10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended June 30, 2022.
☐	Transition Report under Section 13 or 15(d) of the Exchange Act
	For the Transition Period from          to

Commission File Number: 000-55586

Alpha Energy, Inc.

(Exact Name of Registrant as Specified in its Charter)

Colorado	90-1020566
(State of other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

14143 Denver West Parkway, Suite 100,

Golden, CO 80401

(Address of principal executive offices) (Zip Code)

Registrant's Phone: 800-819-0604

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or 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 ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒ No ☐

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of August 18, 2022, was 18,824,106.

	TABLE OF CONTENTS	Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	15
Item 4.	Controls and Procedures	15
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5.	Other Information	15
Item 6.	Exhibits	16

ITEM 1. FINANCIAL STATEMENTS

	Page(s)
Consolidated Balance Sheets (unaudited)	4
Consolidated Statements of Operations (unaudited)	5
Consolidated Statements of Stockholders' Deficit (unaudited)	6
Consolidated Statements of Cash Flows (unaudited)	7
Notes to the Consolidated Financial Statements (unaudited)	8

3

Alpha Energy, Inc. 

Consolidated Balance Sheets 

(Unaudited)

	June 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	1,092,748		$	217
Joint interest billing receivable		7,890			-
Prepaid assets and other current assets		25,000			23,750
Total current assets		1,125,638			23,967
Noncurrent assets:
Oil and gas property, unproved, full cost		902,089			145,791
Total assets	$	2,027,727		$	169,758
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses	$	393,681		$	270,250
Accounts payable and accrued expenses - related parties		203,484			228,668
Interest payable		79,248			77,563
Advances from related parties		-			628,550
Note payable - related party		-			65,000
Subscription liability		1,761,570			-
Derivative liability		341,306			145,041
Convertible note payable		1,210,000			1,210,000
Total current liabilities		3,989,289			2,625,072
Convertible credit line payable – related party, net of discount of $7,856 and $11,100, respectively		160,472			157,228
Senior secured convertible notes payable, related party, net of discount of $172,778		1,147,181			-
Asset retirement obligation		918			918
Total liabilities		5,297,860			2,783,218
Commitments and contingencies
Stockholders' deficit:
Preferred stock, 10,000,000 shares authorized:
Series A convertible preferred stock, $0.001 par value, 2,000,000 shares authorized and 0 shares issued and outstanding		-			-
Common stock, $0.001 par value, 65,000,000 shares authorized and 18,824,106 shares issued and outstanding		18,824			18,824
Additional paid-in capital		2,853,634			2,739,634
Accumulated deficit		(6,142,591	)		(5,371,918	)
Total stockholders' deficit		(3,270,133	)		(2,613,460	)
Total liabilities and stockholders' deficit	$	2,027,727		$	169,758

See accompanying notes to the unaudited consolidated financial statements.

4

Alpha Energy, Inc. 

Consolidated Statements of Operations 

For the three and six months ended June 30, 2022 and 2021

(Unaudited)

	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Oil and gas sales	$	5,239		$	-		$	5,239		$	-
Lease operating expenses		47,558			-			49,434			-
Gross loss		(42,319	)		-			(44,195	)		-
Operating expenses:
Professional services		61,005			35,643			209,693			47,562
Board of director fees		36,000			48,000			84,000			96,000
General and administrative		215,264			129,318			364,594			358,821
Gain on settlement of accounts payable		-			-			-			(120,250	)
Total operating expenses		312,269			212,961			658,287			382,133
Loss from operations		(354,588	)		(212,961	)		(702,482	)		(382,133	)
Other income (expense):
Interest expense		(54,916	)		(35,675	)		(80,402	)		(109,587	)
Gain (loss) on change in fair value of derivative liabilities		14,969			(18,403	)		12,211			(5,099	)
Total other income (expense)		(39,947	)		(54,078	)		(68,191	)		(114,686	)
Net loss	$	(394,535	)	$	(267,039	)	$	(770,673	)	$	(496,819	)
Loss per share:
Basic	$	(0.02	)	$	(0.01	)	$	(0.04	)	$	(0.03	)
Diluted	$	(0.02	)	$	(0.01	)	$	(0.04	)	$	(0.03	)
Weighted average shares outstanding:
Basic		18,824,106			18,309,939			18,824,106			18,249,450
Diluted		19,256,426			18,309,939			19,256,426			18,249,450

See accompanying notes to the unaudited consolidated financial statements.

5

Alpha Energy, Inc. 

Consolidated Statements of Stockholders' Deficit 

For the six months ended June 30, 2022 and 2021

(Unaudited)

	Common Stock				Additional		Accumulated			Total Stockholders'
	Shares		Amount		Paid-in Capital		Deficit			Deficit
Balance, December 31, 2021		18,824,106	$	18,824	$	2,739,634	$	(5,371,918	)	$	(2,613,460	)
				.
Stock-based compensation		-		-		63,000		-			63,000
Net loss		-		-		-		(376,138	)		(376,138	)
Balance, March 31, 2022		18,824,106		18,824		2,802,634		(5,748,056	)		(2,926,598	)
Stock-based compensation		-		-		51,000		-			51,000
Net loss		-		-		-		(394,535	)		(394,535	)
Balance, June 30, 2022		18,824,106	$	18,824	$	2,853,634	$	(6,142,591	)	$	(3,270,133	)
Balance, December 31, 2020		18,145,428	$	18,145	$	2,061,635	$	(4,301,180	)	$	(2,221,400	)
Stock issued for settlement of liabilities		90,000		90		89,910		-			90,000
Stock-based compensation		48,000		48		47,952		-			48,000
Net loss		-		-		-		(229,780	)		(229,780	)
		-
Balance, March 31, 2021		18,283,428		18,283		2,199,497		(4,530,960	)		(2,313,180	)
Stock issued for cash		5,000		5		4,995		-			5,000
Stock-based compensation		63,000		63		62,937		-			63,000
Net loss		-		-		-		(267,039	)		(267,039	)
		-
Balance, June 30, 2021		18,351,428	$	18,351	$	2,267,429	$	(4,797,999	)	$	(2,512,219	)

See accompanying notes to the unaudited consolidated financial statements.

6

Alpha Energy, Inc. 

Consolidated Statements of Cash Flows

For the six months ended June 30, 2022 and 2021

(Unaudited)

	June 30, 2022			June 30, 2021
Cash flows from operating activities:
Net loss	$	(770,673	)	$	(496,819	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		114,000			111,000
Amortization of debt discount		38,942			2,754
(Gain) loss on change in fair value of derivative liabilities		(12,211	)		5,099
Gain on settlement of accounts payable		-			(120,250	)
Write off of option contract associated with oil and gas properties		-			85,500
Asset retirement obligation expense		-			38
Default interest added to note payable		-			50,000
Changes in operating assets and liabilities:
Accounts receivable		(7,890	)		-
Prepaid expenses and other current assets		(1,250	)		25,000
Accounts payable		111,332			63,692
Accounts payable-related party		(13,085	)		55,511
Interest payable		17,863			28,999
Net cash used in operating activities		(522,972	)		(189,476	)
Cash flows from investing activities:
Acquisition of oil and gas property		(756,298	)		-
Deposits for purchase of oil and gas properties		-			(40,000	)
Net cash used in investing activities		(756,298	)		(40,000	)
Cash flows from financing activities:
Advances from related parties		110,235			159,600
Proceeds from note payable, related party		-			65,000
Proceeds from senior secured convertible notes payable, related party		499,996			-
Proceeds from the sale of common stock		-			5,000
Proceeds from unexecuted subscription agreements		1,761,570			-
Net cash provided by financing activities		2,371,801			229,600
Net change in cash and cash equivalents		1,092,531			124
Cash and cash equivalents, at beginning of period		217			-
Cash and cash equivalents, at end of period	$	1,092,748		$	124
Supplemental disclosures of cash flow information:
Cash paid for interest	$	23,596		$	27,834
Cash paid for income taxes	$	-		$	-
Supplemental disclosure of non-cash investing and financing activities:
Expenses paid on behalf of the Company by related party	$	-		$	13,244
Oil and gas payments made by related party on behalf of the Company	$	-		$	65,500
Stock issued for settlement of accounts payable	$	-		$	90,000
Debt discount on senior secured convertible notes payable - related party	$	208,476		$	-
Advances and other liabilities converted to senior secured convertible notes payable, related party	$	819,963		$	-

See accompanying notes to the unaudited consolidated financial statements.

