Filed Pursuant to Rule 424(b)(5)
Registration No. 333-252539
8,333,333 Shares of Class A Common
Stock
Pursuant to this prospectus
supplement and the accompanying prospectus, we are offering to investors 8,333,333 shares of our Class A common stock (the
“Shares”). In connection with this offering, we also issued, as additional compensation, to A.G.P./Alliance
Global Partners. (“A.G.P.”), our exclusive placement agent, placement agent warrants to purchase up to 416,667 shares
of common stock, equivalent to 5% of the Shares, at an exercise price of $6.60 per share (the “Placement Agent Warrants”).
The purchase price
per Share will be $6.00. The shares of Class A common stock issuable from time to time pursuant to the exercise of the Placement
Agent Warrants are also being offered pursuant to this prospectus supplement and the accompanying prospectus.
We have retained A.G.P.
as placement agent (the “Placement Agent”) to use its reasonable best efforts to solicit offers to purchase the securities
in this offering. The Placement Agent has no obligation to buy any of the securities from us or to arrange for the purchase
or sale of any specific number or dollar amount of the securities. We expect that the delivery of the securities being offered
pursuant to this prospectus supplement and the accompanying prospectus will be made on or before February 17, 2021.
Our common stock is
listed on the OTC Markets OTCQB under the symbol “ALPP.” The last reported sale price of our common stock on OTCQB
on February 9, 2021 was $8.05 per share. We recommend that you obtain current market quotations for our common stock prior
to making an investment decision. As of February 9, 2021, the aggregate market value of our outstanding common stock held
by non-affiliates was $971,095,118, based on 127,987,222 shares of Class A common stock outstanding on February 9, 2021,
of which 120,632,934 shares are held by non-affiliates (using information on the holdings of affiliates on various dates within
the 60-day window permitted by General Instruction I.B.6 of Form S-3), and a per share value of $8.05, based on the closing
price of our common stock on the OTCQB on February 9, 2021.
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Per Share
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Total
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Public offering price
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$
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6.00
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$
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50,000,000
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Placement Agent commissions to be paid by us*
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$
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0.42
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$
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3,500,000
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Proceeds, before expenses, to us
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$
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5.58
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$
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46,500,000
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*
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Does not include other additional compensation
received by the placement agent, including warrants issued to the placement agent, reimbursement of legal fees and out of pocket
expenses.
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Investing in our
common stock involves a high degree of risk. Before buying any common stock, you should carefully consider the risks that we have
described in “Supplemental Risk Factors” beginning on page S-5 of this prospectus supplement, as well as those
described in our filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
INVESTING IN OUR COMMON STOCK INVOLVES
A HIGH DEGREE OF RISK. BEFORE MAKING ANY INVESTMENT DECISION, YOU SHOULD CAREFULLY REVIEW AND CONSIDER ALL THE INFORMATION IN THIS
PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN AND THEREIN, INCLUDING
THE RISKS AND UNCERTAINTIES DESCRIBED UNDER “RISK FACTORS” BEGINNING ON PAGE S-5 OF THIS PROSPECTUS SUPPLEMENT AND
THE RISK FACTORS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS.
Neither the U.S. Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
A.G.P.
The date of this prospectus is February 12,
2021.
Table of Contents
Prospectus Supplement
Prospectus
We have not, and
the Placement Agent has not, authorized any dealer, salesperson or other person to give any information or to make any representation
other than those contained in or incorporated by reference into this prospectus supplement, the accompanying prospectus or any
applicable free writing prospectus. You must not rely upon any information or representation not contained in or incorporated by
reference into this prospectus supplement, the accompanying prospectus or any applicable free writing prospectus as if we had authorized
it. This prospectus supplement, the accompanying prospectus and any applicable free writing prospectus do not constitute an offer
to sell or the solicitation of an offer to buy any securities other than the registered securities to which they relate, nor does
this prospectus supplement, the accompanying prospectus or any applicable free writing prospectus constitute an offer to sell or
the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation
in such jurisdiction. You should not assume that the information contained in this prospectus supplement, the accompanying prospectus,
the documents incorporated herein and therein by reference and any applicable free writing prospectus is correct on any date after
their respective dates, even though this prospectus supplement, the accompanying prospectus or an applicable free writing prospectus
is delivered or securities are sold on a later date. Our business, financial condition, results of operations and cash flows may
have changed since those dates.
About This Prospectus Supplement
This prospectus supplement and the accompanying
prospectus are part of a shelf registration statement that we filed with the Securities and Exchange Commission (the “SEC”).
This prospectus supplement amends and supplements the information in the prospectus, dated February 10, 2021, filed as a part
of our registration statement on Form S-3 (File No. 333-252539) (the “Registration Statement”). The Registration
Statement was declared effective by the SEC as of February 10, 2021. This prospectus supplement should be read in conjunction
with the accompanying prospectus, and is qualified by reference thereto, except to the extent that the information herein amends
or supersedes the information contained in the accompanying prospectus. This prospectus supplement is not complete without, and
may only be delivered or utilized in connection with, the accompanying prospectus, and any future amendments or supplements thereto.
Our Registration Statement allows us to
offer from time to time a wide array of securities. In the accompanying prospectus, we provide you with a general description of
the securities we may offer from time to time under our Registration Statement and other general information that may apply to
this offering. Both this prospectus supplement and the accompanying prospectus include important information about us, our common
stock, and other information that you should know before investing. You should carefully read both this prospectus supplement and
the accompanying prospectus as well as additional information described under “Where You Can Find More Information”
before investing in our securities.
This document is in two parts. The first
part is this prospectus supplement, which adds to and updates information contained in the accompanying prospectus. The second
part, the prospectus, provides more general information, some of which may not apply to this offering. Generally, when we refer
to this “prospectus supplement,” we are referring to both this prospectus supplement and the accompanying prospectus,
as well as the documents incorporated by reference herein and therein. If information in this prospectus supplement is inconsistent
with the accompanying prospectus, you should rely on this prospectus supplement.
If the description of the offering varies
between this prospectus supplement and the accompanying prospectus, you should rely on the information contained in this prospectus
supplement. To the extent there is any other conflict between the information contained in this prospectus supplement, on the one
hand, and the information contained in the accompanying prospectus or in any document incorporated by reference that was filed
with the SEC before the date of this prospectus supplement, on the other hand, you should rely on the information in this prospectus
supplement. If any statement in one of these documents is inconsistent with a statement in another document having a later date
(for example, a document incorporated by reference in the accompanying prospectus) the statement in the document having the later
date modifies or supersedes the earlier statement. As noted, it is important for you to read and consider all information contained
in this prospectus supplement and the accompanying prospectus, including the documents we have referred you to in the section entitled
“Where You Can Find More Information” below in this prospectus supplement.
You should rely only on the information
incorporated by reference or provided in this prospectus supplement and the accompanying prospectus. Neither we nor the underwriters
have authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information,
you should not rely on it. This prospectus supplement and the accompanying prospectus do not constitute an offer to sell, or a
solicitation of an offer to purchase, the securities offered by this prospectus supplement and the accompanying prospectus in any
jurisdiction where it is unlawful to make such offer or solicitation. You should assume that the information contained in this
prospectus supplement or the accompanying prospectus, or any document incorporated by reference in this prospectus supplement or
the accompanying prospectus, is accurate only as of the date of those respective documents. Neither the delivery of this prospectus
supplement nor any distribution of securities pursuant to this prospectus supplement shall, under any circumstances, create any
implication that there has been No change in the information set forth or incorporated by reference into this prospectus supplement
or in our affairs since the date of this prospectus supplement. Our business, financial condition, results of operations and prospects
may have changed since that date.
We further note that the representations,
warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference
in this prospectus supplement or the accompanying prospectus were made solely for the benefit of the parties to such agreement,
including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to
be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as
of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing
the current state of our affairs.
This prospectus supplement and the accompanying
prospectus do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the shares of common
stock to which it relates, nor do this prospectus supplement and the accompanying prospectus constitute an offer to sell or the
solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation
in such jurisdiction.
Unless otherwise indicated, information contained in or incorporated
by reference into this prospectus concerning our industry and the markets in which we operate, including market position and market
opportunity, is based on information from our management’s estimates, as well as from industry publications and research,
surveys and studies conducted by third parties. Management estimates are derived from publicly available information, our knowledge
of our industry and assumptions based on such information and knowledge, which we believe to be reasonable. However, assumptions
and estimates of our future performance, and the future performance of our industry are subject to numerous known and unknown risks
and uncertainties, including those described under the heading “Risk Factors” beginning on page S-5 of this prospectus
supplement. These and other important factors could result in our estimates and assumptions being materially different from future
results. You should read the information contained in, or incorporated by reference into, this prospectus completely and with the
understanding that future results may be materially different and worse from what we expect. See the information included under
the heading “Cautionary Statement Regarding Forward-Looking Statements.”
Unless expressly stated
otherwise, all references in this prospectus to “we,” “us,” “our” or similar references mean
Alpine 4 Technologies Ltd. and its subsidiaries on a consolidated basis.
Prospectus Supplement Summary
This summary highlights certain information
about us, this offering and information appearing elsewhere in this prospectus and in the documents which we incorporate by reference.
This summary is not complete and does not contain all of the information that you should consider before investing in our securities.
To fully understand this offering and its consequences to you, you should read this entire prospectus carefully, including the
information referred to under the heading “Risk Factors” in this prospectus on page 3, and the financial statements
and other information incorporated by reference in this prospectus when making an investment decision. In this prospectus, the
terms “we,” “us,” and the “company” refer to Alpine 4 Technologies Ltd. and its subsidiaries.
Our Company
Company Background and History
We were incorporated
under the laws of the State of Delaware on April 22, 2014. We are a publicly traded conglomerate that is acquiring businesses
that fit into our disruptive DSF business model of Drivers, Stabilizers, and Facilitators. At Alpine 4, we understand the nature
of how technology and innovation can accentuate a business. Our focus is on how the adaptation of new technologies even in brick
and mortar businesses can drive innovation. We also believe that our holdings should benefit synergistically from each other and
that the ability to have collaboration across varying industries can spawn new ideas and create fertile ground for competitive
advantages. This unique perspective has culminated in the development of our Blockchain-enabled Enterprise Business Operating System
called SPECTRUMebos.
As of the date of this Prospectus, the Company was a holding
company that owned ten operating subsidiaries:
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A4 Corporate Services, LLC;
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Quality Circuit Assembly, Inc.;
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Morris Sheet Metal, Corp;
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Deluxe Sheet Metal, Inc.;
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Excel Construction Services, LLC;
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Impossible Aerospace, Inc.; and
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In the first quarter of 2020, we also created three additional
subsidiaries to act as silo holding companies, organized by industries. These silo subsidiaries are A4 Construction Services, Inc.
(“A4 Construction”), A4 Manufacturing, Inc. (“A4 Manufacturing”), and A4 Technologies, Inc. (“A4
Technologies”). All three are Delaware corporations. Each is authorized to issue 1,500 shares of common stock with a par
value of $0.01 per share, and the Company is the sole shareholder of each of these three subsidiaries.
Alpine
4 maintains our corporate office located at 2525 E. Arizona Biltmore Circle, Suite C237, Phoenix, Arizona 85016. ALTIA works
out of the headquarters offices. QCA rents a location at 1709 Junction Court #380 San Jose, California 95112. Deluxe
Sheet Metal’s facilities are located at 6661 Lonewolf Dr, South Bend, Indiana 46628. Morris Sheet Metal and JTD Spiral
are located at 6212 Highview Dr, Fort Wayne, Indiana 46818. Excel Construction Services’ office and fabrication
space are located at 297 Wycoff Cir, Twin Falls, Idaho 83301. Impossible Aerospace’s headquarters are located at 2222
Ronald St, Santa Clara, California 95050. Vayu (US) has its headquarters at 326 W Liberty St, Ann Arbor, Michigan 48103.
Who We Are
Alexander Hamilton, in his “Federalist
paper #11,” said that our adventurous spirit distinguishes the commercial character of America. Hamilton knew
that our freedom to be creative gave American businesses a competitive advantage over the rest of the world. We
believe that Alpine 4 also exemplifies this spirit in our subsidiaries and that our greatest competitive advantage is our highly
diverse business structure combined with a culture of collaboration.
It is our mandate to grow Alpine 4 into
a leading, multi-faceted holding company with diverse subsidiary holdings with products and services that not only benefit from
one another as a whole, but also have the benefit of independence. This type of corporate structure is about having our subsidiaries
prosper through strong onsite leadership while working synergistically with other Alpine 4 holdings. The essence of
our business model is based around acquiring business-to-business (B2B) companies in a broad spectrum of industries via our acquisition
strategy of DSF (Drivers, Stabilizer, Facilitator). Our DSF business model (which is discussed more below) offers our shareholders
an opportunity to own small-cap businesses that hold defensible positions in their individual market space. Further,
we believe that our greatest opportunity for growth exists in the smaller to middle-market operating companies with revenues between
$5 to $150 million annually. In this target-rich environment, businesses generally sell at more reasonable multiples, presenting
greater opportunities for operational and strategic improvements that have greater potential to enhance profit.
Driver, Stabilizer, Facilitator (DSF)
Driver: A Driver is a company that
is in an emerging market or technology, that has enormous upside potential for revenue and profits, with a significant market opportunity
to access. These types of acquisitions are typically small, brand new companies that need a structure to support their growth.
Stabilizer: Stabilizers are companies
that have sticky customers, consistent revenue and provide solid net profit returns to Alpine 4.
Facilitators: Facilitators are our
“secret sauce.” Facilitators are companies that provide a product or service that an Alpine 4 sister company
can use as leverage to create a competitive advantage.
Our DSF Strategy is discussed in more detail
below in the section entitled “Business.”
Risk Factors
We face numerous risks that could materially
affect our business, results of operations or financial condition. The most significant of these risks include the following:
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Alpine 4 is an "emerging growth company," and the reduced disclosure requirements applicable to "emerging growth companies" could make our Class A common stock less attractive to investors.
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Growth and development of operations will depend on the acceptance of Alpine 4's proposed businesses. If Alpine 4's products are not deemed desirable and suitable for purchase and it cannot establish a customer base, it may not be able to generate future revenues, which would result in a failure of the business and a loss of the value of your investment.
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If demand for the products Alpine 4 plans to offer slows, then its business would be materially affected, which could result in the loss of your entire investment.
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Our revenue growth rate depends primarily on our ability to satisfy relevant channels and end-customer demands, identify suppliers of our necessary ingredients and to coordinate those suppliers, all subject to many unpredictable factors.
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If securities or industry analysts do not publish or cease publishing research or reports or publish misleading, inaccurate or unfavorable research about us, our business or our market, our stock price and trading volume could decline.
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Alpine 4 stockholders may have difficulty in reselling their shares due to the limited public market or state Blue Sky laws.
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Our existing debt levels may adversely affect our financial condition or operational flexibility and prevent us from fulfilling our obligations under our outstanding indebtedness.
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Growth and development of operations will depend on the growth in our acquisition model and from organic growth from our subsidiaries’ businesses. If we cannot find desirable acquisition candidates, we may not be able to generate growth with future revenues.
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We face risks related to Novel Coronavirus (COVID-19) which have significantly disrupted our manufacturing, research and development, operations, sales and financial results, and could continue to do so for the foreseeable future.
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For further discussion of these and other
risks, see “Risk Factors,” beginning on page S-5.
Recent Developments
Amendment to Certificate of Incorporation
On February 5, 2021, we filed with
the Secretary of State of Delaware a Certificate of Amendment to our Certificate of Incorporation to change the name of the Company
and to increase the number of authorized shares of Class A Common Stock from 125,000,000 to 195,000,000.
The change in the Company’s name
(the “Name Change”) must be approved by the Financial Industry Regulatory Authority (“FINRA”). An application
has been submitted to FINRA relating to the Name Change. We will provide additional information relating to the Name Change and
the status of the FINRA approval process in our public filings with the SEC as more information becomes available.
The increase in our authorized Class A
Common Stock is not required to be approved by FINRA and took effect on February 5, 2021.
The Offering
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Issuer
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Alpine 4 Technologies Ltd.
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Class A Common stock offered
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Shares of Class A common stock having an aggregate offering price of up to $50,000,000. The actual number of shares issued will vary depending on the sales price under this offering.
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Placement Agent Warrants offered by us
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Placement Agent warrants to purchase up to an aggregate of 416,667 shares of common stock at an exercise price of $6.60 per share (the “Placement Agent Warrants”). The Placement Agent Warrants have a term of four years and are exercisable by the holders at any time after August 16, 2021.
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Class A Common Stock outstanding immediately prior to this offering(1)
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127,987,222
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Use of proceeds
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We intend to use the net proceeds from this offering to build additional products and solutions to meet market demand, further advance the development of new products and solutions, engage in corporate development and merge acquisition activities, for working capital needs, capital expenditures, repayment or refinancing of indebtedness, acquisitions, repurchases and redemptions of securities, and for other general corporate purposes. However, we will retain broad discretion over how the net proceeds are used. See “Use of Proceeds.”
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Risk factors
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Investing in our securities involves a high degree of risk. You should carefully consider all of the information in this prospectus and the documents incorporated by reference in this prospectus. In particular, see “Risk Factors” beginning on page S-5 of this prospectus.
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OTC QB Market symbol
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“ALPP”
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(1) The number of Common Stock to
be outstanding prior to and after this offering is based on the actual number of shares outstanding as of February 12, 2021, which
was 127,987,222, and does not include, as of that date:
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416,667 shares of Class A Common Stock issuable upon the exercise of the Placement Agent Warrants.
