Alpha Investment Inc. [ALPC] Filings

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-198772

Alpha Investment Inc. (Exact Name of Registrant as Specified in Its Charter)

200 East Campus View Blvd., Suite 200

Columbus, OH  43235

(305) 704-3294

(Address of Principal Executive Offices, Zip Code & Telephone Number)

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

None

Securities registered pursuant to section 12(g) of the Act:

Common Stock, $0.0001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  o  No  þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act  Yes  o  No  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ  No  o

Indicate by check mark whether the registrant has submitted electronically, if any, 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  þ  No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant ’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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. (Check one):

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. o

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

As of June 30, 2023, the end of the registrant’s most recently completed 2^nd quarter, no market value has been computed because no active trading market had been established.

As of March 31, 2024, the registrant had 11,224,401 shares of common stock outstanding.

ALPHA INVESTMENT INC

TABLE OF CONTENTS

Part I

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this Annual Report on Form 10-K (the “annual report”) contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to consummate a merger or business combination, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this annual report. Readers should carefully review this annual report in its entirety, including but not limited to our consolidated financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Unless the context otherwise requires, references in this annual report to “Alpha Investment,” “ALPC,” the “Company,” “we,” “our” and “us” refers to Alpha Investment Inc. and its subsidiaries.

Item 1. Business

Overview

We intend to provide capital directly to borrowers seeking financing for commercial real estate properties either for refinancing or acquisitions. These loans will encompass originating performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt. Notwithstanding the foregoing, we intend to operate our business so that we do not become subject to the Investment Company Act of 1940, as amended. Accordingly, we do not plan to primarily engage in the business of investing, reinvesting, or trading in securities and we do not plan to acquire investment securities (such as commercial mortgage-backed securities) having a value exceeding 40% of the value of the Company’s total assets.

We expect to offer financing across a broad-spectrum of asset backed and commercial real asset type collateral of any property type such as office, retail, industrial, multi-family, and hospitality. The Company will coordinate its lending initiatives with outside commercial real estate loan brokers, which have access to commercial real estate owners seeking financing or refinancing opportunities, and with loan origination firms that have borrowers seeking loans. We believe that this will enable ALPC to broaden its access to new borrowers and to develop and implement financing solutions for these other lenders, mortgage bankers, borrowers, and owners. In the event the Company uses third party loan origination services and underwriters, the Company will cover these costs in accordance with industry standard practices. In addition, the Company from time to time will also engage in participating equity financing within strategic opportunistic projects and businesses that could bring added value to stockholders.

The Company expects to require substantial capital to fully fund and implement its operations. The Company plans to raise such capital through private or public offerings of equity, debt or other securities or through joint venture partnerships. There can be no assurance that the Company can successfully raise such capital or consummate any offering or joint venture partnerships on favorable terms or otherwise. If such efforts are not successful, then we may be unable to honor funding commitments or be forced to curtail our operations or consider other strategic alternatives.

Investment Strategy

To identify attractive lending opportunities, the Company expects to continue to deploy its capital through the origination of commercial mortgage loans, subordinate financing and other commercial real-estate related debt investments at attractive risk-adjusted yields. The Company targets lending opportunities that are secured by commercial real estate. The Company’s underwriting includes a focus on stressed in-place cash flows, debt yields, debt service coverage ratios, loan-to-value ratios, property quality and market and sub-market dynamics.

Alameda Partners Joint Venture

On March 11, 2019, the Company, through Alpha Mortgage Notes I, LLC (the “SPV”) entered into an operating agreement with Alameda Partners LLC, a Utah limited liability company (“Alameda Partners”). Alameda Partners acquired a ten percent (10%) equity interest in the SPV in exchange for a payment of $1,000,000 to the Company and is the managing member of the SPV. The capital is intended for use in implementing the Company’s strategy of acquiring commercial real estate performing notes and support other related growth initiatives and assets acquisitions for the Company The principals of Alameda Partners have significant long-term of experience in the commercial real estate industry as property developers, owners, and managers and currently hold over $50 million in commercial real estate assets. Pursuant to the operating agreement for the SPV, Alameda Partners is entitled to monthly distributions in cash or stock equal to $10,000. As of December 31, 2022, the SPV has not completed any transactions.

