(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | o | Accelerated filer | o | ||||||||
x | Smaller reporting company | ||||||||||
Emerging growth company |
Page | ||||||||
March 31, 2022 | December 31, 2021 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Inventory, net | |||||||||||
Contract assets | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Intangible asset, net | |||||||||||
Right of use assets, net | |||||||||||
Goodwill | |||||||||||
Other non-current assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Contract liabilities | |||||||||||
Line of credit | |||||||||||
Notes payable, current portion | |||||||||||
Financing lease obligation, current portion | |||||||||||
Operating lease obligation, current portion | |||||||||||
Total current liabilities | |||||||||||
Notes payable, net of current portion | |||||||||||
Line of credit, net of current portion | |||||||||||
Financing lease obligations, net of current portion | |||||||||||
Operating lease obligations, net of current portion | |||||||||||
Deferred tax liability | |||||||||||
TOTAL LIABILITIES | |||||||||||
STOCKHOLDERS' EQUITY: | |||||||||||
Preferred stock, $ | — | — | |||||||||
Series B preferred stock; $ | |||||||||||
Series C preferred stock; $ | |||||||||||
Series D preferred stock; $ | |||||||||||
Class A Common stock, $ | |||||||||||
Class B Common stock, $ | |||||||||||
Class C Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Revenues, net | $ | $ | ||||||||||||
Costs of revenue | ||||||||||||||
Gross profit | ||||||||||||||
Operating expenses: | ||||||||||||||
General and administrative expenses | ||||||||||||||
Research and development | ||||||||||||||
Total operating expenses | ||||||||||||||
Loss from operations | ( | ( | ||||||||||||
Other income (expenses) | ||||||||||||||
Interest expense | ( | ( | ||||||||||||
Gain on forgiveness of debt | ||||||||||||||
Other income (expenses) | ( | |||||||||||||
Total other expenses | ( | ( | ||||||||||||
Loss before income tax | ( | ( | ||||||||||||
Income tax | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Weighted average shares outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
Basic loss per share | $ | ( | $ | ( | ||||||||||
Diluted loss per share | $ | ( | $ | ( |
Series B Preferred Stock | Series C Preferred Stock | Series D Preferred Stock | Class A Common Stock | Class B Common Stock | Class C Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for compensation | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of series D preferred stock to Class A | — | — | — | — | ( | ( | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of series C preferred stock to Class A | — | — | ( | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for cash, net of offering costs | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for convertible note payable and accrued interest | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of series D preferred stock for acquisition | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of class C common stock | — | — | — | — | — | — | — | — | — | — | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beneficial conversion feature on convertible notes | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
OPERATING ACTIVITIES: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Gain on forgiveness of debt | ( | ||||||||||
Employee stock compensation | |||||||||||
Amortization of debt discounts | |||||||||||
Non-cash lease expense | |||||||||||
Write off of inventory | |||||||||||
Bad debt expense | |||||||||||
Change in current assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventory | ( | ||||||||||
Contract assets | ( | ( | |||||||||
Prepaid expenses and other assets | ( | ( | |||||||||
Accounts payable | ( | ( | |||||||||
Accrued expenses | ( | ( | |||||||||
Contract liabilities | ( | ||||||||||
Operating lease liability | ( | ( | |||||||||
Net cash used in operating activities | ( | ( | |||||||||
INVESTING ACTIVITIES: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Cash assumed in acquisition | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
FINANCING ACTIVITIES: | |||||||||||
Proceeds from the sale of common stock, net of offering costs | |||||||||||
Proceeds from issuances of notes payable, non-related party | |||||||||||
Proceeds from issuances of convertible notes payable | |||||||||||
Proceeds from line of credit | |||||||||||
Repurchase of common stock | ( | ||||||||||
Repayments of notes payable, related party | ( | ||||||||||
Repayments of notes payable, non-related parties | ( | ( | |||||||||
Repayments of convertible notes payable | ( | ||||||||||
Repayment of line of credit | ( | ( | |||||||||
Cash paid on financing lease obligations | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
NET INCREASE (DECREASE) IN CASH | ( | ||||||||||
CASH, BEGINNING BALANCE | |||||||||||
CASH, ENDING BALANCE | $ | $ | |||||||||
CASH PAID FOR: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: | |||||||||||
Common stock issued for convertible note payable and accrued interest | $ | $ | |||||||||
Equipment purchased on note payable | $ | $ | |||||||||
Conversion of series D preferred stock for common stock | $ | $ | |||||||||
Issuance of shares of series D preferred stock for acquisition | $ | $ | |||||||||
Beneficial conversion feature on convertible notes | $ | $ |
For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||||||||
Net loss | Shares | Per Share Amount | Net loss | Shares | Per Share Amount | ||||||||||||||||||||||||||||||
Basic EPS | |||||||||||||||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Effect of Dilutive Securities | |||||||||||||||||||||||||||||||||||
Stock options and warrants | — | — | — | — | |||||||||||||||||||||||||||||||
Dilute EPS | |||||||||||||||||||||||||||||||||||
Net loss plus assumed conversions | $ | ( | $ | ( | $ | ( | $ | ( |
Construction Services | Manufacturing | Defense | Technologies | Aerospace | Total | ||||||||||||||||||||||||||||||
Sale of goods | |||||||||||||||||||||||||||||||||||
Circuit boards and cables | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Dietary supplements | |||||||||||||||||||||||||||||||||||
Electronics | |||||||||||||||||||||||||||||||||||
