| NOTE 6 – LIQUIDITY & GOING CONCERN | NOTE
6 – LIQUIDITY & GOING CONCERN Alterola
has negative working capital of $1,127,106 $4,712,691 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 December 31, 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. Forward-Looking Statements Certain statements, other than purely historical information,
including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions
upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words “believes,” “project,” “expects,”
“anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,”
“will,” “would,” “will be,” “will continue,” “will likely result,” and similar
expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those
safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks
and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results
or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect
on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory
changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties
should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We
undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events
or otherwise. Further information concerning our business, including additional factors that could materially affect our financial
results, is included herein and in our other filings with the SEC. Overview Our goal is to provide better medicines for patients
across the globe. We believe in harnessing the therapeutic potential of cannabinoids and cannabinoid- like compounds, which can bring
valuable treatments to seriously ill patients. Rather than just focusing on one method of identifying, researching and developing such
medicines, we are interested in developing new medicines from all sources including botanical, traditional chemical synthesis and biosynthetic
methodologies. On May 28, 2021, we acquired ABTI Pharma Limited,
a company registered in England and Wales (“ABTI Pharma”), with the purchase of all of its capital stock in exchange for 600,000,000
shares of our common stock pro rata to the ABTI Pharma shareholders. As a result of the acquisition, we are a pharmaceutical
company working with cannabinoid and cannabinoid like molecules. We have three areas of focus: 1) Development of regulated pharmaceuticals
(human and animal health) and regulated food products. This has been achieved via the strategic acquisition of Phytotherapeutix Ltd; 2) Production of low cost of goods
Active Pharmaceutical Ingredient (API) and food-grade ingredients (supported by the strategic acquisition of Ferven Ltd); and 3) Formulation, and drug delivery,
providing improved bioavailability, solubility and stability (supported by the exclusive licensing of IP and technology from Nano4M Ltd). Phytotherapeutix Ltd, a subsidiary of ABTI Pharma,
has generated a number of molecules with patents pending, some of which have demonstrable pharmacological activity, similar to that of
CBD. This means that some of these molecules are anticipated to have a similar market potential to CBD across a range of therapeutic areas. Ferven Ltd, another subsidiary of ABTI Pharma, 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. Recently, on December
2, 2021, we closed an Asset Purchase Agreement (the “Purchase Agreement”) with C2 Wellness Corp., a Wyoming corporation, and
Dr. G. Sridhar Prasad (together, the “Seller”). On the Closing Date,
pursuant to the Purchase Agreement, the Company acquired certain IP assets (the “Assets”) from Seller, which include: •
Novel cannabinoid molecules and their associated intellectual property; •
Novel cannabinoid pro-drugs, and their associated intellectual property; •
Novel proprietary cannabinoid formulations, designed to target lymphatic delivery, and their associated intellectual property; •
Novel proprietary nano-encapsulated cannabinoid formulations, in self dissolving polymers, and their associated intellectual property;
and •
Cannabinoids and cannabinoid pro-drug formulations for topical ocular delivery, and their associated intellectual property. In exchange for the Assets, the Company
issued to Seller twenty four million (24,000,000) shares of common stock. As a result of the
Purchase Agreement and the acquisition of the Assets, and following further research and development, the Company may wish to use the
technology platforms and associated intellectual property in the development of its medicines containing cannabinoids and cannabinoid-like
compounds or ratios / combinations thereof, which assuming the necessary quality, safety and efficacy can be successfully demonstrated
in nonclinical and clinical studies, may bring valuable treatments to seriously ill patients in due course Additionally, we may consider entering into Joint
Venture Partnerships, Acquisition of Companies with complimentary portfolios or Licencing Agreements to enhance the product portfolio.
