UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
| [X] |
Quarterly
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| |
|
| |
For
the quarterly period ended October 31, 2014 |
| |
|
| [
] |
Transition
Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
| |
|
| |
For
the transition period from __________ to __________ |
| |
|
| |
Commission
File Number: 333-176736 |
Altovida,
Inc.
(Exact
name of registrant as specified in its charter)
| Nevada |
45-2759045 |
| (State
or other jurisdiction of incorporation or organization) |
(IRS
Employer Identification No.) |
| |
| BioCity
Scotland, Newhouse, Lanarkshire, UK ML1 5UH |
| (Address
of principal executive offices) |
| |
| +44
1698 53 9797 |
| (Registrant’s
telephone number) |
| |
| _______________________________________________________________ |
| (Former
name, former address and former fiscal year, if changed since last report) |
Indicated
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days Yes [ ] No [X]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted 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 and post such files). Yes [ ]
No [X]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.
[
] Large accelerated filer
[
] Non-accelerated filer |
[
] Accelerated filer
[X]
Smaller reporting company |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
[ ] No [X]
State
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 77,650,166
as of December 01, 2014.
PART
I - FINANCIAL INFORMATION
Item
1. Financial Statements
Our
financial statements included in this Form 10-Q are as follows:
| F-1 |
Condensed
Consolidated Balance Sheets as of October 31, 2014 and July 31, 2014 (unaudited); |
| F-2 |
Condensed
Consolidated Statements of Operations for the three months ended October 31, 2014 and the period from November 22, 2013 (inception)
to July 31, 2014 (unaudited); |
| F-3 |
Condensed
Consolidated Statement of Other Comprehensive (Loss) for the period from November 22,2013 (inception) to October 31, 2014
(unaudited); |
| F-4 |
Condensed
Consolidated Statements of Cash Flows for the three months ended October 31, 2014 and the period from November 22, 2013 (inception)
to October 31, 2014 (unaudited); |
| F-5 |
Notes
to Condensed Financial Statements. |
These
unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America for interim financial information and the 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 October 31, 2014
are not necessarily indicative of the results that can be expected for the full year.
ALTOVIDA,
INC.
Condensed
Consolidated Balance Sheet
(Unaudited)
| |
October
31, | |
July 31, |
| | |
2014 | |
2014 |
| ASSETS | |
| |
|
| Current assets: | |
| | | |
| | |
| Cash | |
$ | 33,447 | | |
$ | 210,399 | |
| Accounts receivable | |
| 50,298 | | |
| 44,508 | |
| Prepaid and deposits | |
| 17,273 | | |
| 3,381 | |
| Inventory | |
| 46,806 | | |
| 49,718 | |
| Other
current assets | |
| 13,270 | | |
| 57,402 | |
| Total current assets | |
| 161,094 | | |
| 365,408 | |
| Fixed assets: | |
| | | |
| | |
| Equipment,
net of accumulated depreciation of $1,346 and $353, respectively | |
| 20,523 | | |
| 20,141 | |
| Total
assets | |
$ | 181,617 | | |
$ | 385,549 | |
| LIABILITIES AND STOCKHOLDERS'
(DEFICIT) | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts
payable and accrued liabilities | |
$ | 386,668 | | |
$ | 344,995 | |
| Total current liabilities | |
| 386,668 | | |
| 344,995 | |
| Long term liabilities: | |
| | | |
| | |
| Note
payable | |
| 445,000 | | |
| 445,000 | |
| Total long-term liabilities | |
| 445,000 | | |
| 445,000 | |
| Total
liabilities | |
| 831,668 | | |
| 789,995 | |
| Stockholders' (deficit): | |
| | | |
| | |
| Preferred stock, $0.001
par value; 10,000,000 shares authorized; no shares issued and outstanding as of October 31, 2014 and July 31, 2014, respectively | |
| — | | |
| — | |
| Common stock, $0.001
par value; 90,000,000 shares authorized; 77,650,166 and 89,930,166 issued and outstanding at October 31, 2014 and July 31,
2014, respectively | |
| 77,650 | | |
| 89,930 | |
| Subscription receivable | |
| (62,300 | ) | |
| (74,580 | ) |
| Additional paid in
capital | |
| 364,684 | | |
| 364,684 | |
| Other comprehensive
income | |
| 73,392 | | |
| (10,958 | ) |
| Accumulated
(deficit) | |
| (1,103,447 | ) | |
| (773,522 | ) |
| Total
stockholders' (deficit) | |
| (650,051 | ) | |
| (404,446 | ) |
| Total
liabilities and stockholders' deficit | |
$ | 181,617 | | |
$ | 385,549 | |
The
notes are an integral part to these condensed consolidated financial statements.
