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EX-32.1 - EX32_1 - ALTEROLA BIOTECH INC. | ex32_1.htm |
EX-31.1 - EX31_1 - ALTEROLA BIOTECH INC. | ex31_1.htm |
EX-31.2 - EX31_2 - ALTEROLA BIOTECH INC. | ex31_2.htm |
EXCEL - IDEA: XBRL DOCUMENT - ALTEROLA BIOTECH INC. | Financial_Report.xls |
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, 2013 | |
[ ] | 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 |
(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 (§232.405 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 [X] No
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).
[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 shares as of April 28, 2014.
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 Disclosures | 7 |
Item 5: | Other Information | 7 |
Item 6: | Exhibits | 7 |
2 |
PART I - FINANCIAL INFORMATION
Our financial statements included in this Form 10-Q are as follows:
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 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, 2013 are not necessarily indicative of the results that can be expected for the full year.
3 |
(Formerly Jedediah Resource Corp.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS (unaudited)
AS OF DECEMBER 31, 2013 AND SEPTEMBER 30, 2013
December 31, 2013 | September 30, 2013 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and equivalents | $ | 2,493 | $ | 9,327 | ||||
Prepaid expenses | 6,250 | 12,500 | ||||||
Deferred financing costs | 94 | 1,125 | ||||||
Total Current Assets | 8,837 | 22,952 | ||||||
Website, net | 6,200 | 6,200 | ||||||
TOTAL ASSETS | $ | 15,037 | $ | 29,152 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current Liabilities | ||||||||
Accrued expenses | $ | 17,936 | $ | 23,795 | ||||
Accrued interest | 35,284 | 31,784 | ||||||
Notes payable | 124,000 | 124,000 | ||||||
Total Liabilities | 177,220 | 179,579 | ||||||
Stockholders’ Deficit | ||||||||
Preferred Stock, $.001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding | 0 | 0 | ||||||
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 | 132,850 | 132,850 | ||||||
Deficit accumulated during the development stage | (410,013 | ) | (398,257 | ) | ||||
Total Stockholders’ Deficit | (162,183 | ) | (150,427 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 15,037 | $ | 29,152 |
See accompanying notes to financial statements.
F-1 |
(Formerly Jedediah Resource Corp.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2013 AND 2012
FOR THE PERIOD FROM JULY 21, 2008 (INCEPTION) TO DECEMBER 31, 2013
Three
months ended December 31, 2013 | Three
months ended December 31, 2012 | Period
from July 21, 2008 (Inception) to December 31, 2013 | ||||||||||
REVENUES | $ | 0 | $ | 0 | $ | 0 | ||||||
OPERATING EXPENSES | ||||||||||||
Exploration costs | 0 | 0 | 19,873 | |||||||||
Stock-based compensation | 0 | 0 | 63,000 | |||||||||
Accounting and audit fees | 650 | 650 | 86,901 | |||||||||
Legal fees | 325 | 0 | 117,203 | |||||||||
Consulting fees | 6,250 | 0 | 22,680 | |||||||||
Management fees | 0 | 0 | 84,134 | |||||||||
Transfer agent and filing fees | 0 | 0 | 17,817 | |||||||||
General and administrative expenses | 0 | 0 | 12,644 | |||||||||
TOTAL OPERATING EXPENSES | 7,225 | 650 | 424,252 | |||||||||
LOSS FROM OPERATIONS | (7,225 | ) | (650 | ) | (424,252 | ) | ||||||
OTHER INCOME (EXPENSE) | ||||||||||||
Interest expense | (3,500 | ) | (2,400 | ) | (35,284 | ) | ||||||
Financing costs | (1,031 | ) | 0 | (3,906 | ) | |||||||
Impairment | 0 | 0 | (21,500 | ) | ||||||||
Gain on settlement of payables | 0 | 0 | 22,683 | |||||||||
TOTAL OTHER INCOME (EXPENSE) | (4,531 | ) | (2,400 | ) | (38,007 | ) | ||||||
PROVISION FOR INCOME TAXES | 0 | 0 | 0 | |||||||||
NET LOSS | $ | (11,756 | ) | $ | (3,050 | ) | $ | (462,259 | ) | |||
NET LOSS PER SHARE: BASIC AND DILUTED | $ | (0.00 | ) | $ | (0.00 | ) | ||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED | 114,980,000 | 77,980,000 |
See accompanying notes to financial statements.