Potential Effects of the post COVID-19 Pandemic on our Business

Commercial mortgage lending may be subject to volatility during and after the COVID-19 pandemic and may be adversely affected by a number of factors, including, but not limited to, national, regional and local economic conditions; local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; retroactive changes to building or similar codes; pandemics; natural disasters and other acts of God. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans or loans, which could also cause us to suffer losses. Market volatility has been particularly heightened due to the COVID-19 global pandemic. COVID-19 has disrupted economic activities and could have a continued significant adverse effect on economic and market conditions including limited lending from financial institutions, depressed asset values, and limited market liquidity. At the present time, we are unable to estimate the potential adverse effect which the pandemic may have on our business, operations and financial condition.

Corporate History

We were incorporated in the State of Delaware on February 22, 2013, to develop, create, manufacture and market toys for small children which would be designed to attach to car seats and amuse and entertain children during a drive, without distracting the attention of the driver. The Company, however, encountered significant constraints in raising sufficient capital to fully implement its business plan.

On March 17, 2017, Omega purchased 35,550,000 outstanding shares of the Company’s common stock (the “Control Share Sale”) from Malcolm Hargrave (35,000,000 shares), DTH International Corporation (500,000 shares) and Lisa Foster (50,000 shares) for aggregate consideration of $295,000. The Control Share Sale was consummated in a private transaction pursuant to a common stock purchase agreement entered between Omega and Mr. Hargrave, acting individually and on behalf of the other selling stockholders. Upon completion of the Control Share Sale, a “Change in Control” of the Company took place and in connection therewith, Mr. Hargrave resigned as our sole director and officer and Omega, as the new majority stockholder of the Company, elected Timothy R. Fussell, Ph.D. as President, Chairman of the Board and a director (Dr. Fussell stepped down from those positions in April 2020) and Todd C. Buxton, Omega’s then Chief Executive Officer, as Chief Executive Officer, Vice Chairman of the Board and a director.

In addition to the foregoing, new management elected to shift the Company’s business focus to real estate lending, which they believed offered better opportunities for shareholder growth. In connection therewith, on March 30, 2017, we filed a Certificate of Amendment to our Certificate of Incorporation with the Delaware Secretary of State changing our name from “Gogo Baby, Inc.” to “Alpha Investment Inc.” to better reflect our new business plan.   The name change and a corresponding change in the Company’s OTC markets trading symbol from GGBY to ALPC received approval from FINRA and became effective as of April 19, 2017.

Plan of Operations

Our core objective will be to achieve advantageous yields and consistent interest income on short to long term loans (“Loans”) covering all four lending categories such as prime, alt-A, bridge and hard money loans by:

We plan to administer various financing programs with an emphasis on Loans secured by commercial real estate, such as office buildings, multi-family residences, shopping centers, industrial, and hotels. Loans may consist of senior debt loans, mezzanine or subordinated loans, preferred equity and other equity participation financing structures.

We intend to follow a “conservative lending” profile for our Loans.  Our strategy is to seek low leveraged first lien senior debt mortgage loans and high debt service structured financing programs, as opposed to riskier, less secure, mezzanine or equity positions.

Business Objectives and Strategy

Our core business objective is to achieve advantageous and consistent rates of return from short to long term Loans to borrowers when traditional financing is unavailable to such borrowers for acquisitions, refinancing of commercial property loans and other asset backed transactions. We plan to focus on various alternative commercial real estate financings with an emphasis on Loans secured by commercial real estate and seek to invest in financing of core real estate assets that include office buildings, multi-family residences, shopping centers, and hospitality, plus ground up entitled land developments. The Loans may consist of senior debt loans, mezzanine or subordinated loans, preferred equity and other equity participation financing structures. We intend to follow a “conservative lending” profile for the Loans we fund, which means low loan to value and high debt service cover ratios. Our strategy is to seek Loans that are first lien, senior debt mortgage loans and specialty financing programs, as opposed to riskier, yet much more profitable, and less secure mezzanine or equity positions.

Use of Loan Servicers

In carrying out our business strategy, we will likely utilize third-party firms that specialize in Loan origination and servicing (“Servicers”).  We intend to perform due diligence on each Servicer which we, directly or indirectly, plan to use in the origination and servicing of Loans, in order to evaluate the firm’s experience and expertise in originating and servicing Loans that satisfy our lending and investment criteria.

Use of Other Third-Party Service Providers

We will utilize other third parties to provide various ancillary services to us, such as real estate evaluation and land feasibility appraisal services, closing-legal and escrow title services.

Sale of Participations; Co-Investments and Participations

In the discretion of management, we may sell participation rights in the Loans we originate to other entities.

