These financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for interim financial information and the Securities Exchange
Commission (“SEC”) instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary
for a fair presentation have been included. Operating results for the interim period ended December 31, 2019 are not
necessarily indicative of the results that can be expected for the full year.
NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER
31, 2019
NOTE
1 – NATURE OF BUSINESS
After
formation, the Company was in the business of mineral exploration. On May 3, 2010, the Company sold its mineral exploration business
and entered into an Intellectual Property Assignment Agreement (“IP Agreement”) with Soren Nielsen pursuant to which
Mr. Nielsen transferred his right, title and interest in all intellectual property relating to certain chewing gum compositions
having appetite suppressant activity (the “IP”) to the Company for the issuance of 55,000,000 shares of the Company’s
common stock.
Following
the acquisition of the IP the Company changed its business direction to pursue the development of chewing gums for the delivery
of Nutraceutical/functional ingredients for applications such as appetite suppressant, cholesterol suppressant, vitamin delivery,
antioxidant delivery and motion sickness suppressant.
On
June 21, 2018, the Company signed an escrow agreement with Mr. Lauritsen to serve as its Chief Operating Officer and to contribute
the IP for the company’s chewing gum business. In that agreement, the Company compensated Mr. Lauritsen with 1,000,000 shares
of its common stock and cash in the amount of $90,000 USD. In March 2019, the Company issued 1,000,000 shares of common stock
to Mr. Lauritsen rendered with a deemed value of services provided of $ 90,000.
The
business plan of the company will no longer be focused on a chewing gum delivery system but it will re-focus its activities to
the development of cannabinoid, cannabinoid-like, and non-cannabinoid pharmaceutical active pharmaceutical ingredients (APIs),
pharmaceutical medicines made from cannabinoid, cannabinoid-like, and non-cannabinoid APIs and European novel food approval of
cannabinoid-based, cannabinoid-like and non-cannabinoid ingredients and products .In addition, the company plans to develop such
bulk ingredients for supply into the cosmetic sector.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting
Basis
The
Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP”
accounting). The Company has a September 30 fiscal year end.
Basis
of Presentation
The
accompanying unaudited interim financial statements of Alterola Biotech Inc. have been prepared in accordance with accounting
principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”),
and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s registration
statement filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments,
necessary for the financial statements to be not misleading have been reflected herein. The results of operations for interim
periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which
would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2019
as reported in Form 10-K, have been omitted.
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
DECEMBER
31, 2019
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Funds
held in attorney trust
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 FINANCIAL STATEMENTS
DECEMBER
31, 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.
Foreign
Currency Translation
The
financial statements are presented in US Dollars. Transactions with foreign subsidiaries where US dollars are not the functional
currency will be recorded in accordance with Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) Topic 830 Foreign Currency Transaction. According to Topic 830, all assets and liabilities are translated
at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of
operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are
reported under other comprehensive income (loss) in accordance with ASC Topic 220, Comprehensive Income . Gains and losses
resulting from the translations of foreign currency transactions and balances are reflected in the statement of operations and
comprehensive income (loss
Revenue
Recognition
On
January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), using the
modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for
reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted
and continue to be reported in accordance with our historic accounting under ASC 605. As of and for the year ended September
30, 2018, the financial statements were not materially impacted as a result of the application of Topic 606 compared to Topic
605.
Loss
Per Common Share
Basic
loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted
loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as
the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting
period. The Company does not have any potentially dilutive instruments.
Stock-Based
Compensation
Stock-based
compensation is accounted for at FV in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan
and has not granted any stock options
During
the year ended September 30, 2018, the Company issued 1,000,000 shares of common stock to an officer for services rendered with
a deemed value of services provided of $90,000 for services rendered from April 1, 2018 to January 31, 2019.
During
the year ended September 30, 2019, the Company issued 1,000,000 shares of common stock to an officer for services rendered with
a deemed value of services provided of $90,000.
Risks
and Uncertainties
On
January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International
Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the
spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types
of public places and business. The Coronavirus and actions taken to mitigate it have had an are expected to have an adverse
impact on the economies and financial markets of many countries, including the geographical area in which the Company plans to
operate.”
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
DECEMBER
31, 2019
NOTE
3 – ACCOUNTS PAYABLE
Accounts
payable consisted of the following at December 31, 2019 and September 30, 2019:
|
|
December
|
|
September
|
Audit fees
|
|
$
|
10,000
|
|
|
$
|
10,000
|
|
Accounting
|
|
|
5,850
|
|
|
|
5,600
|
|
Legal fees and transfer agent
|
|
|
19,610
|
|
|
|
19,602
|
|
Total Accrued Expenses
|
|
$
|
35,460
|
|
|
$
|
35,202
|
|
NOTE
4 – CAPITAL STOCK
The
Company has 140,000,000 shares of $0.001 par value common stock authorized and 10,000,000 shares of $0.001 par value preferred
stock authorized.