F-2 |
ALTEROLA BIOTECH, INC.
(Formerly Jedediah Resource Corp.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (unaudited)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2013 AND 2012
FOR THE PERIOD FROM JULY 21, 2008 (INCEPTION) TO DECEMBER 31, 2013
Three
months ended December 31, 2013 | Three
months ended December 31, 2012 | Period
from July 21, 2008 (Inception) to December 31, 2013 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net loss for the period | $ | (11,756 | ) | $ | (3,050 | ) | $ | (462,259 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Stock-based compensation | 0 | 0 | 63,000 | |||||||||
Deferred financing costs | 1,031 | 3,906 | ||||||||||
Impairment | 0 | 0 | 21,500 | |||||||||
Gain on settlement of payables | 0 | 0 | (22,683 | ) | ||||||||
Changes in assets and liabilities: | ||||||||||||
Decrease in prepaid expenses | 6,250 | 0 | (6,250 | ) | ||||||||
Increase (decrease) in accrued expenses | (5,859 | ) | 650 | 40,619 | ||||||||
Increase in accrued interest | 3,500 | 2,400 | 35,284 | |||||||||
Net Cash Used by Operating Activities | (6,834 | ) | 0 | (326,883 | ) | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Acquisition of intellectual property | 0 | 0 | (5,000 | ) | ||||||||
Website development | 0 | 0 | (6,200 | ) | ||||||||
Net Cash Used by Investing Activities | 0 | 0 | (11,200 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Net proceeds from the sale of common stock | 0 | 0 | 208,618 | |||||||||
Contributed capital | 0 | 0 | 11,958 | |||||||||
Proceeds from notes payable | 0 | 0 | 120,000 | |||||||||
Net Cash Provided by Financing Activities | 0 | 0 | 340,576 | |||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | (6,834 | ) | 0 | 2,493 | ||||||||
Cash and cash equivalents, beginning of period | 9,327 | 0 | 0 | |||||||||
Cash and cash equivalents, end of period | $ | 2,493 | $ | 0 | $ | 2,493 | ||||||
SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||||
Interest paid | $ | 0 | $ | 0 | $ | 0 | ||||||
Income taxes paid | $ | 0 | $ | 0 | $ | 0 | ||||||
NON-CASH INVESTING AND FINANCING INFORMATION | ||||||||||||
Common stock issued for intellectual property | $ | 0 | $ | 0 | $ | 16,500 | ||||||
Common stock cancelled on sale of subsidiary | $ | 0 | $ | 0 | $ | 52,246 | ||||||
Common stock issued for services | $ | 0 | $ | 0 | $ | 37,000 |
See accompanying notes to financial statements.
F-3 |
(Formerly Jedediah Resource Corp.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
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 for the purpose of acquiring exploration and development stage mineral properties.
On October 1, 2008, the Company incorporated JRE Exploration Ltd, (“JRE”) a wholly owned subsidiary in Canada for the purpose of holding its Canadian mineral claims.
On May 3, 2010, the Company changed its focus to the development of intellectual property and accordingly sold JRE to the former president. (See Note 3). In keeping with the change of business focus, on July 9, 2010, the Company changed its name to Alterola Biotech Inc.
Effective July 9, 2010, the Board of Directors authorized a 10 for 1 forward stock split on the issued common shares. The authorized number of common shares was increased from 90,000,000 to 140,000,000 common shares with a par value of $0.001. The number of authorized Preferred shares remained unchanged at 10,000,000 with a par value of $0.001. All references in the accompanying financial statements to the number of common shares have been restated to reflect the forward stock split.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage Company
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development-stage companies. A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, and there has been no significant revenues there from.
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 2013 as reported in Form 10-K, have been omitted.
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.
F-4 |
ALTEROLA BIOTECH, INC.
(Formerly Jedediah Resource Corp.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 Cash 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.
Intellectual Property
The Company does not amortize intangible assets with indefinite useful lives, rather such assets are required to be 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. During the year ending September 30, 2011, the value of the intellectual property was determined to be $0 and impairment expense of $21,500 was recorded.