ALTOVIDA,
INC.
Condensed
Consolidated Statement of Operations
(unaudited)
| |
Three
Months Ended | |
November 22, 2013 |
| |
October
31, | |
(Inception) to |
| | |
2014 | |
October
31, 2014 |
| Revenue: | |
| | | |
| | |
| Sales
income | |
$ | 78,952 | | |
$ | 143,865 | |
| Cost of sales | |
| 38,599 | | |
| 86,067 | |
| Gross profit | |
| 40,353 | | |
| 57,798 | |
| Operating expenses | |
| | | |
| | |
| General and administrative | |
| 23,610 | | |
| 112,663 | |
| Professional fees | |
| 46,144 | | |
| 301,433 | |
| Rent expense | |
| 30,988 | | |
| 156,380 | |
| Research and development | |
| 77,907 | | |
| 110,891 | |
| Salaries
and wages | |
| 138,335 | | |
| 436,681 | |
| Total
operating expenses | |
| 316,984 | | |
| 1,118,048 | |
| (Loss)
from operations | |
| (276,631 | ) | |
| (1,060,250 | ) |
| Other income (expense) | |
| | | |
| | |
| Interest expense | |
| (6,675 | ) | |
| (12,943 | ) |
| Gain on forgiveness
of debt | |
| — | | |
| 24,000 | |
| (Loss)
on foreign currency transactions | |
| (46,649 | ) | |
| (54,284 | ) |
| Total
other income (expense) | |
| (53,324 | ) | |
| (43,227 | ) |
| Net
loss | |
$ | (329,955 | ) | |
$ | (1,103,447 | ) |
| Net loss per common
share - Basic and diluted | |
$ | (0.00 | ) | |
$ | (0.05 | ) |
| Weighted average shares outstanding
- Basic and diluted | |
| 84,872,087 | | |
| 22,361,319 | |
The
notes are an integral part to these condensed consolidated financial statements.
ALTOVIDA,
INC.
Condensed
Consolidated Statement of Other Comprehensive (Loss)
(unaudited)
| |
November 22, 2013 |
| |
(Inception) to |
| |
October
31, 2014 |
| Balance, July 31, 2014 | |
| (784,480 | ) |
| Net (loss) | |
| (329,955 | ) |
| Cummulative translation
adjustment: | |
| | |
| Foreign currency translation | |
| 84,350 | |
| Total comprehensive
(loss) | |
$ | (1,030,085 | ) |
The
notes are an integral part to these condensed consolidated financial statements.
ALTOVIDA,
INC.
