional expenses or projects
in the amount of US$500,000 within fifteen (15) days from closing the Agreement and shall fund an additional US $200,000 every
30 days thereafter until a total funding of US $1,100,000 has been delivered.
Item 2. Management’s Discussion
and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions
upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These forward-looking statements generally are identified by the words “believes,” “project,”
“expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely
result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions
for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement
for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations
and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking
statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors
which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not
limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition,
and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise
publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further
information concerning our business, including additional factors that could materially affect our financial results, is included
herein and in our other filings with the SEC.
Overview
The business plan of the
company will no longer be focused on a chewing gum delivery system but it will re-focus its activities to the development of cannabinoid,
cannabinoid-like, and non-cannabinoid pharmaceutical active pharmaceutical ingredients (APIs), pharmaceutical medicines made from
cannabinoid, cannabinoid-like, and non- cannabinoid APIs and the development of ingredients and products with the aim of achieving
European novel food approval of cannabinoid-based, cannabinoid-like and non-cannabinoid ingredients and products .In addition,
the company plans to develop such bulk ingredients for supply into the cosmetic sector.
Because the IP relating
to the development of a chewing gum with nutraceutical/functional ingredients is not relevant to the pharmaceutical development
that the company plans to undertake, the IP surrounding the chewing gum may no longer benefit the company’s operations going
forward. While company has not yet decided on the proper disposition of the IP at present, the company will likely divest ownership
in the near future.
The new business plan of
the company is for the company’s operations to be repositioned as a fully regulatory- compliant pharmaceutical company specializing
in the development of the following:
• cannabinoid, cannabinoid-like
and non-cannabinoid pharmaceutical active pharmaceutical ingredients (APIs) globally;
• pharmaceutical medicines
made from cannabinoid, cannabinoid-like and non-cannabinoid APIs globally;
• cannabinoid, cannabinoid-like
and non-cannabinoid food-grade ingredients with the aim of achieving European novel food approval of such ingredients;
• non-pharmaceutical
(nutraceutical / dietary supplement) products containing cannabinoids, cannabinoid-like and non-cannabinoid food-grade ingredients
with the aim of achieving European novel food approval of such products; and
• Supply of cosmetic
ingredients to potential customers who may develop products containing cannabinoids, cannabinoid-like and non-cannabinoid ingredients
The controlled drugs / cannabinoid
pharmaceutical market worldwide has experienced exponential growth over the past few years in the development of cannabinoid medicines.
It is Alterola’s intention to develop ingredients and products on a global basis, fully compliant with the appropriate international
laws and regulations and also compliant with the relevant national laws and regulations on a territory-by-territory basis.
In December 2020, the company
retained new management and board members that have experience in the pharmaceutical, botanical and nutraceutical industries.
Further to this objective, the company is also interested in recruiting key executives and personnel that have experience in the
controlled drugs / cannabinoid medicines industry. The focus will be on recruiting outstanding talents that have contributed or
can contribute more in the future with the company’s expansion plans.
The company also has interest
in licensing / acquiring other IP from companies that have IP pertinent to the aforementioned products the company plans to develop.
Under consideration are companies that have existing pharmaceutical research and/or development or manufacturing capability or
associated IP. Some of these companies have IP which is available to integrate into our company strategy. These acquisition or
in-licensing opportunities are expected to facilitate the company to develop API and medicines globally and food-grade ingredients
and products for the food and beverage industry in Europe.
Acquisition of ABTI Pharma
On January 19, 2021, we entered into an Stock Transfer Agreement
(the “Agreement”) with ABTI Pharma Limited, a company registered in England and Wales (“ABTI Pharma”),
pursuant to which the Company will acquire all of the outstanding shares of capital stock of ABTI Pharma from its shareholders
in exchange for 600,000,000 shares of the Company pro rata to the ABTI Pharma shareholders. The shares have been issued in anticipation
of the closing and the transaction will close upon the ABTI Pharma Limited Shares being transferred to the company which is expected
to occur upon the filing by the company of its annual report and Form 10-K for 2020, and its quarterly report for the three months
ended March 31, 2021.
Pursuant to the Agreement, from the date of execution,
the Company will provide funding to ABTI Pharma to pay for operating expenses including salaries, office expenses and additional
expenses or projects in the amount of US$500,000 within fifteen (15) days from closing the Agreement and shall fund an additional
US $200,000 every 30 days thereafter until a total funding of US $1,100,000 has been delivered.
Further under the Agreement, Alterola will endeavor to
raise a total of at least $50,000,000 with $45,000,000 in net proceeds and Alterola will arrange an underwriting commitment of
the first ($25,000,000 USD) to be funded at a price of not less than $1.00 per share within 45 days of execution of the Agreement.
As part of the Agreement, Amsterdam Café Holdings Limited
has agreed to cancel and return to the Company 200,000,000 shares it holds and Bulls Run Investments Limited will be issued 19,100,000
shares of common stock.
Results of Operations for the Three and Six Months Ended March
31, 2020 and 2019
We have generated no revenues since inception and we do not anticipate
earning revenues until such time that we are able to market and sell our products.
We incurred operating expenses of $34,308 for the three months ended
March 31, 2020, compared with $39,364 for the three months ended March 31, 2019. We incurred operating expenses of $139,001 for
the six months ended March 31, 2020, compared with $91,751 for the six months ended March 31, 2019.
