10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2018
[   ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _______ to __________

Commission file number:  000-55205

Alpine 4 Technologies Ltd.

(Exact name of registrant as specified in its charter)

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

Registrant’s telephone number, including area code: 855-777-0077 ext 801

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

Securities Registered pursuant to Section 12(b) of the Act: None

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐  No⌧

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

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

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

Indicate by check mark if disclosure of delinquent filings pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ◻       No ⌧

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.  As of June 30, 2018, the aggregate market value of the voting and non-voting common equity held by non-affiliates, computed based on the average bid and asked price of the Class A common stock, was $2,257,363.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:  As of March 31, 2019, the issuer had 26,567,410 shares of its Class A common stock issued and outstanding and 5,000,000 shares of its Class B common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

ALPINE 4 TECHNOLOGIES LTD.

FISCAL YEAR ENDED DECEMBER 31, 2016

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

PART I		Page
ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	9
ITEM 1B.	UNRESOLVED STAFF COMMENTS	15
ITEM 2.	PROPERTIES	15
ITEM 3.	LEGAL PROCEEDINGS	15
ITEM 4.	MINE SAFETY DISCLOSURES	16
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	16
ITEM 6.	SELECTED FINANCIAL DATA	20
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	24
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	24
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES	24
ITEM 9A.	CONTROLS AND PROCEDURES	24
ITEM 9B.	OTHER INFORMATION	25
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	26
ITEM 11.	EXECUTIVE COMPENSATION	28
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	28
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	30
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	30
PART IV
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	30
SIGNATURES		60

2

PART I

Special Note Regarding Forward-Looking Statements

Information included or incorporated by reference in this Annual Report on Form 10-K contains forward-looking statements. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Forward-looking statements may contain the words "believes," "project," "expects," "anticipates," "estimates," "forecasts," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions, and are subject to numerous known and unknown risks and uncertainties. Additionally, statements relating to implementation of business strategy, future financial performance, acquisition strategies, capital raising transactions, performance of contractual obligations, and similar statements may contain forward-looking statements. In evaluating such statements, prospective investors and shareholders should carefully review various risks and uncertainties identified in this Report, including the matters set forth under the captions "Risk Factors" and in the Company's other SEC filings. These risks and uncertainties could cause the Company's actual results to differ materially from those indicated in the forward-looking statements. The Company disclaims any obligation to update or publicly announce revisions to any forward-looking statements to reflect future events or developments.

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

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

ITEM 1.   BUSINESS.

Our Business

Company Background and History

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

3

Who We Are

Alpine 4 is a publicly held enterprise with four principles at the core of its business: Synergy, Innovation, Drive, and Excellence (S.I.D.E.).  At Alpine 4, we believe synergistic innovation drives excellence. By anchoring these words to our combined experience and capabilities, we are able to aggressively pursue opportunities within and across vertical markets. We deliver solutions that not only drive industry standards, but also increase value for our shareholders.

Driver, Stabilizer, Facilitator (DSF)

At the heart of our acquisition model is our focus on what we call DSF, which stands for Driver, Stabilizer, Facilitator.

Driver are companies that are in emerging markets or technologies, have large upside potential for revenue and profits, and a large market opportunity to access.  These types of acquisitions are typically small, brand new companies that need structure that can support their growth.

Stabilizers are companies that have returning or “sticky” customers and consistent revenue, and that can provide solid net profit returns to Alpine 4.

Facilitators are our “secret sauce.”  We believe that our greatest competitive advantage is our highly diversified business structure combined with a collaborative business culture that helps drive out competition in our markets by bringing resources, planning, technology and capacity that our competitors do not have.

The following diagram shows how we view our various subsidiaries as drivers, facilitators, and stabilizers:

At Alpine 4, we understand how technology and innovation can accentuate a business. We strive to develop strategic synergies between our holdings to create value and operational excellence within a unique long-term perspective.

4

Our Strategy

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

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

• Alpine 4 Mini MBA program; and

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

Diversification

It is our goal to help drive Alpine 4 into a leading, multi-faceted holding company with diverse products and services that not only benefit from one another as whole but also have the benefit of independence.  This type of corporate structure is about having our subsidiaries prosper through strong onsite leadership, while working synergistically with other Alpine 4 holdings.   Alpine 4 has been set up with a holding company model, with Presidents who will run each subsidiary business, and Managers with specific industry related experience who, along with Kent Wilson, the CEO of Alpine 4, will help guide our portfolio of companies as needed.  Alpine 4 will work with our Presidents and Managers to ensure that our core principles of Synergy, Innovation, Drive, Excellence are implemented and internalized.  Further, we plan to work with our subsidiaries and capital partners to provide the proper capital allocation and to work to make sure each business is executing at high levels. 

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

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

Effective, January 1, 2017, Alpine 4 acquired 100% of Venture West Energy Services (“VWES”) (formerly Horizon Well Testing, LLC). Additional information about the acquisition of VWES can be found below under “Recent Developments” and in our Current Reports on Form 8-K filed with the SEC on December 8, 2016, and January 13, 2017.  Due to many different circumstances but primarily from the effects of the theft event that occurred in April 2017 on December 31, 2018, we discontinued operations on this company and will begin the liquidation of the VWES assets.  In February 2019, VWES filed for Chapter 7 bankruptcy.

In April 2018, Alpine 4 acquired 100% of American Precision Fabricators (APF) Additional information relating to our acquisition of APF can be found in our Current Report on Form 8-K, filed with the SEC on April 10^th 2018.

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

5

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

Subsidiaries & Product Groups

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

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

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

• BrakeActive™ is a safety device that can improve a vehicle’s third brake light’s ability to greatly reduce or prevent a rear end collision by as much as 40%. According to a National Highway Traffic Safety Administration report issued in 2010, rear end collisions could be reduced by 90% if trailing vehicles had one additional second to react. The Company’s new programmable technology and device aims to provide this additional reaction time to trailing vehicles.

• Quality Circuit Assembly (“QCA”) - Since 1988, QCA has been providing electronic contract manufacturing solutions delivered to its customers via strategic business partnerships. Our abilities encompass a wide variety of skills, beginning with prototype development and culminating in the ongoing manufacturing of a complete product or assembly. Turnkey solutions are tailored around each customer's specific requirements.  Conveniently located in San Jose, California, with close proximity to San Jose airport and all major carriers, QCA’s primary aim is to provide contract-manufacturing solutions to market leading companies within the industrial, scientific, instrumentation, military, medical and green industries.

• American Precision Fabricators (“APF”) – Based in Fort Smith, Arkansas, APF is a sheet metal fabricator that provides American made fabricated metal parts, assemblies and sub-assemblies to Original Equipment Manufacturers (“OEM”). The Company supplies several industries with fabricated parts that it creates in-house.  It offers several production capabilities with its state-of-the-art machinery.

• Morris Sheet Metal (“MSM”) – Based in Fort Wayne, Indiana, MSM is a commercial sheet metal contractor and fabricator. MSM designs, fabricates, and installs dust collectors, commercial ductwork, kitchen hoods, industrial ventilation systems, machine guards, architectural work, water furnaces, and much more.

• JTD Spiral (“JTD”) -  Based in Fort Wayne, Indiana, JTD is a sister company to MSM and provides specialized spiral duct work to MSM clientele.

Recent Developments

New Acquisitions

On January 9, 2019, Alpine 4 announced that it had entered into a Securities Purchase Agreement (the "SPA") with Morris Sheet Metal Corp., an Indiana corporation ("MSM"), JTD Spiral, Inc. a wholly owned subsidiary of MSM, an Indiana corporation ("JTD Spiral"), Morris Enterprises LLC, an Indiana limited liability company ("Morris Enterprises") and Morris Transportation LLC, an Indiana limited liability company ("Morris Transportation"), and James Morris, Daniel Morris and Timothy Morris (each a "Seller," and collectively, the "Sellers").

The total consideration paid was $6,600,000 (the "Purchase Price"), which is the sum of the Cash Consideration paid at Closing, $3,150,000, and the Promissory Note Consideration, consisting of consist of a Secured Promissory Note to James Morris in the amount of $1,033,333.33 and a Secured Promissory Note to Timothy Morris in the amount of $1,033,333.33 and a Secured Promissory Note to  Daniel Morris in the amount of $1,033,333.33 (the "Primary Notes"), and a Secured Promissory Note to James Morris in the amount of $116,666.66 and a Secured Promissory Note to Timothy Morris in the amount of $116,666.66 and a Secured Promissory Note to  Daniel Morris in the amount of $116,666.66 (the "Supplemental Notes").  Additional information about the acquisitions and the transactions can be found in a Current Report filed by the Company on January 11, 2019.

6

Pursuant to the SPA, on January 1, 2019, Alpine 4 took effective control of MSM and JTD.

• Based in Fort Wayne, Indiana, MSM is commercial sheet metal contractor and fabricator. MSM designs, fabricates, and installs dust collectors, commercial ductwork, kitchen hoods, industrial ventilation systems, machine guards, architectural work, water furnaces, and much more.

• Based in Fort Wayne, Indiana, JTD is a sister company to MSM and provides specialized spiral duct work to MSM clientele.

Convertible Notes

On January 10, 2018, the Company entered into a variable convertible note for $150,000 with net proceeds of $135,000.  The note is due October 1, 2018 and bears interest at 12% per annum.  The note is immediately convertible into shares of Class A common stock at the lesser of $0.16 per share or 60% of the lowest trading price the previous 25 days prior to conversion.  The Company can prepay the note within the first 90 days following January 10, 2018 with a prepayment penalty equal to 145% of the total outstanding balance.  The Company also issued 499,999 shares to the lender with this note.  As of the date of this filing this note has been paid off.

On March 13, 2018, the Company entered into a variable convertible note for $128,000 with net proceeds of $125,000.  The note is due December 30, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 42% of the average of the 2 lowest trading price the previous 10 days prior to conversion.  The Company can prepay the note at a penalty ranging from 15% to 40%. As of the date of this filing this note has been paid off.

On April 3, 2018, the Company entered into a variable convertible note for $85,000 with net proceeds of $79,000.  The note is due January 2, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  In connection with this variable convertible note, the Company issued 386,363 shares of its Class A common stock.  As of the date of this filing this note has been paid off.

On April 5, 2018, the Company entered into convertible promissory notes for an aggregate principal amount of $450,000 as part of the consideration for the acquisition of APF.  The convertible notes are due in full in 36 months and bear interest at 4.25% per annum, and are convertible into shares of Class A common stock after 6 months from the issuance date at a rate of $1 per share.

On April 9, 2018, the Company entered into a variable convertible note for $124,199 with net proceeds of $115,000.  The note is due January 9, 2019 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  In connection with this variable convertible note, the Company issued 76,670 shares of its Class A common stock, along with warrants to purchase 153,340 shares of Class A common stock at an exercise price of $1 per share which are immediately vested and have a 3 years contractual life.  As of the date of this filing this note has been paid off.

On April 9, 2018, the Company entered into a variable convertible note for $37,800 with net proceeds of $35,000.  The note is due January 9, 2019 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.

7

On June 4, 2018, the Company entered into a variable convertible note for $165,000 with net proceeds of $151,500.  The note is due January 21, 2019, as amended, and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.  The Company issued 850,000 shares of Class A common stock to the note holder which are returnable if no event of default has occurred and the note is paid in full within 180 days of the note date.  As of the date of this filing this note has been paid off.

On July 16, 2018, the Company entered into a variable convertible note for $220,000 with net proceeds of $214,000.  The note is due July 16, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. As of the date of this filing this note has been paid off.

On July 18, 2018, the Company entered into a variable convertible note for $88,000 with net proceeds of $88,000.  The note is due April 30, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion. As of the date of this filing this note has been paid off.

On August 30, 2018, the Company entered into a variable convertible note for $337,500 with net proceeds of $303,750.  The note is due February 28, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.

On September 27, 2018, the Company entered into a variable convertible note for $93,000 with net proceeds of $93,000.  The note is due July 15, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.

On October 23, 2018, the Company entered into a variable convertible note for $220,000 with net proceeds of $198,000.  The note is due December 14, 2018 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.  As of December 31, 2018 this note is past due.

On November 12, 2018, the Company entered into a variable convertible note for $670,000 with net proceeds of $636,000.  The note is due November 12, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.

On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200.  The note is due September 7, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion.

Issuance of Options

On July 31, 2017, the Company issued options to purchase 488,500 shares of the Company's Class A common stock to employees and consultants of the Company. The options were issued pursuant to the Company's 2016 Stock Option and Stock Award Plan (the “Plan”).  The options granted vest over four years, and the exercise price of the options granted is $0.13, which was the last closing bid price of the Company's common stock as traded on the OTCQB Market. In addition, during 2018, the Company issued an additional 1,064,000 options to purchase shares of the Company’s Class A common stock at exercise prices ranging from $0.05 to $0.10.

The options were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

8

Employees

As of the date of this Report, we had 156 full-time and 3 part-time employees. We believe that our relationship with our employees is good. Other than as disclosed in this Report or previously filed with the SEC, we have no employment agreements with our employees.

ITEM 1A.   RISK FACTORS

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

Risks Associated With Our Business and Operations

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

Alpine 4 is an "emerging growth company," as defined in the JOBS Act. For as long as we are an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding advisory "say-on-pay" votes on executive compensation and shareholder advisory votes on golden parachute compensation. We will remain an "emerging growth company" until the earliest of (i) the last day of the fiscal year during which we have total annual gross revenues of $1 billion or more; (ii) the last date of the fiscal year following the fifth anniversary of the date of the first sale of common stock under the Company's first filed registration statement; (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; and (iv) the date on which we are deemed to be a "large accelerated filer" under the Exchange Act. We will be deemed a large accelerated filer on the first day of the fiscal year after the market value of our common equity held by non-affiliates exceeds $700 million, measured on October 31.

We cannot predict if investors will find our common stock less attractive to the extent we rely on the exemptions available to emerging growth companies. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

A Company that elects to be treated as an emerging growth company shall continue to be deemed an emerging growth company until the earliest of (i) the last day of the fiscal year during which it had total annual gross revenues of $1,000,000,000 (as indexed for inflation), (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of common stock under the Company's first filed registration statement; (iii) the date on which it has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or (iv) the date on which is deemed to be a 'large accelerated filer' as defined by the SEC, which would generally occur upon it attaining a public float of at least $700 million.

However, we are choosing to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

9

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.

Alpine 4 has incurred net losses of $28,520,094 since inception through December 31, 2018.  This net loss was primarily driven in 2015 by stock issuance to employees and the ceasing of business operations for its subsidiary Venture West Energy Services, LLC.  Because we have yet to attain profitable operations, in their report on our financial statements for the period ended December 31, 2018, our independent auditors included an explanatory paragraph regarding their substantial doubt about our ability to continue as a going concern.  While management believes Alpine 4 will have net operating gains beginning in 2019, there can be no guarantee that we will be able to achieve these net operating gains.  Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, increasing sales or obtaining loan from various financial institutions where possible.  Our net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.  Our financial statements contain additional note disclosures describing the management's assessment of our ability to continue as a going concern.

Management of Alpine 4 cannot guarantee that Alpine 4 will continue to generate revenues which could result in a total loss of the value of your investment if it is unsuccessful in its business plans.

While Alpine 4 and its subsidiaries have long term Purchase Order arrangements with its large Contract Manufacturing customers and Master Service Agreements with its mechanical customers that can provide a level of dependable revenue, there can be no assurance that Alpine 4 will be able to continue to generate revenues or that revenues will be sufficient to maintain its business.  As a result, investors or shareholders could lose all of their investment if Alpine 4 is not successful in its proposed business plans.

Alpine 4's needs could exceed the amount of time or level of experience its officers and directors may have.  Alpine 4 will be dependent on key executives, and the loss of the services of the current officers and directors could severely impact Alpine 4's business operations.  

