Item 1. Financial Statements
Our
consolidated financial statements included in this Form 10-Q are as follows:
|
F-1
|
Consolidated Balance Sheets as of
June 30, 2021 and March 31, 2021 (unaudited);
|
|
F-2
|
Consolidated Statements of Operations for the three a months ended June 30, 2021 and 2020 (unaudited);
|
|
F-3
|
Consolidated Statement of Stockholders’ Deficit
for the period from January 1, 2021 to June 30, 2021 (unaudited);
|
|
F-4
|
Consolidated Statements of Cash
Flow for the three months ended June 30, 2021 and 2020 (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 June 30, 2021 are not necessarily indicative of the results that can be expected for the full year.
ALTEROLA
BIOTECH, INC.
UNAUDITED
CONSOLIDATED BALANCE SHEETS
AS
OF JUNE 30, 2021 AND MARCH 31, 2021
|
|
|
June
30, 2021
|
|
March
31, 2021
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Bank
|
|
$
|
387
|
|
|
$
|
519
|
|
Funds
in attorney trust account
|
|
|
12,773
|
|
|
|
|
|
Prepaid
|
|
|
2,067
|
|
|
|
—
|
|
Total
Current Assets
|
|
|
15,227
|
|
|
|
519
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
15,227
|
|
|
$
|
519
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
337,281
|
|
|
$
|
98,379
|
|
Accrued
expenses
|
|
|
164,346
|
|
|
|
20,244
|
|
Accrued
expenses- related party
|
|
|
330,000
|
|
|
|
562,665
|
|
Advances
from related party
|
|
|
79,096
|
|
|
|
78,350
|
|
Total
Current Liabilities
|
|
|
910,723
|
|
|
seam,
|
759,638
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
910,723
|
|
|
|
759,638
|
|
|
|
|
|
|
|
|
|
|
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, 754,280,000 and 754,280,000 shares issued and outstanding, respectively
|
|
|
754,280
|
|
|
|
754,280
|
|
Foreign
currency translation adjustment
|
|
|
160
|
|
|
|
(14,023)
|
|
Additional
paid-in capital
|
|
|
—
|
|
|
|
0
|
|
Accumulated
deficit
|
|
|
(1,649,936
|
)
|
|
|
(1,499,376)
|
|
Total
Stockholders’ Equity (Deficit)
|
|
|
(895,496
|
)
|
|
|
(759,119)
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
$
|
15,227
|
|
|
$
|
519
|
See
accompanying notes to financial statements.
ALTEROLA BIOTECH, INC.
UNAUDITED
CONSOLIDATED STATEMENT OF OPERATIONS
FOR
THE THREE MONTHS ENDED JUNE 30, 2021
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2021
|
|
|
|
|
|
|
REVENUES
|
|
$
|
—
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
Accounting and audit fees
|
|
|
8,392
|
|
Research and development
|
|
|
136,291
|
|
Legal fees
|
|
|
719
|
|
Directors fees
|
|
|
—
|
|
General and administrative expenses
|
|
|
5,158
|
|
TOTAL OPERATING EXPENSES
|
|
|
150,560
|
|
|
|
|
|
|
LOSS FROM OPERATIONS
|
|
|
(150,560)
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
Miscellaneous sale
|
|
|
—
|
|
TOTAL OTHER INCOME (EXPENSE)
|
|
|
—
|
|
|
|
|
|
|
PROVISION FOR INCOME TAXES
|
|
|
—
|
|
|
|
|
|
|
NET LOSS
|
|
$
|
(150,560)
|
|
|
|
|
|
|
NET LOSS PER SHARE: BASIC AND DILUTED
|
|
$
|
(0.00)
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED
|
|
|
754,280,000
|
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
UNAUDITED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR
THE PERIOD FROM JANUARY 7, 2021 (INCEPTION) TO MARCH 31 2021 AND JUNE 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
Amount
|
|
|
|
Additional
paid in capital
|
|
|
|
Accumulated
other comprehensive income ( loss)
|
|
|
|
Deficit
|
|
|
|
Total
|
|
Balance, January 7, 2021(inception)
|
|
|
100
|
|
|
$
|
136
|
|
|
|
—
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
136
|
|
Related party interest forgiven
|
|
|
—
|
|
|
|
—
|
|
|
|
1,544
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,544
|
|
Recapitalization on reverse merger
|
|
|
754,279,900
|
|
|
|
754,144
|
|
|
|
(1,544
|
)
|
|
|
—
|
|
|
|
(1,156,343
|
)
|
|
|
(403,743)
|
|
Change in foreign currency
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(14,023
|
)
|
|
|
|
|
|
|
(14,023)
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(343,033
|
)
|
|
|
(343,033)
|
|
Balance, March 31, 2021
|
|
|
754,280,000
|
|
|
$
|
754,280
|
|
|
|
—
|
|
|
$
|
(14,023
|
)
|
|
$
|
(1,499,376
|
)
|
|
$
|
(759,119)
|
|
Change in foreign currency
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
14,183
|
|
|
|
—
|
|
|
|
14,183
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(150,560