Our operating expenses for the six months ended March 31, 2020 mainly
consisted of $60,000 in director fees, $60,000 in consulting fees, and $10,500 in audit fees. Our operating expenses for the six
months ended March 31, 2019 mainly consisted of $60,000 in Directors fees and $36,000 in stock based compensation.
We recorded other expense of $0 for the three months ended March
31, 2020, as compared with $0 in interest expense for the three months ended March 31, 2019. We recorded other income of $79,000
for the six months ended March 31, 2020, as compared with $249 in interest expense for the six months ended March 31, 2019.
We recorded a net loss of $34,308 for the three months ended March
31, 2020, compared with a net loss of $39,614 for the three months ended March 31, 2019. We recorded a net loss of $60,001 for
the six months ended March 31, 2020, compared with a net loss of $92,000 for the six months ended March 31, 2019.
Liquidity and Capital Resources
As of March 31, 2020, we had $15,274 in current assets and currently
liabilities of $277,985. We had a working capital deficit of $262,711 as of March 31, 2020.
We had no operating, investing or financing cash flows to report
for the three and six months ended March 31, 2020 and 2019.
Based upon our current financial condition, we do not have sufficient
cash to operate our business at the current level for the next 12 months. We intend to fund operations through increased sales
and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan
to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will
be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business
plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or
at all.
Off Balance Sheet Arrangements
As of March 31, 2020, we had no off balance sheet arrangements.
Going Concern
Our financial statements were prepared assuming we will continue
as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
We have incurred cumulative losses of $1,031,278 for the period July 21, 2008 (inception date) through March 31, 2020, expect to
incur further losses in the development of our business and have been dependent on funding operations through the issuance of convertible
debt and private sale of equity securities. These conditions raise substantial doubt about our ability to continue as a going concern.
Management’s plans include continuing to finance operations through the private or public placement of debt and/or equity
securities and the reduction of expenditures. However, no assurance can be given at this time as to whether we will be able to
achieve these objectives. The financial statements do not include any adjustment relating to the recoverability and classification
of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue
as a going concern.
Item 3. Quantitative and Qualitative
Disclosures About Market Risk
A smaller reporting company is not required to provide the information
required by this Item.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March
31, 2020. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our
Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as
of March 31, 2020, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal
control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s
annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following
material weaknesses which have caused management to conclude that, as of March 31, 2020, our disclosure controls and procedures
were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies
and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC
guidelines.
Remediation Plan to Address the Material Weaknesses in Internal
Control over Financial Reporting
Our company plans to take steps to enhance and improve the design
of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not
been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following
changes during our fiscal year ending September 30, 2021: (i) appoint additional qualified personnel to address inadequate segregation
of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial
reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing
the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material
manner.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting
during the three months ended March 31, 2020 that have materially affected, or are reasonable likely to materially affect, our
internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware
of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or more of our voting
securities are adverse to us or have a material interest adverse to us.
Item 1A: Risk Factors
A smaller reporting company is not required to provide the information
required by this Item.
Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds
On July 20, 2020, the Company appointed certain directors and officers.
As part of the appointment, each individual received issuance of 1,000,000 shares of common stock, respectfully.
On September 4, 2020, the Company issued 6,000,000 shares of common
stock to the newly appointed Chief Executive Officer and Director, as compensation for services to the Company.
On September 18, 2020, the Company issued 200,000,000 shares of
common stock to Amsterdam Café Holdings Ltd, at a price of $0.001 per share, for total proceeds of $200,000.
These securities were issued pursuant to Section 4(2) of the Securities
Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only
and not with a view towards distribution. The investors were given adequate information about us to make an informed investment
decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates
with the appropriate restrictive legend affixed to the restricted stock.
Item 3. Defaults upon Senior Securities
None
Item 4. Mine
Safety Disclosures
Not applicable.
Item 5. Other Information
None
Item 6. Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Alterola Biotech, Inc. | |
| Date: | May 13, 2021 |
|
By: /s/ Tim Rogers Tim Rogers Title: Chief Executive Officer and Director |
| Date: | May 13, 2021 |
|
By: /s/ Larson Elmore Larson Elmore Title: Interim Chief Financial Officer, Vice Chairman, |
I, Tim Rogers, certify that;
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 of Alterola Biotech, Inc. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2021
/s/ Tim Rogers
By: Tim Rogers
Title: Chief Executive Officer
I, Larson Elmore, certify that;
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 of Alterola Biotech, Inc. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2021
/s/ Larson Elmore
By: Larson Elmore
Title: Interim Chief Financial Officer
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND
CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
In connection with the Quarterly Report
of Alterola Biotech, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2020 filed with the
Securities and Exchange Commission (the “Report”), I, Tim Rogers, Chief Executive Officer and I, Larson Elmore,
Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented. |
| By: | /s/ Tim Rogers |
| Name: | Tim Rogers |
| Title: | Chief Executive Officer and Director |
| Date: | May 13, 2021 |
| By: | /s/ Larson Elmore |
| Name: | Larson Elmore |
| Title: | Interim Chief Financial Officer |
| Date: | May 13, 2021 |
This certification has been furnished solely pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