7

Alpha Energy, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2021 and 2020 which are included on the Form 10-K filed on April 4, 2022. In the opinion of management, all adjustments which include normal recurring adjustments, necessary to present fairly the financial position, results of operations, and cash flows for the periods shown have been reflected herein. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results for the full year. Certain information and footnote disclosures which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the years ended December 31, 2021, and 2020 have been omitted.

Principles of Consolidation

Our consolidated financial statements include our accounts and the accounts of our 100% owned subsidiary, Alpha Energy Texas Operating, LLC. All intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.

Basic and Diluted Loss per share

Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings (Loss) per Share”. Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. For the three and six months ended June 30, 2022 and 2021, there were 263,992 and 0 shares issuable from the senior secured convertible notes payable and 168,328 and 148,328 shares issuable from the convertible credit line payable which were considered for their dilutive effects but were determined to be anti-dilutive due to the Company’s net loss, respectively.

The reconciliation of basic and diluted loss per share is as follows:

	Three months ended						Six months ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Basic net loss	$	(394,535	)	$	(267,039	)	$	(770,673	)	$	(496,819	)
Add back: (Gain) loss on change in fair value of derivative liabilities		(14,969	)		18,403			(12,211	)		5,099
Diluted net loss	$	(409,504	)	$	(248,636	)	$	(782,884	)	$	(491,720	)
Basic and dilutive shares:
Weighted average basic shares outstanding		18,824,106			18,309,939			18,824,106			18,249,450
Shares issuable from convertible credit line payable		168,328			-			168,328			-
Shares issuable from senior secured convertible notes payable		263,992			-			263,992			-
Dilutive shares		19,256,426			18,309,939			19,256,426			18,249,450
Loss per share:
Basic	$	(0.02	)	$	(0.01	)	$	(0.04	)	$	(0.03	)
Diluted	$	(0.02	)	$	(0.01	)	$	(0.04	)	$	(0.03	)

8

 

Fair Value of Financial Instruments

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The carrying amount of the Company’s financial instruments consisting of cash and cash equivalents, accounts payable, notes payable and convertible notes approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Reclassification

Certain reclassifications may have been made to our prior year’s financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.

Recently Issued Accounting Standards Not Yet Adopted

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that there are no recently issued accounting pronouncements that will have a significant effect on its financial statements.

9

NOTE 2 – GOING CONCERN

The Company’s interim unaudited consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has minimal cash or other current assets and does not have an established ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – OIL AND GAS PROPERTIES

On  June 30, 2020, the Company entered into an option Agreement with Progressive Well Service, LLC (“Progressive”) to acquire oil and gas assets in Lincoln and Logan Counties in Central Oklahoma. On  March 9, 2022, the Company closed on the acquisition of 34 well bores and related assets under the PSA with cash payments of $726,298. The Company is entitled to receive the proceeds of production from  January 1, 2022 under the terms of the PSA and Progressive is required to operate the properties and transfer ownership and royalty decks to Company following a one-month transition period. Under the PSA we are obligated to make a further payment of three (3%) percent of the net revenue from new wells drilled until Progressive receives an additional $350,000.

The Company entered into a Letter of Intent with Chicorica, LLC on  December 13, 2018 and extended the agreement through  March 4, 2022. On  March 1, 2022, the Company entered into an extension agreement with Chicorica to extend the Closing through  August 5, 2022. In return, the Company must pay $30,000 by  April 1, 2022, $35,000 by  July 8, 2022 and $30,000 by  August 5, 2022. During the six months ended June 30, 2022, the Company paid $30,000 related to the extension agreement.

NOTE 4 – RELATED PARTY TRANSACTIONS

Advances from Related Party

The Company received advances from AEI Management, Inc., a Company owned by a significant shareholder, totaling $88,956 and $133,844 during the six months ended  June 30, 2022 and 2021, respectively. The advances are unsecured, non-interest bearing and are payable on demand. During the six months ended June 30, 2022, the Company repaid $10,000 of the advances and converted $413,206 of advances to a senior secured convertible note due February 24, 2024.

The Company received advances from Jay Leaver, President of the Company, totaling $31,280 and $104,500 during the six months ended  June 30, 2022 and 2021, respectively. The advances are unsecured, non-interest bearing and is payable on demand. During the six months ended June 30, 2022, the Company converted $325,580 of advances to a senior secured convertible note due February 24, 2024.

As of  June 30, 2022 and  December 31, 2021, there was $0 and $628,550 of short-term advances due to related parties, respectively.

Accounts Payable and Accrued Expenses - Related Parties

As of June 30, 2022, there was $203,484 of accounts payable related parties which consisted of $203,484 due to Leaverite Exploration, Inc. d/b/a Leaverite Consulting (“Leaverite Exploration”), a corporation wholly-owned by our President, Jay Leaver pursuant to a consulting agreement.

As of December 31, 2021, there was $228,668 of accounts payable related parties which consisted of $203,484 due to Leaverite Exploration, $4,394 due to former CFO John Lepin, $10,000 due Kelloff Oil &Gas, LLC, a limited liability company and $5,790 due to Staley Engineering LLC for consulting services.

10

 

Notes Payable - Related Party

On  December 3, 2020, the Company executed a promissory note for $65,000 with the Jay Leaver, our President. The unsecured note matured three years from date of issuance and bore interest at a rate of 5% per annum. As of  December 31, 2021, the note payable had unpaid accrued interest in the amount of $13,003. On  February 23, 2022, the promissory note was amended to a principal amount of $406,750, which includes the original $65,000 plus additional advances of $325,580, and accrued interest of $16,170. An additional $110,235 was advanced during the six months ended June 30, 2022 maturing February 23, 2025. In  February 2022, Mr. Leaver advanced an additional $500,000 to the Company. On  February 25, 2022, Mr. Leaver’s $406,750 promissory note and $500,000 advance were assigned to 20 Shekels, Inc, a corporation wholly-owned by Marshwiggle, LLC, a limited liability company jointly owned by Mr. Leaver and his spouse and on February 25, 2022 the Company issued $906,750 of its secured senior secured convertible notes due February 24, 2024, bearing interest at a rate of 7.25% per annum (the “7.25% Note”) in exchange for the prior obligations. The 7.25% Note is convertible into shares of the Company’s Common Stock at $5.00 per share. See Note 7 – Senior Secured Convertible Notes Payable.

NOTE 5 – COMMON STOCK

The Company is authorized to issue 75,000,000 shares of its capital stock, consisting of 10,000,000 shares of preferred stock, par value $0.001 per share, and 65,000,000 shares of common stock, par value $0.001 per share.

The Company compensates each of its directors with 4,000 shares of common stock each month. During the six months ended June 30, 2022, the Company recorded stock compensation of $84,000 for directors which was recorded in additional paid in capital, but has not recorded the share compensation as issued and outstanding as of the date hereof

During the six months ended June 30, 2022, the Company recorded stock compensation in the amount of $30,000 for Kelloff Oil & Gas, LLC.

During the six months ended  June 30, 2022, the Company received cash proceeds of $1,761,570 from investor subscriptions to purchase common stock at a purchase price of $1.00 per share recorded as a current liability.