Alpine 4's business plan does not provide for the hiring of any additional employees other than outlined in its plan of operations until sales will support the expense.  Until that time, the responsibility of developing Alpine 4's business and fulfilling the reporting requirements of a public company will fall upon the officers and the directors.  In the event they are unable to fulfill any aspect of their duties to Alpine 4, it may experience a shortfall or complete lack of sales resulting in little or no profits and eventual closure of our business.

Additionally, the management of future growth will require, among other things, continued development of Alpine 4's financial and management controls and management information systems, stringent control of costs, increased marketing activities, and the ability to attract and retain qualified management, research, and marketing personnel.  The loss of key executives or the failure to hire qualified replacement personnel would compromise Alpine 4's ability to generate revenues or otherwise have a material adverse effect on Alpine 4.  There can be no assurance that Alpine 4 will be able to successfully attract and retain skilled and experienced personnel.

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

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

10

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

In connection with the preparation of this Annual Report, we conducted a review of our internal control over financial reporting for the purpose of providing the management report required by these rules. During the course of our review and testing, we have identified deficiencies and have been unable to remediate them before we were required to provide the required reports. Furthermore, because we have material weaknesses in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. Even if we are able to remediate the material weaknesses, we may not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall. In addition, as a public company we are required to file in a timely manner accurate quarterly and annual reports with the SEC under the Securities Exchange Act of 1934 (the "Exchange Act"), as amended.  Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from the market or trading facility where our shares may trade, or other adverse consequences that would materially harm our business.

Because Alpine 4 has shown a net loss since inception, ownership of Alpine 4 shares is highly risky and could result in a complete loss of the value of your investment if Alpine 4 is unsuccessful in its business plans.

Based upon current plans, Alpine 4 expects to stop incurring operating losses in future periods as its subsidiaries move from their Optimization Phase to its Asset Producing Phase.   However new additional subsidiaries may incur significant expenses associated with the growth of those businesses.  Further, there is no guarantee that it will be successful in realizing future revenues or in achieving or sustaining positive cash flow at any time in the future.  Any such failure could result in the possible closure of its business or force Alpine 4 to seek additional capital through loans or additional sales of its equity securities to continue business operations, which would dilute the value of any shares you receive in connection with the Share Exchange.

Growth and development of operations will depend on the growth in the Alpine 4 acquisition model and from organic growth from its subsidiaries businesses.  If Alpine 4 cannot find desirable acquisition candidates, it may not be able to generate growth with future revenues.

Alpine 4 expects to acquire two additional companies in 2019, which management believes will result in significant growth in projected annualized revenue by the end of 2019.  However, there is no guarantee that it will be successful in realizing future revenue growth from its acquisition model.  As such, Alpine 4 is highly dependent on suitable candidates to acquire which the supply of those candidates cannot be guaranteed and is driven from the market for M&A.  If Alpine 4 is unable to locate or identify suitable acquisition candidates, or to enter into transactions with such candidates, or if Alpine 4 is unable to integrate the acquired businesses, Alpine 4 may not be able to grow its revenues to the extent anticipated, or at all.

Alpine 4 has limited management resources, and will be dependent on key executives.  The loss of the services of the current officers and directors could severely impact Alpine 4's business operations and future development, which could result in a loss of revenues and adversely impact the ability to ever sell any Exchange Shares received through participation in the Share Exchange.

Alpine 4 is relying on a small number of key individuals to implement its business and operations and, in particular, the professional expertise and services of Kent B. Wilson, our President, Chief Executive Officer, and Secretary,  and Charles Winters, our Chairman of the Board of Directors.  Mr. Wilson intends to serve full time in his capacities with Alpine 4 to work to develop and grow the Company. Nevertheless, Alpine 4 may not have sufficient managerial resources to successfully manage the increased business activity envisioned by its business strategy.  In addition, Alpine 4's future success depends in large part on the continued service of Mr. Wilson.  If he chooses not to serve as an officer or if he is unable to perform his duties, this could have an adverse effect on Company business operations, financial condition and operating results if we are unable to replace Mr. Wilson or Mr. Winters with other individuals qualified to develop and market our business.  The loss of their services could result in a loss of revenues, which could result in a reduction of the value of any ownership of Alpine 4.

11

Competition that Alpine 4 faces is varied and strong.

Alpine 4's subsidiaries’ products and industries as a whole are subject to competition.  There is no guarantee that we can sustain our market position or expand our business.  

We compete with a number of entities in providing products to our customers.  Such competitor entities include a variety of large nationwide corporations, including but not limited to public entities and companies that have established loyal customer bases over several decades.

Many of our current and potential competitors are well established and have significantly greater financial and operational resources, and name recognition than we have.  As a result, these competitors may have greater credibility with both existing and potential customers.  They also may be able to offer more competitive products and services and more aggressively promote and sell their products.  Our competitors may also be able to support more aggressive pricing than we will be able to, which could adversely affect sales, cause us to decrease our prices to remain competitive, or otherwise reduce the overall gross profit earned on our products.

Our success in business and operations will depend on general economic conditions.

The success of Alpine 4 and its subsidiaries depends, to a large extent, on certain economic factors that are beyond its control.  Factors such as general economic conditions, levels of unemployment, interest rates, tax rates at all levels of government, competition and other factors beyond Alpine 4's control may have an adverse effect on the ability of our subsidiaries to sell its products, to operate, and to collect sums due and owing to them.

Alpine 4 may not be able to successfully implement its business strategy, which could adversely affect its business, financial condition, results of operations and cash flows.  If Alpine 4 cannot successfully implement its business strategy, it could result in the loss of the value of your investment.

Successful implementation of our business strategy depends on our being able to acquire additional businesses and grow our existing subsidiaries, as well as on factors specific to the industries in which our subsidiaries operate, and the state of the financial industry and numerous other factors that may be beyond our control.  Adverse changes in the following factors could undermine our business strategy and have a material adverse effect on our business, our financial condition, and results of operations and cash flow:

• The competitive environment in the industries in which our subsidiaries operate that may force us to reduce prices below the optimal pricing level or increase promotional spending;

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

• Our ability to establish, maintain and eventually grow market share in these competitive environments.

Our revenue growth rate depends primarily on our ability to satisfy relevant channels and end-customer demands, identify suppliers of our necessary ingredients and to coordinate those suppliers, all subject to many unpredictable factors.

We may not be able to identify and maintain the necessary relationships with suppliers of product and services as planned.  Delays or failures in deliveries could materially and adversely affect our growth strategy and expected results.  As we supply more customers, our rate of expansion relative to the size of such customer base will decline. In addition, one of our biggest challenges is securing an adequate supply of suitable product.  Competition for product is intense, and commodities costs subject to price volatility.

12

Our ability to execute our business plan also depends on other factors, including:

• ability to keep satisfied vendor relationships

• hiring and training qualified personnel in local markets;

• managing marketing and development costs at affordable levels;

• cost and availability of labor;

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

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

Risks Related to Our Common Stock

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

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

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

Under Rule 144 affiliates of Alpine 4 may not sell more than one percent of the total issued and outstanding shares in any 90-day period and must resell the shares in an unsolicited brokerage transaction at the market price. If substantial amounts of our common stock become available for resale under Rule 144 once a market has developed for our common stock, the then-prevailing market prices for our common stock may be reduced.

We may, in the future, issue additional securities, which would reduce our stockholders' percent of ownership and may dilute our share value.

Our Certificate of Incorporation, as amended to date, authorizes us to issue 100,000,000 shares of Class A common stock, and 5,000,000 shares of Class B common stock. As of the date of this Annual Report, we had 28,507,853 shares of Class A common stock outstanding, and 5,000,000 shares of Class B common stock outstanding. Accordingly, we may issue up to an additional 71,492,144 shares of Class A common stock, and may not issue any additional shares of Class B common stock.  The future issuance of additional shares of Class A common stock may result in additional dilution in the percentage of our Class A common stock held by our then existing stockholders. We may value any Class A common stock issued in the future on an arbitrary basis including for services or acquisitions or other corporate actions that may have the effect of diluting the value of the shares held by our stockholders, and might have an adverse effect on any trading market for our Class A common stock.  Additionally, our board of directors may designate the rights terms and preferences of one or more series of preferred stock at its discretion including conversion and voting preferences without prior notice to our stockholders.  Any of these events could have a dilutive effect on the ownership of our shareholders, and the value of shares owned.

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

We may seek additional capital through a combination of private and public equity offerings, debt financings, collaborations, and strategic and licensing arrangements, as well as issuing stock to make additional business or asset acquisitions. To the extent that we raise additional capital through the sale of common stock or securities convertible or exchangeable into common stock or through the issuance of equity for purchases of businesses or assets, your ownership interest in Alpine 4 will be diluted.

13

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

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

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

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

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

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

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

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

• variations in our quarterly operating results;

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

• changes in accounting principles;

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

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

• additions or departures of key personnel;

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

• other risks and uncertainties described in these risk factors.

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

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

14

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

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

Our compliance with the Sarbanes-Oxley Act and SEC rules concerning internal controls may be time consuming, difficult and costly.

Alpine 4's executive officers do not have experience being officers of a public company.   It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by Sarbanes-Oxley.  We may need to hire additional financial reporting, internal controls and other finance staff in order to develop and implement appropriate internal controls and reporting procedures.  If we are unable to comply with Sarbanes-Oxley's internal controls requirements, we may not be able to obtain the independent accountant certifications that Sarbanes-Oxley Act requires publicly-traded companies to obtain.

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

Alpine 4's Board of Directors may issue Preferred Stock with voting and conversion rights that could adversely affect the voting power of the holders of Common Stock.  Any such provision may be deemed to have a potential anti-takeover effect, and the issuance of Preferred Stock in accordance with such provision may delay or prevent a change of control of Alpine 4.  The Board of Directors also may declare a dividend on any outstanding shares of Preferred Stock.  All outstanding shares of Preferred Stock are fully paid and non-assessable.

ITEM 1B.   UNRESOLVED STAFF COMMENTS.

Not applicable to Smaller Reporting Companies.

ITEM 2.  PROPERTIES.

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

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

Venture West Energy Services, LLC rent a property 6504 SW 29th, Bldg B Oklahoma City, OK 73179.  The monthly rent obligation is approximately $4,500 per month.

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

ITEM 3.  LEGAL PROCEEDINGS.

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

15

ITEM 4.  MINE SAFETY DISCLOSURES.

Not applicable.

PART II

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

MARKET PRICES AND DIVIDEND DATA

Stock Prices

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

The following table shows the range of high and low sales price information for our Class A common stock as quoted on the OTC Markets for the calendar years 2017 and 2018 and for the first quarter of 2019.  Our Class A common stock was accepted for trading beginning on December 19, 2016.  The quotations below reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.

Calendar Year

	2019				2018				2017
	High		Low		High		Low		High		Low
First Quarter	$	0.05	$	0.0269	$	0.34	$	0.123	$	14.00	$	2.40
Second Quarter					$	0.20	$	0.050	$	2.54	$	0.12
Third Quarter					$	0.18	$	0.068	$	0.25	$	0.09
Fourth Quarter					$	0.05	$	0.115	$	0.46	$	0.098

The high and low sales prices for our Class A common stock on March 29, 2019, were $0.027  and $0.0269, respectively.  

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

Shareholders

As of March 31, 2019, Alpine 4 had 389 shareholders of record.  This number does not include an indeterminate number of stockholders whose shares are held by brokers in street name. The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of our common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to our common stock.

Dividends

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

Director Independence

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

16

Securities Authorized for Issuance under Equity Compensation Plans

Adoption of 2016 Stock Option and Stock Award Plan

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

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

Equity Compensation Plan Information

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

Recent Sales of Unregistered Securities

Issuances in 2018

Issuance of Convertible Notes

On January 5, 2018, the Company entered into a variable convertible note for $64,000.  The note is due July 5, 2018 and bears interest at 10% per annum.  The note is immediately convertible into the Company’s Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for the ten days prior to conversion.  As of the date of this filing this note has been paid off.

On April 3, 2018, the Company entered into a variable convertible note with an unrelated lender for $85,000.  The note is due January 2, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company’s Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  As of the date of this filing this note has been paid off.

On April 5, 2018, the Company entered into a variable convertible note with an unrelated lender for $128,000.  The note is due December 18, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of the Company’s Class A common stock at a discount of 40% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  As of the date of this filing this note has been paid off.

17

On April 9, 2018, the Company entered into a variable convertible note for $124,199.  The note is due January 9, 2019 and bears interest at 12% per annum.  After 180 days, the note is convertible to the Company’s Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for the ten days prior to conversion.  As of the date of this filing this note has been paid off.

On April 9, 2018, the Company entered into a variable convertible note for $37,800.  The note is due January 9, 2019 and bears interest at 12% per annum.  After 180 days, the note is convertible to the Company’s Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for the ten days prior to conversion.

The convertible notes issued between January and April 2018 were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

Convertible Notes

On October 4, 2017, the Company entered into a convertible note with an unrelated lender for $60,000 with net proceeds of $55,000.  The note is due July 4, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from October 5, 2017.  The prepayment penalty is equal to 20% to 25% of the outstanding note amount depending on when prepaid. As of the date of this filing this note has been paid off.

18

On October 11, 2017, the Company entered into a convertible note with an unrelated lender for $58,500 with net proceeds of $55,500.  The note is due July 20, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible to the Company's Class A common stock at a discount of 38% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from October 11, 2017.  The prepayment penalty is equal to 10% to 27% of the outstanding note amount depending on when prepaid. As of the date of this filing this note has been paid off.

On November 2, 2017, the Company entered into a variable convertible note with unrelated 3^rd party for $115,000 with net proceeds of $107,000.  The note is due May 2, 2018 and bears interest at 10% per annum.  The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from November 2, 2017 with a $750 prepayment penalty. As of the date of this filing this note has been paid off.

On November 1, 2017, in contemplation of entering into the November 2, 2017 note, the Company released 150,000 shares of the 500,000 returnable shares (see Note 8 – Other items Related to Equity).  The shares were consideration for the second note dated November 2, 2017, and as such will be accounted for as a discount associated with that note.

On November 28, 2017, the Company entered into a variable convertible note with unrelated third party for $105,000.  The note is due June 15, 2018 and bears interest at 10% per annum.  The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from November 28, 2018 with a $750 prepayment penalty. As of the date of this filing this note has been paid off.

The convertible notes issued between October and December 2017 were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.

Other Equity transaction

On November 1, 2017, the Company entered into an agreement with the investor relations firm RedChip Companies Inc. ("RedChip").  The agreement is for six months with a review after 90 days.  The Company will pay RedChip $2,500 per month for months 1-3 and $5,000 per month for months 4-6.  For the first 90 days of service the Company issued 275,000 shares of the Company's Class A common shares which are restricted pursuant to the provisions of Rule 144.  For the second 90 days of service the Company will issue 125,000 shares for the Company's Class A common shares which are restricted pursuant to the provisions of Rule 144.

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

19

Issuance of Equity Securities in Venture West/Horizon Transaction

In connection with the acquisition of Venture West Energy Services (“VWES”) (formerly Horizon Well Testing, L.L.C.), described in more detail above under “Recent Developments,” Alpine 4 purchased all of the outstanding stock of VWES (the “VWES Stock”) from Alan Martin (the “Seller”).  The purchase price paid by Alpine 4 for the VWES Stock consisted of cash, a note, a convertible note, and securities consideration.  The “Cash Consideration” paid was $2,200,000.  The “Note” consisted of a secured note in the amount of $300,000, secured by a subordinated security interest in the assets of VWES .  The Note bears interest at 1% and will be payable in full by April 30, 2017.  The “Convertible Note” consisted of a secured convertible note in the amount of $1,500,000, secured by a subordinated security interest in the assets of VWES .  The VWES Seller has the opportunity to convert the Convertible Note into shares of Alpine 4’s Class A common stock at a conversion price of $8.50 after a restricted period according to securities laws.    The Convertible Note bears interest at 5% and is payable in full with a balloon payment on the 18-month anniversary of the closing date of the transaction with no monthly payments.  The “Securities” consisted of two components, an aggregate of 379,403 shares of Alpine 4’s Class A common stock issued to the Seller, and a warrant to purchase an additional 75,000 shares of Class A common stock.

