FORM
10-Q
| ☒ |
Quarterly Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 |
| |
|
| |
For the quarterly period
ended December 31, 2023 |
| |
|
| ☐ |
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 |
82-1317032 |
| (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
[X]
Yes [ ] 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 |
| ☒ Non-accelerated Filer |
☒ 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).
[
] Yes [X] No
State the number of shares outstanding of each of
the issuer’s classes of common stock, as of the latest practicable date: 1,382,662,952 shares
as of February 18, 2023.
PART
I - FINANCIAL INFORMATION
Item
1. Financial Statements
Our
consolidated financial statements included in this Form 10-Q are as follows:
| F-1 |
Consolidated Balance Sheets as of
December 31, 2023 (unaudited) and March 31, 2023; |
| F-2 |
Consolidated Statements of Operations
for the three and nine months ended December 31, 2023 and 2022 (unaudited); |
| |
|
| F-3 |
Consolidated Statement of Stockholders’ Deficit
for the nine months ended to December 31, 2023 and 2022 (unaudited); |
| F-4 |
Consolidated Statements of Cash
Flow for the nine months ended December 31, 2023 and 2022 (unaudited); |
| F-5 |
Notes to Consolidated Financial
Statements. |
These
consolidated 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 December 31, 2023 are not necessarily indicative of the results that can be expected for the full year.
ALTEROLA
BIOTECH, INC.
UNAUDITED
CONSOLIDATED BALANCE SHEETS
AS
OF DECEMBER 31, 2023 AND MARCH 31, 2023
| | |
December
31, 2023 | |
March
31, 2023 |
| | |
| |
(audited) |
| ASSETS | |
| | | |
| | |
| Current
Assets | |
| | | |
| | |
| Bank | |
$ | 2,574 | | |
$ | 8,890 | |
| VAT receivable | |
| — | | |
| 37,953 | |
| Deferred
tax asset | |
| — | | |
| 189,355 | |
| Inventories | |
| 1,015 | | |
| 986 | |
| | |
| | | |
| | |
| Total Current Assets | |
| 3,589 | | |
| 237,184 | |
| | |
| | | |
| | |
| Intangible
assets | |
| — | | |
| 12,139,779 | |
| | |
| | | |
| | |
| TOTAL
ASSETS | |
$ | 3,589 | | |
$ | 12,376,963 | |
| | |
| | | |
| | |
| LIABILITIES
AND STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
| | |
| | | |
| | |
| Current
Liabilities | |
| | | |
| | |
| Accounts
payable | |
$ | 803,841 | | |
$ | 611,805 | |
| Accrued
expenses | |
| 310,522 | | |
| 254,864 | |
| Loan
payable, related party | |
| 244,061 | | |
| 1,260,434 | |
| Total
Current Liabilities | |
| 1,358,424 | | |
| 2,127,103 | |
| | |
| | | |
| | |
| Convertible
Note Payable | |
| — | | |
| 154,313 | |
| | |
| | | |
| | |
| Total
Liabilities | |
| 1,358,424 | | |
| 2,281,416 | |
| | |
| | | |
| | |
| Stockholders’
Equity (Deficit) | |
| | | |
| | |
| Preferred
Stock, $.001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding | |
| — | | |
| — | |
| Common
Stock, $.001 par value, 2,000,000,000 shares authorized, 1,382,662,952 and 807,047,948 shares issued and outstanding, respectively | |
| 1,382,663 | | |
| 807,048 | |
| Treasury
stock, 29,015,993 and 0 shares held, respectively | |
| 29,016 | | |
| — | |
| Additional
paid-in capital | |
| 9,663,971 | | |
| 18,927,919 | |
| Accumulated
deficit | |
| (12,441,456 | ) | |
| (9,576,247 | ) |
| Foreign
currency translation adjustment | |
| 10,971 | | |
| (63,173 | ) |
| Total
Stockholders’ Equity (Deficit) | |
| (1,354,835 | ) | |
| 10,095,547 | |
| | |
| | | |
| | |
| TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
$ | 3,589 | | |
$ | 12,376,963 | |
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
UNAUDITED
CONSOLIDATED STATEMENT OF OPERATIONS
FOR
THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | |
Three
months ended December 31, 2023 | |
Three
months ended December 31, 2022 | |
Nine
months ended December 31, 2023 | |
Nine
months ended December 31, 2022 |
| | |
| |
| |
| |
|
| REVENUES | |
| — | | |
| — | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| OPERATING
EXPENSES | |
| | | |
| | | |
| | | |
| | |
| Accounting
and audit fees | |
| 27,882 | | |
| 19,001 | | |
| 99,982 | | |
| 86,816 | |
| Professional
fees | |
| 273,659 | | |
| 249,183 | | |
| 280,844 | | |
| 363,193 | |
| Research
and development | |
| 2,880 | | |
| — | | |