On
April 10, 2017, a former director of the Company surrendered for voluntary cancellation, 37,000,000 shares of common stock with
a deemed value of $ 37,000.
On
April 10,2017, the Company issued 37,000,000 shares of common stock to its director for services with a deemed value of $ 37,000.
On
June 28, 2018 the company issued one million common shares for consulting services with a deemed value of $90,000. The services
are to be provided over a period from April 1, 2018 to January 31, 2019.
In
March 2019, the Company issued 1,000,000 shares of common stock to an officer for services rendered with a deemed value of services
provided of $ 90,000
The
Company has 116,980,000 and 116,980,000 shares of common stock issued and outstanding as of December 31, 2019 and September 30,
2019 respectively. There are no shares of preferred stock issued and outstanding as of December 31, 2019 and September 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 December 31, 2019 and September 31, 2018:
|
|
2019
|
|
2018
|
Current:
|
|
|
|
|
|
|
|
|
Federal income taxes (benefit)
|
|
|
(5,396
|
)
|
|
$
|
(17,896
|
)
|
State income taxes
|
|
|
—
|
|
|
|
—
|
|
Deferred Benefit from net operating loss
|
|
|
5,396
|
|
|
|
17,896
|
|
|
|
$
|
(0
|
)
|
|
$
|
(0
|
)
|
The
following reconciles income taxes reported in the financial statements to taxes that would be obtained by applying regular tax
rates to income before taxes:
|
|
2019
|
|
2018
|
Expected tax expense (benefit) using regular rates
|
|
$
|
5,396
|
|
|
$
|
17,896
|
|
State minimum tax
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
(5,396
|
)
|
|
|
(17,896
|
)
|
Tax Provision
|
|
$
|
—
|
|
|
$
|
—
|
|
The
Company has loss carry forwards totaling $1,049,210 that may be offset against future federal income taxes. If not used, the carry
forwards will expire between 2028 and 2039.
At December 31, 2019 and 2018, the significant components of the
deferred tax assets are summarized below:
|
|
2019
|
|
2018
|
Deferred income tax asset
|
|
|
|
|
|
|
|
|
Net operation loss carryforwards
|
|
|
351,247
|
|
|
|
277,935
|
|
Total deferred income tax asset
|
|
|
351,247
|
|
|
|
277,935
|
|
Less: valuation allowance
|
|
|
(351,247
|
)
|
|
|
(277,935
|
)
|
Total deferred income tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
The
federal income tax returns of the Company for 2019 and 2018 are subject to examination by the IRS, generally for three years after
they were filed.
NOTE
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 December 31, 2019, the Company accrued director’s fees payable of $ 90,000.
ALTEROLA
BIOTECH, INC.
NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER
31, 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.
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
In
accordance with ASC Topic 855-10, the Company analyzed its operations subsequent to December 31, 2019 to the date these financial
statements were issued, and determined it does not have any material subsequent events to disclose in these financial statements.
On
July 20, 2020, the Company appointed certain directors and officers. As part of the appointment, each individual received issuance
of 1,000,000 shares of common stock, respectfully, valued at $10,000 per individual.
On
September 4, 2020, the Company issued 6,000,000 shares of common stock to the newly appointed Chief Executive Officer and Director,
as compensation for services to the Company, valued at $60,000.
On
September 18, 2020, the Company issued 200,000,000 shares of common stock to Amsterdam Café Holdings Ltd, at a price of
$0.001 per share, for total proceeds of $200,000.
On
January 19, 2021, the Company entered into an Stock Transfer Agreement (the “Agreement”) with ABTI Pharma
Limited, a company registered in England and Wales (“ABTI Pharma”), pursuant to which the Company will acquire
all of the outstanding shares of capital stock of ABTI Pharma from its shareholders in exchange for 600,000,000 shares of the
Company pro rata to the ABTI Pharma shareholders. The shares have been issued in anticipation of the closing and the
transaction will close upon the ABTI Pharma Limited Shares being transferred to the Company which will occur upon the filing
by the Company of its outstanding annual report and form 10-K for 2019, and its quarterly reports for 2020, that are
anticipated to be filed by March 30th 2021.
Pursuant
to the Agreement, the Company will provide funding to ABTI Pharma to pay for operating expenses including salaries, office expenses
and additional expenses or projects in the amount of US$500,000 within fifteen (15) days from closing the Agreement and shall
fund an additional US $200,000 every 30 days thereafter until a total funding of US $1,100,000 has been delivered.