# EDGAR Filing Document

**Accession Number:** 0001606698
**File Stem:** 0001628280-23-008361
**Filing Date:** 2023-3
**Character Count:** 429130
**Document Hash:** c55bb49f00662569c79f7795a9324180
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-23-008361.hdr.sgml**: 20230317

**ACCESSION NUMBER**: 0001628280-23-008361

**CONFORMED SUBMISSION TYPE**: 10-K/A

**PUBLIC DOCUMENT COUNT**: 104

**CONFORMED PERIOD OF REPORT**: 20211231

**FILED AS OF DATE**: 20230317

**DATE AS OF CHANGE**: 20230316

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ALPINE 4 HOLDINGS, INC.
- **CENTRAL INDEX KEY:** 0001606698
- **STANDARD INDUSTRIAL CLASSIFICATION:** COMMUNICATIONS EQUIPMENT, NEC [3669]
- **IRS NUMBER:** 465482689
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40913
- **FILM NUMBER:** 23740156

**BUSINESS ADDRESS:**
- **STREET 1:** 2525 EAST ARIZONA BILTMORE CIRCLE
- **STREET 2:** SUITE 237
- **CITY:** PHOENIX
- **STATE:** AZ
- **ZIP:** 85016
- **BUSINESS PHONE:** 480-702-2431

**MAIL ADDRESS:**
- **STREET 1:** 2525 EAST ARIZONA BILTMORE CIRCLE
- **STREET 2:** SUITE 237
- **CITY:** PHOENIX
- **STATE:** AZ
- **ZIP:** 85016

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Alpine 4 Technologies Ltd.
- **DATE OF NAME CHANGE:** 20150626

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Alpine 4 Automotive Technologies Ltd.
- **DATE OF NAME CHANGE:** 20140728

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ALPINE 4 Inc.
- **DATE OF NAME CHANGE:** 20140429

?xml version="1.0" ? alpp-20211231

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K/A**

**Amendment No. 1**

⌧ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021

□ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _______ to __________

**Commission file number: 001-40913**

![alpp-20211231_g1.jpg](alpp-20211231_g1.jpg)

**<u>Alpine 4 Holdings, Inc.</u>** 

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **<u>Delaware</u>** | **<u>46-5482689</u>** |
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
| **2525 E Arizona Biltmore Circle Suite 237** <br>**<u>Phoenix, AZ</u>** | **<u>85016</u>** |
| (Address of Principal Executive Offices) | (Zip Code) |

---

Registrant's telephone number, including area code: <u>480-702-2431</u>

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered pursuant to Section 12(b) of the Act: Class A Common Stock, $0.0001 par value per share

Title of each class Trading Symbol(s) Name of each exchange on which registered <br> <u>Class A Common Stock</u> <u>ALPP</u> <u>The Nasdaq Stock Market</u>

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes □ No ⌧

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | □ | Accelerated filer | □ |
| Non-accelerated filer | ⌧ | Smaller reporting company | ⌧ |
| | | Emerging Growth Company | ⌧ |

---

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes □&nbsp;&nbsp;&nbsp;&nbsp; No ⌧

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. As of June 30, 2021, the aggregate market value of the voting and non-voting common equity held by non-affiliates, computed based on the average bid and asked price of the Class A common stock, was $463,512,811.

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of April 12, 2022, the issuer had 162,210,355 shares of its Class A common stock issued and outstanding; 8,548,088 shares of its Class B common stock issued and outstanding; and 12,500,200 shares of its Class C common stock issued and outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE**

None.

**EXPLANATORY NOTE**

Alpine 4 Holdings, Inc. (the "Company") is filing this Amendment No. 1 on Form 10-K/A ("Form 10-K/A") to its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the "Original Form 10-K"), as originally filed with the U.S. Securities and Exchange Commission (the "SEC") on April 14, 2022, to amend and restate the Original Form 10-K as further described below.

**Restatement Background**

In the third quarter of 2022, the Company identified errors in the accounting for income taxes related to the deferred tax liabilities for certain acquisitions the Company made in 2020 and 2021, the classification of the Series C and Series D preferred shares issued in connection with these acquisitions, errors in the valuation of certain assets acquired for one of the acquisitions in 2021, and errors in the recording of forgiveness of PPP loans that were assumed as part of certain acquisitions in 2020 and 2021.

As a result of the foregoing, upon completion of the materiality study on November 17th, 2022, the Company's Board of Directors concluded that the December 31, 2020, financial statements in the Company's previously filed Annual Report on Form 10-K for the year ended December 31, 2020, the financial statements in the Quarterly Reports on Form 10-Q as of and for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, and the December 31, 2021 financial statements in the Original Form 10-K should no longer be relied upon.

Accordingly, on November 18, 2022, the Company announced that it would restate its financial statements for the above-mentioned periods to correct such errors in this Form 10-K/A.

**Table of Contents**

The following items included in the Original Form 10-K are amended by this Amendment:

–Part I, Item 1A. Risk Factors

–Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

–Part II, Item 8. Financial Statements and Supplementary Data

–Part II Item 9A. Controls and Procedures

–Part IV Items 15. Exhibits and Financial Statement Schedules

The particulars of the misstatements and their effect on the Company's financials are summarized in Note 2 to the financial statements.

This Form 10-K/A is presented as of the filing date of the Original Form 10-K, does not reflect events occurring after that date, and does not modify or update disclosures in any way other than as required to reflect the fiscal year 2020 and 2021 restatement described above. Accordingly, this Form 10-K/A should be read in conjunction with the Company's filings with the SEC subsequent to the date on which the Company filed the Original Form 10-K.

This Form 10-K/A sets forth the Original Form 10-K in its entirety, as amended to reflect the restated financial statements. as discussed above. However, as noted, this Form 10-K/A does not otherwise update or modify disclosures in the Original Form 10-K that are not related to the restated financial statements. Among other things, forward-looking statements made in the Original Form 10-K have not been revised to reflect events that occurred or facts that became known to the Company after the filing of the Original Form 10-K, and such forward-looking statements should be read in their historical context.

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC.**

**FISCAL YEAR ENDED DECEMBER 31, 2021**

**ANNUAL REPORT ON FORM 10-K**

**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
| **[PART I](#ia18bd7c02fe147918e3ffac38a90fe1e_10)** | | <u>Page</u> |
| [ITEM 1.](#ia18bd7c02fe147918e3ffac38a90fe1e_13) | <u>[BUSINESS](#ia18bd7c02fe147918e3ffac38a90fe1e_13)</u> | [3](#ia18bd7c02fe147918e3ffac38a90fe1e_13) |
| [ITEM 1A.](#ia18bd7c02fe147918e3ffac38a90fe1e_16) | <u>[RISK FACTORS](#ia18bd7c02fe147918e3ffac38a90fe1e_16)</u> | [11](#ia18bd7c02fe147918e3ffac38a90fe1e_16) |
| [ITEM 1B.](#ia18bd7c02fe147918e3ffac38a90fe1e_19) | <u>[UNRESOLVED STAFF COMMENTS](#ia18bd7c02fe147918e3ffac38a90fe1e_19)</u> | [25](#ia18bd7c02fe147918e3ffac38a90fe1e_19) |
| [ITEM 2.](#ia18bd7c02fe147918e3ffac38a90fe1e_22) | <u>[PROPERTIES](#ia18bd7c02fe147918e3ffac38a90fe1e_22)</u> | [25](#ia18bd7c02fe147918e3ffac38a90fe1e_22) |
| [ITEM](#ia18bd7c02fe147918e3ffac38a90fe1e_25)3. | <u>[LEGAL PROCEEDINGS](#ia18bd7c02fe147918e3ffac38a90fe1e_25)</u> | [26](#ia18bd7c02fe147918e3ffac38a90fe1e_25) |
| [ITEM 4.](#ia18bd7c02fe147918e3ffac38a90fe1e_28) | <u>[MINE SAFETY DISCLOSURES](#ia18bd7c02fe147918e3ffac38a90fe1e_28)</u> | [26](#ia18bd7c02fe147918e3ffac38a90fe1e_28) |
| **[PART II](#ia18bd7c02fe147918e3ffac38a90fe1e_31)** | | |
| [ITEM 5.](#ia18bd7c02fe147918e3ffac38a90fe1e_34) | <u>[MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](#ia18bd7c02fe147918e3ffac38a90fe1e_34)</u> | [26](#ia18bd7c02fe147918e3ffac38a90fe1e_34) |
| [ITEM 6.](#ia18bd7c02fe147918e3ffac38a90fe1e_37) | [RESERVED] | [31](#ia18bd7c02fe147918e3ffac38a90fe1e_37) |
| [ITEM 7.](#ia18bd7c02fe147918e3ffac38a90fe1e_40) | <u>[MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#ia18bd7c02fe147918e3ffac38a90fe1e_40)</u> | [31](#ia18bd7c02fe147918e3ffac38a90fe1e_40) |
| [ITEM 7A.](#ia18bd7c02fe147918e3ffac38a90fe1e_64) | <u>[QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#ia18bd7c02fe147918e3ffac38a90fe1e_64)</u> | [37](#ia18bd7c02fe147918e3ffac38a90fe1e_64) |
| [ITEM 8.](#ia18bd7c02fe147918e3ffac38a90fe1e_67) | <u>[FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](#ia18bd7c02fe147918e3ffac38a90fe1e_67)</u> | [37](#ia18bd7c02fe147918e3ffac38a90fe1e_67) |
| [ITEM 9.](#ia18bd7c02fe147918e3ffac38a90fe1e_70) | <u>[CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES](#ia18bd7c02fe147918e3ffac38a90fe1e_70)</u> | [37](#ia18bd7c02fe147918e3ffac38a90fe1e_70) |
| [ITEM 9A.](#ia18bd7c02fe147918e3ffac38a90fe1e_73) | <u>[CONTROLS AND PROCEDURES](#ia18bd7c02fe147918e3ffac38a90fe1e_73)</u> | [38](#ia18bd7c02fe147918e3ffac38a90fe1e_73) |
| [ITEM 9B.](#ia18bd7c02fe147918e3ffac38a90fe1e_76) | <u>[OTHER INFORMATION](#ia18bd7c02fe147918e3ffac38a90fe1e_76)</u> | [39](#ia18bd7c02fe147918e3ffac38a90fe1e_76) |
| ITEM 9C. | <u>[DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](#ia18bd7c02fe147918e3ffac38a90fe1e_79)</u> | 39 |
| **[PART III](#ia18bd7c02fe147918e3ffac38a90fe1e_82)** | | |
| [ITEM 10.](#ia18bd7c02fe147918e3ffac38a90fe1e_85) | <u>[DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](#ia18bd7c02fe147918e3ffac38a90fe1e_85)</u> | [40](#ia18bd7c02fe147918e3ffac38a90fe1e_85) |
| [ITEM 11.](#ia18bd7c02fe147918e3ffac38a90fe1e_88) | <u>[EXECUTIVE COMPENSATION](#ia18bd7c02fe147918e3ffac38a90fe1e_88)</u> | [48](#ia18bd7c02fe147918e3ffac38a90fe1e_88) |
| [ITEM 12.](#ia18bd7c02fe147918e3ffac38a90fe1e_91) | <u>[SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](#ia18bd7c02fe147918e3ffac38a90fe1e_91)</u> | [49](#ia18bd7c02fe147918e3ffac38a90fe1e_91) |
| [ITEM 13.](#ia18bd7c02fe147918e3ffac38a90fe1e_94) | <u>[CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](#ia18bd7c02fe147918e3ffac38a90fe1e_94)</u> | [51](#ia18bd7c02fe147918e3ffac38a90fe1e_94) |
| [ITEM 14.](#ia18bd7c02fe147918e3ffac38a90fe1e_97) | <u>[PRINCIPAL ACCOUNTING FEES AND SERVICES](#ia18bd7c02fe147918e3ffac38a90fe1e_97)</u> | [52](#ia18bd7c02fe147918e3ffac38a90fe1e_97) |
| **[PART IV](#ia18bd7c02fe147918e3ffac38a90fe1e_100)** | | |
| [ITEM 15](#ia18bd7c02fe147918e3ffac38a90fe1e_103). | <u>[EXHIBITS, FINANCIAL STATEMENT SCHEDULES](#ia18bd7c02fe147918e3ffac38a90fe1e_103)</u> | [52](#ia18bd7c02fe147918e3ffac38a90fe1e_103) |
| ITEM 16 | FORM 10-K SUMMARY | 52 |
| <u>[SIGNATURES](#ia18bd7c02fe147918e3ffac38a90fe1e_172)</u> | | 56 |

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**PART I**

***Special Note Regarding Forward-Looking Statements***

This Annual Report contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled "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:

–history of operating losses, our ability to develop and implement our business strategies and grow our business:

–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;

–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

–the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing.

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 Report 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 Report, 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 Report 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.

Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-

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looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading "Risk Factors Related to Our Business" below, as well as those discussed elsewhere in this Annual Report on Form 10-K. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We file reports with the Securities and Exchange Commission ("SEC"). You can read and copy any materials we file with the SEC at the SEC's Public Reference Room, 100 F. Street, NE, Washington, D.C. 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

*We disclaim any obligation or intention to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.*

**ITEM 1. BUSINESS.**

**Our Business**

**Company Background and History**

Alpine 4 Holdings, Inc ("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 of this Report, the Company was a holding company that owned fourteen operating subsidiaries:

–A4 Corporate Services, LLC;

–ALTIA, LLC;

–Quality Circuit Assembly, Inc.;

–Morris Sheet Metal, Corp;

–JTD Spiral, Inc.;

–Excel Construction Services, LLC;

–SPECTRUMebos, Inc.;

–Vayu (US), Inc.;

–Thermal Dynamics International, Inc.;

–Alternative Laboratories, LLC.;

–Identified Technologies, Corp;

–ElecJet, Corp.;

–DTI Services Limited Liability Company (doing business as RCA Commercial Electronics); and

–Global Autonomous Corporation.

Starting in the first quarter of 2020, we also created 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"), A4 Aerospace Corporation ("A4 Aerospace"), and A4 Defense Services, Inc. ("A4 Defense Services"). All of these holding companies 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 subsidiaries.

In March 2021, the Company announced the combination of its subsidiaries Deluxe Sheet Metal, Inc. (Deluxe) and Morris Sheet Metal Corporation (Morris) to become one of the largest sheet metal contractors in the Midwest region of the United States. Both companies will be under the Morris Sheet Metal brand. The Company's management believes that the

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combination of these businesses will create a more harmonious relationship between the two companies. The combining of resources should empower Morris to strengthen its brand through its strategic banking relationship, eliminate duplicative and competitive interests, and expand its footprint beyond the Indiana home base.

On May 5, 2021, the Company acquired all of the outstanding shares of stock of Thermal Dynamics International, Inc., a Delaware corporation ("Thermal Dynamics").

On May 10, 2021, the Company acquired all of the outstanding membership interests of KAI Enterprises, LLC, a Florida limited liability company, the sole asset of which was all of the outstanding membership interests of Alternative Laboratories, LLC, a Delaware limited liability company ("Alt Labs").

In June 2021, the Company announced the combination of its subsidiaries Impossible Aerospace ("IA") and Vayu (US) ("Vayu US") to become Vayu Aerospace Corporation ("VAYU"). The Company's management believes that the combination of these businesses will create a more harmonious relationship between the two companies. The combining of resources should empower VAYU to strengthen its brand through its strategic banking relationship, eliminate duplicative and competitive interests, and expand its footprint beyond the Michigan home base.

On October 20, 2021, the Company, and the Company's subsidiary, A4 Aerospace, Inc., a Delaware corporation ("A4 Aerospace"), entered into a Stock Purchase Agreement with Identified Technologies Corporation, a Delaware corporation with foreign registration in Pennsylvania ("Identified Technologies"). Pursuant to the Stock Purchase Agreement, A4 Aerospace purchased all of the outstanding shares of capital stock of Identified Technologies, a total of 6,486,044 shares of Identified Technologies' capital stock (the "ITC Shares"). The total purchase price for the ITC Shares was $4,000,000 and was paid in shares of the Company's Class A common stock, issued to the Shareholders. Following the closing of the transaction, A4 Aerospace owned 100% of the capital stock of Identified Technologies.

On November 29, 2021, the Company, and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 3, Inc. a Delaware corporation ("AC3"), entered into a merger agreement with ElecJet Corp., a Delaware corporation ("ElecJet") and the three ElecJet shareholders. Pursuant to the Agreement, AC3 merged with and into ElecJet. AC3 was created solely for the purpose of the merger with ElecJet, and ElecJet was the surviving entity following the merger.

On December 9, 2021, the Company, and A4 Technologies, Inc., a Delaware corporation and wholly owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement with DTI Services Limited Liability Company (doing business as RCA Commercial Electronics), an Indiana limited liability company ("DTI"), Direct Tech Sales LLC, (also having an assumed business name of RCA Commercial Electronics), an Indiana limited liability company ("Direct Tech"), PMI Group, LLC, an Indiana limited liability company ("PMI"), Continu.Us, LLC, an Indiana limited liability company ("Continu.Us"), Solas Ray, LLC, an Indiana limited liability company ("Solas"), and the two individual owners of these entities. DTI, Direct Tech, PMI, Continu.Us, and Solas were referred to in the Membership Interest Purchase Agreement collectively as "RCA." Pursuant to the Membership Interest Purchase Agreement, the Company acquired all of the outstanding membership interests of RCA.

Alpine 4 maintains our corporate office located at 2525 E. Arizona Biltmore Circle, Suite 237, Phoenix, Arizona 85016. ALTIA works out of the headquarters offices. QCA rents a location at 1709 Junction Court #380 San Jose, California 95112. Morris Sheet Metal and JTD Spiral are located at 6212 Highview Dr, Fort Wayne, Indiana 46818. Excel Construction Services' office and fabrication space are located at 297 Wycoff Cir, Twin Falls, Idaho 83301. Vayu (US) has its headquarters at 3753 Plaza Drive, Ann Arbor, Michigan 48108. The headquarters for TDI are located at 14955 Technology Ct, Fort Myers, Florida 33912. Alt Labs has its headquarters at 4740 S. Cleveland Ave. Fort Myers, Florida 33907. The Identified Technologies Corporation headquarters are located at 6401 Penn Ave, Suite 211, Pittsburgh, Pennsylvania 15206. ElecJet has its headquarters at 2525 E. Arizona Biltmore Cir. Suite 237, Phoenix, Arizona 85016. RCA Commercial Electronics has its headquarters at 5935 W 84th St, Indianapolis, Indiana 46278. Global Autonomous Corporation has its offices at 2525 E Arizona Biltmore Circle, Suite 237, Phoenix Arizona 85016.

*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.

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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.

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 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".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "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.

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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.

**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 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. 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.

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. The company holds two patents on this technology.

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").

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 the real estate assets of Lonewolf Enterprises, LLC, an Indiana limited liability company ("LWE," and collectively with DSMI and DHL, "DSM").

On February 21, 2020, the Company, through its holding subsidiary A4 Construction, completed the acquisition of Excel Fabrication, LLC, an Idaho Limited Liability Company ("EFL"). EFL subsequently changed its name to Excel Construction Services, LLC.

On November 13, 2020, the Company and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 1, Inc. a Delaware corporation ("Merger Sub 1"), entered into a merger agreement (the "IA Agreement") with Impossible Aerospace Corporation, a Delaware corporation ("IAC"), pursuant to which IAC merged with and into Merger Sub 1 (the "IA Merger"). On November 12, 2020, the Company created Merger Sub 1 and became its sole shareholder. Merger Sub 1 was created solely for the purpose of the IA Merger. The IA Merger closed on December 15, 2020.

On December 29, 2020, the Company and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 2, Inc. a Delaware corporation ("Merger Sub 2"), entered into a merger agreement (the "Vayu Agreement") with Vayu (US), Inc., a Delaware corporation ("VAYU"), pursuant to which VAYU merged with and into Merger Sub 2 (the "Vayu Merger"). On December 29, 2020, the Company created Merger Sub 2 and became its sole shareholder. Merger Sub 2 was created solely for the purpose of the Vayu Merger. The Vayu Merger closed on February 8, 2021.

As noted above, in 2021, the Company, either directly or through subsidiaries entered into the following acquisition and merger transactions:

–In May 2021, the Company acquired all of the outstanding shares of stock of Thermal Dynamics;

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–In May 2021, the Company acquired all of the outstanding membership interests of KAI Enterprises, LLC, a Florida limited liability company, the sole asset of which was all of the outstanding membership interests of Alt Labs;

–In June 2021, the Company announced the combination of its subsidiaries Impossible Aerospace ("IA") and Vayu (US) ("Vayu US") to become Vayu Aerospace Corporation ("VAYU");

–In October 2021, the Company, and the Company's subsidiary, A4 Aerospace, Inc., a Delaware corporation, entered into a Stock Purchase Agreement with Identified Technologies;

–In November 2021, the Company, and AC3 entered into a merger agreement with ElecJet;

–In December 2021, the Company, and A4 Technologies entered into a Membership Interest Purchase Agreement with DTI, Direct Tech, PMI, Continu.Us, Solas Ray, and their individual owners to acquire all of the outstanding membership interests of RCA; and

–In January 2022, the Company formed Global Autonomous Corporation with several key employee and consultants. The Company owns 71.43%

As of the date of this Report, the Company was exploring additional acquisition and merger transactions, and additional information will be provided if and when such transactions are either binding or closed.

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.

As of the date of the filing of this Annual Report, our subsidiaries and product groups consisted of the following:

**Subsidiaries & Product Groups**

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

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

–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. 6th Sense Auto uses disruptive technology to improve inventory management, reduce costs, increase sales, and enhance service.

–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 was a sheet metal fabricator that provided American made fabricated metal parts, assemblies and sub-assemblies to Original Equipment Manufacturers ("OEM"). The Company supplied several industries with fabricated parts that it created in-house. It offered several production capabilities with its state-of-the-art machinery. As of August 31, 2020 APF has ceased operations.

• Morris Sheet Metal FW ("MSM FW") – 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.

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• 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, Inc ("DLX") – Based in South Bend, Indiana, DLX 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. In 2021, DLX merged its operations into MSM FW becoming MSM-SB.

• Excel Fabrication, LLC (name subsequently changed to Excel Construction Services) ("EXL") –Based in Twin Falls, Idaho, EXL is an industrial service with customers in the Food, Beverage, Dairy, Mining, Petrochemical, Mineral, and Ammonia Refrigeration. EXL's capabilities include a vast amount of field work including new fabrication, design build, installation, repairs, service, maintenance, turn arounds, down days planned or unplanned with quick and responsive teams for most any items required by the customer needs and demands.

• Vayu Aerospace Corporation formally Vayu (US), Inc. ("Vayu"), has as its mission to solve the hardest and most critical logistics challenges, anywhere in the world. Vayu aims to set the standard and lead the market in safe, reliable, and affordable vertical take-off and landing ("VTOL") aircraft. Vayu focuses on four key areas: medical, logistics, energy, and disaster relief.

–Medical – From blood products for transfusion and time-sensitive anti-venoms, to critical medications, vaccines, and surgical supplies, Vayu's drones deliver vital supplies --anywhere, anytime. Vayu's drone not only brings precious cargo to remote areas, but it can also pick up medical products, such as lab samples, and return them to a central laboratory for testing.

–Logistics - Mail. Spare parts. Consumer electronics. Time-sensitive documents. These are just a few examples of the use cases where Vayu's vehicle can play a critical role. Delivery from hub-to-hub or to the 'last mile'. Vayu's vehicle can both decrease costs, due to its fuel efficiency and autonomous capability -- and increase market share.

–Energy – Vayu's drone can reach open-pit mines and offshore oil platforms. By transporting spare parts, or other commodities, Vayu's vehicle can save a company from down-time and high costs of on-site stocking, while avoiding more costly forms of transportation.

–Disaster Relief – In times of crisis, when infrastructure is compromised, Vayu's drones can reach areas otherwise completely inaccessible. Whether it's after an earthquake, hurricane, or flooding, Vayu's drones can take off and land anywhere, and reach populations in need.

–As noted above, in June 2021, the Company announced the combination of IA and Vayu to become Vayu Aerospace Corporation ("VAYU")

• Alternative Laboratories ("Alt Labs") - Based in Fort Meyers, Florida, Alt Labs operates as a contract manufacturer of dietary and nutritional supplements.

• Thermal Dynamics International, Inc. ("TDI") is an international contracting, fabricator, and project management services company. TDI's primary client is the United States Federal Government, including the Department of Defense and Department of State. TDI specializes in managing complex projects, assets and infrastructure for its customers, including support and services for the engineering, design, logistics and installation of HVAC, Control and Electrical systems in government facilities outside the United States.

• Identified Technologies - Based in Pittsburgh, Pennsylvania, provides geospatial and 3D data to customers in Construction, Oil/Gas, Mining, and Quarries. Users capture the raw data on site with small Unmanned Aerial Systems

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and use automated software to convert the raw imagery to geospatial data. Identified can both enable customers to deploy their own drone departments, and deploy certified pilots to capture the data as a service.

• ElecJet - Based in Phoenix, Arizona, ElecJet operates as a manufacturer of electronic components, a research and development company for graphene batteries.

• DTI Services Limited Liability Company, and Affiliates (collectively referred to as the "RCA") is engaged in the design, manufacture and wholesale distribution of commercial LED lighting and electronics such as televisions, mounting solutions, projectors and screens, audio equipment, digital signage, mobile audio and video systems, and all wire and connecting products throughout the United States of America.

–In January 2022, the Company announced the formation of RCA Batteries Corporation (RCA Batteries), a joint venture between RCA Commercial and Elecjet. RCA Batteries will reside under the Company's subsidiary RCA Commercial and will operate as the manufacturer and distributor of the ElecJet family of graphene batteries.

**Recent Developments**

*Registered Direct Offering*

On November 23, 2021, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with certain purchasers identified on the signature page thereto (the "Purchasers"), pursuant to which the Company sold to the Purchasers in a registered direct offering, an aggregate of 8,571,430 Shares of Class A Common Stock (the "Common Stock") and Warrants the ("Warrants") to purchase up to 4,285,715 Shares of Class A Common Stock (the "Warrant Shares") underlying the Warrants, for aggregate gross proceeds to the Company of $24,000,000, before deducting fees to the placement agent and other estimated offering expenses payable by the Company. At the closing, the Company issued an aggregate of 8,571,430 Shares and Warrants to purchase an aggregate of 4,285,715 Warrants Shares.

*ElecJet Corporation* 

On November 29, 2021, the Company and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 3, Inc. a Delaware corporation ("Merger Sub"), entered into a merger agreement (the "Agreement") with ElecJet Corp., a Delaware corporation ("ElecJet") and the three shareholders of ElecJet, Samuel Gong ("Gong"), Wade Lin ("Lin"), and John Doricko ("Doricko," and collectively with Gong and Lin, the "Securityholders"). Pursuant to the Agreement, Merger Sub merged with and into ElecJet (the "Merger"). Additional information about this transaction can be found in the Current Report on Form 8-K filed by the Company on December 3, 2021.

*Acquisition of DTI Services Limited Liability Company (doing business as RCA Commercial Electronics)*

On December 9, 2021, the Company and A4 Technologies, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("A4 Technologies"), entered into a Membership Interest Purchase Agreement (the "MIPA") with DTI Services Limited Liability Company (doing business as RCA Commercial Electronics), an Indiana limited liability company ("DTI"), Direct Tech Sales LLC, (also having an assumed business name of RCA Commercial Electronics), an Indiana limited liability company ("Direct Tech"), PMI Group, LLC, an Indiana limited liability company ("PMI"), Continu.Us, LLC, an Indiana limited liability company ("Continu.Us"), Solas Ray, LLC, an Indiana limited liability company ("Solas"), Kirby Goedde, an individual ("Goedde"), and Andrew Spence, an individual ("Spence" and with Goedde, each a "Seller" and collectively, the "Sellers"). DTI, Direct Tech, PMI, Continu.Us, and Solas were referred to in the MIPA collectively as "RCA." Pursuant to the MIPA, A4 Technologies acquired all of the outstanding membership interests of RCA from the Sellers, which is referred to herein as the "RCA Transaction."

Prior to the RCA Transaction, the Sellers owned all of the issued and outstanding membership interests in the entities that collectively constituted RCA (collectively, the "Acquired Interests"). Pursuant to the RCA Transaction, A4 Technologies acquired all of the Acquired Interests and became the sole owner of RCA. The parties to the RCA Transaction met all of the required conditions to closing on December 13, 2021, and the RCA Transaction closed on that day. Additional information about the Transaction can be found in the Current Report on Form 8-K filed by the Company on December 15, 2021.

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*RCA Batteries*

On January 26, 2022, the Company issued a press release to announce the formation of RCA Batteries Corporation ("RCA Batteries"), a joint venture between RCA Commercial and Elecjet Corp. As of the date of this Report, the Company had opted to use RCA Batteries as a brand and not a corporate entity. As noted in the press release, RCA Batteries will reside under Alpine 4's subsidiary RCA Commercial and will operate as the manufacturer and distributor of the ElecJet family of graphene batteries. Elecjet will continue as a manufacturer of electronic components, a research and development company, and the legal entity holding the company's intellectual property, including patents and software copyrights. The Company further announced that Samuel Gong will be the President of RCA Batteries while remaining as President of Elecjet.

In March 2022, ElecJet engaged the Battery Innovation Center (BIC) in Newberry, Indiana, to conduct a third-party verification of the specifications of certain of ElecJet's Class of solid-state batteries previously confirmed by ElecJet in its laboratory. The testing included puncture testing, folding/crumpling tests, and thermal heat tests. The AX Battery Class is a Ceramic Oxide solid-state battery and comes in the form of a 31Ah Solid-State Battery and a 10Ah Solid-State Battery. All of the AX and G-AX Classes are true solid-state batteries and are not semi solid-state batteries. ElecJet engaged the BIC to perform several types of testing, ranging from verification of its charge capabilities, to energy density / power density, to induced failure point testing. The BIC tested two versions of the AX 31Ah the AX-01 and the AX-02. These two subclasses are designed for different market segments.

The AX-01 is an ultra-safe version that can withstand a variety of survivability use cases. The AX-01 has a slightly different material composition that enables its amazing survivability characteristics. The BIC confirmed that the AX-01 withstood being punctured, then folded, and finally crumpled while still holding a charge. The cell was then put through a temperature destruction test where the cell survived to a temperature of 410 degrees Fahrenheit (210 degrees Celsius). Details of the tests are described below:

–Nail Puncture Test: The AX-01 was punctured by a 3mm diameter nail. The nail was left inside the battery, purposely causing the battery to short, of which it did for over an hour while being suspended in the air. The battery's temperature fluctuated but would hover at around 98.6°F (37°C) near the end of the hour with a maximum measured temperature of 101.76°F (38.76°C). Subsequently, the battery was lowered back on to the metal surface for the nail to be removed and the battery quickly returned to room temperature. One amazing feature of the battery was that during the entirety of the test, the AX-01 was holding voltage and remained functional. Note: Traditional lithium batteries typically would instantly catch on fire and go into thermal runaway the moment the battery was punctured.