Condensed
Consolidated Statement of Cash Flows
(Unaudited)
| |
Three
Months Ended | |
November 22, 2013 |
| |
October
31, | |
(Inception) to |
| | |
2014 | |
October
31, 2014 |
| Cash flows from operating
activities | |
| | | |
| | |
| Net (loss) | |
$ | (329,955 | ) | |
$ | (1,103,447 | ) |
| Adjustments to reconcile
net loss to net cash used in operating activities | |
| | | |
| | |
| Depreciation | |
| 993 | | |
| 1,346 | |
| Gain on forgiveness
of debt | |
| — | | |
| (24,000 | ) |
| (Gain) loss on foreign
currency transactions | |
| 46,649 | | |
| 54,284 | |
| Changes in operating
assets and liabilities | |
| | | |
| | |
| (Increase) in accounts
receivable | |
| (5,790 | ) | |
| (50,298 | ) |
| (Increase) decrease
in inventory | |
| 2,912 | | |
| (46,806 | ) |
| (Increase) in prepaid
expenses | |
| (13,892 | ) | |
| (17,273 | ) |
| (Increase) decrease
in other assets | |
| 44,132 | | |
| (13,270 | ) |
| Increase
in accounts payable and accrued liabilities | |
| 79,374 | | |
| 366,806 | |
| Net
cash used in operating activities | |
| (175,577 | ) | |
| (832,688 | ) |
| Cash flows from investing
activities | |
| | | |
| | |
| Purchase
of fixed assets | |
| (1,375 | ) | |
| (21,865 | ) |
| Net
cash provided by inventing activities | |
| (1,375 | ) | |
| (21,865 | ) |
| Cash flows from financing
activities | |
| | | |
| | |
| Proceeds from cash
advances | |
| — | | |
| 50,000 | |
| Proceeds from loans
payable | |
| — | | |
| 419,000 | |
| Proceeds
from the sale of common stock | |
| — | | |
| 419,000 | |
| Net
cash provided by financing activities | |
| — | | |
| 888,000 | |
| Net change in cash | |
| (176,952 | ) | |
| 33,447 | |
| Cash at beginning
of period | |
| 210,399 | | |
| — | |
| Cash at end of
period | |
$ | 33,447 | | |
$ | 33,447 | |
| | |
| — | | |
| — | |
| Supplemental cash flow
Information: | |
| | | |
| | |
| Cash
paid for interest | |
$ | — | | |
$ | — | |
| Cash
paid for income taxes | |
$ | — | | |
$ | — | |
| Supplemental disclosure
of non-cash investing and financing activities: | |
| | | |
| | |
| Accounts
payable and accrued liabilities assumed through acquisition | |
$ | — | | |
$ | 45,915 | |
The
notes are an integral part to these condensed consolidated financial statements.
Altovida,
Inc.
Notes
To Condensed Consolidated Financial Statements
(unaudited)
Note
1 - Nature of Business and Summary of Significant Accounting Policies
Nature
of Operations
Altovida,
Inc. (the "Company") was originally incorporated under the laws of the State of Nevada on July 15, 2011 as Remmington
Enterprises, Inc. On May 02 2014, Remmington Enterprises, Inc. acquired Altovida Biosciences Ltd (formerly Mitovie Pharma
Europe Ltd) and changed its business focus from the mining activities to the pharmaceutical industry. Following the acquisition,
the Company amended its articles of incorporation to change its name from Remmington Enterprises, Inc. to Altovida, Inc. on October
29, 2014.
Basis
of Presentation
The
condensed interim financial statements included herein, presented in accordance with United States generally accepted accounting
principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These
statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary
for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in
conjunction with the financial statements of the Company for the period ended July 31, 2014 and notes thereto included in the
Company's Form 10-K. The Company follows the same accounting policies in the preparation of interim reports.
Results
of operations for the interim periods are not indicative of annual results.
The
Company has adopted a July 31 year end.
Principles
of consolidation
The
consolidated financial statements include the accounts of Altovida, Inc. and Altovida Biosciences Ltd. All significant intercompany
balances and transactions have been eliminated. Altovida, Inc. and Altovida Biosciences Ltd will be collectively referred herein
to as the “Company”.
Use
of Estimates
The
preparation of financial statements in accordance with United States generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions
related to stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions
on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs
and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially
and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual
results, future results of operations will be affected.
Cash
and Cash Equivalents
The
Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At
October 31, 2014, the Company had $33,447 in cash and no cash equivalents.
Note
1 - Nature of Business and Summary of Significant Accounting Policies (Continued)
Property
and Equipment
Property
and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements,
maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of,
the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results
of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using
the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated)
for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows:
Equipment 3-5
years
Furniture
7 years
The
Company reviews the carrying value of property, plant, and equipment for impairment whenever events and circumstances indicate
that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use
and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment
loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by
management in performing this assessment include current operating results, trends and prospects, the manner in which the property
is used, and the effects of obsolescence, demand, competition, and other economic factors. Based on this assessment there were
no impairments needed as of October 31, 2014.