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. As of December 31, 2013, the Company’s website was not in service; accordingly no amortization has been recorded during the periods ended December 31, 2013 and 2012.
Fair Value of Financial Instruments
Alterola’s financial instruments consist of cash and cash equivalents, accrued expenses, accrued interest and notes payable. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
Fair value 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 fair value 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 fair value of liabilities should include consideration of non-performance risk including our own credit risk.
In addition to defining fair value, the disclosure requirements around fair value establish a fair value 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 fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:
F-5 |
ALTEROLA BIOTECH, INC.
(Formerly Jedediah Resource Corp.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fair Value of Financial Instruments (continued)
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.
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 fair values 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 fair value 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 fully delivered or services have been 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 fair value 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, 2013, the Company issued 37,000,000 shares of common stock to its director.
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.
F-6 |
ALTEROLA BIOTECH, INC.
(Formerly Jedediah Resource Corp.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 3 – SALE OF SUBSIDIARY
Pursuant to an agreement dated May 3, 2010, the Company sold its wholly-owned subsidiary, JRE Exploration Ltd., to the Company’s former president. In consideration for the sale the purchaser returned 55,000,000 shares of Jedediah to the Company for cancellation, and the Company forgave all amounts owed by JRE to the Company.
The following table summarizes the identifiable assets and liabilities of JRE that were disposed of and the consideration received.
May 3, 2010 | ||||
Identifiable Assets and Liabilities | ||||
Mineral property | $ | 0 | ||
Amount owed to Jedediah Resources Corp. | (21,843 | ) | ||
Net liabilities of JRE | (21,843 | ) | ||
Consideration received | ||||
Elimination of consolidated losses of JRE | 21,843 | |||
Gain (loss) on disposal | $ | 0 | ||
Return and cancellation of 55,000,000 shares of common stock to treasury, recorded in statement of equity (deficit) | $ | (52,246 | ) |
NOTE 4 – INTELLECTUAL PROPERTY
Pursuant to an Assignment Agreement dated May 3, 2010 (the “Agreement”), the Company acquired from the president of the Company a 100% undivided right in and to all intellectual property relating to certain chewing gum compositions having appetite suppressant activity. Consideration given for the acquisition was 55,000,000 Common shares of the Company with a fair value of $16,500. During the year ended September 30, 2010, the Company incurred a further $5,000 in patent application fees. During the year ended September 30, 2011, the Company determined that the value of the intellectual property was $0 and recognized impairment expense of $21,500.
NOTE 5 – ACCRUED EXPENSES
Accrued expenses consisted of the following at December 31, 2013 and September 30, 2013:
December 31, 2013 | September 30, 2013 | |||||||
Audit fees | $ | 5,000 | $ | 4,550 | ||||
Accounting | 400 | 200 | ||||||
Legal fees | 10,000 | 16,509 | ||||||
Transfer agent and filing fees | 1,416 | 1,416 | ||||||
Other | 1,120 | 1,120 | ||||||
Total Accrued Expenses | $ | 17,936 | $ | 23,795 |
F-7 |
ALTEROLA BIOTECH, INC.
(Formerly Jedediah Resource Corp.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 6 – NOTES PAYABLE
Notes payable consisted of the following at December 31, 2013 and September 30, 2013:
December 31, 2013 | September 30, 2013 | |||||||
Note payable, unsecured, bearing interest at 12% per annum, due on June 26, 2011 | $ | 30,000 | $ | 30,000 | ||||
Convertible note payable, unsecured, bearing interest at 12% per annum, due on July 24, 2011 | 50,000 | 50,000 | ||||||
Note payable, unsecured, bearing interest at 10% per annum plus financing charge of $2,500, due on October 10, 2013 | 27,500 | 27,500 | ||||||
Note payable, unsecured, bearing interest at 10% per annum plus financing charge of $1,500, due on February 13, 2014 | 16,500 | 16,500 | ||||||
Total Notes payable | $ | 124,000 | $ | 124,000 |
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 in the amount of $124,000 are currently in default as of the date of issuance of these financial statements.