NOTE 6 – CONVERTIBLE CREDIT LINE PAYABLE AND SENIOR SECURED CONVERTIBLE NOTES PAYABLE – RELATED PARTY

Convertible Credit Line Payable

On  June 1, 2021, the Company entered into a new convertible credit line agreement to borrow up to $1,500,000 and matures on  June 1, 2023. The outstanding balance accrues interest at a rate of 7% per annum and the outstanding balance is convertible to common stock of the Company at the lesser of the close price of the common stock as quoted on the OTCBB on the day interest is due and payable immediately preceding the conversion or $4.00. The Company analyzed the conversion option in the convertible line of credit for derivative accounting consideration under ASC 815, Derivative and Hedging, and determined that the transaction does qualify for derivative treatment. The Company evaluated the new convertible credit line for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt modification as the borrowing capacity under the new credit line is greater than the borrowing capacity under the original credit line. There were no fees paid to the creditor and no unamortized deferred costs on the original credit line. Accordingly, no expense was recognized in connection with the transaction. On  August 8, 2021, the Company received $20,000 in cash proceeds from the credit line. During the six months ended  June 30, 2022, the Company amortized $3,244 of the discount as interest expense. As of  June 30, 2022, and  December 31, 2021, the unamortized discount was $7,856 and $11,100, respectively. The outstanding principal balance on the convertible credit line as of  June 30, 2022 and  December 31, 2021 amounted to $168,328. See discussion of derivative liability in Note 8 – Derivative Liability.

Senior Secured Convertible Notes Payable

On  February 25, 2022, the Company entered into secured senior secured convertible note for the purchase and sale of convertible promissory notes (“Convertible Note”) in the principal amount of $5,000,000. The Senior Convertible Note is convertible at any time after the date of issuance into shares of the Company’s common stock at a fixed conversion price of $5.00 per share. Upon conversion of the convertible note into the Company’s common stock, the noteholder would be issued 1,000,000 shares of the Company’s common stock. Interest on the Convertible Note shall be paid to the investors at a rate of 7.25% per annum, paid on a quarterly basis, and the maturity date of the Convertible Note is two years after the issuance date. The Convertible Note purports to be secured by certain oil and gas leases, lands, minerals and other properties of the Company, subject to prior liens and security interests. See Note 4 – Related Party Transactions. $413,206 from a related party were exchanged for a Convertible Note. Due to the variable conversion price in the convertible credit line, this fixed senior secured convertible note is treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $65,262, which was recorded as a discount on the senior secured convertible notes payable. During the six months ended  June 30, 2022, the Company amortized $11,175 of the discount as interest expense. As of  June 30, 2022, the unamortized discount was $54,087. The outstanding principal balance on the convertible credit line as of  June 30, 2022 amounted to $413,206. See discussion of derivative liability in Note 8 – Derivative Liability. 

11

 

On  February 25, 2022, Mr. Leaver assigned a $406,750 promissory note and advances of $500,000 to 20 Shekels, an affiliated Company. On the same day, the assigned promissory note and advance totaling $906,750 were transferred into a secured senior secured convertible note. The convertible note bears interest at 7.25% and matures on  February 25, 2024. The note is convertible into shares of the Company at $5.00 per share. Due to the variable convertible credit line, this fixed senior secured convertible note are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $143,214, which was recorded as a discount on the senior secured convertible notes payable. During the six months ended  June 30, 2022, the Company amortized $24,523 of the discount as interest expense. As of  June 30, 2022, the unamortized discount was $118,691. The outstanding principal balance on the convertible credit line as of  June 30, 2022 amounted to $906,753. See discussion of derivative liability in Note 8 – Derivative Liability.

As of  June 30, 2022, the senior secured convertible notes payable balance, net of discount was $1,147,181 with accrued interest of $8,878.

NOTE 7 – DERIVATIVE LIABILITY

As discussed in Note 1, we measure certain financial assets and liabilities based upon the fair value hierarchy. The following table presents information about the Company’s financial liabilities, measured at fair value on a recurring basis, as of June 30, 2022 and December 31, 2021:

	Level 1		Level 2		Level 3		Fair Value at June 30, 2022
Liabilities:
Derivative liability	$	-	$	-	$	341,306	$	341,306

	Level 1		Level 2		Level 3		Fair Value at December 31, 2021
Liabilities:
Derivative liability	$	-	$	-	$	145,041	$	145,041

Utilizing Level 3 Inputs, the Company recorded a gain on fair market value adjustments related to convertible credit line payable and senior secured notes payable for the six months ended June 30, 2022 of $12,211. The fair market value adjustments as of June 30, 2022 were calculated utilizing the Black-Scholes option pricing model using the following assumptions: exercise price of $1.00 - $5.00, computed volatility of 247% - 274% and discount rate of 2.80% - 2.92%.

A summary of the activity of the derivative liability is shown below at June 30, 2022:

Balance at December 31, 2021	$	145,041
Debt discount on senior secured notes payable		208,476
Gain on change in derivative fair value adjustment		(12,211	)
Balance at June 30, 2022	$	341,306

12

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

The discussion and analysis below includes certain forward-looking statements that are subject to risks, uncertainties and other factors, as described in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, that could cause our actual growth, results of operations, performance, financial position and business prospects and opportunities for this fiscal year and periods that follow to differ materially from those expressed in or implied by those forward-looking statements. Readers are cautioned that forward-looking statements contained in this Quarterly Report on Form 10-Q should be read in conjunction with our disclosure under the heading “Disclosure Regarding Forward-Looking Statements” below.

13

General Business Development

The Company was formed on September 26, 2013 in the State of Colorado.

Business Strategy

Our strategy is to acquire producing properties that the Company can operate which have proven un-drilled locations available for further development. In the process of identifying drilling prospects, the Company will utilize the expertise of existing management and employ contract engineering firms available to further evaluate the properties.

The company is actively pursuing acquisition of additional properties in Oklahoma, Texas and New Mexico.

Liquidity and Capital Resources

As of June 30, 2022, we had total current assets of $1,125,638 and total current liabilities of $3,989,289.

The Company used $522,971 of cash in operating activities during the six months ended June 30, 2022, compared to $189,476 used in operations during the same period in 2021. Net cash used in operating activities during the six months ended June 30, 2022 was mainly comprised of our $770,673 net loss during the period, adjusted by a non-cash charges of $12,211 for gain on change in fair value of derivative liabilities, stock-based compensation of $114,000, amortization of debt discounts of $38,943 and changes in operating assets and liabilities of $106,971. Net cash used in operating activities during the six months ended June 30, 2021 was mainly comprised of our $496,819 net loss during the period, adjusted by a non-cash charges of $120,250 gain on settlement of accounts payable, $5,099 for loss on change in fair value of derivative liabilities, stock-based compensation of $111,000, amortization of debt discounts of $2,754, write off of option contract associated with oil and gas properties of $85,500, default interest added to note payable of $50,000, asset retirement obligations expense of $19 and changes in operating assets and liabilities of $173,202.

The Company used cash of $756,298 for investing activities during the six months ended June 30, 2022 which consisted of $756,298 for the acquisition of oil and gas property. The Company used cash of $40,000 for investing activities during the six months ended June 30, 2022 related to deposits for oil and gas properties.

The Company generated cash of $2,371,801 from financing activities during the six months ended June 30, 2022 which consisted of $110,235 in proceeds from advances from related parties, $499,996 from senior secured convertible notes payable from related party and $1,761,570 in proceeds from unexecuted subscription agreements. The Company generated cash of $229,600 from financing activities during the six months ended June 30, 2021 which consisted of $159,600 advances from related party, $65,00 of proceeds from note payable, related party and $5,000 in proceeds from the sale of common stock.

Going Concern

The future of our company is dependent upon its ability to obtain financing and upon future profitable operations. Management has plans to seek additional capital through a private placement and public offering of its common stock, if necessary. See Note 2 to the unaudited consolidated financial statements for additional information.