Inventory
Inventories
consist of merchandise held for sale in the ordinary course of business, including cost of freight and other miscellaneous acquisition
costs, and are stated at the lower of cost, or market value determined on the first-in-first-out basis. The Company records a
write-down for inventories, which have become obsolete or are in excess of anticipated demand or net realizable value. The Company
performs a detailed review of inventory each period that considers multiple factors including demand forecasts, market conditions,
product life cycle status, product development plans and current sales levels. If future demand or market conditions for the Company’s
products are less favorable than forecasted or if unforeseen changes negatively affect the utility of the Company’s inventory,
it may be required to record additional write-downs, which would negatively affect gross margins in the period when the write-downs
are recorded. If actual market conditions are more favorable, the Company may have higher gross margins when products incorporating
inventory that were previously written down are sold.
Fair
Value of Financial Instruments
Financial
instruments consist of cash, inventory, prepaid expenses, accounts payable, and notes payable. Recorded values of these instruments
approximate their fair values due to the short-term maturities of such instruments. Recorded values for notes payable and related
liabilities approximate fair values, since their stated or imputed interest rates are commensurate with prevailing market rates
for similar obligations.
Note
1 - Nature of Business and Summary of Significant Accounting Policies (Continued)
Earnings
(Loss) Per Share
The
Company reports earnings (loss) per share in accordance with ASC Topic 260-10. Basic earnings (loss) per share is computed by
dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings
(loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the potential common shares had been issued and if the
additional common shares were dilutive. As of October 31, 2014, there were no potential common shares underlying warrants or options.
Revenue
Recognition
The
Company recognized revenue at point of sale of product utilizing the following general revenue recognition criteria: 1) sales
order received, and; 2) the price to the buyer is fixed or determinable; and 3) good have been shipped; and 4) collectability
is reasonably assured.
Income
Taxes
Income
taxes are accounted for under the asset and liability method in accordance with ASC Topic 740-10. Deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating loss carry-forwards. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date. When it is considered to be more likely than not that a deferred tax
asset will not be realized, a valuation allowance is provided for the excess.
Foreign
Currency
The
Company accounts for foreign currency in accordance with ASC Topic 830 “Foreign Currency” whereby the local currency
is the functional currency. Assets and liabilities of the Company’s foreign locations are translated to reporting currency
at the rate of exchange existing at the balance sheet date. Income statement amounts are translated at a weighted average monthly
exchange rate for each reporting period. The cumulative translation adjustments resulting from changes in exchange rates are included
in the consolidated balance sheet as “Other comprehensive income”, a separate component of stockholders’ equity.
Transaction gains and losses are included in the consolidated statement of operations. As of October 31, 2014, the Company recorded
$84,350 in translation gains related to foreign currency translation.
New
Accounting Standards
On
June 10, 2014, the Financial Accounting Standards Board (FASB) issued a new accounting statement that reduces some of disclosures
and reporting requirements for development stage companies. The change will be in effect for the interim and annual periods beginning
after December 15, 2014. As of such date, among other things development stage entities will no longer be required to report inception-to-date
information. The company has elected early adoption of this pronouncement and will no longer being reporting inception-to-date
information.
Note
1 - Nature of Business and Summary of Significant Accounting Policies (Continued)
There
are no other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the
SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements.
Note
2 - Going Concern
The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business. The Company recorded a net loss of $329,995 for the period of
August 01, 2014 to October 31, 2014. These conditions give rise to doubt about the Company’s ability to continue as a going
concern. These financial statements do not include adjustments relating to the recoverability and classification of reported asset
amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a
going concern. The Company’s continuation as a going concern is dependent upon its ability to obtain additional financing
or sale of its common stock as may be required and ultimately to attain profitability per the current business plan.
