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 December 31, 2017
[  ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________  to __________
	Commission File Number: 333-156091

 

Alterola Biotech, Inc.

(Exact name of Registrant as specified in its charter)

 

Nevada	TBA
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

 

340 S Lemon Ave # 4041 Walnut, California 91789

(Address of principal executive offices)

 

909-584-5853

(Registrant’s telephone number)

_______________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate 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 [X] No

 

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, smaller reporting company, or an emerging growth company.

 

[  ] Large accelerated filer	[  ] Accelerated filer
[  ] Non-accelerated filer	[X] Smaller reporting company
	[  ] Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[X] Yes [ ] No

 

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 114,980,000  common shares as of December 19, 2018

 

 

	TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	6
Item 4:	Controls and Procedures	6
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	7
Item 1A:	Risk Factors	7
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	7
Item 3:	Defaults Upon Senior Securities	7
Item 4:	Mine Safety Disclosure	7
Item 5:	Other Information	7
Item 6:	Exhibits	7

 

  

PART I - FINANCIAL INFORMATION

 

Item 1.     Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

 

F-1	Balance Sheets as of December 31, 2017 and September 30, 2017 (unaudited);

 

F-2	Statements of Operations for the three months ended December 31, 2017 and 2016 (unaudited);

 

F-3	Statements of Cash Flow for the three months ended December 31, 2017 and 2016 (unaudited);

 

F-4	Notes to Financial Statements.

 

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, 2017 are not necessarily indicative of the results that can be expected for the full year.

 

 

ALTEROLA BIOTECH, INC.

BALANCE SHEETS

AS OF DECEMBER 31, 2017 (unaudited) AND SEPTEMBER 30, 2017

 

		December				September
ASSETS
Current Assets
Cash and equivalents		$	—			$	—
			—				—
Website, net			—				—
TOTAL ASSETS		$	—			$	—
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accrued expenses		$	22,150			$	20,900
Accrued interest			102,653				98,028
Advances from director			750				750
Notes payable			175,000				175,000
Total Liabilities			300,553				294,678
Stockholders’ Deficit
Preferred Stock, $.001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding			—				—
Common Stock, $.001 par value, 140,000,000 shares authorized, 114,980,000 shares issued and outstanding			114,980				114,980
Additional paid-in capital			169,850				169,850
Deficit accumulated			(585,383	)			(579,508)
Total Stockholders’ Deficit			(300,553	)			(294,678)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	—			$	—

 

See accompanying notes to financial statements.

 

 

ALTEROLA BIOTECH, INC.

STATEMENTS OF OPERATIONS (unaudited)

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 AND 2016

 

		2017				2016
REVENUES		$	0			$	0
OPERATING EXPENSES
Amortization			—				775
Accounting and audit fees			250				250
Legal fees			1,000				0
General and administrative expenses			—				221
TOTAL OPERATING EXPENSES			1,250				1,246
LOSS FROM OPERATIONS			(1250	)			(1,246)
OTHER INCOME (EXPENSE)
Interest expense			(4,625	)			(4,625)
TOTAL OTHER INCOME (EXPENSE)			(4,625	)			(4,625)
PROVISION FOR INCOME TAXES			0				0
NET (LOSS)		$	(5,875	)		$	(5,871)
NET (LOSS) PER SHARE: BASIC AND DILUTED		$	(0.00	)		$	(0.00)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED			114,980,000				114,980,000

 

See accompanying notes to financial statements.

 

 

ALTEROLA BIOTECH, INC.

STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE PERIOD ENDED DECEMBER 31, 2017

 

			Common stock
			Shares				Amount				Additional paid-in capital				Deficit				Total
Balance, September 30, 2015			114,980,000				114,980				132,850			$	(489,299	)		$	(241,469)
Net loss for the year ended September 30, 2016			—				—				—				(22,577	)			(22,577)
Balance, September 30, 2016			114,980,000				114,980				132,850				(511,876	)			(264,046)
Common stock surrendered for voluntary cancellation			(37,000,000	)			(37,000	)			37,000				0				0
Common stock issued for services			37,000,000				37,000												37,000
Net loss for the year ended September 30, 2017			—				—				—				(67,632	)			(67,632)
Balance, September 30, 2017			114,980,000				114,980				169,850				(579,508	)			(294,678)
Net loss for the period ended December 31, 2017															(5,875	)			(5,875)
Balance, December 31, 2017			114,980,000			$	114,980			$	169,850			$	(585,383	)		$	(300,553)

 

See accompanying notes to financial statements.

 

 

ALTEROLA BIOTECH, INC.

STATEMENTS OF CASH FLOWS (unaudited)

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 AND 2016

\

		2017				2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) for the period		$	(5,875	)		$	(5,871)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization			0				775
Changes in assets and liabilities:
Increase in accrued expenses			1,250				471
Increase in accrued interest			4,625				4,625
Net Cash Used by Operating Activities			0				0
Net Increase (Decrease) in Cash and Cash Equivalents			0				0
Cash and cash equivalents, beginning of period			0				0
Cash and cash equivalents, end of period		$	0			$	0
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid		$	0			$	0
Income taxes paid		$	0			$	0
NON-CASH INVESTING AND FINANCING INFORMATION
Deferred financing costs related to notes payable		$	0			$	0

 

See accompanying notes to financial statements.