–Fold/Crumple Test: After the puncture test, the AX-01 was folded over its long side (AX-01 is a long rectangular shape) by a mechanical actuator. After it was folded to the point that both ends were touching each other, the battery was attempted to be folded over again by its short side. After being folded with as much force as the mechanical actuator could press out, the battery remained functional throughout the entire process and remained at room temperature. Note: Standard lithium batteries would normally catch on fire after being folded at even a small angle.

–Thermal Heat Test: The battery was placed in an oven and the oven would slowly and constantly increase in temperature to test the battery's heat exposure breaking point. The temperature of the battery was brought up to 428°F (220°C) before thermal runaway occurred creating a new BIC record. Once the battery eventually caught fire, the fire was unlike other thermal runaways where a battery spews a stream of fire from a concentrated point, but rather was much more contained to the surface area across the battery. Note: Typical lithium batteries would have a thermal runaway at 266°F (130°C) and the previous highest recorded temperature before thermal runaway on cells of similar capacity, with fielded chemistries, at the BIC was 302°F (150°C).

The BIC confirmed that the AX-01 measured a discharge energy of 111.41Wh at a C/2 rate (measured 31.70 Ah)). At a nominal volume of 0.17571 Liters for each cell and a nominal mass of 0.395 kg, this translates to 634Wh/L and 282Wh/kg of energy densities which are both dramatic improvements over current battery technology.

The AX-01 has a designed commercial cycle life of over 1,200 charge cycles. (Please note: this life cycle range was tested only in the Company's laboratories, and we have not yet received results from the BIC, which generally takes several months to complete.)

The AX-02 is an energy dense cell that also has a high degree of survivability but trades some of the safety material features of the AX-01 for much higher power densities and higher life cycles.

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The BIC confirmed that the AX-02 has the capability to charge at 4C. This means that the battery can fully charge in just 15 minutes. The AX-02 is also capable of 7C discharging and over 2,400 life cycles, both of which are currently in the process of being confirmed by the BIC.

The BIC also confirmed that the AX-02 measured a discharge energy of 113.213Wh at a C/2 rate (measured 31.4 Ah). At a nominal volume of 0.17571 Liters for each cell and a nominal mass of 0.395 kg, this translates to 644Wh/L and 287Wh/kg of energy densities which are both dramatic improvements over current battery technology.

Additionally, the Company has been exploring and has had discussions with different battery engineering firms, capital partners and consultants, in anticipation of bringing production of the ElecJet AX Class of batteries to the United States. ElecJet has current plans to begin with a ½ GW battery factory to support non EV customers with products for ESS systems, aerospace platforms and defense systems that need safe reliable power cells. However, the Company anticipates that factory layout and space accommodation will be made for the factory to expand to 5 GW or greater, if demand from potential EV customers increases. The company has narrowed its search to build this factory to Phoenix and Tucson, Arizona; Houston, Texas; and Indianapolis, Indiana, and plans on making a decision on which location to build this factory in the third quarter of 2022. The Company has also taken an equity position in a battery design firm, and is exploring other strategic opportunities relating to production and design of the batteries in the United States.

*Annual Shareholder Meeting; Mike Loyd Resignation*

On March 25, 2022, the Company held its 2021 Annual Shareholder meeting. At the meeting, the Company's shareholders elected eight directors: Kent B. Wilson, Charles Winters, Ian Kantrowitz, Gerry Garcia, Edmond Lew, Christophe Jeunot, Jonathan Withem, and Mike Loyd; ratified the appointment of MaloneBailey, LLP as the Company's independent registered public accountant for 2021; approved an amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of Class A Common Stock to 295,000,000 shares; and approved the adoption of the Company's new 2021 Equity Incentive Plan.

Prior to the annual meeting, Mike Loyd communicated to the Board his plan to resign, effective immediately, due to added responsibilities with his employer and to spend more time with family.

On April 13, 2022, the Company filed the Certificate of Amendment with the Delaware Secretary of State, increasing the number of authorized shares of Class A Common Stock to 295,000,000 shares.

*Appointment of New Director; Implementation of Rotating Board Chair Position* 

On April 6, 2022, the Company announced that the Board of Directors had appointed Andy Call to join the Board of Directors and to become Chair of the Audit Committee of the Board.

Additionally, on April 6, 2022, the Company's Board of Directors adopted a resolution to implement a rotation in the position of Chair of the Board of Directors. The resolution had been recommended by the Board's Nominating and Corporate Governance Committee. Per the resolution of the Board, the chair position will rotate on an annual basis.

Acting upon a recommendation from the Nominating and Corporate Governance Committee, the Board then appointed Gerry Garcia as the new Chair of the Board of Directors.

Additional information about Mr. Call and about the rotating chair position can be found in the Current Report on Form 8-K filed with the SEC on April 11, 2022.

**Employees** 

As of the date of this Report, we had 480 full-time employees. We believe that our relationship with our employees is good. Other than as disclosed in this Report or previously filed with the SEC, we have no employment agreements with our employees.

**ITEM 1A. RISK FACTORS**

Because of the following factors, as well as other factors affecting the Company's financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.

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*Summary of our 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:

–The global supply chain is an issue for many companies in the global business environment as well as it is for Alpine 4. These constraints affected the company in 2021 and may affect our ability to deliver our products on time in 2022.

–Alpine 4 is an "emerging growth company," and the reduced disclosure requirements applicable to "emerging growth companies" could make our Class A common stock less attractive to investors

.

–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.

–The ongoing COVID-19 pandemic has caused severe disruptions in the U.S. and global economies, which has impacted the business, activities, and operations of our customers, as well as our business and operations. Additionally, through 2021, the U.S. and other economies have been impacted by supply chain disruptions, labor shortages and high inflation, all of which may have a negative impact on our business and operations.

–Our existing debt levels may adversely affect our financial condition or operational flexibility and prevent us from fulfilling our obligations under our outstanding indebtedness.

–Growth and development of operations will depend on the growth in our acquisition model and from organic growth from our subsidiaries' businesses. If we cannot find desirable acquisition candidates, we may not be able to generate growth with future revenues.

–We face risks related to COVID-19 which have significantly disrupted our manufacturing, research and development, operations, sales and financial results, and could continue to do so for the foreseeable future.

–Should we fail to comply with the minimum listing standards applicable to issuers listed on The Nasdaq Capital Market, our common stock may be delisted from The Nasdaq Capital Market.

***<u>Risks Associated with Our Business and Operations</u>***

***We are an "emerging growth company," and the reduced disclosure requirements applicable to "emerging growth companies" could make our common stock less attractive to investors.***

We are 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.

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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 $1,070,000,000 (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.

***Significant time and management resources are required to ensure compliance with public company reporting and other obligations. Taking steps to comply with these requirements will increase our costs and require additional management resources, and does not ensure that we will be able to satisfy them.***

We are a publicly reporting company. As a public company, we are required to comply with applicable provisions of the Sarbanes-Oxley Act of 2002, as well as other federal securities laws, and rules and regulations promulgated by the SEC and the various exchanges and trading facilities where our Class A common stock may trade, which result in significant legal, accounting, administrative and other costs and expenses. These rules and requirements impose certain corporate governance requirements relating to director independence, distributing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest, and codes of conduct, depending on where our shares trade. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all applicable requirements.

***As we review our internal controls and procedures, we may determine that they are ineffective or have material weaknesses, which could impact the market's acceptance of our filings and financial statements.***

In connection with the preparation of this Annual Report, 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 have 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.

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***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 develop, 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 is a growth-based company and 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 we are unsuccessful in its business plans.***

As the Alpine 4's "Driver" classified subsidiaries mature from a start-up phase to an operating phase, the Company expects to stop incurring operating losses at some point in the future. However new additional subsidiaries may incur significant expenses associated with the growth of those businesses. Further, there is no guarantee that the Company 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 one of its subsidiaries 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 purchase in connection with this offering.

***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 we cannot find desirable acquisition candidates, it may not be able to generate growth with future revenues.***

We expect to continue our strategy of acquiring businesses, which management believes will result in significant growth in projected annualized revenue by the end of 2022. However, there is no guarantee that we will be successful in realizing future revenue growth from its acquisition model. As such, we are highly dependent on suitable candidates to acquire, which supply of such candidates cannot be guaranteed and is driven from the market for M&A. If we are unable to locate or identify suitable acquisition candidates, or to enter into transactions with such candidates, or if we are unable to integrate the acquired businesses, we may not be able to grow our revenues to the extent anticipated, or at all.

***We may make acquisitions which could divert the attention of management and which may not be integrated successfully into our existing business.***

We may pursue acquisitions to increase our market penetration, enter new geographic markets and expand the scope of services we provide. We cannot guarantee that we will identify suitable acquisition candidates, that acquisitions will be completed on acceptable terms or that we will be able to integrate successfully the operations of any acquired business into our existing business. The acquisitions could be of significant size and involve operations in multiple jurisdictions. The acquisition and integration of another business would divert management attention from other business activities. This diversion, together with other difficulties we may incur in integrating an acquired business, could have a material adverse effect on our business, financial condition and results of operations. In addition, we may borrow money or issue capital stock to finance acquisitions. Such borrowings might not be available on terms as favorable to us as our current borrowing terms and may increase our leverage, and the issuance of capital stock could dilute the interests of our stockholders.

***As we acquire companies or technologies in the future, they could prove difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our operating results and the value of your investment.***

As part of our business strategy, we regularly evaluate investments in, or acquisitions of, complementary businesses, joint ventures, services and technologies, and we expect that periodically we will continue to make such investments and acquisitions in the future. Acquisitions and investments involve numerous risks, including:

–the potential failure to achieve the expected benefits of the combination or acquisition;

–difficulties in and the cost of integrating operations, technologies, services and personnel;

–diversion of financial and managerial resources from existing operations;

–risk of entering new markets in which we have little or no experience;

–potential write-offs of acquired assets or investments;

–potential loss of key employees;

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–inability to generate sufficient revenue to offset acquisition or investment costs;

–the inability to maintain relationships with customers and partners of the acquired business;

–the difficulty of incorporating acquired technology and rights into our products and services and of maintaining quality standards consistent with our established brand;

–potential unknown liabilities associated with the acquired businesses;

–unanticipated expenses related to acquired technology and its integration into existing technology;

–negative impact to our results of operations because of the depreciation and amortization of amounts related to acquired intangible assets, fixed assets and deferred compensation, and the loss of acquired deferred revenue;

–the need to implement controls, procedures and policies appropriate for a public company at companies that prior to the acquisition lacked such controls, procedures and policies; and

–challenges caused by distance, language and cultural differences.

In addition, if we finance acquisitions by issuing additional convertible debt or equity securities, our existing stockholders may be diluted which could affect the market price of our stock. Further, if we fail to properly evaluate and execute acquisitions or investments, our business and prospects may be seriously harmed, and the value of your investment may decline.

***Alpine 4 has limited management resources and will be dependent on key executives. The loss of the services of the current officers and directors could severely impact Alpine 4's business operations and future development, which could result in a loss of revenues and adversely impact the business.***

Alpine 4 is relying on a small number of key individuals, which the Company has increased during 2021, 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, Jeff Hail, our Chief Operating Officer, Larry Zic, our Chief Financial Officer, and SaVonnah Osmanski, our VP/Corporate Controller. Mr. Wilson serves 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 and the executive team. If Mr. Wilson or any member of the executive team chooses not to serve as an officer or if Mr. Wilson or any member of the executive team is unable to perform his or her duties, this could have an adverse effect on Company business operations, financial condition and operating results, especially if we are unable to replace Mr. Wilson or Mr. Hail with other individuals qualified to develop and market our business. The loss of their services could result in a loss of revenues, which could result in a reduction of the value of any ownership of Alpine 4.

***Competition that we face is varied and strong.***

Our 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to anticipate changes in consumer preferences and to meet customers' needs for our products in a timely cost-effective manner; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ability to keep satisfied vendor relationships

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• hiring and training qualified personnel in local markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• managing marketing and development costs at affordable levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cost and availability of labor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the availability of, and our ability to obtain, adequate supplies of ingredients that meet our quality standards; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• securing required governmental approvals in a timely manner when necessary.

***Our financial condition and results of operations for fiscal 2022 may continue to be adversely affected by the COVID-19 pandemic.***

The impact of the worldwide COVID-19 pandemic has been and will likely continue to be extensive in many geographies and aspects of society. The pandemic has resulted in and will likely continue to result in disruptions to the global economy, as well as businesses, supply chains and capital markets around the world.

Impacts to our business have included temporary closures of many of our government and university customers and our suppliers, disruptions or restrictions on our employees' and customers' ability to travel, and delays in product installations or shipments to and from affected countries. In an effort to halt the outbreak of COVID-19, a number of countries, including the United States, implemented and some continue to implement significant restrictions on travel, shelter in place or stay at home orders, and business closures. While some of these restrictions were loosened in certain jurisdictions, some markets have returned to restrictions in the face of increases in new COVID-19 cases, particularly as more contagious strains of the virus emerge. Many of our employees in jurisdictions in which we have significant operations continue to work remotely. Much of the commercial activity in sales and marketing, and customer demonstrations and applications training, is still either being conducted remotely or postponed. Even where customers have re-opened their sites, some still operate at productivity levels that are below pre-pandemic levels in an effort to accommodate safety protocols and as a

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result of pandemic-related supply chain disruptions. Any resurgence of the virus or the emergence of new strains of the virus, particularly any new strains which are more easily transmitted or which are resistant to existing vaccines, may require us or our customers to close or partially close operations once again. These travel restrictions, business closures and operating reductions at Alpine 4, our customers, our distributors, and/or our suppliers have in the past adversely impacted and may continue to adversely impact our operations, including our ability to manufacture, sell or distribute our products, as well as cause temporary closures of our distributors, or the facilities of suppliers or customers. Further, global supply chains continue to be disrupted, causing shortages, which has impacted our ability to manufacture and supply our products. We could also experience increased compensation expenses associated with employee recruiting and employee retention to the extent employment opportunities continue to multiply post-pandemic, causing the search for and retention of talent to become more competitive. This disruption of our employees, distributors, suppliers and customers has historically impacted and may continue to impact our global sales and future operating results.

We are continuing to monitor and assess the ongoing effects of the COVID-19 pandemic on our commercial operations in 2022 and going forward. However, we cannot at this time accurately predict what effects these conditions will ultimately have on our operations due to uncertainties relating to the severity of the disease, including the impact of any resurgence of the virus, the continued emergence of new strains of the virus, the effectiveness and availability of vaccines, the willingness of individuals to receive vaccines, (including to protect against any new strains of the virus), and the length or severity of travel restrictions, business closures, and other safety and precautionary measures imposed by the governments of impacted countries. The pandemic has also adversely affected the economies and financial markets of many countries, which has affected and may continue to affect demand for our products and our operating results.

In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive such difficult economic times, which could directly affect our ability to attain our operating goals on schedule and on budget. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business. Furthermore, our stock price may decline due in part to the volatility of the stock market and any general economic downturn.

The preparation of the consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. We evaluate estimates, judgments and methodologies on an ongoing basis. Changes in estimates are recorded in the period in which they become known. We base estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. The full extent to which the COVID-19 pandemic will directly or indirectly impact future business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19, the continued emergence of new strains of the virus, the effectiveness and availability of vaccines, the willingness of individuals to receive vaccines (including to protect against any new strains of the virus), and the actions taken to contain or treat the virus, as well as the economic impact on local, regional, national and international customers and markets. We have made estimates of the impact of COVID-19 within the consolidated financial statements and there may be changes to those estimates in future periods. Actual results may differ from management's estimates if these results differ from historical experience.

***Our existing debt levels may adversely affect our financial condition or operational flexibility and prevent us from fulfilling our obligations under our outstanding indebtedness.***

As of December 31, 2021, we had total debt of approximately $63 million. This level of debt or any increase in our debt level could have adverse consequences for our business, financial condition, operating results and operational flexibility, including the following: (i) the debt level may cause us to have difficulty borrowing money in the future for working capital, capital expenditures, acquisitions or other purposes; (ii) our debt level may limit operational flexibility and our ability to pursue business opportunities and implement certain business strategies; and (iii) we have a higher level of debt than some of our competitors or potential competitors, which may cause a competitive disadvantage and may reduce flexibility in responding to changing business and economic conditions, including increased competition and vulnerability to general adverse economic and industry conditions. If we fail to satisfy our obligations under our outstanding debt, an event of default could result that could cause some or all of our debt to become due and payable.

***Cybersecurity risks and cyber incidents, including cyber-attacks, could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and confidential information in our possession and damage to our business relationships, any of which could negatively impact our business, financial condition and operating results.***

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There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us due to our substantial reliance on information technology or otherwise. Cyber-attacks and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside parties. As a result of the generally increasing frequency and sophistication of cyber-attacks, and our substantial reliance on technology, we may face a heightened risk of a security breach or disruption with respect to sensitive information resulting from an attack by computer hackers, foreign governments or cyber terrorists.

The operation of our business is dependent on computer hardware and software systems, as well as data processing systems and the secure processing, storage and transmission of information, which are vulnerable to security breaches and cyber incidents. A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. In addition, we and our employees may be the target of fraudulent emails or other targeted attempts to gain unauthorized access to proprietary or other sensitive information. The result of these incidents may include disrupted operations, misstated or unreliable financial data, fraudulent transfers or requests for transfers of money, liability for stolen information, increased cybersecurity protection and insurance costs, litigation and damage to our business relationships, causing our business and results of operations to suffer. Our reliance on information technology is substantial, and accordingly the risks posed to our information systems, both internal and those provided by third-party service providers are critical. We have implemented processes, procedures and internal controls designed to mitigate cybersecurity risks and cyber intrusions and rely on industry accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems; however, these measures, as well as our increased awareness of the nature and extent of a risk of a cyber-incident, do not guarantee that a cyber-incident will not occur and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident, especially because the cyber-incident techniques change frequently or are not recognized until launched and because cyber-incidents can originate from a wide variety of sources.

Those risks are exacerbated by the rapidly increasing volume of highly sensitive data, including our and our customers' proprietary business information and intellectual property, and personally identifiable information of our employees and customers, that we collect and store in our data centers and on our networks. The secure processing, maintenance and transmission of this information are critical to our operations. A significant actual or potential theft, loss, corruption, exposure, fraudulent use or misuse of employee, customer or other personally identifiable or our or our customers' proprietary business data, whether by third parties or as a result of employee malfeasance (or the negligence or malfeasance of third party service providers that have access to such confidential information) or otherwise, non-compliance with our contractual or other legal obligations regarding such data or intellectual property or a violation of our privacy and security policies with respect to such data could result in significant remediation and other costs, fines, litigation or regulatory actions against us and significant reputational harm.

***Failure to maintain the security of our information and technology networks or data security breaches could harm our reputation and have a material adverse effect on our results of operations, financial condition and cash flow.***

We rely on the reasonably secure processing, storage and transmission of confidential and other sensitive information in our computer systems and networks, and those of our service providers and their vendors. We are subject to various risks and costs associated with the collection, handling, storage and transmission of personally identifiable information and other sensitive information, including those related to compliance with U.S. and foreign data collection and privacy laws and other contractual obligations, as well as those associated with the compromise of our systems processing such information. In the ordinary course of our business, we collect, store a range of data, including our proprietary business information and intellectual property, and personally identifiable information of our employees, our fund investors and other third parties, in our cloud applications and on our networks, as well as our services providers' systems. The secure processing, maintenance and transmission of this information are critical to our operations. We, our service providers and their vendors face various security threats on a regular basis, including ongoing cybersecurity threats to and attacks on our and their information technology infrastructure that are intended to gain access to our proprietary information, destroy data or disable, degrade or sabotage our systems. Cyber-incident techniques change frequently, may not immediately be recognized and can originate from a wide variety of sources. There has been an increase in the frequency, sophistication and ingenuity of the data security threats we and our service providers face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent. Although we and our services providers take protective measures and endeavor to modify them as circumstances warrant, our computer systems, software and networks may be vulnerable to unauthorized access, theft, misuse, computer viruses or other malicious code, including malware, and other events that could have a security impact. We may be the target of more advanced and persistent attacks because, as an alternative asset manager, we hold a significant amount of confidential and sensitive information about, among other things, our fund investors, portfolio companies and potential investments. We may also be exposed to a more significant risk if these acts

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are taken by state actors. Any of the above cybersecurity threats, fraudulent activities or security breaches suffered by our service providers and their vendors could also put our confidential and sensitive information at risk or cause the shutdown of a service provider on which we rely. We and our employees have been and expect to continue to be the target of fraudulent calls and emails, the subject of impersonations and fraudulent requests for money, including attempts to redirect material payment amounts in a transaction to a fraudulent bank account, and other forms of spam attacks, phishing or other social engineering, ransomware or other events. Cyber-criminals may attempt to redirect payments made at the closings of our investments to unauthorized accounts, which we or our services providers we retain, such as paying agents and escrow agents, may be unable to detect or protect against. The COVID-19 pandemic has exacerbated these risks due to heavier reliance on online communication and the remote working environment, which may be less secure, and there has been a significant increase in hacking attempts by cyber-criminals. The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by others, including by our service providers. If successful, such attacks and criminal activity could harm our reputation, disrupt our business, cause liability for stolen assets or information and have a material adverse effect on our results of operations, financial condition and cash flow.

We rely heavily on our back office informational technology infrastructure, including our data processing systems, communication lines, and networks. Although we have back-up systems and business-continuation plan in place, our back-up procedures and capabilities in the event of a failure or interruption may not be adequate. Any interruption or failure of our informational technology infrastructure could result in our inability to provide services to our clients, other disruptions of our business, corruption or modifications to our data and fraudulent transfers or requests for transfers of money. Further consequences could include liability for stolen assets or information, increased cybersecurity protection and insurance costs and litigation. We expect that we will need to continue to upgrade and expand our back-up and procedures and capabilities in the future to avoid disruption of, or constraints on, our operations. We may incur significant costs to further upgrade our data processing systems and other operating technology in the future.

Our technology, data and intellectual property and the technology, data and intellectual property of our funds' portfolio companies are also subject to a heightened risk of theft or compromise to the extent that we and our funds' portfolio companies engage in operations outside the United States, particularly in those jurisdictions that do not have comparable levels of protection of proprietary information and assets, such as intellectual property, trademarks, trade secrets, know-how and customer information and records. In addition, we and our funds' portfolio companies may be required to forgo protections or rights to technology, data and intellectual property in order to operate in or access markets in a foreign jurisdiction. Any such direct or indirect loss of rights in these assets could negatively impact us, our funds and their investments.

A significant actual or potential theft, loss, corruption, exposure or fraudulent, unauthorized or accidental use or misuse of investor, employee or other personally identifiable or proprietary business data could occur, as a result of third-party actions, employee malfeasance or otherwise, non-compliance with our contractual or other legal obligations regarding such data or intellectual property or a violation of our privacy and security policies with respect to such data. If such a theft, loss, corruption, use or misuse of data were to occur, it could result in significant remediation and other costs, fines, litigation and regulatory actions against us by (i) the U.S. federal and state governments, (ii) the EU or other jurisdictions, (iii) various regulatory organizations or exchanges and (iv) affected individuals, as well as significant reputational harm.

Cybersecurity has become a top priority for regulators around the world. Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information and other sensitive information, including, without limitation the General Data Protection Regulation (Regulation (EU) 2016/679) (the "GDPR") in the EU and the Data Protection Act 2018 in the U.K. (the "U.K. Data Protection Act"), comprehensive privacy laws enacted in California, Colorado and Virginia, the Hong Kong Personal Data (Privacy) Ordinance, the Korean Personal Information Protection Act and related legislation, regulations and orders and the Australian Privacy Act. China and other countries have also passed cybersecurity laws that may impose data sovereignty restrictions and require the localization of certain information. We believe that additional similar laws will be adopted in these and other jurisdictions in the future, further expanding the regulation of data privacy and cybersecurity. Such laws and regulations strengthen the rights of individuals (data subjects), mandate stricter controls over the processing of personal data by both controllers and processors of personal data and impose stricter sanctions with substantial administrative fines and potential claims for damages from data subjects for breach of their rights, among other requirements. Some jurisdictions, including each of the U.S. states as well as the EU through the GDPR and the U.K. through the U.K. Data Protection Act, have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data, which would require heightened escalation and notification processes with associated response plans. We expect to devote resources to comply with evolving cybersecurity and data privacy regulations and to continually monitor and enhance our information security and data privacy procedures and controls as necessary. We or our fund's portfolio companies may incur substantial costs to comply with changes in such laws and regulations and may be unable to adapt to such changes in the necessary timeframe and/or at reasonable cost. Furthermore, if we experience a cybersecurity incident and fail to comply with the applicable

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laws and regulations, it could result in regulatory investigations and penalties, which could lead to negative publicity and may cause our fund investors and clients to lose confidence in the effectiveness of our security and privacy measures.

The materialization of one or more of these risks could impair the quality of our operations, harm our reputation, negatively impact our businesses and limit our ability to grow.

***We rely significantly on the use of information technology, as well as those of our third-party service providers. Our failure or the failure of third-party service providers to protect our website, networks, and systems against cybersecurity incidents, or otherwise to protect our confidential information, could damage our reputation and brand and substantially harm our business, financial condition, and results of operations.***

To the extent that our services are web-based, we collect, process, transmit and store large amounts of data about our customers, employees, vendors and others, including credit card information and personally identifiable information, as well as other confidential and proprietary information. We also employ third-party service providers for a variety of reasons, including storing, processing and transmitting proprietary, personal and confidential information on our behalf. While we rely on tokenization solutions licensed from third parties in an effort to securely transmit confidential and sensitive information, including credit card numbers, advances in computer capabilities, new technological discoveries or other developments may result in the whole or partial failure of this technology to protect this data from being breached or compromised. Similarly, our security measures, and those of our third-party service providers, may not detect or prevent all attempts to hack our systems or those of our third-party service providers. DDoS attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other cybersecurity incidents and similar disruptions that may jeopardize the security of information stored in or transmitted by our website, networks and systems or that we or our third-party service providers otherwise maintain, including payment card systems, may subject us to fines or higher transaction fees or limit or terminate our access to certain payment methods. We and our service providers may not anticipate or prevent all types of attacks until after they have already been launched, and techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers, and we may be unable to implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. In addition, cybersecurity incidents can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by persons with whom we have commercial relationships.

Breaches of our security measures or those of our third-party service providers or any cybersecurity incident could result in unauthorized access to our website, networks and systems; unauthorized access to and misappropriation of customer and/or employee information, including personally identifiable information, or other confidential or proprietary information of ourselves or third parties; viruses, worms, spyware or other malware being served from our website, networks or systems; deletion or modification of content or the display of unauthorized content on our website; interruption, disruption or malfunction of operations; costs relating to cybersecurity incident remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third party experts and consultants; litigation, regulatory action and other potential liabilities. If any of these cybersecurity incidents occur, or there is a public perception that we, or our third-party service providers, have suffered such a breach, our reputation and brand could also be damaged and we could be required to expend significant capital and other resources to alleviate problems caused by such cybersecurity incidents. As a consequence, our business could be materially and adversely affected and we could also be exposed to litigation and regulatory action and possible liability. In addition, any party who is able to illicitly obtain a customer's password could access the customer's transaction data or personal information. Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data security and other laws, and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have an material adverse effect on our business, financial condition, and results of operations. This risk is heightened as governmental authorities throughout the U.S. and around the world devote increasing attention to data privacy and security issues.

While we maintain privacy, data breach and network security liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. Additionally, even though we continue to devote resources to monitor and update our systems and implement information security measures to protect our systems, there can be No assurance that any controls and procedures we have in place will be sufficient to protect us from future cybersecurity incidents. Failure by us or our vendors to comply with data security requirements, including (if applicable) the California Consumer Privacy Act's ("CCPA") new "reasonable security" requirement in light of the private right of action, or rectify a security issue may result in class action litigation, fines and the imposition of restrictions on our ability to accept payment cards, which could adversely affect our operations. As cyber threats are continually evolving, our controls and procedures may become inadequate and we may be required to devote additional resources to modify or enhance our systems in the future. As a result, we may face interruptions to our systems, reputational damage, claims under privacy and data protection laws and

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regulations, customer dissatisfaction, legal liability, enforcement actions or additional costs, any and all of which could adversely affect our business, financial condition, and results of operations. In addition, although we seek to detect and investigate data security incidents, security breaches and other incidents of unauthorized access to our information technology systems and data can be difficult to detect and any delay in identifying such breaches or incidents may lead to increased harm and legal exposure of the type described above.

***Environmental, social and governance matters may impact our business and reputation.***

Increasingly, in addition to the importance of their financial performance, companies are being judged by their performance on a variety of environmental, social and governance ("ESG") matters, which are considered to contribute to the long-term sustainability of companies' performance.

A variety of organizations measure the performance of companies on ESG topics, and the results of these assessments are widely publicized. In addition, investment in funds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of ESG measures to their investment decisions. Topics taken into account in such assessments include, among others, companies' efforts and impacts on climate change and human rights, ethics and compliance with law, diversity and the role of companies' board of directors in supervising various sustainability issues.

ESG goals and values are embedded in our core mission and vision, and we actively take into consideration their expected impact on the sustainability of our business over time and the potential impact of our business on society and the environment, including offsetting or reducing carbon emissions and sound pollution from launches. However, in light of investors' increased focus on ESG matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet society's expectations as to our proper role. This could lead to risk of litigation or reputational damage relating to our ESG policies or performance.

Further, our emphasis on ESG issues may not maximize short-term financial results and may yield financial results that conflict with the market's expectations. We have and may in the future make business decisions that may reduce our short-term financial results if we believe that the decisions are consistent with our ESG goals, which we believe will improve our financial results over the long-term. These decisions may not be consistent with the short-term expectations of our stockholders and may not produce the long-term benefits that we expect, in which case our business, financial condition, and operating results could be harmed.

***<u>Risks Related to Our Class A Common Stock</u>***

***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 295,000,000 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 Report, we had 162,210,355 shares of Class A common stock outstanding; 8,548,088 shares of Class B common stock issued and outstanding; and 12,500,200 shares of Class C common stock issued and outstanding.

The future issuance of additional shares of Class A common stock will result in additional dilution in the percentage of our Class A common stock held by our then existing stockholders. We may value any Class A common stock issued in the future on an arbitrary basis including for services or acquisitions or other corporate actions that may have the effect of diluting the value of the shares held by our stockholders, and might have an adverse effect on any trading market for our Class A common stock. Additionally, our board of directors may designate the rights terms and preferences of one or more series of preferred stock at its discretion including conversion and voting preferences without prior notice to our stockholders. Any of these events could have a dilutive effect on the ownership of our shareholders, and the value of shares owned.