We may from time to time co-invest and or syndicate participation interest in loans as the administrative agent or buying a participation interest. We plan to only employ this strategy with seasoned well-established organizations in the commercial real estate (“CRE”) lending industry such as private trusts, real estate financing institutions, mutual funds, pension funds, investment houses, or hedge fund of funds.  We believe that this will afford the Company with an additional opportunity to participate in well-structured transactions with organizations with proven track records involving originating, underwriting, and servicing.

The Commercial Real Estate Lending Product

Operationally, management believes the market for commercial mortgage loans will offer opportunities for the deployment of capital we raise.  The CRE markets have suffered greatly in recent years beginning with the 2008 U.S. financial market crisis, which resulted in a steep and prolonged recession. However, as the lending markets have steadily recovered along with market leaders such as large banks Wells Fargo, JP Morgan Chase, Bank of America and Capital One, we believe the CRE lending landscape has now stabilized in select Centralized Business Districts known as “CBD’s” and afford extremely attractive opportunities for deploying capital. Thus, we will focus on positioning the Company to seize this opportunity within this market.  We believe that our proposed business model is comparable to that currently being used by some of the top-level commercial real estate lender industry professionals. However, to compete and succeed within this industry, we plan to develop a proprietary pricing and lending model for the commercial real estate finance debt and equity markets.  If we are able to do so, as to which no assurance can be given, we believe that we will have a strategic advantage to compete in the market.

Key Operational Highlights – CRE Loans

The Commercial Real Estate Market Forecast

The beleaguered commercial real estate (CRE) industry has been facing headwinds since the onset of the COVID-19 pandemic, and many of the persistent challenges being endured by this important part of the U.S. economy will continue throughout 2024. There are bright spots in the CRE outlook – mostly in the strong demand for multi-family (apartments), the digital economy (cell towers and server farms) and industrial (warehouse) property – but a comprehensive re-assessment and revitalization of the CRE industry is needed.

Cost and Availability of Capital

The U.S. is in a period of rising interest rates that began almost two years ago when the Federal Reserve began raising rates to combat inflation.

The primary effect of rate hikes is obvious. The cost of borrowing has increased dramatically and will likely remain high indefinitely. Higher mortgage rates aren't good for any borrower but can be devastating for CRE investors who borrow heavily and generally need to refinance every three, five or seven years.

The problem is being exacerbated by banks tightening their lending standards or refusing to make CRE loans at all. Federally regulated banks hold virtually all of their reserves in U.S. government bonds. When rates go up the value of bonds goes down. By necessity, banks are being very conservative in making loans. Not only do CRE loans cost more today, but they are harder to find.

Potential Recession

The causes of the post-pandemic inflation we've been experiencing are disputed by economists, but the phenomenon is real. The Federal Reserve responded to inflation with rate hikes. The goal of raising rates is to combat rising prices by slowing the economy. Unfortunately, rate hikes, particularly the rapid and dramatic ones we've seen, can push an economy into recession. In other words, the CRE industry is facing the significant possibility of an economic slowdown in the coming year. A significant downturn would mean commercial landlords will struggle to fill vacancies and find it difficult, if not impossible, to raise rents.

Persistent Inflation

A prolonged period of low inflation and relative price stability ended abruptly three years ago. After an initial and alarming spike, the inflation rate has since moderated, but it's still too high and overall price levels have been slow in receding. Commercial property investors are certainly not immune to the effects of inflation. The cost of operating and maintaining a building and providing amenities to tenants is dramatically higher than it was 36 months ago. When we consider large increases in labor costs, the problem becomes especially pronounced. This is particularly true for construction and development firms that depend greatly on specialty labor. Inflation also causes anxiety in individual consumers who are the end-users of CRE. In inflationary times, the commercial property owners suffer as people cut spending which, in turn, causes businesses to delay or cancel expansion plans that otherwise would have included renting real estate.

A Closer Look at CRE Classes

Office

The work-from-home trend that gained traction during the pandemic severely disrupted the office sector. In fact, "disrupted" may be an understatement. Despite several million new jobs being added to the U.S. economy during the pandemic recovery, offices have lost several hundred million square feet of occupied space. Property values have decreased correspondingly. Corporate managers, who fear that work-from-home will erode corporate culture and discourage employee coordination, are doing what they can to bring employees back into office buildings. But, in America at least, their efforts are falling on deaf ears. Office space utilization in the U.S. is only around 50% of pre-pandemic levels.

The outlook:

Expect U.S. office space to continue to be underutilized unless and until that dynamic changes. A job-killing recession, for instance, would tip the balance toward employers and allow them to force office attendance.

