As filed with the Securities and Exchange Commission on February ___, 2020
Registration No. 333-_________
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
 
Alpine 4 Technologies Ltd.
(Exact name of registrant as specified in its charter)

Delaware
3669
46-5482689
(State or other jurisdiction of incorporation or organization)
(Primary Standard Industrial Classification Code Number)
(I.R.S. Employer Identification Number)
 
2525 E Arizona Biltmore Circle Suite 237
Phoenix, AZ
 
855-777-0077 ext 801
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
 
Kent Wilson
Alpine 4 Technologies Ltd.
4742 N. 24th Street, Suite 300
Phoenix AZ 85016
 
855-777-0077 ext 801
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
 
Copies to:
 
C. Parkinson Lloyd, Esq.
Kirton | McConkie
50 East South Temple Street, Suite 400
Salt Lake City, UT 84111
(801) 328-3600
 
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered
 
Amount
to be
Registered
   
Proposed
Maximum
Offering Price
Per Share
   
Proposed
Maximum
Aggregate
Offering Price
   
Amount of
Registration Fee
 
Class A Common stock, par value $0.0001 per share
   
14,000,000
(1)
   $
0.0773

   $
1,082,200
(2)
   $
141


(1) Pursuant to Rule 416 of the Securities Act of 1933, as amended (the “Securities Act”), this registration statement also covers any additional shares of common stock that become issuable by reason of any share dividend, share split, recapitalization or any other similar transaction without receipt of consideration that results in an increase in the number of shares or common stock outstanding.

(2) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) of the Securities Act based on the average of the high and low prices of the Registrant’s Common Stock on February 10, 2020, as quoted on the OTCQB Market.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a) may determine.

The information in this prospectus is not complete and may be changed. The selling stockholder may not sell these securities until the Securities and Exchange Commission declares this registration statement effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION
DATED FEBRUARY ___, 2020
 
 
This prospectus relates to the resale or other disposition from time to time of up to 14,000,000 shares of common stock, par value $0.0001, of Alpine 4 Technologies, Ltd., by Lincoln Park Capital Fund, LLC (“Lincoln Park”).

The shares of common stock being offered by Lincoln Park, the selling stockholder, have been or may be issued pursuant to the purchase agreement dated January 16, 2020, that we entered into with Lincoln Park. See “The Lincoln Park Transaction” for a description of that agreement and “Selling Stockholder” for additional information regarding Lincoln Park. The prices at which Lincoln Park may sell the shares will be determined by the prevailing market price for the shares or in negotiated transactions.

We are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of shares by the selling stockholder.

The selling stockholder may sell or otherwise dispose of the shares of common stock described in this prospectus in a number of different ways and at varying prices. See “Plan of Distribution” for more information about how the selling stockholder may sell or otherwise dispose of the shares of common stock being registered pursuant to this prospectus. The selling stockholder is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended.

The selling stockholder will pay all brokerage fees and commissions and similar expenses. We will pay the expenses (except brokerage fees and commissions and similar expenses) incurred in registering the shares, including legal and accounting fees. See “Plan of Distribution.”

Our common stock is quoted on the OTCQB Market under the symbol “ALPP.”  On February 10, 2020, the last reported sale of our common stock on the OTCQB Market was $0.0756 per share.

Investing in our common stock involves a high degree of Risk.
See "Risk Factors" beginning on page ____.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.

The date of this prospectus is ______________, 2020.
2

TABLE OF CONTENTS

  Page
   
Prospectus Summary
4
   
Risk Factors
9
   
Cautionary Note Regarding Forward Looking Statements
16
   
Determination of Market Price
17
   
Use of Proceeds
17
   
Dividend Policy
18
   
Lincoln Park Transaction
18
   
Dilution
21
   
Market Price of Common Equity and Related Stockholder Matters
22
   
Business
23
   
Management’s Discussion and Analysis of Financial Condition and Results of Operations
27
   
Management
34
   
Security Ownership of Certain Beneficial Owners and Management
37
   
Certain Relationships and Related Transactions
38
   
Description of Securities
39
   
Selling Stockholder
44
   
Plan of Distribution
45
   
Legal Matters
46
   
Experts
46
   
Where You Can Find More Information
46
   
Index to Financial Statements
F-1

3

ABOUT THIS PROSPECTUS

The registration statement of which this prospectus forms a part that we have filed with the Securities and Exchange Commission, or SEC, includes exhibits that provide more detail of the matters discussed in this prospectus. You should read this prospectus and the related exhibits filed with the SEC, together with the additional information described under the heading “Where You Can Find More Information” before making your investment decision.

You should rely only on the information provided in this prospectus or in a prospectus supplement or any free writing prospectuses or amendments thereto. Neither we, nor the Selling Stockholder, have authorized anyone else to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should assume that the information in this prospectus is accurate only as of the date hereof. Our business, financial condition, results of operations and prospects may have changed since that date.

Neither we, nor the Selling Stockholder, are offering to sell or seeking offers to purchase these securities in any jurisdiction where the offer or sale is not permitted.  We have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States.  Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities as to distribution of the prospectus outside of the United States.
4

ROSPECTUS SUMMARY

The following summary highlights selected information contained in this prospectus. This summary does not contain all the information you should consider before investing in our common stock. You should read the entire prospectus carefully, including the "Risk Factors" beginning on page 5, and our financial statements and the notes to the financial statements included elsewhere in this prospectus. As used throughout this prospectus, the terms "Alpine 4," "Company," "we," "us," or "our" refer to Alpine 4 Technologies Ltd.

General

Company Background and History

Alpine 4 Technologies Ltd. (“Alpine 4,” the “Company,” “we,” or “our”) was incorporated under the laws of the State of Delaware on April 22, 2014.  The Company was formed to serve as a vehicle to effect an asset acquisition, merger, exchange of capital stock, or other business combination with a domestic or foreign business.  As of the date this Registration Statement was filed, the Company was a holding company that owned six operating subsidiaries: ALTIA, LLC; Quality Circuit Assembly, Inc.; American Precision Fabricators, Inc.; Morris Sheet Metal, Corp; JTD Spiral, Inc.; and Deluxe Sheet Metal, Inc. (As discussed in more detail below, we previously had an additional subsidiary, Venture West Energy Services (formerly Horizon Well Testing, LLC) (“Venture West”). However, as of December 31, 2018, we discontinued operations on Venture West and in February 2019 Venture West filed for Chapter 7 bankruptcy proceedings.  As of March 31, 2019, Venture West’s bankruptcy was completed.

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.  American Precision Fabricators rents a property 4401 Savannah St. Fort Smith, Arkansas 72903.  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.

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, 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.”
5

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:

-
Alpine 4 is an "emerging growth company," and the reduced disclosure requirements applicable to "emerging growth companies" could make our common stock less attractive to investors.
   
-
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.
   
-
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.
   
-
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.
   
-
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.
   
-
Alpine 4 stockholders may have difficulty in reselling their shares due to the limited public market or state Blue Sky laws.

For further discussion of these and other risks, see “Risk Factors,” beginning on page 5.

The Offering

On January 16, 2020, we entered into a transaction (the “Lincoln Park Transaction”) consisting of a purchase agreement (the “Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”) with Lincoln Park, pursuant to which Lincoln Park has committed to purchase up to $10.0 million worth of our Class A common stock, $0.0001 par value per share (the “Common Stock”).  A.G.P./Alliance Global Partners acted as sole placement agent for the offering.

Under the terms and subject to the conditions of the Purchase Agreement, we have the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase up to in the aggregate $10.0 million worth of shares of our Common Stock.  As an initial purchase on January 17, 2020, Lincoln Park purchased 1,666,666 shares of our Common Stock (the “Initial Purchase Shares”) at a price of $0.15 per share.

Additional sales of Common Stock by us to Lincoln Park, if any, will be subject to certain limitations, and may occur from time to time, at our sole discretion, over the 36-month period commencing on the date that the registration statement of which this Prospectus is a part is declared effective by the U.S. Securities and Exchange Commission (the “SEC”) and a final prospectus in connection therewith is filed and the other conditions set forth in the purchase agreement are satisfied, all of which are outside the control of Lincoln Park (the date on which all of such conditions are satisfied being the “Commencement Date”).

After the Commencement Date, under the Purchase Agreement, on any business day selected by us, we may direct Lincoln Park to purchase up to 1,000,000 shares of our Common Stock on that business day (each, a “Regular Purchase”), provided, however, that (i) the Regular Purchase may be increased to up to 1,250,000 shares, provided that the closing sale price of the Common Stock is not below $0.30 on the purchase date; (ii) the Regular Purchase may be increased to up to 1,500,000 shares, provided that the closing sale price of the Common Stock is not below $0.40 on the purchase date (subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as provided in the Purchase Agreement); and (iii) the Regular Purchase may be increased to up to 1,750,000 shares, provided that the closing sale price of the Common Stock is not below $0.50 on the purchase date (each subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as provided in the Purchase Agreement). In each case, Lincoln Park’s maximum commitment in any single Regular Purchase may not exceed $1,000,000. The purchase price per share for each such Regular Purchase will be based off of prevailing market prices of Common Stock immediately preceding the time of sale. The purchase price per share will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the business days used to compute such price.

6

In addition to Regular Purchases, we may also direct Lincoln Park to purchase other amounts as accelerated purchases or as additional accelerated purchases if the closing sale price of the common stock exceeds certain threshold prices as set forth in the Purchase Agreement.

Lincoln Park has no right to require us to sell any shares of common stock to Lincoln Park, but Lincoln Park is obligated to make purchases as we direct, subject to certain conditions. In all instances, we may not sell shares of our Common Stock to Lincoln Park under the purchase agreement if it would result in Lincoln Park’s beneficially owning more than 4.99% of our Common Stock. There are no upper limits on the price per share that Lincoln Park must pay for shares of Common Stock. Lincoln Park may not assign or transfer its rights and obligations under the Purchase Agreement.

There are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement or Registration Rights Agreement, other than a prohibition on our entering into certain types of transactions that are defined in the Purchase Agreement as “Variable Rate Transactions.”

We issued to Lincoln Park 2,275,086 shares of Common Stock (the “Commitment Shares”) as consideration for its commitment to purchase shares of Common Stock under the Purchase Agreement.

As of February 10, 2020, we had 110,677,860 shares of our Class A Common Stock outstanding (including the 2,275,086 Commitment Shares and the 1,666,666 Initial Purchase Shares issued to Lincoln Park), of which 106,326,000 shares were held by non-affiliates.

Although the Purchase Agreement provides that we may sell up to $10,000,000 of our common stock to Lincoln Park, only 14,000,000 shares of our common stock are being offered under this prospectus, which represents shares which have been or may be issued to Lincoln Park in the future under the Purchase Agreement.  Depending on the market prices of our common stock at the time we elect to issue and sell shares to Lincoln Park under the Purchase Agreement, we may need to register the resale of additional shares of our Common Stock under the Securities Act in order to receive aggregate gross proceeds equal to the $10,000,000 total commitment available to us under the Purchase Agreement.  If all of the 14,000,000 shares offered by Lincoln Park under this prospectus were issued and outstanding as of the date hereof, such shares would represent approximately 11.23% of the total number of shares of our common stock outstanding, and approximately 11.64% of the total number of outstanding shares excluding shares held by affiliates, in each case as of the date hereof.  If we elect to issue and sell more than the 14,000,000 shares offered under this prospectus to Lincoln Park, which we have the right but not the obligation to do, we must first register for the resale of any such additional shares under the Securities Act pursuant to one or more additional registration statements, which could cause additional substantial dilution to our stockholders.  The number of shares ultimately offered for resale by Lincoln Park is dependent upon the number of shares we sell to Lincoln Park under the Purchase Agreement.

The Purchase Agreement prohibits us from directing Lincoln Park to purchase any shares of common stock if those shares, when aggregated with all other shares of our common stock then beneficially owned by Lincoln Park and its affiliates, would result in Lincoln Park and its affiliates having beneficial ownership, at any single point in time, of more than 4.99% of the then total outstanding shares of our common stock, as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and Rule 13d-3 thereunder, which limitation we refer to as the Beneficial Ownership Cap.

Issuances of our common stock in this offering will not affect the rights or privileges of our existing stockholders, except that the economic and voting interests of each of our existing stockholders will be diluted as a result of any such issuance. Although the number of shares of common stock that our existing stockholders own will not decrease, the shares owned by our existing stockholders will represent a smaller percentage of our total outstanding shares after any such issuance to Lincoln Park.
7

Summary of the Offering

Common stock offered by the Selling Stockholder
 
14,000,000 shares consisting of 2,275,086 Commitment Shares issued to Lincoln Park upon execution of the Purchase Agreement; the 1,666,666 Initial Purchase Shares; and 10,058,248 shares we may sell to Lincoln Park under the Purchase Agreement from time to time after the date of this prospectus
     
Common stock outstanding immediately prior to this offering
 
110,677,860   shares.
     
Common stock to be outstanding immediately following this offering
 
120,736,108 shares.
     
