SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For Quarter ended June 30, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to ________________
Commission File No 0-32307
ALPHA HOLDING, INC.
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(Exact name of registrant as specified in its charter)
Delaware 59-3518707
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(State or other jurisdiction (IRS Employer ID Number)
of incorporation or organization)
Suite 2100, 515 Madison Avenue, New York, NY 10022
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(Address of principal executive offices)
(212) 755-3636
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(Issuer's Telephone Number)
N/A
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(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
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As of June 30, 2003, the Issuer had 3,800,000 shares of Common Stock, par
value $.001 per share, issued and outstanding.
PART I
Item 1. Financial Statements and Exhibits
(a) The unaudited financial statements of Registrant for the three months
ended June 30, 2003, follow. The financial statements reflect all
adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim period presented.
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Item 2. Management's Discussion and Analysis or Plan of Operation
The Company is considered a development stage company with limited assets
or capital, and with limited operations or income since inception in August,
1997. The costs and expenses associated with the preparation and filing of this
registration statement and other operations of the company have been paid for by
the controlling shareholders of the Company who are also its officers and
directors. It is anticipated that the Company will require only nominal capital
to maintain the corporate viability of the Company and any additional needed
funds will most likely be provided by the Company's existing shareholders or its
officers and directors in the immediate future. Current shareholders have not
agreed upon the terms and conditions of future financing and such undertaking
will be subject to future negotiations, except for the express commitment of the
officers and directors to fund required filings pursuant to the Securities
Exchange Act of 1934 (the " `34 Act"). Repayment of any such funding will also
be subject to such negotiations. However, unless the Company is able to
facilitate an acquisition of or merger with an operating business or is able to
obtain significant outside financing, there is substantial doubt about its
ability to continue as a going concern.
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the Company
successfully completes an acquisition or merger. At that time, management will
evaluate the possible effects of inflation on the Company as it relates to its
business and operations following a successful acquisition or merger.
Management plans may but do not currently provide for experts to secure a
successful acquisition or merger partner so that it will be able to continue as
a going concern. In the event such efforts are unsuccessful, contingent plans
have been arranged to provide that the current Director of the Company is to
fund required future filings under the 34 Act, and existing shareholders have
expressed an interest in additional funding if necessary to continue the Company
as a going concern.
Plan of Operation
The Company has entered into negotiations to acquire a privately held
company in exchange for issuance of a controlling interest in the Company's
common stock. In the event that negotiations are not concluded successfully,
then during the next twelve months, the Company will continue to actively seek
out and investigate possible business opportunities with the intent to acquire
or merge with one or more business ventures. In its search for business
opportunities, management will follow the procedures outlined in Item 1, above.
Because the Company has limited funds, it may be necessary for the officers and
directors to either advance funds to the Company or to accrue expenses until
such time as a successful business consolidation can be made. The Company will
not make it a condition that the target company must repay funds advanced by its
officers and directors. Management intends to hold expenses to a minimum and to
obtain services on a contingency basis when possible. Further, the Company's
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directors will defer any compensation until such time as an acquisition or
merger can be accomplished. However, if the Company engages outside advisors or
consultants in its search for business opportunities, it may be necessary for
the Company to attempt to raise additional funds. As of the date hereof, the
Company has not made any arrangements or definitive agreements to use outside
advisors or consultants or to raise any capital. In the event the Company does
need to raise capital, most likely the only method available to the Company
would be to private sale of its securities. Because of the nature of the
Company as a development stage company, it is unlikely that it could make a
public sale of securities or be able to borrow any significant sum from either a
commercial or private lender. There can be no assurance that the Company will be
able to obtain additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
The Company does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is convinced that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates, will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
finding suitable merger or acquisition candidates, expansion and growth of the
Company's business and operations, and other such matters are forward-looking
statements. These statements are based on certain assumptions and analysis made
by the Company in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances. However, whether
actual results or developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, general economic
market and business conditions; the business opportunities (or lack thereof)
that may be presented to and pursued by the Company; changes in laws or
regulation; and other factors, most of which are beyond the control of the
Company. Consequently, all of the forward-looking statements made in this Form
10-QSB are qualified by these cautionary statements, and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or operations.
The Company assumes no obligations to update any such forward-looking
statements.