Results of Operations

We generated revenue of $5,239 and $0 during the three months ended June 30, 2022 and 2021, respectively. Lease operating expenses were $47,558 and $0 during the three months ended June 30, 2022 and 2021, respectively. The increase in lease operating expenses was due to an increase in geological expenses. Total operating expenses were $312,269 during the three months ended June 30, 2022 compared to $212,961 during the same period in 2021. The increase in operating expenses was due to a $25,362 increase in professional fees and $85,946 increase in general and administrative expenses which were offset by $12,000 decrease in board of director fees.

We generated revenues of $5,239 and $0 during the six months ended June 30, 2022 and 2021. Lease operating expenses were $49,434 and $0 during the six months ended June 30, 2022 and 2021, respectively. The increase in lease operating expenses was due to an increase in geological expenses. Total operating expenses were $658,287 during the six months ended June 30, 2022 compared to $382,133 during the same period in 2021. The increase in operating expenses was due to a $162,131 increase in professional fees and $5,773 increase in general administrative expenses which were offset by $12,000 decrease in board of director fees and a $120,250 gain on settlement of accounts payable in 2021.

Off-Balance sheet arrangements

As of June 30, 2022, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

14

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods. Our accounting policies are described in Note 1 to our audited consolidated financial statements for 2021 appearing in our Annual Report on Form 10-K for the year ended December 31, 2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls

The Company and its subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act. The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

You should carefully consider the factors discussed below in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which could materially affect our business, financial position, or future results of operations. The risks described below in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially, adversely affect our business, financial position, or future results of operations. There have been no material changes in the risk factors set forth in the Company’s Form 10K for the period ended December 31, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

See Item 1, Note 5 and Item 1, Note 6.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable to our operations.

ITEM 5. OTHER INFORMATION

None.

15

ITEM 6. EXHIBITS

The following documents are included or incorporated by reference as exhibits to this report:

Exhibit Number	Description
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as a adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as a adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS**	Inline XBRL Instance
101.SCH**	Inline XBRL Taxonomy Extension Schema
101.CAL**	Inline XBRL Taxonomy Extension Calculation
101.DEF**	Inline XBRL Taxonomy Extension Definition
101.LAB**	Inline XBRL Taxonomy Extension Labels
101.PRE**	Inline XBRL Taxonomy Extension Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

16

SIGNATURES

In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: August 18, 2022

Alpha Energy, Inc.
By:	/s/ Jay Leaver
	Jay Leaver, Principal Executive Officer, Principal Financial Officer

17

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Jay Leaver, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Alpha Energy, Inc. (the “Company”); 

2.Based on my knowledge, this 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 report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented ire this report; 

4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: 

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c. Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

d. Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and 

5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and 

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. 

Date: August 18, 2022

/s/ Jay Leaver

Jay Leaver

Principal Executive Officer, Principal Financial Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Jay Leaver, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Alpha Energy, Inc. (the “Company”); 

2.Based on my knowledge, this 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 report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented ire this report; 

4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: 

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c. Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

d. Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and 

5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and 

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. 

Date: August 18, 2022

/s/ Jay Leaver

Jay Leaver

Principal Executive Officer, Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Alpha Energy, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jay Leaver, Principal Executive Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

Date: August 18, 2022

/s/ Jay Leaver

Jay Leaver

Principal Executive Officer, Principal Financial Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Alpha Energy, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jay Leaver, Principal Executive Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

Date: August 18, 2022

/s/ Jay Leaver

Jay Leaver

Principal Executive Officer, Principal Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2022	Aug. 18, 2022
Document Information [Line Items]
Entity Central Index Key	0000855787
Entity Registrant Name	ALPHA ENERGY INC
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	000-55586
Entity Incorporation, State or Country Code	CO
Entity Tax Identification Number	90-1020566
Entity Address, Address Line One	14143 Denver West Parkway, Suite 100
Entity Address, City or Town	Golden
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80401
City Area Code	800
Local Phone Number	819-0604
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		18,824,106

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 1,092,748	$ 217
Joint interest billing receivable	7,890	0
Prepaid assets and other current assets	25,000	23,750
Total current assets	1,125,638	23,967
Noncurrent assets:
Oil and gas property, unproved, full cost	902,089	145,791
Total assets	2,027,727	169,758
Current liabilities:
Accounts payable and accrued expenses	393,681	270,250
Accounts payable and accrued expenses - related parties	203,484	228,668
Interest payable	79,248	77,563
Advances from related parties	0	628,550
Note payable - related party	0	65,000
Subscription liability	1,761,570	0
Derivative liability	341,306	145,041
Convertible note payable	1,210,000	1,210,000
Total current liabilities	3,989,289	2,625,072
Convertible credit line payable – related party, net of discount of $7,856 and $11,100, respectively	160,472	157,228
Senior secured convertible notes payable, related party, net of discount of $172,778	1,147,181	0
Asset retirement obligation	918	918
Total liabilities	5,297,860	2,783,218
Commitments and contingencies
Stockholders' deficit:
Preferred stock, 10,000,000 shares authorized:Series A convertible preferred stock, $0.001 par value, 2,000,000 shares authorized and 0 shares issued and outstanding	0	0
Common stock, $0.001 par value, 65,000,000 shares authorized and 18,824,106 shares issued and outstanding	18,824	18,824
Additional paid-in capital	2,853,634	2,739,634
Accumulated deficit	(6,142,591)	(5,371,918)
Total stockholders' deficit	(3,270,133)	(2,613,460)
Total liabilities and stockholders' deficit	$ 2,027,727	$ 169,758

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized (in shares)	10,000,000	10,000,000
Preferred Stock, Shares Issued (in shares)	0	0
Preferred Stock, Shares Outstanding (in shares)	0	0
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.001	$ 0.001
Common Stock, Shares Authorized (in shares)	65,000,000	65,000,000
Common Stock, Shares, Issued (in shares)	18,824,106	18,824,106
Common Stock, Shares, Outstanding (in shares)	18,824,106	18,824,106
Series A Preferred Stock [Member]
Preferred Stock, Shares Authorized (in shares)	2,000,000	2,000,000
Convertible Credit Line Payable, Related Party [Member]
Convertible debt, noncurrent unamortized discount	$ 7,856	$ 11,100
Secured Senior Secured Convertible Note [Member]
Convertible debt, noncurrent unamortized discount	$ 172,778

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Oil and gas sales	$ 5,239	$ 0	$ 5,239	$ 0
Lease operating expenses	47,558	0	49,434	0
Gross loss	(42,319)	0	(44,195)	0
Operating expenses:
Professional services	61,005	35,643	209,693	47,562
Board of director fees	36,000	48,000	84,000	96,000
General and administrative	215,264	129,318	364,594	358,821
Gain on settlement of accounts payable	0	0	0	(120,250)
Total operating expenses	312,269	212,961	658,287	382,133
Loss from operations	(354,588)	(212,961)	(702,482)	(382,133)
Other income (expense):
Interest expense	(54,916)	(35,675)	(80,402)	(109,587)
Gain (loss) on change in fair value of derivative liabilities	14,969	(18,403)	12,211	(5,099)
Total other income (expense)	(39,947)	(54,078)	(68,191)	(114,686)
Net loss	$ (394,535)	$ (267,039)	$ (770,673)	$ (496,819)
Loss per share:
Basic (in dollars per share)	$ (0.02)	$ (0.01)	$ (0.04)	$ (0.03)
Diluted (in dollars per share)	$ (0.02)	$ (0.01)	$ (0.04)	$ (0.03)
Weighted average shares outstanding:
Basic (in shares)	18,824,106	18,309,939	18,824,106	18,249,450
Diluted (in shares)	19,256,426	18,309,939	19,256,426	18,249,450