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Unless otherwise stated, outstanding share information throughout
this prospectus supplement excludes the above.
RISK FACTORS
Investing
in our Class A common stock involves substantial risk. You should carefully consider the risk factors disclosed below as well
as those contained in our most recent Annual Report on Form 10-K, which is incorporated by reference herein, as updated by
our subsequent filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the other information
contained in this prospectus before acquiring any of our Class A common stock. Additionally, you should carefully consider
and evaluate all of the information included and incorporated by reference or deemed to be incorporated by reference in this prospectus.
Our business, results of operations or financial condition could be adversely affected by any of these risks or by additional risks
and uncertainties not currently known to us or that we currently consider immaterial. These risks could have a material adverse
effect on our business, results of operations or financial condition and cause the value of our Class A common stock to decline.
You could lose all or part of your investment.
Risks
Associated with Our Business and Operations
Alpine 4
is an "emerging growth company," and the reduced disclosure requirements applicable to "emerging growth companies"
could make our Class A common stock less attractive to investors.
Alpine 4 is an
"emerging growth company," as defined in the JOBS Act. For as long as we are an emerging growth company, we may take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not
emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements and exemptions from the requirements of holding advisory "say-on-pay" votes on executive
compensation and shareholder advisory votes on golden parachute compensation. We will remain an "emerging growth company"
until the earliest of (i) the last day of the fiscal year during which we have total annual gross revenues of $1 billion
or more; (ii) the last date of the fiscal year following the fifth anniversary of the date of the first sale of Class A
common stock under the Company's first filed registration statement; (iii) the date on which we have, during the previous
three-year period, issued more than $1 billion in non-convertible debt; and (iv) the date on which we are deemed to be a "large
accelerated filer" under the Exchange Act. We will be deemed a large accelerated filer on the first day of the fiscal year
after the market value of our common equity held by non-affiliates exceeds $700 million, measured on October 31.
We cannot predict
if investors will find our Class A common stock less attractive to the extent we rely on the exemptions available to emerging
growth companies. If some investors find our Class A common stock less attractive as a result, there may be a less active
trading market for our Class A common stock and our stock price may be more volatile.
In addition, Section 107
of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in
Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An emerging growth company
can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
A Company that
elects to be treated as an emerging growth company shall continue to be deemed an emerging growth company until the earliest of
(i) the last day of the fiscal year during which it had total annual gross revenues of $1,000,000,000 (as indexed for inflation),
(ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of common stock under the
Company's first filed registration statement; (iii) the date on which it has, during the previous 3-year period, issued more
than $1,000,000,000 in non-convertible debt; or (iv) the date on which is deemed to be a 'large accelerated filer' as defined
by the SEC, which would generally occur upon it attaining a public float of at least $700 million.
However, we are
choosing to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107
of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting
standards is irrevocable.
Our independent
auditors have expressed substantial doubt about our ability to continue as a going concern.
Alpine 4 has incurred
net losses of $35,457,916 through September 30, 2020. This net loss was primarily driven in 2015 by stock issuance
to employees and the ceasing of business operations for its subsidiary Venture West Energy Services, LLC. Because we have
yet to attain profitable operations, in their report on our financial statements for the year ended December 31, 2019, our
independent auditors included an explanatory paragraph regarding the substantial doubt about our ability to continue as a going
concern. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary
funding from outside sources, including obtaining additional funding from the sale of our securities, increasing sales or obtaining
loan from various financial institutions where possible. Our net operating losses increase the difficulty in meeting
such goals and there can be no assurances that such methods will prove successful. Our financial statements contain
additional note disclosures describing the management's assessment of our ability to continue as a going concern.
Management
of Alpine 4 cannot guarantee that Alpine 4 will continue to generate revenues which could result in a total loss of the value of
your investment if it is unsuccessful in its business plans.
While Alpine 4
and its subsidiaries have long term Purchase Order arrangements with its large Contract Manufacturing customers and Master Service
Agreements with its mechanical customers that can provide a level of dependable revenue, there can be no assurance that Alpine
4 will be able to continue to generate revenues or that revenues will be sufficient to maintain its business. As a result,
investors or shareholders could lose all of their investment if Alpine 4 is not successful in its proposed business plans.
Alpine 4's
needs could exceed the amount of time or level of experience its officers and directors may have. Alpine 4 will be dependent
on key executives, and the loss of the services of the current officers and directors could severely impact Alpine 4's business
operations.
Alpine 4's business
plan does not provide for the hiring of any additional employees other than outlined in its plan of operations until sales will
support the expense. Until that time, the responsibility of developing Alpine 4's business and fulfilling the reporting
requirements of a public company will fall upon the officers and the directors. In the event they are unable to fulfill
any aspect of their duties to Alpine 4, it may experience a shortfall or complete lack of sales resulting in little or no profits
and eventual closure of our business.
Additionally,
the management of future growth will require, among other things, continued development of Alpine 4's financial and management
controls and management information systems, stringent control of costs, increased marketing activities, and the ability to attract
and retain qualified management, research, and marketing personnel. The loss of key executives or the failure to
hire qualified replacement personnel would compromise Alpine 4's ability to generate revenues or otherwise have a material
adverse effect on Alpine 4. There can be no assurance that Alpine 4 will be able to successfully attract and retain
skilled and experienced personnel.
Significant
time and management resources are required to ensure compliance with public company reporting and other obligations. Taking steps
to comply with these requirements will increase our costs and require additional management resources and does not ensure that
we will be able to satisfy them.
We are a publicly
reporting company. As a public company, we are required to comply with applicable provisions of the Sarbanes-Oxley Act of
2002, as well as other federal securities laws, and rules and regulations promulgated by the SEC and the various exchanges
and trading facilities where our Class A common stock may trade, which result in significant legal, accounting, administrative
and other costs and expenses. These rules and requirements impose certain corporate governance requirements relating to director
independence, distributing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts
of interest, and codes of conduct, depending on where our shares trade. Our management and other personnel will need to devote
a substantial amount of time to ensure that we comply with all applicable requirements.
As we review
our internal controls and procedures, we may determine that they are ineffective or have material weaknesses, which could impact
the market's acceptance of our filings and financial statements.
In connection
with the preparation of our Annual Report for the year ended December 31, 2019, we conducted a review of our internal control
over financial reporting for the purpose of providing the management report required by these rules. During the course of our review
and testing, we identified deficiencies and have been unable to remediate them before we were required to provide the required
reports. Furthermore, because we have material weaknesses in our internal control over financial reporting, we may not detect errors
on a timely basis and our financial statements may be materially misstated. Even if we are able to remediate the material weaknesses,
we may not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting, which could
harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price
of our stock to fall. In addition, as a public company we are required to file in a timely manner accurate quarterly and annual
reports with the SEC under the Securities Exchange Act of 1934 (the "Exchange Act"), as amended. Any failure
to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from
the market or trading facility where our shares may trade, or other adverse consequences that would materially harm our business.
Because
Alpine 4 has shown a net loss since inception, ownership of Alpine 4 shares is highly risky and could result in a complete loss
of the value of your investment if Alpine 4 is unsuccessful in its business plans.
Based upon current
plans, Alpine 4 expects to stop incurring operating losses in future periods as its subsidiaries move from their Optimization Phase
to its Asset Producing Phase. However new additional subsidiaries may incur significant expenses associated with the
growth of those businesses. Further, there is no guarantee that it will be successful in realizing future revenues or
in achieving or sustaining positive cash flow at any time in the future. Any such failure could result in the possible
closure of its business or force Alpine 4 to seek additional capital through loans or additional sales of its equity securities
to continue business operations, which would dilute the value of any shares you receive in connection with the Share Exchange.
Growth and
development of operations will depend on the growth in the Alpine 4 acquisition model and from organic growth from its subsidiaries’
businesses. If Alpine 4 cannot find desirable acquisition candidates, it may not be able to generate growth with future
revenues.
Alpine 4 expects
to continue its strategy of acquiring businesses, which management believes will result in significant growth in projected annualized
revenue by the end of 2020. However, there is no guarantee that it will be successful in realizing future revenue growth
from its acquisition model. As such, Alpine 4 is highly dependent on suitable candidates to acquire which the supply of those
candidates cannot be guaranteed and is driven from the market for M&A. If Alpine 4 is unable to locate or identify suitable
acquisition candidates, or to enter into transactions with such candidates, or if Alpine 4 is unable to integrate the acquired
businesses, Alpine 4 may not be able to grow its revenues to the extent anticipated, or at all.
We may make
acquisitions which could divert the attention of management and which may not be integrated successfully into our existing business.
We may pursue
acquisitions to increase our market penetration, enter new geographic markets and expand the scope of services we provide. We cannot
guarantee that we will identify suitable acquisition candidates, that acquisitions will be completed on acceptable terms or that
we will be able to integrate successfully the operations of any acquired business into our existing business. The acquisitions
could be of significant size and involve operations in multiple jurisdictions. The acquisition and integration of another business
would divert management attention from other business activities. This diversion, together with other difficulties we may incur
in integrating an acquired business, could have a material adverse effect on our business, financial condition and results of operations.
In addition, we may borrow money or issue capital stock to finance acquisitions. Such borrowings might not be available on terms
as favorable to us as our current borrowing terms and may increase our leverage, and the issuance of capital stock could dilute
the interests of our stockholders. Currently, we are not contemplating the acquisition of any specific entity.
As we acquire
companies or technologies in the future, they could prove difficult to integrate, disrupt our business, dilute stockholder value
and adversely affect our operating results and the value of your investment.
As part of our
business strategy, we regularly evaluate investments in, or acquisitions of, complementary businesses, joint ventures, services
and technologies, and we expect that periodically we will continue to make such investments and acquisitions in the future. Acquisitions
and investments involve numerous risks, including:
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the potential failure to achieve the expected benefits of the combination or acquisition;
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difficulties in and the cost of integrating operations, technologies, services and personnel;
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diversion of financial and managerial resources from existing operations;
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risk of entering new markets in which we have little or no experience;
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potential write-offs of acquired assets or investments;
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potential loss of key employees;
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inability to generate sufficient revenue to offset acquisition or investment costs;
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the inability to maintain relationships with customers and partners of the acquired business;
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the difficulty of incorporating acquired technology and rights into our products and services and
of maintaining quality standards consistent with our established brand;
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potential unknown liabilities associated with the acquired businesses;
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unanticipated expenses related to acquired technology and its integration into existing technology;
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negative impact to our results of operations because of the depreciation and amortization of amounts
related to acquired intangible assets, fixed assets and deferred compensation, and the loss of acquired deferred revenue;
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the need to implement controls, procedures and policies appropriate for a public company at companies
that prior to the acquisition lacked such controls, procedures and policies; and
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challenges caused by distance, language and cultural differences.
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In addition, if
we finance acquisitions by issuing additional convertible debt or equity securities, our existing stockholders may be diluted which
could affect the market price of our stock. Further, if we fail to properly evaluate and execute acquisitions or investments, our
business and prospects may be seriously harmed, and the value of your investment may decline.
Alpine 4
has limited management resources and will be dependent on key executives. The loss of the services of the current officers
and directors could severely impact Alpine 4's business operations and future development, which could result in a loss of revenues
and adversely impact the ability to ever sell any Exchange Shares received through participation in the Share Exchange.
Alpine 4 is relying on a small number
of key individuals to implement its business and operations and, in particular, the professional expertise and services of Kent
B. Wilson, our President, Chief Executive Officer, and Secretary and Jeff Hail, our Chief Operating Officer. Mr. Wilson
intends to serve full time in his capacities with Alpine 4 to work to develop and grow the Company. Nevertheless, Alpine 4
may not have sufficient managerial resources to successfully manage the increased business activity envisioned by its business
strategy. In addition, Alpine 4's future success depends in large part on the continued service of Mr. Wilson. If
he chooses not to serve as an officer or if he is unable to perform his duties, this could have an adverse effect on Company business
operations, financial condition and operating results if we are unable to replace Mr. Wilson or Mr. Hail with other individuals
qualified to develop and market our business. The loss of their services could result in a loss of revenues, which could
result in a reduction of the value of any ownership of Alpine 4.
Competition
that Alpine 4 faces is varied and strong.
Alpine 4's subsidiaries’
products and industries as a whole are subject to competition. There is no guarantee that we can sustain our market
position or expand our business.
We compete with
a number of entities in providing products to our customers. Such competitor entities include a variety of large nationwide
corporations, including but not limited to public entities and companies that have established loyal customer bases over several
decades.
Many of our current
and potential competitors are well established and have significantly greater financial and operational resources, and name recognition
than we have. As a result, these competitors may have greater credibility with both existing and potential customers. They
also may be able to offer more competitive products and services and more aggressively promote and sell their products. Our
competitors may also be able to support more aggressive pricing than we will be able to, which could adversely affect sales, cause
us to decrease our prices to remain competitive, or otherwise reduce the overall gross profit earned on our products.
Our success
in business and operations will depend on general economic conditions.
The success of Alpine 4 and its subsidiaries
depends, to a large extent, on certain economic factors that are beyond its control. Factors such as general economic
conditions, levels of unemployment, interest rates, tax rates at all levels of government, competition and other factors beyond
Alpine 4's control may have an adverse effect on the ability of our subsidiaries to sell its products, to operate, and to collect
sums due and owing to them.
Alpine 4 may not be able to successfully
implement its business strategy, which could adversely affect its business, financial condition, results of operations and cash
flows. If Alpine 4 cannot successfully implement its business strategy, it could result in the loss of the value of
your investment.
Successful implementation
of our business strategy depends on our being able to acquire additional businesses and grow our existing subsidiaries, as well
as on factors specific to the industries in which our subsidiaries operate, and the state of the financial industry and numerous
other factors that may be beyond our control. Adverse changes in the following factors could undermine our business
strategy and have a material adverse effect on our business, our financial condition, and results of operations and cash flow:
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The competitive environment in the industries in which our subsidiaries operate that may force us to reduce prices below the optimal pricing level or increase promotional spending;
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Our ability to anticipate changes in consumer preferences and to meet customers' needs for our products in a timely cost-effective manner; and
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Our ability to establish, maintain and eventually grow market share in these competitive environments.
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Our revenue
growth rate depends primarily on our ability to satisfy relevant channels and end-customer demands, identify suppliers of our necessary
ingredients and to coordinate those suppliers, all subject to many unpredictable factors.
We may not be
able to identify and maintain the necessary relationships with suppliers of product and services as planned. Delays
or failures in deliveries could materially and adversely affect our growth strategy and expected results. As we supply
more customers, our rate of expansion relative to the size of such customer base will decline. In addition, one of our biggest
challenges is securing an adequate supply of suitable product. Competition for product is intense, and commodities costs
subject to price volatility.
Our ability to
execute our business plan also depends on other factors, including:
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ability to keep satisfied vendor relationships
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hiring and training qualified personnel in local markets;
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managing marketing and development costs at affordable levels;
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cost and availability of labor;
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the availability of, and our ability to obtain, adequate supplies of ingredients that meet our quality standards; and
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securing required governmental approvals in a timely manner when necessary.
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We
face risks related to Novel Coronavirus (COVID-19)
which have significantly disrupted our manufacturing, research and development, operations, sales and financial results, and could
continue to do so for the foreseeable future.
While
we are still providing critical and emergency services, our business has been and will continue to be adversely impacted by the
effects of the Novel Coronavirus (COVID-19).
In addition to global macroeconomic effects, the Novel Coronavirus (COVID-19)
outbreak and any other related adverse public health developments will cause disruption to our international operations and sales
activities. Our third-party manufacturers, suppliers, third-party distributors, sub-contractors and customers have been and will
be disrupted by worker absenteeism, quarantines and restrictions on our employees’ ability to work, office and factory closures,
disruptions to ports and other shipping infrastructure, border closures, or other travel or health-related restrictions. Depending
on the magnitude of such effects on our manufacturing, assembling, and testing activities or the operations of our suppliers, third-party
distributors, or sub-contractors, our supply chain, manufacturing and product shipments will be delayed, which could adversely
affect our business, operations and customer relationships. In addition, the Novel Coronavirus (COVID-19)
or other disease outbreak will in the short-run and may over the longer term adversely affect the economies and financial markets
of many countries, resulting in an economic downturn that will affect demand for our products and impact our operating results.
There can be no assurance that any decrease in sales resulting from the Novel Coronavirus (COVID-19)
will be offset by increased sales in subsequent periods. Although the magnitude of the impact of the Novel Coronavirus (COVID-19)
outbreak on our business and operations remains uncertain, the continued spread of the Novel Coronavirus (COVID-19)
or the occurrence of other epidemics and the imposition of related public health measures and travel and business restrictions
will adversely impact our business, financial condition, operating results and cash flows. In addition, we
have experienced and will experience disruptions to our business operations resulting from quarantines, self-isolations, or other
movement and restrictions on the ability of our employees to perform their jobs that may impact our ability to develop and design
our products in a timely manner or meet required milestones or customer commitments.
Unfavorable
global economic conditions could adversely affect our business, financial condition, stock price and results of operations.
Our
results of operations have been and could continue to be adversely affected by general conditions in the global economy and in
the global financial markets. For example, the global financial crisis caused extreme volatility and disruptions in the capital
and credit markets. A severe or prolonged economic downturn, such as the 2008 global financial crisis, could result in a variety
of risks to our business, including, weakened demand for our product candidates and our ability to raise additional capital when
needed on acceptable terms, if at all. As another example, our financial results may be negatively impacted by the recent Novel
Coronavirus (COVID-19) outbreak.