| 2,880 | | |
| 41,086 | |
| Legal
fees | |
| 60,939 | | |
| 166,699 | | |
| 73,838 | | |
| 174,728 | |
| Directors
fees and expenses | |
| 31,575 | | |
| 27,931 | | |
| 227,575 | | |
| 546,571 | |
| Consulting
fees | |
| 661,421 | | |
| 198,335 | | |
| 995,099 | | |
| 481,429 | |
| Salaries
and wages | |
| 26,857 | | |
| (92,638 | ) | |
| 96,315 | | |
| 101,238 | |
| General
and administrative expenses | |
| 23,734 | | |
| (27,890 | ) | |
| 49,138 | | |
| 28,931 | |
| TOTAL
OPERATING EXPENSES | |
| 1,108,947 | | |
| 540,621 | | |
| 1,825,671 | | |
| 1,823,992 | |
| | |
| | | |
| | | |
| | | |
| | |
| LOSS
FROM OPERATIONS | |
| (1,108,947 | ) | |
| (540,621 | ) | |
| (1,825,671 | ) | |
| (1,823,992 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| OTHER
INCOME (EXPENSE) | |
| | | |
| | | |
| | | |
| | |
| Income tax expense for valuation allowance on deferred tax asset | |
| (194,800 | ) | |
| — | | |
| (194,800 | ) | |
| — | |
| Loss
on impairment of intangible assets | |
| (300,000 | ) | |
| — | | |
| (300,000 | ) | |
| — | |
| Gain
(loss) on conversion of note | |
| (406,575 | ) | |
| — | | |
| (544,738 | ) | |
| — | |
| TOTAL
OTHER INCOME (EXPENSE) | |
| (901,375 | ) | |
| — | | |
| (1,039,538 | ) | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| PROVISION
FOR INCOME TAXES | |
| — | | |
| (5,832 | ) | |
| — | | |
| 101,301 | |
| | |
| | | |
| | | |
| | | |
| | |
| NET
LOSS | |
| (2,010,322 | ) | |
| (534,789 | ) | |
| (2,865,209 | ) | |
| (1,722,691 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Foreign exchange translation
gain (loss) |
|
|
(9,650) |
|
|
|
25,730 |
|
|
|
74,144 |
|
|
|
43,152 |
|
| Comprehensive loss |
|
|
(2,019,972) |
|
|
|
(509,059) |
|
|
|
(2,791,065) |
|
|
|
(1,679,539) |
|
| | |
| | | |
| | | |
| | | |
| | |
| NET
LOSS PER SHARE: BASIC AND DILUTED | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED | |
| 1,265,220,104 | | |
| 807,047,948 | | |
| 948,110,596 | | |
| 806,766,837 | |
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
UNAUDITED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR
THE PERIOD FROM MARCH 31, 2022 TO DECEMBER 31, 2023
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | |
Common
stock | |
Treasury Shares stock | |
| |
| |
| |
| |
|
| | |
Shares | |
Amount | |
Shares | |
Amount | |
Additional
paid in capital | |
Stock
Subscription | |
Accumulated
other comprehensive income ( loss) | |
Accumulated
Deficit | |
Stockholders’
Equity (deficit) |
| Balance,
March 31, 2022 | |
| 802,633,333 | | |
$ | 802,633 | | |
| — | | |
| — | | |
| 17,942,833 | | |
$ |
136,721 |
|
|
$ | 14,599 | | |
$ | (7,833,790 | ) | |
$ | 11,062,996 | |
| Change
in foreign currency | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
|
— |
|
|
| 43,152 | | |
| — | | |
| 43,152 | |
| Shares issued for cash |
|
|
280,000 |
|
|
|
280 |
|
|
|
— |
|
|
|
— |
|
|
|
136,721 |
|
|
|
(136,721 |
) |
|
|
— |
|
|
|
— |
|
|
|
280 |
| Shares issued for cash |
|
|
384,615 |
|
|
|
385 |
|
|
|
— |
|
|
|
— |
|
|
|
49,615 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
50,000 |
|
| Shares issued for services |
|
|
1,500,000 |
|
|
|
1,500 |
|
|
|
— |
|
|
|
— |
|
|
|
319,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
321,000 |
|
| Shares issued for services |
|
|
2,250,000 |
|
|
|
2,250 |
|
|
|
— |
|
|
|
— |
|
|
|
479,250 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
481,500 |
|
| Net
loss for the period ended December 31, 2022 | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
|
— |
|
|
| — | | |
| (1,722,691 | ) | |
| (1,722,691 | ) |
| Balance,
December 31, 2022 | |
| 807,047,948 | | |
$ | 807,048 | | |
| — | | |
| — | | |
| 18,927,919 | | |
|
— |
|
|
$ | 57,751 | | |
$ | (9,556,481 | ) | |
$ | 10,236,237 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
|
|
|
| | | |
| | | |
| | |
| Balance,
March 31, 2023 | |
| 807,047,948 | | |
$ | 807,048 | | |
| — | | |
| — | | |
| 18,927,919 | | |
$ |
— |
|
|
$ | (63,173 | ) | |
$ | (9,576,247 | ) | |
$ | 10,095,547 | |
|
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
|
— |
|
|
| 74,144 | | |
| — | | |
| 74,144 | |
| Shares
reclaimed into treasury shares | |
| (44,064,000 | ) | |
| (44,064 | ) | |