Total sale of goods | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Sale of services | |||||||||||||||||||||||||||||||||||
Construction contracts | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Drone 3D mapping | |||||||||||||||||||||||||||||||||||
Total sale of services | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ |
Construction Services | Manufacturing | Total | |||||||||||||||
Sale of goods | |||||||||||||||||
Circuit boards and cables | $ | $ | $ | ||||||||||||||
Total sale of goods | $ | $ | $ | ||||||||||||||
Sale of services | |||||||||||||||||
Construction contracts | $ | $ | $ | ||||||||||||||
Total sale of services | $ | $ | $ | ||||||||||||||
Total revenues | $ | $ | $ |
Twelve Months Ending March 31, | Finance Leases | Operating Leases | |||||||||
2023 | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
Thereafter | |||||||||||
Total payments | |||||||||||
Less: imputed interest | ( | ( | |||||||||
Total obligation | |||||||||||
Less: current portion | ( | ( | |||||||||
Non-current financing leases obligations | $ | $ |
Classification on Balance Sheet | March 31, 2022 | December 31, 2021 | ||||||||||||
Assets | ||||||||||||||
Operating lease assets | Operating lease right of use assets | $ | $ | |||||||||||
Total lease assets | $ | $ | ||||||||||||
Liabilities | ||||||||||||||
Current liabilities | ||||||||||||||
Operating lease liability | Current operating lease liability | $ | $ | |||||||||||
Noncurrent liabilities | ||||||||||||||
Operating lease liability | Long-term operating lease liability | |||||||||||||
Total lease liability | $ | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
Lines of credit, current portion | $ | $ | |||||||||
Equipment loans, current portion | |||||||||||
Term notes, current portion | |||||||||||
Total current | |||||||||||
Lines of credit, net of current portion | |||||||||||
Long-term portion of equipment loans and term notes | |||||||||||
Total notes payable and line of Credit | $ | $ |
Twelve Months Ending March 31, | |||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total | $ |
Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at December 31, 2021 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
Exercised | |||||||||||||||||||||||
Outstanding at March 31, 2022 | $ | $ | |||||||||||||||||||||
Vested and expected to vest at March 31, 2022 | $ | $ | |||||||||||||||||||||
Exercisable at March 31, 2022 | $ | $ |
Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||
Exercise Price | Number of Shares | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | |||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||
Warrants | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at December 31, 2021 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||
Exercised | |||||||||||||||||||||||
Outstanding at March 31, 2022 | $ | $ | |||||||||||||||||||||
Vested and expected to vest at March 31, 2022 | $ | $ | |||||||||||||||||||||
Exercisable at March 31, 2022 | $ | $ |
Warrants Outstanding | Warrants Exercisable | |||||||||||||||||||||||||||||||
Exercise Price | Number of Shares | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | |||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||
Stock price | $ | ||||
Risk-free interest rate | |||||
Expected life of the options | |||||
Expected volatility | |||||
Expected dividend yield |
Purchase Allocation | |||||
Accounts receivable | $ | ||||
Other current assets | |||||
Inventory | |||||
Property and equipment | |||||
Customer list | |||||
Trademark | |||||
Non-compete agreement | |||||
Goodwill | |||||
ROU asset | |||||
Accounts payable | ( | ||||
Accrued expenses and other current liabilities | ( | ||||
Customer deposits | ( | ||||
Operating lease liability | ( | ||||
Line of credit | ( | ||||
$ |
Cash | $ | ||||
Class A Common Stock ( | |||||
Warrants ( | |||||
Seller notes | |||||
$ |
Pro Forma Combined Financials (unaudited) | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Sales | $ | $ | ||||||||||||
Cost of goods sold | ||||||||||||||
Gross profit | ||||||||||||||
Operating expenses | ||||||||||||||
Loss from operations | ( | ( | ||||||||||||
Net loss | ( | ( | ||||||||||||
Net loss per share | ( | ( |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenue | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Defense | |||||||||||
Technologies | |||||||||||
Aerospace | |||||||||||
$ | $ | ||||||||||
Gross profit | |||||||||||
Construction Services | $ | $ | ( | ||||||||
Manufacturing | |||||||||||
Defense | |||||||||||
Technologies | |||||||||||
Aerospace | |||||||||||
$ | $ | ||||||||||
Income (loss) from operations | |||||||||||
Construction Services | $ | ( | $ | ( | |||||||
Manufacturing | ( | ||||||||||
Defense | |||||||||||
Technologies | |||||||||||
Aerospace | ( | ( | |||||||||
Unallocated | ( | ( |
$ | ( | $ | ( | ||||||||
Depreciation and amortization | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Defense | |||||||||||
Technologies | |||||||||||
Aerospace | |||||||||||
Unallocated | |||||||||||
$ | $ | ||||||||||
Interest Expense | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Technologies | |||||||||||
Aerospace | |||||||||||
Unallocated | |||||||||||
$ | $ | ||||||||||
Net income (loss) | |||||||||||
Construction Services | $ | ( | $ | ( | |||||||
Manufacturing | ( | ||||||||||
Defense | |||||||||||
Technologies | |||||||||||
Aerospace | ( | ( | |||||||||
Unallocated | ( | ( | |||||||||
$ | ( | $ | ( |
As of March 31, 2022 | As of December 31, 2021 | ||||||||||
Total Assets | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Defense | |||||||||||
Technologies | |||||||||||
Aerospace | |||||||||||
Unallocated | |||||||||||
$ | $ | ||||||||||
Goodwill | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Defense | |||||||||||
Technologies | |||||||||||
Aerospace | |||||||||||
$ | $ | ||||||||||
Accounts receivable, net | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Defense | |||||||||||
Technologies | |||||||||||
Aerospace | |||||||||||
$ | $ |
2023 | $ | |||||||
2024 | ||||||||
Total | $ |
Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | $ Change | |||||||||||||||
Revenue | $ | 25,592,154 | $ | 8,668,405 | $ | 16,923,749 | |||||||||||
Cost of revenue | 19,954,697 | 7,913,786 | 12,040,911 | ||||||||||||||