Use of proceeds
 
We will receive no proceeds from the sale of shares of common stock by Lincoln Park in this offering. We may receive up to $10,000,000 in aggregate gross proceeds under the Purchase Agreement from any sales we make to Lincoln Park pursuant to the Purchase Agreement after the date of this prospectus. Any proceeds that we receive from sales to Lincoln Park under the Purchase Agreement will be used for working capital and general corporate purposes. See “Use of Proceeds.”
     
OTCQB Trading Symbol
 
“ALPP”
     
Risk factors
 
You should carefully consider the information set forth in this Prospectus and, in particular, the specific factors set forth in the “Risk Factors” section beginning on page 5 of this Prospectus before deciding whether or not to invest in our common stock.
 
The number of shares of common stock to be outstanding after this offering is based on 110,677,860 shares of common stock outstanding at February 10, 2020, (including the 2,275,086 Commitment Shares issued to Lincoln Park upon execution of the Purchase Agreement and the and the 1,666,666 Initial Purchase Shares purchased by Lincoln Park) and excludes the following:

-
779,000 shares of Class A common stock issuable upon exercise of stock options outstanding at a weighted-average exercise price of $.055 per share;
   
-
75,000 shares of Class A common stock issuable upon exercise of warrants outstanding at a weighted-average exercise price of $4.25per share; and
   
-
6,566,667 shares of Class A common stock issuable upon conversion of $985,000 convertible debt outstanding at a conversion price of $0.15 per share.

Unless otherwise indicated, all information in this prospectus reflects or assumes no issuance or exercise of stock options or warrants on or after September 30, 2019.
8

RISK FACTORS

Investing in our securities involves a high degree of risk. 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.

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 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 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 common stock less attractive to the extent we rely on the exemptions available to emerging growth companies. If some investors find our common stock less attractive as a result, there may be a less active trading market for our 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 $28,520,094 since inception through December 31, 2018.  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 period ended December 31, 2018, our independent auditors included an explanatory paragraph regarding their substantial doubt about our ability to continue as a going concern.  While management believes Alpine 4 will have net operating gains beginning in 2019, there can be no guarantee that we will be able to achieve these net operating gains.  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.
9

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 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, 2018, 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.
10

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.

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 Charles Winters, our Chairman of the Board of Directors.  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. Winters 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.
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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:

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;
   
Our ability to anticipate changes in consumer preferences and to meet customers' needs for our products in a timely cost effective manner; and
   
Our ability to establish, maintain and eventually grow market share in these competitive environments.

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:

ability to keep satisfied vendor relationships
   
hiring and training qualified personnel in local markets;
   
managing marketing and development costs at affordable levels;
   
cost and availability of labor;
   
the availability of, and our ability to obtain, adequate supplies of ingredients that meet our quality standards; and
   
securing required governmental approvals in a timely manner when necessary.

Risks Related to Our Common Stock

Alpine 4 stockholders, and others who choose to purchase shares of Alpine 4 common stock if and when offered, may have difficulty in reselling their shares due to the limited public market or state Blue Sky laws.

Our common stock is currently quoted on the OTC market.  Current Alpine 4 stockholders and persons who desire to purchase them in any trading market should be aware that there might be additional significant state law restrictions upon the ability of investors to resell our shares. Accordingly, investors should consider any secondary market for our securities to be a limited one.

Sales of our common stock under Rule 144 could reduce the price of our stock.

Under Rule 144 affiliates of Alpine 4 may not sell more than one percent of the total issued and outstanding shares in any 90-day period and must resell the shares in an unsolicited brokerage transaction at the market price. If substantial amounts of our common stock become available for resale under Rule 144 once a market has developed for our common stock, the then-prevailing market prices for our common stock may be reduced.
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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 125,000,000 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 110,677,860 shares of Class A common stock outstanding; 9,022,983 shares of Class B common stock issued and outstanding; and 11,527,268 shares of Class C common stock issued and outstanding. Accordingly, we may issue up to an additional 14,322,140 shares of Class A common stock; up to an additional 977,017 shares of Class B common stock; and up to an additional 3,472,732 shares of Class C common stock.  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.

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 common stock is likely to be volatile, in part because the volume of trades of our common stock. In addition, the market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including, among others:

announcements of new products, brands, commercial relationships, acquisitions or other events by us or our competitors; 
   
regulatory or legal developments in the United States and other countries; 
   
fluctuations in stock market prices and trading volumes of similar companies;
   
general market conditions and overall fluctuations in U.S. equity markets;
   
variations in our quarterly operating results;
   
changes in our financial guidance or securities analysts' estimates of our financial performance; 
   
changes in accounting principles;
   
our ability to raise additional capital and the terms on which we can raise it;
   
sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; 
   
additions or departures of key personnel;
   
discussion of us or our stock price by the press and by online investor communities; and 
   
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 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 common stock may cause our stock price to decline.

Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur could significantly reduce the market price of our 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 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 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. that 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

The sale or issuance of our common stock to Lincoln Park may cause dilution, and the sale of the shares of common stock acquired by Lincoln Park, or the perception that such sales may occur, could cause the price of our common stock to fall.

On January 16, 2020, we entered into the Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park has committed to purchase up to $10,000,000 of our common stock. Upon the execution of the Purchase Agreement, we issued 2,275,086 Commitment Shares to Lincoln Park as a fee for its commitment to purchase shares of our common stock under the Purchase Agreement, and immediately following execution of the Purchase Agreement, Lincoln Park purchased 1,666,666 shares of our Common Stock (the “Initial Purchase Shares”).  The remaining shares of our common stock that may be issued under the Purchase Agreement may be sold by us to Lincoln Park at our discretion from time to time over a 36-month period commencing after the satisfaction of certain conditions set forth in the Purchase Agreement, including that the SEC has declared effective the registration statement that includes this prospectus. The purchase price for the shares that we may sell to Lincoln Park under the Purchase Agreement will fluctuate based on the price of our common stock. Depending on market liquidity at the time, sales of such shares may cause the trading price of our common stock to fall.
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We generally have the right to control the timing and amount of any future sales of our shares to Lincoln Park.  Additional sales of our common stock, if any, to Lincoln Park will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to Lincoln Park all, some or none of the additional shares of our common stock that may be available for us to sell pursuant to the Purchase Agreement.  If and when we do sell shares to Lincoln Park, after Lincoln Park has acquired the shares, Lincoln Park may resell all, some or none of those shares at any time or from time to time in its discretion. Therefore, sales to Lincoln Park by us could result in substantial dilution to the interests of other holders of our common stock. Additionally, the sale of a substantial number of shares of our common stock to Lincoln Park, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

If we sell shares of our common stock in future financings, stockholders may experience immediate dilution and, as a result, our stock price may decline.

We may from time to time issue additional shares of common stock at a discount from the current market price of our common stock. As a result, our stockholders would experience immediate dilution upon the purchase of any shares of our common stock sold at such discount. In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or common stock. If we issue common stock or securities convertible into common stock, our common stockholders would experience additional dilution and, as a result, our stock price may decline.

We will have broad discretion in how we use the net proceeds of this offering. We may not use these proceeds effectively, which could affect our results of operations and cause our stock price to decline.

We will have considerable discretion in the application of the net proceeds of this offering, including for any of the purposes described in the section entitled “Use of Proceeds.” We intend to use the net proceeds from this offering to fund clinical development of our product candidates and working capital and other general corporate purposes. As a result, investors will be relying upon management’s judgment with only limited information about our specific intentions for the use of the balance of the net proceeds of this offering. We may use the net proceeds for purposes that do not yield a significant return or any return at all for our stockholders. In addition, pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

An active trading market for our common stock may not be sustained.

Although our 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 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.

The market price for our common stock may be volatile, and an investment in our common stock could decline in value.

The stock market in general has experienced extreme price and volume fluctuations. The market prices of the securities of biotechnology and specialty pharmaceutical companies, particularly companies like ours without product revenues and earnings, have been highly volatile and may continue to be highly volatile in the future. This volatility has often been unrelated to the operating performance of particular companies. The following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of our common stock:
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-
announcements of technological innovations or new products by us or our competitors;
   
-
developments or disputes concerning patents or proprietary rights, including announcements of infringement, interference or other litigation against us or our potential licensees;
   
-
developments involving our efforts to commercialize our products, including developments impacting the timing of commercialization;
   
-
actual or anticipated fluctuations in our operating results;
   
-
changes in financial estimates or recommendations by securities analysts;
   
-
developments involving corporate collaborators, if any;
   
-
changes in accounting principles; and
   
-
the loss of any of our key management personnel.

In the past, securities class action litigation has often been brought against companies that experience volatility in the market price of their securities. Whether or not meritorious, litigation brought against us could result in substantial costs and a diversion of management’s attention and resources, which could adversely affect our business, operating results and financial condition.

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 common stock, which is uncertain and unpredictable. There is no guarantee that our 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:

-
our lack of revenues, history of operating losses, bankruptcy, limited cash reserves and ability to draw on our Purchase Agreement with Lincoln Park or obtain other capital to develop and implement our business strategies and grow our business, and continue as a going concern;
   
-
our ability to execute our strategy and business plan regarding growth, acquisitions, and focusing on our strategy of Drivers, Stabilizers, and Facilitators;
   
-
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;
   
-
our ability to timely source adequate supply of our development products from third-party manufacturers on which we depend;
   
-
the potential, if any, for future development of any of our present or future products;
   
-
our ability to identify and develop additional uses for our products;
   
-
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 undertake no obligation 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.

DETERMINATION OF MARKET PRICE

The selling stockholder will determine at what price it may sell the offered shares, and such sales may be made at prevailing market prices or at privately negotiated prices. See “Plan of Distribution” for more information.

USE OF PROCEEDS

This prospectus relates to shares of our common stock that may be offered and sold from time to time by Lincoln Park. We will receive no proceeds from the sale of shares of common stock by Lincoln Park in this offering.

We may receive up to $10,000,000 in aggregate gross proceeds under the Purchase Agreement from any sales we make to Lincoln Park pursuant to the Purchase Agreement after the date of this prospectus. We estimate that the net proceeds to us from the sale of our common stock to Lincoln Park pursuant to the Purchase Agreement will be up to approximately $9,500,000 over an approximately 36-month period, assuming that we sell the full amount of our common stock that we have the right, but not the obligation, to sell to Lincoln Park under the Purchase Agreement, and after other estimated fees and expenses. See “Plan of Distribution” elsewhere in this prospectus for more information.

We currently intend to use the estimated net proceeds we receive under the Purchase Agreement in the following order of priority: (i) Paying off liabilities incurred in connection with business acquisitions through the date of this Prospectus; (ii) Paying off long-term liabilities; (iii) payment of other acquisition expenses; and (iv) for general working capital and general corporate purposes.

Our management will have significant discretion and flexibility in applying the net proceeds from the Purchase Agreement. Pending the application of the net proceeds, as described above, we intend to invest the net proceeds in high-quality, short-term, interest-bearing securities.
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DIVIDEND POLICY

As of the date of this Prospectus, we had never declared or paid a cash dividend. Our Board of Directors may elect to declare and pay a cash dividend in the future.  As of the date of this Prospectus, we had declared and issued a dividend of shares of our Class C Common Stock to the holders of our Class A Common Stock.  Our Board of Directors may elect to declare and pay other similar dividends in the future.

LINCOLN PARK TRANSACTION
General

On January 16, 2020, we entered into the Purchase Agreement and the Registration Rights Agreement with Lincoln Park. Pursuant to the terms of the Purchase Agreement, Lincoln Park has agreed to purchase from us up to $10,000,000 of our Class A common stock (subject to certain limitations) from time to time during the term of the Purchase Agreement. Pursuant to the terms of the Registration Rights Agreement, we have filed with the SEC the registration statement that includes this prospectus to register for resale under the Securities Act the shares that have been or may be issued to Lincoln Park under the Purchase Agreement.

Pursuant to the terms of the Purchase Agreement, at the time we signed the Purchase Agreement and the Registration Rights Agreement, we issued 2,275,086 Commitment Shares to Lincoln Park as consideration for its commitment to purchase shares of our common stock under the Purchase Agreement.  Additionally, immediately following the execution of the Purchase Agreement and Registration Rights Agreement, Lincoln Park purchased 1,666,666 shares of our common stock (the “Initial Purchase Shares”) at a per share price of $0.15.

We do not have the right to commence any sales to Lincoln Park under the Purchase Agreement until certain conditions set forth in the Purchase Agreement, all of which are outside of Lincoln Park’s control, have been satisfied, including the registration statement that includes this prospectus being declared effective by the SEC, which we refer to as the Commencement. Thereafter, we have the right, but not the obligation, to direct Lincoln Park to purchase up to 1,000,000 Purchase Shares on any single business day from and after the Commencement, which amount may be increased up to 1,250,000 shares, 1,500,000 shares, or 1,750,000 shares, depending on the market price of our common stock at the time of sale, subject to a maximum of [$1,000,000] per purchase.