| 44,064,000 | | |
| 44,064 | | |
| — | | |
|
— |
|
|
| — | | |
| — | | |
| — | |
| Shares
issued for warrants | |
| 13,500,000 | | |
| 13,500 | | |
| (13,500,000 | ) | |
| (13,500 | ) | |
| — | | |
|
— |
|
|
| — | | |
| — | | |
| — | |
| Shares
issued for acquisition of Alinova Resources | |
| 5,000,000 | | |
| 5,000 | | |
| (5,000,000 | ) | |
| (5,000 | ) | |
| 295,000 | | |
|
— |
|
|
| — | | |
| — | | |
| 295,000 | |
| Shares
issued for services | |
| 16,088,000 | | |
| 16,088 | | |
| (16,088,000 | ) | |
| (16,088 | ) | |
| 305,672 | | |
|
— |
|
|
| — | | |
| — | | |
| 305,672 | |
| Shares
issued for services- directors | |
| 9,000,000 | | |
| 9,000 | | |
| (9,000,000 | ) | |
| (9,000 | ) | |
| 171,000 | | |
|
— |
|
|
| — | | |
| — | | |
| 171,000 | |
| Shares
issued for settlement of debt | |
| 476,000 | | |
| 476 | | |
| (476,000 | ) | |
| (476 | ) | |
| 157,339 | | |
|
— |
|
|
| — | | |
| — | | |
| 157,339 | |
| Shares
reclaimed from asset sale | |
| (24,000,000 | ) | |
| (24,000 | ) | |
| 24,000,000 | | |
| 24,000 | | |
| (12,000,000 | ) | |
|
— |
|
|
| — | | |
| — | | |
| (12,000,000 | ) |
| Additional
shares reclaimed from asset sale | |
| (5,015,993 | ) | |
| (5,016 | ) | |
| 5,015,993 | | |
| 5,016 | | |
| — | | |
|
— |
|
|
| — | | |
| — | | |
| — | |
| Shares
issued for conversion of debt | |
| 587,499,996 | | |
| 587,500 | | |
| — | | |
| — | | |
| 1,762,500 | | |
| — | | |
| — | | |
| — | | |
| 2,350,000 | |
| Shares
issued for outside services | |
| 8,360,306 | | |
| 8,360 | | |
| — | | |
| — | | |
| 21,737 | | |
| — | | |
| — | | |
| — | | |
| 30,097 | |
| Shares
issued for services – internal | |
| 8,770,695 | | |
| 8,771 | | |
| — | | |
| — | | |
| 22,804 | | |
| — | | |
| — | | |
| — | | |
| 31,575 | |
| Net
loss for the period ended December 31, 2023 | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (2,865,209 | ) | |
| (2,865,209 | ) |
| Balance,
December 31, 2023 | |
| 1,382,662,952 | | |
$ | 1,382,663 | | |
| 29,015,996 | | |
| 29,016 | | |
| 9,663,971 | | |
| — | | |
$ | 10,971 | | |
$ | (12,441,456 | ) | |
$ | (1,354,835 | ) |
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
UNAUDITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR
THE NINE MONTHS ENDED DECEMBER 31, 2023
AND
2022
| | |
Nine Months Ended December 31, 2023 | |
Nine Months Ended December 31, 2022 |
| CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | |
| Net loss for the period | |
$ | (2,865,209 | ) | |
$ | (1,722,691 | ) |
| Adjustments to reconcile net loss to net cash flows used in operating activities | |
| | | |
| | |
| Non cash currency adjustments | |
| — | | |
| — | |
| Stock for services | |
| — | | |
| 802,500 | |
| Stock to directors | |
| — | | |
| — | |
| Income tax expense for
valuation allowance on deferred tax asset | |
| 189,355 | | |
| — | |
| Impairment of intangibles | |
| 439,779 | | |
| — | |
| Shares issued for warrants | |
| — | | |
| — | |
| Stock subscriptions delivered | |
| — | | |
| 136,721 | |
| Changes in assets and liabilities: | |
| | | |
| | |
| Funds in attorney trust | |
| — | | |
| 12,409 | |
| Inventory | |
| — | | |
| — | |
| VAT receivable | |
| 66,637 | | |
| 15,308 | |
| Deferred tax asset | |
| — | | |
| (142,850 | ) |
| Accounts payable | |
| 740,284 | | |
| 126,162 | |
| Accrued liabilities | |
| 55,658 | | |
| (384,057 | ) |
| Net Cash Used by Operating Activities | |
| (1,373,496 | ) | |
| (1,156,498 | ) |
| | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | |
| Acquisition of intangible assets | |
| — | | |
| (18,147 | ) |
| Net Cash (Used) Provided by Investing Activities | |
| — | | |
| (18,147 | ) |
| | |
| | | |
| | |
| | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
| Purchase of common shares for cash | |
| (44,064 | ) | |
| 50,280 | |
| Shares issued for conversion of debt to equity | |
| 544,738 | | |
| — | |
| Loan from related parties | |
| 788,889 | | |
| 1,043,125 | |
| Net Cash Provided by Financing Activities | |
| 1,289,563 | | |
| 1,093,405 | |
| | |
| | | |
| | |
| Net change in cash | |
| (83,933 | ) | |
| (81,240 | ) |
| | |
| | | |
| | |
| Effect of exchange rate adjustments on cash | |
| 77,617 | | |
| 30,240 | |
| | |
| | | |