|
)
|
|
|
(150,560)
|
|
Balance, June 30, 2021
|
|
|
754,280,000
|
|
|
$
|
754,280
|
|
|
|
0
|
|
|
$
|
160
|
|
|
$
|
(1,649,936
|
)
|
|
$
|
(895,496)
|
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
UNAUDITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR
THREE MONTHS ENDED JUNE 30, 2021
|
|
|
|
|
|
|
|
Three
Months Ended June 30, 2021
|
|
CASH FLOWS
FROM OPERATING ACTIVITIES
|
|
|
|
|
Net
loss for the period
|
|
$
|
(150,560)
|
|
Changes
in assets and liabilities:
|
|
|
|
|
Increase
(decrease) in prepaid assets
|
|
|
(2,067)
|
|
Increase
(decrease) in accrued expenses -related party
|
|
|
(232,832)
|
|
Increase
(decrease) in accrued expenses
|
|
|
144,590
|
|
Increase
(decrease) in accounts payable
|
|
|
240,151
|
|
Net Cash Used by Operating
Activities
|
|
|
(718)
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
Net Cash Used by Investing
Activities
|
|
|
0
|
|
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES
|
|
|
|
|
Due
from related parties
|
|
|
746
|
|
Net Cash Provided by Financing
Activities
|
|
|
746
|
|
|
|
|
|
|
Effect of exchange rate adjustments
on cash
|
|
|
(160)
|
|
|
|
|
|
|
Net Increase (Decrease) in
Cash and Cash Equivalents
|
|
|
(132)
|
|
|
|
|
|
|
Cash
and cash equivalents, beginning of period
|
|
|
519
|
|
Cash
and cash equivalents, end of period
|
|
$
|
387
|
|
|
|
|
|
|
SUPPLEMENTAL
CASH FLOW INFORMATION
|
|
|
|
|
Interest
paid
|
|
$
|
—
|
|
Income
taxes paid
|
|
$
|
—
|
|
|
|
|
|
|
NON-CASH
INVESTING AND FINANCING INFORMATION
|
|
|
|
See
accompanying notes to financial statements.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED CONSOIDATED FINANCIAL STATEMENTS
JUNE
30, 2021
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.
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.
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 December 31, 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 is being 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.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United
State of America (GAAP accounting) and include the accounts of Alterola and its wholly owned subsidiaries ABTI Pharma, Phytotherapeutix
Ltd, Ferven Ltd., and Nano4M Ltd. All material intercompany transactions and balances have been eliminated.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED CONSOLIDATEDEDFINANCIAL STATEMENTS
JUNE
30, 2021
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
Funds
in attorney trust account
The
company does not have its own bank account. Amounts due from attorney 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 CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2021
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 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 June 30, 2021, 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.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2021
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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
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.
NOTE
3 – ACCRUED EXPENSES
Accrued
expenses consisted of the following at June 30, 2021 and March 31, 2021:
|
|
|
June 30, 2021
|
|
March 31, 2021
|
|
Audit fees
|
|
$
|
17,687
|
|
|
$
|
—
|
|
|
Accounting
|
|
|
5,600
|
|
|
|
5,600
|
|
|
Research and development
|
|
|
126,415
|
|
|
|
—
|
|
|
Legal fees and transfer agent
|
|
|
14,644
|
|
|
|
15,644
|
|
|
Total Accrued Expenses
|
|
$
|
164,346
|
|
|
$
|
20,244
|
|
NOTE
4 – CAPITAL STOCK
The
Company has 2,000,000,000 shares of $.001 par value common stock authorized and 10,000,000 shares of $.001 par value preferred stock
authorized.
The
Company has 754,280,000 and 754,280,000 shares of common stock issued and outstanding as of June 30, 2021 and March 31, 2021, respectively.
There are no shares of preferred stock issued and outstanding as of June 30, 2021 and March 31, 2021.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2021
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 June 30, 2021, a shareholder made advances to the company to fund operating expenses in the amount of $79,096. These
advances are non – interest bearing and have no specified terms of repayment.
During
the period ended June 30, 2021, the Company accrued director’s fees payable of $330,000.