***Raising additional capital or purchasing businesses through the issuance of common stock will cause dilution to our existing stockholders.***

We may seek additional capital through a combination of private and public equity offerings, debt financings, collaborations, and strategic and licensing arrangements, as well as issuing stock to make additional business or asset acquisitions. To the extent that we raise additional capital through the sale of common stock or securities convertible or

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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.

Future sales of substantial amounts of our Class A common stock into the public and the issuance of the shares upon conversion of the outstanding convertible notes will be dilutive to our existing stockholders and could result in a decrease in our stock price.

***Raising additional capital may restrict our operations or require us to relinquish rights.***

We may seek additional capital through a combination of private and public equity offerings, debt financings, collaborations, and strategic and licensing arrangements. To the extent that we raise additional capital through the sale of common stock or securities convertible or exchangeable into common stock, the terms of any such securities may include liquidation or other preferences that materially adversely affect your rights as a stockholder. Debt financing, if available, would increase our fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration, strategic partnerships and licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams or grant licenses on terms that are not favorable to us.

***Market volatility may affect our stock price and the value of your shares.***

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• announcements of new products, brands, commercial relationships, acquisitions or other events by us or our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulatory or legal developments in the United States and other countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fluctuations in stock market prices and trading volumes of similar companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general market conditions and overall fluctuations in U.S. equity markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• social and economic impacts resulting from the global COVID-19 pandemic;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• variations in our quarterly operating results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in our financial guidance or securities analysts' estimates of our financial performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to raise additional capital and the terms on which we can raise it;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• additions or departures of key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• discussion of us or our stock price by the press and by online investor communities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other risks and uncertainties described in these risk factors.

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***If securities or industry analysts do not publish or cease publishing research or reports or publish misleading, inaccurate or unfavorable research about us, our business or our market, our stock price and trading volume could decline.***

The trading market for our Class A common stock will be influenced by the research and reports that securities or industry analysts may publish about us, our business, our market or our competitors. We currently have limited coverage and may never obtain increased research coverage by securities and industry analysts. If no or few securities or industry analysts cover our company, the trading price and volume of our stock would likely be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, or provides more favorable relative recommendations about our competitors, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price or trading volume to decline.

***Future sales of our Class A common stock may cause our stock price to decline.***

Sales of a substantial number of shares of our Class A common stock in the public market or the perception that these sales might occur could significantly reduce the market price of our Class A common stock and impair our ability to raise adequate capital through the sale of additional equity securities.

***Alpine 4 may issue Preferred Stock with voting and conversion rights that could adversely affect the voting power of the holders of Class A Common Stock.***

Pursuant to our Certificate of Incorporation, our Board of Directors may issue Preferred Stock with voting and conversion rights that could adversely affect the voting power of the holders of Class A Common Stock. In the fourth quarter of 2019, we issued shares of a newly designated Series B Preferred Stock to members of our Board of Directors. The outstanding shares of Series B Preferred Stock have voting rights in the aggregate equal to 200% of the total voting power of our other outstanding securities, giving our Board of Directors control over any matters submitted to the vote of the shareholders of Alpine 4. Any such provision may be deemed to have a potential anti-takeover effect, and the issuance of Preferred Stock in accordance with such provision may delay or prevent a change of control of Alpine 4. The Board of Directors also may declare a dividend on any outstanding shares of Preferred Stock.

***If we are unable to continue to meet the required listing standards of The Nasdaq Capital Market, our Class A common stock may be delisted from The Nasdaq Capital Market, which could negatively impact the price of our common stock and our ability to access the capital markets.***

Our common stock is currently listed on The Nasdaq Capital Market. The listing standards of The Nasdaq Capital Market require that a company maintain stockholders' equity of at least $2.5 million and a minimum bid price subject to specific requirements of $1.00 per share. Should we fail to comply with the minimum listing standards applicable to issuers listed on The Nasdaq Capital Market, our common stock may be delisted from The Nasdaq Capital Market. If our common stock is delisted, it could reduce the price of our common stock and the levels of liquidity available to our stockholders. In addition, the delisting of our common stock could materially adversely affect our access to the capital markets, and any limitation on liquidity or reduction in the price of our common stock could materially adversely affect our ability to raise capital on terms acceptable to us or at all. Delisting from The Nasdaq Capital Market could also result in other negative implications, including the potential loss of confidence by suppliers, customers and employees, the loss of institutional investor interest and fewer business development opportunities.

***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

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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.

***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.

***We will have broad discretion in how we use the net proceeds of future capital raising transactions. 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 any future capital raising transactions. We intend to use the net proceeds from future capital raising transactions to fund development of our products 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 such capital raising transactions. 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 that offering in a manner that does not produce income or that loses value.

***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:

–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;

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–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.

**ITEM 1B. UNRESOLVED STAFF COMMENTS.**

Not applicable to Smaller Reporting Companies.

**ITEM 2. PROPERTIES.**

Alpine 4 Holdings, Inc., maintains our corporate office in rented offices at 2525 E Arizona Biltmore Cir, Suite 237, Phoenix, Arizona 85016. The monthly rent obligation is approximately $8,500 per month.

Quality Circuit Assembly, Inc. rents a location at 1709 Junction Court #380 San Jose, California 95112. The monthly rent obligation is approximately $32,000 per month.

Quality Circuit Assembly Central, rents a property at 4401 Savannah St. Fort Smith, Arkansas 72903 for $16,200 per month.

Morris Sheet Metal - South Bend rents space at 6661 Lonewolf Dr, South Bend, Indiana 46628. The rent obligation is approximately $79,000 per month. During the year ended December 31, 2021, MSM SB began operating out of the MSM FW location upon the merger of MSM SB and MSM FW.

Morris Sheet Metal - Fort Wayne and JTD Spiral rent office and fabrication space at 6212 Highview Dr, Fort Wayne, Indiana 46818. The monthly rent obligation is approximately $26,300.

Excel Construction Services rents office and fabrication space at 297 Wycoff Cir, Twin Falls, Idaho 83301. The monthly rent obligation is approximately $18,700.

Vayu (US) has its headquarters at 3753 Plaza Drive, Ann Arbor, Michigan 48108. The monthly rent obligation is approximately $9,600.

Alt Labs owns the building of its headquarters at 4740 S Cleveland Ave, Fort Myers, Florida 33907. The monthly mortgage is approximately $25,000

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Thermal Dynamics International rents space at 14955 Technology Court, Fort Myers, Florida 33912. The monthly rent obligation is approximately $26,800.

Identified Technologies has its headquarters at 6401 Penn Ave, Suite 211, Pittsburgh, Pennsylvania 15206. The monthly rent obligation is approximately $1,800.

DTI Services Limited Liability Company rents office and warehouse space at 5935 W. 84th Street, Indianapolis, Indiana 46278. The monthly rent obligation is approximately $33,600.

**ITEM 3. LEGAL PROCEEDINGS.**

From time to time, claims may be made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties, or injunctions prohibiting us from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods.

In June 2020, the Company's subsidiary Excel Fabrication, LLC filed a lawsuit against Fusion Mechanical, LLC, in the Fifth Judicial District Court, State of Idaho (Case Number CV42-20-2246). The Company claimed tortious interference and trade secret violations by the defendant. The defendant filed a motion to dismiss, which was denied by the Court. As of the date of this Report, discovery was proceeding. The defendant filed a second motion to dismiss and the Company filed a memorandum in response to the second motion to dismiss, for which a hearing was held on May 10, 2021. On June 11, 2021, the court issued a decision narrowing the claims of the plaintiffs to three items: breach of contract, good faith and fair dealings and intentional interference for economic advantage. These were the Company's three main points of contention. As of the date of this Report, trial is set for Spring 2023.

In August 2020, the Company filed a lawsuit in the United States District Court, District of Arizona (Case No.2:20-cv-01679-DJH), against Alan Martin, the seller of Horizon Well Testing LLC ("HWT") dba Venture West Energy Services, LLC. The Company brought claims for breach of contract, including but not limited to breaches of the seller's representations and warranties in the purchase agreement in connection with the acquisition of HWT. The defendant answered and counterclaimed, claiming breach by the Company of its obligation to issue a promissory note (to be issued in connection with the acquisition of HWT). As of the date of this Report, the discovery period had ended but no trial date had been scheduled. A summary judgement motion was filed on December 22, 2021, which was pending as of the date of this Report.

In May 2021, the Company and several shareholders filed a lawsuit in the United States District Court for the District of Arizona (Case number 2:21-cv-00886-MTL) against Fin Capital LLC ("Fin Cap"), and Grizzly Research LLC ("Grizzly") alleging securities fraud, tortious interference with business expectancy and libel slander for disseminating false and misleading statements about Alpine 4 and its employees to manipulate the stock price and further their own financial interests. As of the date of this Report, Fin Cap has not been served with the Complaint. The Company plans to move for an order permitting public service of the Complaint on Fin Cap pursuant to Arizona law. As of the date of this Report, no trial date had been set.

**ITEM 4. MINE SAFETY DISCLOSURES.**

Not applicable.

**PART II**

**ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. MARKET PRICES AND DIVIDEND DATA**

**Stock Prices**

As of the date of this Report, our Class A common stock is listed on The Nasdaq Capital Market under the symbol ALPP. Alpine 4 plans to work with a market maker and other professionals to drive trading volume and interest in the stock.

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The following table sets forth the range of high and low sales prices per share of our common stock during the periods shown.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | 2022 | 2022 | 2021 | 2021 | 2020 | 2020 |
| | High | Low | High | Low | High | Low |
| First Quarter | $2.15 | $1.05 | $8.51 | $2.45 | $0.21 | $0.001 |
| Second Quarter |  |  | $5.11 | $2.56 | $0.12 | $0.03 |
| Third Quarter |  |  | $3.24 | $2.20 | $0.08 | $0.03 |
| Fourth Quarter |  |  | $5.36 | $1.84 | $4.40 | $0.04 |

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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.

The high and low sales prices for our Class A common stock on April 11, 2022, were $1.0101 and $0.9320, respectively.

**Shareholders**

As of April 13, 2022, Alpine 4 had 389 shareholders of record. This number does not include an indeterminate number of stockholders whose shares are held by brokers in street name. The holders of our Class A common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. The holders of our Class B common stock have ten (10) votes for each share held of record on all matters submitted to a vote of stockholders. The holders of our Class C common stock have five (5) votes for each share held of record on all matters submitted to a vote of stockholders. Holders of our common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to our common stock.

**Dividends**

Alpine 4 has not declared any cash dividends on its common stock since inception and does not anticipate paying such dividends in the foreseeable future. Any decisions as to future payments of dividends will depend on Alpine 4's earnings and financial position and such other facts, as the Board of Directors deems relevant.

**Director Independence**

*Independent Directors*

Nasdaq's rules generally require that a majority of an issuer's board of directors must consist of independent directors. The Company's Class A common stock began trading on The Nasdaq Capital Market on October 20, 2021. In anticipation of the Company's Class A common stock's beginning to trade on The Nasdaq Capital Market, on March 2, 2021, the Company's Board of Directors (the "Board") unanimously determined to increase the size of the Board, and appointed four new independent directors in connection with the Company's efforts to uplist its Class A common stock for trading on The Nasdaq Stock Market. The new directors appointed were Gerry Garcia, Edmond Lew, Christophe Jeunot, and Jonathan Withem.

Management believes that these four directors, Ms. Garcia and Messrs. Lew, Jeunot, and Withem, meet the Nasdaq director independence standards as they are not and have not been within the past three years employees or executive officers of the Company, have not received compensation from the Company in any 12-month period in the last three years, and have not been employed as an executive officer of another company where the Company's current executive officers during the past three years served on the compensation committee of such other company.

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**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.

*Adoption of 2021 Equity Incentive Plan*

On December 8, 2021, the Company's Board of Directors adopted the Company's 2021 Equity Incentive Plan (the "2021 Plan"). Pursuant to the 2021 Plan, the Company may issue (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards, (f) Cash Awards, and (g) Other Equity-Based Awards. The 2021 Plan will enable the Company to provide stock-based incentives that align the interests of employees, consultants and directors with those of the stockholders of the Company; promote the success of the Company's business; and to attract and retain the types of employees, consultants and directors who will contribute to the Company's long range success. A copy of the Plan was filed as Appendix B to the Company's Definitive Proxy Statement filed with the Commission on February 1, 2022. The 2021 Plan was approved by the Company's shareholders at the 2021 Annual Meeting on March 25, 2022.

**Equity Compensation Plan Information**

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| | | | |
|:---|:---|:---|:---|
| **Plan category** | **Number of**<br>**securities to**<br>**be issued upon**<br>**exercise of**<br>**outstanding** <br>**options,**<br>**warrants** <br>**and rights** | **Weighted-**<br>**average** <br>**exercise price** <br>**of outstanding**<br>**options,** <br>**warrants**<br>**and rights** | **Number of**<br>**securities** <br>**remaining**<br>**available for** <br>**future issuance**<br>**under equity**<br>**compensation**<br>**plans (excluding**<br>**securities**<br>**reflected in**<br>**column (a))** |
|  | (a) | (b) | (c) |
| Equity compensation plans approved by security holders | 1790000 | $0.19 | 5210000 |
| Equity compensation plans not approved by security holders |  |  |  |
| Total | 1790000 | $0.19 | 5210000 |

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**Recent Sales of Unregistered Securities**

*Issuance in 2022*

In January 2022, the Company issued 72,152 shares of Class A common stock for no additional consideration upon conversion of 10,149 shares of Series C Preferred Stock and 78,674 shares of Series D Preferred Stock.

The shares of Class A common stock issued upon conversion of the Series C and Series D Preferred Stock into Class A common stock were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

In March 2022, the Company issued 39,386 shares of Class A Common Stock to management in connection with the acquisition of DTI Services Limited Liability Company.

The shares of Class A common stock referenced above that were issued in 2022, were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

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*Issuances in 2021*

In January 2021, the Company issued 1,432,244 shares of Series D Preferred Stock in connection with the Vayu (US) merger transaction.

The shares of Series D Preferred Stock issued in connection with the Vayu (US) merger transaction were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

For the year ended December 31, 2021, the Company issued an aggregate of 7,384,018 shares of its restricted Class A common stock for convertible debt of $1,886,896.

The shares of Class A common stock referenced above that were issued in 2021, were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

In May 2021, the Company issued 281,223 shares of Class A common stock in connection with the TDI acquisition.

The shares of Class A common stock issued in connection with the TDI acquisition were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

In May 2021, the Company issued 361,787 shares of Class A common stock in connection with the Alt Labs acquisition.

The shares of Class A common stock issued in connection with the Alt Labs acquisition were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

On April 30, 2021, the Company issued 1,617,067 shares of Class A common stock upon conversion of shares of Class C common stock by the holder of the Class C common stock.

The shares of Class A common stock issued upon conversion of the Class C common stock into Class A common stock were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

On May 17, 2021, the Company issued 350,000 shares of Class A common stock upon conversion of shares of Class B common stock by the holder of the Class B common stock.

On November 15, 2021, the Company issued 125,000 shares of Class A common stock upon conversion of shares of Class B common stock by the holder of the Class B common stock.

The shares of Class A common stock issued upon conversion of the Class B common stock were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

On October 20, 2021, in connection with the purchase of the outstanding securities of Identified Technologies Corporation, the Company issued 888,881 shares of its Class A Common Stock.

The shares of Class A common stock issued in connection with the Identified Technologies Corporation acquisition were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

On November 1, 2021, the Company issued 2,409,258 shares of Class A common stock for no additional consideration upon conversion of 1,704,137 shares of Series C Preferred Stock and 1,353,570 shares of Series D Preferred Stock.

The shares of Class A common stock issued upon conversion of the Series C and Series D Preferred Stock into Class A common stock were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

On November 29, 2021, the Company issued 1,803,279 shares of Class A common stock in connection with the ElecJet acquisition.

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The shares of Class A common stock issued in connection with the ElecJet acquisition were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

On December 9, 2021, in connection with the acquisition of DTI Services Limited Liability Company, the Company issued 1,587,301 shares of its Class A Common Stock and 396,825 warrant shares.

The shares of Class A common stock issued in connection with the DTI Services Limited Liability Company acquisition were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

On December 20, 2021, the Company issued 100,000 shares of Class A common stock in connection with the HWT legal proceedings.

The shares of Class A common stock issued in connection with the HWT legal proceedings were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

On December 29, 2021, the Company issued 99,018 shares of Class A common stock to management in connection with the acquisition of DTI Services Limited Liability Company.

The additional shares of Class A common stock issued in connection with the DTI Services Limited Liability Company acquisition were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

*Issuances in 2020*

During the year ended December 31, 2020, the Company made the following issuances of unregistered securities:

The Company issued 11,513,935 shares of Class A common stock to Lincoln Park Capital in connection with the equity line transaction for cash for total proceeds of $674,469.

The shares of Class A common stock issued to Lincoln Park Capital were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

In 2020, the Company issued an aggregate of 12,861,995 shares of Class A common stock to four entities for the conversion of convertible debt and accrued interest. Additionally, the Company issued 300,000 shares of Class A common stock to a noteholder as penalty interest. The Company also issued 1,617,067 shares of Class A common stock and 1,617,067 shares of Class C common stock to the Seller of Deluxe for the settlement of debt of $485,120.

The shares of Class A common stock issued in connection with the conversion of convertible debt, for penalties, and for settlement of debt as described above were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

In January 2020, five officers and directors of the Company converted $603,463 owed to them as salaries and commissions into 4,022,988 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.

Additionally, on November 17, 2020, the Company issued 2,590,000 shares of Class C common stock to twelve employees of the Company for compensation valued at $240,093. The value was determined based on the market value of the Company's Class A common stock on the issuance date.

The shares of Class B and Class C common stock issued to the officers, directors, and employees described above were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder

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During the year ended December 31, 2020, the Company issued 5 shares of Series B Preferred Stock to officers for services rendered.

In November 2020, the Company issued 1,714,286 shares of Series C Preferred Stock in connection with the Impossible Aerospace merger transaction.

The shares of Series C Preferred Stock issued in connection with the Impossible Aerospace merger transaction were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

**Purchases of Equity Securities by the Company and Affiliated Purchasers**

During the fourth quarter of 2021, there were no purchases of the Company's equity securities by the Company or affiliated purchasers.

In March 2021, the Company repurchased 514,286 outstanding restricted stock units (RSUs) which had not yet settled, from two individuals in privately negotiated transactions. The Company purchased 314,286 Class C Preferred Shares and 200,000 Class D Preferred Shares at $3.50 per share. The RSUs had been issued to the individuals in connection with recent merger transactions. The Company also purchased 15,000 Class C Shares each from three non-executive employees at $4.14 per share and returned those shares to treasury.

**Issuer Purchases of Equity Securities**

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| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **(a)<br>Total number of shares (or units) purchased** | **(b)<br>Average price paid per share (or unit)** | **(c)<br>Total number of shares (or units) purchased as part of publicly announced plans or programs** | **(d)<br>Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs** |
| Month #1 – October 1-31, 2021 | 0 | $0 | 0 | 0 |
| Month #2 – November 1-30, 2021 | 0 | $0 | 0 | 0 |
| Month #3 – December 1-31, 2021 | 0 | $0 | 0 | 0 |
| Total | 0 | $0 |  |  |

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**ITEM 6.&nbsp;&nbsp;&nbsp;&nbsp;[Reserved]**

**ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.** 

*There are statements in this Report 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 Report 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,* 

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*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 Report 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 Holdings, Inc. ("we" or 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 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 Report, the Company was a holding company that owned fourteen operating subsidiaries:

–A4 Corporate Services, LLC;

–ALTIA, LLC;

–Quality Circuit Assembly, Inc.;

–Morris Sheet Metal, Corp;

–JTD Spiral, Inc.;

–Excel Construction Services, LLC;

–SPECTRUMebos, Inc.;

–Vayu (US), Inc.;

–Thermal Dynamics, Inc.;

–Alternative Laboratories, LLC.;

–Identified Technologies Corporation;

–ElecJet Corp.;

–DTI Services Limited Liability Company (doing business as RCA Commercial Electronics); and

–Global Autonomous Corporation.

Starting in the first quarter of 2020, we also created 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"), A4 Aerospace Corporation ("A4 Aerospace"), and A4 Defense Services, Inc. ("A4 Defense Services"). All of these holding companies 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 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 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

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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.

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 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".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "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.

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**Results of Operations**

The following are the results of our operations for the year ended December 31, 2021, as compared to the year ended December 31, 2020.

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** | **$ Change** |
| **Revenues, net** | $51640813 | $33454349 | $18186464 |
| **Costs of revenue** | 43942815 | 28090722 | 15852093 |
| **Gross Profit** | 7697998 | 5363627 | 2334371 |
| **Operating expenses:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 27987920 | 9695891 | 18292029 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development | 1464918 |  | 1464918 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment loss of intangible asset and goodwill | 367519 | 1561600 | (1194081) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 29820357 | 11257491 | 18562866 |
| **Loss from operations** | (22122359) | (5893864) | (16228495) |
| **Other income (expenses)** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (3289233) | (5463597) | 2174364 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in value of derivative liabilities |  | 2298609 | (2298609) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of debt | 803079 | 344704 | 458375 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on forgiveness of debt | 3896108 |  | 3896108 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss on equity investment | (1350000) |  | (1350000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration |  | 500000 | (500000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income | 635526 | 71224 | 564302 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expenses) | 695480 | (2249060) | 2944540 |
| **Loss before income tax** | (21426879) | (8142924) | (13283955) |
| **Income tax benefit** | (1943741) | (495076) | (1448665) |
| **Net loss** | $(19483138) | $(7647848) | $(11835290) |

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*<u>Revenues</u>*

Our revenues for the year ended December 31, 2021, increased by $18,186,464 as compared to the year ended December 31, 2020. In 2021, the increase in revenue related to $11,674,220 for Alt Labs (acquired in May 2021); $4,467,376 for TDI (acquired in May 2021); and $4,144,795 for QCA; offset by a decrease of $2,080,978 for APF. We expect our revenue to continue to grow during 2022.

*<u>Costs of revenue</u>*

Our cost of revenue for the year ended December 31, 2021, increased by $15,852,093 as compared to the year ended December 31, 2020. In 2021, the increase in our cost of revenue related to $7,924,342 for Alt Labs; $3,393,740 for TDI; $4,112,489 for QCA. 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, however at a lower rate year over year.

*<u>Operating expenses</u>*

Our operating expenses for the year ended December 31, 2021, increased by $18,562,866 as compared to the year ended December 31, 2020. The increase is a result of $6,777,081 related to Alt Labs; $1,356,518 related to TDI; $1,800,000 related to the repurchase of restricted stock units in March 2021; and $2,216,333 related to Vayu US (acquired in February 2021).

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*<u>Other income (expenses)</u>*

Other expenses for the year ended December 31, 2021, decreased by $2,944,540 as compared to the same period in 2020. This decrease was primarily due to the gain on forgiveness of debt.

**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. In the first quarter of 2021, we raised approximately $55,000,000 through the sale of our common stock in public and private transactions. On November 26, 2021, a direct offering of common stock was issued raising $22,000,000 in cash.

In April and May 2020, the Company received seven loans under the Paycheck Protection Program of the U.S. Coronavirus Aid, Relief and Economic Security ("CARES") Act totaling $3,896,108. During the year ended December 31, 2021, the Company also acquired four loans with a book value totaling $1,799,725 due to acquisitions, and fair value of $65,000 at the time of acquisitions. The loans had terms of 24 months and accrued interest at 1% per annum. The Company paid $88,160 for the loan assumed in connection with the IA acquisition, and the remaining $356,690 was forgiven. The remaining ten loans were forgiven in whole as provided in the CARES Act during the year ended December 31, 2021. The Company also assumed an Economic Injury Disaster Loan (EIDL) in connection with the Vayu acquisition, which was still outstanding as of December 31, 2021.

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 and improved cash flows from operations including the 2021 acquisitions. The Company also secured bank lines of credit totaling $18.8 million in 2021. Another $4.2 million was secured in March 2022. 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 additional bank financing, engage in debt financing through a placement agent, or sell shares of its common stock in public or private offering transactions.

**Liquidity Outlook (As Restated)**

The Company's financial statements are prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") applicable to a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued.

In accordance with Financial Accounting Standards Board (the "FASB"), Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

While the Company experienced a loss for the year ended December 31, 2021, of $19.5 million, and had a negative cash flow used in operations, there were several significant one-time / non-recurring items included in the $19.5 million net loss. These non-recurring items totaled $8.4 million, consisting of $612 thousand in new acquisitions expenses captured in professional fees, and other costs, $1.8 million for repurchase of restricted stock units, $3.0 million in write off of accounts receivables, $367 thousand in write off of intangibles and goodwill, $1.2 million to management for bonuses, and $1.4 million for a loss on equity investment.

The Company received a total of approximately $76.4 million in 2021 in the following two transactions:

–The Company raised approximately $67.1 million in net proceeds in connection with a registered direct offering of its stock and;

–The Company raised approximately $9.3 million in net proceeds in connection with an equity line of credit financing arrangement.

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As of December 31, 2021, the Company has positive working capital of $12.4 million. The Company has also secured bank financing totaling $18.8 million ($18.3 million in Lines of Credit and $0.5 million in capital expenditures lines of credit availability) of which $6.4 million was unused at December 31, 2021.

The Company plans to continue to generate additional revenue (and improve cash flows from operations) partly from the acquisitions of six operating companies which closed in 2021 combined with improved gross profit performance from the existing operating companies. The Company also plans to continue to raise funds through debt financing and the sale of shares through its planned at-the-market offering.

Based on the capital raise as indicated above and management's plans to improve cash flows from operations, management believes the Company has sufficient working capital to satisfy the Company's estimated liquidity needs for the next 12 months.

However, there is no assurance that management's plans will be successful due to the current economic climate in the United States and globally.

**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.

**Critical Accounting Policies and Estimates**

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable. In many instances, we could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives and valuation of long-lived assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving our judgments and estimates.

<u>Intangible Assets</u>

The Company uses a third party specialty valuation firm to value its intangible assets acquired in its business combination and asset acquisitions. The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between one and fifteen years as follows:

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| | |
|:---|:---|
| Customer list | 3-15 years |
| Non-compete agreements | 1-5 years |
| Software development | 5 years |
| Patent | 17 years |
| Proprietary technology | 15 years |

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The intangible assets with finite useful lives are reviewed for impairment when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. The Company has not changed its estimate for the useful lives of its intangible assets, but would expect that a decrease in the estimated useful lives of intangible assets by 20% would result in an annual increase to amortization expense of approximately $720,000, and an increase in the estimated useful lives of intangible assets by 20% would result in an annual decrease to amortization expense of approximately $480,000.

<u>Construction Contracts</u>

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For the Company's material construction contracts, estimates are used to determine the total estimated costs for a job and throughout the respective jobs' progress and adjusted accordingly. Revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For certain of our revenue streams, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicates a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident.

Contract Assets and Contract Liabilities

The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. In addition, many of our time and materials arrangements, are billed pursuant to contract terms that are standard within the industry, resulting in contract assets being recorded, as revenue is recognized in advance of billings. Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the consolidated balance sheets.

Contract liabilities from our construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation.

<u>Contract Retentions</u>

As of December 31, 2021 and 2020, accounts receivable included retainage billed under terms of our contracts. These retainage amounts represent amounts which have been contractually invoiced to customers where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions or completion of the project.

For a summary of our significant accounting policies, refer to Note 3 of our consolidated financial statements included under "Item 8 – Financial Statements and Supplementary Data" in this Form 10-K.

**ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Not required for Smaller Reporting Companies.

**ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

Our consolidated financial statements and footnotes thereto are set forth beginning on page F-1 of this Report.

**ITEM 9.&nbsp;&nbsp;&nbsp;&nbsp;CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**

None.

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**ITEM 9A. CONTROLS AND PROCEDURES** 

**1. Disclosure Controls and Procedures**

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act, as of December 31, 2021. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this Report, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management to allow timely decisions regarding required disclosure. However, we have improved our level of disclosure controls and procedures throughout 2021. As a result of the restatements presented in the financial statements of this Form 10-K/A, management concluded that there was an additional material weakness in the Company's disclosure controls and procedures, as discussed below.

**2. Changes in Internal Control Over Financial Reporting**

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes. There have been no changes in our internal control over financial reporting during the fourth quarter of fiscal year 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, we have improved our level of internal control throughout 2021.

**3**. **Management's Report on Internal Control Over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide reasonable assurance that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and

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

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in "Internal Control—2013 Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, our management determined that our internal controls over financial reporting were not effective as of December 31, 2021 due to material weaknesses related to lack of segregation of duties and inadequate controls and monitoring processes over financial reporting. In connection with the preparation of the restatements presented in Note 2 to the financial statements, the Company identified an additional material weakness in that we did not have in place the appropriate policies and procedures surrounding purchase accounting, accounting for deferred taxes and complex financial instruments. It was determined these material weaknesses had not been remediated as of December 31, 2021. The Company is committed to remediating its material weakness as promptly as possible.

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Additional staff have been hired to address the issue of segregation of duties and the controls and monitoring processes. The Company is also in the process of switching ERP systems to provide greater IT controls over financial reporting. Management anticipates making significant progress to remediate these areas of material weakness in 2023 and has engaged a third party specialty management consultant firm to help facilitate the process. The Company has engaged a tax specialist CPA Firm to ensure tax provisions are being calculated timely and accurately.

This Annual Report does not include an attestation report by MaloneBailey LLP, our independent registered public accounting firm, regarding internal control over financial reporting. As a smaller reporting company, our management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management's report in this Annual Report.

**4. Inherent Limitations on Effectiveness of Controls**

Generally, disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. Nevertheless, an internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system reflects the fact that there are resource constraints, and the benefits of controls are considered relative to their costs. As noted above, we have determined that our disclosure controls and procedures and our internal controls over financial reporting were not effective as of December 31, 2021. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

**ITEM 9B. OTHER INFORMATION**

None.

**ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**PART III**

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**ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.**

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

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| | | | |
|:---|:---|:---|:---|
| Name | Age | Board Member/Position | Committee Assigned |
| Kent B. Wilson | 49 | Director |  |
| Charles Winters | 45 | Director |  |
| Ian Kantrowitz | 42 | Director |  |
| Gerry Garcia\*\*\*\* | 41 | Chairwoman | AUD; Comp; NCG |
| Edmond Lew | 43 | Director | AUD; Comp; NCG |
| Christophe Jeunot | 50 | Director | AUD; Comp |
| Jonathan Withem | 33 | Director | AUD; Comp |
| Mike Loyd\*\* | 45 | Director | AUD\* |
| Andrew Call\*\*\* | 44 | Director | AUD\* |
| Jeffrey Hail | 60 | Chief Operating Officer | N/A |
| Larry Zic | 60 | Chief Financial Officer | N/A |
| SaVonnah Osmanski | 26 | VP/Corporate Controller | N/A |

---

AUD = Audit Committee; COMP = Compensation Committee; NCG = Nominating and Corporate Governance Committee. \* = Committee Chair.