The extent and duration of such impacts remain largely uncertain and dependent on future developments that cannot be accurately
predicted at this time, such as the severity and transmission rate of Novel Coronavirus (COVID-19),
the extent and effectiveness of containment actions taken and the impact of these and other factors on our operations and the global
economy in general. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption, or cause
our customers to delay making payments for our services. If the current equity and credit markets deteriorate, it may make any
necessary debt or equity financing more difficult, more costly, and more dilutive. Failure to secure any necessary financing in
a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock
price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our
current service providers, manufacturers and other partners may not survive such difficult economic times, which could directly
affect our ability to attain our operating goals on schedule and on budget. Any of the foregoing could harm our business and we
cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact
our business. Furthermore, our stock price may decline due in part to the volatility of the stock market and any general economic
downturn.
Our existing
debt levels may adversely affect our financial condition or operational flexibility and prevent us from fulfilling our obligations
under our outstanding indebtedness.
As of September 30,
2020, we had total debt of approximately $50,164,719. This level of debt or any increase in our debt level could have adverse consequences
for our business, financial condition, operating results and operational flexibility, including the following: (i) the debt
level may cause us to have difficulty borrowing money in the future for working capital, capital expenditures, acquisitions or
other purposes; (ii) our debt level may limit operational flexibility and our ability to pursue business opportunities and
implement certain business strategies; and (iii) we have a higher level of debt than some of our competitors or potential
competitors, which may cause a competitive disadvantage and may reduce flexibility in responding to changing business and economic
conditions, including increased competition and vulnerability to general adverse economic and industry conditions. If we fail to
satisfy our obligations under our outstanding debt, an event of default could result that could cause some or all of our debt to
become due and payable.
We, or our third-party
service providers, face risks related to health epidemics and other outbreaks, which could significantly disrupt our operations.
Our
business has been and could continue to be adversely impacted by the effects of Novel Coronavirus (COVID-19) or
other epidemics. A public health epidemic, including Novel Coronavirus (COVID-19),
poses the risk that we or our employees, contractors, suppliers, and other partners may be prevented from conducting business activities
for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. We
currently rely, and may continue to rely, on third-party service providers that are located in locales significantly impacted by Novel
Coronavirus (COVID-19) and/or
who source raw materials, samples, components, or other materials and reports from countries significantly impacted by Novel
Coronavirus (COVID-19).
We may also experience impacts to certain of our suppliers as a result of Novel Coronavirus (COVID-19) or
other health epidemic or outbreak occurring in one or more of these locations, which may materially and adversely affect our business,
financial condition and results of operations. The extent to which Novel Coronavirus (COVID-19)
impacts our results will depend on future developments that are highly uncertain and cannot be predicted, including new information
that may emerge concerning the severity of the virus and the actions to contain its impact.
Risks
Related to Our Class A Common Stock
We may,
in the future, issue additional securities, which would reduce our stockholders' percent of ownership and may dilute our share
value.
Our Certificate
of Incorporation, as amended to date, authorizes us to issue 195,000,000 shares of Class A common stock, and 10,000,000
shares of Class B common stock and 15,000,000 Class C stock. As of the date of this Prospectus, we had 127,987,222 shares
of Class A common stock outstanding; 9,023,088 shares of Class B common stock issued and outstanding; and 14,572,267
shares of Class C common stock issued and outstanding.
The future issuance
of additional shares of Class A common stock will result in additional dilution in the percentage of our Class A common
stock held by our then existing stockholders. We may value any Class A common stock issued in the future on an arbitrary
basis including for services or acquisitions or other corporate actions that may have the effect of diluting the value of the shares
held by our stockholders, and might have an adverse effect on any trading market for our Class A common stock. Additionally,
our board of directors may designate the rights terms and preferences of one or more series of preferred stock at its discretion
including conversion and voting preferences without prior notice to our stockholders. Any of these events could have
a dilutive effect on the ownership of our shareholders, and the value of shares owned.
Raising
additional capital or purchasing businesses through the issuance of common stock will cause dilution to our existing stockholders.
We may seek additional
capital through a combination of private and public equity offerings, debt financings, collaborations, and strategic and licensing
arrangements, as well as issuing stock to make additional business or asset acquisitions. To the extent that we raise additional
capital through the sale of common stock or securities convertible or exchangeable into common stock or through the issuance of
equity for purchases of businesses or assets, your ownership interest in Alpine 4 will be diluted.
Our stockholders
are subject to significant dilution upon the occurrence of certain events which could result in a decrease in our stock price.
As of January 26,
2021, we had approximately $1,533,000 in outstanding convertible debt which was convertible into shares of our Class A common
stock at prices between $0.25 and $3.00 per share of Class A common stock. As of January 26, 2021, there were approximately
4,630,000 shares of our Class A common stock that would be issuable upon the conversion of outstanding convertible debt.
Future sales of
substantial amounts of our Class A common stock into the public and the issuance of the shares upon conversion of the outstanding
convertible notes will be dilutive to our existing stockholders and could result in a decrease in our stock price.
Raising
additional capital may restrict our operations or require us to relinquish rights.
We may seek additional
capital through a combination of private and public equity offerings, debt financings, collaborations, and strategic and licensing
arrangements. To the extent that we raise additional capital through the sale of common stock or securities convertible
or exchangeable into common stock, the terms of any such securities may include liquidation or other preferences that materially
adversely affect your rights as a stockholder. Debt financing, if available, would increase our fixed payment obligations
and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring
additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration,
strategic partnerships and licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual
property, future revenue streams or grant licenses on terms that are not favorable to us.
Market volatility
may affect our stock price and the value of your shares.
The market price
for our Class A common stock is likely to be volatile, in part because the volume of trades of our Class A common stock.
In addition, the market price of our Class A common stock may fluctuate significantly in response to a number of factors,
most of which we cannot control, including, among others:
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announcements of new products, brands, commercial relationships, acquisitions or other events by us or our competitors;
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regulatory or legal developments in the United States and other countries;
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fluctuations in stock market prices and trading volumes of similar companies;
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general market conditions and overall fluctuations in U.S. equity markets;
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social and economic impacts resulting from the global COVID-19 pandemic;
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variations in our quarterly operating results;
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changes in our financial guidance or securities analysts' estimates of our financial performance;
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changes in accounting principles;
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our ability to raise additional capital and the terms on which we can raise it;
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sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders;
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additions or departures of key personnel;
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discussion of us or our stock price by the press and by online investor communities; and
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other risks and uncertainties described in these risk factors.
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If securities
or industry analysts do not publish or cease publishing research or reports or publish misleading, inaccurate or unfavorable research
about us, our business or our market, our stock price and trading volume could decline.
The trading market
for our Class A common stock will be influenced by the research and reports that securities or industry analysts may publish
about us, our business, our market or our competitors. We currently have limited coverage and may never obtain increased research
coverage by securities and industry analysts. If no or few securities or industry analysts cover our company, the trading price
and volume of our stock would likely be negatively impacted. If we obtain securities or industry analyst coverage and if one or
more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, or
provides more favorable relative recommendations about our competitors, our stock price would likely decline. If one or more of
these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could
cause our stock price or trading volume to decline.
Future sales
of our Class A common stock may cause our stock price to decline.
Sales of a substantial
number of shares of our Class A common stock in the public market or the perception that these sales might occur could significantly
reduce the market price of our Class A common stock and impair our ability to raise adequate capital through the sale of additional
equity securities.
Our compliance
with the Sarbanes-Oxley Act and SEC rules concerning internal controls may be time consuming, difficult and costly.
Alpine 4's executive
officers have limited experience being officers of a public company. It may be time consuming, difficult and costly
for us to continue to implement and update the internal controls and reporting procedures required by Sarbanes-Oxley. We
may need to hire additional financial reporting, internal controls and other finance staff in order to develop and implement appropriate
internal controls and reporting procedures. If we are unable to comply with Sarbanes-Oxley's internal controls requirements,
we may not be able to obtain the independent accountant certifications that Sarbanes-Oxley Act requires publicly traded companies
to obtain.
Alpine 4
may issue Preferred Stock with voting and conversion rights that could adversely affect the voting power of the holders of Class A
Common Stock.
Pursuant to our
Certificate of Incorporation, our Board of Directors may issue Preferred Stock with voting and conversion rights that could adversely
affect the voting power of the holders of Class A Common Stock. In the fourth quarter of 2019, we issued shares
of a newly designated Series B Preferred Stock to members of our Board of Directors. The outstanding shares of Series B
Preferred Stock have voting rights in the aggregate equal to 200% of the total voting power of our other outstanding securities,
giving our Board of Directors control over any matters submitted to the vote of the shareholders of Alpine 4. Any such provision
may be deemed to have a potential anti-takeover effect, and the issuance of Preferred Stock in accordance with such provision may
delay or prevent a change of control of Alpine 4. The Board of Directors also may declare a dividend on any outstanding
shares of Preferred Stock.
Risks Related to the Offering
Historically, our stock price has
been volatile, and this is likely to continue; purchasers of our Class A common stock could incur substantial losses as a
result.
Historically,
the market price of our Class A common stock has fluctuated significantly, and we expect that this will continue. Purchasers
of our Class A common stock could incur substantial losses relating to their investment in our stock as a result. For the
fiscal year ended December 31, 2020, the 52-week low and high prices for our Class A common stock was $0.0001 and $4.79,
respectively. Also, the stock market in general has recently experienced volatility that has often been unrelated or disproportionate
to the operating performance of particular companies. These broad market fluctuations could result in fluctuations in the price
of our Class A common stock, which could cause purchasers of our Class A common stock to incur substantial losses. The
market price for our Class A common stock may be influenced by many factors, including:
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developments in our business or with respect to our projects;
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the success of competitive products or technologies;
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regulatory developments in the United States and foreign countries;
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developments or disputes concerning patents or other proprietary rights;
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the recruitment or departure of key personnel;
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quarterly or annual variations in our financial results or those of companies that are perceived
to be similar to us;
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market conditions in the conventional and renewable energy industries and issuance of new or changed
securities analysts’ reports or recommendations;
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the failure of securities analysts to cover our Class A common stock or changes in financial
estimates by analysts;
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the inability to meet the financial estimates of analysts who follow our Class A common stock;
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investor perception of our company and of our targeted markets; and
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general economic, political and market conditions.
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The market valuation of our business
may fluctuate due to factors beyond our control and the value of the investment of our stockholders may fluctuate correspondingly.
The market valuation
of smaller companies such as us frequently fluctuate due to factors unrelated to the past or present operating performance of such
companies. Our market valuation may fluctuate significantly in response to a number of factors, many of which are beyond our control,
including:
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Changes in securities analysts’ estimates of our financial performance;
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Fluctuations in stock market prices and volumes, particularly among securities of smaller companies;
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Changes in market valuations of similar companies;
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Announcements by us or our competitors of significant contracts, new technologies, acquisitions,
commercial relationships, joint ventures or capital commitments;
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Variations in our quarterly operating results;
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Loss of a major customer of failure to complete significant commercial contracts;
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Loss of a relationship with a partner; and
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Additions or departures of key personnel.
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As a result, the value of your investment may fluctuate.
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Our management will have broad discretion
over the use of proceeds from this offering and may not use the proceeds effectively.
Our
management will have broad discretion as to the application of the net proceeds from this offering and could spend the proceeds
in a variety of ways that may ultimately fail to improve our operating results or enhance the value of our Class A
common stock. Our failure to apply these funds effectively could have a negative effect on our business and cause the price of
our Class A common stock to decline.
A large number of shares may be sold
in the market following this offering, which may depress the market price of our Class A common stock.
All of our shares of
Class A common stock sold in the offering will be freely tradable without restriction or further registration under the Securities
Act. As a result, a substantial number of our shares of Class A common stock may be sold in the public market following this
offering, which may cause the market price of our Class A common stock to decline. If there are more shares of Class A
common stock offered for sale than buyers are willing to purchase, then the market price of our Class A common stock may decline
to a market price at which buyers are willing to purchase the offered shares of Class A common stock and sellers remain willing
to sell the shares of Class A common stock.
The actual number of shares we will
issue under the sales agreement, at any one time or in total, is uncertain.
Subject to certain
limitations in the sales agreement and compliance with applicable law, we have the discretion to deliver a placement notice to
A.G.P. at any time and from time to time during the term of the sales agreement. The actual number of shares Class A common
stock that are sold to or through A.G.P. on our behalf pursuant to any placement notice we deliver to A.G.P. will depend on the
market price of the Class A common stock during the periods in which sales are made and any restrictions or limitations applicable
to such sales, such as a minimum price below which sales may not be made, that we may include in such placement notice or that
otherwise apply under the sales agreement. Because the price per share of each share of Class A common stock sold will fluctuate
based on the market price of our Class A common stock during the sales period, it is not possible at this stage to predict
the number of shares that will ultimately be issued.
You may experience immediate dilution
in the book value per share of the Class A common stock you purchase.
Because the price per
share of our Class A common stock being offered from time to time may be substantially higher than the book value per share
of our Class A common stock at the time of the sale, you may suffer substantial dilution in the net tangible book value of
the Class A common stock you purchase in this offering.
An active trading market for our
Class A common stock may not be sustained.
Although our Class A common stock
is listed on the OTCQB Market, the market for our shares has demonstrated varying levels of trading activity. Furthermore, the
current level of trading may not be sustained in the future. The lack of an active market for our Class A common stock may
impair investors’ ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable,
may reduce the fair market value of their shares and may impair our ability to raise capital to continue to fund operations by
selling shares and may impair our ability to acquire additional intellectual property assets by using our shares as consideration.
We do not anticipate paying dividends
on our common stock and, accordingly, stockholders must rely on stock appreciation for any return on their investment.
We have never declared or paid cash dividends
on our common stock and do not expect to do so in the foreseeable future. The declaration of dividends is subject to the discretion
of our board of directors and limitations under applicable law, and will depend on various factors, including our operating results,
financial condition, future prospects and any other factors deemed relevant by our board of directors. You should not rely on an
investment in our company if you require dividend income from your investment in our company. The success of your investment will
likely depend entirely upon any future appreciation of the market price of our Class A common stock, which is uncertain and
unpredictable. There is no guarantee that our Class A common stock will appreciate in value.
We expect that our quarterly results
of operations will fluctuate, and this fluctuation could cause our stock price to decline.
Our quarterly operating results are likely
to fluctuate in the future. These fluctuations could cause our stock price to decline. The nature of our business involves variable
factors, such as the timing of the research, development and regulatory pathways of our product candidates, which could cause our
operating results to fluctuate.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus contains forward-looking
statements. The forward-looking statements are contained principally in the sections entitled “Prospectus Summary,”
“Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and “Business.” These statements relate to future events or to our future financial performance and involve known and
unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking
statements include, but are not limited to, statements about:
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our lack of revenues, history of operating losses, bankruptcy, limited cash reserves and ability to obtain other capital to develop and implement our business strategies and grow our business, and continue as a going concern;
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our ability to execute our strategy and business plan regarding growth, acquisitions, and focusing on our strategy of Drivers, Stabilizers, and Facilitators;
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the success, progress, timing and costs of our efforts to evaluate or consummate various strategic acquisitions, collaborations, and other alternatives if in the best interests of our stockholders;
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our ability to timely source adequate supply of our development products from third-party manufacturers on which we depend;
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the potential, if any, for future development of any of our present or future products;
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our ability to identify and develop additional uses for our products;
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our ability to attain market exclusivity and/or to protect our intellectual property and to operate our business without infringing on the intellectual property rights of others;
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the ability of our Board of Directors to influence control over all matters put to a vote of our stockholders, including elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction; and
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the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing.
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In some cases, you can identify these statements
by terms such as “anticipate,” “believe,” “could,” “estimate,” “expects,”
“intend,” “may,” “plan,” “potential,” “predict,” “project,”
“should,” “will,” “would” or the negative of those terms, and similar expressions that convey
uncertainty of future events or outcomes. These forward-looking statements reflect our management’s beliefs and views with
respect to future events and are based on estimates and assumptions as of the date of this prospectus and are subject to risks
and uncertainties. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions
on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while
we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our
statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available
relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
We discuss many of the risks associated with the forward-looking statements in this prospectus in greater detail under the heading
“Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained
in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking
statements.
You should carefully read this prospectus
and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus
is a part, completely and with the understanding that our actual future results may be materially different from what we expect.
We qualify all of the forward-looking statements in this prospectus by these cautionary statements.
Except as required by law, we expressly
disclaim any obligation or intention to update these forward-looking statements publicly, or to update the reasons actual results
could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future
events or otherwise.
Any forward-looking statement made by us
in this prospectus is based only on information currently available to us and speaks only as of the date on which it is made. We
expressly disclaim any obligation or intention to publicly update any forward-looking statement, whether written or oral that may
be made from time to time, whether as a result of new information, future developments or otherwise, except as required by applicable
law.
USE OF PROCEEDS
We estimate that the net proceeds we will
receive from this offering will be approximately $46,000,000 after deducting estimated offering expenses of approximately $500,000.
We will not receive any proceeds from the sale of common stock issuable upon exercise of the Placement Agent Warrants that we are
offering unless and until such warrants are exercised for cash. If the Placement Agent Warrants issued in connection with this
offering are fully exercised for cash, we would receive proceeds of $2,750,003.