Gross Profit | 5,637,457 | 754,619 | 4,882,838 | ||||||||||||||
Operating expenses: | |||||||||||||||||
General and administrative expenses | 9,045,238 | 5,826,688 | 3,218,550 | ||||||||||||||
Research and development | 191,930 | — | 191,930 | ||||||||||||||
Total operating expenses | 9,237,168 | 5,826,688 | 3,410,480 | ||||||||||||||
Loss from operations | (3,599,711) | (5,072,069) | 1,472,358 | ||||||||||||||
Other income (expenses) | |||||||||||||||||
Interest expense | (608,961) | (1,471,723) | 862,762 | ||||||||||||||
Gain on extinguishment of debt | — | 429,540 | (429,540) | ||||||||||||||
Other income | 32,719 | (15,216) | 47,935 | ||||||||||||||
Total other expenses | (576,242) | (1,057,399) | 481,157 | ||||||||||||||
Loss before income tax | (4,175,953) | (6,129,468) | 1,953,515 | ||||||||||||||
Income tax expense | — | — | — | ||||||||||||||
Net loss | $ | (4,175,953) | $ | (6,129,468) | $ | 1,953,515 |
Exhibit Number | Description | |||||||
2.1 | Impossible Aerospace Merger Agreement dated November 13, 2020 (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 (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed January 4, 2021). | |||||||
3.1 | Series C Preferred Stock Certificate of Designation (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed November 17, 2020). | |||||||
3.2 | Series D Preferred Stock Certificate of Designation (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed January 4, 2021). | |||||||
3.3 | Certificate of Amendment to Certificate of Incorporation (Name Change) filed February 5, 2021 (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed February 8, 2021). |
10.1 | Impossible Aerospace Consultant Agreement dated November 13, 2020 (incorporated by reference to Exhibit 10.1 to Alpine 4’s Current Report on Form 8-K filed November 17, 2020). | |||||||
10.2 | RSU Agreement dated November 13, 2020 (incorporated by reference to Exhibit 10.2 to Alpine 4’s Current Report on Form 8-K filed November 17, 2020). | |||||||
10.3 | Vayu (US) Employment Agreement dated December 29, 2020 (incorporated by reference to Exhibit 10.1 to Alpine 4’s Current Report on Form 8-K filed January 4, 2021). | |||||||
10.4 | RSU Agreement dated December 29, 2020 (incorporated by reference to Exhibit 10.2 to Alpine 4’s Current Report on Form 8-K filed January 4, 2021). | |||||||
10.5 | Form of Securities Purchase Agreement (AGP Transaction) (incorporated by reference to Exhibit 10.1 to Alpine 4’s Current Report on Form 8-K filed February 12, 2021). | |||||||
10.6 | Form of Placement Agent Agreement (incorporated by reference to Exhibit 10.2 to Alpine 4’s Current Report on Form 8-K filed February 12, 2021). | |||||||
10.7 | Stock Purchase Agreement by and among A4 Defense Services, Inc., Thermal Dynamics International, Inc., Page Management Co., Inc., and Stephen L. Page (previously filed as Exhibit 10.1 to the Company’s Current Report filed on May 4, 2021, and incorporated herein by reference). | |||||||
10.8 | Membership Interest Purchase Agreement by and among A4 Manufacturing, Inc., Alpine 4 Holdings, Inc., Alternative Laboratories, LLC, KAI Enterprises, LLC, and Kevin Thomas (previously filed as Exhibit 10.1 to the Company’s Current Report filed on May 10, 2021, and incorporated herein by reference). | |||||||
10.9 | Commercial Lease Agreement by and between 4740 Cleveland, LLC, and Alternative Laboratories, LLC (previously filed as Exhibit 10.4 to the Company’s Current Report filed on May 10, 2021, and incorporated herein by reference). | |||||||
10.10 | Membership Interest Purchase Agreement by and among A4 Manufacturing, Inc., Alpine 4 Holdings, Inc., 4740 Cleveland, LLC, and Kevin Thomas (previously filed as Exhibit 10.5 to the Company’s Current Report filed on May 10, 2021, and incorporated herein by reference). | |||||||
10.11 | Identified Technologies Corporation Stock Purchase Agreement, dated October 20, 2021 (previously filed as Exhibit 10 to the Company’s Current Report filed on October 25, 2021, and incorporated herein by reference). | |||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
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* |
Alpine 4 Holdings, Inc. | ||||||||
Dated: May 23, 2022 | ||||||||
By: | /s/ Kent B. Wilson | |||||||
Kent B. Wilson | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) | ||||||||
By: | /s/ Larry Zic | |||||||
Larry Zic | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) |
Dated: May 23, 2022 | By: | /s/ Kent Wilson | ||||||
Kent Wilson | ||||||||
Chief Executive Officer |
Dated: May 23, 2022 | By: | /s/ Larry Zic | ||||||
Larry Zic | ||||||||
Chief Financial Officer |
Consolidated Statements of Operations - USD ($) |
3 Months Ended | |
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Mar. 31, 2022 |
Mar. 31, 2021 |
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Income Statement [Abstract] | ||
Revenues, net | $ 25,592,154 | $ 8,668,405 |
Costs of revenue | 19,954,697 | 7,913,786 |
Gross profit | 5,637,457 | 754,619 |
Operating expenses: | ||
General and administrative expenses | 9,045,238 | 5,572,717 |
Research and development | 191,930 | 253,971 |
Total operating expenses | 9,237,168 | 5,826,688 |
Loss from operations | (3,599,711) | (5,072,069) |
Other income (expenses) | ||
Interest expense | (608,961) | (1,471,723) |
Gain on forgiveness of debt | 0 | 429,540 |
Other income (expenses) | 32,719 | (15,216) |
Total other expenses | (576,242) | (1,057,399) |
Loss before income tax | (4,175,953) | (6,129,468) |
Income tax | 0 | 0 |
Net loss | $ (4,175,953) | $ (6,129,468) |
Weighted average shares outstanding: | ||
Basic (in shares) | 183,032,447 | 154,616,490 |
Diluted (in shares) | 183,032,447 | 154,616,490 |
Basic loss per share (in dollars per share) | $ (0.02) | $ (0.04) |
Diluted loss per share (in dollars per share) | $ (0.02) | $ (0.04) |
Consolidated Statements Changes in Stockholders' Equity - USD ($) |
Total |
Convertible Notes Payable |
Conversion of series D preferred stock to Class A |
Conversion of series C preferred stock to Class A |
Additional Paid-in Capital |
Additional Paid-in Capital
Convertible Notes Payable
|
Accumulated Deficit |
Series B Preferred Stock
Preferred Stock
|
Series C Preferred Stock
Preferred Stock