| | |
| Cash and cash equivalents, beginning of period | |
| 8,890 | | |
| 63,816 | |
| Cash and cash equivalents, end of period | |
$ | 2,574 | | |
$ | 12,816 | |
| | |
| | | |
| | |
| NON-CASH INVESTING AND FINANCING INFORMATION | |
| | | |
| | |
| Shares issued for services | |
$ | 335,769 | | |
$ | 802,500 | |
| Shares issued to directors | |
$ | 202,575 | | |
$ | — | |
| Shares issued for asset acquisition | |
$ | 295,000 | | |
$ | — | |
| Shares issued for exercise of warrants | |
$ | 13,500 | | |
$ | — | |
| Shares issued for conversion of notes payable | |
$ | 2,507,339 | | |
$ | — | |
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED CONSOIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2023
NOTE
1 – NATURE OF BUSINESS, LIQUIDITY & GOING CONCERN
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
January 19, 2021, the Company entered into an Stock Purchase Agreement (the “Agreement”) with ABTI Pharma Limited, a company
registered in England and Wales (“ABTI Pharma”), pursuant to which the Company agreed to 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 were issued on January 29, 2021 in anticipation of the closing and the parties to the transaction agreed in a March 24, 2021
amendment to close upon the ABTI Pharma Limited Shares being transferred to the Company, which was to occur upon the filing by the Company
of its outstanding September 30, 2020 quarterly report on Form 10-Q, which was filed on May 28, 2021 with the Securities and Exchange
Commission. The transaction closed on May 28, 2021.
The
transaction was accounted for as a reverse acquisition and recapitalization. ABTI Pharma is the acquirer for accounting purposes and
the Company is the issuer. The historical financial statements presented are the financial statements of ABTI. The Agreement was treated
as a recapitalization and not as a business combination; at the date of the acquisition, the net liabilities of the legal acquirer, Alterola,
were $389,721.
The
business plan of the company isl no longer focused on a chewing gum delivery system but was re-focused on 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.
On
December 2, 2021, the Company closed an Asset Purchase Agreement (the “Purchase Agreement”) with C2 Wellness Corp., a Wyoming
corporation, and Dr. G. Sridhar Prasad (together, the “Seller”) and acquired certain IP assets (the “Assets”)
from Seller, which include:
| • | Novel
cannabinoid molecules and their associated intellectual property; |
| • | Novel
cannabinoid pro-drugs, and their associated intellectual property; |
| • | Novel
proprietary cannabinoid formulations, designed to target lymphatic delivery, and their associated
intellectual property; |
| • | Novel
proprietary nano-encapsulated cannabinoid formulations, in self-dissolving polymers, and
their associated intellectual property; and |
| • | Cannabinoids
and cannabinoid pro-drug formulations for topical ocular delivery, and their associated intellectual
property. |
In
exchange for the Assets, the Company issued to Seller shares of common stock. On September 8, 2023, the Company and Seller entered into
an Agreement to sell the assets, such that the Company sold the assets back to the Seller and the Seller paid 29,015,993
shares of ABTI common stock to the Company. The
assets were sold to the Seller in September 2023.
As
of July 5, 2023, we acquired intellectual property from Alinova Biosciences Ltd. We acquired Alinova’s joint interest in the patent
family of PTX 0001. We paid 35,000 Sterling in cash and 5,000,000 shares of ABTI Stock.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED CONSOIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2023
LIQUIDITY & GOING CONCERN
Alterola
has negative working capital of $1,160,035, has incurred losses since inception of $11,946,656, 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
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
These
unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).
They include the accounts of Alterola and its wholly owned subsidiaries ABTI Pharma, Phytotherapeutix Ltd and Ferven Ltd.. All material
intercompany transactions and balances have been eliminated.