Interest expense related to these notes was $3,500 and $2,400 for the periods ended December 31, 2013 and 2012, respectively.
Financing costs are amortized over the term of the loan. As of December 31, 2013 financing costs of $3,906 has been expensed in the statement of operations and unamortized financing costs of $94 are deferred on the balance sheet.
NOTE 7 – 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 August 6, 2008, the Company issued 55,000,000 common shares to the Company’s president at $0.001 per share for total proceeds of $55,000.
F-8 |
ALTEROLA BIOTECH, INC.
(Formerly Jedediah Resource Corp.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 7 – CAPITAL STOCK (CONTINUED)
On September 22, 2008, the incumbent president resigned as both an officer and director and a new president and director was appointed. At the request of the departing president, the Company’s board of directors rescinded his share subscription for 55,000,000 common shares and repaid the subscription proceeds of $55,000.
On September 22, 2008, the Company issued 55,000,000 common shares to the Company’s new president at $0.00095 per share for total proceeds of $52,246.
On September 22, 2008, the Company issued 39,600,000 common shares at approximately $0.00149 per share for total proceeds of $55,740 pursuant to a private placement. On September 30, 2008, the Company issued 2,400,000 common shares at approximately $0.00149 per share for total proceeds of $3,467 pursuant to a private placement. The Company paid a commission of $5,700 for net proceeds of $53,507 for these private placements.
On October 29, 2008, the Company issued 2,400,000 common shares at approximately $0.00119 per share for total proceeds of $2,865 pursuant to a private placement.
On January 5, 2010, pursuant to a share subscription agreement, the Company issued 33,330,000 Common Shares at $0.0015 for aggregate proceeds of $50,000.
On May 3, 2010, pursuant to the sale of JRE Exploration Ltd. (Note 3) the Company received 55,000,000 of its Common stock from the former Company president with a fair value of $52,246 for cancellation, as consideration for the sale of JRE, our wholly owned subsidiary.
On November 17, 2010, the President entered into a stock cancellation agreement the Company whereby 40,000,000 common shares were returned to treasury and cancelled. In consideration the Company will issue to the President options to acquire common stock pursuant to the stock option plan which will be adopted by the Company at some time in the future.
On December 21, 2010, the Company issued 250,000 shares at $0.20 for aggregate proceeds of $50,000.
In February 2011, the former President returned 15,000,000 shares of common stock for voluntary cancellation.
On July 16, 2013, 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, 2013 and September 30, 2013 respectively. There are no shares of preferred stock issued and outstanding as of December 31, 2013 and September 30, 2013.
NOTE 8 – 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.
F-9 |
ALTEROLA BIOTECH, INC.
(Formerly Jedediah Resource Corp.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 9 – INCOME TAXES
For the period ended December 31, 2013, Alterola has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $462,260 at December 31, 2013, and will expire beginning in the year 2028.
The provision for Federal income tax consists of the following for the periods ended December 31:
2013 | 2012 | |||||||
Federal income tax benefit attributable to: | ||||||||
Current operations | $ | 3,997 | $ | 1,037 | ||||
Less: valuation allowance | (3,997 | ) | (1,037 | ) | ||||
Net provision for Federal income taxes | $ | 0 | $ | 0 |
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
2013 | ||||
Deferred tax asset attributable to: | ||||
Net operating loss carryover | $ | 157,168 | ||
Less: valuation allowance | (157,168 | ) | ||
Net deferred tax asset | $ | 0 |
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $462,260 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.
NOTE 10 – SUBSEQUENT EVENTS
In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to December 31, 2013 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.
F-10 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operationsb
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
Corporate History
We were incorporated in the State of Nevada on July 21, 2008 under the name “Jedediah Resources Corp.” We are a development stage company.
After our formation, we were in the business of mineral exploration. On May 3, 2010, however, we entered into two agreements with Ola S. Juvkam-Wold (“Juvkam-Wold”), who was then our Chief Executive Officer and a director of our company: a Stock Purchase Agreement and General Release and Settlement Agreement. Pursuant to the Stock Purchase Agreement, Mr. Juvkam-Wold agreed to cancel and return 55,000,000 shares of common stock owned by him to us in consideration for all of the issued and outstanding stock of our wholly owned subsidiary, JRE Exploration Ltd. (“JRE”), and the cancellation of all debt owed by JRE to us. Pursuant to the Release and Settlement, Mr. Juvkam-Wold released us from any and all claims Mr. Juvkam-Wold may have against us or our affiliates. Our mineral exploration business was housed in JRE, and the transaction jettisoned the business from our company. Mr. Juvkam-Wold resigned as our officer and director and Soren Nielson took his place.