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PART II
Item 6. Exhibits and reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of regulation
S-B, as described in the following index of exhibits, are incorporated
herein by reference, as follows:
Exhibit No. Description
- ----------- --------------------------------------------------------------
3.1 Articles of Incorporation of Alpha Holding, Inc. (1)
3.2 By-Laws of Alpha Holding, Inc. (1)
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(1) Incorporated by reference from the Form 10-SB filed by the Company on
February 7, 2001
(b) The Company did not file any reports on Form 8-K during the quarter
ended June 30, 2003.
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ALPHA HOLDING, INC.
JUNE 30, 2003
(UNAUDITED)
I N D E X
Page No.
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CONDENSED BALANCE SHEET F-2
CONDENSED STATEMENTS OF OPERATIONS F-3
CONDENSED STATEMENTS OF CASH FLOWS F-4
NOTES TO CONDENSED FINANCIAL STATEMENTS F-5
ALPHA HOLDING, INC.
CONDENSED BALANCE SHEET
(UNAUDITED)
JUNE 30, 2003
Assets
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Current assets
Loans receivable - related party $ 430
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Total assets $ 430
========
Liabilities and Stockholders' Deficiency
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Current liabilities
Accrued expenses $ 8,740
Due to related party 12,068
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Total Liabilities 20,808
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Stockholders' deficiency
Common stock - $.001 par value,
authorized 10,000,000 shares,
issued 3,800,000 shares 3,800
Additional paid-in capital 5,160
Deficit (29,338)
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Total stockholders' deficiency (20,378)
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Total liabilities and stockholders' deficiency $ 430
========
The accompanying notes are an integral part of
the condensed financial statements.
F-2
ALPHA HOLDING, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30,
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2 0 0 3 2 0 0 2 2 0 0 3 2 0 0 2
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Cost and expenses
Selling and administrative expenses $ 2,775 $ 967 $ 4,095 $ 6,375
----------- ----------- ----------- -----------
Operating loss (2,775) (967) (4,095) (6,375)
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Net loss $ (2,775) $ (967) $ (4,095) $ (6,375)
=========== =========== =========== ===========
Loss per common share $ (.00) $ (.00) $ (.00) $ (.00)
=========== =========== =========== ===========
Weighted average common shares outstanding 3,800,000 3,800,000 3,800,000 3,800,000
=========== =========== =========== ===========
The accompanying notes are an integral part of
the condensed financial statements.
F-3
ALPHA HOLDING, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
2 0 0 3 2 0 0 2
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Cash flows from operating activities
Net loss $(4,095) $(6,375)
Adjustments to reconcile net loss to net cash used in
operating activities:
Accrued expenses 2,640 1,945
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Cash used in operating activities (1,455) (4,430)
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Cash flows from financing activities
Due to related party 1,455 4,430
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Cash provided by financing activities 1,455 4,430
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Net change in cash -- --
Cash - beginning of period -- --
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Cash - end of period $ -- $ --
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The accompanying notes are an integral part of
the condensed financial statements.
F-4
ALPHA HOLDING, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. BUSINESS DESCRIPTION - ORGANIZATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-QSB and Item 310 of Regulation S-B. Accordingly,
they do not include all of the information and footnotes required by
accounting principles generally accepted in the United States of America
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the six
months ended June 30, 2003 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2003. For further
information, refer to the financial statements and footnotes thereto
included in the Form 10-KSB for the year ended December 31, 2003.
On August 19, 1997, Alpha Holding, Inc. (the "Company") was incorporated
under the laws of the State of Delaware. The Company may engage in any
business that is permitted by the general corporation law of Delaware. The
Company is a "blank check" company. A "blank check" company is a company
that has no specific business plan or purpose or has indicated that its
business plan is to engage in a merger or acquisition with an unidentified
company or companies. The Company has been exploring sources to obtain
additional equity or debt financing. The Company has also indicated its
intention to participate in one or more as yet unidentified business
ventures, which management will select after reviewing the business
opportunities for their profit or growth potential.
LIQUIDITY AND CAPITAL RESOURCES
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered
recurring losses from operations and has a net capital deficiency that
raises substantial doubt about its ability to continue as a going concern.
The Company is a "blank check" Company and has experienced no significant
change in liquidity, capital resources of stockholders' equity other than
the receipt of proceeds for its operating expenses. Substantially all of
such funds have been used to pay expenses incurred by the Company.
RESULTS OF OPERATIONS
For the six months ended June 30, 2003 and 2002, the Company had engaged in
no significant operations other than the acquisition of capital for general
and administrative expenses and registration of its securities under the
Securities Exchange Act of 1934. During this period, the Company received
no operating revenues. General and administrative expenses consist
primarily of professional fees.