These are strategies the Company may implement and any such opportunities will be assessed on a case by case basis and on their merit
at the time. 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. Our address is 47 Hamilton Square Birkenhead Merseyside
CH41 5AR United Kingdom. Our telephone number is +44 151 601 9477. Our website is www.alterolabio.com. We do not incorporate the information on or accessible
through our websites into this Quarterly Report, and you should not consider any information on, or that can be accessed through, our
websites a part of this Quarterly Report. Results of Operations for the Three and Nine
Months Ended December 31, 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 $2,800,677 and $3,213,315
for the three and nine months ended December 31, 2021, respectively. Our operating expenses for the nine months ended December 31, 2021
were mainly the result of $2,545,963 in consulting fees, $322,324 in research and development, $92,525 in accounting and audit fees and
$91,083 in salaries and wages. We expect that our operation expenses will increase
significantly for the balance of the fiscal year ended March 31, 2022 and beyond. 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 $2,800,677 and $3,213,315
for the three and nine months ended December 31, 2021, respectively. 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 December 31, 2021, we had $90,705 in current
assets and currently liabilities of $1,217,811. We had a working capital deficit of $1,127,106 as of December 31, 2021. We used cash in operating activities of $2,596,081
for the nine months ended December 31, 2021, mainly a result of our net loss of $3,213,315 offset by an increase in accounts payable of
$476,324. We used cash in investing activities of $12,000,000
for the nine months ended December 31, 2021 in connection with the acquisition of assets and intellectual property with C2 Wellness. We had cash provided for financing activities of $14,625,352
for the nine months ended December 31, 2021 from share issuances and convertible notes payable offset by payments of $209,657 to related
parties. 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. We received $100,000 in funding in July and we entered
into an equity line financing for up to $125,000,000. 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, which was filed in October and was declared effective by the Securities and Exchange Commission on October 29, 2021,
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 December 31, 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 $1,127,106, and have incurred losses since inception of $4,712,691. 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. 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-15I and 15d-15(e)) as of December
31, 2021. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief
Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December
31, 2021, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over
financial reporting. A material weakness is a deficiency, or a combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified
the following material weaknesses which have caused management to conclude that, as of December 31, 2021, our disclosure controls and
procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies
and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines. Remediation Plan to Address the Material Weaknesses
in Internal Control over Financial Reporting Our company plans to take steps to enhance and improve
the design of internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not
been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes
during our fiscal year ending March 31, 2022: (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 December 31, 2021 that have materially affected, or are reasonable likely to materially
affect, our internal control over financial reporting. PART II – OTHER INFORMATION Item 1. Legal Proceedings We are not a party to any pending legal proceeding. We are not aware of
any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities
are adverse to us or have a material interest adverse to us. Item 1A: Risk Factors 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 On September 6, 2021, the Company raised $136,721
in cash in exchange for 280,000 shares. The shares were issued subsequent to December 31, 2021. On December 21, 2021, the company issued 520,000 shares of stock in exchange
for $130,000 of cash consideration. On October 29, 2021, the Company issued 7,500,000 shares of stock in
exchange for services provided by EMC2 Capital, the selling stockholder. The shares were issued at fair value of the date of
exchange, or $2,399,250. As pursuant to the asset purchase agreement dated
November 9, 2021, the Company acquired certain intellectual property rights of C2 Wellness Corp. In exchanges for the assets acquired,
the Company issued 24,000,000 shares of common stock valued at $0.50 per share. The intellectual property rights acquired are recorded
as intangible assets as of December 31, 2021 for $12,000,000. These
securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented
their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate
information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed
our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock. None Item 4. Mine Safety
Disclosures Not applicable. Item 5. Other Information None Item 6. Exhibits
Exhibit Number Description of Exhibit
31.1** Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2** Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1** 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
101** The following materials from the Company’s Quarterly Report on Form 10-Q for
the quarter ended September 30, 2021 formatted in Extensible Business Reporting Language (XBRL).
**Provided herewith SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Alterola Biotech, Inc.
Date: March 1, 2022
By: /s/ Seamus McAuley Seamus McAuley Title: Chief Executive Officer (Principal Executive Officer)
and Director
Date: March 1, 2022
By: /s/ Timothy Rogers Timothy Rogers Title: Chief Financial Officer (Principal Financial Officer
and Principal Accounting Officer), Chairman, and Director |