\*\* Mr. Loyd resigned from the Board of Directors on March 16, 2022.

\*\*\* Mr. Call was appointed to the Board of Directors on April 6, 2022 and was appointed to the Audit Committee and made chair of the Audit Committee on that date.

\*\*\*\* On April 6, 2022, the Company appointed Gerry Garcia to serve as the non-executive Chairwoman of the Board.

*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.

*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 Ian Kantrowitz*

As VP 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, 6<sup>th</sup> Sense Auto. Additionally, he was a top performing banker for Wells Fargo Bank, ranked number 5 in the country.

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*Biographical information for Gerry Garcia*

Mrs. Gerry Garcia was appointed to the Board on March 2, 2021. There was no arrangement or understanding between the Company and Mrs. Garcia pursuant to which Mrs. Garcia was selected or appointed as a Director. The Board has asked Mrs. Garcia to serve on the Audit Committee and Compensation Committee of the Board.

Mrs. Garcia is a finance and operations executive with more than 18 years of business experience. For the past eight years, Mrs. Garcia has been the Director of Operations and is responsible for a multimillion-dollar budget. Mrs. Garcia has also spent the last 16 years serving as a member of multiple Boards of Directors for various non-profit 501(c)(3) organizations, helping guide them through the complex corporate landscape that non-profit 501(c)(3)'s need access to. The Alpine 4 Board of Directors feels that her knowledge of financial/strategic planning, reporting, budget analysis, and fiduciary prudence from prior Boards will be paramount to upholding the company's financial accountability, stability, and strength and is excited to see her in the role of Chairwoman.

There are no transactions or proposed transactions between the Company and Mrs. Garcia required to be disclosed as "related party transactions" pursuant to Item 404(a) of Regulation S-K.

*Biographical information for Edmond Lew*

Mr. Lew was appointed to the Board of Directors on March 2, 2021. There was no arrangement or understanding between the Company and Mr. Lew pursuant to which Mr. Lew was selected or appointed as a Director. The Board has asked Mr. Lew to serve on the Audit Committee and Compensation Committee of the Board.

Mr. Lew started his career in Information Technology ("IT") as a Systems Engineer, building out hosted applications and delivering them through terminal computing in the early 2000s. This model would evolve and later be adopted as what is now recognized as cloud computing. After working in the support, implementation, and data center sides of the industry, Mr. Lew went out on his own as an IT consultant. Mr. Lew was self-employed for 14 years, lending his expertise to businesses in the construction, hospitality, utilities, education, arts, logistics, law enforcement and technology fields. Additionally, Mr. Lew has given back to the community by volunteering extensively over the past 15 years with various charities and non-profits, focusing on arts and social service organizations. In the interest of becoming a more capable and effective leader, Mr. Lew has completed board governance and diversity training courses and has applied those skills in his volunteer work as well as his professional career. Mr. Lew is an avid cyclist, a talented private chef and a former competitive eater.

There are no transactions or proposed transactions between the Company and Mr. Lew required to be disclosed as "related party transactions" pursuant to Item 404(a) of Regulation S-K.

*Biographical information for Christophe Jeunot*

Mr. Jeunot was appointed to the Board of Directors on March 2, 2021. There was no arrangement or understanding between the Company and Mr. Jeunot pursuant to which Mr. Jeunot was selected or appointed as a Director. The Board has asked Mr. Jeunot to serve on the Audit Committee and Compensation Committee of the Board.

Mr. Jeunot collaborates with Fortune 500 national and international companies as a Story Board Artist aiding in movie, television and branding campaigns. His clients range from Netflix and Peloton to Goldman Sachs, Exxon Mobile, Samsung and 3M, among others. Mr. Jeunot's European perspective and creativity allows solutions to be derived through an alternative lens, lending to diverse and dynamic thinking within strategic planning sessions. Mr. Jeunot's affinity for nature and the environment makes him a conscientious proponent for green technologies.

There are no transactions or proposed transactions between the Company and Mr. Jeunot required to be disclosed as "related party transactions" pursuant to Item 404(a) of Regulation S-K.

*Biographical information for Jonathan Withem*

Mr. Withem was appointed to the Board of Directors on March 2, 2021. There was no arrangement or understanding between the Company and Mr. Withem pursuant to which Mr. Withem was selected or appointed as a Director. The Board has asked Mr. Withem to serve on the Audit Committee and Compensation Committee of the Board.

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Mr. Withem contributed to the development of custom interfaces for eCommerce and onsite sales for entertainment company ETIX. As one of the largest interactive ticketing platforms, ETIX processes over 50 million tickets in 40 countries annually. Mr. Withem has experience working with a variety of teams to create, test and release new products, in addition to client training. Mr. Withem's expertise in project management and budgetary compliance ensures adherence to strict time frames in the achievement of established goals. Mr. Withem is an avid music lover, teaching music curriculum privately and for a California liberal arts university remotely.

There are no transactions or proposed transactions between the Company and Mr. Withem required to be disclosed as "related party transactions" pursuant to Item 404(a) of Regulation S-K.

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

*Biographical Information for Mike Loyd*

Mr. Loyd, 45, currently serves as the Treasurer and SVP at Old National Bank in Fort Branch, Indiana, a position he has held since May 2019. Prior to that, Mr. Loyd had served in the Treasury department of Old National Bank since February 2014. Mr. Loyd has a Bachelor of Business Administration degree from the University of Kentucky and a Master of Business Administration degree from Auburn University.

There are no transactions or proposed transactions between the Company and Mr. Loyd required to be disclosed as "related party transactions" pursuant to Item 404(a) of Regulation S-K.

As noted above, Mr. Loyd resigned from the Board of Directors on March 16, 2022.

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

.

*Biographical Information for Andrew Call*

Andrew Call, 44, is the Director of the School of Accountancy at the W. P. Carey School of Business at Arizona State University, and is the Professional Advisory Board Professor of Accounting. Joining the school in 2013, Mr. Call rose through the ranks to eventually lead the School of Accounting in its research, curriculum, and outreach efforts. Professor Call researches various financial reporting topics, including the role of equity analysts in the capital markets, managers' voluntary disclosures of accounting information, and the role of whistleblowers in the discovery of financial misconduct. In the classroom, Professor Call has taught at both the undergraduate and graduate levels. Andy has specialist background in Security Analysis, Management Guidance, and Whistleblowing. He has also contributed to or been published in 17 different publications including The Accounting Review, Journal of Accounting Research, and the Journal of Accounting and Economics.

Mr. Call serves as the Financial Expert on the Audit Committee, and has been appointed as the Chair of the Audit Committee.

*Biographical Information for Jeff Hail*

Jeff Hail is the Chief Operating Officer (COO) of Alpine 4 Holdings, Inc. 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 of 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.

*Biographical Information for Larry Zic*

Mr. Zic has been with the Company since April 2020, originally serving as Corporate Controller. Later, Mr. Zic was appointed as the Company's Chief Accounting Officer, and on October 1, 2021, was appointed as the Company's Chief Financial Officer. Mr. Zic is a Certified Public Accountant (inactive license) and holds two Bachelors of Science Degrees, one in Accounting and one in Computer Information Systems from Calumet College of St. Joseph (Indiana). He also holds

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an MBA from Indiana University NW. Prior to joining the Company, from November 2016 to April 2020, Mr. Zic served as Chief Financial Officer for Aaron Clark Industries, dba Desert Foothills Landscape.

*Biographical Information for SaVonnah Osmanski* 

Miss. Osmanski is the VP Corporate Controller of Alpine 4 Holdings, Inc. She has been with the Company since March 2021. Miss Osmanski is a Certified Public Accountant and holds two Bachelors of Science Degrees, one in Accounting and one in Finance from Northern Arizona University. She also holds a Masters in Accounting from the W.P Carey School of Business at Arizona State University. Prior to joining the Company Miss. Osmanski was an external auditor.

***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.

**Board Meeting and Attendance**

During fiscal year 2021, our Board held four (4) meetings in person or by telephone. Members of our Board were provided with information between Board meetings regarding the Company's operations and were consulted on an informal basis with respect to pending business. Each director attended all of the Board meetings and the meetings held by all committees of our Board on which such director served during the year.

**Director Independence**

*Independent Directors* 

As of the date of this Report, Alpine 4 was required by The Nasdaq Stock Market to have a majority of independent directors.

Accordingly, as of the date of this Report, the Board had concluded that five of the members of the Board of Directors would qualify as independent directors. The Board of Directors has determined that Ms. Garcia, and Messrs. Call, Lew, Jeunot, and Withem would be independent directors of the Company under the listing standards adopted by The Nasdaq Stock Market. In making these independence determinations, the Board of Directors considered all of the factors that automatically compromise director independence as specified in The Nasdaq Stock Market's listing standards and determined that none of those conditions existed. In addition, the Board of Directors considered whether any direct or indirect material relationship, beyond those factors that automatically compromise director independence, existed between those directors, their immediate family members, or their affiliated entities, on the one hand, and us and our subsidiaries, on the other hand. The Board of Directors determined, for those directors identified as independent above, that any relationship that existed was not material and did not compromise that director's independence. We anticipate that our independent directors will meet in an executive session at least once per year. All standing committee members are independent for the purpose of the committees on which they serve.

**Board Leadership Structure**

We have chosen to split the roles of Chairman of the Board and Chief Executive Officer. Mr. Wilson serves as Chief Executive Officer while Mr. Winters previously served as the non-executive Chairman of the Board. On April 6, 2022, the Company announced that the Board of Directors had decided to have a rotating Chair of the Board position, and appointed Gerry Garcia to serves as the non-executive Chairwoman of the Board. The Board believes that this structure is appropriate

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for the Company and provides the appropriate level of independent oversight necessary to ensure that the Board meets its fiduciary obligations to our stockholders, that the interests of management and our stockholders are properly aligned, and that we establish and follow sound business practices and strategies that are in the best interests of our stockholders.

The Board of Directors does not believe that one particular leadership structure is appropriate at all times and will continue to evaluate the Board's leadership structure from time to time.

**Board's Role in Risk Management**

One of the Board of Directors' key functions is informed oversight of the Company's risk management process. The Board of Directors does not have a standing risk management committee, but rather administers this oversight function directly through the Board of Directors as a whole, as well as through various standing committees of the Board of Directors that address risks inherent in their respective areas of oversight.

In particular, the Board of Directors is responsible for monitoring and assessing strategic and operational risk exposure, which may include financial, legal and regulatory, human capital, information technology and security and reputation risks.

–The Audit Committee has the responsibility to consider and discuss major financial risk exposures and the steps management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken.

–The Nominating and Corporate Governance Committee monitors the effectiveness of the Company's corporate governance policies and the selection of prospective members of the Board of Directors and their qualifications, as well as environmental, social and governance ("ESG")-related risks.

–The Compensation Committee, in conjunction with the Audit Committee, assesses and monitors whether any of the Company's compensation policies and programs have the potential to encourage excessive risk-taking. In addition, the Compensation Committee reviews and monitors matters related to human capital management, including diversity and inclusion initiatives and management of human capital risks.

Like all businesses, we also face threats to our cybersecurity, as we are reliant upon information systems and the Internet to conduct our business activities. In light of the pervasive and increasing threat from cyberattacks, the Board believes oversight of this risk is appropriately allocated to the Board, although the Board may decide to delegate this responsibility to one of the Committees of the Board. The Board, with input from management, assesses the Company's cybersecurity risks and the measures implemented by the Company to mitigate and prevent cyberattacks and respond to data breaches. In addition, management and the Board of Directors have recently focused on risks relating to, and the impact on the Company from, the COVID-19 pandemic, and will continue to do so while the situation remains in flux.

Typically, the entire Board of Directors meets with management and the applicable committees of the Board of Directors at least annually to evaluate and monitor respective areas of oversight. Both the Board of Directors as a whole and the various standing committees receive periodic reports from individuals responsible for risk management, as well as incidental reports as matters may arise. It is the responsibility of the committee chairs to report findings regarding material risk exposures to the Board of Directors as quickly as possible. The Board of Directors' role in risk oversight does not affect its leadership structure.

**Committees of the Board**

The Board of Directors has an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee. The current charters for each of the committees are available on our website *www.alpine4.com* under the "Investors" tab and then the "*Governance*" tab. The members of the committees, as of the Record Date, are identified in the following table:

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| | | | |
|:---|:---|:---|:---|
| **Director** | **Audit Committee** | **Compensation Committee** | **Nominating and Corporate Governance Committee** |
| Kent B. Wilson |  |  |  |
| Charles Winters |  |  |  |
| Ian Kantrowitz |  |  |  |
| Gerry Garcia(1)(2)(3) | X | X | X |
| Edmond Lew(2)(3) | X | X | X |
| Christophe Jeunot(2) | X | X |  |

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| | |
|:---|:---|
| Jonathan Withem(2) | X |
| Mike Loyd(4) | X |
| Andrew Call(5) | X |

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(1) Chairwoman of the Board of Directors.

(2) Ms. Garcia, and Messrs. Lew, Jeunot, and Withem were appointed as members of the Audit Committee and the Compensation Committee in March 2021.

(3) Ms. Garcia and Mr. Lew were appointed as members of the Nominating and Corporate Governance Committee on September 18, 2021.

(4) Mr. Loyd was appointed to the Audit Committee and made chair of the Audit Committee on September 18, 2021. As noted above, Mr. Loyd resigned from the Board on March 16, 2022.

(5) Mr. Call was appointed to the Board on April 6, 2022, and was appointed to the Audit Committee and made chair of the Audit Committee on that date.

***Audit Committee***

As of December 31, 2021, the Audit Committee of the Board of Directors consisted of Mrs. Garcia and Messrs. Loyd (Chair), Lew, Jeunot, and Withem, who are independent for purposes of serving on the committee under the SEC's rules and The Nasdaq Stock Market's listing requirements. (As noted above, Mr. Loyd resigned from the Board on March 16, 2022, and Andrew Call was appointed as a member and Chair of the Audit Committee on April 6, 2022.) The Audit Committee acts under a written charter adopted by the Board of Directors. All Audit Committee members are financially literate. As of the date of this Report, following the resignation of Mr. Loyd from the Board and the Audit Committee, the Board of Directors has determined that Mr. Call qualifies as an "audit committee financial expert" as defined by Item 407(d)(5)(ii) of Regulation S-K under the Exchange Act. The Audit Committee assists the Board of Directors in fulfilling its responsibilities for oversight of the quality and integrity of the accounting, internal controls, and reporting practices of the Company, and performs such other duties as are directed by the Board of Directors. The Audit Committee's role includes a particular focus on the qualitative aspects of financial reporting to stockholders, and on the Company's processes to manage business and financial risk, and for compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee's responsibilities include, among other things, reviewing policies and procedures regarding transactions, and reviewing and overseeing the transactions, between the Company and officers, directors and other related parties that are not a normal part of the Company's business. Annually and on a quarterly basis, the Audit Committee reviews and discusses matters separately with management of the Company and with the Company's independent registered public accounting firm.

The Audit Committee also conducts periodic oversight of the Company's risk management, including regularly reviewing the Company's cybersecurity and other information technology risks, controls and procedures and the Company's plans to mitigate cybersecurity risks and to respond to data breaches.

The Audit Committee is directly responsible for the appointment of the independent registered public accounting firm engaged to prepare and issue an audit report on the financial statements of the Company and periodically reviews and evaluates such firm's performance and independence from management. All audit and permitted non-audit services are pre-approved by the Audit Committee. The Audit Committee was formed in 2021. Prior to the formation of the Audit Committee, the Board as a whole performed the functions of the Audit Committee.

***Compensation Committee***

The Compensation Committee of the Board of Directors consists of Mrs. Garcia and Messrs. Lew (Chair), Jeunot, and Withem. All members of the Compensation Committee are independent for purposes of serving on the committee under The Nasdaq Stock Market's listing requirements and applicable SEC and tax regulations. The Compensation Committee acts under a written charter adopted by the Board of Directors. The Compensation Committee is responsible for establishing policies with respect to the compensation of the Company's officers and has overall responsibilities for approving and evaluating officer compensation plans, policies and programs of the Company. The Compensation Committee's functions include, but are not limited to:

–To review and approve annually the corporate goals and objectives applicable to the compensation of the chief executive officer ("CEO"), evaluate at least annually the CEO's performance in light of those goals and objectives, and determine and approve the CEO's compensation level based on this evaluation.

–To review and approve the compensation of all other executive officers.

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–To review, and make recommendations to the Board regarding, incentive compensation plans and equity-based plans, and where appropriate or required, recommend for approval by the stockholders of the Company, which includes the ability to adopt, amend and terminate such plans.

–To review, and make recommendations to the Board regarding, any employment agreements and any severance arrangements or plans, including any benefits to be provided in connection with a change in control, for the CEO and other executive officers, which includes the ability to adopt, amend and terminate such agreements, arrangements or plans.

–To review all director compensation and benefits for service on the Board and Board committees at least once a year and to recommend any changes to the Board as necessary.

The Compensation Committee has the sole authority to retain and to terminate any compensation consultant, legal counsel or financial or other advisor to be used to assist in the performance of its duties and responsibilities, without consulting or obtaining the approval of senior management of the Company in advance, and has the sole authority to approve the compensation advisor's fees and other retention terms. The Compensation Committee is responsible for annually reviewing an assessment of any potential conflict of interest raised by the work of a compensation consultant (and other compensation advisor, as required) that is involved in determining or recommending executive and/or director compensation.

The Compensation Committee may delegate its authority to a subcommittee of its members. The Compensation Committee was formed in 2021. Prior to the formation of the Compensation Committee, the Board as a whole performed the functions of the Compensation Committee.

***Nominating and Corporate Governance Committee***

The members of the Nominating and Corporate Governance Committee are Ms. Garcia and Mr. Lew. All of the members of the Nominating and Corporate Governance Committee are independent for purposes of serving on the committee under The Nasdaq Stock Market's listing requirements. The Nominating and Corporate Governance Committee acts under a written charter adopted by the Board of Directors. The functions of the Nominating and Corporate Governance Committee include, among other items, overseeing all aspects of the Company's corporate governance functions, including compliance with significant legal, ethical and regulatory requirements. The Nominating and Corporate Governance Committee's functions include, but are not limited to the following functions:

–To determine the qualifications, qualities, skills, and other expertise required to be a director and to develop, and recommend to the Board for its approval, criteria to be considered in selecting nominees for director (the "Director Criteria").

–To consider any director candidates recommended by the Company's stockholders pursuant to the procedures described in the Company's proxy statement. The Committee shall also consider any nominations of director candidates validly made by stockholders in accordance with applicable laws, rules and regulations and the provisions of the Company's charter documents.

–To make recommendations to the Board regarding the selection and approval of the nominees for director to be submitted to a stockholder vote at the annual meeting of stockholders.

–To develop and recommend to the Board a set of corporate governance guidelines applicable to the Company, to review these principles at least once a year and to recommend any changes to the Board.

–To oversee the Company's corporate governance practices and procedures, including identifying best practices and reviewing and recommending to the Board for approval any changes to the documents, policies and procedures in the Company's corporate governance framework, including its certificate of incorporation and bylaws.

–To review the Board's committee structure and composition and to make recommendations to the Board regarding the appointment of directors to serve as members of each committee and committee chairmen annually.

–If a vacancy on the Board and/or any Board committee occurs, to identify and make recommendations to the Board regarding the selection and approval of candidates to fill such vacancy either by election by stockholders or appointment by the Board.

–To develop and oversee a Company orientation program for new directors and a continuing education program for current directors, periodically review these programs and update them as necessary.

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–To review all director compensation and benefits for service on the Board and Board committees at least once a year and to recommend any changes to the Board as necessary.

–To develop and recommend to the Board for approval standards for determining whether a director has a relationship with the Company that would impair its independence.

–To review and discuss with management disclosure of the Company's corporate governance practices, including information regarding the operations of the Committee and other Board committees, director independence and the director nominations process, and to recommend that this disclosure be, included in the Company's proxy statement or annual report on Form 10-K, as applicable.

–To monitor compliance with the Company's Code of Business Conduct (the "Code"), to investigate any alleged breach or violation of the Code, to enforce the provisions of the Code and to review the Code periodically and recommend any changes to the Board.

–To review any director resignation letter tendered in accordance with the Company's director resignation policy, and evaluate and recommend to the Board whether such resignation should be accepted.

The Nominating and Corporate Governance Committee also reports to, and assists, the Board of Directors in identifying individuals for membership on the Board of Directors and recommends to the Board of Directors the director nominees for the Company's Annual Meeting of Stockholders. The Nominating and Corporate Governance Committee was formed in 2021. Prior to the formation of the Nominating and Corporate Governance Committee, the Board as a whole performed the functions of the Nominating and Corporate Governance Committee.

***Director Nomination Process***—The Nominating and Corporate Governance Committee believes that the Company is well-served by its current directors. In the ordinary course, absent special circumstances or a material change in the criteria for membership on the Board of Directors, the Nominating and Corporate Governance Committee will re-nominate incumbent directors who continue to be qualified for service on the Board of Directors and are willing to continue as directors. If an incumbent director is not standing for re-election or if a vacancy occurs between annual stockholder meetings, the Nominating and Corporate Governance Committee will seek out potential candidates for appointment to the Board of Directors who meet the criteria for selection as a nominee and have the specific qualities or skills being sought. Director candidates will be selected based upon input from the members of the Board of Directors, senior management of the Company and, if the Nominating and Corporate Governance Committee deems appropriate, a third-party search firm.

Candidates will be chosen for their ability to represent all of the stockholders, and for their character, judgment, fairness and overall ability. As a group, they are expected to set the appropriate policy for the Company, and to bring to the Board of Directors broad experience in business matters and an insight and awareness of the appropriate and ever-changing role that corporations should have in society. Because the advice of those facing similar issues is of particular value, executive officers of other corporations are desirable candidates. Alpine 4 does not have a set policy or process for considering "diversity", however that term may be defined, in identifying nominees. However, the Nominating and Corporate Governance Committee strives to identify and recruit individuals whose diverse talents, experiences and backgrounds enhance the inclusive environment in which the Board of Directors currently functions. The Nominating and Corporate Governance Committee relies upon its judgment of the foregoing general criteria and the following personal criteria in selecting candidates for nomination to the Board of Directors:

–Independence and absence of conflicts of interest;

–Honesty, integrity and accountability;

–Substantial business experience with a practical application to the Company's needs;

–Willingness to ask tough questions in a constructive manner that adds to the decision-making process of the Board of Directors;

–Demonstrated ability to think strategically and make decisions with a forward-looking focus;

–Ability to assimilate relevant information on a broad range of topics;

–Willingness to express independent thought;

–Team player;

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–Willingness to make a strong commitment of time and attention to the Board of Directors' processes and affairs; and

–Ability to commit to Company stock ownership.

The Nominating and Corporate Governance Committee will also consider proposals for nominees for director from stockholders which are made in writing to the Corporate Secretary of the Company and comply with the requirements set forth in the Bylaws. The recommendation must contain sufficient background information concerning the nominee to enable a proper judgment to be made as to his or her qualifications. Recommendations must also include a written statement from the candidate expressing a willingness to serve.

The Nominating and Corporate Governance Committee seeks to identify director nominees through a combination of referrals, including referrals provided by management, existing members of the Board and our stockholders, and direct solicitations, where warranted. Referrals of director nominees should be sent to the Board of Directors, c/o Chief Executive Officer, Alpine 4 Holdings, Inc., 2525 E Arizona Biltmore Circle, Suite 237, Phoenix, AZ 85016. All referrals will be compiled by the Chief Executive Officer and forwarded to the Board for their review and consideration. At a minimum, a recommendation should include the individual's name, current and past business experience, professional affiliations, age, stock ownership in the Company, particular business qualifications, and such other information as the stockholder deems relevant to assist the Board in considering the individual's potential service as a director.

***Delinquent Section 16(a) Reports.*** Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities. Officers, directors and greater than ten percent beneficial shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us during or with respect to the year ended December 31, 2021, the following persons failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year ended December 31, 2021:

---

| | | | |
|:---|:---|:---|:---|
| Name and Principal Position | Number of Late Reports | Transactions not Reported in Timely Manner | Known Failures to File a Required Form |
| Kent Wilson, CEO, Director | 1 | 5 |  |
| Charles Winters, Director | 1 | 1 |  |
| Ian Kantrowitz, Director | 1 | 1 |  |

---

**ITEM 11. EXECUTIVE COMPENSATION.** 

**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 |
|  |  | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
| Kent B. Wilson, Chief Executive Officer | 2021 | 424485 | 784297 | 164885 | 0 | 0 | 0 | 0 | 1373667 |
|  | 2020 | 300000 | 0 | 46300 | 0 | 0 | 0 | 204073 | 550373 |
| Jeff Hail, Chief Operating Officer | 2021 | 361381 | 288172 | 34076 | 0 | 0 | 0 | 0 | 683629 |
|  | 2020 | 275250 | 0 | 34763 | 0 | 0 | 0 | 0 | 310013 |
| Larry Zic, Chief Financial Officer | 2021 | 235492 | 18350 | 0 | 0 | 0 | 0 | 0 | 253842 |
|  | 2020 | 87461 | 0 | 18540 | 0 | 0 | 0 | 0 | 106001 |

---

**Outstanding Equity Awards**

**None**

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**Director Compensation**

The following table sets forth the amounts paid to the Company's directors for their service as directors of the Company during the year ended December 31, 2021. Please note: the compensation of Mr. Wilson, who is also an executive officer of the Company, is set forth above.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **<u>Name</u>** | **Fees earned<br>or paid<br>in cash** | **Stock awards** | **Option awards** | **Non-equity<br>incentive<br>plan<br>compensation** | **Nonqualified deferred<br>compensation earnings** | **All other compensation** | **Total** |
|  | **($)** | **($)** | **($)** | **($)** | **($)** | **($)** | **($)** |
| Ian Kantrowitz | $46430 | 16489 | $0 | $0 | $0 | $413185 | $476104 |
| Kent Wilson | $46300 | 0 | $0 | $0 | $0 | $0 | $46300 |
| Charles Winters | $46015 | 34076 | $0 | $0 | $0 | $219086 | $299177 |

---

**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.**

The following table sets forth certain information regarding beneficial ownership of Alpine 4 Class A, Class B, and Class C common stock and Series B Preferred Stock as of March 28, 2022, (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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 162,210,355 shares of Class A common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 8,548,088 shares of Class B common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 12,545,201 shares of Class C common stock; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

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 <br>beneficial owner (1);<br>Class of Securities | Title/Class of Security | Number of Shares | Beneficial <br>Ownership of<br>Shares Listed | Votes | Total Voting Power (2) |
| Kent B. Wilson<br>Chief Executive Officer, Director | CLASS A | 1723321 | 1.06% | 1723321 |  |
|  | CLASS B | 3285449 | 38.43% | 32854490 |  |
|  | CLASS C | 1290169 | 10.28% | 6450845 |  |
|  | B Preferred | 2 | 40.00% | 248333792 |  |
| Total Votes |  |  |  | 289362448 | 31.07% |
| Charles Winters, Director | CLASS A | 723322 | 0.45% | 723322 |  |
|  | CLASS B | 1300000 | 15.21% | 13000000 |  |
|  | CLASS C | 675000 | 5.38% | 3375000 |  |
|  | B Preferred | 1 | 20.00% | 124166896 |  |
| Total Votes |  |  |  | 141265218 | 15.17% |
| Ian Kantrowitz<br>Director | CLASS A | 833414 | 0.51% | 833414 |  |
|  | CLASS B | 1499429 | 17.54% | 14994290 |  |
|  | CLASS C | 1009738 | 8.05% | 5048690 |  |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | B Preferred | 1 | 20.00% | 124166896 | |
| Total Votes |  |  |  | 145043290 | 15.58% |
| Jeff Hail<br>Chief Operating<br>Officer | CLASS A | 541000 | 0.33% | 541000 |  |
|  | CLASS B | 1124211 | 13.15% | 11242110 |  |
|  | CLASS C | 788000 | 6.28% | 3940000 |  |
|  | B Preferred | 1 | 20.00% | 124166896 |  |
| Total Votes |  |  |  | 139890006 | 15.02% |
| Gerry Garcia<br>Director | CLASS A | 10000 | 0.0% | 10000 |  |
|  | CLASS B | 0 | 0.0% | 0 |  |
|  | CLASS C | 0 | 0.0% | 0 |  |
|  | B Preferred | 0 | 0.0% | 0 |  |
| Total Votes |  |  |  | 10000 | 0% |
| Edmond Lew<br>Director | CLASS A | 81667 | 0.1% | 81667 |  |
|  | CLASS B | 0 | 0.0% | 0 |  |
|  | CLASS C | 0 | 0.0% | 0 |  |
|  | B Preferred | 0 | 0.0% | 0 |  |
| Total Votes |  |  |  | 81667 | 0.01% |
| Christophe Jeunot<br>Director  | CLASS A | 122236 | 0.1% | 122236 |  |
|  | CLASS B | 0 | 0.0% | 0 |  |
|  | CLASS C | 0 | 0.0% | 0 |  |
|  | B Preferred | 0 | 0.0% | 0 |  |
| Total Votes |  |  |  | 122236 | 0.01% |
| Jonathan Withem<br>Director  | CLASS A | 0 | 0.0% | 0 |  |
|  | CLASS B | 0 | 0.0% | 0 |  |
|  | CLASS C | 0 | 0.0% | 0 |  |
|  | B Preferred | 0 | 0.0% | 0 |  |
| Total Votes |  |  |  | 0 | 0% |
| Mike Loyd<br>Director (3) | CLASS A | 0 | 0.0% | 0 |  |
|  | CLASS B | 0 | 0.0% | 0 |  |
|  | CLASS C | 0 | 0.0% | 0 |  |
|  | B Preferred | 0 | 0.0% | 0 |  |
| Total Votes |  |  |  | 0 | 0% |
| Andrew Call <br>Director (4) | CLASS A | 0 | 0.0% | 0 |  |
|  | CLASS B | 0 | 0.0% | 0 |  |
|  | CLASS C | 0 | 0.0% | 0 |  |
|  | B Preferred | 0 | 0.0% | 0 |  |
| Total Votes |  |  |  | 0 | 0% |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| As a Group | CLASS A | 4034960 | 2.49% | 4034960 |  |
| 9 PEOPLE | CLASS B | 7209089 | 84.34% | 72090890 |  |
|  | CLASS C | 3762907 | 29.99% | 18814535 |  |
|  | B Preferred | 5 | 100.00% | 620834480 |  |
| Total Votes |  |  |  | 715774865 | 77.56% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Except as otherwise indicated, the address of the stockholder is: Alpine 4 Holdings, Inc., 2525 E Arizona Biltmore Cir, Suite 237, Phoenix AZ 85016.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)As noted elsewhere in this Annual Report, Mr. Loyd resigned from the Board of Directors and all committee assignments on March 16, 2022. His information is not included in the "As a Group" totals shown in the chart above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Mr. Call was appointed to the Board of Directors on April 6, 2022.