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Series C Preferred Stock
Preferred Stock
Conversion of series C preferred stock to Class A
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Series D Preferred Stock
Preferred Stock
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Series D Preferred Stock
Preferred Stock
Conversion of series D preferred stock to Class A
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Class A Common Stock
Common Stock
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Class A Common Stock
Common Stock
Convertible Notes Payable
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Class A Common Stock
Common Stock
Conversion of series D preferred stock to Class A
|
Class A Common Stock
Common Stock
Conversion of series C preferred stock to Class A
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Class B Common Stock
Common Stock
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Class C Common Stock
Common Stock
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Beginning balance (in shares) at Dec. 31, 2020 | 5 | 1,714,286 | 0 | 126,363,158 | 9,023,088 | 14,162,267 | ||||||||||||
Beginning balance at Dec. 31, 2020 | $ (8,788,292) | $ 30,991,978 | $ (39,795,401) | $ 5 | $ 171 | $ 0 | $ 12,636 | $ 902 | $ 1,417 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Issuance of shares of common stock for cash, net of offering costs (in shares) | 9,857,397 | |||||||||||||||||
Issuance of shares of common stock for cash, net of offering costs | $ 54,302,982 | $ 54,301,997 | $ 985 | |||||||||||||||
Issuance of shares of common stock for debt settlement (in shares) | 702,877 | |||||||||||||||||
Issuance of shares of common stock for convertible note payable and accrued interest | 109,830 | 109,760 | $ 70 | |||||||||||||||
Issuance of shares of series D preferred stock for acquisition (in shares) | 1,428,570 | |||||||||||||||||
Issuance of shares of series D preferred stock for acquisition | 6,653,309 | 6,653,166 | $ 143 | |||||||||||||||
Repurchase of class C common stock (in shares) | (45,000) | |||||||||||||||||
Repurchase of class C common stock | (185,850) | (185,845) | $ (5) | |||||||||||||||
Share-based compensation expense | 19,341 | 19,341 | ||||||||||||||||
Beneficial conversion feature on convertible notes | 92,428 | 92,428 | ||||||||||||||||
Net loss | (6,129,468) | (6,129,468) | ||||||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 5 | 1,714,286 | 1,428,570 | 136,923,432 | 9,023,088 | 14,117,267 | ||||||||||||
Ending balance at Mar. 31, 2021 | 46,074,280 | 91,982,825 | (45,924,869) | $ 5 | $ 171 | $ 143 | $ 13,691 | $ 902 | $ 1,412 | |||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 5 | 10,149 | 78,674 | 161,798,817 | 8,548,088 | 12,500,200 | ||||||||||||
Beginning balance at Dec. 31, 2021 | 72,111,466 | 131,293,861 | (59,200,693) | $ 5 | $ 0 | $ 7 | $ 16,182 | $ 854 | $ 1,250 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Issuance of shares of common stock for compensation (in shares) | 39,386 | |||||||||||||||||
Issuance of shares of common stock for compensation | 99,252 | 99,248 | $ 4 | |||||||||||||||
Conversion of convertible securities (in shares) | (10,149) | (78,674) | 63,907 | 8,245 | ||||||||||||||
Conversion of convertible securities | $ 0 | $ 0 | $ (7) | $ 7 | ||||||||||||||
Share-based compensation expense | 1,026 | 1,026 | ||||||||||||||||
Net loss | (4,175,953) | (4,175,953) | ||||||||||||||||
Ending balance (in shares) at Mar. 31, 2022 | 5 | 0 | 0 | 161,910,355 | 8,548,088 | 12,500,200 | ||||||||||||
Ending balance at Mar. 31, 2022 | $ 68,035,791 | $ 131,394,135 | $ (63,376,646) | $ 5 | $ 0 | $ 0 | $ 16,193 | $ 854 | $ 1,250 |
Organization and Basis of Presentation |
3 Months Ended |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation The unaudited consolidated financial statements were prepared by Alpine 4 Holdings, Inc. (‘we,” “our,” or the "Company"), pursuant to the rules and regulations of the Securities Exchange Commission ("SEC"). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") were omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K filed with the SEC on April 14, 2022. The results for the three months ended March 31, 2022, are not necessarily indicative of the results to be expected for the year ending December 31, 2022. The Company 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., an Indiana corporation wholly owned by MSM; 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”). Excel subsequently changed its name to Excel Construction Services, LLC. 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 International, 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; •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 Basis of presentation The accompanying consolidated financial statements present the balance sheets, statements of operations, stockholders' deficit and cash flows of the Company. The financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Liquidity 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 an operating loss for the quarter ended March 31, 2022, of $3.6 million, this was an improvement over the previous quarter ended December 31, 2021 and the same quarter last year ended March 31, 2021, during which the Company had an operating loss of $12.4 million and $5.1 million, respectively. While the Company had a negative cash flow used in operation of $5.9 million for the quarter ended March 31, 2022, it was an improvement over the same quarter last year when the Company had a negative cash flow used in operations of $9.0 million. As of March 31, 2022, the Company has positive working capital of approximately $15.1 million, which was an increase of $1.1 million compared to December 31, 2021. The Company has secured bank financing totaling $ 23 million in lines of credit of which approximately $1.5 million was unused at March 31, 2022. As of the date of the Report, the Company had approximately $2.5 million in cash. 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 may raise funds through debt financing, securing additional lines of credit, and the sale of shares through its planned at-the-market offering. Based on management’s plans to improve cash flows as disclosed above 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.