 

 

ALTEROLA BIOTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2017 (UNAUDITED) AND SEPTEMBER 30, 2017

 

NOTE 1 – NATURE OF BUSINESS

 

Alterola Biotech, Inc. (“Alterola” and the “Company”) is a development stage company and was incorporated in Nevada on July 21, 2008. The Company was formed to aquire exploration and development stage mineral properties.

 

In April 2017, the company entered into an assignment agreement with its director to convey all assets and intellectual property to its former director for the cancellation of 37,000,000 shares of the Company

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted a September 30 fiscal year end.

 

Basis of Presentation

The accompanying unaudited interim financial statements of Alterola Biotech Inc. were prepared in accordance with GAAP and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto. 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 2017 as reported in Form 10-K, were 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 FINANCIAL STATEMENTS

DECEMBER 31, 2017 (UNAUDITED) AND SEPTEMBER 30, 2017

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Intellectual Property

The Company does not amortize intangible assets with indefinite useful lives, rather such assets are tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that the assets may be impaired. The Company amortizes its intangible assets with definite lives over their estimated useful lives and reviews these assets for impairment. The Company will amortize its acquired intangible assets with definite lives over the estimated economic life of the completed product.

 

Website Development Costs

Costs incurred in developing and maintaining a website are charged to expense when incurred for the planning, content population, and administration or maintenance of the website. All development costs for the application, infrastructure, and graphics development are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. Capitalized costs will be amortized using straight-line basis over two years, the estimated economic life of the completed website. Amortization for the Company’s website was $775 for the period ended December 31, 2016.

 

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 FINANCIAL STATEMENTS

DECEMBER 31, 2017 (UNAUDITED) AND SEPTEMBER 30, 2017

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

FV 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 FVs 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 the recorded values approximate their FV due to the short maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments.

 

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

Revenue Recognition

The Company will recognize revenue when products are delivered or services provided and collection is reasonably assured.

 

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.

 

Recent Accounting Pronouncements

Alterola does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s financial statements.

 

  

ALTEROLA BIOTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2017 (UNAUDITED) AND SEPTEMBER 30, 2017

 

NOTE 3 – ACCRUED EXPENSES

 

Accrued expenses consisted of the following at December 31, 2017 (unaudited) and September 30, 2017:

 

		December				September
Audit fees		$	1,000			$	1,000
Accounting			3,850				3,600
Legal fees			17,300				8,092
Total Accrued Expenses		$	22,150			$	20,900

 

NOTE 4 – NOTES PAYABLE

 

Notes payable consisted of the following at December 31, 2017 (unaudited) and September 30, 2017:

 

		December				September
Note payable, unsecured, bearing interest at 12%, due on June 26, 2011		$	30,000			$	30,000
Convertible note payable, unsecured, bearing interest at 12%, due on July 24, 2011			50,000				50,000
Note payable, unsecured, bearing interest at 10% plus financing charge of $2,500, due on October 10, 2013			27,500				27,500
Note payable, unsecured, bearing interest at 10% plus financing charge of $1,500, due on February 13, 2014			16,500				16,500
Note payable, unsecured, non interest bearing with finance charge of $1,500 due on March 31, 2014			6,000				6,000
Note payable, unsecured, bearing interest at 10%, due on demand			20,000				20,000
Note payable, unsecured, bearing interest at 10%, due on demand			25,000				25,000
Total Notes payable		$	175,000			$	175,000

  

 

ALTEROLA BIOTECH, INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2017 (UNAUDITED) AND SEPTEMBER 30, 2017

 

NOTE 4 – NOTES PAYABLE (CONTINUED)

 

The Convertible note is convertible at the option of the holder. The number of shares of common stock into which the convertible note will be converted is determined by the Fair Market Price (“FMV”) of the common stock at the date of conversion. In the event there is no determinable market price the FMV shall be:

 

a) The share price at the last private offering of the common stock, or, b) the 30 day moving average of the Common Stock in the event a public listing of the common stock has taken place.

 

Notes payable of $130,000 are currently in default as of the date of issuance of these financial statements.

 

NOTE 5 – 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. 

 

The Company has 114,980,000 shares of common stock issued and outstanding as of December 31 and September 30, 2017. There are no shares of preferred stock issued and outstanding as of December 31 and September 30, 2017.

 

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.

 

NOTE 7 – LIQUIDITY & GOING CONCERN

 

Alterola has negative working capital, has incurred losses since inception, and has not yet 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 depends 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 has analyzed its operations subsequent to December 31, 2017 to the date these financial statements were issued, and has 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

 

Our Business

 

We are developing 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.

 

Our plan is to market nutraceutical/functional chewing gum and in the future medicinal chewing gum. We are researching new ways to use chewing gum as a delivery system, expanding on the kinds of applications chewing gum has been used for in the past. We initially expected to reveal functional chewing gum for new applications by the end of 2014, but we were not able to. We first need to raise additional capital to develop our chewing gum for the delivery of medicines.