We intend to use the net proceeds from
this offering, if any, to build additional products and solutions to meet market demand, further advance the development of new
products and solutions, engage in corporate development and merge acquisition activities, for working capital needs, capital expenditures,
repayment or refinancing of indebtedness, acquisitions, repurchases and redemptions of securities, and for other general corporate
purposes. The amounts and timing of these expenditures will depend on a number of factors, such as the timing, scope, progress
and results of our research and development efforts, the timing and progress of any partnering efforts, and the regulatory and
competitive environment. As of the date of this prospectus, we have not determined the amount of net proceeds to be used specifically
for any particular purpose or the timing of any expenditures. Accordingly, management will retain broad discretion and flexibility
in applying the net proceeds from the sale of the securities, if any.
DIVIDEND POLICY
We have never declared
or paid any cash dividends on our Class A common stock, and we do not currently anticipate declaring or paying cash dividends
on our Class A common stock in the foreseeable future. We currently intend to retain all of our future earnings, if any, to
finance the growth and development of our business. Any future determination relating to our dividend policy will be made at the
discretion of our Board of Directors and will depend on a number of factors, including future earnings, capital requirements, financial
conditions, future prospects, contractual restrictions and covenants and other factors that our Board of Directors may deem relevant.
DILUTION
If you invest in this offering, your ownership interest will
be diluted to the extent of the difference between the public offering price per share and the as adjusted net tangible book value
per share after giving effect to this offering. Our net tangible book value as of September 30, 2020, was approximately ($18,891,199),
or approximately ($0.17) per share of Class A common stock. Net tangible book value per share represents the amount of total
tangible assets (total assets less intangible assets) less total liabilities, divided by the number of shares of our common stock
outstanding as of September 30, 2020.
Dilution in net tangible book value per share represents the
difference between the amount per share paid by purchasers in this offering and the net tangible book value per share of our common
stock immediately after this offering. After giving effect to the sale of 8,333,333 shares of our common stock in this offering
(based on an assumed offering price of $6.00 per share), but excluding the sales agent discounts and commissions and estimated
offering expenses payable by us, our as adjusted net tangible book value as of September 30, 2020, would have been approximately
$31,108,801, or approximately $0.26 per share of Class A common stock. This represents an immediate increase in net tangible
book value of $0.43 per share of Class A common stock to our existing stockholders and an immediate dilution in net tangible
book value of $5.74 per share of Class A common stock to investors in this offering. The actual amounts above are based on
113,577,860 Class A common stock outstanding as of September 30, 2020, and do not reflect the exercise of warrants outstanding
on common stock, the exercise of outstanding options to purchase shares of common stock and non-vested restricted stock issued
to employees in the computation as the effect would be anti-dilutive.
DESCRIPTION OF SECURITIES
Authorized Capital Stock
Our authorized
capital stock consists of 225,000,000 shares of which 220,000,000 shares are common stock, par value $0.0001 per share, and 5,000,000
shares are preferred stock, par value of $0.0001 per share.
Common Stock
Pursuant to our amended Certificate of
Incorporation, we are authorized to issue three classes of common stock: Class A common stock (195,000,000 shares); Class B
common stock (10,000,000 shares); and Class C common stock (15,000,000 shares). The specific rights and preferences are set
forth below.
As of the date of this Prospectus, we had
127,987,222 shares of Class A common stock outstanding; 9,023,088 shares of Class B common stock issued and outstanding;
and 14,572,267 shares of Class C common stock issued and outstanding.
Voting Rights
Holders of our Class A, Class B,
and Class C common stock will have identical rights, except that holders of our Class A common stock are entitled to
one vote per share; holders of our Class B common stock will be entitled to ten (10) votes per share; and holders of
our Class C common stock will be entitled to five (5) votes per share. Holders of shares of Class A, Class B,
and Class C common stock will vote together as a single class on all matters (including the election of directors) submitted
to a vote of stockholders, unless otherwise required by law. We have not provided for cumulative voting for the election of directors
in our certificate of incorporation.
Dividends
Subject to preferences that may apply to
any shares of preferred stock outstanding at the time, the holders of Class A, Class B, and Class C common stock
shall be entitled to share equally in any dividends that our board of directors may determine to issue from time to time. In the
event a dividend is paid in the form of shares of common stock or rights to acquire shares of common stock, the holders of Class A
common stock shall receive Class A common stock, or rights to acquire Class A common stock, as the case may be; the holders
of Class B common stock shall receive Class B common stock, or rights to acquire Class B common stock, as the case
may be; and the holders of Class C common stock shall receive Class C common stock, or rights to acquire Class C
common stock, as the case may be.
Liquidation Rights
Upon our liquidation, dissolution or winding-up,
the holders of Class A, Class B, and Class C common stock shall be entitled to share equally all assets remaining
after the payment of any liabilities and the liquidation preferences on any outstanding preferred stock.
Conversion
Class A Common
Our Class A common stock is not convertible
into any other shares of our capital stock.
Class B Common
Each share of Class B common stock
is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of
Class B common stock shall convert automatically into one share of Class A common stock upon any transfer, whether or
not for value, except for certain transfers described in our Certificate of Incorporation.
Once converted into Class A common
stock, the Class B common stock will be classified as authorized and unissued, and may be reissued. No class of common stock
may be subdivided or combined unless the other class of common stock concurrently is subdivided or combined in the same proportion
and in the same manner.
The Amendment also provides that shares
of Class B common stock, when converted into Class A common stock, will be deemed to be authorized and unissued shares.
The prior version of the Company’s Certificate of Incorporation provided that Class B common stock, when converted into
Class A common stock, would be retired and could not be reissued. The Amendment will permit the Company to reissue shares
of Class B common stock after their conversion.
Class C Common
Each share of Class C common stock
is convertible as follows:
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Between the date of issuance by the Company to the holder (the “Issuance Date”) and the third anniversary of the Issuance Date, the Class C common stock may not be converted into Class A common stock.
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Beginning on the third anniversary of the Issuance Date (the “Initial Conversion Date”), the shareholder may convert up to 25% of the Class C shares owned by such holder into shares of Class A common stock.
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Beginning on the fourth anniversary of the Issuance Date, the shareholder may convert up to an additional 25% of the Class C shares owned by such holder into shares of Class A common stock.
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Beginning on the fifth anniversary of the Issuance Date, the shareholder may convert up to an additional 25% of the Class C shares owned by such holder into shares of Class A common stock.
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Beginning on the sixth anniversary of the Issuance Date, the shareholder may convert up to an additional 25% of the Class C shares owned by such holder into shares of Class A common stock.
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The conversion schedule and limitations above are referred to herein as the “Conversion Schedule.
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As discussed more fully below, any Transfer (as defined in the Amendment) of Class C Common Stock shall result in the Initial Conversion Date being deemed to be reset, and shall be the third anniversary of such Transfer, and the Conversion Schedule shall be reset and calculated from the reset Initial Conversion Date.
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Once converted into Class A common
stock, the Class C common stock shall not be reissued. No class of common stock may be subdivided or combined unless the other
class of common stock concurrently is subdivided or combined in the same proportion and in the same manner.
Restrictions on Transfer
Class A Common
There are no restrictions on the transfer
of the Class A common stock, other than restrictions required by federal and state securities laws.
Class B Common
Each share of
Class B Common Stock shall automatically, without any further action, convert into one (1) fully paid and non-assessable
share of Class A Common Stock upon a Transfer (as defined in the Amendment) of such share, other than a Transfer:
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from a Class B Stockholder to any other Class B Stockholder who is a natural person to certain Permitted Entities, and from any of the Permitted Entities back to such Class B Stockholder and/or any other Permitted Entity established by or for such Class B Stockholder:
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Certain trusts;
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An Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, or certain pensions, profit sharing, stock bonus or other type of plans or trusts;
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Certain entities, including a corporation over which such Class B Stockholder has voting control; a partnership over which such Class B Stockholder has voting con trol; a limited liability company over which such Class B Stockholder has voting control;
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by a Class B Stockholder that is a partnership, or a nominee for a partnership, or a limited liability company, which partnership or limited liability company beneficially held more than five percent (5%) of the total outstanding shares of Class B Common Stock as of the transfer to certain persons listed in the Amendment;
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Additionally,
each share of Class B Common Stock held of record by a Class B Stockholder who is a natural person, or by such Class B
Stockholder’s Permitted Entities, shall automatically, without any further action, convert into one (1) fully paid and
non-assessable share of Class A Common Stock upon the death of such Class B Stockholder.
Shares of Class B Common Stock that
are converted into shares of Class A Common Stock as provided in this section shall be retired and may not be reissued.
Class C Common
Upon the Transfer (as defined in the
Amendment) of any share of Class C Common Stock other than a Transfer:
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from a Class C Stockholder to any other Class C Stockholder who is a natural person to certain Permitted Entities, and from any of the Permitted Entities back to such Class C Stockholder and/or any other Permitted Entity established by or for such Class C Stockholder:
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Certain trusts;
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An Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, or certain pensions, profit sharing, stock bonus or other type of plans or trusts;
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Certain entities, including a corporation over which such Class C Stockholder has voting control; a partnership over which such Class C Stockholder has voting control; a limited liability company over which such Class C Stockholder has voting control;
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by a Class C Stockholder that is a partnership, or a nominee for a partnership, or a limited liability company, which partnership or limited liability company beneficially held more than five percent (5%) of the total outstanding shares of Class C Common Stock as of the transfer to certain persons listed in the Amendment;
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the Initial Conversion Date shall be deemed
to be reset, and shall be the third anniversary of such Transfer, and the Conversion Schedule shall be reset and calculated from
the reset Initial Conversion Date.
Additionally, each share of Class C
Common Stock held of record by a Class C Stockholder who is a natural person, or by such Class C Stockholder’s
Permitted Entities, shall automatically, without any further action, convert into one (1) fully paid and non-assessable share
of Class A Common Stock upon the death of such Class C Stockholder.
The transfer agent
and registrar for our Class A and Class C common stock is VStock Transfer, LLC. The transfer agent’s address is
18 Lafayette Place, Woodmere, NY 11598, and its telephone number is 212.828.8436.
Preferred Stock
We are authorized
by our Certificate of Incorporation to issue one or more series of preferred stock, and our Board of Directors is authorized to
determine the rights, preferences, and terms of any such series without being required to seek approval of the shareholders. This
is often referred to as having “blank check” preferred stock rights.
As of the date of this Prospectus,
we had three series of preferred stock outstanding, our Series B Convertible Preferred Stock (the “Series B Preferred
Stock”), our Series C Convertible Preferred Stock (the “Series C Preferred Stock”), and the Series D
Convertible Preferred Stock (the “Series D Preferred Stock”).
As of the date of this Prospectus,
we had 100 shares of Series B Preferred Stock authorized, of which 5 shares were outstanding; 2,028,572 shares of Series C
Preferred Stock authorized of which 1,714,286 were outstanding; and 1,628,572 shares of Series D Preferred Stock authorized
of which 1,428,570 were outstanding.
Series B Preferred Stock
The terms of the Series B Preferred Stock include the following:
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Number of shares: The Company designated 100 shares of Series B Preferred Stock.
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The Stated Value of the Series B Preferred Stock is $1.00 per share.
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No dividends will accrue.
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Voting Rights
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If at least one share of Series B Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series B Preferred Stock at any given time, regardless of their number, shall have that number of votes (identical in every other respect to the voting rights of the holders of all classes of Common Stock or series of preferred stock entitled to vote at any regular or special meeting of stockholders) equal to two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock.
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If more than one share of Series B Preferred Stock is issued and outstanding at any time, then each individual share of Series B Preferred Stock shall have the voting rights equal to:
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Two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock
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Divided by:
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the number of shares of Series B Preferred Stock issued and outstanding at the time of voting.
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Liquidation
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Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the Holders of the Series B Preferred Stock are entitled to receive out of the assets of the Company for each share of Series B Preferred Stock then held by the Holder an amount equal to the Stated Value, and all other amounts in respect thereof then due and payable before any distribution or payment shall be made to the holders of any Junior Securities.
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Conversion: The Series B Preferred Stock shall be convertible into shares of the Company's Class A Common Stock only as follows:
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In the event that the Holder of Series B Preferred Stock ceases to be a director of the Company, upon such director's resignation or removal from the board by any means, the shares of Series B Preferred Stock held by such resigning or removed director shall convert automatically into that same number of shares of Class A Common Stock (i.e. on a one-for-one share basis).
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Shares of Series B Preferred Stock converted into Class A Common Stock, canceled, or redeemed, shall be canceled and shall have the status of authorized but unissued shares of undesignated preferred stock.
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As of the date
of this Prospectus, we had 5 shares of Series B Preferred Stock outstanding, held by the members of our Board of Directors.
Series C Preferred Stock
The terms of the Series C Preferred Stock include the following:
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Number of shares: The Company designated 2,028,572 shares of Series C Preferred Stock.
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The Stated Value of the Series C Preferred Stock is $3.50 per share.
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No dividends will accrue on the Series C Preferred Stock. If dividends are declared on the Company’s Class A,
Class B, or Class C Common Stock, the holders of the Series C Preferred Stock will participate in such dividends
on a per share basis, pari passu with the Classes of Common Stock.
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The Series C Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share
basis.
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As long as any shares of Series C Preferred Stock are outstanding, the Company may not, without the affirmative vote or
written consent of the holders of a majority of the then outstanding shares of the Series C Preferred Stock, (a) alter
or change the powers, preferences or rights given to the Series C Preferred Stock or alter or amend the Certificate of Designation,
(b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the
holders of the Series C Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing.
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Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"),
the holders of the Series C Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B,
and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company
of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice
of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series C
Preferred Stock.
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Conversion: The Series C Preferred Stock shall be convertible automatically into shares of the Company's Class A
Common Stock (the “Automatic Conversion”) as follows:
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Each share of Series C Preferred Stock will automatically convert into shares of the Company’s Class A Common
Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the
fifth day after the date on which the Company’s Class A Common Stock first trades on a national securities exchange
(including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the “Automatic Conversion
Date”).
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The number of shares of the Company’s Class A Common Stock into which the Series C Preferred Stock shall be
converted shall be determined by multiplying the number of shares of Series C Preferred Stock to be converted by the $3.50
stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted
Average Price (“VWAP”) of the five Trading Days prior to the Automatic Conversion Date. “VWAP” shall be
defined as the volume weighted average price of the Company’s Class A Common Stock on the OTC Markets or other stock
exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason,
VWAP cannot be thus determined, “VWAP” shall mean the average closing or last sale prices over the five Trading Days
prior to the Automatic Conversion Date of the Company’s Class A Common Stock on the OTC Markets or such other exchange
or trading medium.
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Restrictions on Resales of Class C Common Stock
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The sale of shares of the Company’s Class A Common Stock issued at the time of conversion by any holder into the
market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received
by such holder at the time of the automatic conversion in any given 120-day period.
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Company Redemption Rights
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At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than
all) shares of the Series C Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business
days’ notice, at a redemption price per share of Series C Preferred Stock then issued and outstanding (the “Corporation
Redemption Price”), equal to the stated value of $3.50 per share.
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Series D
Preferred Stock
The terms of the Series D Preferred Stock include the following:
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Number of shares: The Company designated 1,628,572 shares of Series D Preferred Stock.
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The Stated Value of the Series D Preferred Stock is $3.50 per share.
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No dividends will accrue on the Series D Preferred Stock. If dividends are declared on the Company’s Class A,
Class B, or Class C Common Stock, the holders of the Series D Preferred Stock will participate in such dividends
on a per share basis, pari passu with the Classes of Common Stock.
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The Series D Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share
basis.
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As long as any shares of Series D Preferred Stock are outstanding, the Company may not, without the affirmative vote or
written consent of the holders of a majority of the then outstanding shares of the Series D Preferred Stock, (a) alter
or change the powers, preferences or rights given to the Series D Preferred Stock or alter or amend the Certificate of Designation,
(b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the
holders of the Series D Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing.
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Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"),
the holders of the Series D Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B,
and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company
of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice
of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series D
Preferred Stock.
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Conversion: The Series D Preferred Stock shall be convertible automatically into shares of the Company's Class A
Common Stock (the “Automatic Conversion”) as follows:
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Each share of Series D Preferred Stock will automatically convert into shares of the Company’s Class A Common
Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the
fifth day after the date on which the Company’s Class A Common Stock first trades on a national securities exchange
(including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the “Automatic Conversion
Date”).
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The number of shares of the Company’s Class A Common Stock into which the Series D Preferred Stock shall be
converted shall be determined by multiplying the number of shares of Series D Preferred Stock to be converted by the $3.50
stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted
Average Price (“VWAP”) of the five Trading Days prior to the Automatic Conversion Date. “VWAP” shall be
defined as the volume weighted average price of the Company’s Class A Common Stock on the OTC Markets or other stock
exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason,
VWAP cannot be thus determined, “VWAP” shall mean the average closing or last sale prices over the five Trading Days
prior to the Automatic Conversion Date of the Company’s Class A Common Stock on the OTC Markets or such other exchange
or trading medium.
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Restrictions on Resales of Class A Common Stock
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The sale of shares of the Company’s Class A Common Stock issued at the time of conversion by any holder into the
market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received
by such holder at the time of the automatic conversion in any given 90-day period.
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Company Redemption Rights
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At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than
all) shares of the Series D Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business
days’ notice, at a redemption price per share of Series D Preferred Stock then issued and outstanding (the “Corporation
Redemption Price”), equal to the stated value of $3.50 per share.
