U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 2000
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission File Number 333-22693
ALPHA RESOURCES, INC.
--------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
DELAWARE 59-3422883
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
901 CHESTNUT STREET, SUITE A, CLEARWATER, FL 33756
--------------------------------------------------
(Address of Principal Executive Offices)
(727) 447-3620
--------------
(Issuer's Telephone Number)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such a
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
--- ---
The number of shares outstanding of the Issuer's Common Stock, $.001 Par
Value, as of March 31, 2000 was 240,000.
Transitional Small Business Disclosure Format:
Yes No X
--- ---
<PAGE>
ALPHA RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
Index
Page
----
Part I - Financial Information
Item 1. Financial Statements
Balance Sheet -
March 31, 2000................................................... 1
Statements of Operations -
Three Months ended March 31, 2000 and 1999
and the period January 13, 1997 (Date of Inception)
to March 31, 2000................................................. 2
Statements of Changes in Stockholders' Deficit -
For the period January 13, 1997 (Date of Inception)
to March 31, 2000................................................. 3
Statements of Cash Flows -
Three Months ended March 31, 2000 and 1999
and the period January 13, 1997 (Date of Inception)
to March 31, 2000................................................. 4
Notes to Financial Statements....................................5 - 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................7 - 9
Part II - Other Information
Item 1. Legal Proceedings................................................. 9
Signatures................................................................ 10
i
<PAGE>
ALPHA RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
(unaudited)
March 31,
2000
-----------------
Assets
Current assets
Cash $ 14,376
-----------------
Total current assets 14,376
-----------------
Other assets
Offering costs 4,206
-----------------
Total assets $ 18,582
=================
Liabilities and Stockholders' Deficit
Current liabilities
Accrued expenses $ 11,277
Loans payable - stockholders 30,000
-----------------
Total current liabilities 41,277
-----------------
Stockholders' deficit
Preferred stock, $.001 par value:
Authorized - 5,000,000
Issued or outstanding - none
Common stock, $.001 par value:
Authorized - 10,000,000
Issued and outstanding - 240,000 240
Additional paid-in capital 960
Deficit accumulated during the development stage (23,895)
-----------------
Total stockholders' (deficit) (22,695)
-----------------
Total liabilities and stockholders' equity $ 18,582
=================
The Accompanying Notes Are An Integral Part Of The Financial Statements
1
<PAGE>
ALPHA RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
Operating Statements
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Cumulative During
Ended March 31, Development Stage
------------------------------- January 13, 1997( Date of
2000 1999 Inception) to March 31, 2000
-------------- -------------- -------------------------------
<S> <C> <C> <C>
Development stage expenses
General & Administrative Expense $ 2,185 $ 21 $ 18,894
Interest Expense 600 300 5,001
-------------- -------------- -----------------------
Net Loss Before Income Taxes (2,785) (321) (23,895)
Income Taxes - - -
-------------- -------------- -----------------------
Net Loss $ (2,785) $ (321) $ (23,895)
============== ============== =======================
Basic Loss Per Share $ (0.01) $ (0.00) $ (0.15)
============== ============== =======================
Weighted average number of
common shares outstanding 240,000 120,000 157,033
============== ============== =======================
</TABLE>
The Accompanying Notes Are An Integral Part Of The Financial Statements
2
<PAGE>
<TABLE>
<CAPTION>
ALPHA RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
Statements of Changes in Stockholders' Deficit
(unaudited)
For the Period January 13, 1997 (Date of Inception) to March 31, 2000
Common Stock Deficit
------------------------------ Accumulated
Shares $ 0.001 Additional During the Total
Issued and Par Paid-in Development Stockholders'
Outstandng Value Capital Stage Equity (Deficit)
--------------- ----------- ------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Issuance of 120,000 shares of
common stock ($.005 per share) 120,000 $ 120 $ 480 $ - $ 600
Net loss for period - - - (11,529) (11,529)
--------------- ----------- ------------- --------------- ----------------
Balance, December 31, 1997 120,000 $ 120 $ 480 $ (11,529) $ (10,929)
--------------- ----------- ------------- --------------- ----------------
Net loss for period - - - (4,800) (4,800)
--------------- ----------- ------------- --------------- ----------------
Balance, December 31, 1998 120,000 $ 120 $ 480 $ (16,329) $ (15,729)