In addition, upon notice to Lincoln Park, we may, from time to time and at our sole discretion, direct Lincoln Park to purchase additional shares of our common stock in “accelerated purchases,” “additional accelerated purchases” and/or “additional purchases” as set forth in the Purchase Agreement. The purchase price per share is based on the market price of our common stock at the time of sale as computed under the Purchase Agreement. Lincoln Park may not assign or transfer its rights and obligations under the Purchase Agreement.

The Purchase Agreement prohibits us from directing Lincoln Park to purchase any shares of common stock if those shares, when aggregated with all other shares of our common stock then beneficially owned by Lincoln Park, would result in Lincoln Park and its affiliates exceeding the Beneficial Ownership Cap.

Purchase of Shares Under the Purchase Agreement

Regular Purchases

Under the Purchase Agreement, on any business day selected by us, we may direct Lincoln Park to purchase up to 1,000,000 shares of our Class A common stock, which we refer to as the Regular Purchase Share Limit, on such business day (the “Purchase Date”) in a regular purchase (a “Regular Purchase”), provided, however, that (i) the Regular Purchase Share Limit may be increased to up to 1,250,000 shares, provided that the closing sale price is not below $0.30 on the applicable Purchase Date, (ii) the Regular Purchase Share Limit may be increased to up to 1,500,000 shares, provided that the closing sale price is not below $0.40 on the applicable purchase date, and (iii) the Regular Purchase Share Limit may be increased to up to 1,750,000 shares, provided that the closing sale price is not below $0.50 on the applicable Purchase Date. In each case, the maximum amount of any single Regular Purchase may not exceed $1,000,000 per purchase. The Regular Purchase Share Limit is subject to proportionate adjustment in the event of a reorganization, recapitalization, non-cash dividend, stock split or other similar transaction; provided, that if after giving effect to such full proportionate adjustment, the adjusted Regular Purchase Share Limit would preclude us from requiring Lincoln Park to purchase common stock at an aggregate purchase price equal to or greater than $150,000 in any single Regular Purchase, then the Regular Purchase Share Limit will not be fully adjusted, but rather the Regular Purchase Share Limit for such Regular Purchase shall be adjusted as specified in the Purchase Agreement, such that, after giving effect to such adjustment, the Regular Purchase Share Limit will be equal to (or as close as can be derived from such adjustment without exceeding) $1,000,000.
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The purchase price per share for each such Regular Purchase will be equal to 95% of the lower of:

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the lowest sale price for our common stock on the purchase date of such shares; and
   
-
the arithmetic average of the three lowest closing sale prices for our common stock during the 12 consecutive business days ending on the business day immediately preceding the purchase date of such shares.

Accelerated Purchases

On any Purchase Date on which the last closing trade price of the Company’s common stock is not below $0.05 per share and the Company has directed Lincoln Park to purchase the full Regular Share Purchase Limit, the Company also has the right, in its sole discretion, to direct Lincoln Park to purchase an amount of stock (an “Accelerated Purchase”) equal to up to the lesser of (i) two times the number of shares purchased pursuant to such Regular Purchase; and (ii) 30% of the aggregate shares of the Company’s common stock traded during all or, if certain trading volume or market price thresholds specified in the Purchase Agreement are crossed on the business day immediately following the Purchase Date (the “Accelerated Purchase Date). The purchase price per share for each such Accelerated Purchase will be equal to 93% of the lesser of:
 
-
the volume weighted average price of the Company’s common stock during the applicable period on the applicable Accelerated Purchase Date; and
   
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the closing sale price of the Company’s common stock on the applicable Accelerated Purchase Date.

In addition, the Company may also direct Lincoln Park on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased thereunder have been properly delivered to Lincoln Park in accordance with the Purchase Agreement, to purchase an amount of stock (the “Additional Accelerated Purchase”) equal to up to the lesser of (i) two times the number of shares purchased pursuant to the corresponding Regular Purchase; and (ii) 30% of the aggregate number of shares of the Company’s common stock traded during a certain portion of the normal trading hours on the applicable Accelerated Purchase date as determined in accordance with the Purchase Agreement (such period of time on the applicable Accelerated Purchase date, the “Additional Accelerated Purchase Measurement Period”). Additional Accelerated Purchases will be equal to 93% of the lesser of:
 
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the volume weighted average price of the Company’s common stock during the applicable Additional Accelerated Purchase Measurement Period on the applicable Accelerated Purchase date; and
   
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the closing sale price of the Company’s common stock on the applicable Accelerated Purchase date.

In the case of the Accelerated and Additional Accelerated Purchases, the purchase price per share will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during the business days used to compute the purchase price.

Other than as described above, there are no trading volume requirements or restrictions under the Purchase Agreement, and we will control the timing and amount of any sales of our common stock to Lincoln Park.

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Events of Default

Events of default under the Purchase Agreement include the following:

-
the effectiveness of the registration statement of which this prospectus forms a part lapses for any reason (including, without limitation, the issuance of a stop order), or any required prospectus supplement and accompanying prospectus are unavailable for the resale by Lincoln Park of our common stock offered hereby, and such lapse or unavailability continues for a period of 10 consecutive business days or for more than an aggregate of 30 business days in any 365-day period;
   
-
suspension by our principal market of our common stock from trading for a period of one business day;
   
-
the de-listing of our common stock from the OTCQB Exchange, our principal market, provided our common stock is not immediately thereafter trading on the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the NYSE American, the NYSE Arca, the OTC Bulletin Board or the OTCQX (or nationally recognized successor thereto);
   
-
the failure of our transfer agent to issue to Lincoln Park shares of our common stock within three business days after the applicable date on which Lincoln Park is entitled to receive such shares;
   
-
any breach of the representations or warranties or covenants contained in the Purchase Agreement or Registration Rights Agreement that has or could have a material adverse effect on us and, in the case of a breach of a covenant that is reasonably curable, that is not cured within five business days;
   
-
any voluntary or involuntary participation or threatened participation in insolvency or bankruptcy proceedings by or against us; or
   
-
if at any time we are not eligible to transfer our common stock electronically.

Lincoln Park does not have the right to terminate the Purchase Agreement upon any of the events of default set forth above. During an event of default, all of which are outside of Lincoln Park’s control, we may not direct Lincoln Park to purchase any shares of our common stock under the Purchase Agreement.

Our Termination Rights

We have the unconditional right, at any time, for any reason and without any payment or liability to us, to give notice to Lincoln Park to terminate the Purchase Agreement. In the event of bankruptcy proceedings by or against us, the Purchase Agreement will automatically terminate without action of any party.

No Short-Selling or Hedging by Lincoln Park

Lincoln Park has agreed that neither it nor any of its affiliates shall engage in any direct or indirect short-selling or hedging of our common stock during any time prior to the termination of the Purchase Agreement.

Prohibitions on Variable Rate Transactions

There are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement or Registration Rights Agreement other than a prohibition on entering into a “Variable Rate Transaction,” as defined in the Purchase Agreement.

Effect of Performance of the Purchase Agreement on Our Stockholders

All 14,000,000 shares registered in this offering which have been or may be issued or sold by us to Lincoln Park under the Purchase Agreement are expected to be freely tradable. It is anticipated that shares registered in this offering will be sold over a period of up to 36 months commencing on the date that the registration statement including this prospectus becomes effective and other conditions set forth in the Purchase Agreement are met. The sale by Lincoln Park of a significant amount of shares registered in this offering at any given time could cause the market price of our common stock to decline and to be highly volatile. Sales of our common stock to Lincoln Park, if any, will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to Lincoln Park all, some or none of the additional shares of our common stock that may be available for us to sell pursuant to the Purchase Agreement. If and when we do sell shares to Lincoln Park, after Lincoln Park has acquired the shares, Lincoln Park may resell all, some or none of those shares at any time or from time to time in its discretion. Therefore, sales to Lincoln Park by us under the Purchase Agreement may result in substantial dilution to the interests of other holders of our common stock. In addition, if we sell a substantial number of shares to Lincoln Park under the Purchase Agreement, or if investors expect that we will do so, the actual sales of shares or the mere existence of our arrangement with Lincoln Park may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales. However, we have the right to control the timing and amount of any additional sales of our shares to Lincoln Park and the Purchase Agreement may be terminated by us at any time at our discretion without any cost to us.
20

Pursuant to the terms of the Purchase Agreement, we have the right, but not the obligation, to direct Lincoln Park to purchase up to $10,000,000 of our common stock, exclusive of the 2,275,086 Commitment Shares issued to Lincoln Park on the date of the Purchase Agreement and the 1,666,666 Initial Purchase Shares. Depending on the price per share at which we sell our common stock to Lincoln Park pursuant to the Purchase Agreement, we may need to sell to Lincoln Park under the Purchase Agreement more shares of our common stock than are offered under this prospectus in order to receive aggregate gross proceeds equal to the $10,000,000 total commitment available to us under the Purchase Agreement. If we choose to do so, we must first register for resale under the Securities Act such additional shares of our common stock, which could cause additional substantial dilution to our stockholders. The number of shares ultimately offered for resale by Lincoln Park under this prospectus is dependent upon the number of shares we direct Lincoln Park to purchase under the Purchase Agreement. The Purchase Agreement prohibits us from issuing or selling to Lincoln Park under the Purchase Agreement any shares of our common stock if those shares, when aggregated with all other shares of our common stock then beneficially owned by Lincoln Park, would exceed the Beneficial Ownership Cap.

The following table sets forth the amount of gross proceeds we would receive from Lincoln Park from our sale of shares to Lincoln Park under the Purchase Agreement at varying purchase prices:

Assumed Average
Purchase Price
Per Share
   
Number of
Registered
Shares to be
Issued if Full
Purchase (1)
   
Percentage of
Outstanding Shares
After Giving Effect to
the Issuance to
Lincoln Park (2)
   
Gross Proceeds
from the Sale of
Shares to Lincoln
Park Under the
Purchase Agreement
 
$
0.0500
     
10,058,248
     
8.33
%
 
$
502,912.40
 
$
0.0756
     
10,058,248
     
8.33
%
 
$
760,403.55
 
$
0.25
     
10,058,248
     
8.33
%
 
$
2,514,562.00
 
$
0.50
     
10,058,248
     
8.33
%
 
$
5,029,124.00
 
$
0.75
     
10,058,248
     
8.33
%
 
$
7,543,686.00
 
$
1.00
     
9,750,000
     
8.10
%
 
$
9,750,000.00
 

(1)
Although the Purchase Agreement provides that we may sell up to $10,000,000 of our common stock to Lincoln Park, we are only registering 14,000,000 shares under this prospectus which represents: (i) 2,275,086 Commitment Shares and the 1,666,666 Initial Purchase Shares that we already issued to Lincoln Park as consideration for making the commitment under the Purchase Agreement, and (ii) an additional 10,058,248 shares which may be issued to Lincoln Park in the future under the Purchase Agreement, if and when we sell shares to Lincoln Park under the Purchase Agreement, and which may or may not cover all the shares we ultimately sell to Lincoln Park under the Purchase Agreement, depending on the purchase price per share. As a result, we have included in this column only those shares that we are registering in this offering.
   
(2)
The denominator is based on 110,677,860 shares outstanding as of February 10, 2020, (which includes the 2,275,086 Commitment Shares and the 1,666,666 Initial Purchase Shares previously issued to Lincoln Park upon the execution of the Purchase Agreement), as adjusted to include the issuance of the number of shares set forth in the adjacent column which we would have sold to Lincoln Park, assuming the purchase price in the adjacent column. The numerator is based on the number of shares issuable under the Purchase Agreement at the corresponding assumed purchase price set forth in the adjacent column.
   
(3)
The closing sale price of our common stock on February 10, 2020.

DILUTION

The sale of our common stock to Lincoln Park pursuant to the Purchase Agreement will have a dilutive impact on our stockholders. In addition, the lower our stock price is at the time we exercise our right to sell shares to Lincoln Park, the more shares of our common stock we will issue to raise our desired amount of proceeds from the sale, and the greater the dilution to our existing stockholders.

The net tangible book value of our company as of September 30, 2019 was $(16,265,701) or approximately $(0.15) per share of common stock. Net tangible book value per share is determined by dividing the net tangible book value of our company (total tangible assets less total liabilities) by the number of outstanding shares of our common stock as of September 30, 2019.
21

After giving effect to the sale of 14,000,000 shares of common stock to Lincoln Park pursuant to the Purchase Agreement and assuming gross proceeds of approximately $1,010,404 from the sale of shares to Lincoln Park pursuant to the Purchase Agreement (based on the closing price of our common stock on February 10, 2020), our adjusted net tangible book value as of September 30, 2019 would have been $(15,255,297) or approximately $(0.11) per share. This represents an immediate increase in net tangible book value of approximately $0.04 per share to existing stockholders.

The hypothetical dilution calculation shown above is based on 131,228,111 shares of Class A, Class B, and Class C common stock issued and outstanding as of February 10, 2020, and excludes:

779,000 shares of common stock issuable upon exercise of stock options outstanding at a weighted-average exercise price of $.055 per share;
   
75,000 shares of common stock issuable upon exercise of warrants outstanding at a weighted-average exercise price of $4.25 per share;
   
6,566,667 shares of Class A common stock issuable upon conversion of $985,000 convertible debt outstanding at a conversion price of $0.15 per share; and
   
2,000,000 shares of our Class A common stock reserved for future issuance under our 2016 Stock Option and Stock Award Plan.