**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**

*Related Party Transactions*

In January 2020, Kent Wilson, Charles Winters, Ian Kantrowitz, Jeff Hail, and Shannon Rigney, who were serving as officers and employees of the Company, collectively converted $603,463 owed to them as salaries and commissions into 4,022,088 shares of the Company's Class B Common stock, as follows:

---

| | | |
|:---|:---|:---|
| | **Amount Owed** | **Shares Issued** |
| &nbsp;&nbsp;&nbsp;&nbsp;Kent Wilson | $204067 | 1360449 |
| &nbsp;&nbsp;Ian Kantrowitz | $119914 | 799429 |
| &nbsp;&nbsp;Jeff Hail | $116132 | 774212 |
| &nbsp;&nbsp;Shannon Rigby | $73344 | 488960 |
| &nbsp;&nbsp;Charlie Winters | $90006 | 600038 |
| TOTAL | $603463 | 4023088 |

---

The conversion price was $0.15 per share, which was 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.

*Director Independence*

Nasdaq listing standards require that a majority of our board of directors be independent. An "independent director" is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company's board of directors, would interfere with the director's exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Ms. Garcia and Messrs. Lew, Jeunot, Withem and Call qualify as "independent directors" as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

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**ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.**

*MaloneBailey, LLP ("MaloneBailey")*

Set below are aggregate fees billed by MaloneBailey for professional services rendered for the year ended December 31, 2021.

**Audit Fees**

The fees for the audit and review services billed by MaloneBailey for the period from January 1, 2021, to December 31, 2021 were $860,000.

**Audit Related Fees**

The fees for the audit related services billed by MaloneBailey for the period from January 1, 2021, to December 31, 2021 were $50,000.

**Tax Fees**

The fees for the tax related services billed by MaloneBailey for the period from January 1, 2021, to December 31, 2021 were $0.

Set below are aggregate fees billed by MaloneBailey for professional services rendered for the year ended December 31, 2020.

**Audit Fees**

The fees for the audit and review services billed by MaloneBailey for the period from January 1, 2020, to December 31, 2020, were $232,000.

**Audit Related Fees**

The fees for the audit related services billed by MaloneBailey for the period from January 1, 2020, to December 31, 2020, were $11,000.

**Tax Fees**

The fees for the tax related services billed by MaloneBailey for the period from January 1, 2020, to December 31, 2020, were $0.

**PART IV**

**ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

**15(a)(1). Financial Statements.**

The following consolidated financial statements, and related notes and Report of Independent Registered Public Accounting Firm are filed as part of this Annual Report:

**ITEM 16. FORM 10-K SUMMARY**

None.

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**Consolidated Financial Statements**

**Contents**

---

| | |
|:---|:---|
| | Page |
| **Financial Statements** |  |
| [Report of Independent Registered Public Accounting Firm](#ia18bd7c02fe147918e3ffac38a90fe1e_109) (PCAOB ID: 206) | F-[2](#ia18bd7c02fe147918e3ffac38a90fe1e_109) |
| [Consolidated Balance Sheets as of](#ia18bd7c02fe147918e3ffac38a90fe1e_112)December 31, 2021,[and](#ia18bd7c02fe147918e3ffac38a90fe1e_112)2020 | F-[3](#ia18bd7c02fe147918e3ffac38a90fe1e_112) |
| [Consolidated Statements of Operations for the Years Ended](#ia18bd7c02fe147918e3ffac38a90fe1e_115)December 31, 2021,[and](#ia18bd7c02fe147918e3ffac38a90fe1e_115)2020 | F-5 |
| [Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the Years Ended](#ia18bd7c02fe147918e3ffac38a90fe1e_118)December 31, 2021,[and](#ia18bd7c02fe147918e3ffac38a90fe1e_118)2020 | F-6 |
| [Consolidated Statements of Cash Flows for the Years Ended](#ia18bd7c02fe147918e3ffac38a90fe1e_121)December 31, 2021,[and](#ia18bd7c02fe147918e3ffac38a90fe1e_121)2020 | F-9 |
| [Notes to Consolidated Financial Statements](#ia18bd7c02fe147918e3ffac38a90fe1e_124) | F-11 |

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Stockholders and Board of Directors of

Alpine 4 Holdings, Inc and Subsidiaries

***Opinion on the Financial Statements***

We have audited the accompanying consolidated balance sheets of Alpine 4 Holdings, Inc. and its subsidiaries (collectively, the "Company") as of December 31, 2021 and 2020, and the related consolidated statements of operations, changes in stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020 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.

**Restatement of Previously Issued Financial Statements**

As discussed in Note 2 to the consolidated financial statements, the Company has restated its 2021 and 2020 financial statements to correct certain misstatements.

***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*

<u>www.malonebailey.com</u>

We have served as the Company's auditor since 2015.

Houston, Texas

April 13, 2022, except for Note 2 as to which the date is March 16, 2023

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

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| | | |
|:---|:---|:---|
| | **December 31,<br>2021** | **December 31,<br>2020** |
| | As Restated | As Restated |
| **<u>ASSETS</u>** |  |  |
| **CURRENT ASSETS:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash | $3715666 | $277738 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash |  | 444845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 11875176 | 6484869 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract assets | 877904 | 717421 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory, net | 24419654 | 2666602 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 1955907 | 32301 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 42844307 | 10623776 |
| Property and equipment, net | 28101471 | 19299286 |
| Intangible assets, net | 39180664 | 8597075 |
| Right of use assets, net | 1460206 | 581311 |
| Goodwill | 22680084 | 2084982 |
| Other non-current assets | 357118 | 401744 |
| &nbsp;&nbsp;&nbsp;&nbsp;**TOTAL ASSETS** | $134623850 | $41588174 |
| **<u>LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)</u>** |  |  |
| **CURRENT LIABILITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $7744957 | $4854467 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 5074006 | 2872202 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 6359449 | 233485 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable, current portion | 5690524 | 4281118 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable, related parties |  | 238651 |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible notes payable, current portion, net of discount of $0 and $1,343,624 |  | 562242 |
| &nbsp;&nbsp;&nbsp;&nbsp;Line of credit, current portion | 4473489 | 2819793 |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing lease obligation, current portion | 649343 | 639527 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease obligation, current portion | 428596 | 334500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 30420364 | 16835985 |
| Notes payable, net of current portion | 8426105 | 15201450 |
| Convertible notes payable, net of current portion |  | 1100635 |
| Line of credit, net of current portion | 5640051 |  |
| Financing lease obligations, net of current portion | 15319467 | 15687176 |
| Operating lease obligations, net of current portion | 1066562 | 269030 |
| Series C and Series D preferred stock subject to redemption | 400092 | 5848013 |
| Deferred tax liability | 1861165 | 880165 |
| &nbsp;&nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES** | 63133806 | 55822454 |
| **STOCKHOLDERS' EQUITY (DEFICIT):** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.0001 par value, 5,000,000 shares authorized |  |  |
| &nbsp;&nbsp;&nbsp;Series B preferred stock; $1.00 stated value; 100 shares authorized, 5 and 5 shares issued and outstanding at December 31, 2021 and 2020  | 5 | 5 |
| &nbsp;&nbsp;&nbsp;Class A Common stock, $0.0001 par value, 195,000,000 shares authorized, 161,798,817 and 126,363,158 shares issued and outstanding at December 31, 2021 and 2020 | 16182 | 12636 |
| &nbsp;&nbsp;&nbsp;Class B Common stock, $0.0001 par value, 10,000,000 shares authorized, 8,548,088 and 9,023,088 shares issued and outstanding at December 31, 2021 and 2020  | 854 | 902 |
| &nbsp;&nbsp;&nbsp;Class C Common stock, $0.0001 par value, 15,000,000 shares authorized, 12,500,200 and 14,162,267 shares issued and outstanding at December 31, 2021 and 2020  | 1250 | 1417 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 130348267 | 25144136 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (58876514) | (39393376) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity (deficit) | 71490044 | (14234280) |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** | $134623850 | $41588174 |

---

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

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2021<br>As Restated** | **2020<br>As Restated** |
| **Revenues, net** | $51640813 | $33454349 |
| **Cost of revenues** | 43942815 | 28090722 |
| **Gross Profit** | 7697998 | 5363627 |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 27987920 | 9695891 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development | 1464918 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment loss of intangible asset and goodwill | 367519 | 1561600 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 29820357 | 11257491 |
| **Loss from operations** | (22122359) | (5893864) |
| **Other income (expenses)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (3289233) | (5463597) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in value of derivative liability |  | 2298609 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of debt | 803079 | 344704 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on forgiveness of debt | 3896108 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration |  | 500000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment loss on equity investment | (1350000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income | 635526 | 71224 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expenses) | 695480 | (2249060) |
| **Loss before income tax** | (21426879) | (8142924) |
| **Income tax (benefit)** | (1943741) | (495076) |
| **Net loss** | $(19483138) | $(7647848) |
| **Weighted average shares outstanding:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | 164216808 | 132987390 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | 164216808 | 139611790 |
| **Basic loss per share** | $(0.12) | $(0.06) |
| **Diluted loss per share** | $(0.12) | $(0.06) |

---

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

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Series B Preferred Stock** | **Series B Preferred Stock** | **Class A Common Stock** | **Class A Common Stock** | **Class B Common Stock** | **Class B Common Stock** | **Class C Common Stock** | **Class C Common Stock** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Deficit** | **Total<br>Stockholders'<br>Equity (Deficit)** |
| | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Deficit** | **Total<br>Stockholders'<br>Equity (Deficit)** |
| **Balance, December 31, 2019** |  | $— | 100070161 | $10007 | 5000000 | $500 | 9955200 | $996 | $19763883 | $(31745528) | $(11970142) |
| Issuance of shares of common stock for cash |  |  | 11513935 | 1151 |  |  |  |  | 673318 |  | 674469 |
| Issuance of shares of common stock for convertible note payable and accrued interest |  |  | 12861995 | 1286 |  |  |  |  | 1928014 |  | 1929300 |
| Issuance of shares of common stock for debt settlement |  |  | 1617067 | 162 |  |  | 1617067 | 162 | 330204 |  | 330528 |
| Issuance of shares of common stock for penalty interest |  |  | 300000 | 30 |  |  |  |  | 44670 |  | 44700 |
| Issuance of shares of common stock for deferred compensation |  |  |  |  | 4023088 | 402 |  |  | 603061 |  | 603463 |
| Issuance of shares of common stock for compensation |  |  |  |  |  |  | 2590000 | 259 | 239834 |  | 240093 |
| Issuance of shares of series B preferred stock for services | 5 | 5 |  |  |  |  |  |  |  |  | 5 |
| Share-based compensation expense |  |  |  |  |  |  |  |  | 78652 |  | 78652 |
| Beneficial conversion feature on convertible notes |  |  |  |  |  |  |  |  | 1482500 |  | 1482500 |
| Net loss |  |  |  |  |  |  |  |  |  | (7647848) | (7647848) |
| **Balance, December 31, 2020 (As Restated)** | 5 | 5 | 126363158 | 12636 | 9023088 | 902 | 14162267 | 1417 | 25144136 | (39393376) | (14234280) |
| Issuance of shares of common stock for cash |  |  | 18428827 | 1844 |  |  |  |  | 76491149 |  | 76492993 |
| Issuance of shares of common stock for convertible note payable and accrued interest |  |  | 7384018 | 740 |  |  |  |  | 1886156 |  | 1886896 |
| Conversion of Class C to Class A |  |  | 1617067 | 162 |  |  | (1617067) | (162) |  |  |  |
| Conversion of Class B to Class A |  |  | 475000 | 48 | (475000) | (48) |  |  |  |  |  |
| Repurchase of class C common stock |  |  |  |  |  |  | (45000) | (5) | (185845) |  | (185850) |
| Issuance of shares of common stock for compensation |  |  | 199018 | 21 |  |  |  |  | 261504 |  | 261525 |
| Issuance of shares of common stock and warrants for acquisition |  |  | 4922471 | 492 |  |  |  |  | 15066719 |  | 15067211 |
| Conversion of series D preferred stock to Class A |  |  | 1066868 | 105 |  |  |  |  | 5194329 |  | 5194434 |
| Conversion of series C preferred stock to Class A |  |  | 1342390 | 134 |  |  |  |  | 6361153 |  | 6361287 |
| Share-based compensation expense |  |  |  |  |  |  |  |  | 36538 |  | 36538 |
| Beneficial conversion feature on convertible notes |  |  |  |  |  |  |  |  | 92428 |  | 92428 |
| Net loss |  |  |  |  |  |  |  |  |  | (19483138) | (19483138) |
| **Balance, December 31, 2021 (As Restated)** | 5 | $5 | 161798817 | $16182 | 8548088 | $854 | 12500200 | $1250 | $130348267 | $(58876514) | $71490044 |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2021<br>As Restated** | **2020<br>As Restated** |
| **OPERATING ACTIVITIES:** | | |
| &nbsp;&nbsp;Net loss | $(19483138) | $(7647848) |
| &nbsp;&nbsp;Adjustments to reconcile net loss to |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 2396966 | 1844634 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization | 1757393 | 225628 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of debt | (803079) | (344704) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on forgiveness of debt | (3896108) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of derivative liabilities |  | (2298609) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in goodwill value for inventory valuation |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of preferred stock subject to redemption | (545509) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax benefit | (1943741) | (495076) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for services |  | 240093 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock issued for services |  | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration |  | (500000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bad debt expense | 3028757 | 88305 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash adjustment to debt booked to interest expense |  | 79211 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock issued for penalties |  | 44700 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee stock compensation | 298063 | 78652 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discounts | 1436052 | 985709 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of convertible debentures for interest |  | 105000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease expense | 412898 | 272262 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment loss on equity investment | 1350000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment loss of intangible asset and goodwill | 367519 | 1561600 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write off of inventory | 237192 | 127919 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in current assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (4235353) | 3951827 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (6795719) | (184766) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets | (160483) | (49697) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (87950) | (256682) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 725596 | (634489) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 614399 | 940098 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 332032 | 63445 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability | (429529) | (260565) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits |  | (12509) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (25423742) | (2075857) |
| **INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | (3571253) | (75670) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for acquisitions | (37324035) | (2513355) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for equity investment | (350000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash assumed in acquisition | 81442 | 453876 |
| &nbsp;&nbsp;Net cash used in investing activities | (41163846) | (2135149) |
| **FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of common stock | 76492993 | 674469 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuances of notes payable, related parties |  | 47000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuances of notes payable, non-related party | 16078 | 4654817 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuances of convertible notes payable | 408000 | 1482500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from line of credit | 11967717 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchase of common stock | (185850) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from financing lease |  | 2000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of notes payable, related party | (238651) | (290003) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of notes payable, non-related parties | (7161807) | (2101825) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of convertible notes payable | (1688464) | (335896) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of line of credit | (9392165) | (996331) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid on financing lease obligations | (637180) | (503628) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 69580671 | 4631103 |
| **NET INCREASE IN CASH AND RESTRICTED CASH** | 2993083 | 420097 |
| **CASH AND RESTRICTED CASH, BEGINNING BALANCE** | 722583 | 302486 |
| **CASH AND RESTRICTED CASH, ENDING BALANCE** | 3715666 | 722583 |
| **CASH PAID FOR:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest | $1973818 | $3504227 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes | $54058 | $— |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Penalty interest added to debt | $— | $15000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for convertible note payable and accrued interest | $1886896 | $1929300 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for debt settlement | $— | $330528 |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of note payable for acquisition | $— | $2300000 |
| &nbsp;&nbsp;&nbsp;&nbsp;ROU asset and operating lease obligation recognized under Topic 842 | $95029 | $193541 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued to settle unpaid salaries | $— | $603463 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equipment purchased on financing lease | $— | $756990 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other asset reclassified to fixed asset | $— | $86471 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest added to note payable - related party | $— | $139834 |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of shares of series C preferred stock for acquisition | $— | $5848013 |
| &nbsp;&nbsp;&nbsp;&nbsp;Beneficial conversion feature on convertible notes | $92428 | $1482500 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reduction of acquisition note payable for uncollectible accounts | $— | $150044 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for acquisition | $15067211 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Remeasurement of finance lease liability | $279287 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage on property purchase | $4680000 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable converted to equity investment | $1000000 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of shares of series D preferred stock for acquisition | $6653309 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable issued to the Sellers for the purchase of DTI | $2000000 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversion of series D preferred stock for common stock | $136 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversion of series C preferred stock for common stock | $171 | $— |

---

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

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

**Note 1 – Organization and Basis of Presentation (As Restated)**

Alpine 4 Holdings, Inc. (together with its subsidiaries, 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 affect an asset acquisition, merger, exchange of capital stock, or other business combination with a domestic or foreign business. On March 2, 2021, the Company changed its name from Alpine 4 Technologies Ltd. to Alpine 4 Holdings, Inc.

Effective April 1, 2016, the Company purchased all of the outstanding capital stock of Quality Circuit Assembly, Inc., a California corporation ("QCA").

Effective January 1, 2019, the Company purchased all of the outstanding capital stock of Morris Sheet Metal Corp., an Indiana corporation ("MSM"), 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").

Effective November 6, 2019, the Company purchased all of the outstanding capital stock and units of Deluxe Sheet Metal, Inc., an Indiana corporation, and DSM Holding, LLC, an Indiana limited liability company, and purchased certain real estate from Lonewolf Enterprises, LLC, an Indiana limited liability company (collectively "Deluxe").

Effective February 21, 2020, the Company purchased all of the outstanding units of Excel Fabrication, LLC., an Idaho Limited Liability Company ("Excel").

Effective December 15, 2020, the Company purchased the assets of Impossible Aerospace Corporation, a Delaware corporation ("IA").

Effective February 8, 2021, the Company purchased the assets of Vayu (US), Inc., a Delaware corporation ("Vayu").

On May 5, 2021, the Company acquired all of the outstanding shares of stock of Thermal Dynamics, Inc., a Delaware corporation ("TDI").

On May 10, 2021, the Company acquired all of the outstanding membership interests of KAI Enterprises, LLC, a Florida limited liability company, the sole asset of which was all of the outstanding membership interests of Alternative Laboratories, LLC, a Delaware limited liability company ("Alt Labs").

On October 20, 2021, the Company acquired 100% of the outstanding shares of Identified Technologies Corporation, a Delaware corporation ("Identified Technologies").

On November 29, 2021, the Company, and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 3, Inc. ("AC3"), entered into a merger agreement with ElecJet Corp., ("ElecJet") and the three ElecJet shareholders. Pursuant to the agreement, AC3 merged with and into ElecJet with ElecJet being the surviving entity following the merger.

On December 9, 2021, the Company, and A4 Technologies, Inc., a wholly owned subsidiary of the Company ("A4 Technologies"), entered into a Membership Interest Purchase Agreement with DTI Services Limited Liability Company (doing business as RCA Commercial Electronics), ("DTI"), Direct Tech Sales LLC, (also having an assumed business name of RCA Commercial Electronics), ("Direct Tech"), PMI Group, LLC, ("PMI"), Continu.Us, LLC, ("Continu.Us"), Solas Ray, LLC, ("Solas"), and the individual owners of the interests of the various entities. DTI, Direct Tech, PMI, Continu.Us, and Solas were each referred to in the Membership Interest Purchase Agreement collectively as "RCA." Pursuant to the MIPA, the Company acquired all of the outstanding membership interests of RCA.

As of the date of this Report, the Company was a holding company owning, directly or indirectly, fourteen companies:

–A4 Corporate Services, LLC;

–ALTIA, LLC;

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

–Quality Circuit Assembly, Inc.;

–Morris Sheet Metal, Corp;

–JTD Spiral, Inc.;

–Excel Construction Services, LLC;

–SPECTRUMebos, Inc.;

–Vayu (US)

–Thermal Dynamics International, Inc.;

–Alternative Laboratories, LLC.;

–Identified Technologies, Corp.;

–ElecJet Corp.;

–DTI Services Limited Liability Company (doing business as RCA Commercial Electronics); and

–Global Autonomous Corporation

<u>Basis of presentation</u>

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP").

<u>Liquidity</u>

The Company's financial statements are prepared in accordance with U.S. GAAP applicable to a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued.

In accordance with Financial Accounting Standards Board (the "FASB"), Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

As shown in the accompanying consolidated financial statements, the Company has incurred significant recurring losses and negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. While the Company experienced a loss for the year ended December 31, 2021, of $19.5 million, and had a negative cash flow used in operations, there were several significant one-time / non-recurring items included in the $19.5 million net loss. These non-recurring items totaled $8.4 million, consisting of $612 thousand in new acquisitions expenses captured in professional fees, and other costs, $1.8 million for repurchase of restricted stock units in March 2021, $3.0 million in write off of accounts receivables, $367 thousand in write off of intangibles and goodwill, $1.2 million to management for bonuses, and $1.4 million for a loss on equity investment.

The Company received a total of approximately $76.4 million in 2021 in the following two transactions:

–The Company raised approximately $67.1 million in net proceeds in connection with a registered direct offering of its stock and;

–The Company raised approximately $9.3 million in net proceeds in connection with an equity line of credit financing arrangement.

As of December 31, 2021, the Company has positive working capital of approximately $12.4 million. The Company has also secured bank financing totaling $18.8 million ($18.3 million in Lines of Credit and $0.5 million in capital expenditures lines of credit availability) of which $6.4 million was unused at December 31, 2021.

The Company plans to continue to generate additional revenue (and improve cash flows from operations) partly from the acquisitions of six operating companies which closed in 2021 combined with improved gross profit performance from the existing operating companies. The Company also plans to continue to raise funds through debt financing and the sale of shares through its planned at-the-market offering.

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

Based on the capital raise as indicated above and management's plans to improve cash flows from operations, management believes the Company has sufficient working capital to satisfy the Company's estimated liquidity needs for the next 12 months. Because of the above factors, the Company believes that this alleviates the substantial doubt in connection with the Company's ability to continue as a going concern.

However, there is no assurance that management's plans will be successful due to the current economic climate in the United States and globally.

**Note 2 – Restatement of Previously Issued Financial Statements** 

In the course of preparing our interim financial statements for the third quarter of 2022, we identified the following misstatements that required restatement of our previously issued 2020 and 2021 financial statements as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Deferred tax liabilities amounting to $451,966 and 1,809,857 were not recognized in 2020 and 2021, respectively, for differences in the income tax treatment of intangible assets acquired from our acquisitions of IA, Vayu and Elecjet. Specifically, the recognition of deferred tax liabilities would result in an increase in goodwill and intangible assets as of December 31, 2021 and 2020, of $2,924,741 and $853,991, respectively, and the recognition of an income tax benefit from the release of our valuation allowance of $1,566,850 and $402,025, for the years ended December 31, 2021 and 2020, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.We had previously classified the Series C and Series D Preferred Stock (collectively, the "Preferred Shares") issued in the acquisitions of IA and Vayu, respectively, under permanent equity. Due to certain provisions in the Preferred Shares where we could be required to issue a variable number of Class A common shares, we determined that the Preferred Shares should be classified as liabilities in accordance with ASC 480, *Distinguishing Liabilities from Equity*. As a result, the Company reclassed the fair value of the Series C Preferred Stock of $5,848,013 as of December 31, 2020, and the fair value of the Series D Preferred Stock of $6,653,309 as of March 31, 2021, from permanent equity to liability. Accretion to interest income of $545,509 was also recognized for the year ended December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.We identified certain valuation-related errors in the determination of fair values related to the RCA acquisition. This resulted in a reduction in the fair value of inventory of $1,562,251 and a reduction in fair value of trademark of $1,180,000 with a corresponding increase to customer relationship of $1,900,000 and increase to goodwill of $842,251.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.When the Company acquired IA, Vayu, and Alt Labs, the Company assumed $444,850, $72,850, and $1,661,875, respectively, of PPP loan liability. The full amounts related to Vayu and Alt Labs were forgiven in 2021, in addition to $356,690 of the $444,850 related to IA. The Company initially recorded this as a gain on forgiveness of debt on the basis that the loan should be recorded at its fair value on the acquisition date without consideration of any potential future forgivable amount. However, under ASC 805, provisional amounts are estimated using the best information available as of the reporting date. As additional information is obtained during the measurement period, these amounts are adjusted through goodwill. Given the facts and circumstances at acquisition date, and since the forgiveness of Alt Labs's PPP loans occurred during the measurement period, the amount forgiven of $1,661,875 should have been recorded as a reduction to goodwill instead of gain on forgiveness of debt. The Company also determined that the fair value of the PPP loans assumed in the IA and Vayu acquisitions should be $88,160 and $0, respectively, after further consideration of the facts and circumstances at the acquisition dates. As such, there should not have been a gain on forgiveness of debt recorded for the combined $429,540 that was forgiven during 2021. As such, there will be a decrease in forgiveness of debt of $2,091,415, a reduction in goodwill of $1,661,875 and a reduction to intangible assets of $429,540.

The following tables summarize the effects of the restatements on each financial statement line item as of the dates and for the periods indicated. The effects of the restatement are incorporated within Notes 1, 3, 5, 8, 9, 10, 12 and 13.

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

**Consolidated Balance Sheets as of December 31,** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2021** | **2021** | **2021** | **2020** | **2020** | **2020** |
| | **As Previously Reported** | **Adjustments** | **As Restated** | **As Previously Reported** | **Adjustments** | **As Restated** |
| Inventory, net | $25981905 | $(1562251) | $24419654 | $2666602 | $— | $2666602 |
| Total current assets | 44406558 | (1562251) | 42844307 | 10623776 |  | 10623776 |
| Property and equipment, net | 28096562 | 4909 | 28101471 | 19299286 |  | 19299286 |
| Intangible assets, net | 36777245 | 2403419 | 39180664 | 7743084 | 853991 | 8597075 |
| Goodwill | 21937634 | 742450 | 22680084 | 2084982 |  | 2084982 |
| Total assets | 133035323 | 1588527 | 134623850 | 40734183 | 853991 | 41588174 |
| Preferred stock subject to redemption |  | 400092 | 400092 |  | 5848013 | 5848013 |
| Deferred tax liability | 51308 | 1809857 | 1861165 | 428199 | 451966 | 880165 |
| Total liabilities | 60923857 | 2209949 | 63133806 | 49522475 | 6299979 | 55822454 |
| Series C preferred stock  |  |  |  | 171 | (171) |  |
| Series D preferred stock | 7 | (7) |  |  |  |  |
| Additional paid-in capital | 131293861 | (945594) | 130348267 | 30991978 | (5847842) | 25144136 |
| Accumulated deficit | (59200693) | 324179 | (58876514) | (39795401) | 402025 | (39393376) |
| Total stockholders' equity | 72111466 | (621422) | 71490044 | (8788292) | (5445988) | (14234280) |
| Total liabilities and stockholders' equity | 133035323 | 1588527 | 134623850 | 40734183 | 853991 | 41588174 |

---

**Consolidated Statements of Operations for the Year Ended December 31,** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2021** | **2021** | **2021** | **2020** | **2020** | **2020** |
| | **As Previously Reported** | **Adjustments** | **As Restated** | **As Previously Reported** | **Adjustments** | **As Restated** |
| General and administrative expenses | $27889130 | $98790 | $27987920 | $9695891 | $— | $9695891 |
| Total operating expenses | 29721567 | 98790 | 29820357 | 11257491 |  | 11257491 |
| Loss from operations | (22023569) | (98790) | (22122359) | (5893864) |  | (5893864) |
| Interest expense | (3834742) | 545509 | (3289233) | (5463597) |  | (5463597) |
| Gain on forgiveness of debt | 5987523 | (2091415) | 3896108 |  |  |  |
| Total other income (expenses) | 2241386 | (1545906) | 695480 | (2249060) |  | (2249060) |
| Loss before income tax | (19782183) | (1644696) | (21426879) | (8142924) |  | (8142924) |
| Income tax (benefit) | (376891) | (1566850) | (1943741) | (93051) | (402025) | (495076) |
| Net loss | (19405292) | (77846) | (19483138) | (8049873) | 402025 | (7647848) |
| Basic loss per share | (0.12) |  | (0.12) | (0.06) |  | (0.06) |
| Diluted loss per share | (0.12) |  | (0.12) | (0.06) |  | (0.06) |

---

**Consolidated Statements of Cash Flows for the Year Ended December 31,** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2021** | **2021** | **2021** | **2020** | **2020** | **2020** |
| | **As Previously Reported** | **Adjustments** | **As Restated** | **As Previously Reported** | **Adjustments** | **As Restated** |
| Net loss | $(19405292) | $(77846) | $(19483138) | $(8049873) | $402025 | $(7647848) |
| Depreciation | 2395864 | 1102 | 2396966 | 1844634 |  | 1844634 |
| Amortization | 1659705 | 97688 | 1757393 | 225628 |  | 225628 |
| (Gain) loss on forgiveness of debt | (5987523) | 2091415 | (3896108) |  |  |  |
| Amortization of preferred stock subject to redemption |  | (545509) | (545509) |  |  |  |
| Income tax benefit | (376891) | (1566850) | (1943741) | (93051) | (402025) | (495076) |
| Net cash used in operating activities | (25423742) |  | (25423742) | (2075857) |  | (2075857) |

---

The impacts of the restatement have been reflected throughout the financial statements, including the applicable footnotes, as noted above.

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

**Restatement of Previously Issued Financial Statements (Unaudited)** 

As a result of the misstatements noted above, we have restated our previously reported unaudited consolidated balance sheets as of March 31, 2021, June 30, 2021, and September 30, 2021. We have also restated the unaudited consolidated statements of operations for the three months ended March 31, 2021, the three and six months ended June 30, 2021, and the three and nine months ended September 30, 2021, and the unaudited consolidated statements of cash flow for the three months ended March 31, 2021, the six months ended June 30, 2021, and the nine months ended September 30, 2021, to recognize accreted interest income on the preferred stock subject to redemption and to properly reflect the gain on forgiveness of debt related to PPP loans that were assumed at the date of acquisition for IA, Vayu, and Alt Labs.