--------------- ----------- ------------- --------------- ----------------
Issuance of 120,000 shares of
common stock ($.005 per share) 120,000 $ 120 $ 480 $ - $ 600
Net loss for period - - - (4,781) (4,781)
--------------- ----------- ------------- --------------- ----------------
Balance, December 31, 1999 240,000 $ 240 $ 960 $ (21,110) $ (19,910)
--------------- ----------- ------------- --------------- ----------------
Net loss for period - - - (2,785) (2,785)
--------------- ----------- ------------- --------------- ----------------
Balance, March 31, 2000 240,000 $ 240 $ 960 $ (23,895) $ (22,695)
=============== =========== ============= =============== ================
</TABLE>
The Accompanying Notes Are An Integral Part Of The Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
ALPHA RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
Statements of Cash Flows
(unaudited)
For the Three Months Cumulative During
Ended March 31, Development Stage
---------------------------------- January 13, 1997( Date of
2000 1999 Inception) to March 31, 2000
---------------- --------------- ----------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (2,785) $ (321) $ (23,895)
Adjustments to reconcile net loss to net
cash used in operating activities:
Increase (Decrease) in accrued expenses 2,086 (1,924) 11,277
---------------- --------------- ------------------
Net cash used by operating activities (699) (2,245) (12,618)
---------------- --------------- ------------------
Cash flows from financing activities:
Proceeds from issuance of common stock - 600 1,200
Proceeds from loans payable - stockholders - 15,000 30,000
Offering costs - - (4,206)
---------------- --------------- ------------------
Net cash provided by financing activities - 15,600 26,994
---------------- --------------- ------------------
Net increase (decrease) in cash (699) 13,355 14,376
Cash beginning 15,075 4,915 -
---------------- --------------- ------------------
Cash ending $ 14,376 $ 18,270 $ 14,376
================ =============== ==================
</TABLE>
The Accompanying Notes Are An Integral Part Of The Financial Statements
4
<PAGE>
ALPHA RESOURCES, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Three Months Ended March 31, 2000
(Unaudited)
Note 1 - Background
----------
Alpha Resources, Inc. (the "Company") was incorporated January 13, 1997 in the
State of Delaware, and has been in the development stage since its formation.
The Company intends to effect a merger, exchange of capital stock, asset
acquisition, or other similar business combination or acquisition with a
business entity. The Company has not identified any specific business or company
to fulfill its intentions.
The Company has registered its securities with the Securities and Exchange
Commission and plans on offering certain securities in a "blank check" offering
subject to Rule 419 of the Securities Act of 1933. On August 12, 1999, the
Company's Registration Statement on Form SB-2 was declared effective by the U.S.
Securities and Exchange Commission.
The accompanying unaudited financial statements, which are for interim periods,
do not include all disclosures provided in the annual financial statements.
These unaudited financial statements should be read in conjunction with the
financial statements and the footnotes thereto contained in Form 10-KSB for the
fiscal year ended December 31, 1999 of Alpha Resources, Inc. (the "Company"), as
filed with the Securities and Exchange Commission.
Note 2 - Summary of Significant Accounting Policies
------------------------------------------
Accounting Estimates
--------------------
The preparation of financial statements requires management to make estimates
and assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
In the opinion of management, all adjustments, consisting of adjustments
necessary for a fair presentation of (a) the results of operations for the three
month periods ended March 31, 2000 and 1999, and the period January 13, 1997
(Date of Inception) to March 31, 2000, (b) the financial position at March 31,
2000, (c) cash flows for the three month period ended March 31, 2000 and 1999,
and the period January 13, 1997 (Date of Inception) to March 31, 2000 have been
made.
Organizational Costs
--------------------
Costs incurred in the organization of the Company were expensed as incurred
under the provision of SOP 98-5, "reporting on the costs of start up
activities."
Income Taxes
------------
Deferred income taxes are provided for when transactions are reflected in income
for financial reporting purposes in a year other than the year of their
inclusion in taxable income. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
5
<PAGE>
ALPHA RESOURCES, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Three Months Ended March 31, 2000
(Unaudited)
(Continued)
Concentration of Credit Risk
----------------------------
The Company maintains cash balances at a bank. The account is insured by the
Federal Deposit Insurance Corporation up to $100,000.