XML

Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2020	18,145,428
Balance at Dec. 31, 2020	$ 18,145	$ 2,061,635	$ (4,301,180)	$ (2,221,400)
Stock-based compensation (in shares)	48,000
Stock-based compensation	$ 48	47,952	0	48,000
Net loss	$ 0	0	(229,780)	(229,780)
Stock issued for settlement of liabilities (in shares)	90,000
Stock issued for settlement of liabilities	$ 90	89,910	0	90,000
Balance (in shares) at Mar. 31, 2021	18,283,428
Balance at Mar. 31, 2021	$ 18,283	2,199,497	(4,530,960)	(2,313,180)
Balance (in shares) at Dec. 31, 2020	18,145,428
Balance at Dec. 31, 2020	$ 18,145	2,061,635	(4,301,180)	(2,221,400)
Net loss				(496,819)
Balance (in shares) at Jun. 30, 2021	18,351,428
Balance at Jun. 30, 2021	$ 18,351	2,267,429	(4,797,999)	(2,512,219)
Balance (in shares) at Mar. 31, 2021	18,283,428
Balance at Mar. 31, 2021	$ 18,283	2,199,497	(4,530,960)	(2,313,180)
Stock-based compensation (in shares)	63,000
Stock-based compensation	$ 63	62,937	0	63,000
Net loss	$ 0	0	(267,039)	(267,039)
Stock issued for cash (in shares)	5,000
Stock issued for cash	$ 5	4,995	0	5,000
Balance (in shares) at Jun. 30, 2021	18,351,428
Balance at Jun. 30, 2021	$ 18,351	2,267,429	(4,797,999)	(2,512,219)
Balance (in shares) at Dec. 31, 2021	18,824,106
Balance at Dec. 31, 2021	$ 18,824	2,739,634	(5,371,918)	(2,613,460)
Stock-based compensation (in shares)	0
Stock-based compensation	$ 0	63,000	0	63,000
Net loss	$ 0	0	(376,138)	(376,138)
Balance (in shares) at Mar. 31, 2022	18,824,106
Balance at Mar. 31, 2022	$ 18,824	2,802,634	(5,748,056)	(2,926,598)
Balance (in shares) at Dec. 31, 2021	18,824,106
Balance at Dec. 31, 2021	$ 18,824	2,739,634	(5,371,918)	(2,613,460)
Net loss				(770,673)
Balance (in shares) at Jun. 30, 2022	18,824,106
Balance at Jun. 30, 2022	$ 18,824	2,853,634	(6,142,591)	(3,270,133)
Balance (in shares) at Mar. 31, 2022	18,824,106
Balance at Mar. 31, 2022	$ 18,824	2,802,634	(5,748,056)	(2,926,598)
Stock-based compensation (in shares)	0
Stock-based compensation	$ 0	51,000	0	51,000
Net loss	$ 0	0	(394,535)	(394,535)
Balance (in shares) at Jun. 30, 2022	18,824,106
Balance at Jun. 30, 2022	$ 18,824	$ 2,853,634	$ (6,142,591)	$ (3,270,133)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities:
Net loss	$ (770,673)	$ (496,819)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	114,000	111,000
Amortization of debt discount	38,942	2,754
(Gain) loss on change in fair value of derivative liabilities	(12,211)	5,099
Gain on settlement of accounts payable	0	(120,250)
Write off of option contract associated with oil and gas properties	0	85,500
Asset retirement obligation expense	0	38
Default interest added to note payable	0	50,000
Changes in operating assets and liabilities:
Accounts receivable	(7,890)	0
Prepaid expenses and other current assets	(1,250)	25,000
Accounts payable	111,332	63,692
Accounts payable-related party	(13,085)	55,511
Interest payable	17,863	28,999
Net cash used in operating activities	(522,972)	(189,476)
Cash flows from investing activities:
Acquisition of oil and gas property	(756,298)	0
Deposits for purchase of oil and gas properties	0	(40,000)
Net cash used in investing activities	(756,298)	(40,000)
Cash flows from financing activities:
Advances from related parties	110,235	159,600
Proceeds from note payable, related party	0	65,000
Proceeds from senior secured convertible notes payable, related party	499,996	0
Proceeds from the sale of common stock	0	5,000
Net cash provided by financing activities	2,371,801	229,600
Net change in cash and cash equivalents	1,092,531	124
Cash and cash equivalents, at beginning of period	217	0
Cash and cash equivalents, at end of period	1,092,748	124
Supplemental disclosures of cash flow information:
Cash paid for interest	23,596	27,834
Cash paid for income taxes	0	0
Supplemental disclosure of non-cash investing and financing activities:
Expenses paid on behalf of the Company by related party	0	13,244
Oil and gas payments made by related party on behalf of the Company	0	65,500
Stock issued for settlement of accounts payable	0	90,000
Debt discount on senior secured convertible notes payable - related party	208,476	0
Related Party Advances and Promissory Note Converted into 7.25% Note [Member]
Supplemental disclosure of non-cash investing and financing activities:
Advances and other liabilities converted to senior secured convertible notes payable, related party	819,963	0
Unexecuted Subscription Agreement [Member]
Cash flows from financing activities:
Proceeds from the sale of common stock	$ 1,761,570	$ 0

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Note 1 - Basis of Presentation

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

NOTE 1 – BASIS OF PRESENTATION

The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2021 and 2020 which are included on the Form 10-K filed on April 4, 2022. In the opinion of management, all adjustments which include normal recurring adjustments, necessary to present fairly the financial position, results of operations, and cash flows for the periods shown have been reflected herein. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results for the full year. Certain information and footnote disclosures which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the years ended December 31, 2021, and 2020 have been omitted.

Principles of Consolidation

Our consolidated financial statements include our accounts and the accounts of our 100% owned subsidiary, Alpha Energy Texas Operating, LLC. All intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.

Basic and Diluted Loss per share

Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings (Loss) per Share”. Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. For the three and six months ended June 30, 2022 and 2021, there were 263,992 and 0 shares issuable from the senior secured convertible notes payable and 168,328 and 148,328 shares issuable from the convertible credit line payable which were considered for their dilutive effects but were determined to be anti-dilutive due to the Company’s net loss, respectively.

The reconciliation of basic and diluted loss per share is as follows:

	Three months ended						Six months ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Basic net loss	$	(394,535	)	$	(267,039	)	$	(770,673	)	$	(496,819	)
Add back: (Gain) loss on change in fair value of derivative liabilities		(14,969	)		18,403			(12,211	)		5,099
Diluted net loss	$	(409,504	)	$	(248,636	)	$	(782,884	)	$	(491,720	)
Basic and dilutive shares:
Weighted average basic shares outstanding		18,824,106			18,309,939			18,824,106			18,249,450
Shares issuable from convertible credit line payable		168,328			-			168,328			-
Shares issuable from senior secured convertible notes payable		263,992			-			263,992			-
Dilutive shares		19,256,426			18,309,939			19,256,426			18,249,450
Loss per share:
Basic	$	(0.02	)	$	(0.01	)	$	(0.04	)	$	(0.03	)
Diluted	$	(0.02	)	$	(0.01	)	$	(0.04	)	$	(0.03	)

Fair Value of Financial Instruments

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The carrying amount of the Company’s financial instruments consisting of cash and cash equivalents, accounts payable, notes payable and convertible notes approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Reclassification

Certain reclassifications may have been made to our prior year’s financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.

Recently Issued Accounting Standards Not Yet Adopted

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that there are no recently issued accounting pronouncements that will have a significant effect on its financial statements.

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Note 2 - Going Concern

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

NOTE 2 – GOING CONCERN

The Company’s interim unaudited consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has minimal cash or other current assets and does not have an established ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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Note 3 - Oil and Gas Properties

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Oil and Gas Properties [Text Block]

NOTE 3 – OIL AND GAS PROPERTIES

On  June 30, 2020, the Company entered into an option Agreement with Progressive Well Service, LLC (“Progressive”) to acquire oil and gas assets in Lincoln and Logan Counties in Central Oklahoma. On  March 9, 2022, the Company closed on the acquisition of 34 well bores and related assets under the PSA with cash payments of $726,298. The Company is entitled to receive the proceeds of production from  January 1, 2022 under the terms of the PSA and Progressive is required to operate the properties and transfer ownership and royalty decks to Company following a one-month transition period. Under the PSA we are obligated to make a further payment of three (3%) percent of the net revenue from new wells drilled until Progressive receives an additional $350,000.

