January 20, 2021 - 2:15pm EST by
2021 2022
Price: 3.70 EPS NM NM
Shares Out. (in M): 150 P/E NM NM
Market Cap (in $M): 550 P/FCF NM NM
Net Debt (in $M): 40 EBIT 0 0
TEV (in $M): 590 TEV/EBIT NM NM
Borrow Cost: Available 0-15% cost

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Short opportunities seem endless at a time when it seems pointless to short.  Coincidence?  I think not!  I generally agree with those who believe we are in an unprecedented market environment and that you should short selectively.  For those who are still interested in shorts, I submit Alpine 4 (ALPP) for your consideration or at least amusement. 


ALPP has a market cap of about $550mm, is up almost 100x in 2 months, is relatively easy to borrow and seems to have a very good shot at being a 0.  While one could argue that ALPP is your typical Barry Honig style pump and dump, I think that would be an unfair characterization.   Barry and his compatriots were far more clever and sophisticated market manipulators.   ALPP is just a couple of guys trying to strike it rich in today’s market madness.  Who can really blame them!  They are the proverbial dog who caught the bus.


Since the facts here are truly stranger than fiction, much of this report is based on excerpts from the company financials and statements.  I don’t think this idea requires a particularly sophisticated analysis, but you can draw your own conclusions.

What is ALPP? According to the CEO’s LinkedIn page:


Alpine 4 is a leading multi-faceted conglomerate servicing industries like Software, Automotive Tchnologies (NOT MY TYPO), Electronic Manufacturing, and Energy Services and Fabrication.

According to the ALPP’s Web Page: 


ALPP “is a publicly traded enterprise with business related endeavors in, Software, Automotive Technologies, Electronics Manufacturing, and Energy Services & Fabrication Technologies. However Alpine 4’s acquisition model is industry agnostic and is based around our Driver, Stabilizer, Facilitator business model. Four principles at the core of our business are: Synergy. Innovation. Drive. Excellence. At Alpine 4, we believe synergistic innovation drives excellence. By anchoring these words to our combined experience and capabilities, we are able to aggressively pursue opportunities within and across vertical markets. We deliver solutions that not only drive industry standards, but increase value for our shareholders.”

And last but not least from the 2019 10K (A bit of a slog but well worth it in my opinion.  I also want to emphasize that this is straight from the 10K):


Alpine 4 Technologies Ltd (“we”, “our”, “Alpine 4”, the “Company”) was 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 this Report was filed, the Company was a holding company that owned seven operating subsidiaries: ALTIA, LLC; Quality Circuit Assembly, Inc.; American Precision Fabricators, Inc.; Morris Sheet Metal, Corp; and JTD Spiral, Inc.; Deluxe Sheet Metal, Inc,; and Excel Fabrication, LLC (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.) In the first quarter of 2020, we also created three additional subsidiaries to act as silo holding companies, organized by industries.  These silo subsidiaries are A4 Construction Services, Inc. (“A4 Construction”), A4 Manufacturing, Inc. (“A4 Manufacturing”), and A4 Technologies, Inc. (“A4 Technologies”). All three are Delaware corporations. Each is authorized to issue 1,500 shares of common stock with a par value of $0.01 per share, and the Company is the sole shareholder of each of these three subsidiaries.  


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 B2B companies in a broad spectrum of industries via our acquisition strategy of DSF (Drivers, Stabilizer, Facilitator).  Our DSF business model (which is discussed further 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 you blend these categories into a longer-term view of the business landscape, you can then begin to see the value-driving force that makes this a truly purposeful and powerful business model.  As stated earlier, 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 our competitors simply don’t have.  DSF reshapes the environment each subsidiary operates in by sharing and exploiting the resources each company has, thus giving them a competitive advantage that their peers don’t have.  

Screen Shot 2019-08-06 at 7.40.57 AM.png 

How We Do It:

Optimization vs. Asset Producing 

The process to purchase a perspective (AGAIN NOT MY TYPO) company can be long and arduous.  During our due diligence period, we are validating and determining 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, What Should Be and What Will Be”.  

“The What Is” (TWI).  TWI is the defining point of where a company is holistically in a myriad of metrics; Sales, Finance, Ease of Operations, Ownership and Customer Relations to name a few. Subsequently, this is usually the point where most acquirers stop in their due diligence.  We look to define this position not just from a number’s standpoint, but also how does this perspective map 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 if TWI is out of the norm with competitors, and does that data show 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 to name a few.  But 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 that run their respective departments and finally, the subsidiaries they manage must have posted a net profit for 3 consecutive months.