The Note, the Convertible Note, and the Securities was issued to the Seller pursuant to a share exchange agreement with the Seller, in which the Seller made certain representations and warranties, including that he was an accredited investor, that he was acquiring the securities for his own account and not for the account of another, that he was acquiring the securities for investment purposes and not with a view to distribute the securities acquired, and that he had sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of an investment in the Company. As such, the securities were issued to the Seller without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.   The VWES transaction did not involve a public offering.

Stock Options to Employees

On April 7, 2017, the Company issued 741,500 options to purchase shares of the Company’s Class A common stock to 34 employees and consultants of the Company. The options were issued pursuant to the Company’s 2016 Stock Option and Stock Award Plan (the “Plan”).  The options granted vest and the exercise price of the options granted was $0.90, which was the last closing bid price of the Company’s common stock as traded on the OTC QB Market..

On April 10, 2018, the Company issued 85,000 options to purchase shares of the Company’s Class A common stock to APF employees. The options were issued pursuant to the Plan.  The options granted vest and the exercise price of the options granted was $0.10, which was the last closing bid price of the Company’s common stock as traded on the OTC QB Market.  The options vest quarterly over four years.

On May 16, 2018, the Company issued 704,000 options to purchase shares of the Company’s Class A common stock to VWES employees. The options were issued pursuant to the Plan.  The options granted vest and the exercise price of the options granted was $0.05, which was the last closing bid price of the Company’s common stock as traded on the OTC QB Market.  The options vest quarterly over four years.

On December 31, 2018, the Company issued 275,000 options to purchase shares of the Company’s Class A common stock to two employees. The options were issued pursuant to the Plan.  The options granted vest and the exercise price of the options granted was $0.05, which was the last closing bid price of the Company’s common stock as traded on the OTC QB Market.  The options vest quarterly over four years.

The Company provided to each of the recipients of the Options copies of the Company’s public filings including the financial information and other disclosures about the Company. The options were issued to the recipients without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and rules and regulations promulgated thereunder. The issuance of the options did not involve a public offering of the Company’s securities.

Purchases of Equity Securities by the Company and Affiliated Purchasers

During the fourth quarter of 2018, there were no purchases of the Company’s equity securities by the Company or affiliated purchasers

ITEM 6.   SELECTED FINANCIAL DATA.

Not required for Smaller Reporting Companies.

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

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

20

Overview and Highlights

Company Background

Alpine 4 Technologies Ltd. (the "Company") was incorporated under the laws of the State of Delaware on April 22, 2014.  Alpine 4 Technologies, Ltd (ALPP) is a publicly traded conglomerate that is acquiring businesses that fit into its disruptive DSF business model of Drivers, Stabilizers, and Facilitators.   At Alpine 4, we understand the nature of how technology and innovation can accentuate a business.  Our focus is on how the adaptation of new technologies even in brick and mortar businesses can drive innovation.   We also believe that our holdings should benefit synergistically from each other and that the ability to have collaboration across varying industries can spawn new ideas and create fertile ground for competitive advantages.  This unique perspective has culminated in the development of our Blockchain enabled Enterprise Business Operating System called SPECTRUMebos. 

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

Business Strategy

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

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

• Alpine 4 Mini MBA program; and

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

21

Business Seasonality and Product Introductions

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

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and had accumulated a deficit of $28,520,094 as of December 31, 2018.  The Company requires capital for its contemplated operational and marketing activities.  The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.  Our net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.  Our financial statements contain additional note disclosures describing the management's assessment of our ability to continue as a going concern.

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

Results of Operations

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

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

Revenue

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

Cost of revenue

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

Operating expenses

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

Other expenses

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

Discontinued operations

In December 2018, we decided to shut down the operations of our VWES subsidiary.  In February 2019, VWES filed for Chapter 7 bankruptcy.

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

22

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

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

Liquidity and Capital Resources

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

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

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

Contractual Obligations

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

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

Off-Balance Sheet Arrangements

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

23

Critical Accounting Policies and Estimates

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

For a summary of our critical accounting policies, refer to Note 2 of our consolidated financial statements included under Item 8 – Financial Statements in this Form 10-K.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for Smaller Reporting Companies.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.  CONTROLS AND PROCEDURES

1. Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act, as of December 31, 2018.  Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this Report, our disclosure controls and procedures were ineffective.

2. Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fourth quarter ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

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

24

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

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

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

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

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

Based on this evaluation, our management determined that our internal controls over financial reporting were not effective as of December 31, 2018.

Areas of material weakness include:

• inadequate segregation of duties

• inadequate control activities and monitoring processes over financial reporting

4. Inherent Limitations on Effectiveness of Controls

Generally, disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives.  Nevertheless, an internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system reflects the fact that there are resource constraints, and the benefits of controls are considered relative to their costs. As noted above, we have determined that our disclosure controls and procedures and our internal controls over financial reporting were not effective as of December 31, 2018.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

ITEM 9B.   OTHER INFORMATION

None.

25

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

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

Name	Age	Officer/Position	Board Member/Position
Kent B. Wilson	45	President, Chief Executive Officer	Director
Charles Winters	40	N/A	Chairman of the Board
Scott Edwards	62	N/A	Director
Ian Kantrowitz	36	N/A	Director
Jeffrey Hail	55	Sr. Vice President

Biographical Information for Kent B. Wilson

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

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

Biographical Information for Charles Winters

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

Biographical Information for Scott Edwards

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

Biographical Information for Ian Kantrowitz

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

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

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

Biographical Information for Jeff Hail

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

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

26

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

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

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

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

Section 16(a) beneficial ownership reporting compliance. Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities. Officers, directors and greater than ten percent beneficial shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us during or with respect to the year ended December 31, 2018, the following persons failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year ended December 2018:

Name and Principal Position	Number of Late Reports	Transactions not Reported in Timely Manner	Known Failures to File a Required Form
Kent Wilson, CEO, Director	1	1	None
Charles Winters, Director	0	1	1
Scott Edwards, Director	1	1	None
Ian Kantrowitz, Director	2	2	None

27

ITEM 11. EXECUTIVE COMPENSATION.

Summary Compensation Table

Outstanding Equity Awards

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

Director Compensation

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

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

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

The following table sets forth certain information regarding beneficial ownership of Alpine 4 Class A and Class B common stock as of March 31, 2019, (i) by each person (or group of affiliated persons) who owns beneficially more than five percent of the outstanding shares of common stock, (ii) by each director and executive officer of Alpine 4, and (iii) by all of the directors and executive officers of Alpine 4 as a group.  The percentages are based on the following figures:

• 28,507,853, shares of Alpine 4 Class A common stock outstanding as of March 31, 2019

• 5,000,000 shares of Alpine 4 Class B common stock outstanding as of March 31, 2019.

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

28

Name and Address of beneficial owner (1)	Amount of beneficial ownership of Class A Common Stock		Amount of beneficial ownership of Class B Common Stock		Percentage of Class A Common Stock (2)			Percentage of Class B Common Stock			Voting Power (3)
Kent B. Wilson, Chief Executive Officer, Director(4)		2,401,689		1,850,000		9.40	%		37.00	%		27.67	%
Jeff Hail, Chief Operating Officer		541,000		350,000		2.12	%		7.00	%		5.35	%
Scott Edwards, Director (5)		252,000		350,000		0.99	%		7.00	%		4.97	%
Charles Winters, Director (6)		709,800		700,000		2.78	%		14.00	%		10.21	%
Ian Kantrowitz, Director (7)		847,371		700,000		3.32	%		14.00	%		10.39	%
Richard Evans 515 W. Coliseum Blvd Ft. Wayne, IN 46808		3,270,000		0		12.80	%		0	%		4.33	%
All Officers and Directors As a Group (5 persons)		4,751,860		3,950,000		18.61	%		79.00	%		58.58	%

(1)	Except as otherwise indicated, the address of the stockholder is: Alpine 4 Technologies Ltd., 2525 E Arizona Biltmore Cir, Suite 237, Phoenix AZ 85016.
(2)	The percentages listed in the table are based on 28,507,853 shares of Alpine 4 Class A common stock outstanding as of March 31, 2019.
(3)	The Voting Power column includes the effect of shares of Class B common stock held by the named individuals, as indicated in the footnotes below. Each share of Class B common stock has 10 votes.  The total voting power for each person is also explained in the footnotes below.
(4)	Mr. Wilson owned as of the date of this Report 2,401,689 shares of Class A common stock, and 1,850,000 shares of Class B common stock, which represents an aggregate of 20,901,689 votes, or approximately 27.67% of the voting power.
(5)	Mr. Edwards owned as of the date of this Report 252,000 shares of Class A Common Stock.  Additionally, Mr. Edwards owned 350,000 shares of Alpine 4 Class B Common Stock which together with the Class A Common Stock will represent an aggregate of 3,752,000 votes, or approximately 4.97 % of the voting power.
(6)	Mr. Winters owned as of the date of this Report 709,800 shares of Class A Common Stock.  Additionally, Mr. Winters owns 700,000 shares of Alpine 4 Class B Common Stock which together with the Class A Common Stock will represent an aggregate of 7,709,800 votes, or approximately 10.21% of the voting power.
(7)	Mr. Kantrowitz owned as of the date of this Report 847,371 shares of Class A Common Stock.  Additionally, Mr. Kantrowitz owned 700,000 shares of Alpine 4 Class B Common Stock which together with the Class A Common Stock will represent an aggregate of 7,847,371 votes, or approximately 10.39% of the voting power.
(8)	Mr. Jeff Hail owned as of the date of this Report 541,000 shares of Class A Common Stock.  Additionally, Mr. Hail owned 350,000 shares of Alpine 4 Class B Common Stock which together with the Class A Common Stock will represent an aggregate of 4,041,000 votes, or approximately 5.35% of the voting power.

29

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Related Party Transactions

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

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Malone Bailey

Set below are aggregate fees billed by Malone Bailey for professional services rendered for the year ended December 31, 2018.

Audit Fees

The fees for the audit and review services billed and to be billed by Malone Bailey for the period from January 1, 2018, to December 31, 2018 were $228,766.

Audit Related Fees

The fees for the audit related services billed and to be billed by Malone Bailey for the period from January 1, 2018, to December 31, 2018 were $0.

Tax Fees

The fees for the tax related services billed and to be billed by Malone Bailey for the period from January 1, 2018, to December 31, 2018 were $0.

Set forth below are the aggregate fees billed by Malone Bailey for professional services rendered for the year ended December 31, 2017.

Audit Fees

The fees for the audit and review services billed and to be billed by Malone Bailey for the period from January 1, 2017, to December 31, 2017 were $116,000.

Audit Related Fees

The fees for the audit related services billed and to be billed by Malone Bailey for the period from January 1, 2017, to December 31, 2017 were $0.

Tax Fees

The fees for the tax related services billed and to be billed by Malone Bailey for the period from January 1, 2017, to December 31, 2017 were $0.

PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

15(a)(1). Financial Statements.

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

30

ALPINE 4 TECHNOLOGIES, LTD.

Consolidated Financial Statements

Contents

	Page
Financial Statements:
Report of Independent Registered Public Accounting Firm	32
Consolidated Balance Sheets as of December 31, 2018 and 2017	33
Consolidated Statements of Operations for the Years Ended December 31, 2018 and 2017	34
Consolidated Statements of Stockholders' Deficit for the Years Ended December 31, 2018 and 2017	35
Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and 2017	36
Notes to Consolidated Financial Statements	37

31

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Alpine 4 Technologies, Ltd.

Phoenix, Arizona

Opinion on the Financial Statements

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

Going Concern Matter

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

Basis for Opinion

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

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

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

/s/ MaloneBailey, LLP

www.malonebailey.com

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

Houston, Texas

April 22, 2019

32

ALPINE 4 TECHNOLOGIES, LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

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

33

ALPINE 4 TECHNOLOGIES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

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

34

ALPINE 4 TECHNOLOGIES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

									Additional						Total
	Class A Common Stock				Class B Common Stock				Paid-in			Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital			Deficit			Deficit
Balance, December 31, 2016		21,474,481	$	2,148		1,600,000	$	160	$	16,228,106		$	(17,436,455	)	$	(1,206,041	)
Issuance of shares of common stock for cash		132,209		13						39,987						40,000
Issuance of shares of common stock to consultants for services		578,640		57						62,027						62,084
Issuance of shares of common stock for convertible note payable and accrued interest		886,757		89						99,484						99,573
Issuance shares for discount on convertible note payable		150,000		15						16,485						16,500
Reclassification of derivative liability										(252,633	)					(252,633	)
Derivative liability resolution										222,099						222,099
Issuance of warrants for acquisition of VWES										40,941						40,941
Share-based compensation expense										87,136						87,136
Beneficial conversation feature associated with convertible notes										30,000						30,000
Net loss													(2,997,420	)		(2,997,420	)
Balance, December 31, 2017		23,222,087		2,322		1,600,000		160		16,573,632			(20,433,875	)		(3,857,761	)
Adoption of ASC 606													(178,202	)		(178,202	)
Issuance of shares for discount/inducement on convertible note payable		1,849,999		104						65,910						66,014
Issuance of shares of common stock for modification of debt		100,000		10						14,990						15,000
Issuance of shares of common stock for convertible note payable and accrued interest		1,015,921		101						54,086						54,187
Reclassification of shares from mezzanine		379,403		38						(38	)					-
Change in fair value of warrant modification										4,310						4,310
Shares issued for employee compensation						3,400,000		340		176,460						176,800
Derivative liability resolution										58,018						58,018
Share-based compensation expense										71,223						71,223
Net loss													(7,908,017	)		(7,908,017	)
Balance, December 31, 2018		26,567,410	$	2,575		5,000,000	$	500	$	17,018,591		$	(28,520,094	)	$	(11,498,428	)

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

35

ALPINE 4 TECHNOLOGIES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2018			2017
OPERATING ACTIVITIES:
Net loss	$	(7,908,017	)	$	(2,997,420	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		871,847			671,423
Amortization		75,412			92,080
Gain on extinguishment of debt		(136,300	)
Loss on disposal of fixed assets		536,772			18,841
Change in value of derivative liabilities		(604,219	)		126,054
Employee stock compensation		71,223			87,136
Stock issued for services		176,800			62,084
Amortization of debt issuance		213,354			50,500
Amortization of debt discounts		1,428,954			89,292
Impairment of assets		1,764,382			-
Change in current assets and liabilities:
Accounts receivable		398,371			(506,436	)
Inventory		(348,194	)		(282,432	)
Capitalized contracts costs		37,300
Prepaid expenses and other assets		159,927			(120,379	)
Accounts payable		1,441,304			546,825
Accrued expenses		929,323			723,733
Income tax payable					(20,123	)
Deferred tax		(43,399	)		(105,450	)
Deferred revenue		(319,410	)		52,425
Net cash used in operating activities		(1,254,570	)		(1,511,847	)
INVESTING ACTIVITIES:
Capital expenditures		(271,516	)		(192,805	)
Proceeds from insurance claim on automobiles and trucks		-			237,732
Proceeds from the sale of fixed assets		318,879			-
Acquisition, net of cash acquired		(1,976,750	)		(1,937,616	)
Net cash used in investing activities		(1,929,387	)		(1,892,689	)
FINANCING ACTIVITIES:
Proceeds from issuances of notes payable, related party		145,000			105,500
Proceeds from issuances of notes payable, non-related party		924,750			1,952,390
Proceeds from issuances of convertible notes payable		2,355,950			785,500
Proceeds from sale of common stock		-			40,000
Proceeds from sale leaseback transaction		1,900,000			-
Repayments of notes payable, related party		(56,500	)		(223,500	)
Repayments of notes payable, non-related party		(741,079	)		(247,084	)
Repayments of convertible notes payable		(1,417,133	)		(219,721	)
Proceeds from line of credit, net		327,325			709,201
Cash paid on financing lease obligations		(175,663	)		(1,691	)
Net cash provided by financing activities		3,262,650			2,900,595
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH		78,693			(503,941	)
CASH AND RESTRICTED CASH, BEGINNING BALANCE		335,823			839,764
CASH AND RESTRICTED CASH, ENDING BALANCE	$	414,516		$	335,823
CASH PAID FOR:
Interest	$	1,162,149		$	1,219,080
Income taxes	$	-		$	2,167
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Common stock issued for convertible note payable and accrued interest	$	54,187		$	99,573
Common stock issued for convertible note discount	$	11,917		$	16,500
Issuance of convertible note for acquisition	$	450,000		$	1,500,000
Issuance of note payable for acquisition	$	1,950,000		$	300,000
Issuance of warrants for acquisition	$	-		$	40,941
Issuance of redeemable common stock for acquisition	$	-		$	1,439,725
Debt discount from convertible note payable	$	-		$	30,000
Debt discount due to derivative liabilities	$	2,282,970		$	115,000
Reclassification of warrants embedded conversion option as derivative liability	$	-		$	252,633
Notes payable and redeemable common stock restructuring	$	3,197,538		$	-
Capital leases	$	247,000		$	-
Proceeds from sale of assets offset directly against debt	$	1,141,588		$	-
Release of derivative liability	$	58,018		$	-

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

36

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

Note 1 – Organization and Basis of Presentation

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.  The Company is a technology holding company owning four companies (ALTIA, LLC; Quality Circuit Assembly, Inc. ("QCA"); Venture West Energy Services (“VWES”) (formerly Horizon Well Testing, LLC); and American Precision Fabricators, Inc., an Arkansas corporation (“APF”).   On April 5, 2018, the Company acquired 100% of the outstanding shares of APF (see Note 9).