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of March 31, 2022, and December 31, 2021. Significant intercompany balances and transactions have been eliminated. Use of estimates The consolidated financial statements are prepared in accordance with 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. Our operations and performance may depend on global, regional, economic and geopolitical conditions. Russia’s invasion and military attacks on Ukraine have triggered significant sanctions from North American and European leaders. These events are currently escalating and creating increasingly volatile global economic conditions. Resulting changes in North American trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a “trade war.” A trade war could result in increased costs for raw materials that we use in our manufacturing and could otherwise limit our ability to sell our products abroad. These increased costs would have a negative effect on our financial condition and profitability. Furthermore, the military conflict between Russia and Ukraine may increase the likelihood of supply interruptions and further hinder our ability to find the materials we need to make our products. If the conflict between Russia and Ukraine continues for a long period of time, or if other countries become further involved in the conflict, we could face significant adverse effects to our business and financial condition. 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. Reclassification 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. Cash Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. As of March 31, 2022, and December 31, 2021, the Company had no cash equivalents. Major Customers The Company had one customer, W.W. Grainger Inc., that made up 13% of accounts receivable as of March 31, 2022. The Company had no customer that made up over 10% of accounts receivable as of December 31, 2021. For the three months ended March 31, 2022, the Company had one customer, W.W. Grainger Inc., that made up 13% of total revenues. For the three months ended March 31, 2021, the Company had two customers, Rivian Automotive, Inc. and Lighthouse Worldwide Solutions, that made up 15% and 10% of total revenues, respectively. For the three months ended March 31, 2022, the Company had 11% of total revenues made up of prime contractors. Major Customer by Segment Manufacturing As of as of March 31, 2022, and December 31, 2021, the manufacturing segment had two customers, Rivian Automotive, Inc. and Lighthouse Worldwide Solutions, that made up 28% and 25%, respectively, and 31% and 20%, respectively, of accounts receivable. For the three months ended March 31, 2022, the manufacturing segment had two customers, Rivian Automotive, Inc. and Lighthouse Worldwide Solutions, that made up 23% and 13%, respectively, of total manufacturing revenues. For the three months ended March 31, 2021, the manufacturing segment had two customers, Rivian Automotive, Inc. and Lighthouse Worldwide Solutions, that made up 34% and 23%, respectively, of total manufacturing revenues. Construction As of March 31, 2022, the construction segment had one customer, A. Hattersley & Sons, Inc., that made up 24% of accounts receivable. As of December 31, 2021, the construction segment had two customers, A. Hattersley & Sons, Inc. and Shambaugh & Sons L.P., that made up 25% and 17%, respectively, of accounts receivable. For the three months ended March 31, 2022, the construction segment had one customer, A. Hattersley & Sons, Inc., that made up 19% of total construction revenues. For the three months ended March 31, 2021, the construction segment had one customer, A. Hattersley & Sons, Inc., that made up 11% of total construction revenues. Defense Of the defense segment, 100% of accounts receivables and defense revenues were related to prime contractors. Technologies In the technologies segment, the Company had one customer, W.W. Grainger Inc., that made up 39% of accounts receivable as of March 31, 2022, and two customers, Direct Supply Inc. and W.W. Grainger Inc., that made up 14% and 30%, respectively, of accounts receivable as of December 31, 2021. For the three months ended March 31, 2022, the technology segment had one customer, W.W. Grainger Inc., that made up 33% of their total revenues. Aerospace As of December 31, 2021, the aerospace segment had one customer, Branch Civil, Inc., that made up 57% of accounts receivable. For the three months ended March 31, 2022, the aerospace segment had no customer that made up over 10% of total aerospace revenues. Fair value measurements 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 March 31, 2022, and December 31, 2021, the Company had no financial assets or liabilities that were required to be fair valued on a recurring basis. Research and Development The Company focuses on quality control and development of new products and the improvement of existing products. All cost related to research and development activities are expensed as incurred. During the three months ended March 31, 2022 and 2021, research and development cost totaled $191,930 and $253,971, respectively. Earnings (loss) per shares The Company presents both basic and diluted net income (loss) per share on the face of the consolidated statements of operations. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted per share calculations give effect to all potentially dilutive shares of common stock outstanding during the period, including stock options and warrants, and using the treasury-stock method. If antidilutive, the effect of potentially dilutive shares of common stock is ignored. The only potentially dilutive securities outstanding during the periods presented were the convertible debt, options and warrants. The following table illustrates the computation of basic and diluted earnings per share (“EPS”) for the three months ended March 31, 2022 and 2021:
Revenue Recognition 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: –executed contract with the Company's customers that it believes are legally enforceable; –identification of performance obligations in the respective contract; –determination of the transaction price for each performance obligation in the respective contract; –allocation of the transaction price to each performance obligation; and –recognition of revenue only when the Company satisfies each performance obligation. The following table presents our revenues disaggregated by type for the three months ended March 31, 2022:
The following table presents our revenues disaggregated by type for the three months ended March 31, 2021:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LeasesThe 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 March 31, 2022, the future minimum finance and operating lease payments were as follows:
Operating Leases The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheets as of March 31, 2022, and December 31, 2021:
The lease expense for the three months ended March 31, 2022, was $126,561. The cash paid under operating leases during the three months ended March 31, 2022, was $124,654. At March 31, 2022, the weighted average remaining lease terms were 2.96 years and the weighted average discount rate was 3.15%.