Note
3 - Business Combination
On
May 2, 2014, the Company completed its acquisition of Altovida Biosciences, Ltd. (“Altovida”). In accordance with
the terms of the Exchange Agreement, the Company issued 12,280,000 shares of its common stock to the shareholders of Altovida
in exchange for all the outstanding stock of Altovida. Due to the change in control and form of consideration given, the transaction
is being accounted for as a recapitalization of Altovida. Whereby Altovida is the accounting acquirer and the Company is the legal
acquirer. Accordingly, it is the historic financial statements of Altovida retroactively restated giving effect to the accounting
recapitalization. There were 15,505,000 shares of the Company’s common stock outstanding before giving effect to the stock
issuances in the exchange. Immediately following the exchange, the Company’s majority shareholder cancelled its 12,050,000
shares. In connection with the Share Exchange Agreement, the Company entered into a Lock-Up Agreement with the acquiring shareholders
whereby the Company and the shareholders agree to a one year prohibition on the sales or transfers of common stock held by the
shareholders.
Note
4 - Related Party Transactions
Services
Agreements
On
May 2, 2014, the Company appointed three officers of Altovida as officers and directors of the Company and assumed liabilities
related to previously issued compensation agreements. Pursuant to the original agreements, effective as of March 1, 2014 provide
for annual compensation to each executive of approximately $167,110 (£100,000) and standard employee benefits subject to
a probationary period of six-months. The term of the agreement is indefinite but may be cancelled with six month written notice
by either party.
Note
5 - Notes payable
On
May 1, 2014, the Company entered into a Replacement Promissory Note in the amount of $419,000 with Knight Financial, Ltd. (“Knight”)
in contemplation of its May 2, 2014 Share Exchange Agreement.
Note
5 - Notes payable (Continued)
Whereas,
Altovida previously issued a Senior Secured Bridge Loan in the principal amount of $81,421 and received a cash advance in the
amount of $50,000 of which Knight agreed to forgive $24,000. The new note was issued by the Company for the purpose of reflecting
all amounts owed to Knight and to restate the terms of the aforementioned security agreement. The replacement note bears interest
at a rate of 6% per annum, matures on May 1, 2018 and is secured by all the assets of the Company.
As
of October 31, 2014, the unpaid principle balance totaled $445,000 and accrued interest amounted to $12,943. Additionally the
Company recorded interest expense for the three month period in the amount of $6,675.
Note
6 - Stockholders’ Deficit
We
are authorized to issue up to 90,000,000 shares of $0.001 par value common stock and 10,000,000 shares of $0.001 par value preferred
stock. The Preferred Stock may be issued in one or more series, with all rights and preferences being determined by the board
of directors.
Preferred
Stock
The
voting rights, rate of dividends preference in relation to other classes or series, and rights in the event of liquidation related
to shares of Preferred Stock of any series are determined by the board of directors and may vary from time to time.
Common
Stock
Holders
of common stock have voting rights equal to one vote for each share of Common Stock held and are entitled to receive dividends
when, and if declared by the board of directors subject to the rights of any Preferred Stock having preference as to dividends.
In the event of liquidation or dissolution, subject to the rights of Preferred Stock holders are entitled to share ratably in
the Corporations assets. Holders of Common Stock do not have conversion, redemption or preemptive rights.
On
May 2, 2014, the Company sold Knight Financial, Ltd. 69,833 common shares at a price of $6 per share, for a total proceeds of
$419,000. As of October 31, 2014 the shares were unissued.
On
June 20, 2014, the Company issued 37,325,083 shares to its CEO, Michael Richard Hawthorne, and 37,325,083 to its Executive Chairman,
Vinod Kaushal at $0.001 per share.
On
September 23, 2014, the Company cancelled 12,280,000 shares of its common stock of which 5,800,000 related to the issuance on
June 20, 2014 to the Company’s CEO, Michael Hawthorne, and 5,800,000 related to the issuance on June 20, 2014 to its Executive
Chairman, Vinod Kaushal.