Basis of presentation

The accompanying 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 U.S. GAAP.

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 December 31, 2018 and 2017.  Significant intercompany balances and transactions have been eliminated.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.  These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances.  Actual results could differ from those estimates.

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.

Advertising

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

Cash

Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days.   As of December 31, 2018 and 2017, the Company had no cash equivalents.

The following table provides a reconciliation of cash and restricted cash reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.

	December 31,		December 31,
	2018		2017
Cash	$	207,205	$	128,512
Restricted cash included in other non-current assets		207,311		207,311
Total cash and restricted cash shown in consolidated statements of cash flows	$	414,516	$	335,823

37

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

Major Customers

The Company had two customers that made up 29% and 27%, respectively, of accounts receivable as of December 31, 2018.  The Company had two customers that made up 41% and 13%, respectively, of accounts receivable as of December 31, 2017.

For the years ended December 31, 2018, the Company had two customer that made up 29% and 13% of total revenues.  For the years ended December 31, 2017, the Company had one customer that made up approximately 36% of total revenues.

Accounts Receivable

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis.  As of December 31, 2018 and 2017, allowance for bad debt was $0 and $0, respectively.

Inventory

Inventory is valued at the lower of the inventory's cost (weighted average basis) or net realizable value. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower.  Inventory is segregated into four areas, raw materials, WIP, finished goods, and In-Transit.  Below is a breakdown of how much inventory was in each area as of December 31, 2018 and 2017:

	2018		2017
Raw materials	$	676,621	$	577,259
WIP		-		440,586
Finished goods		1,499,174		161,310
In Transit		-		33,391
	$	2,175,795	$	1,212,546

Property and Equipment

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

Automobiles & Trucks	10 to 20 years
Buildings	39 years
Leasehold Improvements	15 years or time remaining on lease (whichever is shorter)
Equipment	10 years

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

38

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

Property and equipment consisted of the following as of December 31, 2018 and 2017:

	2018			2017
Automobiles and trucks	$	155,179		$	-
Machinery and equipment		2,548,855			1,276,779
Office furniture and fixtures		109,619			7,056
Building		5,795,000			3,895,000
Leasehold improvements		261,608			261,608
Less: Accumulated depreciation		(879,705	)		(416,685	)
	$	7,990,556		$	5,023,758

Purchased Intangibles and Other Long-Lived Assets

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

Customer List	15 years
Non-compete agreements	15 years
Software development	5 years

Intangible assets consisted of the following as of December 31, 2018 and 2017:

	2018			2017
Software	$	278,474		$	278,474
Noncompete		100,000			100,000
Customer lists		531,187			531,187
Less: Accumulated amortization		(232,451	)		(157,039	)
	$	677,210		$	752,622

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

Year Ending December 31,
2019	79,960
2020	79,960
2021	79,960
2022	46,361
2023	46,361
Thereafter	344,608
Total	677,210

39

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

Other Long-Term Assets

Other long-term assets consisted of the following as of December 31, 2018 and 2017:

	2018		2017
Restricted Cash	$	207,311	$	207,311
Deposits		50,927		50,927
Other		32,000		-
	$	290,238	$	258,238

Restricted cash consists of deposit account collateralizing letters of credit in favor of the counterparty in our lease financing obligation. 

Impairment of Long-Lived Assets

The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, Accounting for the Impairment of Long-Lived Assets.  This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset.  During all periods presented, there have been no impairment losses, except to the impairment loss of $1,596,537 for the year ended December 31, 2018 related to the discontinued operation.

Goodwill

In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable.  We assess potential impairment by considering present economic conditions as well as future expectations.  All assessments of goodwill impairment are conducted at the individual reporting unit level.  As of December 31, 2018 and 2017, the reporting units with goodwill were QCA and APF.

The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount.  Based on the qualitative criteria the company believes there not to be any triggers for potential impairment of goodwill and therefore the Company has recorded no impairment of goodwill in any period presented, except to the impairment of goodwill of $167,845 for the year ended December 31, 2018 related to the discontinued operation.

Fair Value Measurement

The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes and line 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.  For additional information, please see Note 11 – Derivative Liabilities and Fair Value Measurements.

Redeemable Common Stock

As discussed in Note 9 below, 379,403 shares of the Company's Class A common stock that were issued as consideration for the VWES acquisition contain a redemption feature which allows for the redemption of common stock at the option of the holder. In accordance with ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity.   Accordingly, at December 31, 2017, 379,403 shares of Class A common stock were classified outside of permanent equity at its redemption value.  During the year ended December 31, 2018, the shares were redeemed and classified as permanent equity.

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, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under ASC Topic 605.

The Company recorded a net increase to its opening accumulated deficit of $178,202 as of January 1, 2018 due to the cumulative impact of adopting ASC Topic 606, with the impact related to recognition of revenue and costs relating to the sales of the 6^th Sense Auto service.  Under the new revenue standard, sales of the Company’s 6^th Sense Auto service, which includes a hardware and a monthly subscription component, are required to be treated as a single performance obligation and recognized over time.  As a result, the deferred revenue increased by $279,736 and capitalized contract costs increased by $101,534.  The impact to the consolidated statement of operations for the year ended December 31, 2018 was a net increase of $279,736 to revenue and a net increase of $101,534 to cost of revenue as a result of applying ASC Topic 606. 

Revenues under ASC Topic 606 are recognized when the promised goods or services are transferred to customers, in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services.  The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries.

40

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

ALTIA

Revenues recorded by ALTIA relate primarily to the Company’s 6^th Sense Auto service.  The Company accounts for its revenue by deferring the total contract amount and recognizing the amounts over the monthly subscription period, ranging from 12 to 36 months.  

QCA

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

APF

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

Earnings (loss) per share

Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debentures, but they are anti-dilutive due to the net loss incurred. 

Stock-based compensation

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718-10, Compensation – Stock Compensation, and the conclusions reached by ASC 505-50, Equity – Equity-Based Payments to Non-Employees. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment is reached or completion of performance by the provider of goods or services as defined by ASC 505-50.

Income taxes

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

41

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

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

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

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings.  If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features.

Related Party Disclosure

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

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its financial statements.

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

Note 3 – Going Concern

The accompanying financial statements have been prepared on a going concern basis. The working capital of the Company is currently negative and causes doubt of the ability for the Company to continue. The Company requires capital for its operational and marketing activities.  The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company's plan of operations, and its ultimate transition to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

42

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

In order to mitigate the risk related with the going concern uncertainty, the Company has a three-fold plan to resolve these risks.  First, the acquisitions of QCA, and APF have allowed for an increased level of cash flow to the Company.  Second, the Company is considering other potential acquisition targets that, like QCA, should increase income and cash flow to the Company.  Third, the Company plans to issue additional shares of common stock for cash and services during the next 12 months and has engaged professional service firms to provide advisory services in connection with that capital raise.

Note 4 – Leases

As of December 31, 2018, the future minimum capital lease and financing transaction payments, net of amortization of debt issuance costs, were as follows:

Year Ending December 31,
2019		817,181
2020		836,022
2021		849,645
2022		865,351
2023		875,428
Thereafter		8,763,471
Total		13,007,098
Less: Current capital leases and financing transaction		(105,458	)
Less: imputed interest		(4,606,464	)
Non-current capital leases and financing transaction	$	8,295,176

In 2016, the Company sold a building and used the money to purchase QCA.  Because this is a financing transaction, the sale is recorded under "financing lease obligation" on the accompanying consolidated balance sheet and amortized over the 15-year term of the lease.  The term of the lease has been extended through December 31, 2032 at a monthly rate of approximately $69,000.  These payments are reflected in the table above.

On April 5, 2018, the Company acquired APF (see Note 9).  In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from APF was sold for $1,900,000, and leased back to the company for a period of 15 years at a monthly rate of $15,833, subject to an annual increase of 2% throughout the term of the lease.  The Company had no gain or loss resulting from the sale of the property, and the resulting lease qualifies as a capital lease.  As a result, the Company has capitalized the cost of the building and the resulting capital lease obligation liability of $1,900,000.  The resulting capital lease obligation liability of $1,763,903 as of December 31, 2018 is reflected in financing lease obligation in the accompanying consolidated balance sheets.  The payments related to this lease are reflected in the table above.

Operating Leases

The Company has two non-cancellable operating leases as of December 31, 2018 for its locations in San Jose, California.  Approximate monthly rent obligations for these locations amount to $21,500 and $5,000 respectively.  The Company also has an office it leases in Phoenix, Arizona on a month-to-month basis.

43

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

The five-year minimum rent payments for each location are as follows:

Year Ending December 31,
2019	$	274,118
2020		282,342
2021		290,812
Thereafter		-
Total	$	847,272

Rent expense for the years ended December 31, 2018 and 2017 amounted to $447,595 and $468,673, respectively.

Note 5 – Notes Payable

In May 2018, APF also secured a line of credit with Crestmark, providing for borrowings up to $1,000,000 at a variable interest rate, collateralized by APF’s outstanding accounts receivable. 

As of December 31, 2017, the Company had an outstanding term loan with a 30% interest rate of $10,000 which was repaid during the year ended December 31, 2018.  During the years ended December 31, 2018, the Company borrowed an aggregate total of $149,000 in additional short-term notes payable bearing interest at 15% per annum with maturity dates of three months from the date of issuance.

On February 22, 2018, the Company issued a $3,000,000 note payable under the Amended and Restated Secured Promissory Note with the seller of VWES.  The note is secured by the assets of VWES and bears interest at 7% per annum and is due in semi-annual payments of $150,000 commencing on June 1, 2018, through June 1, 2020.

On April 5, 2018, the Company issued two secured promissory notes in the aggregate principal amount of $1,950,000 (“Secured APF Notes”) as part of the consideration for the purchase of APF (see Note 9).  The Secured APF Notes are secured by the equipment, customer accounts and intellectual property of the Company, and all of the products and proceeds from any of the assets of APF.  The Secured APF Notes bear interest at 4.25% per annum and have aggregate monthly payments of $19,975 for the first 23 months, with a balloon payment due in April 2020 for the remaining principal and interest outstanding.

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

The outstanding balances for the loans as of December 31, 2018 and 2017 were as follows:

	2018		2017
Lines of credit, current portion	$	2,504,440	$	1,657,610
Equipment loans, current portion		260,301		147,079
Term notes, current portion		880,862		10,000
Total current		3,645,603		1,814,689
Long-term portion		4,517,441		-
Total notes payable	$	8,163,044	$	1,814,689

Future scheduled maturities of outstanding notes payable from related parties are as follows:

Year Ending December 31,
2019	$	3,645,603
2020		4,271,959
2021		178,607
2022		66,875
Total	$	8,163,044

44

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

Note 6 – Notes Payable, Related Parties

At December 31, 2018 and 2017, notes payable due to related parties consisted of the following:

	2018		2017
Notes payable; non-interest bearing; due upon demand; unsecured	$	4,500	$	4,500
Note payable; bearing interest at 8% per annum; due June 30, 2017; unsecured		7,500		7,500
Note payable; bearing at 30% per annum; due March 3, 2018; unsecured		-		11,500
Note payable; bearing at 20% per annum; due April 28, 2018; unsecured		-		20,000
Series of notes payable, bearing interest at rates from 10% to 15% per annum, with maturity dates from April 2018 to July 2018, unsecured		120,000		-
Total notes payable - related parties	$	132,000	$	43,500

The above notes which are in default as of December 31, 2018, were due on demand by the lenders as of the date of this Report.

