NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
JUNE
30, 2019
NOTE
1 – NATURE OF BUSINESS
Alterola
Biotech, Inc. (“Alterola” and the “Company”) is a development stage company and was incorporated in Nevada
on July 21, 2008. The Company was formed to acquire exploration and development stage mineral properties.
On
October 1, 2008, the Company incorporated JRE Exploration Ltd, (“JRE”) a wholly owned subsidiary in Canada to hold
its Canadian mineral claims.
On
May 3, 2010, the Company changed its focus to the development of intellectual property and accordingly sold JRE to the former
president. In keeping with the change of business focus, on July 9, 2010, the Company changed its name to Alterola Biotech Inc.
In
April 2017, the Company entered into an assignment agreement with its director to convey all assets and intellectual property
to its former director for the cancellation of 37,000,000 shares of the Company.
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
JUNE
30, 2019
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 represents fund 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 UNAUDITED FINANCIAL STATEMENTS
JUNE
30, 2019
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.
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. As of September 30,
2018, $36,000 of stock-based compensation has been recorded as a prepaid expense.
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 FINANCIAL STATEMENTS
JUNE
30, 2019
NOTE
3 – NOTES PAYABLE
Notes
payable consisted of the following at June 30, 2019 and September 30, 2018:
|
|
June 30, 2019
|
|
September 30, 2018
|
|
|
|
|
|
Note payable, secured by assets of the company, bearing interest at 5% due on April 25, 2023
|
|
|
0
|
|
|
|
19,950
|
|
|
|
0
|
|
|
|
19,950
|
Less: current portion
|
|
|
(0
|
)
|
|
|
(0)
|
|
|
|
|
|
|
|
|
Total Notes payable
|
|
$
|
0
|
|
|
$
|
19,950
|
The
Convertible note was convertible at the option of the holder. The number of shares of common stock into which the convertible
note was to be converted is determined by the Fair Market Price (“FMV”) of the common stock at the date of conversion.
In the event there is no determinable market price the FMV shall be:
a)
The share price at the last private offering of the common stock, or, b) the 30 day moving average of the Common Stock in the
event a public listing of the common stock has taken place.
Interest
expense was $249 and $9,848 for the periods ended June 30, 2019 and 2018, respectively.
On
March 28, 2018 the Company entered into agreements with its debt holders to forgive promissory notes and accrued interest of $
282,178. As a result, the Company has reclassified debt and interest payable to additional paid in equity for $ 282,178 in the
financial statements for the year ended September 30, 2018. On December 31, 2018 the Company entered into agreements with a debt
holder to forgive additional promissory notes and accrued interest of $21,559. As a result, the Company has reclassified debt
and interest payable to additional paid in equity for $21,559 in the financial statements for the period ended December 31, 2018.
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. As the services
are to be provided over a period from April 1, 2018 to January 31, 2019, the company has recorded $63,000 as prepaid stock based
compensation.
The
Company has 115,980,000 and 115,980,000 shares of common stock issued and outstanding as of June 30, 2019 and September 30, 2018
respectively. There are no shares of preferred stock issued and outstanding as of June 30, 2019 and September 30, 2018.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
JUNE
30, 2019
NOTE
5 - 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 June 30, 2019 and 2018:
|
|
2019
|
|
2018
|
Current:
|
|
|
|
|
|
|
|
Federal income taxes (benefit)
|
|
|
(41,565
|
)
|
|
$
|
(23,665)
|
State income taxes
|
|
|
—
|
|
|
|
—
|
Deferred Benefit from net operating loss
|
|
|
—
|
|
|
|
—
|
|
|
$
|
(41,565
|
)
|
|
$
|
(23,665)
|
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:
|
|
2019
|
|
2018
|
Expected tax expense (benefit) using regular rates
|
|
$
|
41,565
|
|
|
$
|
23,665
|
State minimum tax
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
(41,565
|
)
|
|
|
(23,665)
|
Tax Provision
|
|
$
|
—
|
|
|
$
|
—
|
The
Company has loss carry forwards totaling $857,071 that may be offset against future federal income taxes. If not used, the carry
forwards will expire between 2028 and 2039. The change in control may limit the amount of loss carryforward that may be utilized.
At
June 30, 2019 and September 30, 2018, the significant components of the deferred tax assets are summarized below:
|
|
June 30,2019
|
|
September 30, 2018
|
Deferred income tax asset
|
|
|
|
|
|
|
|
Net operation loss carryforwards
|
|
|
301,689
|
|
|
|
260,039
|
Total deferred income tax asset
|
|
|
301,689
|
|
|
|
260,039
|
Less: valuation allowance
|
|
|
(301,689
|
)
|
|
|
(260,039)
|
Total deferred income tax asset
|
|
$
|
—
|
|
|
$
|
—
|
The
federal income tax returns of the Company for 2018 and 2017 are subject to examination by the IRS, generally for three years after
they were filed.
.
NOTE
6 – 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 June 30, 2019, the Company accrued director’s fees payable of $150,000.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
JUNE
30, 2019
NOTE
7 – LIQUIDITY & GOING CONCERN
Alterola
has negative working capital, has incurred losses since inception, 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. As of 6/30/2019,
the Company had negative working capital of $156,258 and accumulated deficit of $834,825
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 – SUBSEQUENT EVENTS
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
December 2, 2020, the board of directors accepted the resignations of Irving Aronson as Chairman and Director, Peter Maddocks
as CFO and Director, Oliver Aubrey as Chief Medical Officer and Director, Rene Lauritsen as COO and Director, and Larson Elmore
as CEO. Dr. Daniel Reshef and Lalit Kumar will remain as Directors of the Board. Mr. Elmore will continue as Vice Chairman, Director
and Secretary of our company.
Also on December 2, 2020, we have appointed the following officers and directors: Tim Rogers as the CEO and Director, and Director,
Dominic Schiller as Director & IP Counsel, Seamus McAuley as Chief Commercial Officer and Director, Daniel Reshef as Vice
Chairman Medical Director and Zohar Koren as Advisory Medical Director.