The following tables present the impact of the restatements, to the applicable line items in the unaudited consolidated balance sheets, unaudited consolidated statements of operations, and unaudited consolidated statements of cash flow to the Company's previously reported consolidated financial statements for the above mentioned periods:

**Consolidated Balance Sheets as of,** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **March 31, 2021** | **March 31, 2021** | **March 31, 2021** | **June 30, 2021** | **June 30, 2021** | **June 30, 2021** | **September 30, 2021** | **September 30, 2021** | **September 30, 2021** |
| | **As Previously Reported** | **Adjustments** | **As Restated** | **As Previously Reported** | **Adjustments** | **As Restated** | **As Previously Reported** | **Adjustments** | **As Restated** |
| Property and equipment, net | $19094688 | $6011 | $19100699 | $20728221 | $6011 | $20734232 | $27320596 | $6011 | $27326607 |
| Intangibles, net | 14590504 | 1781107 | 16371611 | 29440716 | 1781107 | 31221823 | 29001665 | 1781107 | 30782772 |
| Goodwill | 2084982 |  | 2084982 | 5866454 |  | 5866454 | 5866454 | (849792) | 5016662 |
| Total assets | 84653265 | 1787118 | 86440383 | 94027836 | 1787118 | 95814954 | 97111332 | 937326 | 98048658 |
| Preferred stock subject to redemption |  | 12383616 | 12383616 |  | 12197558 | 12197558 |  | 12011499 | 12011499 |
| Deferred tax liability | 428199 | 1814633 | 2242832 | 428199 | 1814633 | 2242832 | 428199 | 1814633 | 2242832 |
| Total liabilities | 38578985 | 14198249 | 52777234 | 47118206 | 14012191 | 61130397 | 47358006 | 13826132 | 61184138 |
| Preferred Stock | 314 | (314) |  | 314 | (314) |  | 314 | (314) |  |
| Additional paid-in capital | 91982825 | (12501008) | 79481817 | 95944854 | (12501008) | 83443846 | 96306820 | (12501008) | 83805812 |
| Accumulated deficit | (45924869) | 90191 | (45834678) | (49052146) | 276249 | (48775897) | (46570554) | (387484) | (46958038) |
| Total stockholders' equity | 46074280 | (12411131) | 33663149 | 46909630 | (12225073) | 34684557 | 49753326 | (12888806) | 36864520 |
| Total liabilities and stockholders' equity | 84653265 | 1787118 | 86440383 | 94027836 | 1787118 | 95814954 | 97111332 | 937326 | 98048658 |

---

**Consolidated Statement of Operations for the Three Months ended March 31, 2021**

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended March 31, 2021** | **Three Months Ended March 31, 2021** | **Three Months Ended March 31, 2021** |
| | **As Previously Reported** | **Adjustments** | **As Restated** |
| Interest expense | $(1471723) | $117706 | $(1354017) |
| Gain on forgiveness of debt | 429540 | (429540) |  |
| Total other income (expenses) | (1057399) | (311834) | (1369233) |
| Loss before income taxes | (6129468) | (311834) | (6441302) |
| Net loss | (6129468) | (311834) | (6441302) |
| Basic loss per share | (0.04) |  | (0.04) |
| Diluted loss per share | (0.04) |  | (0.04) |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

**Consolidated Statements of Operations for the Three and Six Months ended June 30, 2021**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2021** | **Three Months Ended June 30, 2021** | **Three Months Ended June 30, 2021** | **Six Months Ended June 30, 2021** | **Six Months Ended June 30, 2021** | **Six Months Ended June 30, 2021** |
| | **As Previously Reported** | **Adjustments** | **As Restated** | **As Previously Reported** | **Adjustments** | **As Restated** |
| Interest expense | $(1216587) | $186058 | $(1030529) | $(2688310) | $303764 | $(2384546) |
| Gain on forgiveness of debt | 159742 |  | 159742 | 589282 | (429540) | 159742 |
| Total other income (expenses) | (223060) | 186058 | (37002) | (1280459) | (125776) | (1406235) |
| Income (loss) before income tax | (3127277) | 186058 | (2941219) | (9256745) | (125776) | (9382521) |
| Net income (loss) | (3127277) | 186058 | (2941219) | (9256745) | (125776) | (9382521) |
| Basic loss per share | (0.02) |  | (0.02) | (0.06) |  | (0.06) |
| Diluted loss per share | (0.02) |  | (0.02) | (0.06) |  | (0.06) |

---

**Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2021**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2021** | **Three Months Ended September 30, 2021** | **Three Months Ended September 30, 2021** | **Nine Months Ended September 30, 2021** | **Nine Months Ended September 30, 2021** | **Nine Months Ended September 30, 2021** |
| | **As Previously Reported** | **Adjustments** | **As Restated** | **As Previously Reported** | **Adjustments** | **As Restated** |
| Interest expense | $(537882) | $186059 | $(351823) | $(3226192) | $489823 | $(2736369) |
| Gain on forgiveness of debt | 4307291 | (849792) | 3457499 | 4896573 | (1279332) | 3617241 |
| Total other income (expenses) | 4208110 | (663733) | 3544377 | 2927651 | (789509) | 2138142 |
| Income (loss) before income tax | 2535650 | (663733) | 1871917 | (6721095) | (789509) | (7510604) |
| Net income (loss) | 2481592 | (663733) | 1817859 | (6775153) | (789509) | (7564662) |
| Basic income (loss) per share | 0.01 |  | 0.01 | (0.04) |  | (0.04) |
| Diluted income/(loss) per share | 0.01 |  | 0.01 | (0.04) |  | (0.04) |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

**Consolidated Statements of Cash Flows for the Three, Six, and Nine Months Ended March 30, 2021, June 30, 2021, and September 30, 2021**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended March 31, 2021** | **Three Months Ended March 31, 2021** | **Three Months Ended March 31, 2021** | **Six Months Ended June 30, 2021** | **Six Months Ended June 30, 2021** | **Six Months Ended June 30, 2021** | **Nine Months Ended September 30, 2021** | **Nine Months Ended September 30, 2021** | **Nine Months Ended September 30, 2021** |
| | **As Previously Reported** | **Adjustments** | **As Restated** | **As Previously Reported** | **Adjustments** | **As Restated** | **As Previously Reported** | **Adjustments** | **As Restated** |
| Net Loss | $(6129468) | $(311834) | $(6441302) | $(9256745) | $(125776) | $(9382521) | $(6775153) | $(789509) | $(7564662) |
| Amortization of preferred stock subject to redemption |  | (117706) | (117706) |  | (303764) | (303764) |  | (489823) | (489823) |
| Gain on forgiveness of debt | (429540) | 429540 |  | (589282) | 429540 | (159742) | (4896573) | 1279332 | (3617241) |
| Net cash used in operating activities | (8950925) |  | (8950925) | (14374257) |  | (14374257) | (21226966) |  | (21226966) |

---

**Note 3 - Summary of Significant Accounting Policies (As Restated)**

<u>Principles of consolidation</u>

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2021 and 2020. Significant intercompany balances and transactions have been eliminated.

<u>Use of estimates</u>

The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. In many instances, the Company could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives of long-lived assets, reserves for accounts receivable and inventory, valuation allowance for deferred tax assets, fair values assigned to intangible assets acquired, and impairment of long-lived assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, the Company's future financial statement presentation, financial condition, results of operations and cash flows will be affected. The ultimate impact from COVID-19 on the Company's operations and financial results during 2022 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, and the speed with which the economy recovers. The Company is not able to fully quantify the impact that these factors will have on the Company's financial results during 2022 and beyond. COVID-19 did have a negative impact on the Company's financial performance in 2021.

<u>Reclassification</u>

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position.

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

<u>Advertising</u>

Advertising costs are expensed when incurred. All advertising takes place at the time of expense. We have no long-term contracts for advertising. Advertising expense for all periods presented were not significant.

<u>Cash</u>

Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. As of December 31, 2021, and 2020, the Company had no cash equivalents. As of December 31, 2021, and 2020, the Company had $0 and $444,845 in restricted cash, respectively, for amounts held in escrow.

The following table sets forth a reconciliation of cash, and restricted cash reported in the consolidated statements of cash flows that agrees to the total of those amounts presented in the consolidated statements of cash flows.

---

| | | |
|:---|:---|:---|
| | December 31,<br>2021 | December 31,<br>2020 |
| Cash | $3715666 | $277738 |
| Restricted cash |  | 444845 |
| Total cash and restricted cash shown in statement of cash flows | $3715666 | $722583 |

---

<u>Major Customers</u>

The Company had no customers that made up over 10% of accounts receivable as of December 31, 2021. The Company had two customers that made up 10% and 8%, respectively, of accounts receivable as of December 31, 2020.

For the year ended December 31, 2021, the Company had two customers that each made up 11% of total revenues. For the year ended December 31, 2020, the Company had one customer that made up 10% of total revenues

For the year ended December 31, 2021, the Company had 9% of total revenues made up of government contracts.

*Major Customer by Segment*

*Manufacturing* 

The manufacturing segment had two customers that made up 31% and 20%, respectively, of accounts receivable as of December 31, 2021.

For the year ended December 31, 2021, the manufacturing segment had four customer that made up a total of 65% of total manufacturing revenues.

*Aerospace*

The aerospace segment had one customer that made up 57% of accounts receivable as of December 31, 2021.

For the year ended December 31, 2021, the aerospace segment had two customers that made up 26% and 10%, respectively, of total aerospace revenues.

*Construction*

The construction segment had two customers that made up over 25% and 17%, respectively, of accounts receivable as of December 31, 2021.

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

For the year ended December 31, 2021, the construction segment had two customers that made up 28% and 18%, respectively, of total construction revenues.

*Defense*

Of the defense segment 100% of accounts receivables and defense revenues were related to government contracts.

*Technologies* 

The Company had two customers that made up 14% and 30% of accounts receivable as of December 31, 2021.

For the year ended December 31, 2021, the technology segment had two customers that made up 22% and 12%, respectively, of total technologies revenues.

<u>Accounts Receivable</u>

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. As of December 31, 2021 and 2020, allowance for bad debt was $199,936 and $49,914, respectively. During the year ended December 31, 2021, the Company wrote off $3,028,757 to bad debts expense.

<u>Inventory</u>

Inventory for all subsidiaries is valued at weighted average. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower. Inventory is segregated into three areas, raw materials, work-in-process and finished goods. Inventory, net at December 31, 2021 and 2020 consists of:

---

| | | |
|:---|:---|:---|
| | December 31,<br>2021 | December 31,<br>2020 |
| Raw materials | $8322867 | $1584651 |
| Work in process | 2480979 | 573806 |
| Finished goods | 14829365 | 508145 |
|  | 25633211 | 2666602 |
| Reserve | (1213557) |  |
| Inventory, net | $24419654 | $2666602 |

---

<u>Property and Equipment</u>

Property and equipment are carried at cost less depreciation. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows:

---

| | |
|:---|:---|
| Automobiles & Trucks | 5 to 7 years |
| Buildings and improvements | 39 years |
| Leasehold Improvements | 15 years or time remaining on lease (whichever is shorter) |
| Machinery and equipment | 10 years |

---

Maintenance and repair costs are charged against income as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset.

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

Property and equipment consisted of the following as of December 31, 2021 and 2020:

---

| | | |
|:---|:---|:---|
| | December 31,<br>2021 | December 31,<br>2020 |
| Automobiles and trucks | $1251187 | $918602 |
| Machinery and equipment | 8876402 | 5436847 |
| Office furniture and fixtures | 167581 | 119546 |
| Buildings and improvements | 23630250 | 16167000 |
| Total Property and equipment | 33925420 | 22641995 |
| Less: Accumulated depreciation | (5823949) | (3342709) |
| Property and equipment, net | $28101471 | $19299286 |

---

Included in Buildings and improvements in the above table are two buildings of $9,000,000 and $2,000,000 related to sale leaseback transactions in connection with the acquisitions of Deluxe and Excel. (See Note 4.)

<u>Purchased Intangibles and Other Long-Lived Assets (As Restated)</u>

The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between five and fifteen years as follows:

---

| | |
|:---|:---|
| Customer list | 3-15 years |
| Non-compete agreements | 1 to 5 years |
| Software development | 5 years |
| Patents | 17 years |
| Proprietary technology | 15 years |

---

Intangible assets consisted of the following as of December 31, 2021 and 2020:

---

| | | |
|:---|:---|:---|
| | December 31,<br>2021 | December 31,<br>2020 |
| Software | $128474 | $278474 |
| Non-compete agreement | 1378772 | 157953 |
| Customer list | 13011187 | 2031187 |
| Patents, trademarks, and licenses | 7174912 | 6701632 |
| Proprietary technology | 19616743 |  |
| Total intangible assets | 41310088 | 9169246 |
| Less: Accumulated amortization | (2129424) | (572171) |
| Intangibles, net | $39180664 | $8597075 |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows:

---

| | |
|:---|:---|
| Years Ending December 31, |  |
| 2022 | $3016058 |
| 2023 | 3045243 |
| 2024 | 3025381 |
| 2025 | 2812882 |
| 2026 | 2788590 |
| Thereafter | 24492510 |
| Total | $39180664 |

---

<u>Other Long-Term Assets</u>

Other long-term assets consisted of the following as of December 31, 2021 and 2020:

---

| | | |
|:---|:---|:---|
| | December 31,<br>2021 | December 31,<br>2020 |
| Deposits | $149517 | $293327 |
| Other | 207601 | 108417 |
|  | $357118 | $401744 |

---

<u>Impairment of Long-Lived Assets</u>

The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, *Accounting for the Impairment of Long-Lived Assets*. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. During the year ended December 31, 2021, due to the significant impact of COVID-19, the Company determined that the customer list for Excel was impaired and took a charge to earnings of $359,890. During the year ended December 31, 2020, due to the loss of significant customers and the impact of COVID-19, the Company determined that the customer list for APF and Deluxe was impaired and took a charge to earnings of $671,500 and $450,000, respectively.

<u>Goodwill</u> 

In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations. All assessments of goodwill impairment are conducted at the individual reporting unit level. As of December 31, 2021 and 2020, the reporting units with goodwill were QCA, Morris, Excel, Alt Labs, TDI, Identified Technology, ElecJet, and RCA.

The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount. During the year ended December 31, 2021, the Company determined that the goodwill for Excel was impaired and took a charge to earnings of $7,629. During the year ended December 31, 2020, the Company determined that the goodwill for APF was impaired, as the company ceased operating as of August 31, 2020 and took a charge to earnings of $440,100.

<u>Leases</u>

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

The Company accounts for its leases under ASC 842, Leases ("ASC 842"). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. The Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term.

<u>Fair Value Measurement</u>

Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

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

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes payable and lines of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. As of December 31, 2021 and 2020, the Company had no financial assets or liabilities that were required to be fair valued on a recurring basis.

<u>Equity Investments</u>

The Company's equity investments consist of investment in one private company in which the Company does not have the ability to exercise significant influence over their operating and financial activities. This investment is carried at cost as there is no market for the common stock and LLC membership units, accordingly, no quoted market price is available. The investment is tested for impairment, at least annually, and more frequently upon the occurrences of certain events. As of December 31, 2021, in accordance with the ASC 321 guidelines, the Company recognized a lost on impairment for the entire value of $1,350,000.

The Company has adopted the provisions of ASU 2016-01 and values the investment using the measurement alternative, defined as costs, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

<u>Research and Development</u>

The Company focuses on quality control and development of new products and the improvement of existing products. All costs related to research and development activities are expensed as incurred. During the year ended December 31, 2021, research and development cost totaled $1,464,918.

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

<u>Revenue Recognition</u>

On January 1, 2018, the Company adopted ASC Topic 606, *Revenue from Contracts with Customers* using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC Topic 606.

The following is a summary of the revenue recognition policy for each of the Company's subsidiaries.

Revenue is recognized under *Topic 606* in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• executed contracts with the Company's customers that it believes are legally enforceable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identification of performance obligations in the respective contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• determination of the transaction price for each performance obligation in the respective contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• allocation the transaction price to each performance obligation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recognition of revenue only when the Company satisfies each performance obligation.

The following is a summary of the revenue recognition policy for each of the Company's subsidiaries.

*QCA and Alt Labs* 

QCA and Alt Labs are contract manufacturers and recognize revenue when the products have been built and control has been transferred to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed. For all periods presented, management determined that the warranty and returns would be immaterial.

*ElecJet*

ElecJet is a research and development of battery technology and development/sales of battery consumer products and recognizes revenue when the products have been shipped to the customer. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial.

*Identified Technologies*

IDT provides drone software and data for industrial job sites and recognizes revenue when the service has been provided to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial

*Direct Tech Sales*

RCA is engaged in the design, manufacture and wholesale distribution of commercial LED lighting and electronics such as televisions, mounting solutions, projectors and screens, audio equipment, digital signage, mobile audio and video systems, and all wire and connecting products throughout the United States of America. RCA recognizes revenue when the products have been shipped to the customer which is also when title transfers. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial.

*Morris*, *Deluxe, Excel and Thermal Dynamics*

For our construction contracts, revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For certain of our revenue streams, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident.

*Contract Assets and Contract Liabilities*

The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. In addition, many of our time and materials arrangements, are billed pursuant to contract terms that are standard within the industry, resulting in contract assets being recorded, as revenue is recognized in advance of billings. Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the consolidated balance sheets.

Contract liabilities from our construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation.

*Contract Retentions*

As of December 31, 2021 and 2020, accounts receivable included retainage billed under terms of our contracts. These retainage amounts represent amounts which have been contractually invoiced to customers where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions or completion of the project.

The following table presents our revenues disaggregated by type:

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| | | |
|:---|:---|:---|
| | Year ended December 31, | Year ended December 31, |
| | **2021** | **2020** |
| **Sale of goods** |  |  |
| Circuit boards and cables | $15700902 | $12602910 |
| Dietary supplements | 11674220 |  |
| Electronics | 1543469 |  |
| Total sale of goods | 28918591 | 12602910 |
| **Sale of services** |  |  |
| Construction contracts | 22462399 | 20851439 |
| Drone 3D mapping | 259823 |  |
| Total sale of services | 22722222 | 20851439 |
| Total revenues | $51640813 | $33454349 |

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

<u>Earnings (loss) per share</u> 

Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debt and options. The following table illustrates the computation of basic and diluted EPS for the years ended December 31, 2021 and 2020:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the Year Ended December 31, 2021 | For the Year Ended December 31, 2021 | For the Year Ended December 31, 2021 | For the Year Ended December 31, 2020 | For the Year Ended December 31, 2020 | For the Year Ended December 31, 2020 |
| | Net loss | Shares | Per Share Amount | Net loss | Shares | Per Share Amount |
| **Basic EPS** |  |  |  |  |  |  |
| Loss available to stockholders | $(19483138) | 164216808 | $(0.12) | $(7647848) | 132987390 | $(0.06) |
| **Effect of Dilutive Securities** |  |  |  |  |  |  |
| Convertible debt |  |  |  | (1001192) | 6624400 |  |
| **Dilute EPS** |  |  |  |  |  |  |
| Loss available to stockholders plus assumed conversions | $(19483138) | 164216808 | $(0.12) | $(8649040) | 139611790 | $(0.06) |

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<u>Stock-based compensation</u>

The Company follows the guidelines in ASC 718-10 Compensation-Stock Compensation, which requires companies to measure the cost of employee and non-employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense for stock options is recognized on a straight-line basis over the requisite service period. The Company may issue compensatory shares for services including, but not limited to, executives, management, accounting, operations, corporate communication, financial and administrative consulting services. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model.

<u>Income taxes</u>

The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company's experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives.

The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve, and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance.

Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately anticipate actual outcomes.

<u>Related Party Disclosure</u>

ASC 850, *Related Party Disclosures*, requires companies to include in their financial statements disclosures of material related party transactions. The Company discloses all material related party transactions. Related parties are defined to include any principal owner, director or executive officer of the Company and any immediate family members of a principal owner, director or executive officer.

<u>Recent Accounting Pronouncements</u>

In December 2019, the FASB issued ASU 2019-12, *Simplifying the Accounting for Income Taxes* which amends ASC 740 *Income Taxes* (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company's consolidated financial statements and related disclosures.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.

**Note 4 – Leases**

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company's leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.

As of December 31, 2021, the future minimum finance and operating lease payments are as follows:

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| | | |
|:---|:---|:---|
| Years Ending December 31, | Finance<br>Leases | Operating<br>Leases |
| 2022 | $1904458 | $504885 |
| 2023 | 1927351 | 516405 |
| 2024 | 1954170 | 528059 |
| 2025 | 1882226 | 97338 |
| 2026 | 1869656 |  |
| Thereafter | 16768517 |  |
| Total payments | 26306378 | 1646687 |
| Less: imputed interest | (10337568) | (151529) |
| Total obligation | 15968810 | 1495158 |
| Less: current portion | (649343) | (428596) |
| Non-current capital leases obligations | $15319467 | $1066562 |

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

*Finance Leases*

On April 5, 2018, the Company acquired APF. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from APF was sold for $1,900,000, and leased back to the company for a period of 15 years at a monthly rate of $15,833, subject to an annual increase of 2% throughout the term of the lease. The Company had no gain or loss resulting from the sale of the property, and the resulting lease qualifies as a capital lease. As a result, the Company has capitalized the cost of the building and the resulting capital lease obligation liability of $1,900,000. The payments related to this lease are reflected in the table above. As of October 1, 2020, the APF building lease was modified, assignment of the building was transferred to Excel Fabrication, LLC ("Excel"), and Quality Circuit Assembly, Inc. ("QCA"). As part of the modification, the lease was extended through 2037 and the payment terms were amended effective January 15, 2021. As a result of this amendment, the Company remeasured the finance lease liability and recorded an additional $279,287 to the related asset and finance lease liability on the date of the modification.

On January 1, 2019, the Company acquired Morris. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Morris was sold for $3,267,000, and leased back to the company for a period of 15 years at a monthly rate of $27,500, subject to an annual increase of 2% throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above.

On November 6, 2019, the Company acquired Deluxe. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Deluxe was sold for $9,000,000, and leased back to the company for a period of 15 years at a monthly rate of $75,000, subject to an annual increase of 2.5% throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above.

On February 21, 2020, the Company acquired Excel. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Excel was sold for $2,000,000, and leased back to the Company for a period of 15 years at a monthly rate of $18,700 for the first five years, subject to annual increases throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above.

During the year ended December 31, 2020, the Company entered into three finance leases for equipment totaling $756,990. Each has a 60 month term with an interest rate ranging from 6.7% to 9%.

*Operating Leases*

The table below presents the lease related assets and liabilities recorded on the Company's consolidated balance sheet as of December 31, 2021:

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| | | | |
|:---|:---|:---|:---|
| | Classification on Balance Sheet | December 31,<br>2021 | December 31,<br>2020 |
| **Assets** |  |  |  |
| &nbsp;&nbsp;Operating lease assets | Operating lease right of use assets | $1460206 | $581311 |
| Total lease assets |  | $1460206 | $581311 |
| **Liabilities** |  |  |  |
| Current liabilities |  |  |  |
| &nbsp;&nbsp;Operating lease liability | Current operating lease liability | $428596 | $334500 |
| Noncurrent liabilities |  |  |  |
| &nbsp;&nbsp;Operating lease liability | Long-term operating lease liability | 1066562 | 269030 |
| Total lease liability |  | $1495158 | $603530 |

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

During the year ended December 31, 2020, the Company amended its lease for its office space in Phoenix, Arizona through March 2025. As a result of this amendment, the Company remeasured the right of use asset and liability and recorded an additional $193,541 in right of use asset on the date of the modification.

During the year ended December 31, 2021, the Company amended its lease for the warehouse in San Jose, California through September 30, 2022, with monthly lease payments of $31,746.

On May 3, 2021, the Company entered into a lease agreement for the building on 4740 Cleveland in Ft. Myers, Florida. The lease had a term of 72 months with monthly payments ranging from $40,833 to $49,583 from May 2021 to July 2021 and $58,333 from August 2021 through the end of the term. The Company determined the lease to be an operating lease and recognized a right-of-use asset and operating lease liability of $3,689,634 based on the present value of the minimum lease payments discounted using an incremental borrowing rate of 3.96%. This lease was terminated on August 27, 2021, when the Company purchased the building.

In December 2021, the Company acquired RCA. As part of this purchase the Company entered into a lease agreement for office and warehouse space under a non-cancellable operating lease. The lease has a term of 89 months with monthly payments ranging from $31,350 to $35,207. The Company determined the lease to be an operating lease and recognized a right-of-use asset of $1,196,764 and operating lease liability of $1,226,128 based on the present value of the minimum lease payments discounted using an incremental borrowing rate of 4%.

The lease expense for the years ended December 31, 2021 and 2020 was $386,056 and $373,884, respectively. The cash paid under operating leases during the years ended December 31, 2021 and 2020 was $402,688 and $362,771, respectively. At December 31, 2021, the weighted average remaining lease terms were 3.2 years and the weighted average discount rate was 10%.

**Note 5 – Debt (As Restated)**

In May 2018, APF secured a line of credit with Crestmark, providing for borrowings up to $1,000,000 at a variable interest rate, collateralized by APF's outstanding accounts receivable. In February 2019 the Company moved the Crestmark line of credit to FSW with a variable interest and collateralized by APF's accounts receivable. In January 2020 the Company received a default notice from Crestmark regarding noncompliance with certain loan covenants, including but not limited to, QCA's failure to maintain a tangible net worth as contained in the loan agreement. QCA's credit line with Crestmark totaled $2,800,000 and was restructured from an ABL line of credit to a ledger line of credit. In addition, a minimum interest of 7.75% interest was imposed; an exit fee of 1% through January 31, 2021 and the financial covenant replaced with a requirement for QCA to maintain a free cash flow of at least $1.00 beginning with QCA's financial statements as of January 31, 2020. As of December 31, 2021, the outstanding balance was paid off and the line of credit was closed.

On February 22, 2018, the Company issued a $3,000,000 note payable under the Amended and Restated Secured Promissory Note with the seller of VWES. The note is secured by the assets of VWES and bears interest at 7% per annum and is due in semi-annual payments of $150,000 commencing on June 1, 2018, through June 1, 2020. The remaining principal and accrued interest is due on the 3-year anniversary. The Company is not current on its payments on the note. In August 2020, the company filed a lawsuit against Alan Martin regarding his note payable . The balance as of December 31, 2021, was $2,857,500 and accrued interest of $1,170,861 which is reflective in the current liabilities. The default rate is 10% and the daily late charge is $575.

On April 5, 2018, the Company issued two secured promissory notes in the aggregate principal amount of $1,950,000 ("Secured APF Notes") as part of the consideration for the purchase of APF. The Secured APF Notes are secured by the equipment, customer accounts and intellectual property of the Company, and all of the products and proceeds from any of the assets of APF. The Secured APF Notes bear interest at 4.25% per annum and have aggregate monthly payments of $19,975 for the first 23 months, with a balloon payment due in April 2020 for the remaining principal and interest outstanding. During the year ended December 31, 2020, the Company amended both of the notes. The noteholders forgave all $450,000 of the $450,000 convertible notes (See Note 7) in exchange for an increase in their notes payable of $67,617. The principal amount of their notes payable was amended to $1,689,000 at 0% interest with weekly payments of $4,086 and the balance to be paid on May 27, 2022. The Company recognized a gain on settlement of debt of $382,384 related to these transactions. As of December 31, 2021, the balance of these notes were paid in full.

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

On May 3, 2018, the Company entered into an equipment note with a lender for total borrowings of $630,750, which is secured by the equipment of APF. The note bears interest at 11.75% per annum and is payable in weekly payments of $3,795 commencing on the loan date through May 4, 2022. As of December 31, 2021, the balance of this note has been paid in full.

In connection with the Morris acquisition in January 2019, the Company issued three subordinated secured promissory notes for an aggregate of $3,100,000. The notes bear interest at 4.25% per annum, require monthly payment for the first 35 months of $31,755 with any remaining principal and accrued interest due on the 3 year-anniversary. The Company also issued three supplemental notes payable for an aggregate of $350,000. The notes bear interest at 4.25% per annum and are due on the 1-year anniversary. In May 2020, the Company amended the three supplemental notes of $116,667 each with the sellers of Morris. The notes were due January 1, 2020. Each of the new notes as of the date of amendment had accrued interest of $2,703. This was added to the note resulting in the principal amount of each of the new notes equaling to $119,370. The amendment required an initial payment of $30,000 for each note, which was made on May 23, 2020, and 8 monthly installments of $10,000 with one final payment of $13,882 through January 2021. The amended notes have an interest rate of 6%. The Company is current on all of the respective subordinated notes and the supplemental notes have been paid in full as of the date of this report. As of December 31, 2021, the outstanding balance on these notes was $2,374,062.

In connection with the Deluxe acquisition in November 2019, the Company issued two subordinated secured promissory notes to the seller. The first note for $1,900,000 bears interest at 4.25% per annum, require monthly payment for the first 35 months of $19,463 with any remaining principal and accrued interest due on the 3 year-anniversary. The second note for $496,343 bears interest at 8.75% and is due in January 2020. In January 2020, the Company entered into a debt conversion agreement with the seller which fully settled the second note. On April 8, 2021, the Company entered into a settlement agreement with the seller wherein the outstanding balance on the first note amounting to $1,883,418 including accrued interest and net other costs was settled in full through a payment of approximately $887,000 and the exchange of 1,617,067 shares of the Company's Class C common shares held by the seller for the same number of shares of the Company's Class A common stock. The Company recognized a gain on extinguishment of debt totaling $803,079 during the year ended December 31, 2021 as a result of the settlement of the note.

In connection with the Excel acquisition in February 2020, the Company issued a subordinated secured promissory note to the seller. The note for $2,300,000 bears interest at 4.25% per annum, requires monthly interest only payments for 48 months and is due February 2024. The ending balance for this loan as of December 31, 2021 was $2,062,318.

In November 2019, in connection with the termination of the lease for the San Diego building, the Company issued the landlord a note payable. The note is for $2,740,000, bears interest at 7% with monthly payments starting at $15,984 and is due in November 2034. As of December 31, 2021, the outstanding balance of the term note was paid in full.

In January 2020, the Company entered into a $200,000 term note with Celtic Capital, Inc. The note is subject to annual interest which is the greater of 13% or 11% plus the 3 month LIBOR rate and requires monthly payments of $3,333 over a period of 60 months. As of December 31, 2021, the outstanding balance of the term note was paid in full.

In connection with the Excel acquisition, the Company entered into a $425,000 term note with Celtic Capital, Inc. The note is subject to annual interest which is the greater of 13% or 11% plus the 3 month LIBOR rate and requires monthly payments of $7,083 over a period of 60 months. As of December 31, 2021, the outstanding balance of the term note was paid in full .

In October 2019 Morris entered into an equipment finance note for $107,997 with an interest rate of 9.4% for 48 monthly payments with Bryn Mawr Equipment Finance Inc. The Company was current on this note as of December 31, 2021.

The Company issued a $48,000 note in January 2020 to a private investor with an interest rate of 15% with a due date of 1 year. As of December 31, 2021, the balance of this note has been paid in full.

In connection with the RCA acquisition in December 2021, the Company issued two subordinated secured promissory notes for an aggregate of $2,000,000. The notes bear interest at 3.75% per annum, require monthly payment of $19,590 for a term of 120 months. As of December 31, 2021, the Company was current on all of the respective subordinated notes.