Note 7 – Convertible Notes Payable

At December 31, 2018 and 2017, convertible notes payable consisted of the following:

	2018		2017
Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 20% per annum, with due dates ranging from April 2016 through October 2017.  The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share.	$	25,000	$	40,000
Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019.  The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $10 per share.		1,654,588		1,827,108
Secured convertible note payable issued to the seller of VWES on January 1, 2017 for an aggregate of $1,500,000, bearing interest at 5% per annum, due in full on July 1, 2018.  The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $8.50 per share.  The amount was extinguished and replaced by the Amended and Restated Secured Promissory Note (see Note 9).		-		1,500,000
Series of convertible notes payable issued in January 2017, bearing interest at rates of 10% per annum, and due in January 2018.  The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share.		10,000		30,000

45

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

On July 13, 2017, the Company entered into a variable convertible note for $43,000 with net proceeds of $40,000.  The note is due April 30, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 38% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the note up to 180 days prior to the due date, with the prepayment penalty ranging from 10% to 27% depending on when prepaid.	-	43,000
On July 19, 2017, the Company entered into a variable convertible note for $115,000 with net proceeds of $107,000.  The note is due January 21, 2018 and bears interest at 10% per annum.  The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from July 19, 2017.  The Company issued 500,000 shares of Class A common stock to the note holder which are returnable if no event of default has occurred and the note is paid in full within 180 days of the note date.  Management had determined that it was probable that the Company would meet the conditions under the note and therefore the shares and the cost of issuance were not recorded.  During the three months ended March 31, 2018, the Company repaid the note and the shares were returned.	-	72,748
On September 5, 2017, the Company entered into a variable convertible note for $105,000 with net proceeds of $100,000.  The note is due September 5, 2018 and bears interest at 10% per annum.  After 180 days, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from September 5, 2017.  The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date.	-	105,000
On October 4, 2017, the Company entered into a variable convertible note for $60,000 with net proceeds of $55,000.  The note is due July 4, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 35% of the lowest trading price during the previous ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from October 4, 2017.  The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date.	-	60,000
On October 11, 2017, the Company entered into a variable convertible note for $58,500 with net proceeds of $55,500.  The note is due on July 20, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 38% of the average of the three lowest trading prices of the stock for ten days prior to conversion.    The Company can prepay the convertible note up to 180 days from October 11, 2017.  The prepayment penalty is equal to 10% to 27% of the outstanding note amount depending on the prepayment date.	-	58,500
On November 2, 2017, the Company entered into a variable convertible note for $115,000 with net proceeds of $107,000.  The note is due May 2, 2018 and bears interest at 10% per annum.  The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company issued 150,000 shares to the lender with this note, which has been recorded as a discount.	-	115,000
On November 28, 2017, the Company entered into a variable convertible note for $105,000 with net proceeds of $100,000.  The note is due November 28, 2018 and bears interest at 10% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 35% of the average of the three lowest trading price during the previous ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from November 28, 2017.  The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date.	-	105,000

46

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

On December 6, 2017, the Company entered into a variable convertible note for $86,000 with net proceeds of $79,000.  Additional borrowings of $64,000 were received under this convertible note in January 2018.  The note is due June 6, 2018 and bears interest at 10% per annum.  After 180 days at the maturity date, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.	-	86,000
On January 10, 2018, the Company entered into a variable convertible note for $150,000 with net proceeds of $135,000.  The note is due October 1, 2018 and bears interest at 12% per annum.  The note is immediately convertible into shares of Class A common stock at  the lesser of $0.16 per share or 60% of the lowest trading price the previous 25 days prior to conversion.  The Company can prepay the note within the first 90 days following January 10, 2018 with a prepayment penalty equal to 145% of the total outstanding balance.  The Company issued 333,333 shares to the lender with this note, which has been recorded as a discount.	95,000	-
On March 13, 2018, the Company entered into a variable convertible note for $128,000 with net proceeds of $125,000.  The note is due December 30, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 42% of the average of the 2 lowest trading price the previous 10 days prior to conversion.  The Company can prepay the note at a penalty ranging from 15% to 40%.	-	-
On April 3, 2018, the Company entered into a variable convertible note for $85,000 with net proceeds of $79,000.  The note is due January 2, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  In connection with this variable convertible note, the Company issued 386,363 shares of its Class A common stock, which has been recorded as a discount.	-	-
On April 5, 2018, the Company entered into convertible promissory notes for an aggregate principal amount of $450,000 as part of the consideration for the acquisition of APF (see Note 9).  The convertible notes are due in full in 36 months and bear interest at 4.25% per annum, and are convertible into shares of Class A common stock after 6 months from the issuance date at a rate of $1 per share.	450,000	-
On April 9, 2018, the Company entered into a variable convertible note for $124,199 with net proceeds of $115,000.  The note is due January 9, 2019 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  In connection with this variable convertible note, the Company issued 76,670 shares of its Class A common stock, along with warrants to purchase 153,340 shares of Class A common stock at an exercise price of $1 per share which are immediately vested and have a 3 years contractual life.  The value of the common stock and warrants have been recorded as a discount.	61,699	-
On April 9, 2018, the Company entered into a variable convertible note for $37,800 with net proceeds of $35,000.  The note is due January 9, 2019 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.	37,800	-
On June 4, 2018, the Company entered into a variable convertible note for $165,000 with net proceeds of $151,500.  The note is due December 4, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.  The Company issued 850,000 shares of Class A common stock to the note holder which are returnable if no event of default has occurred and the note is paid in full within 180 days of the note date.	165,000	-
On July 16, 2018, the Company entered into a variable convertible note for $220,000 with net proceeds of $214,000.  The note is due July 16, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.	-	-

47

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

On July 18, 2018, the Company entered into a variable convertible note for $88,000 with net proceeds of $88,000.  The note is due April 30, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		88,000			-
On August 30, 2018, the Company entered into a variable convertible note for $337,500 with net proceeds of $303,750.  The note is due February 28, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		337,500			-
On September 27, 2018, the Company entered into a variable convertible note for $93,000 with net proceeds of $93,000.  The note is due July 15, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		93,000			-
On October 23, 2018, the Company entered into a variable convertible note for $220,000 with net proceeds of $198,000.  The note is due December 14,2018 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		220,000			-
On November 12, 2018, the Company entered into a variable convertible note for $670,000 with net proceeds of $636,000.  The note is due November 12, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.		670,000			-
On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200.  The note is due September 7, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion.		130,000			-
Total convertible notes payable		4,037,587			4,042,356
Less: discount on convertible notes payable		(942,852	)		(79,630	)
Total convertible notes payable, net of discount		3,094,735			3,962,726
Less: current portion of convertible notes payable		(2,644,735	)		(2,302,620	)
Long-term portion of convertible notes payable	$	450,000		$	1,660,106

The discounts on convertible notes payable arise from stock issued with notes payable, beneficial conversion features, as well as conversion features of certain convertible notes being treated as derivative liabilities (see Note 11).  The discounts are being amortized over the terms of the convertible notes payable.  Amortization of debt discounts during the years ended December 31, 2018 and 2017 amounted to $1,428,954 and $89,292, respectively, and is recorded as interest expense in the accompanying consolidated statements of operations.  The unamortized discount balance for these notes was $942,852 as of December 31, 2018, which is expected to be amortized over the next 12 months.

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

Balance outstanding, December 31, 2016	$	2,007,557
Issuance of convertible notes payable for acquisition of VWES		1,500,000
Issuance of convertible notes payable for cash		836,000
Repayment of notes		(219,721	)
Conversion of notes payable to common stock		(88,902	)
Discount from issuance of common stock		(16,500	)
Discount from beneficial conversion feature		(30,000	)
Discount from derivative liabilities		(115,000	)
Amortization of debt discounts		89,292
Balance outstanding, December 31, 2017		3,962,726
Issuance of convertible notes payable for acquisition of APF		450,000
Issuance of convertible notes payable for cash		2,355,950
Issuance for debt discounts		147,341
Extinguishment of convertible note		(1,500,000	)
Repayment of notes		(1,417,133	)
Conversion of notes payable to common stock		(50,133	)
Discount from beneficial conversion feature		(2,282,970	)
Amortization of debt discounts		1,428,954
Balance outstanding, December 31, 2018	$	3,094,735

48

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

Note 8 – Stockholders' Equity

Preferred Stock

The Company is authorized to issue 10,000,000 shares of $.0001 par value preferred stock. As of December 31, 2018 and December 31, 2017, no shares of preferred stock were outstanding.

Common Stock

Pursuant to the Second Amended and Restated Certificate of Incorporation, the Company is authorized to issue two classes of common stock: Class A common stock, which has one vote per share, and Class B common stock, which has ten votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the rights of the two classes of common stock will be identical.

The Company had the following transactions in its common stock during the year ended December 31, 2018:

• Issued 499,999 shares of its Class A common stock in connection with a convertible note payable.  The note payable had an embedded conversion option that was a derivative, and the residual amount after allocating proceeds to the derivative was $0.  Accordingly, no discount was recognized.

• Issued 120,000 shares of its Class A common stock in connection with the conversion of convertible notes payable and accrued interest with a value of $15,600.

• Issued 100,000 shares of the Company's Class A common stock related to the Amended Agreement with the seller of VWES.

• Issued 76,670 shares of Class A common stock in connection with a convertible note payable.  The value of the shares amounted to $9,584 and has been recorded as a discount to the note payable.

• Issued 3,400,000 shares of Class B common stock to various employees, officers and board members as compensation.  The value of the shares amounted to $176,800 and has been recorded as a component of general and administrative expenses for the year ended December 31, 2018.

• Issued 250,000 shares of Class A common stock for the conversion of $7,250 of outstanding convertible notes payable.

• Issued 23,330 shares of Class A common stock with debt valued at $2,333.

• Issued 274,295 shares of Class A common stock for the conversion of $14,000 of outstanding convertible notes payable.

• Issued 195,924 shares of Class A common stock for the conversion of $10,000 of outstanding convertible notes payable.

• Issued 175,702 shares of Class A common stock for the conversion of $3,883 of outstanding convertible notes payable and $3,454 of accrued interest.

• Issued 1,250,000 shares of Class A common stock as an inducement to investors to entering into convertible note agreements.

49

 

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

The Company had the following transactions in its common stock during the year ended December 31, 2017:

• Issued 578,640 shares of its Class A common stock for services.  Total expense for the shares issued for services was $62,084;

• Issued 886,757 shares of its Class A common stock in connection with the conversion of convertible notes payable and accrued interest with a value of $99,573;

• Issued 132,209 shares of the Company's restricted Class A common stock in private placement transactions to investors, in exchange for capital raised of $40,000; and

• Issued 150,000 Class A common stock to a lender valued at $16,500.

Redeemable Common Stock

During 2017, the Company issued 379,403 shares of its Class A common stock in connection with the purchase of VWES.  Of these shares, 260,000 shares were redeemable at $4.25 per share at three different redemption periods:  130,000 shares at 12 months, 65,000 shares at 18 months and 65,000 shares at 24 months from the closing date of the purchase of VWES.  Additionally, 119,403 shares were redeemable at $3.35 per share at 12 months from the closing date of the purchase of VWES.  These shares were valued at the redemption value of $1,439,725.  The redemption right on these shares was cancelled in connection with the Amended Agreement entered on February 22, 2018 (see Note 9).

Due to the nature of the issuance of stock for the VWES acquisition, it was historically recorded outside of permanent equity.  Subsequent to February 22, 2018 after the cancellation of the redemption rights, the stock was reclassified to equity in the accompanying consolidated balance sheet.

Stock Options

The Company has issued stock options to purchase shares of the Company’s Class A common stock issued pursuant to the Company's 2016 Stock Option and Stock Award Plan (the "Plan").  The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant and on each modification date. The following key assumptions during the years ended December 31, 2018 and 2017:

	2018			2017
Risk free rate		2.38	%		2.38	%
Volatility		200	%		200	%
Expected terms (years)		6.25			6.25
Dividend rate		0	%		0	%

The following summarizes the stock option activity for the years ended December 31, 2018:

						Weighted-
				Weighted-		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Options			Price		Life (Years)		Value
Outstanding at December 31, 2016		-		$	0.00
Granted		1,344,000			0.57
Forfeited		(561,750	)		0.77
Outstanding at December 31, 2017		782,250		$	0.42		9.44	$	-
Granted		1,064,000			0.07
Forfeited		(56,250	)		0.81
Exercised		-			0.00
Outstanding at December 31, 2018		1,790,000		$	0.19		9.10	$	-
Vested and expected to vest at December 31, 2018		1,790,000		$	0.19		9.10	$	-
Exercisable at December 31, 2018		391,969		$	0.32		8.67	$	-

50

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

The following table summarizes information about options outstanding and exercisable as of December 31, 2018:

		Options Outstanding						Options Exercisable
				Weighted		Weighted				Weighted
				Average		Average				Average
Exercise		Number		Remaining		Exercise		Number		Exercise
Price		of Shares		Life (Years)		Price		of Shares		Price
$	0.05		979,000		9.38	$	0.05		88,000	$	0.05
	0.10		85,000		9.28		0.10		10,625		0.10
	0.13		388,500		8.59		0.13		145,688		0.13
	0.26		114,000		8.34		0.26		49,875		0.26
	0.90		223,500		8.27		0.90		97,781		0.90
			1,790,000						391,969

During the years ended December 31, 2018 and 2017, stock option expense amounted to $71,223 and $87,136, respectively.  Unrecognized stock option expense as of December 31, 2018 amounted to $199,812, which will be recognized over a period extending through December 2022. 

Warrants

On April 9, 2018, the Company granted 153,340 warrants in connection with the issuance of a convertible note payable.  The warrants have a 3 year contractual life, an exercise price of $1 per share and are vested immediately.

On January 1, 2017, the Company granted 75,000 warrants to the seller of VWES.  The warrants have a 3 year contractual life, an exercise price of $4.25 per share and are vested immediately.  The warrants were accounted for as part of the purchase price of the acquisition of VWES.  On February 22, 2018, in connection with the Amended Agreement (see Note 9), the warrants were cancelled and replaced with 75,000 new warrants with an exercise price of $1 per share that were vested immediately and have a contractual life of 3 years.

During the year ended December 31, 2017, the Company granted an aggregate total of 2,001 warrants to individuals.  These warrants all have a 3 year contractual life, an exercise price of $2.00 per share and are vested immediately.

As of December 31, 2018, the Company had 230,341 warrants outstanding with a weighted average exercise price of $1.01 and a weighted average remaining life of 2.23 years.

Note 9 – Business Combinations

Venture West Energy Services

Effective January 1, 2017, the Company purchased 100% of the outstanding interests of Venture West Energy Services (“VWES”) (formerly Horizon Well Testing, LLC).

Alpine 4 purchased 100% of the outstanding interests of VWES for $2,200,000 cash, two notes payable ($1,500,000 and $300,000), 379,403 shares of Alpine 4's Class A common stock, valued at $1,439,725, and 75,000 warrants, to purchase one share of Alpine 4 Class A common stock, valued at $40,941.  The $300,000 note bears interest at 1% and was payable in full by July 31, 2017 (see Note 6).  The $1,500,000 note is a convertible note with an option to convert at $8.50 into Alpine 4's Class A common stock.  The $1,500,000 note bears interest at 5% per annum and has a balloon payment due on the 18-month anniversary of the closing of the purchase.  There were also post-closing adjustments of $25,232.

51

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

A summary of the purchase price allocation at fair value is below.

	Purchase Allocation
Cash	$	262,384
Accounts Receivable, net		245,833
Property, Plant & Equipment		4,804,458
Intangibles		-
Goodwill		167,845
Accrued Expenses		(25,086	)
Total consideration	$	5,455,434

On February 22, 2018, the Company entered into an Amended Agreement with the seller of VWES.  Per the terms of the Amended Agreement, the two notes payable initially issued to the seller of VWES on January 1, 2017, for $1,500,000 and $300,000 were cancelled, along with the redemption rights associated with 379,403 shares the Company’s Class A common stock and 75,000 warrants, and replaced with a new Amended and Restated Secured Promissory Note for $3,000,000 (see Note 5).  The new note is due in semi-annual payments of $150,000 commencing on June 1, 2018, through June 1, 2020 and bears interest at 7% per annum.  If the note is paid was full on or before June 1, 2018, the balance due would be discounted by $500,000.  If the note is paid in full after June 1, 2018, and on or before December 1, 2018, the balance due will be discounted by $450,000.  If the note is paid in full after December 1, 2018, and on or before June 1, 2019, the balance due will be discounted by $350,000.  If the note is paid in full after June 1, 2019, and on or before December 1, 2019, the balance due will be discounted by $250,000.  If the note is paid in full after December 1, 2019, and on or before June 1, 2020, the balance due will be discounted by $200,000.

In connection with the Amended Agreement, the Company also issued an additional 100,000 shares of Class A common stock to the seller of VWES valued at $15,000, and granted new warrants effective February 22, 2018 to purchase 75,000 shares of common stock with an exercise price of $1.00 per share valued at $9,142 using the Black-Sholes model.  The warrants are immediately vested and have a contractual life of 3 years.  The Company also agreed to return the land and building acquired in the acquisition of VWES to the seller.  The land and building had an aggregate book value as of February 22, 2018 of $173,396, which approximated its fair value.

The Company compared the value of the extinguished debt, returned land and building and cancelled stock and warrants to the value of the new Amended and Restated Secured Promissory Note and new instruments issued as of February 22, 2018.  The difference of $136,300 was reflected as a gain on extinguishment of debt during the accompanying consolidated statements of operations for the year ended December 31, 2018.

The following is a summary of the non-cash items given as consideration to the seller of VEWS in connection with the Amended and Restated Secured Promissory Note, which is reflected in the supplemental disclosure of non-cash financing activities in the accompanying consolidated statement of cash flows for the year ended December 31, 2018.