Loss Per Share
--------------
Basic loss per share is computed by dividing net loss available to common
shareholders by the weighted average number of shares outstanding for the
period.
Note 3 - Related Party Transactions
--------------------------
The Company has received $30,000 of loans from the six shareholders of the
Company. These loans are due on demand and bear interest at 8% per annum and are
unsecured. Three of these shareholders are also officers and directors of the
Company. The Company accrued $4,401 of interest on these notes at March 31,
2000.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The statements contained in this Report on Form 10-QSB, that are not purely
historical, are forward-looking information and statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These include statements regarding the Company's
expectations, intentions, or strategies regarding future matters. All
forward-looking statements included in this document are based on information
available to the Company on the date hereof. It is important to note that the
Company's actual results could differ materially from those projected in such
forward-looking statements contained in this Form 10-QSB. The forward-looking
statements contained here in are based on current expectations that involve
numerous risks and uncertainties. Assumptions relating to the foregoing involve
judgments regarding, among other things, the Company's ability to secure
financing or investment for capital expenditures, future economic and
competitive market conditions, and future business decisions. All these matters
are difficult or impossible to predict accurately and many of which may be
beyond the control of the Company. Although the Company believes that the
assumptions underlying its forward-looking statements are reasonable, any of the
assumptions could be inaccurate and, therefore, there can be no assurance that
the forward-looking statements included in this form 10-QSB will prove to be
accurate.
General
BACKGROUND.
Alpha Resources, Inc. (the "Company") was organized as a Delaware corporation on
January 13, 1997. Since inception, the Company's activities have been limited to
the sale of initial shares in connection with its organization. A total of
240,000 shares of Common Stock have been issued, of which 120,000 shares have
been issued to officers and directors of the Company, for an aggregate of $1,200
in cash. Additional funds have been loaned to the Company by its officers,
directors and principal shareholders, to cover Company expenses. The Company
proposes to evaluate one or more businesses and ultimately acquire an interest
or otherwise participate in a business. To date, no specific businesses have
been investigated by the Company, and it does not propose to engage in the
evaluation of any such businesses unless and until a successful completion of a
public securities offering. Consequently, the Company has presently allocated
the net proceeds of a offering to the search for and participation in a business
by a merger.
The Company's offices are located at 901 Chestnut Street, Suite A, Clearwater,
FL 33756, where its telephone number is (727) 447-3620.
PLAN OF OPERATION
The Company's plan of operation over the next twelve months is to seek and, if
possible, acquire an operating business or valuable assets by entering into a
business combination. The Company will not be restricted in its search for
business combination candidates to any particular geographical area, industry or
industry segment, and may enter into a combination with a private business
engaged in any line of business, including service, finance, mining,
manufacturing, real estate, oil and gas, distribution, transportation, medical,
communications, high technology, biotechnology or any other. Management's
discretion is, as a practical matter, unlimited in the selection of a
combination candidate. Management of the Company will seek combination
candidates in the United States and other countries, as available time and
resources permit, through existing associations and by word of mouth. This plan
of operation has been adopted in order to attempt to create value for its
shareholders.
The Company does not intend to do any product research or development. The
Company does not expect to buy or sell any real estate, plant or equipment
except as such a purchase might occur by way of a business combination that is
structured as an asset purchase, and no such asset purchase currently is
anticipated. Similarly, the Company does not expect to add additional employees
or any full-time employees except as a result of completing a business
combination, and any such employees likely will be persons already then employed
by the company acquired.
7
<PAGE>
COMPETITION. The Company will be in direct competition with many entities
in its efforts to locate suitable business opportunities. Included in the
competition will be business development companies, venture capital partnerships
and corporations, small business investment companies, venture capital
affiliates of industrial and financial companies, broker-dealers and investment
bankers, management and management consultant firms and private individual
investors. Most of these entities will possess greater financial resources and
will be able to assume greater risks than those which the Company, with its
limited capital, could consider. Many of these competing entities will also
possess significantly greater experience and contacts than the Company's
management. Moreover, the Company also will be competing with numerous other
blank check companies for such opportunities.
EMPLOYEES. The Company has no full-time employees, and its only employees
currently are its officers. It is not expected that the Company will have
additional full-time or other employees except as a result of completing a
combination.