Retail

Retail performance is a function of consumer sentiment, which was weak in the first half of the year but began to recover in the second half. That recovery can be attributed to a corresponding easing of the inflation rate (mentioned above) and moderation in energy prices. As evidenced by bankruptcy filings, weaker retailers are falling by the wayside, but healthier, higher-quality stores are doing a great job picking up the slack. Store openings have outpaced store closings so far in 2023.

The outlook:

In general, better retailers in better locations offering good service and decent quality will continue to absorb and displace weaker competitors. The demand for retail rental space should be maintained in 2024, but by consolidation rather than overall growth. A recession or a resurgence of inflation would depress consumers and the retail sector.

Multi-family

Rising mortgage rates have, unfortunately, placed homeownership out of reach for many in the middle class. This is in addition to a low-income housing shortage that's been plaguing the housing market for decades. The result is high and fast-growing demand for multi-family apartment properties and residential rentals. Multi-family is among the few CRE classes enjoying strong rent growth and increasing property values. Finding equilibrium in the housing markets will take some number of years. While that's not good news for homebuyers or renters, it is good news for owners of apartment buildings.

The outlook:

Interest rates are cyclical and will eventually come down. If that process starts in 2024, some renters will opt for homeownership, but it will be a slow process and shouldn't cause a dramatic change in the profitability of rental housing.

Industrial

After suffering major disruptions during COVID lockdowns, the trucking and warehousing sectors of the CRE industry have experienced a boom. Driven by strong consumer spending, competition in e-commerce and "nearshoring" – relocating operations closer to home – industrial real estate construction achieved record levels in 2023. Subsequently, industrial landlords are enjoying excellent rent growth and full occupancy.

The outlook:

The nearshoring or "onshoring" phenomenon is a long process that is in its early stages. The intense competition among retailers for faster home delivery, likewise, shows no signs of slowing down. This bodes well for industrial CRE. The 2024 outlook calls for more trucking terminals and more warehouses.

Consumer spending will ease if the economy slows, but unless we have a severe and prolonged recession, it won't be enough to dim the prospects of this sector.

Loan Production Strategy

We have access to a database of top commercial real estate mortgage bankers nationwide through organizations such as Strategic Alliance Mortgage, LLC (“SAM”), which is a company comprised of the top independently owned commercial real estate mortgage banking firms located throughout the United States. Through SAM, firms utilize their shared national knowledge to execute superior capital market solutions for developers, commercial real estate investors, investment management firms, asset management firms, real estate investment trusts and private real estate equity firms with the goal of utilizing their production networks. We have focused on firms that have experienced loan origination back-office staff to ensure our CRE Loan services will be appropriately and professionally marketed. Also, management has a proprietary database of 50 to 100 mortgage bankers to market their CRE Loan products to and generate Loan production internally for consistent deal flow. In addition, we believe that as our operations expand, we potentially could establish and retain an in-house sales team.

Competition

A few much larger proven commercial real estate lenders such as JP Morgan Chase, Bank of America, Goldman, and Apollo Commercial Real Estate currently have established operations with large balance sheets and back office staff. However, we are a non-banking institution and are not regulated like the larger banks or typical CMBS lenders in that we are not “pigeon-holed” into securitizing our assets. Rather, we elect to use these industry standards and underwriting characteristics to originate loans, to consequently mitigate liquidly-risk (i.e. recapitalization) with the ability to hold these loans on the un-tainted balance sheet to garner stable income to yield strong growth and market share. However, as most of these lenders have far longer operating histories and significantly larger financial resources than we do, there can be no assurance given that we can effectively compete.

Employees

We currently have no employees other than our executive officers. As noted above, we intend to rely on third parties retained by us for services in areas such as loan origination and production, credit analysis, underwriting, due diligence, and loan servicing. As our operations grow, we may elect to bring certain, if not all of these services in house.

Item 1A. Risk Factors

Not applicable to a “smaller reporting company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Item 2. Properties

Our principal executive offices are located at 200 East Campus View Blvd. Suite 200 Columbus, OH 43235.

Item 3. Legal Proceedings

We are currently involved in the following legal proceedings:

Steven T. Matthiesen and Joanna K. Matthiesen, jointly and severally v. Tmothy Fussell et al. In the United States District Court, Southern District of Florida, Case No. 21CV62334. This breach of contract matter resulted in a default judgment against the Defendants in 2022 of $1,514,000 plus fees and costs. This case remains pending as to Defendants Timothy Fussell and Partners South Holdings, LLC only.