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The shares issued on conversion of the Series D Preferred Stock have piggyback registration rights beginning on that date
which his six months after the date on which the Company’s Class A Common Stock trades on a national securities exchange,
and are subject to standard underwriter holdback limitations.
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Anti-Takeover
Provisions of Our Charter Documents and Delaware Law
Some provisions
of our Charter, our Bylaws and Delaware law could make it more difficult to acquire our company by means of a tender offer, a proxy
contest, or otherwise.
Our Bylaws establish
advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other
than nominations made by or at the direction of our board of directors or a committee of our board of directors. These procedures
provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at
which the action is to be taken. Generally, for a proposal to be timely submitted for consideration at an annual meeting, notice
must be delivered to our secretary not less than 90 days nor more than 120 days prior to the first anniversary date of the annual
meeting for the preceding year. Our Bylaws specify the requirements as to form and content of all stockholders’ notices.
These provisions might preclude our stockholders from bringing matters before our annual meeting of stockholders or from making
nominations for directors at our annual meeting of stockholders if the proper procedures are not followed.
Our Charter and
Bylaws both provide that vacancies on our board of directors, including newly created directorships, may be filled only by a majority
vote of directors then in office, and directors so chosen shall hold office for a term expiring at the next annual meeting of stockholders
or until such director’s successor shall have been duly elected and qualified. Accordingly, the board of directors could
prevent any stockholder from filling the new directorships with such stockholder’s own nominee.
Additionally,
as noted, our Charter provides our Board with “blank check” preferred stock authority, by which means the Board of
Directors may designate a new series of preferred stock, and determine the rights and preferences, including voting rights, without
the need to seek approval from our shareholders.
Delaware Anti-Takeover Law
We are subject
to Section 203 of the Delaware General Corporation Law which contains anti-takeover provisions. In general, Section 203
prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period
of three years following the date that the person became an interested stockholder, unless the business combination or the transaction
in which the person became an interested stockholder is approved in a prescribed manner. Generally, a business combination includes
a merger, asset or stock sale or another transaction resulting in a financial benefit to the interested stockholder. An interested
stockholder is a person who, together with affiliates and associates, owns 15% or more of the corporation’s voting stock.
The existence of this provision may have an anti-takeover effect with respect to transactions that are not approved in advance
by our board of directors, including discouraging attempts that might result in a premium over the market price for the shares
of common stock held by stockholders.
No Cumulative
Voting
Under Delaware
law, cumulative voting for the election of directors is not permitted unless a corporation’s certificate of incorporation
authorizes cumulative voting. Our Charter does not provide for cumulative voting in the election of directors. Cumulative voting
allows a minority stockholder to vote a portion or all of its shares for one or more candidates for seats on our board of directors.
Without cumulative voting, a minority stockholder will not be able to gain as many seats on our board of directors based on the
number of shares of our stock the stockholder holds as compared to the number of seats the stockholder would be able to gain if
cumulative voting were permitted. The absence of cumulative voting makes it more difficult for a minority stockholder to gain a
seat on our board of directors to influence our board’s decision regarding a takeover.
Stockholder
Action by Written Consent
Delaware law generally
provides that the affirmative vote of a majority of the shares entitled to vote on such matter is required to amend a corporation’s
certificate of incorporation or bylaws, unless a corporation’s certificate of incorporation or bylaws requires a greater
percentage. Our Charter permits our board of directors to amend or repeal most provisions of our Bylaws by majority vote. Generally,
our Charter may be amended by holders of a majority of the voting power of the then outstanding shares of our capital stock entitled
to vote. The stockholder vote or consent with respect to an amendment of our Charter or Bylaws would be in addition to any separate
class vote that might in the future be required under the terms of any series of preferred stock that might be outstanding at the
time such a proposed amendment were submitted to stockholders. Delaware law and the provisions of our Bylaws generally permit stockholders
owning the requisite percentage of shares of common stock necessary to approve an amendment to our Charter and Bylaws to act by
written consent in lieu of a meeting of our stockholders.
Limitation
of Liability and Indemnification of Officers and Directors
Our Bylaws provide
indemnification, including advancement of expenses, to the fullest extent permitted under applicable law to any person made or
threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative by reason of the fact that such person is or was a director or officer of the company, or is or was serving at
our request as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise, including
service with respect to an employee benefit plan. In addition, our Charter provides that our directors will not be personally liable
to us or our stockholders for monetary damages for breaches of their fiduciary duty as directors, unless they violated their duty
of loyalty to us or our shareholders, acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends
or redemptions or derived an improper personal benefit from their action as directors. This provision does not limit or eliminate
our rights or the rights of any stockholder to seek nonmonetary relief such as an injunction or rescission in the event of a breach
of a director’s duty of care. In addition, this provision does not limit the directors’ responsibilities under Delaware
law or any other laws, such as the federal securities laws. We have obtained insurance that insures our directors and officers
against certain losses, and which insures us against our obligations to indemnify the directors and officers. We also have entered
into indemnification agreements with our directors and executive officers.
Transfer Agent and Registrar
The transfer agent
and registrar for our Class A and Class C common stock is VStock Transfer, LLC. The transfer agent’s address is
18 Lafayette Place, Woodmere, NY 11598, and its telephone number is 212.828.8436.
Our Class A common stock is traded
on the OTC QB Market under the symbol “ALPP.”
PLAN OF DISTRIBUTION
Pursuant to a placement agent agreement dated February 11,
2021 (the “Placement Agent Agreement”), we have engaged A.G.P./Alliance Global Partners (the “Placement
Agent”), to act as our placement agent in connection with this offering of our securities pursuant to this prospectus
supplement and accompanying prospectus. Under the terms of the Placement Agent Agreement, the Placement Agent has agreed to be
our placement agent, on a reasonable best effort basis, in connection with the issuance and sale by us of our shares of common
stock in this offering. The terms of this offering were subject to market conditions and negotiations between us and prospective
investors. The Placement Agent Agreement does not give rise to any commitment by the Placement Agent to purchase any of our shares
of common stock, and the Placement Agent will have no authority to bind us by virtue of the Placement Agent Agreement. Further,
the Placement Agent does not guarantee that it will be able to raise new capital in any prospective offering. The Placement Agent
may engage sub-agents or selected dealers to assist with the offering.
The Placement Agent may be deemed to be
an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit
realized on the resale of the securities sold by it while acting as principal might be deemed to be underwriting discounts or commissions
under the Securities Act. As an underwriter, the Placement Agent would be required to comply with the requirements of the Securities
Act and the Exchange Act, including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5
and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of shares
of common stock by the Placement Agent acting as principal. Under these rules and regulations, the Placement Agent:
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may not engage in any stabilization activity in connection with our securities; and
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may not bid for or purchase any of our securities or attempt to induce any person to purchase any
of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.
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Upon receipt of investors’
funds for the offering pursuant to this prospectus supplement, we will deliver the shares of common stock and warrants being issued
to the investors. We expect to deliver the securities being offered pursuant to this prospectus supplement on or before February 17,
2021, subject to customary closing conditions.
Commissions and Offering Expenses
The Placement Agent
proposes to offer the securities at the offering price shown on the cover of this prospectus supplement.
As consideration for the services of the Placement Agent, the
Placement Agent will receive a cash commission equal to 7.0% of the gross proceeds from the sale of our securities in this offering
and warrants entitling the Placement Agent to purchase an amount of our common stock equal to 5.0% of the aggregate number of shares
of our common stock sold in this offering. The following table shows the public offering price, Placement Agent commissions and
proceeds, before expenses, to us (excluding warrants issued to the Placement Agent).
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Per Unit
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Total
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Public offering price
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$
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6.00
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$
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50,000,000
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Placement Agent commissions to be paid by us
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$
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0.42
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$
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3,500,000
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Proceeds, before expenses, to us
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$
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5.58
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$
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46,500,000
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We
have also agreed to reimburse the Placement Agent for legal and out of pocket expenses not to exceed $100,000 in the aggregate
and (ii) non-accountable expenses (the "NAE"). The total NAE allowance shall equal 1% of the aggregate
gross proceeds from the sale of our securities in this offering. The Placement Agent has the right to reduce any item of compensation
or adjust the terms thereof in the event that a determination shall be made by FINRA to the effect that the Placement Agent’s
aggregate compensation is in excess of the rules of FINRA or that the terms thereof require adjustment. We estimate the total
offering expenses of this offering that will be payable by us, excluding the Placement Agents’ fees and expenses, will be
approximately $45,000.
Placement Agent Warrants
We have agreed to issue to the Placement
Agent Warrants to purchase up to 416,667 shares of common stock sold in this offering (which represent 5.0% of the aggregate number
of shares of common stock sold in this offering), at an exercise price of $6.60 per share. The Placement Agent Warrants may be
purchased in cash or via cashless exercise, will not be exercisable until August 16, 2021, and will expire on February 16,
2025. The Placement Agent Warrants and the underlying shares will be deemed compensation by FINRA, and therefore will be subject
to FINRA Rule 5110(e)(1). In accordance with FINRA Rule 5110(e)(1), and except as otherwise permitted by FINRA rules,
particularly FINRA Rule 5110(e)(2), neither the Placement Agent Warrants nor any of our shares issued upon exercise of the
Placement Agent Warrants may be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale,
derivative, put or call transaction that would result in the effective economic disposition of such securities by any person, for
a period of 180 days beginning on the date of commencement of sales of the offering. The exercise price and number of shares issuable
upon exercise of the Placement Agent Warrants may be adjusted in certain circumstances, including in the event of a share dividend,
cash dividend or our recapitalization, reorganization, forward split or reverse stock split of outstanding shares.
Indemnification
We have agreed to indemnify the Placement
Agent and specified other persons against certain liabilities relating to or arising out of the Placement Agent’s activities
under the Placement Agent Agreement and to contribute to payments that the placement agent may be required to make in respect of
such liabilities.
Lock-Up
Pursuant to the Securities Purchase Agreement
until 60 days after the closing date, we shall not issue, enter into any agreement to issue or announce the issuance or proposed
issuance of any shares of Common Stock or Common Stock equivalents or file any registration statement thereto. In addition,
our officers and directors have agreed that they will not, during the 60 days after the closing of this offering: (a) offer,
sell, agree to offer or sell, solicit offers to purchase, convert, exercise, exchange, grant any call option or purchase any put
option with respect to, pledge, encumber, assign, borrow or otherwise dispose of or transfer (each a “Transfer”) any
Relevant Security (as defined below) or otherwise publicly disclose the intention to do so, or (b) establish or increase any
“put equivalent position” or liquidate or decrease any “call equivalent position” (in each case within
the meaning of Section 16 of the Exchange Act and the rules and regulations thereunder) with respect to any Relevant
Security or otherwise enter into any swap, derivative or other transaction or arrangement that Transfer to another, in whole or
in part, any economic consequence of ownership of a Relevant Security, whether or not such transaction is to be settled by the
delivery of Relevant Securities, other securities, cash or other consideration, or otherwise publicly disclose the intention to
do so. As used herein, the term “Relevant Security” means any share, warrant to purchase shares or any other security
of the Company or any other entity that is convertible into, or exercisable or exchangeable for, shares or any other equity security
of the Company, in each case owned beneficially or otherwise by the officer or director on the date set forth on the front cover
of the final prospectus used in connection with this offering or acquired by the officer or director during the lock-up period.
Principal Market
Our Class A common stock is traded
on the OTC Markets OTCQB under the symbol “ALPP.”
LEGAL MATTERS
The legal validity of the securities offered
by this prospectus will be passed upon for us by Kirton McConkie, P.C., Salt Lake City, Utah. Sichenzia Ross Ference LLP is counsel
to the Placement Agent in connection with this offering.
EXPERTS
The audited financial statements for the
years ended December 31, 2019 and 2018, and for each of the two years in the period ended December 31, 2019, appearing
in this prospectus and the registration statement, have been audited by MaloneBailey, LLP, an independent registered public accounting
firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
The following documents,
which have previously been filed by us with the SEC under the Exchange Act, are incorporated herein by reference:
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with
the SEC on June 1, 2020;
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our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the
SEC on July 6, 2020;
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our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, filed with the
SEC on August 14, 2020;
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our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with
the SEC on November 16, 2020;
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our Current Reports on Form 8-K, filed with the SEC on January 3, 2020; January 23, 2020; January 30, 2020; February 24, 2020; March 27, 2020; April 4, 2020; April 8, 2020; May 1, 2020;
May 13, 2020; June 1, 2020; July 8, 2020; August 14, 2020; November 17, 2020; December 2, 2020; December 9, 2020; December 15, 2020; January 4, 2021; February 8, 2021; February 9, 2021; and February 12, 2021 (excluding
any information furnished pursuant to Item 2.02 or Item 7.01 of any such Current Report on Form 8-K);
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the description of our Class A common stock set forth in our registration statement on Form S-1,
February 18, 2020, (File No. 333-236474) and in any and all subsequent amendments and reports filed for the purpose of
updating that description.
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All documents filed
by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished pursuant to
Item 2.02 or Item 7.01 on any current report on Form 8-K and any corresponding information furnished under Item 9.01 or included
as an exhibit) after the date of the initial registration statement of which this prospectus forms a part and until the termination
of the offering under this prospectus shall be deemed to be incorporated in this prospectus by reference and to be a part hereof
from the date of filing of such documents. Any statement contained herein, or in a document incorporated or deemed to be incorporated
by reference herein, shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein, modifies
or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
You may request a free
copy of these filings, other than any exhibits, unless the exhibits are specifically incorporated by reference into this prospectus,
by writing or telephoning us at the following address:
ALPINE 4 TECHNOLOGIES LTD.
2525 E Arizona Biltmore Circle Suite C237
Phoenix,
AZ 85016
Attention: Director, Investor Relations
480-702-2431
WHERE YOU CAN FIND MORE INFORMATION
This prospectus forms
a part of a registration statement on Form S-3 we filed with the SEC. This prospectus does not contain all of the information
found in the registration statement. For further information regarding us and our securities, you may desire to review the full
registration statement, including its exhibits and schedules, filed under the Securities Act, as well as our
proxy statement, annual, quarterly and other reports and other information we file with the SEC. You may read and copy any
document we file with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain
information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website on
the Internet at www.sec.gov that contains reports, proxy and information statements, and other information regarding companies
that file electronically with the SEC. We maintain a website on the Internet at alpine4.com. Our registration statement, of which
this prospectus constitutes a part, can be downloaded from the SEC’s website. Information on the SEC website, our website
or any other website is not incorporated by reference in this prospectus and does not constitute part of this prospectus.
PROSPECTUS
Up to $170,000,000
Shares of Class A Common Stock
Preferred Stock
Warrants
Subscription Rights
Purchase Contracts
Units
We may offer from time to time shares of our Class A Common
Stock, shares of our preferred stock, warrants, subscription rights, purchase contracts, and units.
The aggregate initial offering price of the securities that
we offer will not exceed $170,000,000. We will offer the securities in amounts, at prices and on terms to be determined at the
time of the offering.
Our Class A common stock is quoted on the OTCQB Market
under the symbol “ALPP.” The last reported sale price of our Class A common stock on January 27, 2021, was
$3.88 per share.
We will provide the specific terms of the offering in supplements
to this prospectus. You should read this prospectus and any supplement carefully before you invest. This prospectus may not be
used to offer and sell our securities unless accompanied by a prospectus supplement.
Investing in our securities involves significant risks that
are described in the “Risk Factors” section beginning on page 9 of this prospectus.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is February 10,
2021.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is
part of a registration statement that we filed with the Securities and Exchange Commission, or the Commission or the SEC, utilizing
a “shelf” registration process. Under this shelf registration process, we may sell any combination of the securities
described in this prospectus in one or more offerings up to a total dollar amount of $170,000,000. This prospectus provides you
with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of the offering and the offered securities. This prospectus, together with
applicable prospectus supplements, any information incorporated by reference, and any related free writing prospectuses we file
with the Commission, includes all material information relating to these offerings and securities. We may also add, update or change
in the prospectus supplement any of the information contained in this prospectus or in the documents that we have incorporated
by reference into this prospectus, including without limitation, a discussion of any risk factors or other special considerations
that apply to these offerings or securities or the specific plan of distribution. If there is any inconsistency between the information
in this prospectus and a prospectus supplement or information incorporated by reference having a later date, you should rely on
the information in that prospectus supplement or incorporated information having a later date. We urge you to read carefully this
prospectus, any applicable prospectus supplement and any related free writing prospectus, together with the information incorporated
herein by reference as described under the heading “Incorporation of Certain Documents By Reference” and the additional
information described under the heading “Where You Can Find More Information,” before buying any of the securities
being offered.
You should rely only
on the information we have provided or incorporated by reference in this prospectus, any applicable prospectus supplement and any
related free writing prospectus. We have not authorized anyone to provide you with different information. No dealer, salesperson
or other person is authorized to give any information or to represent anything not contained in this prospectus, any applicable
prospectus supplement or any related free writing prospectus.
Neither the delivery
of this prospectus nor any sale made under it implies that there has been No change in our affairs or that the information
in this prospectus is correct as of any date after the date of this prospectus. You should assume that the information in this
prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate only as of the date on the
front of the document and that any information we have incorporated by reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of this prospectus, any applicable prospectus supplement or any related
free writing prospectus, or any sale of a security.