RESULTS OF OPERATIONS
Three months ended March 31, 2000 compared to three months ended March 31, 1999
The Company has no revenues for either the first quarter of its calendar year
ended March 31, 2000 and 1999 respectively. For the recent three month period
ended March 31, 2000, general and administrative expenses amounted to $2,185 as
compared to $21 in the similar prior year period. This increase was attributed
to auditing fees incurred during the present period. There was not a similar
expense incurred in the year ago period.
Interest expense was $600 for first quarter of its calendar year ended March 31,
2000 as compared to $300 in the similar year ago period. This increase is
attributed to higher level of shareholder loans which thereby increased total
interest expense.
During the first quarter ended March 31, 2000, the Company incurred a net loss
of $2,785 as compared to a net loss of $321 for three month period ended March
31, 1999. This loss for the three month period ended March 31, 2000 is
attributed to both higher general and administrative expense and higher interest
expense charges as compared to the same year ago period.
For the quarter ended March 31, 2000, the basic loss per share was $0.01 as
compared to -$0- in the same year ago period. The weighted average shares
outstanding were 240,000 and 120,000, respectively for the three month periods
ended March 31, 2000 and March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company had $14,376 in cash on hand at the end of the March 31, 2000 quarter
and had no other tangible assets to meet ongoing expenses or debts that may
accumulate. Since inception, the Company has accumulated a deficit (net loss) of
$23,895.
The Company has no commitment for any capital expenditure and foresees none.
However, the Company will incur routine fees and expenses incident to its
reporting duties as a public company, and it will incur expenses in finding and
investigating possible acquisitions and other fees and expenses in the event it
makes an acquisition or attempts but is unable to complete an acquisition. The
Company's cash requirements for the next twelve months are relatively modest,
principally accounting expenses and other expenses relating to making filings
required under the Securities Exchange Act of 1934 (the "Exchange Act"), which
should not exceed $5,000 in the fiscal year ending December 30, 2000. Any
travel, lodging or other expenses which may arise related to finding,
investigating and attempting to complete a combination with one or more
potential acquisitions could also amount to thousands of dollars.
8
<PAGE>
The Company's current management and its counsel have informally agreed to
continue rendering services to the Company and to not demand payment of sums
owed unless and until the Company completes an acquisition. The terms of any
such payment will have to be negotiated with the principals of any business
acquired. The existence and amounts of debt may make it more difficult to
complete, or prevent completion of, a desirable acquisition. In addition,
offices are provided to the Company without charge.
Once its present cash position is depleted, the Company will only be able to pay
its debts and meet operating expenses by raising additional funds, acquiring a
profitable enterprise or otherwise generating positive cash flow. As a practical
matter, the Company is unlikely to generate positive cash flow by any means
other than acquiring an enterprise with cash flow. The Company believes that
management members or shareholders will advance future funds as needed for its
operations prior to completion of an acquisition. Management and the
shareholders are not obligated to provide any such funds. The Company's
shareholders and management members who advanced money to the Company to cover
operating expenses will expect to be reimbursed, either by the Company or by an
acquired company, prior to or at the time of completing a combination. The
Company has no intention of borrowing money to reimburse or pay salaries to any
of its officers or directors. There currently are no plans to sell additional
securities to raise capital, although sales of securities may be necessary to
obtain needed funds. There is no assurance whatever that the Company will be
able to raise necessary funds once needed from outside sources. Such a lack of
funds could result in severe consequences to the Company, including among
others:
(1) failure to make timely filings with the SEC as required by the Exchange
Act, which also probably would result in fines and penalties to the Company
under the Exchange Act;
(2) curtailing or eliminating the Company's ability to locate and perform
suitable investigations of potential acquisitions; or
(3) inability to complete a desirable acquisition due to lack of funds to
pay legal and accounting fees and acquisition-related expenses.
Management hopes to require potential candidate companies to deposit funds with
The Company that it can use to defray professional fees and travel, lodging and
other due diligence expenses incurred by management related to finding and
investigating a acquisition and negotiating and consummating a business
combination. There is no assurance that any potential candidate will agree to
make such a deposit.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
------------------
There are no legal proceedings in which the Company is involved.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant had
duly caused the report to be signed on its behalf by the undersigned thereunto
duly authorized.
Alpha Resources, Inc.
Dated 6/23/2000
/s/ Gerald Couture
------------------
Gerald Couture
President
