SUBSEQUENT EVENTS

3 Months Ended

Jun. 30, 2024

NOTE 10 – SUBSEQUENT EVENTS

In accordance with ASC Topic 855-10, the Company analyzed its operations subsequent to June 30, 2024 to the date these financial statements were issued and determined it does not have any material subsequent events to disclose in these financial statements, except as noted below.

On August 13, 2024, the Company issued a total of 2,114,666 shares to Guy Webber in lieu of services provided to the company as per his employment contract.

On August 13, 2024, the shares which were held in escrow as part payment for services provided by Bridgeway Capital Partners as per an agreement dated June 24, 2022, were returned to Alterola Company Treasury, as Bridgeway Capital Partners waived their right to this payment.

On August 30, 2024, the Company borrowed $310,000 from FLUFFY’S WORLD, LLC – FWP3, a Delaware series limited liability company, under the terms of a convertible promissory note (the “Note”) for working capital. The details of the loan are as per the 8K issued by the Company on September 12, 2024.

On September 24, 2024, the board of directors of Alterola Biotech, Inc. (the “Company”) determined, upon the recommendation of the Company’s management, and in consultation with the Company’s independent registered public accounting firm, that the Company should restate its previously issued financial statements for quarter ended June 30, 2024 to correct the accounting in its unaudited balance sheets for said quarter. The restatement relates to an error in the consolidation of the Company’s subsidiaries. The details of the restatement are as per the 8K issued by the Company on September 30, 2024.

Business Combination Agreement

On July 22, 2024, Chain Bridge I, a Cayman Islands exempted company (“CBRG”), CB Holdings, Inc., a Nevada corporation (“HoldCo”), CB Merger Sub 1, a Cayman Islands exempted company (“CBRG Merger Sub”), Phytanix Bio, a Nevada corporation (the “Company”), and wholly owned subsidiary of Alterola Biotech, Inc., a Nevada corporation, and CB Merger Sub 2, Inc., a Nevada corporation (“Company Merger Sub”), entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”).

Phytanix Bio is a subsidiary of Alterola Biotech, Inc., and Phytanix is the parent company of ABTI Pharma, which holds the subsidiaries, Ferven and Phytotherapeutix Ltd. Phytanix Bio is an innovative pharmaceutical company dedicated to the development of therapeutics based on cannabinoid and cannabinoid-like molecules. CBRG is a special purpose acquisition company formed for the purpose of acquiring or merging with one or more businesses. Upon closing of the transaction, expected to occur in the fourth quarter of 2024, the combined company will be named Phytanix Inc., and its common stock is expected to be listed on the Nasdaq Capital Market under the ticker symbol “PHYX.”

The Business Combination

The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and CBRG. The Business Combination Agreement provides for, among other things, the consummation of the following transactions (the transactions contemplated by the Business Combination Agreement, collectively, the “Business Combination”):

(i)	CBRG Merger Sub will merge with and into CBRG (the “CBRG Merger”) and Company Merger Sub will merge with and into the Company (the “Company Merger” and, together with the CBRG Merger, the “Mergers”), with CBRG and the Company surviving the Mergers and, after giving effect to such Mergers, each of CBRG and the Company becoming a wholly owned subsidiary of HoldCo, on the terms and subject to the conditions in the Business Combination Agreement;

(ii)	(A) each issued and outstanding Class A ordinary share, par value $0.0001 per share, of CBRG (the “CBRG Class A Shares”) will be automatically cancelled, extinguished and converted into the right to receive one share of common stock, par value $0.0001 per share, of HoldCo (the “HoldCo Shares”); and (B) each issued and outstanding Class B ordinary share, par value $0.0001 per share, of CBRG (the “CBRG Class B Shares” and together with the CBRG Class A Shares, the CBRG Shares), will be automatically cancelled, extinguished and converted into the right to receive one HoldCo Share;

(iii)	each outstanding warrant to purchase one CBRG Class A Share will be automatically exchanged for a warrant to purchase one HoldCo Share; and

(iv)	(A) each warrant of the Company to purchase Company common stock will be exchanged for a warrant to purchase HoldCo Shares; (B) each warrant of the Company to purchase Company preferred stock will be exchanged for a warrant to purchase HoldCo preferred stock; (C) all promissory notes of the Company issued in connection with its June 2024 financing will be exchanged for HoldCo Series A convertible preferred stock, and any remaining issued and outstanding promissory notes of the Company will be automatically and fully cancelled; (D) each share of preferred stock, par value $0.000000001 per share, of the Company (the “Company Preferred Stock”) that is issued and outstanding will be automatically converted into shares of HoldCo preferred stock; and (E) all issued and outstanding shares of Company Common Stock (other than treasury shares and shares with respect to which appraisal rights under the Nevada law are properly exercised and not withdrawn) will be automatically cancelled, extinguished and converted into the right to receive HoldCo Shares based on the exchange ratio set forth in the Business Combination Agreement.