	Non-Cash
	Consideration
Note payable	$	3,000,000
Common stock		15,000
Warrants		9,142
Land and building		173,396
Total	$	3,197,538

52

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

American Precision Fabricators (“APF”)

On April 5, 2018, the Company announced that it had entered into a Securities Purchase Agreement (the "SPA") with APF, an Arkansas corporation, and Andy Galbach ("Galbach") and Clarence Carl Davis, Jr. ("Davis"), the owners of APF (the "Sellers").  Pursuant to the SPA, the Company acquired 100% of the outstanding shares in APF.

The total purchase price of APF from the SPA amounted to $4,500,000, which consisted of aggregate cash consideration paid to the Sellers of $2,100,000, an aggregate of $1,950,000 of secured promissory notes due to the Sellers (see Note 5), and an aggregate of $450,000 of convertible promissory notes due to the Sellers (see Note 7).  At the closing date, the Company and the Sellers agreed to a reduction of the purchase price of $123,250, resulting from a net working capital adjustment which was deducted from the cash consideration due to the Sellers.  As a result, the total purchase price of APF was $4,376,750.

A summary of the purchase price allocation at fair value is below.  The business combination accounting is not yet complete and the amounts assigned to assets acquired and liabilities assumed are provisional.  The Company is still in the process of obtaining and assessing documentation of the contracts for customer relationships.  Therefore, this may result in future adjustments to the provisional amounts as new information is obtained about facts and circumstances that existed at the acquisition date.

	Purchase Allocation
Accounts receivable	$	945,050
Inventory		675,074
Prepaid expenses and other current assets		250,040
Property and equipment		3,300,000
Goodwill		1,230,100
Accounts payable		(1,234,328	)
Accrued expenses		(154,186	)
Line of credit		(165,000	)
Deferred tax liability		(470,000	)
	$	4,376,750

In connection with the SPA, and as consideration for the Company to enter into the SPA, APF and Galbach entered into a Consulting Services Agreement (the "Consulting Agreement"), pursuant to which Galbach agreed for a period of 90 days following the closing date to provide strategic management services to APF, meet with APF's new management, and provide his knowledge in customer relations, trade and service implementation, and other business disciplines. Additionally, APF agreed to reimburse Galbach for his expenses incurred by Galbach in connection with providing the services under the Consulting Agreement.

Simultaneous with the purchase of APF, a building, owned by APF prior to the acquisition, was sold in a sale-leaseback transaction agreement, whereby the building was leased from the buyer for 15 years.  The proceeds from the sale-leaseback of $1,900,000 were used to fund the cash consideration to the sellers.  The building and the lease is being treated as a capital lease (see Note 4).

The following are the unaudited pro forma results of operations for the three and years ended December 31, 2018 and 2017, as if APF had been acquired on January 1, 2017.  The pro forma results include estimates and assumptions which management believes are reasonable.  However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated.

	Pro Forma Combined Financials (Unaudited)
	Year Ended December 31, 2018			Year Ended December 31, 2017
Revenue	$	15,407,012		$	11,995,811
Net Loss from continuing operations	$	(3,189,893	)	$	(1,649,423	)
Net loss per shares from continuing operations	$	(0.12	)	$	(0.07	)

53

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

Note 10 – Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  A full valuation allowance is established against the remaining net deferred tax assets as of December 31, 2018 and 2017 based on estimates of recoverability.  The Company determined that such a valuation allowance was necessary given the current and expected near term losses and the uncertainty with respect to its ability to generate sufficient profits from its new business model. The Tax Cuts and Jobs Act was signed into law on December 22, 2017, and reduced the corporate income tax rate from 34% to 21%.  The Company's deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new tax law.

The following is a reconciliation of the difference between the effective and statutory income tax rates for years ended December 31:

	2018						2017
	Amount			Percent			Amount			Percent
Federal statutory rates	$	(1,660,684	)		21.0	%	$	(1,106,976	)		34.0	%
State income taxes		(474,481	)		6.0	%		(367,525	)		11.3	%
Permanent differences		890,348			-11.3	%		4,103			-0.1	%
Impact of change in tax rate		-						727,566			22.3	%
Other		-						(27,282	)		0.9	%
Valuation allowance against net deferred tax assets		1,201,418			-15.2	%		511,722			-14.9	%
Effective rate	$	(43,399	)		0.5	%	$	(258,392	)		53.5	%

At December 31, 2018 and December 31, 2017, the significant components of the deferred tax assets are summarized below:

	2018			2017
Deferred income tax asset
Net operation loss carryforwards	$	2,607,105		$	1,253,964
Total deferred income tax asset		2,607,105			1,253,964
Less: valuation allowance		(2,607,105	)		(1,253,964	)
Total deferred income tax asset	$	-		$	-

At December 31, 2018 and December 31, 2017, the significant components of the deferred tax liabilities are summarized below:

	2018		2017
Deferred income tax liabilities:
Book to tax differences in intangible assets		608,304		181,703
Total deferred income tax asset	$	608,304	$	181,703

54

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

The deferred tax liability is mostly made up of the difference between book and tax values for property and equipment and intangible assets.

The Company has recorded as of December 31, 2018 and 2017 a valuation allowance of $2,607,105 and $1,253,964, respectively, as management believes that it is more likely than not that the deferred tax assets will not be realized in future years.  Management has based its assessment on the Company's lack of profitable operating history.

The Company annually conducts an analysis of its tax positions and has concluded that it had no uncertain tax positions as of December 31, 2018.

The Company has net operating loss carry-forwards of approximately $9.8 million.  Such amounts are subject to IRS code section 382 limitations and begin to expire in 2029.  The tax years from 2015 - 2018 are still subject to audit.

Note 11 – Industry Segments

This summary presents the Company's segments, QCA and APF for the years ended December 31, 2018 and 2017: 

	Year Ended December 31, 2018
								Unallocated
								and				Total
	QCA			APF				Eliminations				Consolidated
Revenue		$	10,513,743			3,104,791			$	643,260			$	14,261,794
Segment gross profit			3,293,86			1,078,075				449,535				4,820,796
Segment depreciation and amortization			299,328			200,247				33,333				532,908
Segment interest expense			734,033			153,107				2,234,061				3,121,201
Segment net income (loss)			390,158			(455,125	)			(2,931,926	)			(2,996,893	)
	As of December 31, 2018
								Unallocated
								and				Total
	QCA			APF				Eliminations				Consolidated
Accounts receivable, net		$	1,649,701		$	958,153			$	2,500			$	2,610,354
Goodwill			1,963,761			1,230,100				-				3,193,861
Total assets			10,767,883			6,159,098				1,013,695				17,940,676
	Year Ended December 31, 2017
				Unallocated
				and				Total
	QCA			Eliminations				Consolidated
Revenue		$	7,809,813		$	508,203			$	8,318,016
Segment gross profit			2,191,078			219,517				2,410,595
Segment depreciation and amortization			289,746			50,001				339,747
Segment interest expense			730,096			532,397				1,262,493
Segment net income (loss)			327,511			(1,614,287	)			(1,286,776	)
	As of December 31, 2017
				Unallocated
				and				Total
	QCA			Eliminations				Consolidated
Accounts receivable, net		$	1,545,422		$	15,058			$	1,560,480
Goodwill			1,963,761			-				1,963,761
Total assets			10,569,893			5,401,057				15,970,950

55

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

Note 12 – Derivative Liabilities and Fair Value Measurements

Derivative liabilities

The Company has issued convertible notes payable that were evaluated under the guidance in FASB ASC 815-40, Derivatives and Hedging, and were determined to have characteristics of derivative liabilities.  As a result of the characteristics of these notes, the conversion options relating to previously issued convertible debt and outstanding Class A common stock warrants were also required to be accounted for as derivative liabilities under ASC 815.   Under this guidance, this derivative liability is marked-to-market at each reporting period with the non-cash gain or loss recorded in the period as a gain or loss on derivatives. 

The valuation of our embedded derivatives is determined by using the Black-Scholes Option Pricing Model.  As such, our derivative liabilities have been classified as Level 2.

The Company estimated the fair value of the derivative liabilities using the Black-Scholes Option Pricing Model and the following key assumptions during the years ended December 31, 2018 and 2017:

	2018			2017
Risk free rate		2.63	%		2.38	%
Volatility		200	%		200	%
Expected terms (years)	0.5 to 3.0			0.5 to 2.67
Dividend rate		0	%		0	%

Fair value measurements

FASB 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.  FASB 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.  FASB 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.

If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument.

56

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

The following table provides a summary of the fair value of our derivative liabilities as of December 31, 2018 and 2017:

	Fair Value As of		Fair Value Measurements at
	December 31,		December 31, 2018
Description	2018		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Conversion feature on convertible notes	$	1,892,321	$	-	$	1,892,321	$	-
	Fair Value As of December 31,		Fair Value Measurements at December 31, 2017
Description	2017		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Conversion feature on convertible notes	$	271,588	$	-	$	271,588	$	-

The below table presents the change in the fair value of the derivative liabilities during the years ended December 31, 2018:

Derivative liability balance, December 31, 2016	$	-
Issuance of derivative liability during the period		367,633
Derivative liability resolution		(222,099	)
Change in derivative liability during the period		126,054
Derivative liability balance, December 31, 2017		271,588
Issuance of derivative liability during the period		2,282,970
Derivative liability resolution		(58,018	)
Change in derivative liability during the period		(604,219	)
Derivative liability balance, December 31, 2018	$	1,892,321

Note 13 – Discontinued Operations

In December 2018, the Company decided to shut down the operations of its VWES subsidiary.  In February 2019, VWES filed for Chapter 7 bankruptcy.

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

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

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

57

ALPINE 4 TECHNOLOGIES, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2018 and 2017

The assets and liabilities of the discontinued operations at December 31, 2018 and 2017 are summarized below:

	2018		2017
Current assets	$	121,296	$	574,174
Property and equipment		387,727		4,174,629
Goodwill		-		167,845
Total assets		509,023		4,916,648
Current liabilities		2,493,049		922,276
Notes payable - related party		43,500		343,500
Notes payable		215,898		2,079,198
Total liabilities		2,752,447		3,344,974

Note 14 – Subsequent Events

On January 9, 2019, the Company, announced that it had entered into a Securities Purchase Agreement (the "SPA") with Morris Sheet Metal Corp., an Indiana corporation (" MSM "), JTD Spiral, Inc. a wholly owned subsidiary of MSM, an Indiana corporation (" JTD Spiral "), Morris Enterprises LLC, an Indiana limited liability company ("Morris Enterprises ") and Morris Transportation LLC, an Indiana limited liability company (" Morris Transportation " and, with MSM, JTD Spiral, and Morris Enterprises, and James Morris, Daniel Morris and Timothy Morris.  The purchase price was $6,600,000 consisting of $3,150,000 in cash and the remainder financed with a seller note.

58

15(a)(2). Financial Statement Schedules.

None.

15(a)(3). Exhibits.

EXHIBIT INDEX

ExhibitNumber	Description
2.1	Asset Purchase and Share Exchange Agreement (included as Annex A to the joint proxy statement/prospectus forming part of Alpine 4’s registration statement, previously filed with the SEC).
3.1	Certificate of Incorporation of Alpine 4 Automotive Technologies Ltd. (incorporated by reference to Exhibit 3.1 to Alpine 4’s Registration Statement on Form 10, filed May 8, 2014).
3.2	Certificate of Amendment to Certificate of Incorporation, dated June 27, 2014 (incorporated by reference to Exhibit 3.3 to Alpine 4’s Current Report on Form 8-K filed July 18, 2014).
3.3	Certificate of Amendment to Certificate of Incorporation, dated June 30, 2014 (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed July 18, 2014).
3.4	Second Amended and Restated Certificate of Incorporation, dated August 24, 2015 (incorporated by reference to Exhibit 3.1 to Alpine 4’s Current Report on Form 8-K filed August 27, 2015)
3.5	Certificate of Amendment of Amended and Restated Certificate of Incorporation, dated December 15, 2017
3.6	By-Laws of Alpine 4 (incorporated by reference to Exhibit 3.2 to Alpine 4’s Registration Statement on Form 10, filed May 8, 2014).
4.1	Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Alpine 4’s Registration Statement on Form 10, filed May 8, 2014).
10.1	PULS™ Master Service Agreement by and between Alpine 4 and CalAmp Wireless Data Systems, Inc., dated as of August 15, 2014. Portions of this exhibit were redacted pursuant to a request for confidential treatment submitted to the Securities and Exchange Commission on January 15, 2015. (Incorporated by reference to Form S-4/A filed on January 20, 2015)
10.2	Stock Purchase Agreement dated as of October 19, 2015 (incorporated by reference to Exhibit 99 to Alpine 4’s Current Report on Form 8-K filed with the Commission on October 21, 2015)
10.7	Horizon Secured Promissory Note (incorporated by reference to Exhibit 99.1 to Alpine 4’s Current Report on Form 8-K filed with the Commission on December 8, 2016)
10.8	Horizon Security Agreement (incorporated by reference to Exhibit 99.1 to Alpine 4’s Current Report on Form 8-K filed with the Commission on December 8, 2016)
10.9	Horizon Warrant (incorporated by reference to Exhibit 99.1 to Alpine 4’s Current Report on Form 8-K filed with the Commission on December 8, 2016)
10.11	Consulting Services Agreement (incorporated by reference to Exhibit 99.1 to Alpine 4’s Current Report on Form 8-K filed with the Commission on December 8, 2016)
10.12	Third Amendment of Lease (incorporated by reference to Exhibit 10.13 to Alpine 4’s Quarterly Report for the Quarter ended June 30, 2017, filed with the Commission on August 14, 2017)
10.13	APF Securities Agreement (incorporated by reference to Alpine 4’s Current Report on Form 8-K filed with the Commission on April 9, 2018)
10.14	Secured Promissory Notes (incorporated by reference to Alpine 4’s Current Report on Form 8-K filed with the Commission on April 9, 2018)
10.15	Secured Convertible Notes (incorporated by reference to Alpine 4’s Current Report on Form 8-K filed with the Commission on April 9, 2018)
10.16	Security Agreement (incorporated by reference to Alpine 4’s Current Report on Form 8-K filed with the Commission on April 9, 2018)
10.17	Consulting Services Agreement (incorporated by reference to Alpine 4’s Current Report on Form 8-K filed with the Commission on April 9, 2018)
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 INS	XBRL Instance Document*
101 SCH	XBRL Schema Document*
101 CAL	XBRL Calculation Linkbase Document*
101 DEF	XBRL Definition Linkbase Document*
101 LAB	XBRL Labels Linkbase Document*
101 PRE	XBRL Presentation Linkbase Document*

*The XBRL related information in Exhibit 101 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

59

 SIGNATURES

Pursuant to the requirements of section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

ALPINE 4 TECHNOLOGIES LTD.

Date: April 22, 2019	By:	/s/ Kent B. Wilson
	Name:	Kent B. Wilson
		Title: Chief Executive Officer, Chief Financial Officer (Principal Executive Officer, Principal Financial and Accounting Officer), President, and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Kent B. Wilson Kent B. Wilson	Chief Executive Officer, Chief Financial Officer, President, Director	April 22, 2019
/s/ Scott Edwards Scott Edwards		April 22, 2019
/s/ Charles Winters Charles Winters	Chairman of the Board	April 22, 2019
/s/ Ian Kantrowitz Ian Kantrowitz	Director	April 22, 2019

60

EX-3.5

Exhibit 3.5

CERTIFICATE OF AMENDMENT OF

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF

ALPINE 4 TECHNOLOGIES LTD.

ALPINE 4 TECHNOLOGIES LTD., a corporation organized and existing under, and by virtue of, the General Corporation Law of the State of Delaware, hereby certifies that:

FIRST: The name of the Corporation is Alpine 4 Technologies Ltd. (the "Corporation").