On May 3, 2010, we 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 us in consideration for the issuance of 55,000,000 newly issued shares of our common stock. Following the acquisition of the IP we changed our business direction and, during the quarterly period covered by this report, were pursuing 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 July 9, 2010, we changed our name from “Jedediah Resources Corp.” to “Alterola Biotech Inc,” increased our authorized common stock to 140,000,000 shares and conducted a forward split of 10 for 1 of our issued and outstanding common stock.
On December 21, 2010, we issued 250,000 shares at $0.20 for aggregate proceeds of $50,000.
On February 28, 2011, Mr. Nielson resigned as our officer and director and Tobias Hedstrom took his place. On March 15, 2011, we entered into an agreement with Mr. Nielsen to cancel and return 15,000,000 shares he held in our company back to treasury in exchange for a complete release of all claims. We also paid a company controlled by Mr. Nielson $50,000 for unpaid and accrued management fees.
On February 12, 2012, Mr. Hedstrom resigned as our officer and director and Rene Lauritsen took his place. Mr. Lauritsen is currently the sole member of our board of directors and our President, Chief Executive Officer, Chief Financial Officer and Secretary.
On July 16, 2013, we issued Mr. Lauritsen 37,000,000 shares of our common stock in consideration for his service as our officer from February 12, 2012.
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Plan of Operation
Our plan is to use our IP and develop and market Nutraceutical/functional chewing gum and in the future medicinal chewing gum. We are ardently 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 expect to reveal functional chewing gum for new applications by the end of 2014 and in the future we plan to develop 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 a small loan of $25,000 to pay the legal and accounting fees needed to bring our reporting filings current with the Securities and Exchange Commission. We will need more funds to meet our timetable of introducing Nutraceutical/functional chewing gum by the end of 2014.
Results of Operations for the Three Months Ended December 31, 2013 and 2012 and Period from Inception (July 21, 2008) to December 31, 2013
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 $8,256 for the three months ended December 31, 2013, compared with operating expenses of $650 for the three months ended December 31, 2012. Our operating expenses in 2013 increased from 2012 mainly as a result of financing costs, consulting fees and legal fees that were not incurred in 2012. We incurred operating expenses of $427,877 for the period from inception (July 21, 2008) to December 31, 2013.
We incurred other expenses of $3,500 in the form of interest expenses for the three months ended December 31, 2013, as compared to $2,400 for the three months ended December 31, 2012, which is entirely made up of interest expenses for both periods. We incurred other expenses of $34,101 for the period from inception (July 21, 2008) to December 31, 2013.
We incurred a net loss of $11,756 for the three months ended December 31, 2013, as compared with a net loss of $3,050 for the three months ended December 31, 2012. We incurred a net loss of $462,259 for the period from inception (July 21, 2008) to December 31, 2013.
Liquidity and Capital Resources
As of December 31, 2013, we had current assets of $8,837 and current liabilities of $177,220. We had a working capital deficit of $168,383 as of December 31, 2013.
Operating activities used $6,834 in cash for the three months ended December 31, 2013. Our negative operating cash flow was attributable to funding the loss for the period along with a decrease in accrued expenses, offset by a decrease in prepaid expenses, deferred financing costs, and an increase in accrued interest.
Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve 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.
Off Balance Sheet Arrangements
As of December 31, 2013, there were no off balance sheet arrangements.
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Going Concern
Our financial statements have been prepared assuming that 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 $462,259 for the period July 21, 2008 (inception date) through December 31, 2013, 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, 2013. 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, 2013, 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, 2013, 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 September 30, 2014: (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.
We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees.
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, 2013 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
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.
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.
None
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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: | May 13, 2014 |
By: | /s/ Rene Lauritsen |
Rene Lauritsen | |
Title: | Chief Executive Officer and Director |
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