The Company entered into a Letter of Intent with Chicorica, LLC on  December 13, 2018 and extended the agreement through  March 4, 2022. On  March 1, 2022, the Company entered into an extension agreement with Chicorica to extend the Closing through  August 5, 2022. In return, the Company must pay $30,000 by  April 1, 2022, $35,000 by  July 8, 2022 and $30,000 by  August 5, 2022. During the six months ended June 30, 2022, the Company paid $30,000 related to the extension agreement.

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Note 4 - Related Party Transactions

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE 4 – RELATED PARTY TRANSACTIONS

Advances from Related Party

The Company received advances from AEI Management, Inc., a Company owned by a significant shareholder, totaling $88,956 and $133,844 during the six months ended  June 30, 2022 and 2021, respectively. The advances are unsecured, non-interest bearing and are payable on demand. During the six months ended June 30, 2022, the Company repaid $10,000 of the advances and converted $413,206 of advances to a senior secured convertible note due February 24, 2024.

The Company received advances from Jay Leaver, President of the Company, totaling $31,280 and $104,500 during the six months ended  June 30, 2022 and 2021, respectively. The advances are unsecured, non-interest bearing and is payable on demand. During the six months ended June 30, 2022, the Company converted $325,580 of advances to a senior secured convertible note due February 24, 2024.

As of  June 30, 2022 and  December 31, 2021, there was $0 and $628,550 of short-term advances due to related parties, respectively.

Accounts Payable and Accrued Expenses - Related Parties

As of June 30, 2022, there was $203,484 of accounts payable related parties which consisted of $203,484 due to Leaverite Exploration, Inc. d/b/a Leaverite Consulting (“Leaverite Exploration”), a corporation wholly-owned by our President, Jay Leaver pursuant to a consulting agreement.

As of December 31, 2021, there was $228,668 of accounts payable related parties which consisted of $203,484 due to Leaverite Exploration, $4,394 due to former CFO John Lepin, $10,000 due Kelloff Oil &Gas, LLC, a limited liability company and $5,790 due to Staley Engineering LLC for consulting services.

Notes Payable - Related Party

On  December 3, 2020, the Company executed a promissory note for $65,000 with the Jay Leaver, our President. The unsecured note matured three years from date of issuance and bore interest at a rate of 5% per annum. As of  December 31, 2021, the note payable had unpaid accrued interest in the amount of $13,003. On  February 23, 2022, the promissory note was amended to a principal amount of $406,750, which includes the original $65,000 plus additional advances of $325,580, and accrued interest of $16,170. An additional $110,235 was advanced during the six months ended June 30, 2022 maturing February 23, 2025. In  February 2022, Mr. Leaver advanced an additional $500,000 to the Company. On  February 25, 2022, Mr. Leaver’s $406,750 promissory note and $500,000 advance were assigned to 20 Shekels, Inc, a corporation wholly-owned by Marshwiggle, LLC, a limited liability company jointly owned by Mr. Leaver and his spouse and on February 25, 2022 the Company issued $906,750 of its secured senior secured convertible notes due February 24, 2024, bearing interest at a rate of 7.25% per annum (the “7.25% Note”) in exchange for the prior obligations. The 7.25% Note is convertible into shares of the Company’s Common Stock at $5.00 per share. See Note 7 – Senior Secured Convertible Notes Payable.

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Note 5 - Common Stock

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE 5 – COMMON STOCK

The Company is authorized to issue 75,000,000 shares of its capital stock, consisting of 10,000,000 shares of preferred stock, par value $0.001 per share, and 65,000,000 shares of common stock, par value $0.001 per share.

The Company compensates each of its directors with 4,000 shares of common stock each month. During the six months ended June 30, 2022, the Company recorded stock compensation of $84,000 for directors which was recorded in additional paid in capital, but has not recorded the share compensation as issued and outstanding as of the date hereof

During the six months ended June 30, 2022, the Company recorded stock compensation in the amount of $30,000 for Kelloff Oil & Gas, LLC.

During the six months ended  June 30, 2022, the Company received cash proceeds of $1,761,570 from investor subscriptions to purchase common stock at a purchase price of $1.00 per share recorded as a current liability.

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Note 6 - Convertible Credit Line Payable and Senior Secured Convertible Notes Payable - Related Party

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Convertible Debt Disclosure [Text Block]

NOTE 6 – CONVERTIBLE CREDIT LINE PAYABLE AND SENIOR SECURED CONVERTIBLE NOTES PAYABLE – RELATED PARTY

Convertible Credit Line Payable

On  June 1, 2021, the Company entered into a new convertible credit line agreement to borrow up to $1,500,000 and matures on  June 1, 2023. The outstanding balance accrues interest at a rate of 7% per annum and the outstanding balance is convertible to common stock of the Company at the lesser of the close price of the common stock as quoted on the OTCBB on the day interest is due and payable immediately preceding the conversion or $4.00. The Company analyzed the conversion option in the convertible line of credit for derivative accounting consideration under ASC 815, Derivative and Hedging, and determined that the transaction does qualify for derivative treatment. The Company evaluated the new convertible credit line for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt modification as the borrowing capacity under the new credit line is greater than the borrowing capacity under the original credit line. There were no fees paid to the creditor and no unamortized deferred costs on the original credit line. Accordingly, no expense was recognized in connection with the transaction. On  August 8, 2021, the Company received $20,000 in cash proceeds from the credit line. During the six months ended  June 30, 2022, the Company amortized $3,244 of the discount as interest expense. As of  June 30, 2022, and  December 31, 2021, the unamortized discount was $7,856 and $11,100, respectively. The outstanding principal balance on the convertible credit line as of  June 30, 2022 and  December 31, 2021 amounted to $168,328. See discussion of derivative liability in Note 8 – Derivative Liability.

Senior Secured Convertible Notes Payable

On  February 25, 2022, the Company entered into secured senior secured convertible note for the purchase and sale of convertible promissory notes (“Convertible Note”) in the principal amount of $5,000,000. The Senior Convertible Note is convertible at any time after the date of issuance into shares of the Company’s common stock at a fixed conversion price of $5.00 per share. Upon conversion of the convertible note into the Company’s common stock, the noteholder would be issued 1,000,000 shares of the Company’s common stock. Interest on the Convertible Note shall be paid to the investors at a rate of 7.25% per annum, paid on a quarterly basis, and the maturity date of the Convertible Note is two years after the issuance date. The Convertible Note purports to be secured by certain oil and gas leases, lands, minerals and other properties of the Company, subject to prior liens and security interests. See Note 4 – Related Party Transactions. $413,206 from a related party were exchanged for a Convertible Note. Due to the variable conversion price in the convertible credit line, this fixed senior secured convertible note is treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $65,262, which was recorded as a discount on the senior secured convertible notes payable. During the six months ended  June 30, 2022, the Company amortized $11,175 of the discount as interest expense. As of  June 30, 2022, the unamortized discount was $54,087. The outstanding principal balance on the convertible credit line as of  June 30, 2022 amounted to $413,206. See discussion of derivative liability in Note 8 – Derivative Liability. 