Fusion Lodgings LLC v. PLC et al, In the District Court, 160^th Judicial District, Dallas County, TX, Cause No. DC-20-09139. This breach of contract matter resulted in a default judgment against the Defendants of $1,000,000 plus fees and costs.

Supplemental complaint for financial relief in regards to collections, In the circuit court of the eleventh judicial circuit in and for Miami-Dade County, Florida, case #2021-20869-CA01, seeking $144,147 plus 6% interest from 2013. The Company is currently in negotiations with plaintiff.

The Company is not aware of any additional litigation.

Item 4. Mine Safety Disclosures

Not applicable to a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

Part II

Item 5. Market for Common Equity and Related Stockholder Matters

Market Information

Our Shares are quoted on the OTCPink tier of the over-the-counter market operated by OTC Markets Group, under the symbol “ALPC.”  However, the market for our Shares has been extremely limited and there have only been minimal and sporadic public quotations for our Shares and there have been no recent closing quotations for our Shares.  There can be no assurance given that a  liquid public market for our Shares will develop and if developed, be sustained.

Holders

As of December 31, 2023, we had 11,224.401 shares of common stock issued and outstanding, and 457 shareholders of record of our common stock.

Dividends

The payment by us of dividends, if any, in the future rests within the discretion of our board of directors and will depend, among other things, upon our earnings, capital requirements and financial condition, as well as other relevant factors.  We have not paid any dividends since our inception and we do not intend to pay any cash dividends in the foreseeable future, but intend to retain all earnings, if any, for use in our business.

Securities Authorized for Issuance under Equity Compensation Plans

Item 6. Selected Financial Data

Not applicable to a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results.  The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the accompanying notes thereto included in “Item 8. Financial Statements and Supplementary Data.”  In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.  See “Forward-Looking Statements.”  Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors.

Results of Operations

General

We have recognized net losses of $(536,666) and $(3,123,461) for the years ended December 31, 2023 and 2022.  As of December 31, 2023 and 2022, the Company had an accumulated deficit of $10,935,082 and $10,398,416.

The following table provides selected balance sheet data as of December 31, 2023 and 2022.

Year ended December 31, 2023 as compared to year ended December 31, 2022

For the year ended December 31, 2023, we generated no income, compared to no income in 2022. We incurred $327,881 in operating expenses during the 2023 period, compared to $551,245 in 2022, reflecting our decreased level of operations.. In 2023 the Company recognized $144,147 in judgments and settlements and $40,590 in interest expense. In 2022, the Company recognized $2,518,000 in judgments and settlements and $30,529 in net interest expense.

Liquidity and Capital Resources

During the year ended December 31, 2023, Omega, the principal stockholder of the Company, made additional capital contributions to the Company of approximately $31,040 in expenses paid on behalf of the Company, and Omega International, a related party, purchased 1,500,000 of common stock for $1,500 or $.001/share.

During the year ended December 31, 2022, Omega, the principal stockholder of the Company, made additional capital contributions to the Company of approximately $73,650 in expenses paid on behalf of the Company.

Related Party Transactions

Loans receivable

The Company has extended lines of credit and loans to related parties. See Note 4 to consolidated financial statements.

Management fee and other expenses

During the years ended December 31, 2023 and 2022, Omega Commercial Finance Corp was accrued $150,000 in management fees pursuant to a corporate governance management agreement executed on June 1, 2017. Omega is to provide services related to facilitating the introduction of potential investors for compensation of no less than $150,000 per year, not to exceed $300,000 per year. The agreement remains in effect until cancelled by Omega.

Stock purchase

During the year ended December 31, 2023, Omega International, a related party, purchased 1,500,000 shares of common stock for $1,500 or $.0001/share. There were no stock transactions during the year ended December 31, 2022.

Critical Accounting Policies

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 certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. The Company is required to make judgments and estimates about the effect of matters that are inherently uncertain. The Company regularly evaluates estimates and assumptions related to the valuation of the allowance for loan losses, loss contingencies, useful life and recoverability of long-lived assets, deferred income tax asset valuations and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Although, we believe our judgments and estimates are appropriate, actual future results may be different; if different assumptions or conditions were to prevail, the results could be materially different from our reported results.

Loans Receivable, net and Allowance for Losses

The Company records its investments in loans receivable at cost less unamortized costs of issuance and deferred origination fees. Origination fees collected at the time of investment are recorded against the loans receivable and amortized into net interest income over the lives of the related loans. Issuance costs incurred are capitalized along with the initial investment and amortized against net interest income over the lives of the related loans.

