Pharma & Biotech
Pharma & Biotech
07:00 Fri 02 Jul 2021
The Phoenix, Arizona-based group company acquires businesses that fit into what it considers a “disruptive DSF” business model: Drivers, Stabilizers and Facilitators
Price: 2.26 USD
Alpine 4 Technologies Ltd (OTCQB:ALPP) is a diversified technology holding company that has continued making acquisitions after starting 2021 with a powerful portfolio.
The Phoenix, Arizona-based group company acquires businesses that fit into what it considers a “disruptive DSF” business model: Drivers, Stabilizers and Facilitators.
Drivers are companies that Alpine 4 believes are on the cusp of growth, with huge upside potential for market share and revenue generation, for example, its subsidiary ALTIA, which operates in a $9 billion market space. Stabilizers are companies that have sticky customers, consistent revenue, and provide solid net profit returns, while Facilitators such as its subsidiary Quality Circuit Assembly are companies that have synergistic relevance to the first two categories.
More specifically, the company is interested in how the adaptation of new technologies – even in brick and mortar businesses – can drive innovation, a unique perspective that has culminated in the development of the company’s Blockchain-enabled Enterprise Business Operating System called SPECTRUMebos.
Alpine 4’s overall acquisition strategy focuses on existing smaller, middle-market operating companies with revenues of $5 million to $50 million, and each business retains its own leadership with help from the holding company.
CEO Kent Wilson has led the company since 2014 and is backed by a strong team of executives with vast experience in operations and finance.
After starting 2021 with nine companies in its portfolio, the firm has stuck to its commitment to continue growing.
In a first-quarter 2021 letter to shareholders, published on May 18, Alpine 4 CEO Kent Wilson told shareholders and employees that the company had changed direction to become a dominant player in several indices.
Its shift began when it submitted, in January, a $170 million S3 shelf registration statement with the US Securities and Exchange Commission (SEC) – usually reserved for companies with a much larger operating footprint and for companies typically listed on the NASDAQ or NYSE. Alpine 4 met the S3 requirements and its S3 went effective with no review by the SEC.
Wilson noted that Alpine 4 became a much stronger and more focused company in the three months ended March 31, 2021. It raised $54 million in cash with five institutional investment groups, paid down over $14 million in debt, and added another piece to its very important aerospace holdings with the addition of Vayu US Inc, which builds high-performance vertical take-off and landing (VTOL) hybrid propulsion-based, autonomous aircraft.
That followed the November 2020 acquisition of electric-aircraft maker Impossible Aerospace, which builds high-performance electric aircraft and drones and has big name clients like the US Air Force. Described by Wilson as a “unicorn” Driver company, Impossible Aerospace boasts patented or patentable IP, leading-edge technology, well-funded development behind its IP, and a market space of $5 billion or larger. Both companies plan to build the nation’s most vertically integrated UAV manufacturer.
On June 30, Alpine 4 announced that Impossible Aerospace Corporation and Vayu (US) plan to merge to become Vayu Aerospace Corporation Inc. Vayu Aerospace will be located in Ann Arbor, Michigan at the current Vayu facility. The merger is expected to be completed by October 1, 2021, the company said. Alpine 4 initially acquired Impossible Aerospace in the fourth quarter of 2020.
The company noted that Quality Circuit Assembly Inc, another of Alpine 4’s subsidiaries, will still manufacture and assemble the components for the company’s planned US-1 airframe and will also be adding many new components to its G1 and G2 airframes as well.
Earlier in June, Alpine 4 announced that its A4 Defense Systems (A4DS) holding subsidiary agreed to acquire Thermal Dynamics International, Inc (TDII), an engineering, fabricator, and project management services company based out of Fort Myers, Florida. TDII’s primary client is the US Federal Government, including the Department of Defense and Department of State. While TDII is a non-aerospace acquisition, Alpine 4 said it put it firmly in bed with the US Federal Government.
The company has also entered the Nutraceutical and CBD manufacturing industry with the acquisition of Southwest Florida-based Alternative Labs. The company specializes in the manufacturing and packaging of liquids, powders, tablets, capsules, and other unique nutritional and CBD products for various international wholesalers and retail entities
Financially, Alpine 4 felt the negative impact of the coronavirus (COVID-19) pandemic, particularly on its Deluxe Sheet Metals (DLX) customer educational customer base. Corrective action was taken, the company said, which is expected to bear fruit in 3Q 2021.
The company still generated $8.7 million in revenue for the first quarter of 2021 compared to $8.8 million in 1Q 2020, although gross profit was down 57% from a year earlier, primarily driven by its A4 Construction Services holding subsidiary and losses at DLX.
Alpine 4 said it expects the second quarter to bring increased margins and a reduction in costs from consolidation. With the addition of Thermal Dynamics International and Alternative Labs, and CEO Wilson noted that the company is “racing towards net profitability.”
“Alpine 4 is in continued conversation with the NASDAQ,” the company’s CEO Kent Wilson said in his letter to shareholders in May 2021.
“We consistently offer them expeditious answers to their comments and are enthusiastic for the completion of their work. In the meantime, we continue to execute on our DSF business model and grow shareholder value through the strengthening of our fundamentals.”
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