Prior to the closing of the Business Combination (the “Closing”), (A) HoldCo will file with the Secretary of State of the State of Nevada an amended and restated certificate of incorporation of HoldCo, and (B) the board of directors of HoldCo will approve and adopt amended and restated bylaws of HoldCo, each in a form to be mutually agreed between CBRG and the Company. Following the Business Combination, it is anticipated that HoldCo will change its name to Phytanix, Inc. and will be a publicly listed holding company which is expected to be listed on the Nasdaq Capital Market under the ticker symbol “PHYX.”

The Business Combination is expected to close in the first quarter of 2025, following the receipt of the required approval by CBRG’s and the Company’s shareholders and the fulfillment of other customary closing conditions.

Consideration

Under the terms of the Business Combination Agreement, the aggregate consideration to be paid in the Business Combination is derived from an equity value of $58 million. In addition, HoldCo will issue 17,000 shares of HoldCo Series A convertible preferred stock and issue additional shares of HoldCo preferred stock in exchange for certain short term debt obligations of the Company.

Representations and Warranties; Covenants

The Business Combination Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type. HoldCo has agreed to take all action as may be necessary or appropriate such that, immediately after the Closing, HoldCo’s board of directors will consist of up to seven directors, which shall be divided into three classes and be comprised of seven individuals determined by the Company, the CBRG Sponsor and CBRG prior to the effectiveness of the Registration Statement on Form S-4 (the “Registration Statement”), two of which directors shall be designated by the Company, in consultation with CBRG and the CBRG Sponsor, two of which directors shall be designated by the CBRG Sponsor, in consultation with the Company, and three of which directors shall be mutually agreed upon by the CBRG Sponsor and the Company. In addition, the board of directors of HoldCo will adopt an equity incentive plan and an employee stock purchase plan prior to the closing of the Business Combination.

Conditions to Each Party’s Obligations

The obligation of CBRG, HoldCo, CBRG Merger Sub, Company Merger Sub and the Company to consummate the Business Combination is subject to certain customary closing conditions, including, but not limited to, (i) the absence of any order, law or other legal restraint or prohibition issued by any court of competent jurisdiction or other governmental entity of competent jurisdiction prohibiting or preventing the consummation of the transactions contemplated by the Business Combination Agreement, (ii) the effectiveness of the Registration Statement to be filed by HoldCo, in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”), registering certain shares of HoldCo to be issued in the Business Combination, (iii) the required approval of the Company’s stockholders, (iv) the required approval of CBRG’s shareholders, (v) HoldCo having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) after giving effect to the transactions contemplated by the Business Combination Agreement (provided such limitation has not been validly removed from the amended and restated memorandum and articles of association (the “Articles”) of CBRG prior to the Closing Date), (vi) the approval by Nasdaq of HoldCo’s initial listing application in connection with the Business Combination, (vii) entry into employment agreements with certain key Company executives, (viii) formation of a capital markets and financing advisory committee made up of certain CBRG directors, (ix) assumption or cancellation of certain existing Company and CBRG notes, and (x) entry into an agreement providing for a $100 million equity line of credit with Keystone Capital Partners, LLC or its affiliates.

Termination

The Business Combination Agreement may be terminated under certain customary and limited circumstances prior to the closing of the Business Combination, including, but not limited to, (i) by mutual written consent of CBRG and the Company, (ii) by CBRG if the representations and warranties of the Company are not true and correct or if the Company fails to perform any covenant or agreement set forth in the Business Combination Agreement (including an obligation to consummate the Closing), in each case such that certain conditions to closing cannot be satisfied and the breach or breaches of such representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be cured within certain specified time periods, (iii) by the Company if the representations and warranties of the Company are not true and correct or if the Company fails to perform any covenant or agreement set forth in the Business Combination Agreement (including an obligation to consummate the Closing), in each case such that certain conditions to closing cannot be satisfied and the breach or breaches of such representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be cured within certain specified time periods, (iv) by either CBRG or the Company if the required approvals are not obtained from CBRG shareholders after the conclusion of a meeting of CBRG’s shareholders held for such purpose at which such shareholders voted on such approvals, (v) by either CBRG or the Company, if any governmental entity of competent jurisdiction shall have issued an order permanently enjoining, restraining or otherwise prohibiting the transactions contemplated under the Business Combination Agreement and such order shall have become final and nonappealable, (vi) by CBRG if the Company does not deliver, or cause to be delivered to CBRG the written consent of the requisite shareholders of the Company adopting and approving the Business Combination and such failure is not cured within specified time periods, and (vii) by either CBRG or the Company if the transactions contemplated by the Business Combination Agreement have not been consummated on or prior to the last deadline for CBRG to consummate its initial business combination pursuant to the Articles.