To the extent that outstanding options or warrants outstanding have been or may be exercised or other shares are issued upon conversion of outstanding convertible notes, investors purchasing our common stock in this offering may experience further dilution. In addition, we expect to raise additional capital to fund our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.
 
Market Price of Our Common Stock and Related Stockholder Matters

Our common stock trades on the OTCQB Market under the symbol “ALPP.” The following table sets forth the range of high and low sales prices per share of our common stock during the periods shown.

 
2020
 
2019
 
2018
 
 
High
 
Low
 
High
 
Low
 
High
 
Low
 
                         
First Quarter
 
$
0.21
   
$
0.074
   
$
0.06
   
$
0.02
   
$
0.34
   
$
0.112
 
Second Quarter
                 
$
0.091
   
$
0.006
   
$
0.19
   
$
0.050
 
Third Quarter
                 
$
0.037
   
$
0.008
   
$
0.18
   
$
0.06
 
Fourth Quarter
                 
$
0.44
   
$
0.013
   
$
0.115
   
$
0.05
 

PLEASE NOTE: Trading in the Company’s Class A common stock is limited, and as such, relatively small sales may have a disproportionately large impact on the trading price. The prices shown in the table above reflect the price fluctuations resulting from relatively low volume of trades.

Holders

As of February 10, 2020, we had 389 registered holders of record of our Class A common stock. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held through banks, brokers, other financial institutions and registered clearing agencies.
22

BUSINESS

Background

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, we were a holding company that owned six operating subsidiaries: ALTIA, LLC; Quality Circuit Assembly, Inc.; American Precision Fabricators, Inc.; Morris Sheet Metal, Corp; JTD Spiral, Inc.; and Deluxe Sheet Metal, Inc. (As discussed in more detail in our public filings, we previously had an additional subsidiary, Venture West Energy Services (formerly Horizon Well Testing, LLC). However, as of December 31, 2018, we discontinued operations on Venture West.)

Business Strategy

What We Do:

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, 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. 

When these categories are blended into a longer-term view of the business landscape, the value-driving force that makes this a truly purposeful and powerful business model becomes apparent.  As stated earlier, we believe that our greatest competitive advantage is our highly diversified business structure combined with a collaborative business culture, that helps drive out competition in our markets by bringing; resources, planning, technology and capacity that we feel that our competitors simply do not have.  The DSF model reshapes the environment each subsidiary operates in by sharing and exploiting the resources each company has, thus giving them a competitive advantage over their industry peers.  
23


How We Do It:

Optimization vs. Asset Producing 

The process to purchase a perspective company can be long and arduous.  During our due diligence period, we attempt to validate and determine three major points, not just the historical record of the company we are buying.  Those three major points are what we call “The What is,” “The What Should Be,” and “The What Will Be.”  

“The What Is” (TWI).  TWI is the defining point of where a company is holistically in a myriad of metrics, including Sales, Finance, Ease of Operations, Ownership, and Customer Relations. Subsequently, this is usually the point where most acquirers stop in their due diligence.  We look to define this position not just from a numbers standpoint, but also to determine how this perspective maps out to a larger picture of culture and business environment.
   
“The What Should Be” (TWSB).  TWSB is the validation point of inflection where we use many data inputs to assess and determine whether TWI is out of the norm with competitors, and whether that data shows the potential for improvement.
   
“The What Will Be” (TWWB).  TWWB is how we seek to identify the net results or what we call Kinetic Profit (KP) between the TWI and TWSB.  The keywords are Kinetic Profit.  KP is the profit waiting to be achieved by some form of action or as we call it, the Optimization Phase of acquiring a new company.

Optimization:  During the Optimization Phase, we seek to root up employees with in-depth training on various topics.  Usually, these training sessions include Profit and Expense Control, Production Planning, Breakeven Analysis, and Profit Engineering.  However, the end game is to guide these companies to become net profitable with the new debt burden placed on them post-acquisition; mitigate the loss of sales due to acquisition attrition (we typically plan on 10% of our customers leaving simply due to old ownership not being involved in the company any longer); potential replacement of employees that no longer wish to be employed post-acquisition; and other ancillary issues that may arise.  The Optimization Phase usually takes 12-18 months post-acquisition, and a company can fall back into Optimization if it is stagnant or regresses in its training.  

Asset Producing:  Asset Producing is the ideal point where we want our subsidiaries to be.  To become Asset Producing, subsidiary management must have completed prescribed training formats, proven they understand the key performance indicators (KPIs) that run their respective departments, and finally, the subsidiaries they manage must have posted a net profit for three consecutive months.

Diversification

It is our goal to help drive Alpine 4 into a leading, multi-faceted holding company with diverse products and services that not only benefit from one another as 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.   Alpine 4 has been set up with a holding company model, with Presidents who will run each subsidiary business, and Managers with specific industry related experience who, along with Kent Wilson, the CEO of Alpine 4, will help guide our portfolio of companies as needed.  Alpine 4 will work with our Presidents and Managers to ensure that our core principles of Synergy, Innovation, Drive, Excellence are implemented and internalized.  Further, we plan to work with our subsidiaries and capital partners to provide the proper capital allocation and to work to make sure each business is executing at high levels. 
24

In 2016, we saw the beginning of our plan for diversification take hold with the acquisition of Quality Circuit Assembly, Inc. (“QCA”), when Alpine 4 acquired 100% of QCA’s stock effective April 1, 2016.  Additional information relating to our acquisition of QCA can be found in our Current Report on Form 8-K, filed with the SEC on March 15, 2016.

In October 2016, we formed a new Limited Liability Company called ALTIA (Automotive Logic & Technology In Action) to create an independent subsidiary for Alpine 4’s 6th Sense Auto product and its BrakeActive product.

Effective, January 1, 2017, we acquired 100% of Venture West Energy Services (“VWES”) (formerly Horizon Well Testing, LLC). Additional information about the acquisition of VWES can be found below under “Recent Developments” and in our Current Reports on Form 8-K filed with the SEC on December 8, 2016, and January 13, 2017.  Due to many different circumstances but primarily from the effects of the theft event that occurred in April 2017 on December 31, 2018, we discontinued operations on this company and will begin the liquidation of the VWES assets.  In February 2019, VWES filed for Chapter 7 bankruptcy.  As of March 31, 2019, VWES’ bankruptcy was completed.

In April 2018, we acquired 100% of American Precision Fabricators (APF) Additional information relating to our acquisition of APF can be found in our Current Report on Form 8-K, filed with the SEC on April 10, 2018.

Effective January 1, 2019, we purchased Morris Sheet Metal Corp., an Indiana corporation, JTD Spiral, Inc. a wholly owned subsidiary of MSM, an Indiana corporation, Morris Enterprises LLC, an Indiana limited liability company and Morris Transportation LLC, an Indiana limited liability company (collectively “Morris”).

And on November 6, 2019, we completed our acquisition of Deluxe Sheet Metal, Inc., an Indiana corporation (“DSMI”), DSM Holding, LLC, an Indiana limited liability company (“DHL”), and Lonewolf Enterprises, LLC, an Indiana limited liability company (“LWE,” and collectively with DSMI and DHL, “DSM”).

At the core of our business strategy is our focus on scalable corporate platform solutions.  We have built a strong portfolio of manufacturing, software, and energy driven businesses with a focus on long-term value creation.

Subsidiaries & Product Groups

As of the date of the filing of this Prospectus, we had the following subsidiaries and product groups:

ALTIA, LLC is an automotive technology company with several core product offerings.
     

 o
6th Sense Auto is a connected car technology that provides a distinctive and powerful advantage to management, sales, finance and service departments at automotive dealerships in order to increase productivity, profitability and customer retention.   6thSenseAuto uses disruptive technology to improve inventory management, reduce costs, increase sales, and enhance service.
     

 o
BrakeActive™ is a safety device that can improve a vehicle’s third brake light’s ability to greatly reduce or prevent a rear end collision by as much as 40%. According to a National Highway Traffic Safety Administration report issued in 2010, rear end collisions could be reduced by 90% if trailing vehicles had one additional second to react. The Company’s new programmable technology and device aims to provide this additional reaction time to trailing vehicles.
     
Quality Circuit Assembly (“QCA”) - Since 1988, QCA has been providing electronic contract manufacturing solutions delivered to its customers via strategic business partnerships. Our abilities encompass a wide variety of skills, beginning with prototype development and culminating in the ongoing manufacturing of a complete product or assembly. Turnkey solutions are tailored around each customer's specific requirements.  Conveniently located in San Jose, California, with close proximity to San Jose airport and all major carriers, QCA’s primary aim is to provide contract-manufacturing solutions to market leading companies within the industrial, scientific, instrumentation, military, medical and green industries.
     
American Precision Fabricators (“APF”) – Based in Fort Smith, Arkansas, APF is a sheet metal fabricator that provides American made fabricated metal parts, assemblies and sub-assemblies to Original Equipment Manufacturers (“OEM”). The Company supplies several industries with fabricated parts that it creates in-house.  It offers several production capabilities with its state-of-the-art machinery.
     
Morris Sheet Metal (“MSM”) – Based in Fort Wayne, Indiana, MSM is a commercial sheet metal contractor and fabricator. MSM designs, fabricates, and installs dust collectors, commercial ductwork, kitchen hoods, industrial ventilation systems, machine guards, architectural work, water furnaces, and much more.
     
JTD Spiral (“JTD”) -  Based in Fort Wayne, Indiana, JTD is a sister company to MSM and provides specialized spiral duct work to MSM clientele.
     
Deluxe Sheet Metal (“DSM”) –  DSM is a company that has been in business for over 45 years, specializing in all aspects of Commercial and Industrial Sheet Metal installations. Servicing top research institutions like the University of Norte Dame and large companies like GE, DSM is the go-to company for complex thermal and HVAC design in their region.
25

Employees

As of the date of this Prospectus, we had 240 full-time employees. We believe that our relationship with our employees is good. Other than as disclosed in this Prospectus or previously filed with the SEC, we have no employment agreements with our employees.

PROPERTIES

Alpine 4 Technologies, Ltd maintains our corporate office in rented offices at 2525 E Arizona Biltmore Cir, Suite 237, Phoenix, Arizona 85016. The monthly rent obligation is approximately $5,100 per month.

Quality Circuit Assembly, Inc. rents a location at 1709 Junction Court #380 San Jose, California 95112.  The monthly rent obligation is approximately $27,500 per month.

American Precision Fabricators, rents a property 4401 Savannah St. Fort Smith, Arkansas 72903 for $15,833 per month.

Deluxe Sheet Metal rents space at 6661 Lonewolf Dr, South Bend, Indiana 46628. The rent obligation is approximately $75,000 per month.

Morris Sheet Metal and JTD Spiral rent office and fabrication space at 6212 Highview Dr, Fort Wayne, Indiana 46818. The monthly rent obligation is approximately $26,000.

LEGAL PROCEEDINGS.

Kevin Cannon et al. v. Alpine 4 Technologies Ltd., Jeff Hail, et al, Arizona Superior Court, Maricopa County, Cas No. CV2017-055699.  On October 4, 2017, Kevin Cannon and Michelle Hanby, individually and on behalf of It’s a Date LLC and Brake Plus NWA, Inc., filed a lawsuit in the Arizona Superior Court, Maricopa County, against the Company and several other defendants, including Jeff Hail, the Company’s Sr. Vice President. The claim against the Company alleged tortious interference of contract by the Company. The Company brought a motion to dismiss the Complaint for failure to state a claim on which relief could be granted. The Court permitted the plaintiffs to amend their complaint, which they did. The Company has filed another motion dismiss the Complaint for failure to state a claim on which relief could be granted. Following negotiations with the plaintiffs, the Company and the plaintiffs moved for dismissal of the Company. On January 28, 2019, the court dismissed all claims against the Company with prejudice.

Venture West Bankruptcy Proceedings

In February 2019, Venture West Energy Services (“VWES”) (formerly Horizon Well Testing, LLC) filed for bankruptcy protection under Chapter 7 of the bankruptcy laws.  As of March 31, 2019, VWES’s bankruptcy was completed.
26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

There are statements in this Prospectus that are not historical facts. These "forward-looking statements" can be identified by use of terminology such as "believe," "hope," "may," "anticipate," "should," "intend," "plan," "will," "expect," "estimate," "project," "positioned," "strategy" and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should read this entire Report carefully, especially the risks discussed under "Risk Factors." Although management believes that the assumptions underlying the forward looking statements included in this Prospectus are reasonable, they do not guarantee our future performance, and actual results could differ from those contemplated by these forward looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In the light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Prospectus will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We expressly disclaim any obligation or intention to update or revise any forward-looking statements.