These
financial statements and the notes attached hereto should be read in conjunction with the financial statements and notes included in
the Company’s 10-K for its fiscal year ended March 31, 2023. In the opinion of the Company, all adjustments, including normal recurring
adjustments necessary to present fairly the financial position of the Company, as of December 31, 2023, and the results of its operations
and cash flows for the three and nine months then ended have been included. The results of operations for the interim period are not
necessarily indicative of the results for the full year ending March 31, 2024.
The
Company had a September 30 fiscal year end. Subsequent to the Agreement with ABTI Pharma, the Company has changed its year end from September
30 to March 31.
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.
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.
ALTEROLA BIOTECH, INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
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.
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 December 31, 2022, the financial statements
were not materially impacted as a result of the application of Topic 606 compared to Topic 605.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2023
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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
Research
and development
We engage in a variety of research and development
activities to develop our technologies and work toward development of a saleable product. When it is determined that the research and
development products we are creating have reached a point where saleable products are possible, these amounts are capitalized. As of December
31, 2023 and March 31 ,2023 there are no capitalized research and development costs.
The research and development costs incurred by the
company relate to the following:
| |
• |
Licenses
for patent and know-how ( Nano 4 M) - this relates to the company’s formulation of Active Pharmaceutical Ingredients ( API)
for its lead pharmaceutical programs. |
| |
• |
Protein Technologies Ltd – this relates to the company’s research into production of cannabinoids by biosynthesis (as opposed to botanical production by growing plants). The company has genetically modified an organism to produce cannabinoids by fermentation ( similar to methodology used for the production of antibiotics) |
| |
• |
Apex Molecular Ltd.-
the company has a number of pharmaceutical development programs using both novel and natural molecules. The Company employs third
party chemistry / contract, manufacturing companies such as Apex Molecular Ltd. to synthesize and purify these compounds for their
pharmaceutical development programs. |
| |
• |
Acquisition of intellectual property from Alinova Biosciences Ltd. |
| |
• |
Continued patent prosecution and internationalization of company intellectual property. |
| |
• |
Staff costs and consultancy costs relating to R & D. |
Other
Intangible Assets
We
have recorded the assets acquired as part of the C2 Wellness acquisition as indefinite lived Intangible assets. Indefinite life intangible
assets recorded are not amortized and, as a result, are assessed for impairment at least annually, using either a qualitative or quantitative
process. We performed this annual assessment as of March 31, 2023, noting no factors indicating possible impairment of intangible assets
recognized.
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 and 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.
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.
ALTEROLA BIOTECH, INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE
3 – ACCRUED EXPENSES
Accrued
expenses consisted of the following at December 31, 2023 and March 31, 2023
| | |
December 31, 2023 | |
March 31,2023 |
| Audit fees | |
$ | — | | |
$ | 15,000 | |
| Accounting | |
| 7,407 | | |
| 7,407 | |
| Research and development | |
| 9,433 | | |
| 9,433 | |
| General and administrative | |
| 106,014 | | |
| 115,821 | |
| Legal fees and transfer agent | |
| 187,668 | | |
| 107,203 | |
| Total Accrued Expenses | |
$ | 310,522 | | |
$ | 254,864 | |
NOTE
4 – CAPITAL STOCK
The
Company has 2,000,000,000 shares of $0.001 par value common stock authorized and 10,000,000 shares of $0.001 par value preferred stock
authorized.
On
August 11, 2021, the Company issued 15,000,000
warrants to purchase common stock at $0.64
per share. The warrants were issued with a 5
year term. The warrants exercise price includes
a declining scale with the stock price. As of December 31, 2022, the warrants were exercisable at $0.001
per share and the
total potential impact on the financial statements of the exercise of the warrants was approximately $1 million dollars. The
warrants were exercised on June 13, 2023 (see below). The total potential impact on the financial statements of the exercise of the warrants
was approximately $13,500.
During September
2021,
the Company received an investment for £100,000 Sterling (or $136,721)
in exchange for a subscription for 280,000 shares. On May 2, 2022, the Company issued the 280,000 shares to the investor
On
October 29, 2021, the Company issued 7,500,000 shares of stock in exchange for services provided byEMC2 Capital. The shares were issued
at fair value of the date of exchange, or $2,399,250.
As
pursuant to the asset purchase agreement dated November 9, 2021, the Company acquired certain intellectual property rights of C2 Wellness
Corp. In exchanges for the assets acquired, the Company issued 24,000,000
shares of common stock valued at $0.50
per share. The intellectual property rights acquired
are recorded as intangible assets as of December 31, 2021 for $12,000,000.
On
December 21, 2021, the company issued 520,000 shares of stock in exchange for $130,000 of cash consideration.
On February 8, 2022, the
company issued 333,333 shares to an investor for an investment of $50,000 (at a price of $0.15 per share).