The registration statement
containing this prospectus, including exhibits to the registration statement, provides additional information about us and the
securities offered under this prospectus and any prospectus supplement. We have filed and plan to continue to file other documents
with the Commission that contain information about us and our business. Also, we will file legal documents that control the terms
of the securities offered by this prospectus as exhibits to the reports that we file with the Commission. The registration statement
and other reports can be read at the Commission website or at the Commission offices mentioned under the heading “Where You
Can Find More Information.”
This prospectus contains
summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents
for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents
referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement
of which this prospectus is a part, and you may obtain copies of those documents as described below under “Where You Can
Find More Information.”
ALPINE 4 TECHNOLOGIES LTD.
Our Company
Company Background and History
We were incorporated
under the laws of the State of Delaware on April 22, 2014. We are a publicly traded conglomerate that is acquiring businesses
that fit into our disruptive DSF business model of Drivers, Stabilizers, and Facilitators. At Alpine 4, we understand the nature
of how technology and innovation can accentuate a business. Our focus is on how the adaptation of new technologies even in brick
and mortar businesses can drive innovation. We also believe that our holdings should benefit synergistically from each other and
that the ability to have collaboration across varying industries can spawn new ideas and create fertile ground for competitive
advantages. This unique perspective has culminated in the development of our Blockchain-enabled Enterprise Business Operating System
called SPECTRUMebos.
As of the date of this Prospectus, the Company was a holding
company that owned ten operating subsidiaries:
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A4 Corporate Services, LLC;
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Quality Circuit Assembly, Inc.;
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aMorris Sheet Metal, Corp;
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Deluxe Sheet Metal, Inc.;
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Excel Construction Services, LLC;
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Impossible Aerospace, Inc.; and
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In the first quarter of 2020, we also created three additional
subsidiaries to act as silo holding companies, organized by industries. These silo subsidiaries are A4 Construction Services, Inc.
(“A4 Construction”), A4 Manufacturing, Inc. (“A4 Manufacturing”), and A4 Technologies, Inc. (“A4
Technologies”). All three are Delaware corporations. Each is authorized to issue 1,500 shares of common stock with a par
value of $0.01 per share, and the Company is the sole shareholder of each of these three subsidiaries.
Alpine 4 maintains our corporate office located at 2525 E. Arizona
Biltmore Circle, Suite C237, Phoenix, Arizona 85016. ALTIA works out of the headquarters offices. QCA rents a location
at 1709 Junction Court #380 San Jose, California 95112. Deluxe Sheet Metal’s facilities are located at 6661 Lonewolf
Dr, South Bend, Indiana 46628. Morris Sheet Metal and JTD Spiral are located at 6212 Highview Dr, Fort Wayne, Indiana
46818. Excel Construction Services’ office and fabrication space are located at 297 Wycoff Cir, Twin Falls, Idaho 83301.
Impossible Aerospace’s headquarters are located at 2222 Ronald St, Santa Clara, California 95050. Vayu (US) has its headquarters
at 326 W Liberty St, Ann Arbor, Michigan 48103.
Who We Are
Alexander Hamilton, in his “Federalist
paper #11,” said that our adventurous spirit distinguishes the commercial character of America. Hamilton knew
that our freedom to be creative gave American businesses a competitive advantage over the rest of the world. We
believe that Alpine 4 also exemplifies this spirit in our subsidiaries and that our greatest competitive advantage is our highly
diverse business structure combined with a culture of collaboration.
It is our mandate to grow Alpine 4 into
a leading, multi-faceted holding company with diverse subsidiary holdings with products and services that not only benefit from
one another as a whole, but also have the benefit of independence. This type of corporate structure is about having our subsidiaries
prosper through strong onsite leadership while working synergistically with other Alpine 4 holdings. The essence of
our business model is based around acquiring business-to-business (B2B) companies in a broad spectrum of industries via our acquisition
strategy of DSF (Drivers, Stabilizer, Facilitator). Our DSF business model (which is discussed more below) offers the Company
an opportunity to own small-cap businesses that hold defensible positions in their individual market space. Further,
Alpine 4’s greatest opportunity for growth exists in the smaller to middle-market operating companies with revenues between
$5 to $150 million annually. In this target-rich environment, businesses generally sell at more reasonable multiples, presenting
greater opportunities for operational and strategic improvements that have greater potential to enhance profit.
Driver, Stabilizer, Facilitator (DSF)
Driver: A Driver is a company that
is in an emerging market or technology, that has enormous upside potential for revenue and profits, with a significant market opportunity
to access. These types of acquisitions are typically small, brand new companies that need a structure to support their growth.
Stabilizer: Stabilizers are companies
that have sticky customers, consistent revenue and provide solid net profit returns to Alpine 4.
Facilitators: Facilitators are our
“secret sauce.” Facilitators are companies that provide a product or service that an Alpine 4 sister company
can use as leverage to create a competitive advantage.
Our DSF Strategy is discussed in more detail
below in the section entitled “Business.”
Recent Developments
As of the filing
of the Registration Statement of which this Prospectus is a part, our authorized capital stock consisted of 155,000,000 shares
of which 150,000,000 shares are common stock, par value $0.0001 per share, and 5,000,000 shares are preferred stock, par value
of $0.0001 per share.
Pursuant to our amended Certificate of
Incorporation, we are authorized to issue three classes of common stock: Class A common stock (125,000,000 shares); Class B
common stock (10,000,000 shares); and Class C common stock (15,000,000 shares). As of the date of this Prospectus, we had
127,987,222 shares of Class A common stock outstanding; 9,023,088 shares of Class B common stock issued and outstanding;
and 14,572,267 shares of Class C common stock issued and outstanding. (Additional information relating to the Classes of Common
Stock, as well as our Preferred Stock, including the number of shares of each series of Preferred Stock as of the date of this
Prospectus, may be found below in the section “Description of Capital Stock.”)
Our Board of Directors has approve alternate
amendments to our Certificate of Incorporation to either (i) increase the number of authorized shares of our Class A
common stock from 125,000,000 to 195,000,000; or (ii) to effectuate a reverse stock split of our Class A, Class B,
and Class C common stock at a ratio of not less than 1-for-1.5 and not greater than 1-for-2, such ratio to be determined by
the Company’s Board of Directors. Assuming both of these alternatives are approved by our shareholders at the meeting, the
Board intends to select one of the alternative amendments, but not both. Either will result in our having additional shares of
our Class A common stock available for issuance.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus contains forward-looking
statements. The forward-looking statements are contained principally in the sections entitled “Prospectus Summary,”
“Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and “Business.” These statements relate to future events or to our future financial performance and involve known and
unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking
statements include, but are not limited to, statements about:
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the impact of the COVID-19 pandemic
on our business, operations, customers, suppliers and manufacturers;
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our lack of revenues, history of operating losses, bankruptcy, limited cash reserves and ability to obtain other capital to develop and implement our business strategies and grow our business, and continue as a going concern;
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our ability to execute our strategy and business plan regarding growth, acquisitions, and focusing on our strategy of Drivers, Stabilizers, and Facilitators;
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the success, progress, timing and costs of our efforts to evaluate or consummate various strategic acquisitions, collaborations, and other alternatives if in the best interests of our stockholders;
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our ability to timely source adequate supply of our development products from third-party manufacturers on which we depend;
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the potential, if any, for future development of any of our present or future products;
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our ability to identify and develop additional uses for our products;
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our ability to attain market exclusivity and/or to protect our intellectual property and to operate our business without infringing on the intellectual property rights of others;
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the ability of our Board of Directors to influence control over all matters put to a vote of our stockholders, including elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction;
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the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; and
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our ability to protect our intellectual property portfolio.
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In some cases, you can identify these statements
by terms such as “anticipate,” “believe,” “could,” “estimate,” “expects,”
“intend,” “may,” “plan,” “potential,” “predict,” “project,”
“should,” “will,” “would” or the negative of those terms, and similar expressions that convey
uncertainty of future events or outcomes. These forward-looking statements reflect our management’s beliefs and views with
respect to future events and are based on estimates and assumptions as of the date of this prospectus and are subject to risks
and uncertainties. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions
on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while
we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our
statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available
relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
We discuss many of the risks associated with the forward-looking statements in this prospectus in greater detail under the heading
“Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained
in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking
statements.
You should carefully read this prospectus
and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus
is a part, completely and with the understanding that our actual future results may be materially different from what we expect.
We qualify all of the forward-looking statements in this prospectus by these cautionary statements.
Except as required by law, we expressly
disclaim any obligation or intention to update these forward-looking statements publicly, or to update the reasons actual results
could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future
events or otherwise.
Any forward-looking statement made by us
in this prospectus is based only on information currently available to us and speaks only as of the date on which it is made. We
expressly disclaim any obligation or intention to publicly update any forward-looking statement, whether written or oral that may
be made from time to time, whether as a result of new information, future developments or otherwise, except as required by applicable
law.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus forms
a part of a registration statement on Form S-3 we filed with the SEC. This prospectus does not contain all of the information
found in the registration statement. For further information regarding us and our securities, you may desire to review the full
registration statement, including its exhibits and schedules, filed under the Securities Act, as well as our
proxy statement, annual, quarterly and other reports and other information we file with the SEC. You may read and copy any
document we file with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain
information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website on
the Internet at www.sec.gov that contains reports, proxy and information statements, and other information regarding companies
that file electronically with the SEC. We maintain a website on the Internet at alpine4.com. Our registration statement, of which
this prospectus constitutes a part, can be downloaded from the SEC’s website. Information on the SEC website, our website
or any other website is not incorporated by reference in this prospectus and does not constitute part of this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
The following documents,
which have previously been filed by us with the SEC under the Exchange Act, are incorporated herein by reference:
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with
the SEC on June 1, 2020;
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our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the
SEC on July 6, 2020;
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our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, filed with the
SEC on August 14, 2020;
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our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with
the SEC on November 16, 2020;
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our Current Reports on Form 8-K, filed with the SEC on January 3,
2020; January 23, 2020; January 30,
2020; February 24, 2020; March 27,
2020; April 4, 2020; April 8,
2020; May 1, 2020; May 13,
2020; June 1, 2020; July 8,
2020; August 14, 2020; November 17,
2020; December 2, 2020; December 9,
2020; December 15,
2020; and January 4,
2021; (excluding any information furnished pursuant to Item 2.02 or Item 7.01
of any such Current Report on Form 8-K);
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the description of our Class A common stock set forth in our registration statement on Form S-1,
February 18, 2020, (File No. 333-236474) and in any and all subsequent amendments and reports filed for the purpose of
updating that description.
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All documents filed
by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished pursuant to
Item 2.02 or Item 7.01 on any current report on Form 8-K and any corresponding information furnished under Item 9.01 or included
as an exhibit) after the date of the initial registration statement of which this prospectus forms a part and until the termination
of the offering under this prospectus shall be deemed to be incorporated in this prospectus by reference and to be a part hereof
from the date of filing of such documents. Any statement contained herein, or in a document incorporated or deemed to be incorporated
by reference herein, shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein, modifies
or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
You may request a free
copy of these filings, other than any exhibits, unless the exhibits are specifically incorporated by reference into this prospectus,
by writing or telephoning us at the following address:
ALPINE 4 TECHNOLOGIES LTD.
2525 E Arizona Biltmore Circle Suite C237
Phoenix,
AZ 85016
Attention: Director, Investor Relations
480-702-2431
RISK FACTORS
An investment in our
securities involves a high degree of risk. You should carefully consider the risk factors and all of the other information included
in, or incorporated by reference into, this prospectus, including those risk factors included in our Annual Report on Form 10-K
for the year ended December 31, 2019, our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31,
June 30, and September 30, 2020, and our subsequent Commission filings, in evaluating an investment in our securities.
If any of these risks were to occur, our business, financial condition or results of operations could be adversely affected. In
that case, the trading price of our securities could decline, and you could lose all or part of your investment. When we offer
and sell any securities pursuant to a prospectus supplement, we may include additional risk factors relevant to such securities
in the prospectus supplement.
USE OF PROCEEDS
Unless we inform you
otherwise in the prospectus supplement or any pricing supplement, we will use the net proceeds from the sale of the securities
offered by us to build additional products and solutions to meet market demand, further advance the development of new products
and solutions, engage in corporate development and merger and acquisition activities, for working capital needs, capital expenditures,
repayment or refinancing of indebtedness, acquisitions, repurchases and redemptions of securities, and for other general corporate
purposes. The amounts and timing of these expenditures will depend on a number of factors, such as the timing, scope, progress
and results of our sales, research and development efforts, the timing and progress of any partnering efforts, and the regulatory
and competitive environment. Pending any specific application, we may initially invest funds in short-term marketable securities
or apply them to the reduction of indebtedness.
DILUTION
Our net tangible book
value at September 30, 2020, was approximately ($18,891,199), or approximately ($0.141) per share of common stock. Net tangible
book value per share of common stock is determined by dividing our tangible net worth, which is tangible assets less liabilities,
by the total number of shares of our common stock outstanding. If we offer shares of our common stock, purchasers of our common
stock in that offering may experience immediate dilution in net tangible book value per share. The prospectus supplement relating
to an offering of shares of our common stock will set forth the information regarding any dilutive effect of that offering.
DESCRIPTION OF CAPITAL STOCK
In
the discussion that follows, we have summarized selected provisions of our certificate of incorporation and bylaws. You should
read our certificate of incorporation and bylaws as currently in effect for more details regarding the provisions we describe below
and for other provisions that may be important to you. We have filed copies of those documents with the SEC, and they are incorporated
by reference herein. Please read “Where You Can Find More Information.”
Authorized Capital Stock
Our authorized
capital stock consists of 155,000,000 shares of which 150,000,000 shares are common stock, par value $0.0001 per share, and 5,000,000
shares are preferred stock, par value of $0.0001 per share.
Common Stock
Pursuant to our amended Certificate of
Incorporation, we are authorized to issue three classes of common stock: Class A common stock (125,000,000 shares); Class B
common stock (10,000,000 shares); and Class C common stock (15,000,000 shares). The specific rights and preferences are set
forth below.
As of the date of this Prospectus, we had
127,987,222 shares of Class A common stock outstanding; 9,023,088 shares of Class B common stock issued and outstanding;
and 14,572,267 shares of Class C common stock issued and outstanding.
Voting Rights
Holders of our Class A, Class B,
and Class C common stock will have identical rights, except that holders of our Class A common stock are entitled to
one vote per share; holders of our Class B common stock will be entitled to ten (10) votes per share; and holders of
our Class C common stock will be entitled to five (5) votes per share. Holders of shares of Class A, Class B,
and Class C common stock will vote together as a single class on all matters (including the election of directors) submitted
to a vote of stockholders, unless otherwise required by law. We have not provided for cumulative voting for the election of directors
in our certificate of incorporation.
Dividends
Subject to preferences that may apply to
any shares of preferred stock outstanding at the time, the holders of Class A, Class B, and Class C common stock
shall be entitled to share equally in any dividends that our board of directors may determine to issue from time to time. In the
event a dividend is paid in the form of shares of common stock or rights to acquire shares of common stock, the holders of Class A
common stock shall receive Class A common stock, or rights to acquire Class A common stock, as the case may be; the holders
of Class B common stock shall receive Class B common stock, or rights to acquire Class B common stock, as the case
may be; and the holders of Class C common stock shall receive Class C common stock, or rights to acquire Class C
common stock, as the case may be.
Liquidation Rights
Upon our liquidation, dissolution or winding-up,
the holders of Class A, Class B, and Class C common stock shall be entitled to share equally all assets remaining
after the payment of any liabilities and the liquidation preferences on any outstanding preferred stock.
Conversion
Class A Common
Our Class A common stock is not convertible
into any other shares of our capital stock.
Class B Common
Each share of Class B common stock
is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of
Class B common stock shall convert automatically into one share of Class A common stock upon any transfer, whether or
not for value, except for certain transfers described in our Certificate of Incorporation.
Once converted into Class A common
stock, the Class B common stock will be classified as authorized and unissued, and may be reissued. No class of common stock
may be subdivided or combined unless the other class of common stock concurrently is subdivided or combined in the same proportion
and in the same manner.
The Amendment also provides that shares
of Class B common stock, when converted into Class A common stock, will be deemed to be authorized and unissued shares.
The prior version of the Company’s Certificate of Incorporation provided that Class B common stock, when converted into
Class A common stock, would be retired and could not be reissued. The Amendment will permit the Company to reissue shares
of Class B common stock after their conversion.
Class C Common
Each share of Class C common stock
is convertible as follows:
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Between the date of issuance by the Company to the holder (the “Issuance Date”) and the third anniversary of the Issuance Date, the Class C common stock may not be converted into Class A common stock.
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Beginning on the third anniversary of the Issuance Date (the “Initial Conversion Date”), the shareholder may convert up to 25% of the Class C shares owned by such holder into shares of Class A common stock.
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Beginning on the fourth anniversary of the Issuance Date, the shareholder may convert up to an additional 25% of the Class C shares owned by such holder into shares of Class A common stock.
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Beginning on the fifth anniversary of the Issuance Date, the shareholder may convert up to an additional 25% of the Class C shares owned by such holder into shares of Class A common stock.
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Beginning on the sixth anniversary of the Issuance Date, the shareholder may convert up to an additional 25% of the Class C shares owned by such holder into shares of Class A common stock.
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The conversion schedule and limitations above are referred to herein as the “Conversion Schedule.
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As discussed more fully below, any Transfer (as defined in the Amendment) of Class C Common Stock shall result in the Initial Conversion Date being deemed to be reset, and shall be the third anniversary of such Transfer, and the Conversion Schedule shall be reset and calculated from the reset Initial Conversion Date.