When a loan receivable is placed on non-accrual status, the related interest receivable is reversed against interest income of the current period. If a non-accrual loan is returned to accrual status, the accrued interest existing at the date the residential loan is placed on non-accrual status and interest during the non-accrual period are recorded as interest income as of the date the loan no longer meets the non-accrual criteria.

The Company maintains an allowance for loan losses on its investments in real estate loans receivable for estimated credit impairment.  Management’s estimate of losses is based on a number of factors including the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower’s ability to repay, prevailing economic conditions and the underlying collateral securing the loan.  Additions to the allowance are provided through a charge to earnings and are based on an assessment of certain factors, which may indicate estimated losses on the loans.  Actual losses on loans are recorded first as a reduction to the allowance for loan losses.  Generally, subsequent recoveries of amounts previously charged off are recognized as income.

Estimating allowances for loan losses requires significant judgment about the underlying collateral, including liquidation value, condition of the collateral, competency and cooperation of the related borrower and specific legal issues that affect loan collections or taking possession of the property on an individual loan receivable basis. As of December 31, 2021, given the shifting economic conditions, the Company determined the likelihood of collecting these loans was significantly diminished and established an allowance account to write down the value of all receivables to $0.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Not applicable to a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

Item 8. Financial Statements

Index

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Alpha Investment Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Alpha Investment Inc. as of December 31, 2023 and 2022, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/S/ BF Borgers CPA PC (PCAOB ID 5041)

We have served as the Company's auditor since 2022

Lakewood, CO

April 15, 2024 

Alpha Investment Inc

Condensed Consolidated Balance Sheets

Series A Convertible Preferred Stock

The accompanying notes are an integral part of these consolidated financial statements.

Alpha Investment Inc

Condensed Consolidated Statements of Operations

The accompanying notes are an integral part of these consolidated financial statements.  

Alpha Investment Inc

Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit)

(Audited)

Common Stock

Series A Preferred Stock

Series AA Preferred Stock

Paid-In Capital

Non-Controlling Interest

Accumulated Deficit

The accompanying notes are an integral part of these consolidated financial statements.

Alpha Investment Inc

Condensed Consolidated Statements of Cash Flows

The accompanying notes are an integral part of these consolidated financial statements.

Alpha Investment Inc.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of December 31, 2023, our Chief Executive Officer (our principal executive, financial and accounting officer) conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures; as is defined in Rule 13a-15(e) of Exchange Act. We recognize that there are material weaknesses related to our internal controls. Therefore, our Chief Executive Officer (our principal executive, financial and accounting officer) has concluded that our disclosure controls and procedures were not effective, as of the end of the period covered by this Annual Report on Form 10-K. This includes ensuring that information required to be disclosed was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Furthermore, to provide reasonable assurance that information required to be disclosed is accumulated and communicated as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our Chief Executive Officer (our principal executive, financial and accounting officer) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. We have designed our internal controls to provide reasonable assurance that our financial statements are prepared in accordance with generally accepted accounting principles in the United States and include those policies and procedures that:

● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of our assets; 

● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorization of our management and directors; and 

● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Our Chief Executive Officer (our principal executive, financial and accounting officer) conducted an evaluation of the effectiveness of our internal controls over financial reporting as of December 31, 2021. In making this evaluation, the Chief Executive Officer used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its 2013 Internal Control — Integrated Framework.

Based on this evaluation, our Chief Executive Officer (our principal executive, financial and accounting officer) has concluded that our internal controls over financial reporting were not effective as of the end of the period covered in this Annual Report on Form 10-K. The Chief Executive Officer (our principal executive, financial and accounting officer) has concluded that the financial statements included in this report fairly present in all material respects our financial position and results of operations.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. The Chief Executive Officer’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual report.

Material Weakness in Internal Control Over Financial Reporting

A material weakness is a control deficiency or a combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Our Chief Executive Officer (our principal executive, financial and accounting officer) has concluded that, as of December 31, 2023, we did not maintain effective controls over the preparation, review, presentation and disclosure of our financial statements. Specifically, we noted the following.

● the Company did not maintain effective controls to identify and maintain segregation of duties to support the identification, authorization, approval, accounting for, and the disclosure of related-party transactions and significant unusual transactions. Specifically, one individual, the Chief Executive Officer, initiates related-party transactions and non-routine transactions. This Chief Executive Officer also reviews, evaluates, and approves these same transactions.