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

In April and May 2020, the Company received seven loans under the Paycheck Protection Program of the U.S. Coronavirus Aid, Relief and Economic Security ("CARES") Act totaling $3,896,108. During the year ended December 31, 2021, the Company also acquired four loans with a book value totaling $1,799,725 due to acquisitions, and fair value of $65,000 at the time of acquisition. The loans have terms of 24 months and accrue interest at 1% per annum. The Company paid $88,160 for the PPP loan assumed in connection with the IA acquisition, and the remaining $356,690 was forgiven. The remaining ten loans were forgiven as provided by the CARES Act during the year ended December 31, 2021. The Company recognized a gain on forgiveness of debt of $3,896,108. The Company also assumed an Economic Injury Disaster Loan (EIDL) in connection with the Vayu acquisition, which was still outstanding as of December 31, 2021.

During 2021, the Company entered into four revolving lines of credit totaling $18.3 million and two capital expenditures lines of credit totaling $0.5 million. The revolving lines of credit used as of December 31, 2021, totaled $10.1 million with an interest rate ranging from prime plus 2.50% - 4.25% and a term of one to two years. As of December 31, 2021, the Company had $6.4 million in additional funds available to borrow.

On August 27, 2021 the Company entered into $4.7 million agreement for the purchase of a building located at 4740 Cleveland in Ft. Myers, Florida. The loan bears interest at a rate of 3.95% per annum for a term of 10 years and requires monthly payments of $24,722. The loan is secured by the building and a guarantee by the Company. As of the December 31, 2021, the Company was current with this obligation.

The outstanding balances for the loans as of December 31, 2021 and 2020 were as follows:

---

| | | |
|:---|:---|:---|
| | December 31,<br>2021 | December 31,<br>2020 |
| Lines of credit, current portion | $4473489 | $2819793 |
| Equipment loans, current portion | 61640 | 245388 |
| Term notes, current portion | 5628884 | 4035730 |
| Total current | 10164013 | 7100911 |
| PPP loans |  | 4340956 |
| Line of credit, net of current portion | 5640051 |  |
| Long-term portion of equipment loans and term notes | 8426105 | 10860494 |
| Total notes payable | $24230169 | $22302361 |

---

Future scheduled maturities of outstanding debt are as follows:

---

| | |
|:---|:---|
| Years Ending December 31, |  |
| 2022 | $10164013 |
| 2023 | 5874596 |
| 2024 | 3844706 |
| 2025 | 129849 |
| 2026 | 135072 |
| Thereafter | 4081933 |
| Total | $24230169 |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

**Note 6 – Notes Payable, Related Parties**

At December 31, 2021 and 2020, notes payable due to related parties consisted of the following:

---

| | | |
|:---|:---|:---|
| | December 31,<br>2021 | December 31,<br>2020 |
| Notes payable; non-interest bearing; due upon demand; unsecured | $— | $3000 |
| Series of notes payable, bearing interest at rates from 3% to 20% per annum, with maturity dates from July 2018 to July 2020, unsecured |  | 235651 |
| Total notes payable - related parties | $— | $238651 |

---

**Note 7 – Convertible Notes Payable**

At December 31, 2021 and 2020, convertible notes payable consisted of the following:

---

| | | |
|:---|:---|:---|
| | December 31,<br>2021 | December 31,<br>2020 |
| Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 10% per annum, with due dates ranging from December 2016 through June 2017. Of the outstanding principal and interest balances $7,500 was paid out in cash and the remaining balances were converted during the year ended December 31, 2021. | $— | $25000 |
| Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019. On August 6 and 11, 2019, the Company extended the due date of the two notes to December 31, 2020 and December 31, 2022, respectively. In May and June 2020, these convertible notes were amended -- see below. The outstanding principal and interest balances were fully paid in cash during the year ended December 31, 2021. |  | 1291463 |
| On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200. The note is due September 7, 2019 and bears interest at 12% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion. This note was amended in November 2019 to increase the principal amount by $180,000 due to penalty interest; increase the interest rate to 15% and effect a floor in the conversion price of $0.15 per share. The outstanding principal and interest balance of the note was converted during the year ended December 31, 2021. |  | 7538 |
| On November 14, 2019, the Company issued convertible note for $200,000. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. The outstanding principal balance of the note was converted during the year ended December 31, 2021. |  | 200000 |
| In December 2020 and January 2021, the Company issued convertible notes to individual investors totaling to $1,890,500. The notes are due three to six months from the date of issuance; accrue interest at 5 – 6.25% per annum and are convertible into shares of the Company's Class A common stock at a fixed rate of $0.25 to $3.00. Of the outstanding principal balance of the notes $389,500 was paid in cash and the remaining balances were converted during the year ended December 31, 2021. |  | 1482500 |
| Total convertible notes payable |  | 3006501 |
| Less: discount on convertible notes payable |  | (1343624) |
| Total convertible notes payable, net of discount |  | 1662877 |
| Less: current portion of convertible notes payable |  | (562242) |
| Long-term portion of convertible notes payable | $— | $1100635 |

---

(A) In May and June 2020 the Company amended the following seller notes:

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

–The convertible note with Jeff Moss with a $720,185 balance as of May 4, 2020 was amended to extend the maturity date to May 4, 2027 at 5% interest with weekly payments of $2,605. The principal balance was increased to $798,800 and the balance outstanding at December 31, 2021 and 2020 was $0 and $735,329, respectively.

–The convertible note with Mr. Hargreaves with a $551,001 balance as of June 5, 2020 was amended to extend the maturity date to June 5, 2026 at 6% interest with weekly payments of $2,316. The principal balance was increased to $605,464 and the balance outstanding at December 31, 2021 and 2021 was $0 and $556,135, respectively. A loss on extinguishment of debt of $192,272 was recognized on these transactions.

The discounts on convertible notes payable arise from stock issued with notes payable, and beneficial conversion features. During the years ended December 31, 2021 and 2020, the Company issued convertible notes with a fixed conversion price. The beneficial conversion feature related to these convertible notes that have been recorded as a discount on the convertible notes and as a component of equity was $92,428 and $1,482,500 for the years ended December 31, 2021, and 2020, respectively. The discounts are being amortized over the terms of the convertible notes payable. Amortization of debt discounts during the years ended December 31, 2021 and 2020 amounted to $1,436,052 and $985,709, respectively, and is recorded as interest expense in the accompanying consolidated statements of operations. There was no remaining unamortized discount balance for these notes as of December 31, 2021.

A summary of the activity in the Company's convertible notes payable is provided below:

---

| | |
|:---|:---|
| Balance outstanding, December 31, 2019 | $2783806 |
| Issuance of convertible notes payable for cash | 1482500 |
| Non-cash extinguishment | (2470) |
| Repayment of notes | (335896) |
| Conversion of notes payable to common stock | (1525544) |
| Penalty interest added to convertible note | 15000 |
| Convertible note issued for interest | 192272 |
| Settlement of convertible note | (450000) |
| Amortization of debt discounts | 985709 |
| Discount from beneficial conversion feature | (1482500) |
| Balance outstanding, December 31, 2020 | 1662877 |
| Issuance of convertible notes payable for cash | 408000 |
| Repayment of notes | (1688464) |
| Conversion of notes payable to common stock | (1726037) |
| Amortization of debt discounts | 1436052 |
| Discount from beneficial conversion feature | (92428) |
| Balance outstanding, December 31, 2021 | $— |

---

**Note 8 - Preferred Stock Subject to Redemption (As Restated)**

*Series C Preferred Stock*

The Company designated 2,028,572 shares of Series C Preferred Stock with a stated value of $3.50 per share. No dividends will accrue on the Series C Preferred Stock. If dividends are declared on the Company's Class A, Class B, or Class C Common Stock, the holders of the Series C Preferred Stock will participate in such dividends on a per share basis, pari passu with the classes of Common Stock.

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

Voting Rights - The Series C Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share basis. As long as any shares of Series C Preferred Stock are outstanding, the Company may not, without the affirmative vote or written consent of the holders of a majority of the then outstanding shares of the Series C Preferred Stock, (a) alter or change the powers, preferences or rights given to the Series C Preferred Stock or alter or amend the Certificate of Designation, (b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series C Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing.

Liquidation - Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the holders of the Series C Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B, and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series C Preferred Stock.

Conversion - The Series C Preferred Stock shall be convertible automatically into shares of the Company's Class A Common Stock (the "Automatic Conversion") as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Each share of Series C Preferred Stock will automatically convert into shares of the Company's Class A Common Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the fifth day after the date on which the Company's Class A Common Stock first trades on a national securities exchange (including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the "Automatic Conversion Date").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The number of shares of the Company's Class A Common Stock into which the Series C Preferred Stock shall be converted shall be determined by multiplying the number of shares of Series C Preferred Stock to be converted by the $3.50 stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted Average Price ("VWAP") of the five Trading Days prior to the Automatic Conversion Date. "VWAP" shall be defined as the volume weighted average price of the Company's Class A Common Stock on the OTC Markets or other stock exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason, VWAP cannot be thus determined, "VWAP" shall mean the average closing or last sale prices over the five Trading Days prior to the Automatic Conversion Date of the Company's Class A Common Stock on the OTC Markets or such other exchange or trading medium.

Restrictions on Resales of Class A Common Stock - The sale of shares of the Company's Class A Common Stock issued at the time of conversion by any holder into the market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received by such holder at the time of the automatic conversion in any given 120-day period.

Company Redemption Rights -At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than all) shares of the Series C Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business days' notice, at a redemption price per share of Series C Preferred Stock then issued and outstanding (the "Corporation Redemption Price"), equal to the stated value of $3.50 per share. As a result of this redemption, the fair value of the Series C shares is classified as a liability on the consolidated balance sheet.

During the year ended December 31, 2020, the Company issued 1,714,286 shares of Series C Preferred Stock in connection with the acquisition of assets of IA that were valued at $5,848,013. The difference between the fair value and the redemption amount is accreted over a period of 24 months or upon conversion from Series C Preferred Stock to Class A Common stock. After 24 months the Series C Preferred Stock is automatically converted into Class A Common Stock. As of December 31, 2021, 1,704,137 of these shares were converted to Class A common stock. Prior to conversion the Company recognized accretion to interest expense in the amount of $69,661.

As of December 31, 2021 and 2020, 10,149 and 1,714,286 shares of Series C Preferred Stock were outstanding, respectively.

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

*Series D Preferred Stock*

The Company designated 1,628,572 shares of Series D Preferred Stock with a stated value of $3.50 per share. No dividends will accrue on the Series D Preferred Stock. If dividends are declared on the Company's Class A, Class B, or Class C Common Stock, the holders of the Series D Preferred Stock will participate in such dividends on a per share basis, pari passu with the Classes of Common Stock.

Voting Rights - The Series D Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share basis. As long as any shares of Series D Preferred Stock are outstanding, the Company may not, without the affirmative vote or written consent of the holders of a majority of the then outstanding shares of the Series D Preferred Stock, (a) alter or change the powers, preferences or rights given to the Series D Preferred Stock or alter or amend the Certificate of Designation, (b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series D Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing.

Liquidation - Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the holders of the Series D Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B, and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series D Preferred Stock.

Conversion - The Series D Preferred Stock shall be convertible automatically into shares of the Company's Class A Common Stock (the "Automatic Conversion") as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Each share of Series D Preferred Stock will automatically convert into shares of the Company's Class A Common Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the fifth day after the date on which the Company's Class A Common Stock first trades on a national securities exchange (including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the "Automatic Conversion Date").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The number of shares of the Company's Class A Common Stock into which the Series D Preferred Stock shall be converted shall be determined by multiplying the number of shares of Series D Preferred Stock to be converted by the $3.50 stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted Average Price ("VWAP") of the five Trading Days prior to the Automatic Conversion Date. "VWAP" shall be defined as the volume weighted average price of the Company's Class A Common Stock on the OTC Markets or other stock exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason, VWAP cannot be thus determined, "VWAP" shall mean the average closing or last sale prices over the five Trading Days prior to the Automatic Conversion Date of the Company's Class A Common Stock on the OTC Markets or such other exchange or trading medium.

Restrictions on Resales of Class A Common Stock - The sale of shares of the Company's Class A Common Stock issued at the time of conversion by any holder into the market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received by such holder at the time of the automatic conversion in any given 90-day period.

Company Redemption Rights -At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than all) shares of the Series D Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business days' notice, at a redemption price per share of Series D Preferred Stock then issued and outstanding (the "Corporation Redemption Price"), equal to the stated value of $3.50 per share. As a result of this redemption, the fair value of the Series D shares is classified as a liability on the consolidated balance sheet.

Registration Rights -The shares issued on conversion of the Series D Preferred Stock have piggyback registration rights beginning on that date which his six months after the date on which the Company's Class A Common Stock trades on a national securities exchange, and are subject to standard underwriter holdback limitations

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

During the year ended December 31, 2021, the Company issued 1,432,244 shares of Series D Preferred Stock in connection with the acquisition of assets of Vayu that were valued at $6,653,309. The difference between the fair value and the redemption amount is accreted over a period of 24 months or upon conversion from Series D Preferred Stock to Class A Common stock. After 24 months the Series D Preferred Stock is automatically converted into Class A Common Stock. As of December 31, 2021, 1,353,570 of these shares were converted to Class A common stock. Prior to conversion the Company recognized accretion to interest income in the amount of $615,170.

As of December 31, 2021 and 2020, 78,674 and 0 shares of Series D Preferred Stock were outstanding, respectively.

**Note 9 – Stockholders' Equity (As Restated)**

<u>Preferred Stock</u>

The Company is authorized to issue 5,000,000 shares of $0.0001 par value preferred stock.

*Series B Preferred Stock*

The Company is authorized to issue 100 shares of Series B preferred stock. The Series B Preferred Stock has a $1.00 stated value and does not accrue dividends. The Series B has the following voting rights:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

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.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

As of December 31, 2021 and 2020, 5 and 5 shares of Series B Preferred Stock were outstanding and were issued to officers for services rendered.

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

<u>Common Stock</u>

Pursuant to the Amended and Restated Certificate of Incorporation, the Company is authorized to issue three classes of common stock: Class A common stock, which has one vote per share, Class B common stock, which has ten votes per share and Class C common stock, which has five votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the voting rights of the two classes of common stock will be identical. Any holder of Class C common stock may convert 25% of his or her shares at any time after the 3rd to 6th anniversary into shares of Class A common stock on a share-for-share basis. Otherwise the voting rights of the two classes of common stock will be identical.

The Company had the following transactions in its common stock during the year ended December 31, 2021:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On February 11, 2021, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with certain investors to purchase 8,333,333 shares of the Company's Class A common stock for aggregate gross proceeds of approximately $50 million. A.G.P./Alliance Global Partners served as the placement agent and received a cash fee of 7% of the aggregate gross proceeds and warrants to purchase shares of the Company's Class A Common Stock equal to 5% of the number of shares sold in the offering with an exercise price of $6.60 per share and are not exercisable until August 16, 2021. Net proceeds from the sale of shares amounted to approximately $45 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In February 2021, the Company issued 1,524,064 shares of Class A common stock to an investor for cash for total proceeds of approximately $9.3 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• During the year ended December 31, 2021, the Company issued 7,384,018 shares of Class A common stock for the conversion of total debt and accrued liabilities totaling $1,886,896.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On March 17, 2021, the Company repurchased 45,000 shares of Class C common stock for $185,850.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On May 5, 2021, the Company issued 281,223 shares of Class A common stock that were valued at $1,102,394 in connection with the acquisition of TDI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On May 10, 2021, the Company issued 361,787 shares of Class A common stock that were valued at $1,432,677 in connection with the acquisition of Alt Labs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On April 30, 2021, the Company issued 1,617,067 shares of Class A common stock for no additional consideration upon conversion of that number of shares of Class C common stock by the holder of the Class C common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On May 17, 2021, the Company issued 350,000 shares of Class A common stock for no additional consideration upon conversion of that number of shares of Class B common stock by the holder of the Class B common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On November 15, 2021 the Company issued 125,000 shares of Class A common stock for no additional consideration upon conversion of that number of shares of Class B common stock by the holder of the Class B common stock .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On October 20, 2021, the Company issued 888,881 shares of Class A common stock that were valued at $3,617,746 in connection with the acquisition of Identified Technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On November 9, 2021, the Company issued 2,409,248 shares of Class A common stock for no additional consideration upon conversion of 1,704,137 shares of Series D Preferred Stock and 1,353,570 shares of Series C Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On November 26, 2021, the Company closed on a registered direct offering where it sold to certain investors a total of 8,571,430 shares of the Company's Class A common stock and 4,285,715 warrant to purchase shares of Class A common stock for net proceeds of $22,189,152.

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On November 29, 2021, the Company issued 1,803,279 shares of Class A common stock that were valued at $4,562,996 in connection with the ElecJet acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On November 29, 2021, the Company granted 983,636 contingent shares of Class A common stock that were valued at $2,488,599 in connection with the ElecJet acquisition. These contingent shares represent equity compensation for post-acquisition services and are accounted for under ASC 718. Management determined the performance conditions were deemed not probable and as such no expense was recognized on these awards for the year ended December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On December 9, 2021, in connection with the acquisition of DTI Services Limited Liability Company, the Company issued 1,587,301 shares of its Class A Common Stock that were valued at $3,682,539.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On December 20, 2021, the Company issued 100,000 shares of Class A common stock in connection with the HWT legal proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On December 29, 2021, the Company issued 99,018 shares of Class A common stock to management in connection with the acquisition of DTI Services Limited Liability Company.

The Company had the following transactions in its common stock during the year ended December 31, 2020:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• issued 11,513,935 shares of Class A common stock for cash for total proceeds of $674,469;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• issued 12,861,995 shares of Class A common stock for the conversion of convertible debt and accrued interest of $1,929,300;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• issued 1,617,067 shares of Class A common stock and 1,617,067 shares of 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• issued 300,000 shares of Class A common stock with a fair value of $44,700 to a noteholder as penalty interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• issued 4,023,088 shares of Class B common stock to settle unpaid salaries of $603,463; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• issued 2,590,000 shares of Class C common stock for compensation valued at $240,093. The value was determined based on the market value of the Company common stock on the grant date.

<u>Stock Options</u>

The Company has issued stock options to purchase shares of the Company's Class A common stock issued pursuant to the Company's 2016 Stock Option and Stock Award Plan (the "Plan"). The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant and on each modification date.

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

The following summarizes the stock option activity for the years ended December 31, 2021 and 2020:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Options** | **Weighted-<br>Average<br>Exercise<br>Price** | **Weighted-<br>Average<br>Remaining<br>Contractual<br>Life (Years)** | **Aggregate<br>Intrinsic<br>Value** |
| Outstanding at December 31, 2019 | 1790000 | $0.19 | 8.10 | $176445 |
| Granted |  |  |  |  |
| Forfeited |  |  |  |  |
| Exercised |  |  |  |  |
| Outstanding at December 31, 2020 | 1790000 | $0.19 | 7.09 | $6176855 |
| Granted |  |  |  |  |
| Forfeited |  |  |  |  |
| Exercised |  |  |  |  |
| Outstanding at December 31, 2021 | 1790000 | $0.19 | 6.09 | $3098055 |
| Vested and expected to vest at December 31, 2021 | 1790000 | $0.19 | 6.09 | $3098055 |
| Exercisable at December 31, 2021 | 1622625 | $0.20 | 6.04 | $2785595 |

---

The following table summarizes information about options outstanding and exercisable as of December 31, 2021:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Options Outstanding** | **Options Outstanding** | **Options Outstanding** | **Options Exercisable** | **Options Exercisable** |
| **Exercise<br>Price** | **Number<br>of Shares** | **Weighted<br>Average<br>Remaining<br>Life (Years)** | **Weighted<br>Average<br>Exercise<br>Price** | **Number<br>of Shares** | **Weighted<br>Average<br>Exercise<br>Price** |
| $0.05 | 979000 | 6.38 | $0.05 | 822250 | $0.05 |
| 0.10 | 85000 | 6.28 | 0.10 | 74375 | 0.10 |
| 0.13 | 388500 | 5.58 | 0.13 | 388500 | 0.13 |
| 0.26 | 114000 | 5.34 | 0.26 | 114000 | 0.26 |
| 0.90 | 223500 | 5.27 | 0.90 | 223500 | 0.90 |
|  | 1790000 |  |  | 1622625 |  |

---

During the years ended December 31, 2021 and 2020, stock option expense amounted to $36,538 and $78,652, respectively. Unrecognized stock option expense as of December 31, 2021 amounted to $7,210, which will be recognized over a period extending through December 2022.

<u>Warrants</u>

The following summarizes the warrant activity for the year ended December 31, 2021:

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Warrants** | **Weighted-<br>Average<br>Exercise<br>Price** | **Weighted-<br>Average<br>Remaining<br>Contractual<br>Life (Years)** | **Aggregate<br>Intrinsic<br>Value** |
| Outstanding at December 31, 2019 | 277001 | $1.01 | 1.23 | $— |
| Granted |  |  |  |  |
| Forfeited | (2001) | 1.01 |  |  |
| Exercised |  |  |  |  |
| Outstanding at December 31, 2020 | 275000 | $1.01 | 0.23 | $723250 |
| Granted | 5527778 | 3.32 | 4.62 |  |
| Forfeited | (275000) | 1.01 |  |  |
| Exercised |  |  |  |  |
| Outstanding at December 31, 2021 | 5527778 | $3.32 | 4.62 | $— |
| Vested and expected to vest at December 31, 2021 | 5527778 | $3.32 | 4.62 | $— |
| Exercisable at December 31, 2021 | 5099207 | $3.34 | 4.62 | $— |

---

The following table summarizes information about warrants outstanding and exercisable as of December 31, 2021:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Exercisable** | **Warrants Exercisable** |
| **Exercise<br>Price** | **Number<br>of Shares** | **Weighted<br>Average<br>Remaining<br>Life (Years)** | **Weighted<br>Average<br>Exercise<br>Price** | **Number<br>of Shares** | **Weighted<br>Average<br>Exercise<br>Price** |
| $6.60 | 416667 | 3.13 | $6.60 | 416667 | $6.60 |
| 2.25 | 396825 | 2.94 | 2.52 | 396825 | 2.52 |
| 3.10 | 4285715 | 4.90 | 3.10 | 4285715 | 3.1 |
| 3.08 | 428571 | 4.90 | 3.08 |  |  |
|  | 5527778 |  |  | 5099207 |  |

---

During the year ended December 31, 2021, the Company issued 416,667 warrants to a placement agent in connection with sale of its common stock The warrants have an exercise price of $6.60, are exercisable as of August 16, 2021 and expire on February 16, 2025. The Company issued another 428,571 warrants to a placement agent in connection with the sale of its common stock. The warrants have an exercise price of $3.08, are exercisable as of May 26, 2022 and expire November 22, 2026. The Company issued another 396,825 warrants in connection to the RCA acquisition. The warrants have an exercise price of $2.52, are exercisable as of December 9, 2021 and expire December 9, 2024.

The fair value of the 416,667, 428,571, and the 396,825 warrants, issued to the placement agent and RCA sellers during the year ended December 31, 2021, are $2,498,637, $902,414, and $668,863 respectively and was determined using the Black-Scholes option pricing model with the following assumptions:

---

| | |
|:---|:---|
| Stock price | $2.51 - 7.03 |
| Risk-free interest rate | 0.01 - 1.02%  |
| Expected life of the options | 2-5 years |
| Expected volatility | 159-347% |
| Expected dividend yield | 0% |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

**Note 10 – Business Combinations (As Restated)**

<u>Excel</u>

On February 21, 2020, the Company purchased Excel. This acquisition was considered an acquisition of a business under ASC 805.

A summary of the purchase price allocation at fair value is presented below.

---

| | |
|:---|:---|
| | Purchase Allocation |
| Cash | $174283 |
| Accounts receivable | 1943480 |
| Inventory | 9075 |
| Property and equipment | 2958190 |
| Customer list | 410000 |
| Goodwill | 7629 |
| Accounts payable | (340151) |
| Accrued expenses and other current liabilities | (262506) |
|  | $4900000 |

---

The purchase price was paid as follows:

---

| | |
|:---|:---|
| Cash | $2600000 |
| Seller notes | 2300000 |
|  | $4900000 |

---

Simultaneous with the purchase of Excel, a building, owned by Excel prior to the acquisition, was sold in a sale-leaseback transaction agreement, whereby the building was leased from the buyer for 15 years. The proceeds from the sale-leaseback of $2,000,000 were used to fund the cash consideration to the seller. The building and the lease is being treated as a financing lease (see Note 4).

<u>Impossible Aerospace</u>

On November 13, 2020, the Company and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 1, Inc. a Delaware corporation ("Merger Sub"), entered into a merger agreement (the "Agreement") with IA pursuant to which IA merged with and into Merger Sub. The IA acquisition closed on December 15, 2020, and the Company added IA to the Company's aerospace services portfolio of companies.

Under the provision of ASC 805, the Company had to determine whether this acquisition was a business combination or an asset (or a group of assets) acquisition. In doing so, the Company determined that the acquisition of IA is in fact an asset purchase. Of the consideration given for the IA purchase more than 95% is concentrated in a single asset or a group of assets in Intellectual Property. And as such, the Company accounted for this acquisition as an asset acquisition in accordance with ASC 805-10-20. Accordingly, the assets acquired are initially recognized at the consideration paid, which was fair value of the preferred series C stock issued, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair values. The assets acquired and liabilities assumed of were as follows at the purchase date:

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

---

| | |
|:---|:---|
| | Purchase Allocation |
| Cash | $453876 |
| Inventory | 199438 |
| Property and equipment | 108753 |
| Patent | 6344943 |
| Non-solicitation covenant | 57953 |
| Deferred tax liability | (853991) |
| Accrued expenses and other current liabilities | (374799) |
| SBA loan (PPP funds) | (88160) |
|  | $5848013 |

---

The purchase price was paid as follows:

---

| | |
|:---|:---|
| Series C Preferred Stock (1,714,286 shares) | $5848013 |
|  | $5848013 |

---

<u>Vayu (US)</u>

Effective February 8, 2021, the Company purchased the assets of Vayu.

Under the provision of ASC 805, the Company had to determine whether this acquisition was a business combination or an asset (or a group of assets) acquisition. In doing so, the Company determined that the acquisition of Vayu was in fact an asset purchase. Of the consideration given for the Vayu acquisition more than 95% was concentrated in a single asset or a group of assets in Intellectual Property. As such, the Company accounted for this acquisition as an asset acquisition in accordance with ASC 805-10-20. Accordingly, the assets acquired are initially recognized at the consideration paid, which was the fair value of the series D preferred stock issued, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair values. The assets acquired and liabilities assumed were as follows at the acquisition date:

---

| | |
|:---|:---|
| | Purchase Allocation |
| Cash | $81442 |
| Property and equipment | 56011 |
| Intellectual property | 8406743 |
| Non-compete agreement | 100819 |
| Deferred tax liability | (1362667) |
| Accrued expenses and other current liabilities | (564039) |
| SBA loan (PPP funds) | (65000) |
|  | $6653309 |

---

The purchase price was paid as follows:

---

| | |
|:---|:---|
| Series D Preferred Stock (1,432,244 shares) | $6653309 |
|  | $6653309 |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

<u>TDI</u>

On May 5, 2021, the Company closed on the acquisition of TDI. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below.

---

| | |
|:---|:---|
| | Purchase Allocation |
| Accounts receivable | $1408682 |
| Property and equipment | 111789 |
| Customer list | 3840000 |
| Non-compete agreement | 120000 |
| Goodwill | 6426786 |
| Other asset | 91000 |
| Accounts payable | (786151) |
| Accrued expenses and other current liabilities | (53857) |
| Contract liabilities | (3637122) |
| Notes payable | (64733) |
|  | $7456394 |

---

The purchase price was paid as follows:

---

| | |
|:---|:---|
| Class A Common Stock (281,223 shares) | $1102394 |
| Cash | 6354000 |
|  | $7456394 |

---

<u>Alt Labs</u>

On May 10, 2021, the Company closed on the acquisition of Alt Labs. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below.

---

| | |
|:---|:---|
| | Purchase Allocation |
| Accounts receivable | $397441 |
| Inventory | 2621653 |
| Property and equipment | 1739441 |
| Customer list | 1250000 |
| Proprietary technology | 3670000 |
| Non-compete agreement | 20000 |
| Goodwill | 4410564 |
| Other assets | 390502 |
| Accounts payable | (397441) |
| Accrued expenses and other current liabilities | (411830) |
| Contract liabilities | (1754290) |
| Notes payable | (33363) |
|  | $11902677 |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

The purchase price was paid as follows:

---

| | |
|:---|:---|
| Class A Common Stock (361,787 shares) | $1432677 |
| Cash | 10470000 |
|  | $11902677 |

---

On May 4, 2021, the Company also entered into an agreement to acquire the 100% membership interest in 4740 Cleveland LLC ("Cleveland"), a Florida limited liability company that is the owner of the building currently being leased by Alt Labs, for a total purchase price of $7,000,000. In connection with this agreement, the Company placed in escrow the amount of $1,400,000 which will be applied to the purchase price upon closing. The Company closed on the purchase of the building in August 2021.

<u>Identified Technologies</u>

On October 20, 2021, the Company acquired Identified Technologies. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below.

---

| | |
|:---|:---|
| | Purchase Allocation |
| Accounts receivable | $90858 |
| Other asset | 27469 |
| Proprietary technology | 1650000 |
| Tradename | 210000 |
| Goodwill | 1913310 |
| Non-compete agreement | 90000 |
| Accrued expenses and other current liabilities | (363856) |
|  | $3617781 |

---

The purchase price was paid as follows:

---

| | |
|:---|:---|
| Cash | $35 |
| Class A Common Stock (888,881 shares) | 3617746 |
|  | $3617781 |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

<u>ElectJet</u>

On November 29, 2021, the Company acquired ElecJet. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below.

---

| | |
|:---|:---|
| | Purchase Allocation |
| Cash | $27466 |
| Accounts receivable | 30000 |
| Inventory | 95000 |
| Proprietary technology | 5890000 |
| Non-compete agreement | 200000 |
| Goodwill | 6496343 |
| Deferred tax liability | (1562074) |
| Accrued expenses and other current liabilities | (113742) |
|  | $11062993 |

---

The purchase price was paid as follows:

---

| | |
|:---|:---|
| Cash | $6500000 |
| Class A Common Stock (1,803,279 shares) | 4562993 |
|  | $11062993 |

---

<u>DTI Services (doing business as RCA Commercial Electronics)</u>

On December 13, 2021, the Company closed the acquisition of RCA. The acquisition was considered an acquisition of a business under ASC 805. The business combination is not yet complete and the amounts assigned to assets acquired and liabilities assumed are provisional. Therefore, this may result in future adjustments to the provisional amounts as new

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

information is obtained about fact and circumstances that existed at the acquisition date. A summary of the purchase price allocation at fair value is presented below:

---

| | |
|:---|:---|
| | Purchase Allocation |
| Accounts receivable | $3409230 |
| Other current assets | 1259556 |
| Inventory | 12477872 |
| Property and equipment | 761370 |
| Customer list | 6300000 |
| Trademark | 620000 |
| Non-compete agreement | 690000 |
| Goodwill | 1355728 |
| ROU asset | 1196764 |
| Accounts payable | (951302) |
| Accrued expenses and other current liabilities | (677720) |
| Customer deposits | (153201) |
| Operating lease liability | (1226128) |
| Line of credit | (4710768) |
|  | $20351401 |

---

The purchase price was paid as follows:

---

| | |
|:---|:---|
| Cash | $14000000 |
| Class A Common Stock (1,587,301 shares) | 3682538 |
| Warrants (396,825 shares) | 668863 |
| Seller notes | 2000000 |
|  | $20351401 |

---

The following are the unaudited pro forma results of operations for the years ended December 31, 2021 and 2020, as if Excel, IA, Vayu, TDI, Alt Labs, Identified Technology, Electjet, and RCA had been acquired on January 1, 2020. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated.