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Once converted into Class A common
stock, the Class C common stock shall not be reissued. No class of common stock may be subdivided or combined unless the other
class of common stock concurrently is subdivided or combined in the same proportion and in the same manner.
Restrictions on Transfer
Class A Common
There are no restrictions on the transfer
of the Class A common stock, other than restrictions required by federal and state securities laws.
Class B Common
Each share of
Class B Common Stock shall automatically, without any further action, convert into one (1) fully paid and non-assessable
share of Class A Common Stock upon a Transfer (as defined in the Amendment) of such share, other than a Transfer:
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from a Class B Stockholder to any other Class B Stockholder who is a natural person to certain Permitted Entities, and from any of the Permitted Entities back to such Class B Stockholder and/or any other Permitted Entity established by or for such Class B Stockholder:
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Certain trusts;
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An Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, or certain pensions, profit sharing, stock bonus or other type of plans or trusts;
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Certain entities, including a corporation over which such Class B Stockholder has voting control; a partnership over which such Class B Stockholder has voting control; a limited liability company over which such Class B Stockholder has voting control;
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by a Class B Stockholder that is a partnership, or a nominee for a partnership, or a limited liability company, which partnership or limited liability company beneficially held more than five percent (5%) of the total outstanding shares of Class B Common Stock as of the transfer to certain persons listed in the Amendment;
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Additionally,
each share of Class B Common Stock held of record by a Class B Stockholder who is a natural person, or by such Class B
Stockholder’s Permitted Entities, shall automatically, without any further action, convert into one (1) fully paid and
non-assessable share of Class A Common Stock upon the death of such Class B Stockholder.
Shares of Class B Common Stock that
are converted into shares of Class A Common Stock as provided in this section shall be retired and may not be reissued.
Class C Common
Upon the Transfer (as defined in the
Amendment) of any share of Class C Common Stock other than a Transfer:
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from a Class C Stockholder to any other Class C Stockholder who is a natural person to certain Permitted Entities, and from any of the Permitted Entities back to such Class C Stockholder and/or any other Permitted Entity established by or for such Class C Stockholder:
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Certain trusts;
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An Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, or certain pensions, profit sharing, stock bonus or other type of plans or trusts;
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Certain entities, including a corporation over which such Class C Stockholder has voting control; a partnership over which such Class C Stockholder has voting control; a limited liability company over which such Class C Stockholder has voting control;
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by a Class C Stockholder that is a partnership, or a nominee for a partnership, or a limited liability company, which partnership or limited liability company beneficially held more than five percent (5%) of the total outstanding shares of Class C Common Stock as of the transfer to certain persons listed in the Amendment;
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the Initial Conversion Date shall be deemed
to be reset, and shall be the third anniversary of such Transfer, and the Conversion Schedule shall be reset and calculated from
the reset Initial Conversion Date.
Additionally, each share of Class C
Common Stock held of record by a Class C Stockholder who is a natural person, or by such Class C Stockholder’s
Permitted Entities, shall automatically, without any further action, convert into one (1) fully paid and non-assessable share
of Class A Common Stock upon the death of such Class C Stockholder.
The transfer agent
and registrar for our Class A and Class C common stock is VStock Transfer, LLC. The transfer agent’s address is
18 Lafayette Place, Woodmere, NY 11598, and its telephone number is 212.828.8436.
Preferred Stock
We are authorized
by our Certificate of Incorporation to issue one or more series of preferred stock, and our Board of Directors is authorized to
determine the rights, preferences, and terms of any such series without being required to seek approval of the shareholders. This
is often referred to as having “blank check” preferred stock rights.
As of the date of this Prospectus,
we had three series of preferred stock outstanding, our Series B Convertible Preferred Stock (the “Series B Preferred
Stock”), our Series C Convertible Preferred Stock (the “Series C Preferred Stock”), and the Series D
Convertible Preferred Stock (the “Series D Preferred Stock”).
As of the date of this Prospectus,
we had 100 shares of Series B Preferred Stock authorized, of which 5 shares were outstanding; 2,028,572 shares of Series C
Preferred Stock authorized of which 1,714,286 were outstanding; and 1,628,572 shares of Series D Preferred Stock authorized
of which 1,428,570 were outstanding.
Series B Preferred Stock
The terms of the Series B Preferred Stock include the following:
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Number of shares: The Company designated 100 shares of Series B Preferred Stock.
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The Stated Value of the Series B Preferred Stock is $1.00 per share.
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No dividends will accrue.
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Voting Rights
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If at least one share of Series B Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series B Preferred Stock at any given time, regardless of their number, shall have that number of votes (identical in every other respect to the voting rights of the holders of all classes of Common Stock or series of preferred stock entitled to vote at any regular or special meeting of stockholders) equal to two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock.
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If more than one share of Series B Preferred Stock is issued and outstanding at any time, then each individual share of Series B Preferred Stock shall have the voting rights equal to:
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Two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock
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Divided by:
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the number of shares of Series B Preferred Stock issued and outstanding at the time of voting.
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Liquidation
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Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the Holders of the Series B Preferred Stock are entitled to receive out of the assets of the Company for each share of Series B Preferred Stock then held by the Holder an amount equal to the Stated Value, and all other amounts in respect thereof then due and payable before any distribution or payment shall be made to the holders of any Junior Securities.
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Conversion: The Series B Preferred Stock shall be convertible into shares of the Company's Class A Common Stock only as follows:
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In the event that the Holder of Series B Preferred Stock ceases to be a director of the Company, upon such director's resignation or removal from the board by any means, the shares of Series B Preferred Stock held by such resigning or removed director shall convert automatically into that same number of shares of Class A Common Stock (i.e. on a one-for-one share basis).
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Shares of Series B Preferred Stock converted into Class A Common Stock, canceled, or redeemed, shall be canceled and shall have the status of authorized but unissued shares of undesignated preferred stock.
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As of the date
of this Prospectus, we had 5 shares of Series B Preferred Stock outstanding, held by the members of our Board of Directors.
Series C Preferred Stock
The terms of the Series C Preferred Stock include the following:
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Number of shares: The Company designated 2,028,572 shares of Series C Preferred Stock.
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The Stated Value of the Series C Preferred Stock is $3.50 per share.
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No dividends will accrue on the Series C Preferred Stock. If dividends are declared on the Company’s Class A,
Class B, or Class C Common Stock, the holders of the Series C Preferred Stock will participate in such dividends
on a per share basis, pari passu with the Classes of Common Stock.
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The Series C Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share
basis.
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As long as any shares of Series C Preferred Stock are outstanding, the Company may not, without the affirmative vote or
written consent of the holders of a majority of the then outstanding shares of the Series C Preferred Stock, (a) alter
or change the powers, preferences or rights given to the Series C Preferred Stock or alter or amend the Certificate of Designation,
(b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the
holders of the Series C Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing.
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Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"),
the holders of the Series C Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B,
and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company
of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice
of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series C
Preferred Stock.
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Conversion: The Series C Preferred Stock shall be convertible automatically into shares of the Company's Class A
Common Stock (the “Automatic Conversion”) as follows:
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Each share of Series C Preferred Stock will automatically convert into shares of the Company’s Class A Common
Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the
fifth day after the date on which the Company’s Class A Common Stock first trades on a national securities exchange
(including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the “Automatic Conversion
Date”).
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The number of shares of the Company’s Class A Common Stock into which the Series C Preferred Stock shall be
converted shall be determined by multiplying the number of shares of Series C Preferred Stock to be converted by the $3.50
stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted
Average Price (“VWAP”) of the five Trading Days prior to the Automatic Conversion Date. “VWAP” shall be
defined as the volume weighted average price of the Company’s Class A Common Stock on the OTC Markets or other stock
exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason,
VWAP cannot be thus determined, “VWAP” shall mean the average closing or last sale prices over the five Trading Days
prior to the Automatic Conversion Date of the Company’s Class A Common Stock on the OTC Markets or such other exchange
or trading medium.
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Restrictions on Resales of Class C Common Stock
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The sale of shares of the Company’s Class A Common Stock issued at the time of conversion by any holder into the
market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received
by such holder at the time of the automatic conversion in any given 120-day period.
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Company Redemption Rights
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At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than
all) shares of the Series C Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business
days’ notice, at a redemption price per share of Series C Preferred Stock then issued and outstanding (the “Corporation
Redemption Price”), equal to the stated value of $3.50 per share.
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Series D
Preferred Stock
The terms of the Series D Preferred Stock include the following:
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Number of shares: The Company designated 1,628,572 shares of Series D Preferred Stock.
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The Stated Value of the Series D Preferred Stock is $3.50 per share.
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No dividends will accrue on the Series D Preferred Stock. If dividends are declared on the Company’s Class A,
Class B, or Class C Common Stock, the holders of the Series D Preferred Stock will participate in such dividends
on a per share basis, pari passu with the Classes of Common Stock.
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The Series D Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share
basis.
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As long as any shares of Series D Preferred Stock are outstanding, the Company may not, without the affirmative vote or
written consent of the holders of a majority of the then outstanding shares of the Series D Preferred Stock, (a) alter
or change the powers, preferences or rights given to the Series D Preferred Stock or alter or amend the Certificate of Designation,
(b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the
holders of the Series D Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing.
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Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"),
the holders of the Series D Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B,
and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company
of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice
of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series D
Preferred Stock.
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Conversion: The Series D Preferred Stock shall be convertible automatically into shares of the Company's Class A
Common Stock (the “Automatic Conversion”) as follows:
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Each share of Series D Preferred Stock will automatically convert into shares of the Company’s Class A Common
Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the
fifth day after the date on which the Company’s Class A Common Stock first trades on a national securities exchange
(including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the “Automatic Conversion
Date”).
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The number of shares of the Company’s Class A Common Stock into which the Series D Preferred Stock shall be
converted shall be determined by multiplying the number of shares of Series D Preferred Stock to be converted by the $3.50
stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted
Average Price (“VWAP”) of the five Trading Days prior to the Automatic Conversion Date. “VWAP” shall be
defined as the volume weighted average price of the Company’s Class A Common Stock on the OTC Markets or other stock
exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason,
VWAP cannot be thus determined, “VWAP” shall mean the average closing or last sale prices over the five Trading Days
prior to the Automatic Conversion Date of the Company’s Class A Common Stock on the OTC Markets or such other exchange
or trading medium.
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Restrictions on Resales of Class A Common Stock
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The sale of shares of the Company’s Class A Common Stock issued at the time of conversion by any holder into the
market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received
by such holder at the time of the automatic conversion in any given 90-day period.
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Company Redemption Rights
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At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than
all) shares of the Series D Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business
days’ notice, at a redemption price per share of Series D Preferred Stock then issued and outstanding (the “Corporation
Redemption Price”), equal to the stated value of $3.50 per share.
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The shares issued on conversion of the Series D Preferred Stock have piggyback registration rights beginning on that date
which his six months after the date on which the Company’s Class A Common Stock trades on a national securities exchange,
and are subject to standard underwriter holdback limitations.
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Dividend Policy
We have never
declared or paid any cash dividends on our capital stock, and we do not currently intend to pay any cash dividends on our common
stock for the foreseeable future. We expect to retain future earnings, if any, to fund the development and growth of our business.
Any future determination to pay dividends on our common stock will be at the discretion of our board of directors and will depend
upon, among other factors, our financial condition, operating results, current and anticipated cash needs, plans for expansion
and other factors that our board of directors may deem relevant.
Anti-Takeover
Provisions of Our Charter Documents and Delaware Law
Some provisions
of our Charter, our Bylaws and Delaware law could make it more difficult to acquire our company by means of a tender offer, a proxy
contest, or otherwise.
Our Bylaws establish
advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other
than nominations made by or at the direction of our board of directors or a committee of our board of directors. These procedures
provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at
which the action is to be taken. Generally, for a proposal to be timely submitted for consideration at an annual meeting, notice
must be delivered to our secretary not less than 90 days nor more than 120 days prior to the first anniversary date of the annual
meeting for the preceding year. Our Bylaws specify the requirements as to form and content of all stockholders’ notices.
These provisions might preclude our stockholders from bringing matters before our annual meeting of stockholders or from making
nominations for directors at our annual meeting of stockholders if the proper procedures are not followed.
Our Charter and
Bylaws both provide that vacancies on our board of directors, including newly created directorships, may be filled only by a majority
vote of directors then in office, and directors so chosen shall hold office for a term expiring at the next annual meeting of stockholders
or until such director’s successor shall have been duly elected and qualified. Accordingly, the board of directors could
prevent any stockholder from filling the new directorships with such stockholder’s own nominee.
Additionally,
as noted, our Charter provides our Board with “blank check” preferred stock authority, by which means the Board of
Directors may designate a new series of preferred stock, and determine the rights and preferences, including voting rights, without
the need to seek approval from our shareholders.
Delaware Anti-Takeover Law
We are subject
to Section 203 of the Delaware General Corporation Law which contains anti-takeover provisions. In general, Section 203
prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period
of three years following the date that the person became an interested stockholder, unless the business combination or the transaction
in which the person became an interested stockholder is approved in a prescribed manner. Generally, a business combination includes
a merger, asset or stock sale or another transaction resulting in a financial benefit to the interested stockholder. An interested
stockholder is a person who, together with affiliates and associates, owns 15% or more of the corporation’s voting stock.
The existence of this provision may have an anti-takeover effect with respect to transactions that are not approved in advance
by our board of directors, including discouraging attempts that might result in a premium over the market price for the shares
of common stock held by stockholders.
No Cumulative
Voting
Under Delaware
law, cumulative voting for the election of directors is not permitted unless a corporation’s certificate of incorporation
authorizes cumulative voting. Our Charter does not provide for cumulative voting in the election of directors. Cumulative voting
allows a minority stockholder to vote a portion or all of its shares for one or more candidates for seats on our board of directors.
Without cumulative voting, a minority stockholder will not be able to gain as many seats on our board of directors based on the
number of shares of our stock the stockholder holds as compared to the number of seats the stockholder would be able to gain if
cumulative voting were permitted. The absence of cumulative voting makes it more difficult for a minority stockholder to gain a
seat on our board of directors to influence our board’s decision regarding a takeover.
Stockholder
Action by Written Consent
Delaware law generally
provides that the affirmative vote of a majority of the shares entitled to vote on such matter is required to amend a corporation’s
certificate of incorporation or bylaws, unless a corporation’s certificate of incorporation or bylaws requires a greater
percentage. Our Charter permits our board of directors to amend or repeal most provisions of our Bylaws by majority vote. Generally,
our Charter may be amended by holders of a majority of the voting power of the then outstanding shares of our capital stock entitled
to vote. The stockholder vote or consent with respect to an amendment of our Charter or Bylaws would be in addition to any separate
class vote that might in the future be required under the terms of any series of preferred stock that might be outstanding at the
time such a proposed amendment were submitted to stockholders. Delaware law and the provisions of our Bylaws generally permit stockholders
owning the requisite percentage of shares of common stock necessary to approve an amendment to our Charter and Bylaws to act by
written consent in lieu of a meeting of our stockholders.
Limitation
of Liability and Indemnification of Officers and Directors
Our Bylaws provide indemnification, including
advancement of expenses, to the fullest extent permitted under applicable law to any person made or threatened to be made a party
to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative
by reason of the fact that such person is or was a director or officer of the company, or is or was serving at our request as a
director or officer of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect
to an employee benefit plan. In addition, our Charter provides that our directors will not be personally liable to us or our stockholders
for monetary damages for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our
shareholders, acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived
an improper personal benefit from their action as directors. This provision does not limit or eliminate our rights or the rights
of any stockholder to seek nonmonetary relief such as an injunction or rescission in the event of a breach of a director’s
duty of care. In addition, this provision does not limit the directors’ responsibilities under Delaware law or any other
laws, such as the federal securities laws. We have obtained insurance that insures our directors and officers against certain losses,
and which insures us against our obligations to indemnify the directors and officers. We also have entered into indemnification
agreements with our directors and executive officers.
Transfer Agent and Registrar
The transfer agent
and registrar for our Class A and Class C common stock is VStock Transfer, LLC. The transfer agent’s address is
18 Lafayette Place, Woodmere, NY 11598, and its telephone number is 212-828-8436.
Our Class A common
stock is listed on the OTC QB Market under the symbol “ALPP.”
DESCRIPTION OF WARRANTS
We may issue warrants
to purchase debt securities, preferred stock, common stock, purchase contracts or units that are registered pursuant to the registration
statement to which this prospectus relates. We may issue warrants independently or together with other securities that are registered
pursuant to the registration statement to which this prospectus relates. Warrants sold with other securities may be attached to
or separate from the other securities. We will issue each series of warrants under a separate warrant agreement between us and
a warrant agent that we will name in the prospectus supplement. We will describe additional terms of the warrants and the applicable
warrant agreements in the applicable prospectus supplement.
General
If warrants are offered,
the prospectus supplement relating to a series of warrants will include the specific terms of the warrants, including:
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the offering price;
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the title of the warrants;
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the aggregate number of warrants offered;
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the dates or periods during which the warrants can be exercised;
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whether the warrants will be issued in individual certificates to holders or in the form of global securities held by a depositary on behalf of holders;
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the designation and terms of any securities with which the warrants are issued;
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if the warrants are issued as a unit with another security, the date, if any, on and after which the warrants and the other security will be separately transferable;
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if the exercise price is not payable in U.S. dollars, the foreign currency, currency unit or composite currency in which the exercise price is denominated;
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any terms, procedures and limitations relating to the transferability, exchange or exercise of the warrants;
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any special tax implications of the warrants or their exercise;
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any antidilution provisions of the warrants;
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any redemption or call provisions applicable to the warrants; and
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any other terms of the warrants.
