ALPHA ENERGY INC MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS. (Form 10-K)

0

This discussion should be read in conjunction with the other sections contained herein, including the risk factors and the consolidated financial statements and related schedules contained herein. The various sections of this discussion contain a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this report as well as other matters on which we have no control. Our actual results may differ materially from those anticipated in these forward-looking statements due to certain factors, including, but not limited to, those set forth in this report. See “Risk Factors” and “Caution Regarding Forward-Looking Statements”.



                                       34

————————————————– ——————————



Company Overview


The Company was incorporated in September 2013. Our business model is to engage in oil and gas development. the acquisition cost in 22 to 30 months.



Going Concern



The future of our business depends on its ability to obtain financing and its future profitable operations. Management intends to raise additional capital through a private placement and a public offering of its common stock, if necessary. Our auditors have expressed a going concern opinion that raises substantial doubt about the Company’s ability to continue as a going concern.

The Company’s financial statements are prepared in accordance with generally accepted accounting principles. The United States of America (we GAAP) applicable to a going concern, which provides for the realization of assets and the liquidation of liabilities in the ordinary course of business. However, the Company does not have significant cash or other short-term assets, or an established source of revenue sufficient to cover its operating costs and enable it to continue as a going concern. These conditions raise substantial doubts about the ability of the company to continue its activities.

Under the going concern assumption, an entity is generally considered to continue as a going concern for the foreseeable future without the intention or need to wind up, go out of business, or seek protection from creditors in accordance with laws or regulations. . Accordingly, assets and liabilities are recognized on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.

The Company’s ability to continue as a going concern depends on its ability to successfully execute the plan described in the business paragraph and eventually achieve profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

Over the next fiscal year, the Company’s foreseeable cash needs will be linked to the continued development of its business operations, the maintenance of its good reputation and the making of the required deposits with the Security and Exchange Commission, and the payment of expenses related to research and development. The Company could experience a cash shortfall and be required to raise additional capital.

Historically, it has relied primarily on internally generated funds and funds from equity sales to fund its operations and growth. Management may raise additional capital through future public or private offerings of Company stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. Failure of the Company to do so could have a material adverse effect on it and its shareholders.


Results of Operations


For the year ended December 31, 2021 Compared to the year ended December 31, 2020

Over the years ended December 31, 2021 and 2020, the Company earned minimal revenue from its operating activities. Partly because these activities were focused on identifying opportunities and potential properties.

During the year ended December 31, 2021the Company recognized a net loss of
$1,070,738 compared to $1,986,978 for the year ended December 31, 2020. The decrease in $916,240 mainly stemmed from a decrease in the impairment charge of $1,000,000a decrease in interest charges of $107,768decrease in attendance fees of $16,000 which were offset by a gain on settlement of supplier accounts of $120,250increase in loss on change in fair value of derivative liabilities of $8,081 and an increase in general and administrative expenses of
$314,183.

Cash and capital resources

From December 31, 2021the Company had current assets of $23,967 and total non-current assets of $145,791 consisting of acquisition costs. From December 31, 2021the Company had total current liabilities of $2,625,072 including
$270,250 in accounts payable, $228,668 in related parties to pay, $145,041 in derivative liability, $77,563 in interest to be paid, $628,550 in short-term advances from related parties, $65,000 in related party notes payable and
$1,210,000 in a convertible note payable. The Company had a working capital deficit of $2,601,105.

During the year ended December 31, 2021the Company used cash from $356,892 in our operations compared to $109,394 during the year ended December 31, 2020. During the year ended December 31, 2021the company used $95,791 in investing activities compared to $30,000 used by investing activities during the year December 31, 2020. During the year ended December 31, 2021the Company received funds from $452,900 of our financing activities compared to $139,394
during the year ended December 31, 2020. The net change in cash was $217 during the year ended December 31, 2021 compared to a decrease in $0 for the year ended
December 31, 2020.



                                       35

————————————————– ——————————

At various times during the year ended December 31, 2021 and 2020, the Company received advances, short-term notes and convertible line advances payable to related parties for operating expenses. During the year ended December 31, 2021the Company received the proceeds of a convertible bond – related party of
$20,000 and advances from a related party of $427,900 and the proceeds from the sale of common shares of $5,000. During the year ended December 31, 2020the Company made installments on a convertible line payable of $4,250payments on short-term notes of $100,000 and repayments on short-term advances from related parties of
$856. The Company also received proceeds from the sale of common shares of
$75,000proceeds of the convertible loan to be paid from $8,500advances from a related party of $96,000 and note payable – related party of $65,000 during the year ended December 31, 2020.

In summary, our cash flows were as follows:



                                                  Fiscal Year Ended December 31,
                                                    2021                  2020

Net cash used in operating activities ($356,892) ($109,394)
Net cash used in investing activities

                  (95,791 )             (30,000 )
Net cash provided by financing activities              452,900               139,394
Net change in cash and cash equivalents                    217                     -
Cash and cash equivalents, beginning of year                 -                     -
Cash and cash equivalents, end of year         $           217       $             -




Short Term


In the short term, the Company has not generated sufficient revenue to cover its operations. Based on past history, the Company will continue to have insufficient revenues to satisfy current and recurring liabilities as the Company continues its exploration activities.


Capital Resources


Other than targeted acquisitions, the Company has no material commitments for capital expenditures over the next year, but if operations are initiated, significant capital will be required to pay for participation, investigation, exploration, acquisition and working capital.


Need for Additional Financing


The Company does not have sufficient capital to meet its cash requirements. The Company will need to seek loans or equity investments to cover these cash requirements. Once exploration begins, its need for additional funding will likely increase significantly.

No commitment to provide additional funds has been made by the management of the Company or other shareholders. Accordingly, there can be no assurance that additional funds will be made available to enable us to meet Company expenses when they may be incurred.

The Company will require substantial additional capital to support its proposed future oil exploration activities. The Company has minimal revenues. The Company has no committed source of funds as of the date hereof. No representation is made that funds will be available should the need arise. If the funds cannot be raised when needed, the Company may not be able to carry out its business plan, may never realize sales or royalty income and may go bankrupt due to these uncertainties.

Decisions regarding future participation in exploration wells or geophysical studies or other activities will be made on a case-by-case basis. The Company may, in any particular case, decide to participate or refuse to participate. If it participates, the Company may pay its share of the costs to maintain the Company’s proportionate interest through cash flow, debt or equity financing. If participation is declined, the Company may choose to subcontract, not consent, sell or otherwise negotiate a cost-sharing method to maintain an ongoing interest in the prospect.

Off-balance sheet arrangements


None



                                       36

————————————————– ——————————



Critical Accounting Policies


The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with we GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not evident from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management has determined that there are no critical accounting estimates.



                                       37

————————————————– ——————————

© Edgar Online, source Previews

Share.

Comments are closed.