On  February 25, 2022, Mr. Leaver assigned a $406,750 promissory note and advances of $500,000 to 20 Shekels, an affiliated Company. On the same day, the assigned promissory note and advance totaling $906,750 were transferred into a secured senior secured convertible note. The convertible note bears interest at 7.25% and matures on  February 25, 2024. The note is convertible into shares of the Company at $5.00 per share. Due to the variable convertible credit line, this fixed senior secured convertible note are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $143,214, which was recorded as a discount on the senior secured convertible notes payable. During the six months ended  June 30, 2022, the Company amortized $24,523 of the discount as interest expense. As of  June 30, 2022, the unamortized discount was $118,691. The outstanding principal balance on the convertible credit line as of  June 30, 2022 amounted to $906,753. See discussion of derivative liability in Note 8 – Derivative Liability.

As of  June 30, 2022, the senior secured convertible notes payable balance, net of discount was $1,147,181 with accrued interest of $8,878.

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Note 7 - Derivative Liability

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Derivatives and Fair Value [Text Block]

NOTE 7 – DERIVATIVE LIABILITY

As discussed in Note 1, we measure certain financial assets and liabilities based upon the fair value hierarchy. The following table presents information about the Company’s financial liabilities, measured at fair value on a recurring basis, as of June 30, 2022 and December 31, 2021:

	Level 1		Level 2		Level 3		Fair Value at June 30, 2022
Liabilities:
Derivative liability	$	-	$	-	$	341,306	$	341,306

	Level 1		Level 2		Level 3		Fair Value at December 31, 2021
Liabilities:
Derivative liability	$	-	$	-	$	145,041	$	145,041

Utilizing Level 3 Inputs, the Company recorded a gain on fair market value adjustments related to convertible credit line payable and senior secured notes payable for the six months ended June 30, 2022 of $12,211. The fair market value adjustments as of June 30, 2022 were calculated utilizing the Black-Scholes option pricing model using the following assumptions: exercise price of $1.00 - $5.00, computed volatility of 247% - 274% and discount rate of 2.80% - 2.92%.

A summary of the activity of the derivative liability is shown below at June 30, 2022:

Balance at December 31, 2021	$	145,041
Debt discount on senior secured notes payable		208,476
Gain on change in derivative fair value adjustment		(12,211	)
Balance at June 30, 2022	$	341,306

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

Our consolidated financial statements include our accounts and the accounts of our 100% owned subsidiary, Alpha Energy Texas Operating, LLC. All intercompany transactions and balances have been eliminated.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.

Earnings Per Share, Policy [Policy Text Block]

Basic and Diluted Loss per share

Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings (Loss) per Share”. Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. For the three and six months ended June 30, 2022 and 2021, there were 263,992 and 0 shares issuable from the senior secured convertible notes payable and 168,328 and 148,328 shares issuable from the convertible credit line payable which were considered for their dilutive effects but were determined to be anti-dilutive due to the Company’s net loss, respectively.

The reconciliation of basic and diluted loss per share is as follows:

	Three months ended						Six months ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Basic net loss	$	(394,535	)	$	(267,039	)	$	(770,673	)	$	(496,819	)
Add back: (Gain) loss on change in fair value of derivative liabilities		(14,969	)		18,403			(12,211	)		5,099
Diluted net loss	$	(409,504	)	$	(248,636	)	$	(782,884	)	$	(491,720	)
Basic and dilutive shares:
Weighted average basic shares outstanding		18,824,106			18,309,939			18,824,106			18,249,450
Shares issuable from convertible credit line payable		168,328			-			168,328			-
Shares issuable from senior secured convertible notes payable		263,992			-			263,992			-
Dilutive shares		19,256,426			18,309,939			19,256,426			18,249,450
Loss per share:
Basic	$	(0.02	)	$	(0.01	)	$	(0.04	)	$	(0.03	)
Diluted	$	(0.02	)	$	(0.01	)	$	(0.04	)	$	(0.03	)

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The carrying amount of the Company’s financial instruments consisting of cash and cash equivalents, accounts payable, notes payable and convertible notes approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Reclassification, Comparability Adjustment [Policy Text Block]

Reclassification

Certain reclassifications may have been made to our prior year’s financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Standards Not Yet Adopted

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that there are no recently issued accounting pronouncements that will have a significant effect on its financial statements.

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Note 1 - Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended						Six months ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Basic net loss	$	(394,535	)	$	(267,039	)	$	(770,673	)	$	(496,819	)
Add back: (Gain) loss on change in fair value of derivative liabilities		(14,969	)		18,403			(12,211	)		5,099
Diluted net loss	$	(409,504	)	$	(248,636	)	$	(782,884	)	$	(491,720	)
Basic and dilutive shares:
Weighted average basic shares outstanding		18,824,106			18,309,939			18,824,106			18,249,450
Shares issuable from convertible credit line payable		168,328			-			168,328			-
Shares issuable from senior secured convertible notes payable		263,992			-			263,992			-
Dilutive shares		19,256,426			18,309,939			19,256,426			18,249,450
Loss per share:
Basic	$	(0.02	)	$	(0.01	)	$	(0.04	)	$	(0.03	)
Diluted	$	(0.02	)	$	(0.01	)	$	(0.04	)	$	(0.03	)

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Note 7 - Derivative Liability (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

	Level 1		Level 2		Level 3		Fair Value at June 30, 2022
Liabilities:
Derivative liability	$	-	$	-	$	341,306	$	341,306

	Level 1		Level 2		Level 3		Fair Value at December 31, 2021
Liabilities:
Derivative liability	$	-	$	-	$	145,041	$	145,041

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

Balance at December 31, 2021	$	145,041
Debt discount on senior secured notes payable		208,476
Gain on change in derivative fair value adjustment		(12,211	)
Balance at June 30, 2022	$	341,306

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Note 1 - Basis of Presentation (Details Textual) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Secured Senior Secured Convertible Note [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	263,992	0	263,992	0
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	168,328	148,328	168,328	148,328
Alpha Energy Texas Operating, LLC [Member]
Noncontrolling Interest, Ownership Percentage by Parent	100.00%		100.00%

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Note 1 - Basis of Presentation - Basic and Diluted Loss Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Basic net loss	$ (394,535)	$ (267,039)	$ (770,673)	$ (496,819)
Add back: (Gain) loss on change in fair value of derivative liabilities	(14,969)	18,403	(12,211)	5,099
Diluted net loss	$ (409,504)	$ (248,636)	$ (782,884)	$ (491,720)
Weighted average basic shares outstanding (in shares)	18,824,106	18,309,939	18,824,106	18,249,450
Shares issuable from convertible credit line payable (in shares)	168,328	0	168,328	0
Shares issuable from senior secured convertible notes payable (in shares)	263,992	0	263,992	0
Dilutive shares (in shares)	19,256,426	18,309,939	19,256,426	18,249,450
Basic (in dollars per share)	$ (0.02)	$ (0.01)	$ (0.04)	$ (0.03)
Diluted (in dollars per share)	$ (0.02)	$ (0.01)	$ (0.04)	$ (0.03)

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Note 3 - Oil and Gas Properties (Details Textual)					3 Months Ended	6 Months Ended
	Aug. 05, 2022 USD ($)	Jul. 08, 2022 USD ($)	Apr. 01, 2022 USD ($)	Mar. 09, 2022 USD ($)	Mar. 31, 2022	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)
Payments to Acquire Oil and Gas Property						$ 756,298	$ (0)
Purchase and Sale Agreement [Member] | Progressive [Member]
Acquisition, Number of Well Bores				34
Payments to Acquire Oil and Gas Property				$ 726,298
Option Agreement, Acquire Oil and Gas Assets, Payment, Percentage of Net Revenue					3.00%
Logan 1 Project [Member] | Progressive [Member]
Additional Progressive Receivable				$ 350,000
Chicorica, LLC [Member]
Payments to Acquire Oil and Gas Property	$ 30,000	$ 35,000	$ 30,000
Business Combination, Extension Payments						$ 30,000