On or about March 3, 2022, the Company issued 16,000,000 shares of stock for services under a consulting
agreement. The shares were issued at fair value the date of the exchange, or $3,360,000.
On April 5, 2022, the company
issued 384,615 shares to an investor for an investment of $50,000 (at a price of $0.13 per share).
On April 29, 2022, the Company
issued 1,500,000 shares for services under a consultancy agreement at $0.214 per share, or $321,000.
On May 2, 2022, the Company
issued 280,000 shares to an investor relating to a subscription agreement for an investment of £100,000 Sterling (or $136,721)
at $0.50 per share, or $140,000.
On May 4, 2022, we issued
2,250,000 shares of our common stock to our director, Mr. Michael Hunter Land, pursuant to his employment agreement dated October 18,
2021 and board decision to award him shares for his performance.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2023
NOTE
4 – CAPITAL STOCK (CONTINUED)
On
June 6, 2023, the Company reclaimed 44,064,000 shares into Treasury.
On
June 13, 2023, we issued 13,500,000 shares of common stock to EMC2 Capital LLC following the cashless exercise of their 15,000,000 Warrants
issued in August 2021.
On
June 13, 2023, we issued 476,000 shares of common stock to Alison Rose Burgess as settlement of a £125,000 Sterling loan under
the terms and conditions of the loan dated 21 September 2021.
On
June 13, 2023, we issued 5,000,000 shares of common stock to Alinova Biosciences Ltd as part payment of consideration for the acquisition
of intellectual property.
June
13, 2023, we issued 5,999,900 shares of common stock to Long Eight Limited as part payment of consideration for services received by
Green Ocean Administration Limited.
June
13, 2023, we issued 10,088,100 shares of common stock to Warren Law Group to be held in escrow as potential part payment for services
received from Bridgeway Capital Partners LLC, Bridgeway Capital Partners II LLC and Entoro Securities LLC.
On
June 14, 2023, we issued 9,000,000 shares of common stock to our Directors as payment for their services as Directors.
On
September 8, 2023, the Company entered into an Agreement to Return Assets and Shares with C2 Wellness Corp. As part of the agreement,
the company received 29,015,993
shares of ABTI stock (24,000,000 shares originally
issued and 5,015,996 shares additionally issued) and sold all assets related to the acquisition, resulting in a write-off of $12,000,000
in intangibles.
On
October 16, 2023, the Company issued 587,499,996 shares in exchange of forgiveness of debt of approximately $2.35 million outstanding.
The exchange resulted in a loss on exchange of $406,575.
On
December 21, 2023, the Company issued 17,131,001 shares in exchange for services provided for the company for the period ended December
31, 2023, valued at $61,672 at the date of issuance.
The
Company has 1,382,662,952 and 807,047,948 shares of common stock issued and outstanding as of December 31, 2023 and March 31, 2023, respectively.
There are no shares of preferred stock issued and outstanding as of December 31, 2023 and March 31, 2023. The Company had
807,047,948 and 802,913,333 shares of common stock issued and outstanding as of December 31, 2022 and March 31, 2022, respectively. There
are no shares of preferred stock issued and outstanding as of December 31, 2022 and March 31, 2022.
NOTE
5 – NOTES PAYABLE
On
August 1, 2022, the Company issued a note payable for 90 days bearing zero interest for the term of the note, for cash received by the
Company on June 29, 2022 and July 18, 2022 totaling $75,000. As part of the note the Company committed delivery of 2,250,000 shares
to the note holders. The loans totaling $75,000 were repaid in full by December 23, 2022.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2023
NOTE
6 – RELATED PARTY TRANSACTIONS
Alterola neither owns nor leases any real or personal
property. An officer has provided office space as an arms length transaction with rental at commercial rates. 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 December 31, 2023, a shareholder made advances to the company to fund operating expenses in the amount of $244,061.
These advances are non – interest bearing and have no specified terms of repayment.
NOTE
7 – SUBSEQUENT EVENTS
In
accordance with ASC Topic 855-10, the Company analyzed its operations subsequent to December 31, 2023 to the date these financial statements
were issued, and determined it does not have any material subsequent events to disclose in these financial statements, except as noted
below.
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
Our
Business
Our goal is to provide better medicines for patients
around the world. We believe in harnessing the therapeutic potential of cannabinoids and cannabinoid- like compounds, which can be developed
into valuable treatments to seriously ill patients. Rather than just focusing on one method of identifying, researching and developing
such medicines, we are interested in developing new medicines from all sources including botanical, traditional chemical synthesis and
biosynthetic methodologies.
On May 28, 2021, we acquired ABTI Pharma Limited,
a company registered in England and Wales (“ABTI Pharma”), with the purchase of all of its capital stock in exchange for 600,000,000
shares of our common stock pro rata to the ABTI Pharma shareholders.