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Transfers and Exchanges
A holder will be able
to exchange warrant certificates for new warrant certificates of different denominations, or to transfer warrants, at the corporate
trust office of the warrant agent or any other office indicated in the prospectus supplement. Prior to exercise, holders of warrants
will have none of the rights of holders of the underlying securities.
Exercise
Holders will be able
to exercise warrants up to 5:00 P.M. New York City time on the date set forth in the prospectus supplement as the expiration
date.
After this time, unless
we have extended the expiration date, the unexercised warrants will be void.
Subject to any restrictions
and additional requirements that may be set forth in a prospectus supplement, holders of warrants may exercise them by delivering
to the warrant agent at its corporate trust office the following:
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warrant certificates properly completed; and
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payment of the exercise price.
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As soon as practicable
after the delivery, we will issue and deliver to the indicated holder the securities purchasable upon exercise. If a holder does
not exercise all the warrants represented by a particular certificate, we will also issue a new certificate for the remaining number
of warrants.
No Rights of Security Holder Prior to
Exercise
Prior to the exercise
of their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon the exercise
of the warrants, and will not be entitled to:
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in the case of warrants to purchase equity securities, the right to vote or to receive dividend payments or similar distributions
on the securities purchasable upon exercise
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Enforceability of Rights by Holders
of Warrants
Each warrant agent
will act solely as our agent under the relevant warrant agreement and will not assume any obligation or relationship of agency
or trust for any warrant holder. A single bank or trust company may act as warrant agent for more than one issue of warrants. A
warrant agent will have No duty or responsibility if we default in performing our obligations under the relevant warrant agreement
or warrant, including any duty or responsibility to initiate any legal proceedings or to make any demand upon us.
Title
We and the warrant
agents and any of our respective agents may treat the registered holder of any warrant certificate as the absolute owner of the
warrants evidenced by that certificate for any purpose and as the person entitled to exercise the rights attaching to the warrants
so requested, despite any notice to the contrary.
DESCRIPTION OF SUBSCRIPTION RIGHTS
We may issue subscription
rights to purchase common stock, preferred stock, other securities described in this prospectus or any combination thereof. These
subscription rights may be issued independently or together with any other security offered by us and may or may not be transferable
by the securityholder receiving the subscription rights in such offering. In connection with any offering of subscription rights,
we may enter into a standby arrangement with one or more underwriters or other investors pursuant to which the underwriters or
other investors may be required to purchase any securities remaining unsubscribed for after such offering.
To the extent appropriate,
the applicable prospectus supplement will describe the specific terms of the subscription rights to purchase shares of our securities
offered thereby, including the following:
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the date of determining the securityholders entitled to the subscription rights distribution;
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the price, if any, for the subscription rights;
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the exercise price payable for the common stock, preferred stock, or other securities upon the exercise of the subscription right;
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the number of subscription rights issued to each securityholder;
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the amount of common stock, preferred stock, or other securities that may be purchased per each subscription right;
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any provisions for adjustment of the amount of securities receivable upon exercise of the subscription rights or of the exercise price of the subscription rights;
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the extent to which the subscription rights are transferable;
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the date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights shall expire;
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the extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities;
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the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of subscription rights;
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any applicable federal income tax considerations; and
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any other terms of the subscription rights, including the terms, procedures and limitations relating to the transferability, exchange and exercise of the subscription rights.
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DESCRIPTION OF PURCHASE CONTRACTS
We may issue purchase
contracts obligating holders to purchase from us, and us to sell to the holders, a specified number, or amount, of securities at
a future date or dates. The purchase contracts may be issued separately or as part of units consisting of a purchase contract and
an underlying debt or preferred security covered by this prospectus, U.S. Treasury security or other U.S. government or agency
obligation. The holder of the unit may be required to pledge the debt, preferred security, U.S. Treasury security or other U.S.
government or agency obligation to secure its obligations under the purchase contract.
If purchase contracts
are offered, the prospectus supplement will specify the material terms of the purchase contracts, the units and any applicable
pledge or depository arrangements, including one or more of the following:
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the stated amount that a holder will be obligated to pay under the purchase contract in order to purchase the underlying security;
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the settlement date or dates on which the holder will be obligated to purchase the underlying security and whether the occurrence of any events may cause the settlement date to occur on an earlier date and the terms on which any early settlement would occur;
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the events, if any, that will cause our obligations and the obligations of the holder under the purchase contract to terminate;
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the settlement rate, which is a number that, when multiplied by the stated amount of a purchase contract, determines the number, or amount, of securities that we will be obligated to sell and a holder will be obligated to purchase under that purchase contract upon payment of the stated amount of that purchase contract;
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whether the purchase contracts will be issued separately or as part of units consisting of a purchase contract and an underlying debt or preferred security with an aggregate principal amount or liquidation amount equal to the stated amount;
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the type of security, if any, that is pledged by the holder to secure its obligations under a purchase contract;
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the terms of the pledge arrangement relating to the security, including the terms on which distributions or payments of interest and principal on the security will be retained by a collateral agent, delivered to us or be distributed to the holder; and
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the amount of the contract fee, if any, that may be payable by us to the holder or by the holder to us, the date or dates on which the contract fee will be payable and the extent to which we or the holder, as applicable, may defer payment of the contract fee on those payment dates.
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DESCRIPTION OF UNITS
As specified in the
applicable prospectus supplement, we may issue units consisting of one or more shares of common stock, shares of preferred stock,
warrants, debt securities, subscription rights, purchase contracts or any combination of such securities. The applicable prospectus
supplement will describe:
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the securities comprising the units, including whether and under what circumstances the securities comprising the units may be separately traded;
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the terms and conditions applicable to the units, including a description of the terms of any applicable unit agreement governing the units; and
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a description of the provisions for the payment, settlement, transfer or exchange of the units.
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FORMS OF SECURITIES
We may issue the warrants,
purchase contracts, and units of any series in the form of one or more fully registered global securities that will be deposited
with a depositary or with a nominee for a depositary and registered in the name of the depositary or its nominee. In that case,
one or more global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate
principal or face amount of outstanding registered securities of the series to be represented by such global securities. Unless
and until the depositary exchanges a global security in whole for securities in definitive registered form, the global security
may not be transferred except as a whole by the depositary to a nominee of the depositary or by a nominee of the depositary to
the depositary or another nominee of the depositary or by the depositary or any of its nominees to a successor of the depositary
or a nominee of such successor.
The specific terms
of the depositary arrangement with respect to any portion of a series of securities to be represented by a global security will
be described in the prospectus supplement relating to such series. We anticipate that the following provisions will apply to all
depositary arrangements.
Ownership of beneficial
interests in a global security will be limited to persons that have accounts with the depositary for such global security known
as “participants” or persons that may hold interests through such participants.
Upon the issuance of
a global security, the depositary for such global security will credit, on its book-entry registration and transfer system, the
participants’ accounts with the respective principal or face amounts of the securities represented by the global security
beneficially owned by the participants. The accounts to be credited shall be designated by any dealers, underwriters or agents
participating in the distribution of such securities.
Ownership of beneficial
interests in such global security will be shown on, and the transfer of such ownership interests will be effected only through,
records maintained by the depositary for such global security (with respect to interests of participants) and on the records of
participants (with respect to interests of persons holding through participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the
ability to own, transfer or pledge beneficial interests in global securities.
So long as the depositary
for a global security, or its nominee, is the registered owner of such global security, such depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the securities represented by such global security for all purposes
under the applicable indenture, warrant agreement, purchase contract or unit agreement. Except as set forth below, owners of beneficial
interests in a global security will not be entitled to have the securities represented by such global security registered in their
names, will not receive or be entitled to receive physical delivery of such securities in definitive form and will not be considered
the owners or holders thereof under the applicable indenture, warrant agreement, purchase contract or unit agreement. Accordingly,
each person owning a beneficial interest in a global security must rely on the procedures of the depositary for the global security
and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the applicable indenture, warrant agreement, purchase contract or unit agreement. We understand
that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a global
security desires to give or take any action which a holder is entitled to give or take under the applicable indenture, warrant
agreement, purchase contract or unit agreement, the depositary for such global security would authorize the participants holding
the relevant beneficial interests to give or take such action, and such participants would authorize beneficial owners owning through
such participants to give or take such action or would otherwise act upon the instructions of beneficial owners holding through
them.
Any payments to holders
with respect to warrants, purchase contracts or units represented by a global security registered in the name of a depositary or
its nominee will be made to such depositary or its nominee, as the case may be, as the registered owner of such global security.
None of us, the trustees, the warrant agents, the unit agents or any of our other agents, agent of the trustees or agent of the
warrant agents or unit agents will have any responsibility or liability for any aspect of the records relating to or payments made
on account of beneficial ownership interests in such global security or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
We expect that the
depositary for any securities represented by a global security, or its nominee, upon receipt of any payment of principal, premium,
interest or other distribution of underlying securities or commodities to holders in respect of such global security, will immediately
credit participants’ accounts in amounts proportionate to their respective beneficial interests in such global security as
shown on the records of such depositary or its nominee. We also expect that payments by participants to owners of beneficial interests
in such global security held through such participants will be governed by standing customer instructions and customary practices,
as is now the case with the securities held for the accounts of customers in bearer form or registered in “street name,”
and will be the responsibility of such participants.
If the depositary for
any securities represented by a global security is at any time unwilling or unable to continue as depositary or ceases to be a
clearing agency registered under the Exchange Act, and we do not appoint a successor depositary registered as a clearing agency
under the Exchange Act within 90 days, we will issue such securities in definitive form in exchange for such global security. In
addition, we may at any time and in our sole discretion determine not to have any of the securities of a series represented by
one or more global securities and, in such event, will issue securities of such series in definitive form in exchange for all of
the global security or securities representing such securities. Any securities issued in definitive form in exchange for a global
security will be registered in such name or names as the depositary shall instruct the relevant trustee, warrant agent or other
relevant agent of ours. We expect that such instructions will be based upon directions received by the depositary from participants
with respect to ownership of beneficial interests in such global security.
PLAN OF DISTRIBUTION
We may sell our securities
from time to time through underwriters, dealers or agents or directly to purchasers, in one or more transactions at a fixed price
or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. We may also sell our securities upon the exercise of subscription rights that may be distributed
to security holders. We may use these methods in any combination.
We will describe the
terms of the offering of the securities in a prospectus supplement, information incorporated by reference or any related free writing
prospectus, including:
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the name or names of any underwriters, if any;
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the purchase price of the securities and the proceeds we will receive from the sale;
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any underwriting discounts and other items constituting underwriters’ compensation;
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any initial public offering price;
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any discounts or concessions allowed or reallowed or paid to dealers; and
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any securities exchange or market on which the securities may be listed.
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Only underwriters we
name in the prospectus supplement, information incorporated by reference or any related free writing prospectus are underwriters
of the securities offered thereby.
The distribution of
securities may be effected, from time to time, in one or more transactions, including:
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block transactions (which may involve crosses) and transactions on the NASDAQ or any other organized
market where the securities may be traded;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant
to a prospectus supplement;
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ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers;
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sales “at the market” to or through a market maker or into an existing trading market,
on an exchange or otherwise; and
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sales in other ways not involving market makers or established trading markets, including direct
sales to purchasers.
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By Underwriters
We may use an underwriter
or underwriters in the offer or sale of our securities.
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If we use an underwriter or underwriters, the offered securities will be acquired by the underwriters
for their own account.
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We will include the names of the specific managing underwriter or underwriters, as well as any
other underwriters, and the terms of the transactions, including the compensation the underwriters and dealers will receive, in
the prospectus supplement.
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The underwriters will use this prospectus and the prospectus supplement to sell our securities.
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We may also sell securities
pursuant to one or more standby agreements with one or more underwriters in connection with the call, redemption or exchange of
a specified class or series of any of our outstanding securities. In a standby agreement, the underwriter or underwriters would
agree either:
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to purchase from us up to the number of shares of Class A common stock that would be issuable
upon conversion or exchange of all the shares of the class or series of our securities at an agreed price per share of Class A
common stock; or
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to purchase from us up to a specified dollar amount of offered securities at an agreed price per
offered security, which price may be fixed or may be established by formula or other method and which may or may not relate to
market prices of our Class A common stock or any other outstanding security.
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The underwriter or
underwriters would also agree, if applicable, to convert or exchange any securities of the class or series held or purchased by
the underwriter or underwriters into or for our Class A common stock or other security.
The underwriter or
underwriters may assist in the solicitation of conversions or exchanges by holders of the class or series of securities.
By Dealers
We may use a dealer
to sell our securities.
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If we use a dealer, we, as principal, will sell our securities to the dealer.
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The dealer will then resell our securities to the public at varying prices that the dealer will
determine at the time it sells our securities.
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We will include the name of the dealer and the terms of our transactions with the dealer in the
prospectus supplement.
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If we offer securities
in a subscription rights offering to our existing security holders, we may enter into a standby underwriting agreement with dealers,
acting as standby underwriters. We may pay the standby underwriters a commitment fee for the securities they commit to purchase
on a standby basis. If we do not enter into a standby underwriting arrangement, we may retain a dealer-manager to manage a subscription
rights offering for us.
By Agents
We may designate agents
to solicit offers to purchase our securities.
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We will name any agent involved in offering or selling our securities and any commissions that
we will pay to the agent in the prospectus supplement.
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Unless we indicate otherwise in the prospectus supplement, our agents will act on a best efforts
basis for the period of their appointment.
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Our agents may be deemed to be underwriters under the Securities Act of any of our securities that
they offer or sell.
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By Delayed Delivery Contracts
We may authorize our
agents and underwriters to solicit offers by certain institutions to purchase our securities at the public offering price under
delayed delivery contracts.
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If we use delayed delivery contracts, we will disclose that we are using them in the prospectus
supplement and will tell you when we will demand payment and delivery of the securities under the delayed delivery contracts.
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These delayed delivery contracts will be subject only to the conditions that we set forth in the
prospectus supplement.
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We will indicate in the prospectus supplement the commission that underwriters and agents soliciting
purchases of our securities under delayed delivery contracts will be entitled to receive.
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Direct Sales
We may directly solicit
offers to purchase our securities, and we may directly sell our securities to institutional or other investors, including our affiliates.
We will describe the terms of our direct sales in the prospectus supplement. We may also sell our securities upon the exercise
of rights which we may issue.
General Information
Underwriters, dealers
and agents that participate in the distribution of our securities may be underwriters as defined in the Securities Act, and any
discounts or commissions they receive and any profit they make on the resale of the offered securities may be treated as underwriting
discounts and commissions under the Securities Act. Any underwriters or agents will be identified and their compensation described
in a prospectus supplement. We may indemnify agents, underwriters and dealers against certain civil liabilities, including liabilities
under the Securities Act, or make contributions to payments they may be required to make relating to those liabilities. Our agents,
underwriters and dealers, or their affiliates, may be customers of, engage in transactions with or perform services for us in the
ordinary course of business.
Each series of securities
offered by this prospectus (other than Class A common stock) may be a new issue of securities with no established trading
market. Any underwriters to whom securities offered by this prospectus are sold by us for public offering and sale may make a market
in the securities offered by this prospectus, but the underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the liquidity of the trading market for any securities
offered by this prospectus.
Representatives of
the underwriters through whom our securities are sold for public offering and sale may engage in over-allotment, stabilizing transactions,
syndicate short covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate short position. Stabilizing transactions permit bids
to purchase the offered securities so long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering
transactions involve purchases of the offered securities in the open market after the distribution has been completed in order
to cover syndicate short positions. Penalty bids permit the representative of the underwriters to reclaim a selling concession
from a syndicate member when the offered securities originally sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions, syndicate covering transactions and penalty bids
may cause the price of the offered securities to be higher than it would otherwise be in the absence of such transactions. These
transactions may be effected on a national securities exchange and, if commenced, may be discontinued at any time. Underwriters,
dealers and agents may be customers of, engage in transactions with or perform services for, us and our subsidiaries in the ordinary
course of business.
Fees and Commissions
In compliance with
the guidelines of the Financial Industry Regulatory Authority, or FINRA, the aggregate maximum discount, commission or agency fees
or other items constituting underwriting compensation to be received by any FINRA member or independent broker-dealer will not
exceed 8% of any offering pursuant to this prospectus and any applicable prospectus supplement or other offering materials; however,
it is anticipated that the maximum commission or discount to be received in any particular offering of securities will be less
than this amount.
If 5% or more of the
net proceeds of any offering of securities made under this prospectus will be received by a FINRA member participating in the offering
or affiliates or associated persons of such FINRA member, the offering will be conducted in accordance with FINRA Rule 5121.
LEGAL MATTERS
The legal validity of the securities offered
by this prospectus will be passed upon for us by Kirton McConkie, P.C., Salt Lake City, Utah.
EXPERTS
The audited consolidated financial statements
incorporated by reference in this prospectus and elsewhere in the registration statement have been so incorporated by reference
in reliance upon the report of MaloneBailey, LLP, independent registered public accountants, upon the authority of said firm as
experts in accounting and auditing.
8,333,333
Shares of Class A common stock
Prospectus
A.G.P.
February _______ ,
2021