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Leases | LeasesThe 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 March 31, 2022, the future minimum finance and operating lease payments were as follows:
Operating Leases The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheets as of March 31, 2022, and December 31, 2021:
The lease expense for the three months ended March 31, 2022, was $126,561. The cash paid under operating leases during the three months ended March 31, 2022, was $124,654. At March 31, 2022, the weighted average remaining lease terms were 2.96 years and the weighted average discount rate was 3.15%.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The outstanding balances for the loans as of March 31, 2022, and December 31, 2021, were as follows:
Future scheduled maturities of outstanding debt are as follows:
In August 2020, the Company filed a lawsuit against Alan Martin regarding his note payable (See Note 8). As of March 31, 2022, the note had a balance of $2,857,500 and accrued interest of $1,248,779 which is reflective in the current liabilities. During 2022, the Company had four revolving lines of credit totaling in the aggregate $23.5 million including one capital expenditures line of credit totaling $0.5 million. The revolving lines of credit used as of March 31, 2022, totaled $13.9 million with an interest rate ranging from prime plus 2.50% - 4.25% and a term of -two years. As of March 31, 2022, the Company had $1.5 million in additional funds available to borrow. The Company is required to maintain covenants including financial ratios as a condition of the line of credit agreements. We are in compliance with these covenants. In April 2022, the Company had three notes payable due to the seller of Morris that matured. As of the date of this report the notes carry a balance of $2,280,177. This balance is expected to be paid off by June 2022.
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Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Common Stock The Company had the following transactions in its common stock during the three months ended March 31, 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 of Series D Preferred Stock. •In March 2022, the Company issued 39,386 shares of Class A common stock for services with a value of $99,252. •On January 13, 2022 the Company amended the Corporation's Amended and Restated Certificate of Incorporation increasing the authorized capital stock from 195,000,000 to 295,000,000. Stock Options The following summarizes the stock option activity for the three months ended March 31, 2022:
The following table summarizes information about options outstanding and exercisable as of March 31, 2022:
During the three months ended March 31, 2022 and 2021, stock option expense amounted to $1,026 and $19,341, respectively. Unrecognized stock option expense as of March 31, 2022, amounted to $6,184, which will be recognized over a period extending through December 2022. Warrants The following summarizes the warrants activity for the three months ended March 31, 2022:
The following table summarizes information about warrants outstanding and exercisable as of March 31, 2022:
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, were exercisable as of December 9, 2021, and expire December 9, 2024. The fair value of the 416,667, the 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:
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Business Combinations |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Business Combinations DTI Services (doing business as RCA Commercial Electronics) ("RCA") 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 accounting is not yet complete and the amounts assigned to assets acquired and liabilities assumed are provisional. Therefore, this may result in future adjustment to the provisional amounts as new information is obtained about facts and circumstances that existed at the acquisition date. A summary of the purchase price allocation at fair value is presented below:
The purchase price was paid as follows:
The following are the unaudited pro forma results of operations for the three months ended March 31, 2022 and 2021, as if Vayu, TDI, Alt Labs, Identified Technologies, ElecJet, and RCA had been acquired on January 1, 2021. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do not 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.
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting The Company discloses segment information that is consistent with the way in which management operates and views its business. Effective during the quarter ended March 31, 2022, the Company has reduced its reportable segments to five operating segments as represented by the Company’s five silo companies: A4 Construction Services, Inc.; A4 Manufacturing, Inc.; A4 Technologies, Inc.; A4 Aerospace Corporation; and A4 Defense Systems, Inc. The Company’s reportable segments for the three months ended March 31, 2022, and March 31, 2021, and as of March 31, 2022, and December 31, 2021, were as follows:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | 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, S.A., as licensor and expires December 31, 2024. DTI agreed to pay a royalty fee of 2.5% on net sales of the licensed products with a minimum annual payment of $420,000 for the years ended 2020 and 2021, $440,000 for the year ended 2022, $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, for whom services will be provided through 2030. In exchange for these services, DTI receives annual payments as follows: Years Ending March 31,
Royalty Agreement On November 28, 2021, the Company entered into a Royalty Agreement with the sellers of ElecJet. In the Royalty Agreement, the Company noted that upon closing of the merger with ElecJet, the Company desired to build its initial factory (“Factory”) to manufacture batteries in the United States. The Company agreed 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. 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 Capital and Grizzly Research LLC filed motions to dismiss for lack of jurisdiction. The Court has denied Fin Capital’s motion to dismiss and accepted Grizzly Research motion, however the Court granted the Company until May 12th to file a modification of its complaint order. The Company has filed its response and anticipates the Court to move to dismiss Grizzly Research’s motion to dismiss but the date of such dismissal is unknown as of the date of this report. In August of 2021 Rob Porter filed a lawsuit in the District Court of Oklahoma Country State of Oklahoma CJ-2021-3421 alleging Unjust Enrichment and Breach of Contract for Class B Shares. In October 2021 the Company responded with its answer denying such claims. In October 2021 the Company also filed a counter claims against Mr. Porter for conversion and breach of fiduciary duties. The Company believes this is a frivolous lawsuit. In October 2021 the Company received three complaints in the District Court of Oklahoma Country State of Oklahoma from former VWES employees Bruce Morse CJ-2021-4316, Brian Hobbs CJ-2021-4315, Thomas Karraker CJ-2021-4314 for Unjust Enrichment, and Breach of Contract. On January 19, 2022, the Company filed a response that denied these claims and believes these are frivolous lawsuits.
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn April 29, 2022, the Company issued 171,850 shares of Class A at a value of $132,325 as employee compensation. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of March 31, 2022, and December 31, 2021. Significant intercompany balances and transactions have been eliminated.
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Use of estimates | Use of estimates The consolidated financial statements are prepared in accordance with 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. Our operations and performance may depend on global, regional, economic and geopolitical conditions. Russia’s invasion and military attacks on Ukraine have triggered significant sanctions from North American and European leaders. These events are currently escalating and creating increasingly volatile global economic conditions. Resulting changes in North American trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a “trade war.” A trade war could result in increased costs for raw materials that we use in our manufacturing and could otherwise limit our ability to sell our products abroad. These increased costs would have a negative effect on our financial condition and profitability. Furthermore, the military conflict between Russia and Ukraine may increase the likelihood of supply interruptions and further hinder our ability to find the materials we need to make our products. If the conflict between Russia and Ukraine continues for a long period of time, or if other countries become further involved in the conflict, we could face significant adverse effects to our business and financial condition. 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.