SECOND: The Corporation was originally incorporated under the name "ALPINE 4 INC.," and the original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on April 22, 2014.

THIRD: The Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the General Corporation Law of the State of Delaware, adopted resolutions on April 18, 2017, amending and restating the Corporation's Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation"), to replace Section 1 of ARTICLE IV with the following language:

Section 1.  Authorized Shares . This Corporation is authorized to issue ONE HUNDRED MILLION (100,000,000) shares of Class A Common Stock, par value $0.0001 per share (the "Class A Common Stock"), FIVE MILLION (5,000,000) shares of Class B Common Stock, par value $0.0001 per share (the "Class B Common Stock", and together with the Class A Common Stock, the "Common Stock"), and TEN MILLION (10,000,000) shares of Preferred Stock, par value $0.0001 per share. The previously issued shares of common stock are hereby redesignated as the Class A Common Stock.  The number of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding shares of Common Stock of the Corporation, voting together as a single class.

FOURTH: Also pursuant to a resolution of the Board of Directors, thereafter this Certificate of Amendment was submitted to the stockholders of the Corporation for their approval, and was duly adopted by the Shareholders at the 2017 Annual Meeting of Shareholders held on November 18, 2016, in accordance with the provisions of Sections 211 and 242 of the General Corporation Law of the State of Delaware.

FIFTH: All other provisions of the Amended and Restated Certificate of Incorporation shall remain in full force and effect.

IN WITNESS WHEREOF, ALPINE 4 TECHNOLOGIES LTD. has caused this Certificate of Amendment to be signed by its Chief Executive Officer this 15 th day of December, 2017.

ALPINE 4 TECHNOLOGIES LTD.

By:    /s/ Kent B. Wilson

Kent B. Wilson

Chief Executive Officer

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Kent B. Wilson, certify that:
1.	I have reviewed this Annual Report on Form 10-K of Alpine 4 Technologies Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:  April 22, 2019

By: /s/ Kent B. Wilson

Kent B. Wilson

Chief Executive Officer,

(Principal Executive Officer, Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Alpine 4 Technologies Ltd. (the "Company") for the year ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Kent B. Wilson, Chief Executive Officer and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1)The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  April 22, 2019	By: /s/ Kent B. Wilson
	Kent B. Wilson
	Chief Executive Officer, Chief Financial Officer

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2018	Mar. 31, 2019	Jun. 30, 2018
Registrant Name	Alpine 4 Technologies Ltd.
Registrant CIK	0001606698
SEC Form	10-K
Period End date	Dec. 31, 2018
Fiscal Year End	--12-31
Trading Symbol	alpp
Tax Identification Number (TIN)	465482689
Public Float			$ 2,257,363
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Voluntary filer	No
Well-known Seasoned Issuer	No
Shell Company	false
Small Business	true
Emerging Growth Company	true
Ex Transition Period	false
Amendment Flag	false
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Incorporation, State Country Name	Delaware
Entity Address, Address Line One	2525 E Arizona Biltmore Circle
Entity Address, Address Line Two	Suite 237
Entity Address, City or Town	Phoenix
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85016
City Area Code	855
Local Phone Number	777-0077
Common Class A
Number of common stock shares outstanding		26,567,410
Common Class B
Number of common stock shares outstanding		5,000,000

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2018	Dec. 31, 2017
CURRENT ASSETS:
Cash	$ 207,205	$ 128,512
Accounts receivable	2,610,354	1,560,480
Inventory	2,175,795	1,212,546
Capitalized contract costs	64,234	0
Prepaid expenses and other current assets	222,200	154,385
Assets of discontinued operations	121,296	574,174
Total current assets	5,401,084	3,630,097
Property and equipment, net	7,990,556	5,023,758
Intangible asset, net	677,210	752,622
Goodwill	3,193,861	1,963,761
Other non-current assets	290,238	258,238
Assets of discontinued operations	387,727	4,342,474
TOTAL ASSETS	17,940,676	15,970,950
CURRENT LIABILITIES:
Accounts payable	3,102,970	1,367,989
Accrued expenses	1,254,853	739,645
Deferred revenue	25,287	64,918
Derivative liabilities	1,892,321	271,588
Deposits	12,509	12,509
Notes payable, current portion	3,645,603	1,814,689
Notes payable, related parties, current portion	132,000	43,500
Convertible notes payable, current	2,644,735	2,302,620
Financing lease obligation, current portion	105,458	24,590
Net liabilities of discontinued operations	2,752,447	3,344,974
Total current liabilities	15,568,183	9,987,022
Notes payable, net of current portion	4,517,441	0
Convertible notes payable, net of current portion	450,000	1,660,106
Financing lease obligations, net of current portion	8,295,176	6,560,112
Deferred revenue	0	43
Deferred tax liability	608,304	181,703
TOTAL LIABILITIES	29,439,104	18,388,986
REDEEMABLE COMMON STOCK	0	1,439,725
STOCKHOLDERS' DEFICIT:
Preferred shares	0	0
Additional paid-in capital	17,018,591	16,573,632
Accumulated deficit	(28,520,094)	(20,433,875)
Total stockholders' deficit	(11,498,428)	(3,857,761)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	17,940,676	15,970,950
Common Class A
STOCKHOLDERS' DEFICIT:
Common shares	2,575	2,322
Total stockholders' deficit	2,575	2,322
Common Class B
STOCKHOLDERS' DEFICIT:
Common shares	500	160
Total stockholders' deficit	$ 500	$ 160

XML

Consolidated Balance Sheets - Parenthetical - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument, Unamortized Discount	$ 942,852	$ 79,630
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Redeemable Class A Common Stock
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares, Issued	0	379,403
Common Stock, Shares, Outstanding	0	379,403
Common Class A
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares, Issued	25,267,410	23,222,087
Common Stock, Shares, Outstanding	25,267,410	23,222,087
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Class B
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares, Issued	5,000,000	1,600,000
Common Stock, Shares, Outstanding	5,000,000	1,600,000
Common Stock, Shares Authorized	5,000,000	5,000,000

XML

Condensed Consolidated Statement of Operations - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Details
Revenue	$ 14,261,794	$ 8,318,016
Cost of revenue	9,440,998	5,907,421
Gross Profit	4,820,796	2,410,595
Operating expenses:
General and administrative expenses	5,470,148	2,814,111
Total operating expenses	5,470,148	2,814,111
Loss from operations	(649,352)	(403,516)
Other expenses
Interest expense	(3,121,201)	(1,262,493)
Change in value of derivative liability	604,219	(126,054)
Gain on extinguishment of debt	6,305	0
Other income	119,737	246,895
Total other expenses	(2,390,940)	(1,141,652)
Loss before income tax	(3,040,292)	(1,545,168)
Income tax (benefit)	(43,399)	(258,392)
Loss from continuing operations	(2,996,893)	(1,286,776)
Discontinued operations:
Loss from discontinued operations	(4,911,124)	(1,710,644)
Total discontinued operations	(4,911,124)	(1,710,644)
Net loss	$ (7,908,017)	$ (2,997,420)
Weighted average shares outstanding :
Weighted Average Number of Shares Outstanding, Basic	28,447,969	23,858,031
Weighted Average Number of Shares Outstanding, Diluted	28,447,969	23,858,031
Basic and Diluted Loss per shares
Income (Loss) from Continuing Operations, Per Basic and Diluted Share	$ (0.11)	$ (0.06)
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic and Diluted Share	(0.17)	(0.07)
Earnings Per Share, Basic and Diluted	$ (0.28)	$ (0.13)

XML

Statements of Stockholders' Deficit - USD ($)	Additional Paid-in Capital	Retained Earnings	Total	Common Class A	Common Class B
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2016	$ 16,228,106	$ (17,436,455)	$ (1,206,041)	$ 2,148	$ 160
Shares, Outstanding, Beginning Balance at Dec. 31, 2016				21,474,481	1,600,000
Proceeds from sale of common stock	39,987		40,000	$ 13
Issuance of shares of common stock for cash				132,209
Issuance of shares of common stock to consultants for services	62,027		62,084	$ 57
Stock Issued During Period, Shares, Issued for Services				578,640
Issuance of shares of common stock for convertible note payable and accrued interest	99,484		99,573	$ 89
Issuance of shares of common stock for convertible note payable and accrued interest, shares				886,757
Issuance shares for discount on convertible note payable	16,485		16,500	$ 15
Issuance shares for discount on convertible note payable, shares				150,000
Reclassification of derivative liability	(252,633)		(252,633)
Derivative liability resolution	222,099		222,099
Issuance of warrants for acquisition	40,941		40,941
Employee stock compensation	87,136		87,136
Reclassification of warrants embedded conversion option as derivative liability	30,000		30,000
Net loss		(2,997,420)	(2,997,420)
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2017	16,573,632	(20,433,875)	(3,857,761)	$ 2,322	$ 160
Shares, Outstanding, Ending Balance at Dec. 31, 2017				23,222,087	1,600,000
Adoption of ASC 606		(178,202)	(178,202)
Issuance of shares for discount/inducement on convertible note payable	65,910		66,014	$ 104
Issuance of shares for discount/inducement on convertible note payable, shares				1,849,999
Issuance of shares of common stock for modification of debt	14,990		15,000	$ 10
Issuance of shares of common stock for modification of debt, shares				100,000
Proceeds from sale of common stock			0
Issuance of shares of common stock for convertible note payable and accrued interest	54,086		54,187	$ 101
Issuance of shares of common stock for convertible note payable and accrued interest, shares				1,015,921
Reclassification of shares from mezzanine	(38)		0	$ 38
Reclassification of shares from mezzanine, shares				379,403
Change in fair value of warrant modification	4,310		4,310
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture					3,400,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	176,460		176,800		$ 340
Derivative liability resolution	58,018		58,018
Employee stock compensation	71,223		71,223
Net loss		(7,908,017)	(7,908,017)
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2018	$ 17,018,591	$ (28,520,094)	$ (11,498,428)	$ 2,575	$ 500
Shares, Outstanding, Ending Balance at Dec. 31, 2018				26,567,410	5,000,000

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Net Cash Provided by (Used in) Operating Activities
Net loss	$ (7,908,017)	$ (2,997,420)
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities
Depreciation	871,847	671,423
Amortization	75,412	92,080
Gain on extinguishment of debt	(136,300)
Loss on disposal of fixed assets	536,772	18,841
Change in value of derivative liabilities	(604,219)	126,054
Employee stock compensation	71,223	87,136
Stock issued for services	176,800	62,084
Amortization of debt issuance	213,354	50,500
Amortization of debt discounts	1,428,954	89,292
Impairment of assets	1,764,382	0
Change in current assets and liabilities:
Increase (Decrease) in Receivables	398,371	(506,436)
Increase (Decrease) in Inventories	(348,194)	(282,432)
Capitalized Contract Cost, Amortization	37,300
Increase (Decrease) in Prepaid Expense	159,927	(120,379)
Increase (Decrease) in Accounts Payable	1,441,304	546,825
Increase (Decrease) in Accrued Liabilities	929,323	723,733
Income tax payable		(20,123)
Increase (Decrease) in Deferred Income Taxes	(43,399)	(105,450)
Increase (Decrease) in Deferred Revenue	(319,410)	52,425
Net cash used in operating activities	(1,254,570)	(1,511,847)
Net Cash Provided by (Used in) Investing Activities
Capital expenditures	(271,516)	(192,805)
Proceeds from insurance claim on automobiles and trucks	0	237,732
Proceeds from the sale of fixed assets	318,879	0
Acquisition, net of cash acquired	(1,976,750)	(1,937,616)
Net cash used in investing activities	(1,929,387)	(1,892,689)
Net Cash Provided by (Used in) Financing Activities
Proceeds from issuances of notes payable, related party	145,000	105,500
Proceeds from issuances of notes payable, non-related party	924,750	1,952,390
Proceeds from issuances of convertible notes payable	2,355,950	785,500
Proceeds from sale of common stock	0	40,000
Proceeds from sale leaseback transaction	1,900,000	0
Repayments of notes payable, related party	(56,500)	(223,500)
Repayments of notes payable, non-related party	(741,079)	(247,084)
Repayments of convertible notes payable	(1,417,133)	(219,721)
Proceeds from line of credit, net	327,325	709,201
Cash paid on financing lease obligations	(175,663)	(1,691)
Net cash provided by financing activities	3,262,650	2,900,595
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH	78,693	(503,941)
CASH AND RESTRICTED CASH, BEGINNING BALANCE	335,823	839,764
CASH AND RESTRICTED CASH, ENDING BALANCE	414,516	335,823
Supplemental Cash Flow Information
Interest Paid	1,162,149	1,219,080
Income Taxes Paid	0	2,167
Supplemental Cash Flow Elements
Common stock issued for convertible note payable and accrued interest	54,187	99,573
Common stock issued for convertible note discount	11,917	16,500
Issuance of convertible note for acquisition	450,000	1,500,000
Issuance Of Note Payable For Acquisitions	1,950,000	300,000
Issuance of warrants for acquisition	0	40,941
Issuance of redeemable common stock for acquisition	0	1,439,725
Debt discount from convertible note payable	0	30,000
Debt discount due to derivative liabilities	2,282,970	115,000
Reclassification of warrants embedded conversion option as derivative liability	0	252,633
Notes payable and redeemable common stock restructuring	3,197,538	0
Capital leases	247,000	0
Proceeds from sale of assets offset directly against debt	1,141,588	0
Release of derivative liability	$ 58,018	$ 0

XML

Note 1 - Organization and Basis of Presentation

12 Months Ended

Dec. 31, 2018

Notes

Note 1 - Organization and Basis of Presentation

Note 1 – Organization and Basis of Presentation

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.  The Company is a technology holding company owning four companies (ALTIA, LLC; Quality Circuit Assembly, Inc. ("QCA"); Venture West Energy Services (“VWES”) (formerly Horizon Well Testing, LLC); and American Precision Fabricators, Inc., an Arkansas corporation (“APF”).   On April 5, 2018, the Company acquired 100% of the outstanding shares of APF (see Note 9).

Basis of presentation

The accompanying 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 U.S. GAAP.

XML

Note 2 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Notes

Note 2 - 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 December 31, 2018 and 2017.  Significant intercompany balances and transactions have been eliminated.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.  These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances.  Actual results could differ from those estimates.

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.

Advertising

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

Cash

Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days.   As of December 31, 2018 and 2017, the Company had no cash equivalents. 

The following table provides a reconciliation of cash and restricted cash reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows. 

		December 31,		December 31,
		2018		2017
Cash	$	207,205	$	128,512
Restricted cash included in other non-current assets		207,311		207,311
Total cash and restricted cash shown in consolidated statements of cash flows	$	414,516	$	335,823

Major Customers

The Company had two customers that made up 29% and 27%, respectively, of accounts receivable as of December 31, 2018.  The Company had two customers that made up 41% and 13%, respectively, of accounts receivable as of December 31, 2017.

For the years ended December 31, 2018, the Company had two customers that made up 29% and 13% of total revenues.  For the years ended December 31, 2017, the Company had one customer that made up approximately 36% of total revenues. 

Accounts Receivable

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis.  As of December 31, 2018 and 2017, allowance for bad debt was $0 and $0, respectively.