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.

For those who made it this far, congrats!   If any of the above makes sense to you, please feel free to enlighten me.  Here is my quick summary for others who might be confused.  ALPP is a bizarre little rollup which is essentially insolvent.  It started in 2015 in “auto tech.”  This part of the business (ALTIA) seems to have shrivelled to basically nothing at this point.  They bought a circuit board manufacturer (QCA) for $3mm in 2016 which seems to have avoided any implosion so far.  In 2017, they bought an energy services company for about $5mm which has since gone bankrupt. And in 2018 and 2019 they bought several metal fabricators (think HVAC ductwork and other sheet metal products).   Makes total sense to me!  As of 2019, about 1/3 of revenues came from QCA with the remainder in metal fabrication.  All of the acquisitions were heavily seller financed with a combination of promissory notes, convertible debt and facility sale leasebacks in addition to cash and shares.  Shares outstanding have increased from around 24mm in 2016 to about 150mm today.


Now for a bit more summary (again from public sources).  ALPP is run by these guys:


Kent Wilson - CEO

Before being named CEO/President in June 2014, Mr. Wilson was the Chief Financial Officer of United Petroleum, Inc and was responsible for all of the company’s financial and reporting operations, including end-to-end management of company’s (AGAIN NOT MY TYPO) supply chain, and financial support systems. In prior years he also served as the Chief Executive Officer of Crystal Technologies, Ltd a technology company serving both the automotive industry and the insurance industry. Kent played a key and critical role in the development and deployment of a strategic web-based insurance platform for automobile dealerships.​ Mr. Wilson earned his MBA from Northcentral University and considers himself a “University of Arizona Wildcat”. He also spent 4 years studying at the University of Arizona before earning his undergraduate degree in Management from the University of Phoenix.​ Mr. Wilson also serves on the Board of Directors for Restoration Ministries dba Crossroads Youth a faith based organization dedicated to helping at risk children of the working poor in downtown Phoenix.

Ian Kantrowitz - VP Investor Relations

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. Ian 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 products 6thsenseauto and Brake Active. Additionally, he was a top performing banker for Wells Fargo Bank ranked number 5 in the country. Mr. Kantrowitz is responsible for managing the communication between Alpine 4’s corporate management and investors. He helps support the creation and release of pertinent information, handles inquiries and meetings, provides feedback to management from current and potential investors and assists in crisis management. In addition to his role as Investor Relations, Mr. Kantrowitz has been instrumental in raising capital needs from the private sector.


As of the last Proxy, Kent owned about 7mm shares and Ian owned about half that.    The financials look like this (in $000s)













Cost of revenue






Gross Profit







General and administrative expenses






Interest expense







And a debt stack that looks like this (in $000s)



September 30, 

December 31, 




Lines of credit, current portion



Equipment loans, current portion



Term notes, current portion



Merchant loans



Total current



PPP loans



Long-term portion of equipment loans and term notes



  Total notes payable




They also have about $16mm of sale leaseback financing and $2mm of convertibles (the majority at $0.15/share).   ALPP received $4mm of PPP which is fairly horrifying on many levels. 

Current cash is basically $0 and has been a thorny issue as detailed in their recent Q:

The Company had the following transactions in its common stock during the nine months ended September 30, 2020:


Issued 6,941,753 Class A common stock for cash for total proceeds of $374,000;  



Issued 4,648,879 Class A common stock for the conversion of convertible debt and accrued interest of $697,332;  



Issued 1,617,067 Class A common stock and 1,617,067 Class C common stock to the Seller of Deluxe for the settlement of debt of $485,120; the fair value of the stock was $330,528.  The Company recognized a gain on the settlement of debt of $154,592;  



Issued 300,000 Class A common stock with a fair value of $44,700 to a noteholder as penalty interest; and  


Issued 4,023,088 Class B common stock to settle unpaid salaries of $603,463.  


And of course there is that nagging going concern problem they have never been able to solve.

Note 3 – Going Concern


The accompanying financial statements have been prepared on a going concern basis. The working capital of the Company is currently negative and causes doubt as to the ability of the Company to continue. The Company requires capital for its 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 plan of operations, and its ultimate transition 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.