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Cash | Cash Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. |
Major customers | Major Customers The Company had one customer, W.W. Grainger Inc., that made up 13% of accounts receivable as of March 31, 2022. The Company had no customer that made up over 10% of accounts receivable as of December 31, 2021. For the three months ended March 31, 2022, the Company had one customer, W.W. Grainger Inc., that made up 13% of total revenues. For the three months ended March 31, 2021, the Company had two customers, Rivian Automotive, Inc. and Lighthouse Worldwide Solutions, that made up 15% and 10% of total revenues, respectively. For the three months ended March 31, 2022, the Company had 11% of total revenues made up of prime contractors. Major Customer by Segment Manufacturing As of as of March 31, 2022, and December 31, 2021, the manufacturing segment had two customers, Rivian Automotive, Inc. and Lighthouse Worldwide Solutions, that made up 28% and 25%, respectively, and 31% and 20%, respectively, of accounts receivable. For the three months ended March 31, 2022, the manufacturing segment had two customers, Rivian Automotive, Inc. and Lighthouse Worldwide Solutions, that made up 23% and 13%, respectively, of total manufacturing revenues. For the three months ended March 31, 2021, the manufacturing segment had two customers, Rivian Automotive, Inc. and Lighthouse Worldwide Solutions, that made up 34% and 23%, respectively, of total manufacturing revenues. Construction As of March 31, 2022, the construction segment had one customer, A. Hattersley & Sons, Inc., that made up 24% of accounts receivable. As of December 31, 2021, the construction segment had two customers, A. Hattersley & Sons, Inc. and Shambaugh & Sons L.P., that made up 25% and 17%, respectively, of accounts receivable. For the three months ended March 31, 2022, the construction segment had one customer, A. Hattersley & Sons, Inc., that made up 19% of total construction revenues. For the three months ended March 31, 2021, the construction segment had one customer, A. Hattersley & Sons, Inc., that made up 11% of total construction revenues. Defense Of the defense segment, 100% of accounts receivables and defense revenues were related to prime contractors. Technologies In the technologies segment, the Company had one customer, W.W. Grainger Inc., that made up 39% of accounts receivable as of March 31, 2022, and two customers, Direct Supply Inc. and W.W. Grainger Inc., that made up 14% and 30%, respectively, of accounts receivable as of December 31, 2021. For the three months ended March 31, 2022, the technology segment had one customer, W.W. Grainger Inc., that made up 33% of their total revenues. Aerospace As of December 31, 2021, the aerospace segment had one customer, Branch Civil, Inc., that made up 57% of accounts receivable. For the three months ended March 31, 2022, the aerospace segment had no customer that made up over 10% of total aerospace revenues.
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Fair value measurements | Fair value measurements 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 March 31, 2022, and December 31, 2021, the Company had no financial assets or liabilities that were required to be fair valued on a recurring basis.
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Research and development | Research and DevelopmentThe Company focuses on quality control and development of new products and the improvement of existing products. All cost related to research and development activities are expensed as incurred. |
Earnings (loss) per shares | Earnings (loss) per sharesThe Company presents both basic and diluted net income (loss) per share on the face of the consolidated statements of operations. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted per share calculations give effect to all potentially dilutive shares of common stock outstanding during the period, including stock options and warrants, and using the treasury-stock method. If antidilutive, the effect of potentially dilutive shares of common stock is ignored. The only potentially dilutive securities outstanding during the periods presented were the convertible debt, options and warrants. |
Revenue Recognition | 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: –executed contract with the Company's customers that it believes are legally enforceable; –identification of performance obligations in the respective contract; –determination of the transaction price for each performance obligation in the respective contract; –allocation of the transaction price to each performance obligation; and –recognition of revenue only when the Company satisfies each performance obligation.
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Basis of Accounting, Policy | The accompanying consolidated financial statements present the balance sheets, statements of operations, stockholders' deficit and cash flows of the Company. The financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). |
Summary of Significant Accounting Policies (Tables) |
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Schedule of Computation of Basic and Diluted EPS | The following table illustrates the computation of basic and diluted earnings per share (“EPS”) for the three months ended March 31, 2022 and 2021:
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Disaggregation of Revenue | The following table presents our revenues disaggregated by type for the three months ended March 31, 2022:
The following table presents our revenues disaggregated by type for the three months ended March 31, 2021:
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance Lease, Liability, Fiscal Year Maturity | As of March 31, 2022, the future minimum finance and operating lease payments were as follows:
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Lessee, Operating Lease, Liability, Maturity | As of March 31, 2022, the future minimum finance and operating lease payments were as follows:
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Assets And Liabilities, Lessee | The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheets as of March 31, 2022, and December 31, 2021:
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notes Payable | The outstanding balances for the loans as of March 31, 2022, and December 31, 2021, were as follows:
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Schedule of Maturities of Long-term Debt | Future scheduled maturities of outstanding debt are as follows:
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Stockholders' Equity (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Option, Activity | The following summarizes the stock option activity for the three months ended March 31, 2022:
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Share-based Payment Arrangement, Option, Exercise Price Range | The following table summarizes information about options outstanding and exercisable as of March 31, 2022:
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Schedule of Stockholders' Equity Note, Warrants or Rights | The following summarizes the warrants activity for the three months ended March 31, 2022:
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Schedule of Warrants Outstanding and Exercisable | The following table summarizes information about warrants outstanding and exercisable as of March 31, 2022:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of the 416,667, the 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:
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Business Combinations (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | A summary of the purchase price allocation at fair value is presented below:
The purchase price was paid as follows:
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Business and Asset Acquisition, Pro Forma Information | The following are the unaudited pro forma results of operations for the three months ended March 31, 2022 and 2021, as if Vayu, TDI, Alt Labs, Identified Technologies, ElecJet, and RCA had been acquired on January 1, 2021. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do not 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.