The Company is seeking to carry out its plan of business to complete a
merger or business acquisition transaction. The Company's existing capital
will not be sufficient to meet the Company's cash needs, including
complying with its continuing reporting obligation under the Securities
Exchange Act of 1934. Accordingly, additional capital will be required.
F-5
ALPHA HOLDING, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
STATEMENT OF CASH FLOWS
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. No cash was paid
for interest for the six months ended June 30, 2003 and 2002. During the
six months ended June, 2003 and 2002, the Company paid $455 and $-0-,
respectively, in income taxes.
START-UP COSTS
The Company adopted the provisions of the American Institute of Certified
Public Accountants' Statement of Position 98-5, "Reporting on the Costs of
Start-Up Activities". SOP provides guidance on the financial reporting of
start-up and organization costs and requires such costs to be expensed as
incurred.
The start-up costs consist principally of professional and consulting fees.
LOSS PER COMMON SHARE
Loss per common share is computed by dividing the net loss for the period
by the weighted average number of shares outstanding for the six months
ended June 30, 2003 and 2002.
USE OF ESTIMATES
The preparation of the accompanying condensed 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 of the financial statements, and the reported
amounts of expenses during the reporting periods. Actual results could
differ from those estimates.
SIGNIFICANT ESTIMATES
Several areas require significant management estimates relating to
uncertainties for which it is reasonably possible that there will be a
material change in the near term. The significant area requiring the use of
management estimates related to accrued expenses.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax basis. 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 reverse. The effect on deferred tax
assets and liabilities from a change in tax rates is recognized in the
statement of operations in the period that includes the enactment date.
F-6
ALPHA HOLDING, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
INCOME TAXES (Continued)
The Company has not yet commenced an active trade or business, therefore,
the Company did not provide any current or deferred federal or state income
tax provision or benefit for any of the periods presented because to date,
it has experienced operating losses. The Company has a federal net
operating loss carryforward of approximately $29,000 expiring in the years
2017 through 2022. The tax benefit of this net operating loss, based on an
effective tax rate of 40%, is approximately $12,000 and has been offset by
a full valuation allowance. For the six months ended June 30, 2003 and
2002, based on an effective tax rate of 40%, the valuation allowance
increased by $1,639 and $2,550, respectively.
The use of net operating loss carryforward is subject to limitations
imposed by the Internal Revenue Service in the event of the change in
control.
3. COMMON STOCK
The Company is authorized to issue 10,000,000 shares of par value $.001
common stock.
The Company has issued and outstanding 3,800,000 shares of common stock
that has been valued at prices ranging from $.001 to $.10. These values
were based upon management's estimate of the current market prices at the
time the shares were issued.
4. RELATED PARTY TRANSACTIONS
The caption "Due to related Company" are loans that are unsecured,
non-interest bearing and have no fixed terms of repayment, therefore,
deemed payable on demand. The Company's operating expenses in 2003 and 2002
were paid by the related company.
The balance due to the related company, at June 30, 2003 was $12,068.
F-7
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: July 22, 2003 ALPHA HOLDING, INC.
/s/ John R. Rice, III
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John R. Rice, III, President
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CERTIFICATION
We, John R. Rice, III and Joseph F. Ingrassia certify that:
1. We have read this quarterly report on Form 10QSB of Alpha Holding,
Inc..
2. To our knowledge, the information in this report is true in all
important respects as of June 30, 2003; and
3. This report contains all information about the company of which we are
aware that we believe important to a reasonable investor, in light of
the subjects required to be addressed in this report as of June 30,
2003.
For purposes of this certifications, information is "important to a reasonable
investor" if:
(a) There is a substantial likelihood that a reasonable investor would view
the information as significantly altering the total mix of information
in the report; and
(b) The report would be misleading to a reasonable investor if the
information was omitted from the report.
Date: July 22, 2003
/s/ John R. Rice, III
-----------------------------------
John R. Rice, III, President
/s/ Joseph F. Ingrassia
-----------------------------------
Joseph F. Ingrassia, Secretary
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CERTIFICATE UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John R. Rice, III, being the President of Alpha Holding, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB for the period ended
June 30, 2003.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made. Not misleading with respect to the period covered by
this quarterly report; and
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for the periods presented in this
quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date oft his quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: July 22, 2003
/s/ John R. Rice, III
----------------------------
John R. Rice, III, President
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