The
$64,650 due for the adjusted share balance due from related parties has not been paid as of October 31, 2014 and remains a subscription
receivable.
Note
7 - Subsequent Events
In
accordance with ASC 855, management evaluated all activity of the Company through the issue date of the financial statements and
concluded that no subsequent events have occurred that would require recognition or disclosure in the 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.” 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. 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.
Overview
We
are a rapidly growing biopharmaceutical company focused on the development and commercialization of medicines in areas of real
clinical need. Currently, we operate through our wholly-owned subsidiary, Altovida Biosciences Limited based in Scotland, UK.
We
believe we adopt a unique approach to management of the risks associated with drug development. We do this in two ways
- by the sale
of a portfolio of commercial drugs which we market predominantly in the European markets; and
- our pipeline
of soon to market drug development projects
Whilst
the commercial products offer the opportunity for revenue growth, the main thrust of the business is to complete the development
of high-value projects and commercialize them in the main global markets (initially through partners), with a priority focus on
the USA and Europe.
The
current development portfolio includes 5 high-value, relatively low-risk medicines which we are working to bring to market in
the US and Europe within our current planning period.
Of
these we have two lead projects: ALT022 and ALT025. These medicines are auto-injector versions of naloxone (for the treatment
of opioid overdose) and midazolam (for sedation and the treatment of acute seizures), respectively.
Cost
from initiation to registration for the development projects is very low by regular pharma terms. Time to market for each of the
lead projects is approximately 2.5 years. During that time, we plan to engage in development activities, compile regulatory dossiers
and submit for approval to the regulatory authorities (e.g., the FDA).
Work
is progressing well in our lead projects and we believe that should this continue our time to market expectations will be met.
This is however, dependent on further funding.
The
founders have so far invested $3.4 million in the company’s pipeline. We will need to raise capital to bring our development
product portfolio to market. We raised roughly $850,000 to commence our first project, ALT022, but will need an estimated $10
million in order to commence work on all projects in the pipeline. If we are unable to raise these funds, our plan is to finish
our first project and then commence subsequent projects with revenues generated from ALT022.
The
commercial product portfolio includes proprietary medicines and recently in-licensed therapies. This is supported by small scale,
inexpensive in-house manufacturing which ensures continuity of supply of these critical medicines and favorable product margins.
Results
of Operations for the three months ended October 31, 2014.
Revenues
We
had revenues of $78,952 for the three months ended October 31, 2014. Our revenue is growing and we anticipate it will continue
to grow, however, we are a development stage company and there is no guarantee that we will be able to successfully execute our
business plan and this could have a detrimental impact on revenue. Gross profit for the three months ended October 31, 2014 was
$40,353, or 51.1% of revenues.
Operating
Expenses
Operating
expenses were $316,984 for the three months ended October 31, 2014 these consisted of salaries and wages of $138,335, professional
fees of $46,144, rent expenses of $30,988, general and administrative expenses of $23,610 and research and development of $77,907.
Other
(Expenses)
During
the three moth period we had total other expenses in the amount of $53,324 comprised of interest expense in the amount of $6,675
and a loss on our foreign currency transactions of $46,649. We anticipate interest to remain consistent through out the remainder
of the year. Our loss on foreign currency transactions will continue to fluctuate in concert with the foreign exchange rates between
the U.S. dollar and the British pound.
We
anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to development,
administrative and operating costs associated with our planned activities and the professional fees associated with our reporting
obligations under the Securities Exchange Act of 1934. We intend to closely monitor and align our operating costs to our anticipated
revenue growth.
We
had a net loss of $329,955 for the three months ended October 31, 2014.
Liquidity
and Capital Resources
As
of October 31, 2014, we had current assets of $161,094 and current liabilities of $386,668. Thus, we had a working capital deficit
of $225,574 as of October 31, 2014.
Operating
activities used $175,577 in cash for the three months ended October 31, 2014. Our negative operating cash flow for the period
was mainly a result of our net loss for the period.
Investing
activities for the three months ended October 31, 2014 used $1,375 for the purchase of fixed assets.