● the Company has not established a well-defined process for financial reporting. The process and its key attributes (e.g., overall timing, methodology, format, and frequency of analyses) are not formally documented, approved, or reviewed on a regular basis. Specifically, several instances of transactions were not properly recorded and the lack of timely reconciliations of account balances effected by the improperly recorded transactions.

● the Company does not have accounting policies and procedures to specify the correct treatment for estimating the allowance for doubtful accounts and bad debt expense of loans receivable. Specifically, a supporting analysis is not prepared for estimating the allowance for loan losses and bad debt expense.

Plan for Remediation of Material Weakness

We anticipate, contingent on cash funds available, that actions will be taken to strengthen the Company’s internal control over financial reporting and will, over time, address the related material weakness. However, because many of the controls in the Company’s system of internal controls rely extensively on manual review and approval, the successful operation of these controls may be required for several quarters prior to management being able to conclude that the material weakness has been remediated.

Limitations on the Effectiveness of Controls

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There have been no other changes in our internal control over financial reporting that occurred during our fiscal year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10.  Directors and Executive Officers

The following table sets forth the name, age and position of each person who is a director or executive officer as of the date of this annual report.

Todd C. Buxton has served as the Company’s Chief Executive Officer and Vice Chairman since April 2017 and as Omega’s Chief Executive Officer from April 2015 to March 2017. Mr. Buxton carries out initiatives to significantly improve the company's strategic operational execution and integration of new and existing subsidiaries with a goal to accelerate profitability, shareholder value and growth for the company. This includes planning the overall strategic business direction and facilitating creative development business models for Omega specifically within the capacity of the Omega's M&A contractual negotiations and internal business contract facilitation for sales transactions, mergers and acquisitions, and capital markets growth strategies. Prior to serving as Omega’s Chief Executive Officer, from 2010 through 2015, Mr. Buxton served in the same capacity for Bentley-Addison Capital Finance, which directly brokered and advised companies as an intermediary for commercial real estate financing opportunities. Mr. Buxton has a strong foundation in the commercial real estate construction management industry and real estate developer/contracting business as well as the information technology field going back to 1992. In January 2011, Mr. Buxton filed a petition for relief under Chapter 7 of the United States Bankruptcy Code in the Southern District of Ohio. In March 2014, Mr. Buxton filed a motion to dismiss the case prior to discharge, which was granted in May 2014.

The Company intends to retain a Chief Financial Officer and expand its board of directors to include a majority of “independent directors” in the proximate future.

Terms of Office

Our directors are appointed for a one-year term to hold office until the next annual meeting of our stockholders and until a successor is appointed and qualified, or until their removal, resignation, or death.  Executive officers serve at the pleasure of the board of directors.

Director Independence

At present, our sole director is not “independent” as defined under Rule 10A-3(b)(1) under the Exchange Act.

Board Committees

Our board of directors does not currently have an audit committee, a compensation committee, or a corporate governance committee.  As we expand our board in the future to add “independent” directors, we intend to establish such committees, all the members of which will be “independent” directors.

Code of Ethics

We have adopted a Code of Ethics that applies to employees, including our principal executive officer, principal financial officer, or persons performing similar functions.

Board of Directors Role in Risk Oversight

Members of the board of directors have periodic meetings with management and the Company’s independent auditors to perform risk oversight with respect to the Company’s internal control processes. The Company believes that the board’s role in risk oversight does not materially affect the leadership structure of the Company.

Item 11.  Executive Compensation

Summary Compensation Table

The table below summarizes all compensation awarded to, earned by or paid to our executive officers for 2022, 2021, and 2020.

SUMMARY COMPENSATION TABLE

Employment Agreements

The Company is presently party to an employment agreement with its executive officer for compensation in cash and stock. No cash has been paid nor stock issued for the year ended December 31, 2023.

Outstanding Equity Awards at Fiscal Year-End Table

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards outstanding as of December 31, 2023 for our executive officers.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

Compensation of Directors Table

The table below summarizes all compensation paid for our last completed fiscal year to each of our directors.

DIRECTOR COMPENSATION

Narrative Disclosure to the Director Compensation Table

We currently do not compensate our directors for their services as such. When we expand our board to include “independent” directors we intend to implement a plan and compensate them with a combination of cash and stock option awards, depending on our financial resources at that time.

