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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2001.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission file number 0-9563
ALPHA PETROLEUM EXPLORATION CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
New York 23-2090563
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(State or Other Jurisdiction of (IRS Employer I.D. No.)
Incorporation or Organization)
3401 N. Tamiami Trail, Suite 207, Naples, FL 34103
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Address of Principal Executive Offices Including Zip Code
Registrant's telephone number including area code: (941) 263-4223
Securities registered pursuant to Section 12(b) of the Exchange Act: None.
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Securities registered pursuant to Section 12(g) of the Exchange
Act: Common Stock.
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the 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 [ ] No [X].
As of March 31, 2001, 120,697 shares of Common Stock, $0.01 par value,
were outstanding.
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PART ONE
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Reference is made to the quarterly Financial Statements
attached hereto.
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ALPHA PETROLEUM EXPLORATION CORPORATION
* * * * * * * *
REPORT ON COMPILATION OF
CONSOLIDATED FINANCIAL STATEMENTS
* * * * * * * *
THREE MONTHS ENDED MARCH 31, 2001
THE FIORE, FEDELI & SNYDER FIRM, P.C.
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Accountant's Report
Board of Directors
Alpha Petroleum Exploration Corporation
Naples, Florida
We have compiled the accompanying consolidated balance sheets of Alpha Petroleum
Exploration Corporation as of March 31, 2001, and the related consolidated
statements of operations and retained earnings and cash flows for the three
months then ended in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public
Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
and opinion or any other form of assurance on them.
We are not independent with respect to Alpha Petroleum Exploration Corporation.
State College, Pennsylvania
June 21, 2001
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ALPHA PETROLEUM EXPLORATION CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31,
2001
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ASSETS:
Cash $ 100
Investment, net of valuation allowance of $13,077 --
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Total Assets $ 100
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LIABILITIES AND STOCKHOLDERS' EQUITY/
(DEFICIENCY IN ASSETS)
Liabilities:
Accounts payable $ 73,832
Accrued tax liabilities 417
Notes payable - noncurrent 116,133
Interest payable 239,413
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Total Liabilities 429,795
Stockholders' Equity/(Deficiency in Assets):
Common stock, $.01 par
(authorized, 40,000,000 shares;
issued and outstanding,
120,697 shares) 1,207
Additional Paid-in-Capital 6,710,602
Retained Earnings/(Deficit) (7,141,504)
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Total Stockholders' Equity/(Deficiency in Assets) (429,695)
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Total Liabilities and
Stockholders' Equity/(Deficiency in Assets) $ 100
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See accompanying notes to consolidated financial statements
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ALPHA PETROLEUM EXPLORATION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
Three Months Ended
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March 31,
2001
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Revenues $ --
Interest on Notes Payable 9,172
State Tax Franchise
Taxes --
Interest and penalty 76
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Net Loss (9,248)
Retained Earnings/(Deficit), Beginning of Year (7,132,256)
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Retained Earnings/(Deficit), End of year $(7,141,504)
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Loss per share $ (.08)
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See accompanying notes to consolidated financial statements
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ALPHA PETROLEUM EXPLORATION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
Three Months Ended
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March 31,
2001
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Cash flows from operating activities:
Net loss $(9,248)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Interest accrual on notes payable 9,172
Tax and related accruals 76
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Net cash provided by operating
activities --
Cash, beginning of year 100
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Cash, end of year $ 100
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See accompanying notes to consolidated financial statements
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ALPHA PETROLEUM EXPLORATION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2001
A. Organization and Nature of Operations
Alpha Petroleum Exploration Corporation ("Alpha" or the "Company") was
incorporated under the laws of the State of New York in 1968 and has been
primarily inactive since 1989.
In March 1997, the Company formed a 100% owned subsidiary, Polo Energy
Corporation ("Polo"). Polo's business is the investment in oil and gas
production on an international basis.
Plans for Reinstatement
During 1997 the Company initiated plans to reinstate itself as a
corporation in good standing with the Secretary of State of New York
and the Securities and Exchange Commission ("SEC"), this will allow it
to branch into new business fields. The Company's reinstatement plans
include the following:
1. Reinstatement in the State of New York by filing its
delinquent New York State Franchise Tax Returns for
1998 and 1999 and paying the assessed penalties and
interest.
2. Filing Form 10K, as of September 30, 2000, with the
Securities and Exchange Commission ("SEC").
3. Approve the dilution of the existing stockholders'
shares in the Company by the issuance of additional
stock.
4. Obtain approval from the SEC to trade its shares
publicly.
5. Initiate stock swaps with Finnish Companies, in order
to market the Finnish technologies and products on a
global basis.
6. Make offerings of stock in order to raise capital.
Upon its reinstatement the Company will seek to identify companies
which are capable of being market leaders in segments of the
information technology industry and which are at a stage of development
that would benefit from the Company's business development and
management support, financing, and market knowledge. The Company will
invest in companies in which it can purchase a large enough stake to
enable it to have significant influence over the management and
policies of the company and to realize a large enough return to
compensate it for its investment of management time and effort, as well
as capital.
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ALPHA PETROLEUM EXPLORATION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2001
B. Summary of Significant Accounting Policies
The financial statements of the Company are presented in accordance
with generally accepted accounting principles. A summary of the more significant
policies are presented below.
Cash and Cash Equivalents
The Company considers highly liquid investments, with a maturity of
three months or less, when acquired, to be cash equivalents.