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, Morris, Deluxe and Excel have allowed for an increased level of cash flow to the Company.  Second, the Company is considering other potential acquisition targets that, like QCA, Morris, Deluxe and Excel 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.


So how would you feel if you were Kent and Ian going into 2020?  Well, you would probably be worried that the businesses you bought aren’t really growing and that gross profit doesn’t even cover your interest expense not to mention your $8mm of SG&A.   You have known for a while that your budding conglomerate is in a bit of a pickle, so you promoted this guy to COO so you could focus on the big picture:

Jeffrey Hail -- COO

Mr. Jeffrey Hail joined Alpine 4 Technologies, Ltd. from its inception, working with Alpine 4’s CEO, Kent Wilson and has been an integral part in building the strategy and vision of Alpine and its subsidiary companies.​ Mr. Hail came onboard bringing a diverse background that includes both government and private sector experience. Raised in Scottsdale, AZ; he earned his Bachelor of Science degree in Operations and Production Management from the W.P. Carey School of Business at Arizona State University.  After college, he worked in the Contracts and Procurement Section with the State of Arizona at its Department of Transportation for a number of years and then transitioned to the private sector by starting several 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 background of business experience and acumen especially within the operational aspects of running a business in today’s realm.


But shortly into 2020, Covid happens, and despite your attempts to reassure your investor base with numerous press releases about your “robust growth”, your public filings tell a different story:


Our revenues for the three months ended September 30, 2020, increased by $1,641,451 as compared to the three months ended September 30, 2019.  In 2020, the increase in revenue related to $1,938,446 for Deluxe (acquired in November 2019); $797,217 for Excel (acquired in February 2020); and $557,990 for QCA; offset by a decrease of $1,067,417 for Morris (acquired in January 2019); $536,807 for APF and $47,978 relating to the 6th Sense Auto and Brake Active services of ALTIA.  The increase in revenue was driven by the acquisitions of Deluxe and Excel.  We expect our revenue to continue to grow over the remainder of 2020.


Even a casual observer can see that the robust growth touted in the press releases is really only the effect of recent acquisitions offsetting declining revenues for the businesses you have owned for over a year.  Despite your best efforts, the stock is still stuck around a nickel in November 2020. So what would you do now?

…...YOU WOULD BUY A DRONE COMPANY.   And not just any drone company, one founded by a former SpaceX and Tesla employee!  You don’t need to mention that drone company (Impossible Aerospace) is basically defunct and that its well known investors you tout are for some reason willing to part with it for $6mm of convertible preferred stock (with a no upside VWAP conversion feature) in your strange little rollup.  You don’t even need to emphasize that the founder was an intern at SpaceX and worked for Tesla for one year AND won’t be staying on as a full time employee (he does have a consulting contract).  Nor is it really necessary to mention that most of the (few) senior people in the company have recently departed for greener pastures.  You just announce a new leg to your rollup strategy and do this little video: (well worth watching)

...and BOOM your stock shoots up over 40x to $2 in about a month.  So, that definitely felt nice, and Pavlov was no dummy, so at this point it clearly makes sense to hastily assemble another DRONE company (VAYU) acquisition and do another PR video: (if one wasn’t enough)

And now your stock is over $4 which is a lot better than $0.04 in October.  Never mind that VAYU was also basically defunct (on the day of acquisition, I could only pull up an archived version of its website), that its last funding round was a 100k grant in 2017 (total of $1mm since 2015), that its fixed wing drone was designed to ferry aid supplies around 3rd world countries or that its shareholders were also willing to sell it for $5mm on the exact same terms as the Impossible deal.  It’s interesting to note that the Vayu merger agreement is a virtual cut and paste.  One notable exception is a clause inserted by the Vayu CEO to ensure that his current credit card bill would be paid by ALPP.  Clearly this is the start of something great!!

That is basically where we are today.  No doubt, there could be many more chapters to this story: potential fundraising, talk of a Nasdaq uplisting, more cowbell / drone acquisitions, etc.  The “shareholder letter” published today is a case in point.  It is well worth the reading time and is further proof that this management team will not suffer the undue burden of a spellchecker!  I think ALPP is a great risk / reward here with the potential to upsize into future shenanigans.  As an aside, you can’t help but feel a little sorry for Barry Honig, who was banned from penny stock trading in 2019 -- talk about terrible timing!

I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise hold a material investment in the issuer's securities.



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