Incentive Plan

Our Incentive Plan provides for equity incentives to be granted to our employees, executive officers or directors or to key advisers or consultants.  Equity incentives may be in the form of stock options with an exercise price not less than the fair market value of the underlying Shares as determined pursuant to the Incentive Plan, restricted stock awards, other stock-based awards, or any combination of the foregoing.  The Incentive Plan is administered by the board of directors.  331,867 Shares are reserved for issuance pursuant to the exercise of awards under the Incentive Plan.  The number of shares so reserved automatically adjusts upward on January 1 of each year, so that the number of shares covered by the Incentive Plan is equal to 15% of our issued and outstanding common stock. As of the date of this report, we have granted restricted stock awards of 3,625,000 shares to six consultants in 2017. No grants have been awarded since that date.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of the date of this annual report, the beneficial ownership of our common stock by each director and executive officer, by each person known by us to beneficially own 5% or more of our common stock and by directors and executive officers as a group.  Unless otherwise stated, the address of the persons set forth in the table is c/o the Company, 200 East Campus View Blvd., Suite 200, Columbus, OH 43235.

Under the rules of the SEC, a person (or group of persons) is deemed to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security.  Accordingly, more than one person may be deemed to be a beneficial owner of the same security.

Item 13.  Certain Relationships and Related Transactions

Related Party Transactions

During the year ended December 31, 2023, the Company sold 1,500,000 shares of its common stock, par value $.0001, to a related party for $1,500 or $.001/share.

During the years ended December 31, 2023 and 2022, Omega, the principal stockholder of the Company, made additional capital contributions to the Company of $31,040 and $73,650.

On August 28, 2017, the Company entered into two loan agreements with companies owned by Timothy R. Fussell, our then President, Chairman of the Board and a director of the Company.  The first agreement, with Partners South Holdings LLC (“PSHL”), provides for a revolving line of credit in the maximum principal sum of $3,600,000 for the purpose of financing real property construction costs and working capital needs.  The line of credit is secured by a pledge of all the limited liability company membership interests of PSHL.  The maturity date of the line of credit is August 31, 2022 at which time the entire then outstanding principal balance plus accrued interest thereon is due and payable.  The fixed interest rate on the loan is 3.5% to be paid quarterly on the first day of each calendar. As of December 31, 2022 and 2021, no amounts had been advanced under this line of credit. Origination fees of $180,000 due to the Company have been added to the outstanding balance due on the line of credit. At December 31, 2021, the Company established a full reserve against the outstanding balance, and at December 31, 2023 and 2022, the loan receivable balance was $0.

The second agreement, with Partners South Properties Corporation (“PSPC”), provides for a revolving line of credit in the maximum principal sum of $5,000,000 for the purpose of financing real property construction costs and working capital needs.  The line of credit is secured by a pledge of all the capital stock of PSPC. The maturity date of the line of credit is August 31, 2022 at which time the entire then outstanding principal balance plus accrued interest thereon is due and payable.  The fixed interest rate on the line of credit is 3.5% to be paid quarterly on the first day of each calendar quarter. At December 31, 2021, the Company established a full reserve against the outstanding balance and at December 31, 2023 and 2022, the loan receivable balance was $0.

Review, Approval and Ratification of Related Party Transactions

The Company does not have a policy that expressly prohibits its directors, officers, principal stockholders or their respective affiliates from engaging for their own account in business activities of the types conducted by the Company. The Company’s code of business conduct and ethics contains a conflict of interest policy that prohibits its directors and executive officers, or whoever provides services to the Company, from engaging in any transaction that involves an actual conflict of interest with the Company, provided, however, that once the Company adds independent directors to its board, any such conflict may by a majority vote of independent directors.

Item 14.  Principal Accounting Fees and Services

The total fees charged to the Company by our independent registered public accounting firm, BFBorgers CPA PC, for audit-related services, including quarterly reviews, were $36,500 and $36,500 for the years ended December 31,2023 and 2022. The firm did not provide us with any tax or other services during either of such years.

The SEC requires that before our independent registered public accounting firm is engaged by us to render any auditing or permitted non-audit related service, the engagement be either: (i) approved by our Audit Committee or (ii) entered into pursuant to pre-approval policies and procedures established by the Audit Committee, provided that the policies and procedures are detailed as to the particular  service,  the  Audit Committee is informed of each service, and such policies and procedures do not include delegation of the Audit Committee’s responsibilities to management.

We do not have an audit committee.  Our Board pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees paid during 2023 and 2022 were pre-approved by our Board.

PART IV

Item 15. Exhibits

^*       Management compensation plan or arrangement.

SIGNATURES

Pursuant to the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ALPHA INVESTMENT INC.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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