Investments
The Company's subsidiary, Polo, owns a .0617983% interest in Benex Oil
and Gas Company, LLC representing a share in its KOI Chush #1 well in
Atoka County, Oklahoma. The capital account at December 31, 1998 was
$13,077, however, it is shown on the balance sheet net of an equivalent
valuation allowance, due to the lack of revenue production from the
well.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements. Actual results could differ
from those estimates.
Consolidation Policy
The consolidated financial statements include the accounts of Alpha and
its subsidiaries. All significant intercompany balances and
transactions have been eliminated. Investments in companies in which
the company has a 20% to 50% interest are carried at cost, adjusted for
the company's proportionate share of their undistributed earnings or
losses.
Monies advanced by owners and interested parties are recorded as
expenses of the Company with offsetting credits to additional
paid-in-capital. During the quarter ended March 31, 2001, $5,485 was
recognized as such a contribution.
Earnings Per Share
The Company has adopted SFAS No. 128, Earnings Per Share, which
established standards for computing and presenting both basic and
diluted earnings per share ("ESP").
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ALPHA PETROLEUM EXPLORATION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2001
C. Income Taxes
Under generally accepted accounting principles, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which temporary differences are expected to be
recovered or settled.
Generally accepted accounting principles requires the establishment of
a deferred tax asset for all deductible temporary differences and operating loss
carry forwards. The Company has available at September 30, 2000, approximately
$1,894,000 of unused operating loss carryforwards that may be applied against
future taxable income and that expire in various years from 2001 to 2012.
Approximately $82,000 of that amount will expire in the year 2001. At September
30, 2000, based on the amount of operating loss carry forwards, the Company
would have had a deferred tax asset of approximately $777,000. However, because
of the uncertainty that the Company will generate income in the future
sufficient to fully or partially utilize these carry forwards, an equivalent
valuation allowance has been established. Accordingly, no current or deferred
tax benefit nor deferred tax asset is reflected in these financial statements.
D. Franchise Taxes
At March 31, 2001 the amount of tax liability was $5,826 and $417,
respectively.
March 31,
2001
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Tax liability $ --
Penalties and interest accruals 417
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Total $417
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As stated above, the Company is in the process of reinstating itself.
This process is expected to include the payment, in full, of all tax
liabilities.
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ALPHA PETROLEUM EXPLORATION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2001
E. Notes Payable
The Company had two notes payable as of December 31, 2000 and March 31,
2001.
March 31,
2001
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Principal - Andrikoupoulous note $ 58,162
Principal - Bockius note 57,971
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116,133
Interest 239,413
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Total $355,546
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No payments have been made since 1989. Interest is accrued at the prime
rate plus 2%. It is not practicable to estimate the fair value of this debt.
F.a Loss Per Share
Loss per share of common stock is based on weighted average number of
common shares outstanding for each period presented. The Company has 120,697
shares of common stock issued and outstanding.
G. Contingencies
There is no pending or threatened litigation against the Company at
September 30, 2000, which could have a material effect on the consolidated
financial statements.
The Company plans to fund its reinstatement by issuing stock to the
Drumore Corporation.
Meanwhile, a group of individuals has advanced funds on behalf of
Drumore, in order to pay the legal, accounting, audit, tax and other costs
incurred in connection with this effort.
The effect of this dilution will compensate the group or individuals
advancing funds who will become shareholders of Drumore Corporation.
In the event that these efforts fail, the Company may be contingently
liable for costs an fees incurred to various service providers.
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ALPHA PETROLEUM EXPLORATION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2001
H. Subsequent Events
On April 9, 2001, the Company invested in several newly incorporated
companies. The Company acquired 100% of Journey Entertainment Corp. which will
be fully consolidated in future periods. The Company also invested in Fruit Wash
Corporation and LinuxCE, Inc., which will be accounted for using the equity
method.
On April 26, 2001, the Board of Directors authorized a 1 for 286
reverse stock split of common stock to shareholders of record on April 26, 2001.
Per-share amounts have been adjusted for the split.
On April 26, 2001, the Company issued 1,279,303 shares of post-split
stock to Drumore Corporation. Shares were issued as compensation for fees paid
to reinstate the Company, as discussed above.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Results of Operations
As the Company has been inactive since 1988, the Company has
had no revenue or any other type of income since 1988.
Similarly, the Company has had virtually no general and
administrative expenses since 1988. During the year ended
March 31, 2001, the only activity of the Company involved
discussions with various technology-driven companies in
Finland for the Company to assist in their capital raising
activity.
Liquidity and Capital Resources
There are no known trends or known demands, commitments,
events or uncertainties that will result in or that are
reasonably likely to result in the Company's liquidity
increasing or decreasing in any material way. As previously
stated, the Company's proposed business activities are
dependent upon a successful completion of a proposed private
placement offering. If a private placement offering cannot be
completed, the Company will not be able to carry out its
business plan.
The Company does not have any material commitments for capital
expenditures. Again, the Company is investigating possible
business combinations with other companies. However, the
Company's ability to enter into any business combinations is
contingent upon its ability to raise funds through a private
placement offering of its common stock.
PART TWO
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None. The Company is in default of two promissory notes with a
principal amount totaling $116,113.00. However, the company
believes that the statute of limitations involving the
promissory notes has expired and that, therefore, the holders
of the promissory notes have no legal ability to enforce the
notes.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
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None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Reports on Form 8-K: None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
ALPHA PETROLEUM EXPLORATION
CORPORATION
By: /S/ Roland M. Jermyn
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Roland M. Jermyn, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Company in the
capacities and on the dates so indicated.
/S/ Roland M. Jermyn
______________________________ July 2, 2001
Roland M. Jermyn, Director
Principal Executive Officer, and
Principal Financial Officer