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.





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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.





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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.





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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.

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