---

| | | |
|:---|:---|:---|
| | **Pro Forma Combined Financials (unaudited)** | **Pro Forma Combined Financials (unaudited)** |
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2021** | **2020** |
| Sales | $98321144 | $102892997 |
| Cost of goods sold | 75523745 | 78037039 |
| Gross profit | 22797399 | 24855958 |
| Operating expenses | 38643670 | 26956730 |
| Loss from operations | (15846271) | (2100772) |
| Net loss | (12144338) | (3646603) |
| Loss per share | (0.06) | (0.02) |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

**Note 11 – Equity Investments**

***AmplifeiIntl LLC***

On September 15, 2021, A4 Manufacturing, Inc. entered into a Membership Interest Purchase Agreement acquiring approximately a 9% membership interest in AmplifeiIntl LLC (also doing business as Happinss) ("Amplifei"). The membership interest is non-voting and the Company does not have the ability to exercise significant influence over operating and financial activities. The equity investment is being valued using cost as there is no market for the membership units, and accordingly, no quoted market price is available. The investment is tested for impairment, at least annually, and more frequently upon the occurrences of certain events. As of December 31, 2021, the Company determined there was an impairment on this investment and took a loss against earnings of $1,350,000.

The membership interest was paid for as follows:

---

| | |
|:---|:---|
| Accounts receivable owed from Amplifei | $1000000 |
| Cash | 350000 |
| Total | $1350000 |

---

**Note 12 – Income Taxes (As Restated)**

The components of the Company's income tax provision are as follows:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** |
| Current expense (benefit) |  |  |
| Federal | $— | $— |
| State |  |  |
| Deferred benefit |  |  |
| Federal | $(1616916) | $(812782) |
| State | (326825) | 317706 |
|  | (1943741) | (495076) |
| Provision for income tax benefit | $(1943741) | $(495076) |

---

A reconciliation of the provision for income taxes with the expected provision for income taxes computed by applying the federal statutory income tax rate of 21% to the net loss before provision for income taxes is as follows:

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** | **Year Ended December 31, 2020** |
| | **Amount** | **Percentage** | **Amount** | **Percentage** |
| Pre-tax book loss | $(19335464) |  | $(8142924) |  |
| Federal income tax at statutory rate | (4060446) | 21.0% | (1710014) | 21.0% |
| State income tax benefit | (66430) | (0.3)% | (482992) | 5.9% |
| Change in valuation allowance | 3559163 | (18.4)% | 2193890 | (26.9)% |
| Other | (1376028) | 7.1% | (495960) | 6.1% |
| Provision for income tax benefit | $(1943741) |  | $(495076) |  |

---

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's net deferred income taxes are as follows:

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** |
| Deferred tax asset: |  |  |
| &nbsp;&nbsp;Accrued expenses and other | $347645 | $1192 |
| &nbsp;&nbsp;Loss carryforwards | 13124197 | 8028808 |
| &nbsp;&nbsp;Stock based compensation | 90293 | 80912 |
| &nbsp;&nbsp;Interest | 615260 |  |
| &nbsp;&nbsp;Total deferred tax asset | 14177395 | 8110912 |
| &nbsp;&nbsp;Valuation allowance | (9887550) | (6165669) |
| Net deferred tax assets | 4289845 | 1945243 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;Fixed assets | (365922) | (758399) |
| &nbsp;&nbsp;Intangible assets and goodwill | (5785088) | (2067009) |
| Total deferred tax liabilities | (6151010) | (2825408) |
| Net non-current deferred tax liability | $(1861165) | $(880165) |

---

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted into law. The legislation contains a number of economic relief provisions in response to the COVID-19 pandemic, including the following tax related provisions; (1) ability to carryback tax losses five years for losses generated in tax year 2018 through 2020, (2) the ability for Corporations to elect to utilize the 2019 Adjusted Taxable Income and 50% limitation for Internal Revenue Code ("IRC") Section 163(j) purposes, (3) a technical correction to the definition of Qualified Leasehold Improvement Property, and (4) the ability to defer employer payroll taxes for the period of March 27 to December 31, 2020. As of December 31, 2021, the provisions reflected in the Company's income tax provision include the election to apply the 50% limitation for IRC Section 163(j) purposes. All other provisions enacted do not materially impact the Company.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated

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**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

was the lack of sustained profitability in recent years. Such objective evidence limits the ability to consider other subjective evidence, such as the Company's projections for future growth.

On the basis of this evaluation, as of December 31, 2021 and 2020, a valuation allowance of $9.9 million and $6.2 million, respectively, has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted based on changes in objective and subjective evidence in future years. If and when the Company determines the valuation allowance should be released (i.e., reduced), the adjustment would result in a tax benefit reported in that period's consolidated statement of operations, the effect of which would be an increase in reported net income. The amount of any such tax benefit associated with release of the Company's valuation allowance in a particular reporting period may be material.

The Company has gross federal and state net operating loss carryforwards of $63.4 million and $13.8 million , respectively, at December 31, 2021. Federal net operating loss carryforwards will begin to expire in 2034 while the state net operating losses will begin to expire in 2024. The Company has a gross interest limitation carryforward of $2.4 million under Section 163(j) for federal tax purposes at December 31, 2021. The Section 163(j) interest may be carried forward indefinitely.

Under IRC Section 382 ("Section 382"), the annual utilization of the Company's federal net operating loss carryforwards and federal IRC Section 163(j) interest expense carryforward may be limited. The Company will be completing a Section 382 analysis to determine if any ownership shifts have occurred.

With exceptions due to the generation and utilization of net operating losses or credits, as of December 31, 2021, Alpine 4 Holdings and Subsidiaries are no longer subject to federal or state examinations by taxing authorities for tax years before 2018 and 2017, respectively.

Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. Although the Company believes that it has appropriately reserved for its uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different than expectations. The Company will adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit, the refinement of an estimate, the closing of a statutory audit period or changes in applicable tax law. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences would impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to the reserves that are considered appropriate, as well as related net interest.

The Company's policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at December 31, 2021 or 2020 and has not recognized interest or penalties during the years ended December 31, 2021 and 2020, since there was no reduction of income taxes paid due to uncertain tax positions.

The following table summarizes the activity related to the Company's gross unrecognized tax liabilities:

---

| | | |
|:---|:---|:---|
| | **December 30, 2021** | **December 30, 2020** |
| Unrecognized tax liabilities, beginning of the year | $— | $— |
| Increase related to prior year tax positions |  |  |
| Increase related to current year tax positions | 1169028 |  |
| Unrecognized tax liabilities, end of year | $1169028 | $— |

---

**Note 13 – Industry Segments (As Restated)**

The Company discloses segment information that is consistent with the way in which management operates and views its business. Effective during the quarter ended September 30, 2021, the Company has reduced its reportable segments to five

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

operating segments as represented by the Company's four silos: A4 Construction Services, Inc.; A4 Manufacturing, Inc.; A4 Aerospace Corporation; A4 Technologies, Inc; and A4 Defense Systems, Inc. The Company's reportable segments for the years ended December 31, 2021 and 2020:

---

| | | |
|:---|:---|:---|
| | Years Ended December 31, | Years Ended December 31, |
| | 2021 | 2020 |
| **Revenue** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction Services | $17995023 | $20851439 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing | 27375122 | 12602910 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defense | 4467376 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technologies | 1543469 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aerospace | 259823 |  |
|  | $51640813 | $33454349 |
| **Gross profit** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction Services | $(478031) | $2587850 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing | 6508230 | 2775777 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defense | 1073636 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technologies | 456558 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aerospace | 137605 |  |
|  | $7697998 | $5363627 |
| **Income (loss) from operations** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction Services | $(6216775) | $(1821309) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing | (2158492) | (998038) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defense | (282882) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technologies | (162491) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aerospace | (5041741) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unallocated and eliminations | (8259978) | (3074517) |
|  | $(22122359) | $(5893864) |
| **Depreciation and amortization** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction Services | $1138364 | $1414875 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing | 1279952 | 619505 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aerospace | 1125943 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technologies | 83132 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defense | 191740 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unallocated | 335228 | 35882 |
|  | $4154359 | $2070262 |
| **Interest Expenses** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction Services | $997870 | $2404714 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing | 547202 | 724342 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aerospace | 4545 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technologies | 15347 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defense | 825 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unallocated | 1723444 | 2334541 |

---

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

---

| | | |
|:---|:---|:---|
| | $3289233 | $5463597 |
| **Net income (loss)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction Services | $(3380894) | $(3596516) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing | (2316838) | (1366239) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aerospace | (5022630) | 402025 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technologies | (177838) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defense | (270289) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unallocated | (8314649) | (3087118) |
|  | $(19483138) | $(7647848) |

---

---

| | | |
|:---|:---|:---|
| | As of<br>December 31, 2021 | As of<br>December 31, 2020 |
| **Total Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction Services | $13985561 | $28991044 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing | 38302311 | 10731936 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aerospace | 18767254 | 853991 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technologies | 41078358 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defense | 11982580 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unallocated | 10507786 | 1011203 |
|  | $134623850 | $41588174 |
| **Goodwill** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction Services | $113592 | $1963761 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing | 6374325 | 121221 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aerospace | 1913310 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technologies | 7852071 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defense | 6426786 |  |
|  | $22680084 | $2084982 |
| **Accounts receivable, net** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction Services | $4193243 | $4501401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing | 3192030 | 1983468 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aerospace | 119774 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technologies | 2998945 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defense | 1371184 |  |
|  | $11875176 | $6484869 |

---

**Note 14 - Commitments and Contingencies**

*Licensing Agreement*

DTI has entered into licensing agreements with RCA Trademark Management for the licensing rights to the respective trademarks in the United States of America and Canada.

The RCA licensing agreement was amended with Technicolor as licensor and expires December 31, 2024. DTI agrees to pay a royalty fee of 2.50% on net sales of the licensed products with a minimum annual payment of $420,000 for the years

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

ended 2020 and 2021, $440,000 for the year ended 2022, and $460,000 for the year ended 2023, and $480,000 for the year ended 2024.

*Warranty Service Agreement*

DTI entered into a warranty service agreement to provide certain warranty services for a lighting supplier through December 31, 2024, except for one class of customer through 2030. In exchange for these services DTI receives annual payments as follows:

---

| | |
|:---|:---|
| Years Ending December 31, |  |
| 2022 | $75712 |
| 2023 | 66626 |
| 2024 | 59964 |
| Total | $202302 |

---

*Royalty Agreement*

On November 28, 2021, the Company entered into a Royalty Agreement with the sellers of ElecJet. Upon closing the Company desires to build its initial factory ("Factory") to manufacture batteries in the territory of the United States. The Company agrees to pay the sellers 1.5% of net sales for batteries produced by the Factory. Royalty payments shall continue to be paid for a period of ten years from the starting date, or until the total of the royalty payments equals $50 million, whichever occurs first.

*Legal Proceedings*

From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. As of the date of this Report, the Company was not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company's business, financial condition, operating results, or cash flows, except as set forth below.

In June 2020, the Company's subsidiary Excel Fabrication, LLC filed a lawsuit against Fusion Mechanical, LLC, in the Fifth Judicial District Court, State of Idaho (Case Number CV42-20-2246). The Company claimed tortious interference and trade secret violations by the defendant. The defendant filed a motion to dismiss, which was denied by the Court. The defendant filed a second motion to dismiss and the Company filed a memorandum in response to the second motion to dismiss, for which a hearing was held on May 10, 2021. On June 11, 2021, the court issued a decision narrowing the claims of the plaintiffs to three items, breach of contract, good faith and fair dealings, and intentional interference for economic advantage. These were the Company's three main points of contention. As of the date of this Report, discovery was proceeding. The Company intends to pursue vigorously its claims.

In August 2020, the Company filed a lawsuit, in the United States District Court, District of Arizona (Case No.2:20-cv-01679-DJH), against Alan Martin, the seller of Horizon Well Testing LLC ("HWT") dba Venture West Energy Services, LLC. The Company brought claims for breach of contract, including but not limited to breaches of the seller's representations and warranties in the purchase agreement in connection with the acquisition of HWT. The defendant answered and counterclaimed, claiming breach by the Company of its obligation to issue a promissory note (to be issued in connection with the acquisition of HWT). As of the date of this Report, the discovery period had ended but no trial date had been scheduled. A summary judgement motion was filed on December 22, 2021, which was pending as of the date of this Report.

In May 2021, the Company and several shareholders filed a lawsuit, in the United States District Court for the District of Arizona (Case number 2:21-cv-00886-MTL) against Fin Capital LLC ("Fin Cap"), and Grizzly Research LLC ("Grizzly") alleging securities fraud, tortious interference with business expectancy and libel and slander for disseminating false and

------

**<u>[**Table of Contents**](#ia18bd7c02fe147918e3ffac38a90fe1e_7)</u>**

**ALPINE 4 HOLDINGS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**For the Years Ended December 31, 2021 and 2020**

misleading statements about Alpine 4 and its employees to manipulate the stock price and further their own financial interests.

**Note 15 – Subsequent Events** 

In March 2022, the Company secured another $4.2 million in lines of credit for Alt Labs. The line of credit accrues interest at a rate of 2.5% above the greater of the prime rate or 3.25%. The line of credit matures on March 8, 2024. This line is secured by substantially all assets of the Alt Labs.

In January 2022, the Company issued 72,152 shares of Class A common stock for no additional consideration upon conversion of 10,149 shares of Series C Preferred Stock and 78,674 shares of Series D Preferred Stock.

In March 2022, the Company issued 39,386 shares of Class A Common Stock to management in connection with the acquisition of DTI Services Limited Liability Company.

------

EXHIBIT INDEX

---

| | |
|:---|:---|
| **Exhibit** | |
| **Number** | **Description** |
| 2.1 | [Impossible Aerospace Merger Agreement dated November 13, 2020](https://www.sec.gov/Archives/edgar/data/1606698/000109690620000320/alpp_ex2z1.htm) (incorporated by reference to Exhibit 3.4 to Alpine 4's Current Report on Form 8-K filed November 17, 2020). |
| 2.2 | [Vayu (US) Merger Agreement dated December 29, 2020](https://www.sec.gov/Archives/edgar/data/1606698/000109690621000002/alpp_ex2z1.htm) (incorporated by reference to Exhibit 3.4 to Alpine 4's Current Report on Form 8-K filed January 4, 2021). |
| 2.3 | [ElecJet Merger Agreement, dated November 29, 2021 (incorporated by referenece to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on December 3, 2021)](https://www.sec.gov/Archives/edgar/data/1606698/000109690621002928/alpp_ex2z1.htm) |
| 3.1 | [Certificate of Incorporation of Alpine 4 Automotive Technologies Ltd.](https://www.sec.gov/Archives/edgar/data/1606698/000126246314000386/ex31.htm) (incorporated by reference to Exhibit 3.1 to Alpine 4's Registration Statement on Form 10, filed May 8, 2014). |
| 3.2 | [Certificate of Amendment to Certificate of Incorporation](https://www.sec.gov/Archives/edgar/data/1606698/000126246314000613/ex33.htm), dated June 27, 2014 (incorporated by reference to Exhibit 3.3 to Alpine 4's Current Report on Form 8-K filed July 18, 2014). |
| 3.3 | [Certificate of Amendment to Certificate of Incorporation](https://www.sec.gov/Archives/edgar/data/1606698/000126246314000613/ex34.htm), dated June 30, 2014 (incorporated by reference to Exhibit 3.4 to Alpine 4's Current Report on Form 8-K filed July 18, 2014). |
| 3.4 | [Second Amended and Restated Certificate of Incorporation](https://www.sec.gov/Archives/edgar/data/1606698/000109690615000973/alpine4exh31.htm), dated August 24, 2015 (incorporated by reference to Exhibit 3.1 to Alpine 4's Current Report on Form 8-K filed August 27, 2015) |
| 3.5 | [Certificate of Amendment of Amended and Restated Certificate of Incorporation](https://www.sec.gov/Archives/edgar/data/1606698/000109690619000151/exh3_5.htm), dated December 15, 2017 |
| 3.6 | [By-Laws of Alpine 4](https://www.sec.gov/Archives/edgar/data/1606698/000126246314000386/ex32.htm) (incorporated by reference to Exhibit 3.2 to Alpine 4's Registration Statement on Form 10, filed May 8, 2014). |
| 3.7 | [Series C Preferred Stock Certificate of Designation](https://www.sec.gov/Archives/edgar/data/1606698/000109690620000320/alpp_ex3z1.htm) (incorporated by reference to Exhibit 3.4 to Alpine 4's Current Report on Form 8-K filed November 17, 2020). |
| 3.8 | [Series D Preferred Stock Certificate of Designation](https://www.sec.gov/Archives/edgar/data/1606698/000109690621000002/alpp_ex3z1.htm) (incorporated by reference to Exhibit 3.4 to Alpine 4's Current Report on Form 8-K filed January 4, 2021). |
| 3.9 | [Certificate of Amendment to Certificate of Incorporation (Name Change) filed February 5, 2021](https://www.sec.gov/Archives/edgar/data/1606698/000109690621000282/alpp_3z1.htm) (incorporated by reference to Exhibit 3.4 to Alpine 4's Current Report on Form 8-K filed February 8, 2021). |
| 4.1 | [Form of Placement Agent Warrant](https://www.sec.gov/Archives/edgar/data/1606698/000110465921021286/tm216473d1_ex4-1.htm) (incorporated by reference to Exhibit 3.4 to Alpine 4's Current Report on Form 8-K filed February 12, 2021). |
| 4.2 | [Form of Investor Warrant (incorporated by reference to Exhibit 4.1 to Alpine 4's Current Report on Form 8-K filed November 24, 2021).](https://www.sec.gov/Archives/edgar/data/1606698/000109690621002836/alpp_ex4z2.htm) |
| 4.3 | [Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 to Alpine 4's Current Report on Form 8-K filed November 24, 2021).](https://www.sec.gov/Archives/edgar/data/1606698/000109690621002836/alpp_ex4z1.htm) |
| 10.1 | [Purchase Agreement, dated effective January 16, 2020, by and between Alpine 4 Technologies Ltd. and Lincoln Park Capital Fund, LLC](https://www.sec.gov/Archives/edgar/data/1606698/000109690620000015/exh10_1.htm) (incorporated by reference to the Company's Current Report filed with the SEC on January 23, 2020) |
| 10.2 | [Registration Rights Agreement, dated effective January 16, 2020, by and between Alpine 4 Technologies Ltd. and Lincoln Park Capital Fund, LLC](https://www.sec.gov/Archives/edgar/data/1606698/000109690620000015/exh10_2.htm) (incorporated by reference to the Company's Current Report filed with the SEC on January 23, 2020) |
| 10.3 | [FPCD Note - $350,000](https://www.sec.gov/Archives/edgar/data/1606698/000109690619000399/exh10_23.pdf) (incorporated by reference to the Company's Current Report filed with the SEC on November 25, 2019) |

---

------

---

| | |
|:---|:---|
| 10.4 | [FPCD Note - $600,000](https://www.sec.gov/Archives/edgar/data/1606698/000109690619000399/exh10_24.pdf) (incorporated by reference to the Company's Current Report filed with the SEC on November 25, 2019) |
| 10.5 | [Note Amendment – #1](https://www.sec.gov/Archives/edgar/data/1606698/000109690619000399/exh10_25.pdf) (incorporated by reference to the Company's Current Report filed with the SEC on November 25, 2019) |
| 10.6 | [Note Amendment - # 2](https://www.sec.gov/Archives/edgar/data/1606698/000109690619000399/exh10_26.pdf) (incorporated by reference to the Company's Current Report filed with the SEC on November 25, 2019) |
| 10.7 | [FPCD Note - $137,870.48](https://www.sec.gov/Archives/edgar/data/1606698/000109690619000399/exh10_27.pdf) (incorporated by reference to the Company's Current Report filed with the SEC on November 25, 2019) |
| 10.8 | [Note Amendment - $180,000](https://www.sec.gov/Archives/edgar/data/1606698/000109690619000399/exh10_28.pdf) (incorporated by reference to the Company's Current Report filed with the SEC on November 25, 2019) |
| 10.9 | [APF Securities Agreement](https://www.sec.gov/Archives/edgar/data/1606698/000109690618000188/exh99_1.htm) (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on April 9, 2018) |
| 10.10 | [Secured Promissory Notes](https://www.sec.gov/Archives/edgar/data/1606698/000109690618000188/exh99_2.htm) (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on April 9, 2018) |
| 10.11 | [Secured Convertible Notes](https://www.sec.gov/Archives/edgar/data/1606698/000109690618000188/exh99_3.htm) (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on April 9, 2018) |
| 10.12 | [Security Agreement](https://www.sec.gov/Archives/edgar/data/1606698/000109690618000188/exh99_4.htm) (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on April 9, 2018) |
| 10.13 | [Consulting Services Agreement](https://www.sec.gov/Archives/edgar/data/1606698/000109690618000188/exh99_5.htm) (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on April 9, 2018) |
| 10.14 | [Purchase Agreement](https://www.sec.gov/Archives/edgar/data/1606698/000109690620000088/exh10_1.htm) (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on February 24, 2020) |
| 10.15 | [Secured Promissory Note - $2,300,000](https://www.sec.gov/Archives/edgar/data/1606698/000109690620000088/exh10_2.htm) (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on February 24, 2020) |
| 10.16 | [Security Agreement](https://www.sec.gov/Archives/edgar/data/1606698/000109690620000088/exh10_3.htm) (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on February 24, 2020) |
| 10.17 | [Amendment to Purchase Agreement](https://www.sec.gov/Archives/edgar/data/1606698/000109690620000088/exh10_4.htm) (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on February 24, 2020)  |
| 10.18 | [Impossible Aerospace Consultant Agreement dated November 13, 2020](https://www.sec.gov/Archives/edgar/data/1606698/000109690620000320/alpp_ex10z1.htm) (incorporated by reference to Exhibit 10.1 to Alpine 4's Current Report on Form 8-K filed November 17, 2020). |
| 10.19 | [RSU Agreement dated November 13, 2020](https://www.sec.gov/Archives/edgar/data/1606698/000109690620000320/alpp_ex10z2.htm) (incorporated by reference to Exhibit 10.2 to Alpine 4's Current Report on Form 8-K filed November 17, 2020). |
| 10.20 | [Vayu (US) Employment Agreement dated December 29, 2020](https://www.sec.gov/Archives/edgar/data/1606698/000109690621000002/alpp_ex10z1.htm) (incorporated by reference to Exhibit 10.1 to Alpine 4's Current Report on Form 8-K filed January 4, 2021). |
| 10.21 | [RSU Agreement dated December 29, 2020](https://www.sec.gov/Archives/edgar/data/1606698/000109690621000002/alpp_ex10z2.htm) (incorporated by reference to Exhibit 10.2 to Alpine 4's Current Report on Form 8-K filed January 4, 2021). |
| 10.22 | [Form of Securities Purchase Agreement (AGP Transaction)](https://www.sec.gov/Archives/edgar/data/1606698/000110465921021286/tm216473d1_ex10-1.htm) (incorporated by reference to Exhibit 10.1 to Alpine 4's Current Report on Form 8-K filed February 12, 2021). |
| 10.23 | [Form of Placement Agent Agreement](https://www.sec.gov/Archives/edgar/data/1606698/000110465921021286/tm216473d1_ex10-2.htm) (incorporated by reference to Exhibit 10.2 to Alpine 4's Current Report on Form 8-K filed February 12, 2021). |

---

------

---

| | |
|:---|:---|
| 10.24 | [Class A Common Stock Sales Agreement, dated March 8, 2022, between the Company and A.G.P. (incorporated by reference to Exhibit 10.1 to Alpine 4's Current Report on Form 8-K filed March 9, 2022](https://www.sec.gov/Archives/edgar/data/1606698/000109690622000510/alpp_ex10z1.htm) |
| 10.25 | [Membership Interest Purchase Agreement for DTI Transaction, dated December 9, 2021 (incorporated by reference to Exhibit 10.1 to Alpine 4's Current Report on Form 8-K filed December 15, 2021)](https://www.sec.gov/Archives/edgar/data/1606698/000109690621002993/alpp_ex10z1.htm) |
| 10.26 | [Placement Agent Agreement between the Company and A.G.P., dated November 22, 2021 (incorporated by reference to Exhibit 10.2 to Alpine 4's Current Report on Form 8-K filed November 24, 2021)](https://www.sec.gov/Archives/edgar/data/1606698/000109690621002836/alpp_ex10z2.htm) |
| 10.27 | [Securities Purchase Agreement between the Company and the Purchasers named therein, dated as of November 22, 2021 (incorporated by reference to Exhibit 10.1 to Alpine 4's Current Report on Form 8-K filed November 24, 2021)](https://www.sec.gov/Archives/edgar/data/1606698/000109690621002836/alpp_ex10z1.htm) |
| 10.28 | [Membership Interest Purchase Agreement for Alt Labs Transaction, dated May 4, 2021 (incorporated by reference to Exhibit 10.1 to Alpine 4's Current Report on Form 8-K filed May 10, 2021)](https://www.sec.gov/Archives/edgar/data/1606698/000109690621001082/alpp_ex10z1.htm) |
| 23 | [Consent of MaloneBailey, LLP](consentofmalonebaileyllp.htm) |
| 31.1 | [Certification of Chief Executive Officer](a311-302xceoxcertification.htm)[pursuant to S](a311-302xceoxcertification.htm)[ection](a311-302xceoxcertification.htm)[302](a311-302xceoxcertification.htm)[of the Sarbanes-Oxley Act of 2002](a311-302xceoxcertification.htm) |
| 31.2 | [Certification of](a312-302xcfocertificationo.htm)[Chief Financial Officer pursuant to](a312-302xcfocertificationo.htm)[Section](a312-302xcfocertificationo.htm)[302](a312-302xcfocertificationo.htm)[of the Sarbanes-Oxley Act of 2002](a312-302xcfocertificationo.htm) |
| 32.1 | [Certification of Chief Executive Officer](a321-906xceocertificationo.htm)[pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](a321-906xceocertificationo.htm) |
| 32.2 | [Certification of](a322-906xcfocertificationo.htm)[Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](a322-906xcfocertificationo.htm) |
| 101 INS | XBRL Instance Document\* |
| 101 SCH | XBRL Schema Document\* |
| 101 CAL | XBRL Calculation Linkbase Document\* |
| 101 DEF | XBRL Definition Linkbase Document\* |
| 101 LAB | XBRL Labels Linkbase Document\* |
| 101 PRE | XBRL Presentation Linkbase Document\* |

---

\*The XBRL related information in Exhibit 101 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

------

**SIGNATURES**

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

**ALPINE 4 HOLDINGS, INC.**

---

| | | |
|:---|:---|:---|
| Date: March 16, 2023 | By: | /s/ Kent B. Wilson |
|  | Name: | Kent B. Wilson |
|  | Title: | Chief Executive Officer (Principal Executive Officer), President, and Director |
| Date: March 16, 2023 | By: | /s/ Larry Zic |
|  | Name: | Larry Zic |
|  | Title: | Chief Financial Officer (Principal Financial Officer) |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| <u>/s/ Kent B. Wilson</u><br>Kent B. Wilson  | Chief Executive Officer, President, Director | March 16, 2023 |
| <u>/s/ Ian Kantrowitz</u><br>Ian Kantrowitz | Director | March 16, 2023 |
| <u>/s/ Gerry Garcia</u><br>Gerry Garcia  | Chairwoman of the Board | March 16, 2023 |
| <u>/s/ Edmond Lew</u><br>Edmond Lew | Director | March 16, 2023 |
| <u>/s/ Christophe Jeunot</u><br>Christophe Jenuot | Director | March 16, 2023 |
| <u>/s/ Jonathan Withem</u><br>Jonathan Withem | Director | March 16, 2023 |

---

## Ex-23

**Exhibit 23**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in the Registration Statement on Form S-3 (File No. 333-252539) of our report dated April 13, 2022, except for Note 2 as to which the date is March 16, 2023, with respect to the audited consolidated financial statements of Alpine 4 Holdings, Inc. and Subsidiaries (collectively, the "Company") appearing in this Annual Report on Form 10-K/A of the Company for the year ended December 31, 2021.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

March 16, 2023

## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATIONS**

I, Kent B. Wilson, certify that:

1. &nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Annual Report on Form 10-K/A of Alpine 4 Holdings, Inc.;

2. &nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

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

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) &nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) &nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

------

---

| | |
|:---|:---|
| Dated: March 16, 2023 | Dated: March 16, 2023 |
| By: | */s/ Kent B. Wilson*  |
| Kent B. Wilson | Kent B. Wilson |
| Chief Executive Officer | Chief Executive Officer |
| (Principal Executive Officer) | (Principal Executive Officer) |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATIONS**

I, Larry Zic, certify that:

1. &nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Annual Report on Form 10-K/A of Alpine 4 Holdings, Inc.;

2. &nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

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

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) &nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) &nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

------

---

| | |
|:---|:---|
| Dated: March 16, 2023 | Dated: March 16, 2023 |
| By: | */s/ Larry Zic* |
| Larry Zic | Larry Zic |
| Chief Financial Officer | Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report on Form 10-K/A of Alpine 4 Holdings, Inc. (the "Company") for the year ending December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Kent B. Wilson, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

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

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

---

| | |
|:---|:---|
| Dated: March 16. 2023 | Dated: March 16. 2023 |
| By: | */s/ Kent B. Wilson*  |
| Kent B. Wilson | Kent B. Wilson |
| Chief Executive Officer | Chief Executive Officer |
| (Principal Executive Officer) | (Principal Executive Officer) |

---

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report on Form 10-K/A of Alpine 4 Holdings, Inc. (the "Company") for the year ending December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Larry Zic, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

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

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

---

| | |
|:---|:---|
| Dated: March 16. 2023 | Dated: March 16. 2023 |
| By: | */s/ Larry Zic* |
| Larry Zic | Larry Zic |
| Chief Financial Officer | Chief Financial Officer |

---

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

<br>