As a result of the acquisition, we are a pharmaceutical
company working with cannabinoid and cannabinoid like molecules. We have three areas of focus:
| |
1) |
Development of regulated pharmaceuticals (human and animal health) and regulated food products. This has been achieved via the strategic acquisition of Phytotherapeutix Ltd.; |
| |
2) |
Production of low cost of goods Active Pharmaceutical Ingredient (API) and food-grade ingredients (supported by the strategic acquisition of Ferven Ltd); and |
| |
3) |
Formulation, and drug delivery, providing improved bioavailability, solubility and stability (supported by the exclusive licensing of IP and technology from Nano4M Ltd). |
Phytotherapeutix Ltd, a subsidiary of ABTI Pharma
Ltd, has generated a number of molecules with patents pending, some of which have demonstrable pharmacological activity, similar to that
of CBD. This means that some of these molecules are anticipated to have a similar market potential to CBD across a range of therapeutic
areas.
Ferven Ltd, another subsidiary of ABTI Pharma Ltd,
is looking to produce cannabinoids by fermentation. The exclusively licensed organism has the potential to be genetically modified to
produce multiple cannabinoids at an anticipated very low cost of goods. It is anticipated that the selected genetically modified organisms
will grow very quickly, which in turn, reduces the cost of production.
Nano4M Ltd is a company which has exclusively licensed
its nano-formulation patents and know-how to ABTI Pharma Ltd.
Additionally, we may consider entering into Joint
Venture Partnerships, or acquire companies with complimentary portfolios or enter into Licensing Agreements to enhance the product portfolio.
These are strategies the Company may implement and any such opportunities will be assessed on a case by case basis and on their merit
at the time.
Alterola and ABTI Pharma Ltd management have extensive
experience, know-how and connections in the cannabinoid medicines sector, and are looking to utilize this knowledge and experience for
the development of such medicines from existing cannabinoids and cannabinoid-like molecules.
Our address is 47 Hamilton Square Birkenhead Merseyside
CH41 5AR United Kingdom. Our telephone number is +44 151 601 9477. Our website is www.alterolabio.com. The company has a fully operational
US$ and a £ sterling bank account in the United Kingdom with the HSBC Group.
We do not incorporate the information on or accessible
through our websites into this Quarterly Report, and you should not consider any information on, or that can be accessed through, our
websites a part of this Quarterly Report.
Results of Operations for the Three and Nine Months
Ended December 31, 2023 and 2022
We
have generated no revenues since inception and we do not anticipate earning revenue until such time that we are able to market and sell
our ingredients and / or products / medicines.
We incurred operating expenses of $1,108,947 for the
three months ended December 31, 2023, as compared with $540,621 for the same period ended 2022. We incurred operating expenses of $1,825,671
for the nine months ended December 31, 2023, as compared with $1,823,992 for the same period ended 2022.
Our operating expenses for the nine months ended December
31, 2023 increased over the same period in 2022 mainly as a result of more spent on consulting fees and accounting and audit fees. Our
operating expenses for the nine months ended December 31, 2023 were mainly the result of $995,099 in consulting fees, $273,659 in professional
fees, $227,575 in director fees and expenses, $99,982 in accounting and audit fees, and $96,315 in salaries and wages. Our operating expenses
for the nine months ended December 31, 2022 were mainly the result of $546,571 in directors fees and expenses, $481,429 in consulting
fees, $363,193 in professional fees, $101,238 in salaries and wages, $86,816 in accounting and audit fees and $41,086 in research and
development.
We had other expenses of $406,575 and $544,738 for
the three and nine months ended December 31, 2023, respectively, for losses on the conversion of a note, with no other expense for the
same periods ended December 31, 2022.
If we are able to obtain financing, we expect that
our operational expenses will increase significantly for the balance of the fiscal year ended March 31, 2024 and beyond. This would be
the result of increased research and development expenses associated with our product candidates, the development of those candidates
in compliance with regulatory processes, laws and regulations, increased payroll as we take on more help, as well as the expenses associated
with our reporting obligations with the Securities and Exchange Commission.
We recorded a net loss of $1,515,522 for the three
months ended December 31, 2023, as compared with $534,789 for the same period ended 2022. We recorded a net loss of $2,370,409 for the
nine months ended December 31, 2023, as compared with $1,722,691 for the same period ended 2022.
As a relatively recently formed pharmaceutical company,
the company has limited operations to date, and expects to have reoccurring losses, as is typical with companies in the pharmaceutical
industry, for the foreseeable future. As explained above, the company intends to raise capital and ramp up its efforts to bring its product
candidates to market. This will require significant capital, product development to continue and complete and momentum on those product
candidates through the regulatory process. There are no assurances that we will be able to generate revenues and achieve profitable operations.
Liquidity and Capital Resources
As of December 31, 2023, we had $198,389 in current
assets, consisting mostly of a deferred tax credit, and current liabilities of $1,358,424. We had a working capital deficit of $1,160,035
as of December 31, 2023, compared with a working capital deficit of $2,322,023 as of September 30, 2023.