If the Business Combination Agreement is validly terminated, none of the parties to the Business Combination Agreement will have any liability or any further obligation under the Business Combination Agreement, except in the case of a willful and material breach or fraud and for customary obligations that survive the termination thereof (such as confidentiality obligations).

Sponsor Letter Agreement

Concurrently with the execution of the Business Combination Agreement, CBRG and the CBRG Sponsor, entered into a letter agreement (the “Sponsor Letter Agreement”), pursuant to which, among other things, (i) CBRG Sponsor agreed to vote its Class B Ordinary Shares in favor of each of the transaction proposals to be voted upon at the meeting of CBRG shareholders, including approval of the Business Combination Agreement and the transactions contemplated thereby, (ii) CBRG Sponsor agreed to waive any adjustment to the conversion ratio set forth in the governing documents of CBRG or any other anti-dilution or similar protection with respect to the Class B Ordinary Shares (whether resulting from the transactions contemplated by the Subscription Agreements (as defined below) or otherwise), and (iii) CBRG Sponsor agreed to be bound by certain transfer restrictions with respect to his, her or its shares in CBRG prior to the Closing.

Company Stockholder Transaction Support Agreements

Pursuant to the Business Combination Agreement, certain stockholders of the Company entered into transaction support agreements (collectively, the “Company Transaction Support Agreements”) with CBRG and the Company, pursuant to which such stockholders of the Company agreed to, among other things, (i) vote in favor of the Business Combination Agreement and the transactions contemplated thereby and (ii) be bound by certain covenants and agreements related to the Business Combination.

Investor Rights Agreement

Concurrently with the execution of the Business Combination Agreement, CBRG, HoldCo, the CBRG Sponsor, and certain Company stockholders entered into an investor rights agreement (the “Investor Rights Agreement”) pursuant to which, among other things, the CBRG Sponsor, and certain Company stockholders will be granted certain customary registration rights. Further, subject to customary exceptions set forth in the Investor Rights Agreement, the shares of HoldCo beneficially owned or owned of record by the CBRG Sponsor, certain officers and directors of CBRG and HoldCo (including any shares of HoldCo issued pursuant to the Business Combination Agreement) will be subject to a lock-up period beginning on the date the Closing occurs (the “Closing Date”) until the date that is the earlier of (i) 365 days following the Closing Date (or six months after the Closing Date if a lock up party is an independent director) or (ii) the first date subsequent to the Closing Date with respect to which the closing price of HoldCo Shares equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing Date.

Secured Loan

On June 26, 2024, Alterola Biotech, Inc. entered into a Secured Promissory Note with its subsidiary, Phytanix Bio, in the amount of $42,500 due on September 26, 2024. The agreement does not call for any interest and may be prepaid at anytime.

2024 Financing

On June 26, 2024, certain Financing Investors and Phytanix Bio entered into certain Securities Purchase Agreements pursuant to which, among other things, the Financing Investors agreed to purchase (i) certain promissory notes of Phytanix Bio in the original principal amount of $4,413,650.40, (ii) certain warrants to acquire Phytanix Bio’s common shares (Common Warrants”), and (iii) warrants to acquire Phytanix Bio’s Series A Preferred Shares. During the three month ended September 30, 2024, Phytanix Bio closed on a portion of the Securities Purchase Agreements, pursuant to which the Company issued and sold to the Financing Investors (i) promissory notes in the principal amount of $1,030,980 and (ii) three-year warrants to purchase up to 103,098 shares of the Company’s common stock at an initial exercise price of $11.00 per share, subject to adjustment. Phytanix Bio received net proceeds of $1,176,406, net of offering costs and expenses of $632,931. The notes are non-interest bearing and have a maturity date of June 29, 2025. The 180,933 Common Warrants were valued at $216,927, or $1.20, and using the relative fair value method, the Company recorded a debt discount of $216,927 to be amortized into interest expense over the life of the notes.

Loan Agreements

On June 26, 2024, the Company agreed to loan CBRG $1,590,995.12, pursuant to an unsecured non-interest bearing promissory note (the “Bridge Financing Note”). The maturity date of the Bridge Financing Note is the later of (x) June 29, 2025 and (y) the consummation of the CBRG’s initial business combination. The Bridge Financing Note may not be repaid with funds from the trust account that CBRG established for the benefit of its public holders. The proceeds from the Bridge Financing Note will be used (i) to pay off certain working capital loans issued by CBRG to Fulton AC I LLC, (ii) to pay for certain fees and expenses incurred in connection with the transactions contemplated in the Bridge Financing Note and CBRG’s initial business combination and (iii) for other general corporate purposes. During the three months ended September 30, 2024, the Company lent $1,063,235 of this agreed upon loan to CBRG.

ALTEROLA BIOTECH INC. 10-Q/A