Overview and Highlights

Company Background

Alpine 4 Technologies Ltd. (the "Company") was incorporated under the laws of the State of Delaware on April 22, 2014.  Alpine 4 Technologies, Ltd (ALPP) is a publicly traded conglomerate that is acquiring businesses that fit into its 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 six operating subsidiaries: ALTIA, LLC; Quality Circuit Assembly, Inc.; American Precision Fabricators, Inc.; Morris Sheet Metal, Corp; JTD Spiral, Inc.; and Deluxe Sheet Metal. (As discussed in more detail below, we previously had an additional subsidiary, Venture West Energy Services (formerly Horizon Well Testing, LLC). However, as of December 31, 2018, we discontinued operations on this company.)

Business Strategy

Alpine 4's strategy is to provide Fortune 500-level execution strategies in its subsidiary companies and market segments to businesses and companies that have the most to benefit from this access.

Alpine 4 feels this opportunity exists in smaller middle market operating companies with revenues between $5 to $150 million.  In this target rich environment, businesses generally sell at more reasonable multiples, presenting greater opportunities for operational and strategic improvements and have greater potential for growth.   Implementation of our strategy within our holdings is accomplished by the offering of strategic and tactical MBA-level training and development, delivered via the following modules:

Alpine 4 Mini MBA program; and
   
An Alpine 4 developed ERP (Enterprise Resource Planning system) and collaboration system called SPECTRUMebos.  SPECTRUMebos is an Enterprise Business Operating System (ebos).  This system will combine the key technology software components of Accounting and Financial Reporting, an Enterprise Resource Planning System (ERP), a Document Management System (DMS), a Business Intelligence (BI) platform and a Customer Resource Management (CRM) hub which will be tethered to management reporting and collaboration toolsets. Management believes that these tools will help drive real-time information in two directions: first, to the front lines by empowering customer-facing stakeholders; and second, back to management for planning, problem solving, and integration.   Management believes that SPECTRUMebos will be the technology "secret sauce" in managing our portfolio of companies and, in time, may be offered to external customers.

27

Business Seasonality and Product Introductions

Following the acquisition of the Quality Circuit Assembly, Inc., VWES and APF, the Company expects to experience higher net sales in its third and fourth quarters compared to other quarters in its fiscal year Each company has varying seasonality to their sales and will be reflected in the financial statements.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and had accumulated a deficit of $28,520,094 as of December 31, 2018.  The Company requires capital for its contemplated operational and marketing activities.  The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.  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.

The management of Alpine 4 understands basis for including a going concern in this filing.  However, the management points out that over the past 4 years, Alpine 4 has consistently been able to operate under the current working capital environment and the going concern is nothing new or a recent event.    In order to mitigate the risk related with the going concern uncertainty, the Company has a three-fold plan to resolve these risks.  First, the acquisitions of QCA, VWES, and APF have allowed for an increased level of cash flow to the Company.  Second, the Company is considering other potential acquisition targets that, like QCA, should increase income and cash flow to the Company.  Third, the Company plans to issue additional shares of common stock for cash and services during the next 12 months and has engaged professional service firms to provide advisory services in connection with that capital raise.

Results of Operations – Year ended December 31, 2018

The following are the results of our operations for the year ended December 31, 2018 as compared to 2017.

   
Year Ended December 31,
2018
   
Year Ended December 31,
2017
   
$ Change
 
                   
Revenue
 
$
14,261,794
   
$
8,318,016
   
$
5,943,778
 
Cost of revenue
   
9,440,998
     
5,907,421
     
3,533,577
 
Gross Profit
   
4,820,796
     
2,410,595
     
2,410,201
 
                         
Operating expenses:
                       
General and administrative expenses
   
5,470,148
     
2,814,111
     
2,656,037
 
Total operating expenses
   
5,470,148
     
2,814,111
     
2,656,037
 
Loss from operations
   
(649,352
)
   
(403,516
)
   
(245,836
)
                         
Other expenses
                       
Interest expense
   
3,121,201
     
1,262,493
     
1,858,708
 
Change in value of derivative liabilities
   
(604,219
)
   
126,054
     
(730,273
)
Gain on extinguishment of debt
   
(6,305
)
   
0
     
(6,305
)
Other (income)
   
(119,737
)
   
(246,895
)
   
127,158
 
Total other expenses
   
2,390,940
     
1,141,652
     
1,249,288
 
                         
Loss before income tax
   
(3,040,292
)
   
(1,545,168
)
   
(1,495,124
)
                         
Income tax expense
   
(43,399
)
   
(258,392
)
   
214,993
 
                         
Loss from continuing operations
   
(2,996,893
)
   
(1,286,776
)
   
(1,710,117
)
                         
Discontinue operations
   
(4,911,124
)
   
(1,710,644
)
   
(3,200,480
)
                         
Net loss
 
$
(7,908,017
)
 
$
(2,997,420
)
 
$
(4,910,597
)

28

Revenue

Our revenues for the year ended December 31, 2018, increased by $5,943,778 as compared to the year ended December 31, 2017.  In 2018, the increase in revenue is related to $2,744,022 for QCA, $3,104,791 for APF which did not exist in 2017, and $94,965 relating to the 6th Sense Auto and Brake Active services of ALTIA.  The increase in revenue was driven by the continued growth of QCA through the acquisition of new customers and expanded business with existing customers, as well as the acquisition of APF.  We expect our revenue to continue to grow during the next year.

Cost of revenue

Our cost of revenue for the year ended December 31, 2018, increased by $3,533,577 as compared to the year ended December 31, 2017.  In 2018, the increase in our cost of revenue related to $1,602,387 for QCA, $2,026,716 for APF which did not exist in 2017, and $(95,526) for ALTIA services and other.  The increase in cost of revenue among all the different segments was the result of the increase in revenues.  We expect our cost of revenue to increase over the next year as our revenue increases.

Operating expenses

Our operating expenses for the year ended December 31, 2018, increased by $2,656,037 as compared to the year ended December 31, 2017.  The increase consisted primarily of an increase to general and administrative expenses of was the result of increased operating activity resulting from the acquisition of APF during the second quarter of 2018 which did not exist in 2017.

Other expenses

Other expenses for the year ended December 31, 2018, increased by $1,249,288 as compared to 2017. This increase was primarily due to an increase in interest expense due to the issuance of new convertible debentures offset by the change in the fair value of our derivative liability.

Discontinued operations

In December 2018, we decided to shut down the operations of our VWES subsidiary.  In February 2019, VWES filed for Chapter 7 bankruptcy. As of March 31, 2019, VWES’ bankruptcy was completed.

VWES has been presented as discontinued operations in the accompanying consolidated financial statements.

The operating results for VWES have been presented in the accompanying consolidated statement of operations for the years ended December 31, 2018 and 2017 as discontinued operations and are summarized below:

   
Years Ended
 
   
December 31,
   
December 31,
 
   
2018
   
2017
 
Revenue
 
$
3,040,458
   
$
1,773,474
 
Cost of revenue
   
2,974,313
     
2,288,815
 
Gross Profit
   
66,145
     
(515,341
)
Operating expenses
   
5,045,078
     
890,856
 
Loss from operations
   
(4,978,933
)
   
(1,406,197
)
Other income (expenses)
   
67,809
     
(304,447
)
Net loss
 
$
(4,911,124
)
 
$
(1,710,644
)

29

Results of Operations – Three Months Ended September 30, 2019

The following are the results of our operations for the three months ended September 30, 2019, as compared to the three months ended September 30, 2018.

   
Three Months
Ended
September 30,
2019
   
Three Months
Ended
September 30,
2018
   
$ Change
 
                   
Revenue
 
$
7,088,182
   
$
4,342,203
   
$
2,745,979
 
Cost of revenue
   
5,311,323
     
2,119,913
     
3,191,410
 
Gross Profit
   
1,776,859
     
2,222,290
     
(445,431
)
                         
Operating expenses:
                       
General and administrative expenses
   
1,739,867
     
2,387,092
     
(647,225
)
     Total operating expenses
   
1,739,867
     
2,387,092
     
(647,225
)
Income (loss) from operations
   
36,992
     
(164,802
)
   
201,794
 
                         
Other income (expenses)
                       
Interest expense
   
698,844
     
701,114
     
(2,270
)
Change in value of derivative liabilities
   
(3,389,116
)
   
1,012,743
     
(4,401,859
)
Other (income)
   
(77,918
)
   
(55,949
)
   
(21,969
)
     Total other income (expenses)
   
(2,768,190
)
   
1,657,908
     
(4,426,098
)
                         
Loss before income tax
   
2,805,182
     
(1,822,710
)
   
4,627,892
 
                         
Income tax expense
   
-
     
-
     
-
 
                         
Income (loss) from continuing operations
   
2,805,182
     
(1,822,710
)
   
4,627,892
 
                         
Discontinue operations
   
-
     
(1,051,916
)
   
1,051,916
 
                         
Net income (loss)
 
$
2,805,182
   
$
(2,874,626
)
 
$
5,679,808
 

Revenue

Our revenues for the three months ended September 30, 2019, increased by $2,745,979 as compared to the three months ended September 30, 2018.  In 2019, the increase in revenue related to, $3,820,472 for Morris (acquired in January 2019) offset by a decrease of $233,794 for APF; $183,234 relating to the 6th Sense Auto and Brake Active services of ALTIA and $657,465 for QCA.  The increase in revenue was driven by the acquisition of Morris.  We expect our revenue to continue to grow over the remainder of the year.

Cost of revenue

Our cost of revenue for the three months ended September 30, 2019, increased by $3,191,410 as compared to the three months ended September 30, 2018.  In 2019, the increase in our cost of revenue related to $3,117,797 for Morris (acquired in January 2019); $184,531 for APF and $24,562 relating to the 6th Sense Auto and Brake Active services of ALTIA; offset by a decrease of $135,480 for QCA. The increase in cost of revenue is principally the result of the increase in revenues as described above.  We expect our cost of revenue to increase over the next year as our revenue increases.
30

Operating expenses

Our operating expenses for the three months ended September 30, 2019, decreased by $647,225 as compared to the three months ended September 30, 2018.  The decrease consisted primarily a decrease in general and administrative expenses at APF offset by additional general and administrative expenses associated with the operations of Morris which were acquired in January 2019.

Other income (expenses)

Other income (expenses) for the three months ended September 30, 2019, increased by $4,426,098 as compared to 2018.  This increase was primarily due to the change in the value of the derivative liability.

Discontinued operations

In December 2018, we decided to shut down the operations of our VWES subsidiary.  In February 2019, VWES filed for Chapter 7 bankruptcy.  As of March 31, 2019, VWES’ bankruptcy was completed.

VWES has been presented as discontinued operations in the accompanying consolidated financial statements.

The operating results for VWES have been presented in the accompanying consolidated statement of operations for the three months ended September 30, 2019 and 2018 as discontinued operations and are summarized below:

   
Three Months Ended
September 30,
 
   
2019
   
2018
 
Revenue
 
$
-
   
$
452,966
 
Cost of revenue
   
-
     
369,222
 
Gross Profit
   
-
     
83,744
 
Operating expenses
   
-
     
1,169,913
 
Loss from operations
   
-
     
(1,086,169
)
Other income (expenses)
   
-
     
34,253
 
Net loss
 
$
-
   
$
(1,051,916
)

As of September 30, 2019, VWES’ bankruptcy was completed and the Company removed all the assets and liabilities of VWES resulting in a gain on the disposition of discontinued operations of $2,515,028.

The following are the results of our operations for the nine months ended September 30, 2019, as compared to the nine months ended September 30, 2018.
31

   
Nine Months
Ended
September 30,
2019
   
Nine Months
Ended
September 30,
2018
   
$ Change
 
                   
Revenue
 
$
20,690,014
   
$
10,570,032
   
$
10,119,982
 
Cost of revenue
   
15,542,194
     
6,478,090
     
9,064,104
 
Gross Profit
   
5,147,820
     
4,091,942
     
1,055,878
 
                         
Operating expenses:
                       
General and administrative expenses
   
5,509,996
     
4,255,035
     
1,254,961
 
     Total operating expenses
   
5,509,996
     
4,255,035
     
1,254,961
 
Loss from operations
   
(362,176
)
   
(163,093
)
   
(199,083
)
                         
Other expenses
                       
Interest expense
   
2,736,968
     
1,642,562
     
1,094,406
 
Change in value of derivative liabilities
   
689,369
     
766,718
     
(77,349
)
Gain on extinguishment of debt
   
-
     
(6,305
)
   
6,305
 
Other (income)
   
(206,681
)
   
(173,608
)
   
(33,073
)
     Total other expenses
   
3,219,656
     
2,229,367
     
990,289
 
                         
Loss before income tax
   
(3,581,832
)
   
(2,392,460
)
   
(1,189,372
)
                         
Income tax expense
   
-
     
-
     
-
 
                         
Loss from continuing operations
   
(3,581,832
)
   
(2,392,460
)
   
(1,189,372
)
                         
Discontinue operations
   
2,419,849
     
(1,720,538
)
   
4,140,387
 
                         
Net loss
 
$
(1,161,983
)
 
$
(4,112,998
)
 
$
2,951,015
 

Revenue

Our revenues for the nine months ended September 30, 2019, increased by $10,119,982 as compared to the nine months ended September 30, 2018.  In 2019, the increase in revenue related to, $1,763,064 for APF (acquired in April 2018), and $9,561,843 for Morris (acquired in January 2019) offset by a decrease of $405,391 relating to the 6th Sense Auto and Brake Active services of ALTIA and $799,534 for QCA.  The increase in revenue was driven by the acquisitions of APF and Morris.  We expect our revenue to continue to grow over the remainder of the year.