We used cash for operating activities of $1,513,275
for the nine months ended December 31, 2023, as compared with cash used of $1,156,498 for the same period ended 2022. Our negative operating
cash flow the nine months ended December 31, 2023 was mainly the result of a net loss, offset mainly by shares issued for services, to
directors and others. Our negative operating cash flow for 2022 was mainly the result of a net loss, net changes in operating assets and
liabilities and deferred tax credit offset by shares issued for services.
We
used $0 in cash for investing activities for the nine months ended December 31, 2023, as compared with $18,147 in cash provided
for the same period ended 2022.
Financing activities provided $1,289,563 for the nine
months ended December 31, 2023, mainly as a result of shares issued for conversion of debt to equity and loan from related parties. Financing
activities provided $1,093,405 for the nine months ended December 31, 2022, as a result of related party notes.
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 short-term or long-term debt and/or equity financing arrangements, however this 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 December 31, 2023, 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 negative working capital of $1,160,035 as
of December 31, 2023, and have an accumulated deficit
of $11,946,656. We expect to incur further losses in the development of our business and have been dependent on funding operations from
inception. 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
December 31, 2023. 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
December 31, 2023, 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 December 31, 2023, 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 internal controls over financial reporting. In October 2023, the company appointed a new Chief Financial Officer. 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 March 31, 2024: (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
Aside from above, there were no changes in our internal
control over financial reporting during the three months ended December 31, 2023 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% or more of our
voting securities are adverse to us or have a material interest adverse to us.
Item 1A: Risk Factors
Please see the Risk Factors contained in our Annual
Report on Form 10-K filed with the SEC on July 10, 2023, which are incorporated herein by reference.
Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds
On September 8, 2023, the Company entered into an
Agreement to sell assets to with C2 Wellness Corp. As part of the agreement, the company received 29,015,996 shares of ABTI stock and
sold all assets related to the acquisition, resulting in a write-off of $12,000,000 in intangibles.
On October 16, 2023, TPR Global Limited, Equipped
4 Holdings Limited and Phytotherapeutix Holdings Ltd converted a total of $2.35m USD of debt in the Company into common shares at a price
of $0.004 per share.
The issuance of the shares is exempt from registration
in reliance upon Section 4(2) and/or Regulation D of the Securities Act of 1933, as amended.
Item 3. Defaults upon Senior Securities
None
Item 4. Mine Safety
Disclosures
Not applicable.
Item 5. Other Information
On October 10, 2023, Mr. Tim Rogers resigned as Chief Financial Officer
and Mr. David Hitchcock resigned as company Secretary. On the same day, Mr. Nathan Thompson was appointed as Chief Financial Officer and
Secretary. At present, we do not have a compensation arrangement with Mr. Thompson.
On October 13, 2023, we revised the Audit Committee membership, with Mr.
Hunter Land appointed to serve on the audit committee of the company. The committee is now comprised of Ning Qu as Chairperson and Mr.
Land, both independent directors of ther company.
On October 16, 2023, Terry Raif was removed from the Board of Directors
by shareholder vote.
On October 20, 2023, the company dismissed Gries and Associtaes as the
company’s independent auditor and appointed GreenGrowth CPAs as the company’s independent auditor.
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: |
February 20, 2024 |
| |
|
| |
By:
/s/ David Hitchcock
David
Hitchcock
Title: Chief
Executive Officer (Principal Executive Officer) and Director |
| Date: |
February 20, 2024 |
| |
|
| |
By:
/s/ Nathan Thompson
Nathan
Thompson
Title:
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), and Director |
I, David Hitchcock, certify that;
| 1. |
|
I
have reviewed this Quarterly Report on Form 10-Q for the period ended December 31, 2023 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: February 20, 2024
/s/ David Hitchcock
By: David Hitchcock
Title: Chief Executive Officer, Principal Executive Officer
and Director
I, Nathan Thompson, certify that
| 1. |
|
I
have reviewed this Quarterly Report on Form 10-Q for the period ended December 31, 2023 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: February 20, 2024
/s/
Nathan Thompson
By:
Nathan Thompson
Title: Chief Financial Officer (Principal Financial Officer
and Principal Accounting Officer), and Director
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 December 31, 2023 filed with the Securities
and Exchange Commission (the “Report”), I, David Hitchcock, Chief Executive Officer and I, Nathan
Thompson, 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/ David Hitchcock |
| Name: |
David Hitchcock |
| Title: |
Chief Executive Officer and Director |
| Date: |
February 20, 2024 |
| By: |
/s/ Nathan
Thompson |
| Name: |
Nathan
Thompson |
| Title: |
Chief Financial Officer (Principal Financial Officer
and Principal Accounting Officer), and Director |
| Date: |
February 20, 2024 |
This certification has been furnished solely pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
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