 

Our mission is to improve the health and quality of life for millions of people all over the world who are unable to or have difficulty with swallowing tablets. As much as 40% of the adult population and an even greater percentage of the adolescent population have difficulties swallowing pills, and we believe our solutions will greatly benefit them.

 

Presently, we are focused on nutrition and health chewing gum with natural based ingredients. The products below are currently under development and we are working to file patents to protect the ingredients in these products.

 

§

Appetite suppressor

§

Cholesterol suppressor

§

Antioxidant gum

§

Motion sickness suppressor

§

Vitamin gum

 

In order to implement our business plan, however, we will need to raise funds. We were able to secure loans to pay the legal and accounting fees needed to keep our reporting filings current with the SEC. We will need more funds to meet our timetable of introducing Nutraceutical/functional chewing gum. We expect to need $500,000 to develop our product.

 

 

Corporate History

 

On April 10, 2017, we entered into an Agreement of Conveyance, Transfer and Assignment of Assets (the “Agreement”) with our prior officer and director, Rene Lauritsen. Pursuant to the Agreement, we transferred all assets related to our nutraceutical chewing gum business to Mr. Lauritsen. In exchange for this assignment of assets, Mr. Lauritsen returned his 37,000,000 of our shares for cancellation.

 

Prior to resigning, Mr Lauritsen appointed Micahel Freitag as our sole officer and director and we agreed to compensate him with 37,000,000 shares of our common stock for his first nine months of service.

 

As of April 10, 2017, we intended to raise further capital, bring all public filings current and set about a new business direction based around a novel therapy and the intellectual property generated from our research and development activities on ethanol based intoxication.

 

Subsequently, on March 26, 2018, Mr. Freitag sold his control shares along with another shareholder, Krono Partners Limited, to London Pharma Holdings Limited for $200,000. This resulted in a change of control.

 

Also on March 26, 2018, Mr. Freitag resigned from his official positions as Director and CEO of the Company, and on the same day the shareholders of the Corporation voted Mr. Peter Maddocks as Director, and CEO.

 

On June 21, 2018, we signed an escrow agreement with Mr. Lauritsen to serve as our Chief Operating Officer and to contribute the IP for the Company’s chewing gum business. In that agreement, we agreed to enter into an employment agreement with Mr. Lauritsen and to pay him a salary of $7,500 per month. For the IP, we have agreed to compensate Mr. Lauritsen with 1,000,000 shares of our common stock and cash of $75,000. Neither the employment agreement nor the IP transfer agreement have been executed as of the date of this report.

 

Results of Operations for the Three Months Ended December 31, 2017 and 2016

 

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 $1,250 for the three months ended December 31, 2017, compared with $1,246 for the three months ended December 31, 2016. Our operating expenses for the three months ended December 31, 2017 consisted of $1,000 in legal fees and $250 in accounting and audit fees. Our operating expenses for the three months ended December 31, 2016 consisted of $775 in amortization, $250 in accounting and audit fees and $221 in general and administrative expenses.

 

We incurred other expenses of $4,625 for the three months ended December 31, 2017, which consisted of interest expense, compared to other expenses of $4,625, which also consisted of interest expense for the three months ended December 31, 2016.

 

We recorded a net loss of $5,875 for the three months ended December 31, 2017, compared with a net loss of $5,871 for the three months ended December 31, 2016.

 

Liquidity and Capital Resources

 

As of December 31, 2017, we had $0 in current assets and currently liabilities of $300,553. We had a working capital deficit of $300,553 as of December 31, 2017.

 

Operating activities used $0 in cash for the three months ended December 31, 2017, compared with $0 for the comparable period ended December 31, 2016.

 

Financing activities provided $0 for the three months ended December 31, 2017, compared with $0 for the comparable period ended December 31, 2016.

 

 

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 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.

 

Off Balance Sheet Arrangements

 

As of December 31, 2017, 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 incurred cumulative losses of $585,383 for the period July 21, 2008 (inception date) through December 31, 2017, expect to incur further losses in the development of our business and have been dependent on funding operations through the issuance of convertible debt and private sale of equity securities. 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.

 

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 December 31, 2017. 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, 2017, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting. (“ICFR”)

 

A material weakness is a deficiency, or a combination of deficiencies, in ICFR, 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, 2017, 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 ICFR. 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 September 30, 2018: (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 ICFR during the three months ended December 31, 2017 that have materially affected, or are reasonable likely to materially affect, our ICFR.

 

 

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

 

None

 

Item 3.     Defaults upon Senior Securities

 

None

 

Item 4.     Mine Safety Disclosures

 

Not applicable.

 

Item 5.     Other Information

 

None

 

Item 6.      Exhibits

 

Exhibit Number	Description of Exhibit
10.1	Executive Employment Agreement, dated April 1, 2018
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 December 31, 2017 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:	January 11, 2019
	By: /s/ Peter Maddocks Peter Maddocks Title:   Chief Executive Officer, Chief Financial Officer and Director