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Note 4 - Related Party Transactions (Details Textual) - USD ($)			1 Months Ended	6 Months Ended
	Feb. 25, 2022	Dec. 03, 2020	Feb. 28, 2022	Jun. 30, 2022	Jun. 30, 2021	Feb. 23, 2022	Dec. 31, 2021
Due to Related Parties, Total				$ 0			$ 628,550
Accounts Payable, Related Parties				203,484			228,668
Proceeds from Related Party Debt				110,235	$ 159,600
Secured Senior Secured Convertible Note [Member]
Debt Instrument, Face Amount	$ 5,000,000
Debt Instrument, Term (Year)	2 years
Interest Payable				8,878
Notes Payable, Total				1,147,181
Debt Instrument, Interest Rate, Stated Percentage	7.25%
Debt Instrument, Convertible, Conversion Price (in dollars per share)	$ 5.00
Related Party Advances Converted into 7.25% Note [Member]
Debt Conversion, Original Debt, Amount	$ 413,206
Related Party Advances and Promissory Note Converted into 7.25% Note [Member]
Debt Conversion, Original Debt, Amount				819,963	0
AEI Management, Inc. [Member]
Cash and Noncash Proceeds from Related Party Debt				88,956	133,844
Repayments of Related Party Debt				10,000
AEI Management, Inc. [Member] | Related Party Advances Converted into 7.25% Note [Member]
Debt Conversion, Original Debt, Amount				413,206
President [Member]
Cash and Noncash Proceeds from Related Party Debt			$ 500,000	31,280	$ 104,500
Accounts Payable, Related Parties				203,484			203,484
President [Member] | Promissory Note [Member]
Debt Instrument, Face Amount		$ 65,000				$ 325,580
Debt Instrument, Term (Year)		3 years
Debt Instrument, Interest Rate During Period		5.00%
Interest Payable						16,170	13,003
Notes Payable, Total						$ 406,750
Proceeds from Related Party Debt				110,235
President [Member] | Secured Senior Secured Convertible Note [Member]
Debt Instrument, Interest Rate, Stated Percentage	7.25%
Debt Instrument, Convertible, Conversion Price (in dollars per share)	$ 5.00
President [Member] | Related Party Advances Converted into 7.25% Note [Member]
Debt Conversion, Original Debt, Amount	$ 500,000			$ 325,580
President [Member] | Related Party Promissory Note Converted into 7.25% Note [Member]
Debt Conversion, Original Debt, Amount	406,750
President [Member] | Related Party Advances and Promissory Note Converted into 7.25% Note [Member]
Debt Conversion, Converted Instrument, Amount	$ 906,750
Chief Financial Officer [Member]
Accounts Payable, Related Parties							4,394
Vice President [Member]
Accounts Payable, Related Parties							10,000
Staley Engineering LLC [Member]
Accounts Payable, Related Parties							$ 5,790

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Note 5 - Common Stock (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Capital Stock, Shares Authorized (in shares)	75,000,000
Preferred Stock, Shares Authorized (in shares)	10,000,000		10,000,000
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.001		$ 0.001
Common Stock, Shares Authorized (in shares)	65,000,000		65,000,000
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.001		$ 0.001
Proceeds from Issuance of Common Stock	$ 0	$ 5,000
Unexecuted Subscription Agreement [Member]
Proceeds from Issuance of Common Stock	$ 1,761,570	$ 0
Shares Purchased but Unissued, Price Per Share (in dollars per share)	$ 1.00
Kelloff Oil & Gas, LLC [Member]
Share-Based Payment Arrangement, Expense	$ 30,000
Director [Member]
Stock Issued During Period, Shares Per Month Per Director (in shares)	4,000
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition, Total	$ 84,000

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Note 6 - Convertible Credit Line Payable and Senior Secured Convertible Notes Payable - Related Party (Details Textual)			6 Months Ended
	Feb. 25, 2022 USD ($) $ / shares	Aug. 08, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)	Jun. 01, 2021 USD ($) $ / shares
Amortization of Debt Discount (Premium)			$ 38,942	$ 2,754
Related Party Advances Converted into 7.25% Note [Member]
Debt Conversion, Original Debt, Amount	$ 413,206
Related Party Advances Converted into 7.25% Note [Member] | President [Member]
Debt Conversion, Original Debt, Amount	500,000		325,580
Related Party Promissory Note Converted into 7.25% Note [Member] | President [Member]
Debt Conversion, Original Debt, Amount	406,750
Related Party Advances and Promissory Note Converted into 7.25% Note [Member]
Debt Conversion, Original Debt, Amount			819,963	$ 0
Related Party Advances and Promissory Note Converted into 7.25% Note [Member] | President [Member]
Debt Conversion, Converted Instrument, Amount	906,750
Convertible Credit Line Payable, Related Party [Member]
Debt Instrument, Face Amount						$ 1,500,000
Debt Instrument, Interest Rate, Stated Percentage						7.00%
Debt Instrument, Convertible, Conversion Price (in dollars per share) | $ / shares						$ 4.00
Proceeds from Convertible Debt		$ 20,000
Amortization of Debt Discount (Premium)			3,244
Debt Instrument, Unamortized Discount, Total			7,856		$ 11,100
Long-Term Line of Credit, Total					$ 168,328
Secured Senior Secured Convertible Note [Member]
Debt Instrument, Face Amount	$ 5,000,000
Debt Instrument, Interest Rate, Stated Percentage	7.25%
Debt Instrument, Convertible, Conversion Price (in dollars per share) | $ / shares	$ 5.00
Amortization of Debt Discount (Premium)			11,175
Debt Instrument, Unamortized Discount, Total	$ 65,262		54,087
Debt Instrument, Convertible, Number of Equity Instruments	1,000,000
Debt Instrument, Term (Year)	2 years
Long-Term Debt, Gross			413,206
Notes Payable, Total			1,147,181
Interest Payable			8,878
Secured Senior Secured Convertible Note [Member] | President [Member]
Debt Instrument, Interest Rate, Stated Percentage	7.25%
Debt Instrument, Convertible, Conversion Price (in dollars per share) | $ / shares	$ 5.00
Amortization of Debt Discount (Premium)			24,523
Debt Instrument, Unamortized Discount, Total	$ 143,214		118,691
Long-Term Debt, Gross			$ 906,753

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Note 7 - Derivative Liability (Details Textual)	6 Months Ended
	Jun. 30, 2022 USD ($)
Unrealized Gain (Loss) on Derivatives	$ 12,211
Measurement Input, Exercise Price [Member] | Minimum [Member]
Embedded Derivative Liability, Measurement Input	0.0100
Measurement Input, Exercise Price [Member] | Maximum [Member]
Embedded Derivative Liability, Measurement Input	0.0500
Measurement Input, Price Volatility [Member] | Minimum [Member]
Embedded Derivative Liability, Measurement Input	247
Measurement Input, Price Volatility [Member] | Maximum [Member]
Embedded Derivative Liability, Measurement Input	274
Measurement Input, Discount Rate [Member] | Minimum [Member]
Embedded Derivative Liability, Measurement Input	2.80
Measurement Input, Discount Rate [Member] | Maximum [Member]
Embedded Derivative Liability, Measurement Input	2.92

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Note 7 - Derivative Liability - Liabilities Measured at Fair Value (Details) - Fair Value, Recurring [Member] - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Derivative liability	$ 341,306	$ 145,041
Fair Value, Inputs, Level 1 [Member]
Derivative liability	0	0
Fair Value, Inputs, Level 2 [Member]
Derivative liability	0	0
Fair Value, Inputs, Level 3 [Member]
Derivative liability	$ 341,306	$ 145,041

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Note 7 - Derivative Liability - Schedule of Derivative Liability Activity (Details) - Derivative Financial Instruments, Liabilities [Member]	6 Months Ended
	Jun. 30, 2022 USD ($)
Derivative balance	$ 145,041
Debt discount on senior secured notes payable	208,476
Gain on change in derivative fair value adjustment	(12,211)
Derivative balance	$ 341,306