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Segment Reporting (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The Company’s reportable segments for the three months ended March 31, 2022, and March 31, 2021, and as of March 31, 2022, and December 31, 2021, were as follows:
|
Commitment and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Annual Payments for Warranty Services | In exchange for these services, DTI receives annual payments as follows:Years Ending March 31,
|
Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash and Restricted Cash (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accounting Policies [Abstract] | ||
Cash equivalents | $ 0 | $ 0 |
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Accounting Policies [Abstract] | ||
Research and development | $ 191,930 | $ 253,971 |
Summary of Significant Accounting Policies - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Accounting Policies [Abstract] | ||
Net loss | $ (4,175,953) | $ (6,129,468) |
Basic (in shares) | 183,032,447 | 154,616,490 |
Basic loss per share (in dollars per share) | $ (0.02) | $ (0.04) |
Stock options and warrants (in shares) | $ 0 | $ 0 |
Net loss plus assumed conversions, diluted EPS | $ (4,175,953) | $ (6,129,468) |
Diluted (in shares) | 183,032,447 | 154,616,490 |
Diluted loss per share (in dollars per share) | $ (0.02) | $ (0.04) |
Leases - Schedule of Future Minimum Lease Payments for Capital Leases (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Finance Leases | ||
2023 | $ 1,913,037 | |
2024 | 1,931,586 | |
2025 | 1,962,256 | |
2026 | 1,851,918 | |
2027 | 1,880,265 | |
Thereafter | 16,292,620 | |
Total payments | 25,831,682 | |
Less: imputed interest | (10,020,457) | |
Total obligation | 15,811,225 | |
Less: current portion | (670,619) | $ (649,343) |
Non-current financing leases obligations | 15,140,606 | 15,319,467 |
Liabilities | ||
2023 | 507,765 | |
2024 | 519,298 | |
2025 | 494,972 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total payments | 1,522,035 | |
Less: imputed interest | (130,252) | |
Total obligation | 1,391,783 | 1,495,158 |
Less: current portion | (437,490) | (428,596) |
Non-current financing leases obligations | $ 954,293 | $ 1,066,562 |
Leases - Schedule of Right of Use Assets and Lease Liabilities (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Assets | ||
Operating lease assets | $ 1,354,925 | $ 1,460,206 |
Liabilities | ||
Current Operating lease liability | 437,490 | 428,596 |
Non-current Operating lease liability | 954,293 | 1,066,562 |
Total obligation | $ 1,391,783 | $ 1,495,158 |
Leases - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Lessee, Lease, Description [Line Items] | |
Lease expense | $ 126,561 |
Cash paid under operating leases during period | $ 124,654 |
Operating lease, weighted average remaining lease term | 2 years 11 months 15 days |
Operating lease, weighted average discount rate (as a percent) | 3.15% |
Debt - Schedule of Outstanding Balances (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Total current | $ 9,124,406 | $ 10,164,013 |
Total | 28,019,303 | 24,230,169 |
Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total current | 3,590,862 | 4,473,489 |
Long-term debt | 10,339,420 | 5,640,051 |
Secured Debt and Notes Payable | ||
Debt Instrument [Line Items] | ||
Long-term debt | 8,555,477 | 8,426,105 |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Total current | 86,173 | 61,640 |
Notes Payable | ||
Debt Instrument [Line Items] | ||
Total current | $ 5,447,371 | $ 5,628,884 |
Debt - Future Scheduled Maturities (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Disclosure [Abstract] | ||
2023 | $ 9,124,406 | |
2024 | 10,674,063 | |
2025 | 2,407,852 | |
2026 | 359,791 | |
2027 | 370,582 | |
Thereafter | 5,082,609 | |
Total | $ 28,019,303 | $ 24,230,169 |
Stockholders' Equity - Valuation Assumptions (Details) - Warrant |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate (as a percent) | 0.01% |
Risk-free interest rate (as a percent) | 1.02% |
Expected dividend yield (as a percent) | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock price (in dollars per share) | $ 2.51 |
Expected life of the options | 2 years |
Expected volatility (as a percent) | 159.00% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock price (in dollars per share) | $ 7.03 |
Expected life of the options | 5 years |
Expected volatility (as a percent) | 347.00% |
Business Combinations - Schedule of Pro Forma Information (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Business Combination and Asset Acquisition [Abstract] | ||
Sales | $ 25,592,154 | $ 24,481,464 |
Cost of goods sold | 19,954,697 | 17,791,716 |
Gross profit | 5,637,457 | 6,689,748 |
Operating expenses | 9,237,168 | 8,815,016 |
Loss from operations | (3,599,711) | (2,125,268) |
Net loss from continuing operations | $ (4,175,953) | $ (2,560,359) |
Basic Earnings Per Share, Pro Forma | $ (0.02) | $ (0.02) |
Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands |
Nov. 28, 2021 |
Mar. 31, 2022 |
---|---|---|
Licensing Agreement | ||
Other Commitments [Line Items] | ||
Royalty fee (as a percent) | 2.50% | |
Minimum annual payment, year one | $ 420 | |
Minimum annual payment, year two | 420 | |
Minimum annual payment, year three | 440 | |
Minimum annual payment, year four | 460 | |
Minimum annual payment, year five | $ 480 | |
Royalty Agreements | ||
Other Commitments [Line Items] | ||
Payment as a percentage of net sales | 1.50% | |
Royalty agreement, term | 10 years | |
Total royalty payment | $ 50,000 |
Commitment and Contingencies - Annual Payments For Warranty Services (Details) |
Mar. 31, 2022
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 66,626 |
2024 | 59,964 |
Total | $ 126,590 |
Subsequent Events (Details) - Subsequent Event - Management |
Apr. 29, 2022
USD ($)
shares
|
---|---|
Subsequent Event [Line Items] | |
Stock issued (in shares) | shares | 171,850 |
Value of stock issued | $ | $ 132,325 |
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