Cost of revenue

Our cost of revenue for the nine months ended September 30, 2019, increased by $9,064,104 as compared to the nine months ended September 30, 2018.  In 2019, the increase in our cost of revenue related to $32,158 for QCA, $1,399,133 for APF (acquired in April 2018), and $7,814,224 for Morris (acquired in January 2019) offset by a decrease of $181,411 relating to the 6th Sense Auto and Brake Active services of ALTIA. The increase in cost of revenue among all the different segments was the result of the increase in revenues as described above.  We expect our cost of revenue to increase over the next year as our revenue increases.

Operating expenses

Our operating expenses for the nine months ended September 30, 2019, increased by $1,254,961 as compared to the nine months ended September 30, 2018.  The increase consisted primarily of an increase to general and administrative expenses associated with the operations of APF and Morris which were acquired in April 2018 and January 2019, respectively.

Other expenses

Other expenses for the nine months ended September 30, 2019, increased by $990,289 as compared to 2018.  This increase was primarily due to the increase in interest expense due to the increase in outstanding debt in 2019 compared to 2018 and the amortization of debt discounts.

Discontinued operations

In December 2018, we decided to shut down the operations of our VWES subsidiary.  In February 2019, VWES filed for Chapter 7 bankruptcy.  As of March 31, 2019, VWES’ bankruptcy was completed.
32

VWES has been presented as discontinued operations in the accompanying consolidated financial statements.

The operating results for VWES have been presented in the accompanying consolidated statement of operations for the nine months ended September 30, 2019 and 2018 as discontinued operations and are summarized below:

   
Nine Months Ended
September 30,
 
   
2019
   
2018
 
Revenue
 
$
-
   
$
2,938,441
 
Cost of revenue
   
-
     
2,489,273
 
Gross Profit
   
-
     
449,168
 
Operating expenses
   
95,179
     
2,267,843
 
Loss from operations
   
(95,179
)
   
(1,818,675
)
Other income (expenses)
   
-
     
98,137
 
Net loss
 
$
(95,179
)
 
$
(1,720,538
)

As of September 30, 2019, VWES’ bankruptcy was completed and the Company removed all the assets and liabilities of VWES resulting in a gain on the disposition of discontinued operations of $2,515,028.

Liquidity and Capital Resources

We have financed our operations since inception from the sale of common stock, capital contributions from stockholders and from the issuance of notes payable and convertible notes payable.  We expect to continue to finance our operations from our current operating cash flow and by the selling shares of our common stock and or debt instruments.

Management expects to have sufficient working capital for continuing operations from either the sale of its products or through the raising of additional capital through private offerings of our securities. Additionally, the Company is monitoring additional businesses to acquire which management hopes will provide additional operating revenues to the Company.  There can be no guarantee that the planned acquisitions will close or that they will produce the anticipated revenues on the schedule anticipated by management.

The Company also may elect to seek bank financing or to engage in debt financing through a placement agent.  If the Company is unable to raise sufficient capital from operations or through sales of its securities or other means, we may need to delay implementation of our business plans.

Contractual Obligations

Our significant contractual obligations as of December 31, 2018, were as follows:

   
Payments due by Period
 
   
Less than
One Year
   
One to
Three Years
   
Three to
Five Years
   
More Than
Five Years
   
Total
 
Capital lease obligations
   
817,181
     
1,685,667
     
1,740,779
     
8,763,471
     
13,007,098
 
Operating lease obligations
   
274,118
     
573,154
     
-
     
-
     
847,272
 
Notes payable, related parties
   
132,000
     
-
     
-
     
-
     
132,000
 
Notes payable, non-related parties
   
3,645,603
     
4,450,566
     
66,875
     
-
     
8,163,044
 
Convertible notes payable
   
3,587,587
     
450,000
     
-
     
-
     
4,037,587
 
Total
   
8,456,489
     
7,159,387
     
1,807,654
     
8,763,471
     
26,187,001
 

Off-Balance Sheet Arrangements

The Company has not entered into any transactions with unconsolidated entities whereby the Company has financial guarantees, subordinated retained interests, derivative instruments, or other contingent arrangements that expose the Company to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to the Company.
33

Critical Accounting Policies and Estimates

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require that we make certain assumptions and estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses during each reporting period.  On an ongoing basis, management evaluates its estimates, including those related to collection of receivables, impairment of goodwill, contingencies, calculation of derivative liabilities and income taxes. Management bases its estimates and judgments on historical experiences and on various other factors believed to be reasonable under the circumstances. Actual results under circumstances and conditions different than those assumed could result in material differences from the estimated amounts in the financial statements. 

For a summary of our critical accounting policies, refer to Note 2 of our consolidated financial statements included under Item 8 – Financial Statements in this Prospectus.

MANAGEMENT

As of the date of this Prospectus, the officers and directors of Alpine 4 were the following:

Name
Age
Officer/Position
Board Member/Position
Kent B. Wilson
46
President, Chief Executive Officer
Director
Charles Winters
41
N/A
Chairman of the Board
Scott Edwards
63
N/A
Director
Ian Kantrowitz
37
N/A
Director
Jeffrey Hail
56
Sr. Vice President
 

Biographical Information for Kent B. Wilson

Mr. Wilson serves as the Chief Executive Officer and Secretary for the Company. Previously, he has raised approximately two million dollars via seed capital and private placement funds to start Crystal Technology Holdings, Ltd./NextSure, LLC.  This company successfully designed, built, and brought two products to market, including an internet-based insurance rating engine that allowed prospective buyers to rate and buy their auto insurance online via a virtual insurance agent.  Since 2002 Mr. Wilson has been actively involved with all facets of corporate financial and operational planning and has held the title of CFO and CEO for several different companies.  Mr. Wilson has also consulted for various finance departments of publicly traded companies such as JDA Software and Switch & Data, Inc. to help them identify and develop best SOX and GAAP practices and procedures. In 2011, Mr. Wilson took over as CFO of United Petroleum Company and helped guide them from a small startup with less than $1 million in revenue to a company with $20 million in revenue and a growth path for 2013 and 2014.Mr. Wilson holds a BA degree in Management and holds an MBA from Northcentral University.​

On August 21, 2014, Mr. Wilson formed a corporation, WBK 1 Inc., a Delaware corporation.  On September 17, 2014, WBK 1 Inc. filed a Form 10 with the U.S. Securities and Exchange Commission.  WBK 1 Inc. is a "shell company" as defined in the rules of the SEC.  Mr. Wilson was the Chief Executive Officer, Secretary, Treasurer and Director of WBK 1 Inc. from its inception through December 28, 2014, when he sold all of his ownership in WBK 1 to an unrelated third party.  WBK 1 disclosed the change in ownership in a Current Report filed with the Commission on December 29, 2014.  There is no relationship between Alpine 4 and WBK 1 Inc.

Biographical Information for Charles Winters

Mr. Winters is an automotive executive with over 10 years of automotive dealership experience.  He is also a principal in several automotive dealerships and repair shops throughout the southwest.  Mr. Winters holds a Bachelor's Degree in Economics from Auburn University.

Biographical Information for Scott Edwards

Mr. Edwards is automotive sales and marketing executive with over 19 years of experience in the automotive industry.  He currently represents a large national automotive franchise distributorship and has extensive knowledge of the inner workings of the retail and wholesale automotive market.

34

Biographical Information for Ian Kantrowitz

As Director of Investor Relations, Mr. Kantrowitz is accountable for creating and presenting a consistently applied investment message to our shareholders and the investment community on behalf of Alpine 4. Furthermore, he is responsible for monitoring and presenting management with the opinions of the investment community regarding the company's performance.

Prior to joining the Alpine 4 team, Mr. Kantrowitz was a project manager for two major homebuilders in Phoenix, AZ, Continental Homes and Engle Homes.  Mr. Kantrowitz has also been actively involved in the automotive industry where his in-depth knowledge of the auto industry lends a valuable perspective to our in-house product, 6th Sense Auto. Additionally, he was a top performing banker for Wells Fargo Bank, ranked number 5 in the country.

Our bylaws authorize no fewer than one director. As of the date of this Prospectus, we had four directors.

Biographical Information for Jeff Hail

Jeff Hail is the Sr. Chief Operating Officer (COO) of Alpine 4 Technologies, Ltd. Raised and educated in Scottsdale, AZ; Mr. Hail earned his Bachelors of Science degree in Operations and Production Management from the W.P. Carey School of Business at Arizona State University.  Mr. Hail’s professional experience has been both in the government and private sector.  As a Buyer/Contract Officer with the Arizona Department of Transportation writing, awarding and administering highway services contracts.

In the private sector, Mr. Hail experienced success by starting a number different companies and building them to be the leaders in their niche sectors from both electronics manufacturing to e-commerce.  As a result, he brings a broad-based experience level with the operational aspects of running a business in today’s realm.

Term of office. Our directors are appointed for a one-year term to hold office until the next annual meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our Board and hold office until removed by the Board.

Family relationships. There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

Director or officer involvement in certain legal proceedings. To the best of our knowledge, except as described below, during the past five years, none of the following occurred with respect to a present or former director or executive officer of the Company: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

As of the date of this Prospectus, we did not have a standing audit, compensation, or nominating committee of the Board of Directors.  The Company has determined that the Board of Directors does not have an "Audit Committee Financial Expert" as that term is defined in Item 407(d)(5) of SEC Regulation S-K.

Code of Ethics

We have adopted a Code of Business Conduct that applies to all of our directors, officers and employees, including our principal executive officer and principal financial officer. The Code of Business Conduct is posted on our website at www.alpine4.com/code-of-conduct/.

Director Independence

Alpine 4 is not required by any outside organization (such as a stock exchange or trading facility) to have independent directors.
35

Summary Compensation Table

Name and Principal Position
Year
 
Salary
   
Bonus
   
Stock Awards
   
Option Awards
   
Nonequity
Incentive
Plan
Compensation
   
Deferred
Compensation
Earnings
   
All other
Compensation
   
Total
 
(a)
(b)
 
(c)
   
(d)
   
(e)
   
(f)
   
(g)
   
(h)
   
(i)
   
(j)
 
Kent B. Wilson, Chief Executive Officer (Principal Executive Officer)
2016
   
120,000
     
0
           
0
     
0
     
0
     
0
     
120,000
 
2017
   
200,000
     
0
           
0
     
0
     
0
     
0
     
200,000
 
2018
   
200,000
     
0
     
44,200
     
0
     
0
     
0
     
0
     
244,200
 
                                                                   
Jeff Hail, Chief Operating Officer
2016
   
0
     
0
             
0
     
0
     
0
     
0
     
0
 
2017
   
120,000
     
0
             
0
     
0
     
0
     
0
     
120,000
 
2018
   
120,000
     
0
     
18,200
     
0
     
0
     
0
     
0
     
138,200
 

Outstanding Equity Awards

David Schmitt, the Company’s CFO through December 31, 2017, was granted 400,000 options on April 7, 2017 with a vesting period of 4 years and an exercise price of $0.90.  The options had a fair value of $311,563 on the date of grant as calculated under ASC 718.  Of the options included in this grant, 350,000 forfeited as of December 31, 2017.  Mr. Schmitt was also granted 100,000 options on July 31, 2017 with a vesting period of 4 years and an exercise price of $0.13.  The options had a fair value of $12,850 on the date of grant as calculated under ASC 718.  Of the options included in this grant, 93,750 forfeited as of December 31, 2017.

Director Compensation

The following table sets forth the amounts paid to the Company's directors for their service as directors of the Company.  Please note: the compensation of Mr. Wilson, who is also an executive officer of the Company, is set forth above.

Name
Fees earned
or paid
in cash
 
Stock awards
 
Option awards
 
Non-equity
incentive
plan
compensation
 
Nonqualified
deferred
compensation
earnings
 
All other
compensation
 
Total
 
 
($)
 
($)
 
($)
 
($)
 
($)
 
($)
 
($)
 
(a)
(b)
 
(c)
 
(d)
 
(e)
 
(f)
 
(g)
 
(h)
 
Ian Kantrowitz
 
$
0
     
26,000
   
$
0
   
$
0
   
$
0
   
$
0
   
$
26,000
 
Kent Wilson
 
$
0
     
44,200
   
$
0
   
$
0
   
$
0
   
$
0
   
$
44,200
 
Charles Winters
 
$
0
     
26,000
   
$
0
   
$
0
   
$
0
   
$
0
   
$
26,000
 
Scott Edwards
 
$
0
     
7,800
   
$
0
   
$
0
   
$
0
   
$
0
   
$
7,800
 

Securities Authorized for Issuance under Equity Compensation Plans

 Adoption of 2016 Stock Option and Stock Award Plan

On November 10, 2016, the Company's Board of Directors adopted the Company's 2016 Stock Option and Stock Award Plan (the “Plan”).  Pursuant to the Plan, the Company may issue stock options, including incentive stock options and non-qualifying stock options, and stock grants to employees and consultants of the Company, as set forth in the Plan, a copy of which was filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2016.