There
were no financing activities in the three month period to October 31, 2014.
The
success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund
operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working
capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement
or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable
terms, or at all.
Going
Concern
The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business. We had net (loss) from operations of $276,631 and a total net
(loss) of $329,955 during the three months ended October 31, 2014 and had an accumulated (deficit) of $1,103,477.
These
conditions give rise to doubt about our ability to continue as a going concern. These financial statements do not include adjustments
relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that
might be necessary should we be unable to continue as a going concern. Our continuation as a going concern is dependent upon its
ability to obtain additional financing or sale of our common stock as may be required and ultimately to attain profitability.
Off
Balance Sheet Arrangements
As
of October 31, 2014, there were no off balance sheet arrangements.
Critical
Accounting Policies
In
December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management
Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the
portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or
complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Currently, we do not believe that any accounting policies fit this definition.
Recently
Issued Accounting Pronouncements
On
June 10, 2014, the Financial Accounting Standards Board (FASB) issued a new accounting statement that reduces some of disclosures
and reporting requirements for development stage companies. The change will be in effect for the interim and annual periods beginning
after December 15, 2014. As of such date, among other things development stage entities will no longer be required to report inception-to-date
information. We have elected early adoption of this pronouncement and will no longer being reporting inception-to-date information.
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 October 31, 2014. 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 October 31 2014, 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 October 31, 2014, our disclosure controls and procedures were not effective: (i) inadequate segregation
of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting
with respect to the requirements and application of both US GAAP and SEC guidelines.
Remediation
Plan to Address the Material Weaknesses in Internal Control over Financial Reporting
Our
company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period
covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To
remediate such weaknesses, we plan to implement the following changes during our fiscal year ending July 31, 2015: (i) appoint
additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient
written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent
upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing
such funds, remediation efforts may be adversely affected in a material manner.
Changes
in Internal Control over Financial Reporting
There
were no changes in our internal control over financial reporting during the three months ended October 31, 2014 that have materially
affected, or are reasonable likely to materially affect, our internal control over financial reporting.
Limitations
on the Effectiveness of Internal Controls
Our
management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily
prevent all fraud and material error. Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud,
if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making
can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by
the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The
design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time,
control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may
deteriorate.
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
A
smaller reporting company is not required to provide the information required by this Item.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
There
have been no issuances of securities without registration under the Securities Act of 1933 during the reporting period.
Item
3. Defaults upon Senior Securities
None
Item
4. Mine Safety Disclosures
Not
applicable.
Item
5. Other Information
None.
Item
6. Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
| |
Altovida,
Inc. |
| |
|
| Date: |
December
12, 2014 |
| |
|
| By: |
/s/
Michael Richard Hawthorne
Michael
Richard Hawthorne |
| Title: |
Chief
Executive Officer and Director |
CERTIFICATIONS
I, Michael Richard Hawthorne, certify that;
| 1. |
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended October 31, 20144 of Altovida 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: December 12, 2014
/s/ Michael Richard Hawthorne
By: Michael Richard Hawthorne
Title: Chief Executive Officer
CERTIFICATIONS
I, Lorna Peers, certify that;
| 1. |
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended October 31, 20144 of Altovida 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: December 12, 2014
/s/ Lorna Peers
By: Lorna Peers
Title: Chief Financial Officer
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND
CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
In connection with the quarterly
Report of Altovida Inc. (the “Company”) on Form 10-Q for the quarter ended October 31, 20144 filed with the
Securities and Exchange Commission (the “Report”), I, Michael Richard Hawthorne, Chief Executive Officer of the
Company, and I, Lorna Peers, 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/ Michael Richard Hawthorne |
| Name: |
Michael Richard Hawthorne |
| Title: |
Principal Executive Officer and Director |
| Date: |
December 12, 2014 |
| By: |
/s/ Lorna Peers |
| Name: |
Lorna Peers |
| Title: |
Principal Financial Officer and Director |
| Date: |
December 12, 2014 |
This certification has been furnished solely pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.