NOTE
6 – LIQUIDITY & GOING CONCERN
Alterola
has negative working capital of $895,496, has incurred losses since inception of $1,649,936, 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
7 – SUBSEQUENT EVENTS
In
accordance with ASC Topic 855-10, the Company analyzed its operations subsequent to June 30, 2021 to the date these financial statements
were issued, and determined it does not have any material subsequent events to disclose in these financial statements.
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 is focused on activities involved in 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.
The 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:
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cannabinoid, cannabinoid-like and non-cannabinoid pharmaceutical active pharmaceutical ingredients (APIs) globally;
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pharmaceutical medicines made from cannabinoid, cannabinoid-like and non-cannabinoid APIs globally;
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cannabinoid, cannabinoid-like and non-cannabinoid food-grade ingredients with the aim of achieving European novel food approval of such ingredients;
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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
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Supply of cosmetic ingredients to potential customers who may develop products containing cannabinoids, cannabinoid-like and non-cannabinoid ingredients
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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 finance, capital markets, 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.
On May 24, 2021, we and the shareholders of ABTI Pharma memorialized a
new closing date in an amendment to the Agreement (the “Amendment”). We have already issued the 600,000,000 shares in anticipation
of the closing and the transaction closed on May 28, 2021, upon the filing of our December 31, 2020 quarterly report on Form 10-Q with
the Securities and Exchange Commission.
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. The Company will receive $100,000 net funding in July and expects a further
$400,000 to be deposited week ending August 20, 2021. It was previously noted that these funds will be available post the completion date,
but may exceed the 15 day deadline before this is available to the Company.
Further under the Agreement, Alterola will endeavor to raise a total of
at least $75,000,000 with $70,000,000 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 closing of the Agreement. The Company also
expects that these funds will be available in the month of September 2021, but may exceed the 45 day deadline before this is available
to the Company.
As part of the Agreement, Amsterdam Café Holdings Limited cancelled
and returned to us 200,000,000 shares it holds and we issued Bulls Run Investments Limited 19,100,000 shares of common stock. Another
2,000,000 shares were also issued for services rendered.
Operations of ABTI Pharma
ABTI Pharma Ltd is a UK-based pharmaceutical company developing cannabinoid,
cannabinoid-like, and non- cannabinoid pharmaceutical active pharmaceutical ingredients (APIs), pharmaceutical medicines made from cannabinoid,
cannabinoid-like, and non-cannabinoid APIs and targeting European novel food approval of cannabinoid-based, cannabinoid-like and non-cannabinoid
ingredients and products. In addition, the company is seeking to develop such bulk ingredients for supply into the cosmetic sector.
ABTI Pharma Ltd is a UK-based pharma company working with cannabinoid and
cannabinoid like molecules. It has 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, is a company which has been acquired, which 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, is a company, which is looking to produce cannabinoids by fermentation.
The exclusively licensed organism has the potential to be genetically modified to produce multiple cannabinoids at a 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, in principle agreements have been reached to bring a number
of other IP-protected technologies into Alterola via the deal with ABTI Pharma.
ABTI Pharma management has extensive proven experience, know-how and connections
in the cannabinoid medicines sector, and is looking to utilize this knowledge and experience for the development of such medicines from
existing cannabinoids and cannabinoid-like molecules.
Results of Operations for the Three Months Ended June 30, 2021 and 2020
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 $150,560 for the three months ended June
30, 2021, consisting mainly of research and development of $136,291.
We expect that our operation expenses will increase significantly for the
balance of the fiscal year ended March 31, 2022. This would be the result of increased research and development expenses associated with
our product candidates, the regulatory process of approval of those products, as well as the expenses associated with our reporting obligations
with the Securities and Exchange Commission.
We recorded a net loss of $150,560 for the three months ended June 30,
2021.
As a newly 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 June 30, 2021, we had $15,227 in current assets and currently liabilities
of $910,723. We had a working capital deficit of $895,496 as of June 30, 2021.
We had insignificant operating, investing or financing cash flows to report
for the three months ended June 30, 2021 and 2020.
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.
Subsequent to the reporting period, we received $100,000 in funding in
July and we entered into an equity line financing for up to $125,000,000. The terms of this financing are set forth below in this quarterly
report. The company is hopeful that this financing may assist the company to raise the funds needed to implement its business plan. The
financing, however, is conditional on filing a registration statement with the Securities and Exchange Commission and other factors set
forth in the definitive agreements. If we are unable to use the equity line, or we are limited in the amounts of funds we are able to
draw from such line, we may not realize the funds necessary to implement our business plan exclusively from this equity line financing.
Off Balance Sheet Arrangements
As of June 30, 2021, 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 $895,496 and have incurred losses since inception of $1,649,936. 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.