The Company has reserved 2,000,000 shares of the Company's Class A common stock for issuance under the Plan.
36

Equity Compensation Plan Information

Plan category
Number of
securities to
be issued
upon exercise of outstanding
options,
warrants
and rights
 
Weighted-
average
exercise price
of outstanding
options,
warrants
and rights
 
Number of
securities
remaining
available for
future issuance under equity compensation
plans (excluding securities
reflected in column (a))
 
 
(a)
 
(b)
 
(c)
 
Equity compensation plans approved by security holders
   
1,790,000
   
$
0.19
     
210,000
 
Equity compensation plans not approved by security holders
                       
Total
   
1,790,000
   
$
0.19
     
210,000
 

BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth certain information regarding beneficial ownership of Alpine 4 Class A and Class B common stock as of February 10, 2020, (i) by each person (or group of affiliated persons) who owns beneficially more than five percent of the outstanding shares of common stock, (ii) by each director and executive officer of Alpine 4, and (iii) by all of the directors and executive officers of Alpine 4 as a group.  The percentages are based on the following figures:

110,677,860   shares of Class A common stock;
   
9,022,983 shares of Class B common stock;
   
11,527,268 shares of Class C common stock; and
   
5 shares of Series B Preferred stock.

Except as otherwise noted, the persons named in the table have sole voting and dispositive power with respect to all shares beneficially owned, subject to community property laws where applicable.

Name and Address of beneficial owner (1); Class of Securities
Title/Class of Security
Number of Shares
Beneficial
Ownership of
Shares Listed
Votes
Total Voting Power (2)
Kent B. Wilson, Chief Executive Officer,  Director(3)
CLASS A
2,001,689
1.81%
2,001,689
 
 
CLASS B
3,285,449
36.41%
32,854,490
 
 
CLASS C
790,169
6.85%
3,950,845
 
 
B Preferred
2
40.00%
206,835,224
 
Total Votes
     
245,642,248
31.67%
           
Scott Edwards, Director (4)
CLASS A
252,000
0.23%
252,000
 
 
CLASS B
350,000
3.88%
3,500,000
 
 
CLASS C
225,200
1.95%
1,126,000
 
 
B Preferred
1
20.00%
103,417,612
 
Total Votes
     
108,295,612
13.96%
           
Charles Winters, Director (5)
CLASS A
709,800
0.64%
709,800
 
 
CLASS B
1,300,000
14.41%
13,000,000
 
 
CLASS C
300,000
2.60%
1,500,000
 
 
B Preferred
1
20.00%
103,417,612
 
Total Votes
     
118,627,412
15.29%
           
Ian Kantrowitz, Director (6)
CLASS A
847,371
0.77%
1,499,429
 
 
CLASS B
1,499,429
16.62%
14,994,290
 
 
CLASS C
634,738
5.51%
3,173,690
 
 
B Preferred
1
20.00%
103,417,612
 
Total Votes
     
122,432,963
15.78%
           
Jeff Hail
Chief Operating Officer(7)
CLASS A
541,000
0.49%
541,000
 
 
CLASS B
1,124,211
12.46%
11,242,110
 
 
CLASS C
412,500
3.58%
2,062,500
 
Total Votes
     
13,845,610
1.79%
           
As a Group
CLASS A
4,351,860
3.93%
4,351,860
 
5 PEOPLE
CLASS B
7,559,089
83.78%
75,590,890
 
 
CLASS C
2,362,607
20.50%
11,813,035
 
 
B Preferred
5
100.00%
517,088,060
 
Total Votes
     
608,843,845
78.50%

37

(1)
Except as otherwise indicated, the address of the stockholder is: Alpine 4 Technologies Ltd., 2525 E Arizona Biltmore Cir, Suite 237, Phoenix AZ 85016.
   
(2)
The Voting Power column includes the effect of shares of Class B Common Stock, Class C Common Stock, and Series B Preferred Stock held by the named individuals, as indicated in the footnotes below. Each share of Class B common stock has 10 votes.  Each share of Class C Common Stock has 5 votes. Collectively, all of the shares of Series B Preferred have voting power equal to 200% of the total voting power of all other Classes or series of outstanding shares. Each Series B Preferred share has a fractional portion of that aggregate vote.  The total voting power for each person is also explained in the footnotes below.
   
(3)
Mr. Wilson owned as of the date of this Prospectus 2,001,689 shares of Class A common stock; 3,285,449 shares of Class B Common Stock; 790,169 shares of Class C Common Stock, and 2 shares of Series B Preferred Stock, which represent an aggregate of 245,642,248 votes, or approximately 31.67% of the total voting power.
   
(4)
Mr. Edwards owned as of the date of this Prospectus 252,000 shares of Class A Common Stock; 350,000 shares of Class B Common Stock; 225,200 shares of Class C Common Stock, and 1 share of Series B Preferred Stock, which represent an aggregate of 108,295,612 votes, or approximately 13.96% of the voting power.
   
(5)
Mr. Winters owned as of the date of this Prospectus 709,800 shares of Class A Common Stock; 1,300,000 shares of Class B Common Stock; 300,000 shares of Class C Common Stock, and 1 share of Series B Preferred Stock, which represent an aggregate of 118,627,412 votes, or approximately 15.29% of the voting power.
   
(6)
Mr. Kantrowitz owned as of the date of this Prospectus 847,371 shares of Class A Common Stock; 1,499,429 shares of Class B Common Stock; 634,738 shares of Class C Common Stock, and 1 share of Series B Preferred Stock, which represent an aggregate of 122,432,963 votes, or approximately 15.78% of the voting power.
   
(7)
Mr. Jeff Hail owned as of the date of this Prospectus 541,000 shares of Class A Common Stock; 1,124,211 shares of Class B Common Stock; and 412,500 shares of Class C Common Stock, which represent an aggregate of 13,845,610 votes, or approximately 1.79% of the voting power.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Party Transactions

The Company had outstanding notes payable due to related parties totaling $132,000 at December 31, 2018.

In January 2020, five officers and directors of the Company converted $603,448 owed to them as salaries and commissions into 4,022,983 shares of the Company’s Class B Common stock. The conversion price was $0.15 per share, the closing price of the Company’s Class A common stock on January 7, 2020, which was when the individuals agreed with the Company to convert the amounts owing. The Class B common stock converts one share for one share into Class A common stock, so the Class A common stock market price was used as the conversion price.

38

DESCRIPTION OF SECURITIES

Authorized Capital Stock

Our authorized capital stock consists of 160,000,000 shares of which 150,000,000 shares shall be common stock, par value $0.0001 per share, and 10,000,000 shares shall be 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.

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.
39

Class C Common

Each share of Class C common stock is convertible as follows:

-
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.
   
-
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.
   
-
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.
   
-
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.
   
-
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.
   
-
The conversion schedule and limitations above are referred to herein as the “Conversion Schedule.
   
-
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.

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:

-
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:
     

 o
Certain trusts;
     

 o
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;
     

 o
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;
     
-
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;

40

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:

-
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:
     

 o
Certain trusts;
     

 o
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;
     

 o
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;
     
-
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;

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 one series of preferred stock outstanding, our Series B Convertible Preferred Stock (the “Series B Preferred Stock”).

The terms of the Series B Preferred Stock include the following:

-
 
Number of shares: The Company designated 100 shares of Series B Preferred Stock.
     
-
 
The Stated Value of the Series B Preferred Stock is $1.00 per share.
     
-
 
No dividends will accrue.
     
-
 
Voting Rights
     

 o
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.
     

 o
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:
     

 ◾
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
     

  Divided by:
     

 ◾
the number of shares of Series B Preferred Stock issued and outstanding at the time of voting.
     
-
 
Liquidation
     

 o
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.
     
-
 
Conversion: The Series B Preferred Stock shall be convertible into shares of the Company's Class A Common Stock only as follows:
     

 o
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).
     

 o
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.

41

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.

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.
42

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.
43

 SELLING STOCKHOLDER

This prospectus relates to the possible resale by the selling stockholder, Lincoln Park, of shares of common stock that have been or may be issued to Lincoln Park pursuant to the Purchase Agreement. We are filing the registration statement of which this prospectus forms a part pursuant to the provisions of the Registration Rights Agreement, which we entered into with Lincoln Park on January 16, 2020, concurrently with our execution of the Purchase Agreement, in which we agreed to provide certain registration rights with respect to sales by Lincoln Park of the shares of our common stock that have been or may be issued to Lincoln Park under the Purchase Agreement.

Lincoln Park, as the selling stockholder, may, from time to time, offer and sell pursuant to this prospectus any or all of the shares that we have sold or may sell to Lincoln Park under the Purchase Agreement. The selling stockholder may sell some, all or none of its shares. We do not know how long the selling stockholder will hold the shares before selling them, and we currently have no agreements, arrangements or understandings with the selling stockholder regarding the sale of any of the shares.

The following table presents information regarding the selling stockholder and the shares that it may offer and sell from time to time under this prospectus. The table is prepared based on information supplied to us by the selling stockholder, and reflects its holdings as of February 10, 2020. Neither Lincoln Park nor any of its affiliates has held a position or office, or had any other material relationship, with us or any of our predecessors or affiliates. Beneficial ownership is determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 13d-3 thereunder.

Selling Stockholder
 
Shares Beneficially Owned Before this Offering
   
Percentage of Outstanding Shares Beneficially Owned Before this Offering
   
Shares to be Sold in this Offering
   
Percentage of Outstanding Shares Beneficially Owned After this Offering
 
Lincoln Park Capital Fund, LLC (1)
   
3,941,752(2
)
   
3.56
%(3)
   
14,000,000
(4)
   
*(5
)
 
_____________
* Represents less than 1%

(1)
Josh Scheinfeld and Jonathan Cope, the Managing Members of Lincoln Park Capital, LLC, are deemed to be beneficial owners of all of the shares of common stock owned by Lincoln Park Capital Fund, LLC. Messrs. Cope and Scheinfeld have shared voting and investment power over the shares being offered under the prospectus filed with the SEC in connection with the transactions contemplated under the Purchase Agreement. Lincoln Park Capital, LLC is not a licensed broker dealer or an affiliate of a licensed broker dealer.
   
(2)
Represents 2,275,086 Commitment Shares of our common stock issued to Lincoln Park upon our execution of the Purchase Agreement as a fee for its commitment to purchase shares of our common stock under the Purchase Agreement, together with and 1,666,666 Initial Purchase Shares, all of which shares are covered by the registration statement that includes this prospectus. We have excluded from the number of shares beneficially owned by Lincoln Park prior to the offering all of the additional shares of common stock that Lincoln Park may be required to purchase pursuant to the Purchase Agreement, because the issuance of such shares is solely at our discretion and is subject to certain conditions, the satisfaction of all of which are outside of Lincoln Park’s control, including the registration statement of which this prospectus is a part becoming and remaining effective. Furthermore, under the terms of the Purchase Agreement, issuances and sales of shares of our common stock to Lincoln Park are subject to certain limitations on the amounts we may sell to Lincoln Park at any time, including the Beneficial Ownership Cap. See the description under the heading “Lincoln Park Transaction” for more information about the Purchase Agreement.
   
(3)
Based on 110,677,860 outstanding shares of our common stock as of February 10, 2020, which includes the 2,275,086 Commitment Shares and the and 1,666,666 Initial Purchase Shares we issued to Lincoln Park on January 16, 2020.
   
(4)
Although the Purchase Agreement provides that we may sell up to $10,000,000 of our common stock to Lincoln Park, only and,14,000,000 shares of our common stock are being offered under this prospectus, which represents: (i) 2,275,086 Commitment Shares issued to Lincoln Park upon our execution of the Purchase Agreement as consideration for its commitment to purchase shares of our common stock under the Purchase Agreement; (ii) and 1,666,666 Initial Purchase Shares; and (iii) an aggregate of and 10,058,248 shares of our common stock that may be sold by us to Lincoln Park at our discretion from time to time over a 36-month period commencing after the satisfaction of certain conditions set forth in the Purchase Agreement, including that the SEC has declared effective the registration statement that includes this prospectus. Depending on the price per share at which we sell our common stock to Lincoln Park pursuant to the Purchase Agreement, we may need to sell to Lincoln Park under the Purchase Agreement more shares of our common stock than are offered under this prospectus in order to receive aggregate gross proceeds equal to the $10,000,000 total commitment available to us under the Purchase Agreement. If we choose to do so, we must first register for resale under the Securities Act such additional shares. The number of shares ultimately offered for resale by Lincoln Park is dependent upon the number of shares we sell to Lincoln Park under the Purchase Agreement.
   
(5)
Assumes the sale of all shares of common stock registered pursuant to this prospectus, although the selling stockholder is under no obligation to sell any shares of common stock at this time.

44

PLAN OF DISTRIBUTION
 
The common stock offered by this prospectus is being offered by the selling stockholder, Lincoln Park. The common stock may be sold or distributed from time to time by the selling stockholder directly to one or more purchasers or through brokers, dealers, or underwriters who may act solely as agents at market prices prevailing at the time of sale, at prices related to the prevailing market prices, at negotiated prices, or at fixed prices, which may be changed. The sale of the common stock offered by this prospectus could be affected in one or more of the following methods:
 
-
ordinary brokers’ transactions;
   
-
transactions involving cross or block trades;
   
-
through brokers, dealers, or underwriters who may act solely as agents;
   
-
“at the market” into an existing market for the common stock;
   
-
in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through agents;
   
-
in privately negotiated transactions; or
   
-
any combination of the foregoing.
 
In order to comply with the securities laws of certain states, if applicable, the shares may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the state or an exemption from the state’s registration or qualification requirement is available and complied with.
 
Lincoln Park is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act.
 
Lincoln Park has informed us that it intends to use an unaffiliated broker-dealer to effectuate all sales, if any, of the common stock that it may purchase from us pursuant to the Purchase Agreement. Such sales will be made at prices and at terms then prevailing or at prices related to the then current market price. Each such unaffiliated broker-dealer will be an underwriter within the meaning of Section 2(a)(11) of the Securities Act. Lincoln Park has informed us that each such broker-dealer will receive commissions from Lincoln Park that will not exceed customary brokerage commissions.
 
Brokers, dealers, underwriters or agents participating in the distribution of the shares as agents may receive compensation in the form of commissions, discounts, or concessions from the selling stockholder and/or purchasers of the common stock for whom the broker-dealers may act as agent. The compensation paid to a particular broker-dealer may be less than or in excess of customary commissions. Neither we nor Lincoln Park can presently estimate the amount of compensation that any agent will receive.
 
We know of no existing arrangements between Lincoln Park or any other stockholder, broker, dealer, underwriter or agent relating to the sale or distribution of the shares offered by this prospectus. At the time a particular offer of shares is made, a prospectus supplement, if required, will be distributed that will set forth the names of any agents, underwriters or dealers and any compensation from the selling stockholder, and any other required information.
45

We will pay the expenses incident to the registration, offering, and sale of the shares to Lincoln Park. We have agreed to indemnify Lincoln Park and certain other persons against certain liabilities in connection with the offering of shares of common stock offered hereby, including liabilities arising under the Securities Act or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities. Lincoln Park has agreed to indemnify us against liabilities under the Securities Act that may arise from certain written information furnished to us by Lincoln Park specifically for use in this prospectus or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities.
 
Lincoln Park has represented to us that at no time prior to the Purchase Agreement has Lincoln Park or its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of our common stock or any hedging transaction, which establishes a net short position with respect to our common stock. Lincoln Park agreed that during the term of the Purchase Agreement, it, its agents, representatives or affiliates will not enter into or effect, directly or indirectly, any of the foregoing transactions.
 
We have advised Lincoln Park that it is required to comply with Regulation M promulgated under the Exchange Act. With certain exceptions, Regulation M precludes the selling stockholder, any affiliated purchasers, and any broker-dealer or other person who participates in the distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability of the securities offered by this prospectus.
 
This offering will terminate on the earlier of (i) termination of the Purchase Agreement or (ii) the date that all shares offered by this prospectus have been sold by Lincoln Park.

Placement Agent Fee

Prior to our entry into the Purchase Agreement, we had engaged Alliance Global Partners (“A.G.P.”) as a placement agent to help us raise capital in connection with a private offering. A.G.P. introduced us to Lincoln Park, for which we agreed to pay A.G.P. a fee of 10% of the amount of the funds received from Lincoln Park. At the time of signing our agreement with A.G.P., we paid an advance of $12,000, which was to be applied to the 10% fee payable. In connection with execution of the Purchase Agreement, we sold the Initial Purchase Shares to Lincoln Park for $250,000, and were obligated to pay a fee of $25,000 to A.G.P., and we paid the remaining $13,000. Going forward, we are required to pay a placement agent fee of 10% to A.G.P. of all amounts received from Lincoln Park.
 
Our common stock is quoted on the 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.

EXPERTS

The audited financial statements for the fiscal years ended December 31, 2017, and December 31, 2018 and for each of the two years in the period ended December 31, 2018, appearing in this prospectus and the registration statement, have been audited by MaloneBailey, LLC, 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.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-1 under the Securities Act of 1933, as amended, relating to the shares of common stock being offered by this prospectus, and reference is made to such registration statement. This prospectus and it does not contain all information in the registration statement, as certain portions have been omitted in accordance with the rules and regulations of the Securities and Exchange Commission.

In addition, since our common stock is registered under the Securities Exchange Act of 1934, we are required to file annual, quarterly, and current reports, or other information with the SEC as provided by the Securities Exchange Act of 1934, as amended. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on the Investor Relations portion of our website, www.alpine4.com, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. In addition, the SEC maintains an internet site that contains the reports, proxy and information statements, and other information we electronically file with or furnish to the SEC, located at http://www.sec.gov.

Information contained in, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into, this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
46


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Alpine 4 Technologies, Ltd.
Phoenix, Arizona

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Alpine 4 Technologies, Ltd. and its subsidiaries (collectively, the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

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

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

/s/ MaloneBailey, LLP
www.malonebailey.com
We have served as the Company's auditor since 2015.
Houston, Texas
April 22, 2019
F - 1

ALPINE 4 TECHNOLOGIES, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

   
December 31,
   
December 31,
 
   
2018
   
2017
 
             
ASSETS
           
             
CURRENT ASSETS:
           
Cash
 
$
207,205
   
$
128,512
 
Accounts receivable
   
2,610,354
     
1,560,480
 
Inventory
   
2,175,795
     
1,212,546
 
Capitalized contract costs
   
64,234
     
-
 
Prepaid expenses and other current assets
   
222,200
     
154,385
 
Assets of discontinued operations
   
121,296
     
574,174
 
Total current assets
   
5,401,084
     
3,630,097
 
                 
Property and equipment, net
   
7,990,556
     
5,023,758
 
Intangible asset, net
   
677,210
     
752,622
 
Goodwill
   
3,193,861
     
1,963,761
 
Other non-current assets
   
290,238
     
258,238
 
Assets of discontinued operations
   
387,727
     
4,342,474
 
                 
 TOTAL ASSETS
 
$
17,940,676
   
$
15,970,950
 
                 
LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' DEFICIT
               
                 
CURRENT LIABILITIES:
               
Accounts payable
 
$
3,102,970
   
$
1,367,989
 
Accrued expenses
   
1,254,853
     
739,645
 
Deferred revenue
   
25,287
     
64,918
 
Derivative liabilities
   
1,892,321
     
271,588
 
Deposits
   
12,509
     
12,509
 
Notes payable, current portion
   
3,645,603
     
1,814,689
 
Notes payable, related parties, current portion
   
132,000
     
43,500
 
Convertible notes payable, current portion, net of discount of $942,852 and $79,630
   
2,644,735
     
2,302,620
 
Financing lease obligation, current portion
   
105,458
     
24,590
 
Net liabilities of discontinued operations
   
2,752,447
     
3,344,974
 
 Total current liabilities
   
15,568,183
     
9,987,022
 
                 
Notes payable, net of current portion
   
4,517,441
     
-
 
Convertible notes payable, net of current portion
   
450,000
     
1,660,106
 
Financing lease obligations, net of current portion
   
8,295,176
     
6,560,112
 
Deferred revenue
   
-
     
43
 
Deferred tax liability
   
608,304
     
181,703
 
                 
TOTAL LIABILITIES
   
29,439,104
     
18,388,986
 
                 
REDEEMABLE COMMON STOCK
               
Class A Common stock, $0.0001 par value, 0 and 379,403 shares issued and outstanding at December 31, 2018 and 2017
   
-
     
1,439,725
 
                 
STOCKHOLDERS' DEFICIT:
               
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding at December 31, 2018 and 2017
   
-
     
-
 
Class A Common stock, $0.0001 par value, 100,000,000 shares authorized, 26,567,410 and 23,222,087 shares issued and outstanding at December 31, 2018 and 2017
   
2,575
     
2,322
 
Class B Common stock, $0.0001 par value, 5,000,000 shares authorized, 5,000,000 and 1,600,000 shares issued and outstanding at December 31, 2018 and 2017
   
500
     
160
 
Additional paid-in capital
   
17,018,591
     
16,573,632
 
Accumulated deficit
   
(28,520,094
)
   
(20,433,875
)
Total stockholders' deficit
   
(11,498,428
)
   
(3,857,761
)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
 
$
17,940,676
   
$
15,970,950
 

The accompanying notes are an integral part of these consolidated financial statements.
F - 2

ALPINE 4 TECHNOLOGIES, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

   
Years Ended
December 31,
 
   
2018
   
2017
 
             
Revenue
 
$
14,261,794
   
$
8,318,016
 
Cost of revenue
   
9,440,998
     
5,907,421
 
Gross Profit
   
4,820,796
     
2,410,595
 
                 
Operating expenses:
               
General and administrative expenses
   
5,470,148
     
2,814,111
 
                 
Total operating expenses
   
5,470,148
     
2,814,111
 
Loss from operations
   
(649,352
)
   
(403,516
)
                 
Other expenses
               
Interest expense
   
(3,121,201
)
   
(1,262,493
)
Change in value of derivative liability
   
604,219
     
(126,054
)
Gain on extinguishment of debt
   
6,305
     
-
 
Other income
   
119,737
     
246,895
 
Total other expenses
   
(2,390,940
)
   
(1,141,652
)
                 
Loss before income tax
   
(3,040,292
)
   
(1,545,168
)
                 
Income tax (benefit)
   
(43,399
)
   
(258,392
)
                 
Loss from continuing operations
   
(2,996,893
)
   
(1,286,776
)
                 
Discontinued operations:
               
Loss from discontinued operations
   
(4,911,124
)
   
(1,710,644
)
Total discontinued operations
   
(4,911,124
)
   
(1,710,644
)
                 
Net loss
 
$
(7,908,017
)
 
$
(2,997,420
)
                 
Weighted average shares outstanding :
               
Basic
   
28,447,969
     
23,858,031
 
Diluted
   
28,447,969
     
23,858,031
 
                 
Basic and Diluted Loss per shares
               
Continuing operations
 
$
(0.11
)
 
$
(0.06
)
Discontinued operations
   
(0.17
)
 
$
(0.07
)
   
$
(0.28
)
   
(0.13
)

The accompanying notes are an integral part of these consolidated financial statements.
F - 3

ALPINE 4 TECHNOLOGIES, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                           
Additional
         
Total
 
   
Class A Common Stock
   
Class B Common Stock
   
Paid-in
   
Accumulated
   
Stockholders'
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Deficit
   
Deficit
 
Balance, December 31, 2016
   
21,474,481
   
$
2,148
     
1,600,000
   
$
160
   
$
16,228,106
   
$
(17,436,455
)
 
$
(1,206,041
)
                                                         
Issuance of shares of common stock for cash
   
132,209
     
13
                     
39,987
             
40,000
 
Issuance of shares of common stock to consultants for services
   
578,640
     
57
                     
62,027
             
62,084
 
Issuance of shares of common stock for convertible note payable and accrued interest
   
886,757
     
89
                     
99,484
             
99,573
 
Issuance shares for discount on convertible note payable
   
150,000
     
15
                     
16,485
             
16,500
 
Reclassification of derivative liability
                                   
(252,633
)
           
(252,633
)
Derivative liability resolution
                                   
222,099
             
222,099
 
Issuance of warrants for acquisition of VWES
                                   
40,941
             
40,941
 
Share-based compensation expense
                                   
87,136
             
87,136
 
Beneficial conversation feature associated with convertible notes
                                   
30,000
             
30,000
 
Net loss
                                           
(2,997,420
)
   
(2,997,420
)
                                                         
Balance, December 31, 2017
   
23,222,087
     
2,322
     
1,600,000
     
160
     
16,573,632
     
(20,433,875
)
   
(3,857,761
)
                                                         
Adoption of ASC 606
                                           
(178,202
)
   
(178,202
)
Issuance of shares for discount/inducement on convertible note payable
   
1,849,999
     
104
                     
65,910
             
66,014
 
Issuance of shares of common stock for modification of debt
   
100,000
     
10
                     
14,990
             
15,000
 
Issuance of shares of common stock for convertible note payable and accrued interest
   
1,015,921
     
101
                     
54,086
             
54,187
 
Reclassification of shares from mezzanine
   
379,403
     
38
                     
(38
)
           
-
 
Change in fair value of warrant modification
                                   
4,310
             
4,310
 
Shares issued for employee compensation
                   
3,400,000
     
340
     
176,460
             
176,800
 
Derivative liability resolution
                                   
58,018
             
58,018
 
Share-based compensation expense
                                   
71,223
             
71,223
 
Net loss
                                           
(7,908,017
)