Inventory

Inventory is valued at the lower of the inventory's cost (weighted average basis) or net realizable value. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower.  Inventory is segregated into four areas, raw materials, WIP, finished goods, and In-Transit.  Below is a breakdown of how much inventory was in each area as of December 31, 2018 and 2017:

		2018		2017
Raw materials	$	676,621	$	577,259
WIP		-		440,586
Finished goods		1,499,174		161,310
In Transit		-		33,391
	$	2,175,795	$	1,212,546

Property and Equipment

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

Automobiles & Trucks	10 to 20 years
Buildings	39 years
Leasehold Improvements	15 years or time remaining on lease (whichever is shorter)
Equipment	10 years

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

Property and equipment consisted of the following as of December 31, 2018 and 2017:

		2018		2017
Automobiles and trucks	$	155,179	$	-
Machinery and equipment		2,548,855		1,276,779
Office furniture and fixtures		109,619		7,056
Building		5,795,000		3,895,000
Leasehold improvements		261,608		261,608
Less: Accumulated depreciation		(879,705)		(416,685)
	$	7,990,556	$	5,023,758

Purchased Intangibles and Other Long-Lived Assets

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

Customer List	15 years
Non-compete agreements	15 years
Software development	5 years

Intangible assets consisted of the following as of December 31, 2018 and 2017:

		2018		2017
Software	$	278,474	$	278,474
Noncompete		100,000		100,000
Customer lists		531,187		531,187
Less: Accumulated amortization		(232,451)		(157,039)
	$	677,210	$	752,622

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

Year Ending December 31,
2019	79,960
2020	79,960
2021	79,960
2022	46,361
2023	46,361
Thereafter	344,608
Total	677,210

Other Long-Term Assets

Other long-term assets consisted of the following as of December 31, 2018 and 2017:

		2018		2017
Restricted Cash	$	207,311	$	207,311
Deposits		50,927		50,927
Other		32,000		-
	$	290,238	$	258,238

Restricted cash consists of deposit account collateralizing letters of credit in favor of the counterparty in our lease financing obligation.

Impairment of Long-Lived Assets

The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, Accounting for the Impairment of Long-Lived Assets.  This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset.  During all periods presented, there have been no impairment losses, except to the impairment loss of $1,596,537 for the year ended December 31, 2018 related to the discontinued operation.

Goodwill

In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable.  We assess potential impairment by considering present economic conditions as well as future expectations.  All assessments of goodwill impairment are conducted at the individual reporting unit level.  As of December 31, 2018 and 2017, the reporting units with goodwill were QCA and APF.

The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount.  Based on the qualitative criteria the company believes there not to be any triggers for potential impairment of goodwill and therefore the Company has recorded no impairment of goodwill in any period presented, except to the impairment of goodwill of $167,845 for the year ended December 31, 2018 related to the discontinued operation.

Fair Value Measurement

The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes and line 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.  For additional information, please see Note 11 – Derivative Liabilities and Fair Value Measurements.

Redeemable Common Stock

As discussed in Note 9 below, 379,403 shares of the Company's Class A common stock that were issued as consideration for the VWES acquisition contain a redemption feature which allows for the redemption of common stock at the option of the holder. In accordance with ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity.   Accordingly, at December 31, 2017, 379,403 shares of Class A common stock were classified outside of permanent equity at its redemption value.  During the year ended December 31, 2018, the shares were redeemed and classified as permanent equity.

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, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under ASC Topic 605. 

The Company recorded a net increase to its opening accumulated deficit of $178,202 as of January 1, 2018 due to the cumulative impact of adopting ASC Topic 606, with the impact related to recognition of revenue and costs relating to the sales of the 6^th Sense Auto service.  Under the new revenue standard, sales of the Company’s 6^th Sense Auto service, which includes a hardware and a monthly subscription component, are required to be treated as a single performance obligation and recognized over time.  As a result, the deferred revenue increased by $279,736 and capitalized contract costs increased by $101,534.  The impact to the consolidated statement of operations for the year ended December 31, 2018 was a net increase of $279,736 to revenue and a net increase of $101,534 to cost of revenue as a result of applying ASC Topic 606. 

Revenues under ASC Topic 606 are recognized when the promised goods or services are transferred to customers, in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services.  The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries.  

ALTIA

Revenues recorded by ALTIA relate primarily to the Company’s 6^th Sense Auto service.  The Company accounts for its revenue by deferring the total contract amount and recognizing the amounts over the monthly subscription period, ranging from 12 to 36 months.  

QCA

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

APF

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

Earnings (loss) per share

Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debentures, but they are anti-dilutive due to the net loss incurred. 

Stock-based compensation

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718-10, Compensation – Stock Compensation, and the conclusions reached by ASC 505-50, Equity – Equity-Based Payments to Non-Employees. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment is reached or completion of performance by the provider of goods or services as defined by ASC 505-50.

Income taxes

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

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

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

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings.  If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features.

Related Party Disclosure

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

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its financial statements.

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

XML

Note 3 - Going Concern

12 Months Ended

Dec. 31, 2018

Notes

Note 3 - Going Concern

Note 3 – Going Concern

The accompanying financial statements have been prepared on a going concern basis. The working capital of the Company is currently negative and causes doubt of the ability for the Company to continue. The Company requires capital for its operational and marketing activities.  The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company's plan of operations, and its ultimate transition to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

In order to mitigate the risk related with the going concern uncertainty, the Company has a three-fold plan to resolve these risks.  First, the acquisitions of QCA, and APF have allowed for an increased level of cash flow to the Company.  Second, the Company is considering other potential acquisition targets that, like QCA, should increase income and cash flow to the Company.  Third, the Company plans to issue additional shares of common stock for cash and services during the next 12 months and has engaged professional service firms to provide advisory services in connection with that capital raise.

XML

Note 4 - Leases

12 Months Ended

Dec. 31, 2018

Notes

Note 4 - Leases

Note 4 – Leases

As of December 31, 2018, the future minimum capital lease and financing transaction payments, net of amortization of debt issuance costs, were as follows:

Year Ending December 31,
2019		817,181
2020		836,022
2021		849,645
2022		865,351
2023		875,428
Thereafter		8,763,471
Total		13,007,098
Less: Current capital leases and financing transaction		(105,458)
Less: imputed interest		(4,606,464)
Non-current capital leases and financing transaction	$	8,295,176

In 2016, the Company sold a building and used the money to purchase QCA.  Because this is a financing transaction, the sale is recorded under "financing lease obligation" on the accompanying consolidated balance sheet and amortized over the 15-year term of the lease.  The term of the lease has been extended through December 31, 2032 at a monthly rate of approximately $69,000.  These payments are reflected in the table above.

On April 5, 2018, the Company acquired APF (see Note 9).  In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from APF was sold for $1,900,000, and leased back to the company for a period of 15 years at a monthly rate of $15,833, subject to an annual increase of 2% throughout the term of the lease.  The Company had no gain or loss resulting from the sale of the property, and the resulting lease qualifies as a capital lease.  As a result, the Company has capitalized the cost of the building and the resulting capital lease obligation liability of $1,900,000.  The resulting capital lease obligation liability of $1,763,903 as of December 31, 2018 is reflected in financing lease obligation in the accompanying consolidated balance sheets.  The payments related to this lease are reflected in the table above.        

Operating Leases

The Company has two non-cancellable operating leases as of December 31, 2018 for its locations in San Jose, California.  Approximate monthly rent obligations for these locations amount to $21,500 and $5,000 respectively.  The Company also has an office it leases in Phoenix, Arizona on a month-to-month basis. 

The five-year minimum rent payments for each location are as follows:

Year Ending December 31,
2019	$	274,118
2020		282,342
2021		290,812
Thereafter		-
Total	$	847,272

Rent expense for the years ended December 31, 2018 and 2017 amounted to $447,595 and $468,673, respectively.   

XML

Note 5 - Notes Payable

12 Months Ended

Dec. 31, 2018

Notes

Note 5 - Notes Payable

Note 5 – Notes Payable

In May 2018, APF also secured a line of credit with Crestmark, providing for borrowings up to $1,000,000 at a variable interest rate, collateralized by APF’s outstanding accounts receivable. 

As of December 31, 2017, the Company had an outstanding term loan with a 30% interest rate of $10,000 which was repaid during the year ended December 31, 2018.  During the years ended December 31, 2018, the Company borrowed an aggregate total of $149,000 in additional short-term notes payable bearing interest at 15% per annum with maturity dates of three months from the date of issuance.

On February 22, 2018, the Company issued a $3,000,000 note payable under the Amended and Restated Secured Promissory Note with the seller of VWES.  The note is secured by the assets of VWES and bears interest at 7% per annum and is due in semi-annual payments of $150,000 commencing on June 1, 2018, through June 1, 2020.      

On April 5, 2018, the Company issued two secured promissory notes in the aggregate principal amount of $1,950,000 (“Secured APF Notes”) as part of the consideration for the purchase of APF (see Note 9).  The Secured APF Notes are secured by the equipment, customer accounts and intellectual property of the Company, and all of the products and proceeds from any of the assets of APF.  The Secured APF Notes bear interest at 4.25% per annum and have aggregate monthly payments of $19,975 for the first 23 months, with a balloon payment due in April 2020 for the remaining principal and interest outstanding. 

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

The outstanding balances for the loans as of December 31, 2018 and 2017 were as follows:

		2018		2017
Lines of credit, current portion	$	2,504,440	$	1,657,610
Equipment loans, current portion		260,301		147,079
Term notes, current portion		880,862		10,000
Total current		3,645,603		1,814,689
Long-term portion		4,517,441		-
Total notes payable	$	8,163,044	$	1,814,689

Future scheduled maturities of outstanding notes payable from related parties are as follows:

Year Ending December 31,
2019	$	3,645,603
2020		4,271,959
2021		178,607
2022		66,875
Total	$	8,163,044

XML

Note 6 - Notes Payable, Related Parties

12 Months Ended

Dec. 31, 2018

Notes

Note 6 - Notes Payable, Related Parties

Note 6 – Notes Payable, Related Parties

At December 31, 2018 and 2017, notes payable due to related parties consisted of the following:

		2018		2017
Notes payable; non-interest bearing; due upon demand; unsecured	$	4,500	$	4,500
Note payable; bearing interest at 8% per annum; due June 30, 2017; unsecured		7,500		7,500
Note payable; bearing at 30% per annum; due March 3, 2018; unsecured		-		11,500
Note payable; bearing at 20% per annum; due April 28, 2018; unsecured		-		20,000
Series of notes payable, bearing interest at rates from 10% to 15% per annum, with maturity dates from April 2018 to July 2018, unsecured		120,000		-
Total notes payable - related parties	$	132,000	$	43,500

The above notes which are in default as of December 31, 2018, were due on demand by the lenders as of the date of this Report.

XML

Note 7 - Convertible Notes Payable

12 Months Ended

Dec. 31, 2018

Notes

Note 7 - Convertible Notes Payable

Note 7 – Convertible Notes Payable

At December 31, 2018 and 2017, convertible notes payable consisted of the following:

		2018		2017
Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 20% per annum, with due dates ranging from April 2016 through October 2017.  The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share.	$	25,000	$	40,000
Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019.  The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $10 per share.		1,654,588		1,827,108
Secured convertible note payable issued to the seller of VWES on January 1, 2017 for an aggregate of $1,500,000, bearing interest at 5% per annum, due in full on July 1, 2018.  The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $8.50 per share.  The amount was extinguished and replaced by the Amended and Restated Secured Promissory Note (see Note 9).		-		1,500,000
Series of convertible notes payable issued in January 2017, bearing interest at rates of 10% per annum, and due in January 2018.  The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share.		10,000		30,000
On July 13, 2017, the Company entered into a variable convertible note for $43,000 with net proceeds of $40,000.  The note is due April 30, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 38% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the note up to 180 days prior to the due date, with the prepayment penalty ranging from 10% to 27% depending on when prepaid.		-		43,000
On July 19, 2017, the Company entered into a variable convertible note for $115,000 with net proceeds of $107,000.  The note is due January 21, 2018 and bears interest at 10% per annum.  The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from July 19, 2017.  The Company issued 500,000 shares of Class A common stock to the note holder which are returnable if no event of default has occurred and the note is paid in full within 180 days of the note date.  Management had determined that it was probable that the Company would meet the conditions under the note and therefore the shares and the cost of issuance were not recorded.  During the three months ended March 31, 2018, the Company repaid the note and the shares were returned.		-		72,748
On September 5, 2017, the Company entered into a variable convertible note for $105,000 with net proceeds of $100,000.  The note is due September 5, 2018 and bears interest at 10% per annum.  After 180 days, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from September 5, 2017.  The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date.		-		105,000
On October 4, 2017, the Company entered into a variable convertible note for $60,000 with net proceeds of $55,000.  The note is due July 4, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 35% of the lowest trading price during the previous ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from October 4, 2017.  The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date.		-		60,000
On October 11, 2017, the Company entered into a variable convertible note for $58,500 with net proceeds of $55,500.  The note is due on July 20, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 38% of the average of the three lowest trading prices of the stock for ten days prior to conversion.    The Company can prepay the convertible note up to 180 days from October 11, 2017.  The prepayment penalty is equal to 10% to 27% of the outstanding note amount depending on the prepayment date.		-		58,500
On November 2, 2017, the Company entered into a variable convertible note for $115,000 with net proceeds of $107,000.  The note is due May 2, 2018 and bears interest at 10% per annum.  The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company issued 150,000 shares to the lender with this note, which has been recorded as a discount.		-		115,000
On November 28, 2017, the Company entered into a variable convertible note for $105,000 with net proceeds of $100,000.  The note is due November 28, 2018 and bears interest at 10% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 35% of the average of the three lowest trading price during the previous ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from November 28, 2017.  The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date.		-		105,000
On December 6, 2017, the Company entered into a variable convertible note for $86,000 with net proceeds of $79,000.  Additional borrowings of $64,000 were received under this convertible note in January 2018.  The note is due June 6, 2018 and bears interest at 10% per annum.  After 180 days at the maturity date, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.		-		86,000
On January 10, 2018, the Company entered into a variable convertible note for $150,000 with net proceeds of $135,000.  The note is due October 1, 2018 and bears interest at 12% per annum.  The note is immediately convertible into shares of Class A common stock at  the lesser of $0.16 per share or 60% of the lowest trading price the previous 25 days prior to conversion.  The Company can prepay the note within the first 90 days following January 10, 2018 with a prepayment penalty equal to 145% of the total outstanding balance.  The Company issued 333,333 shares to the lender with this note, which has been recorded as a discount.		95,000		-
On March 13, 2018, the Company entered into a variable convertible note for $128,000 with net proceeds of $125,000.  The note is due December 30, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 42% of the average of the 2 lowest trading price the previous 10 days prior to conversion.  The Company can prepay the note at a penalty ranging from 15% to 40%.		-		-
On April 3, 2018, the Company entered into a variable convertible note for $85,000 with net proceeds of $79,000.  The note is due January 2, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  In connection with this variable convertible note, the Company issued 386,363 shares of its Class A common stock, which has been recorded as a discount.		-		-
On April 5, 2018, the Company entered into convertible promissory notes for an aggregate principal amount of $450,000 as part of the consideration for the acquisition of APF (see Note 9).  The convertible notes are due in full in 36 months and bear interest at 4.25% per annum, and are convertible into shares of Class A common stock after 6 months from the issuance date at a rate of $1 per share.		450,000		-
On April 9, 2018, the Company entered into a variable convertible note for $124,199 with net proceeds of $115,000.  The note is due January 9, 2019 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  In connection with this variable convertible note, the Company issued 76,670 shares of its Class A common stock, along with warrants to purchase 153,340 shares of Class A common stock at an exercise price of $1 per share which are immediately vested and have a 3 years contractual life.  The value of the common stock and warrants have been recorded as a discount.		61,699		-
On April 9, 2018, the Company entered into a variable convertible note for $37,800 with net proceeds of $35,000.  The note is due January 9, 2019 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.		37,800		-
On June 4, 2018, the Company entered into a variable convertible note for $165,000 with net proceeds of $151,500.  The note is due December 4, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.  The Company issued 850,000 shares of Class A common stock to the note holder which are returnable if no event of default has occurred and the note is paid in full within 180 days of the note date.		165,000		-
On July 16, 2018, the Company entered into a variable convertible note for $220,000 with net proceeds of $214,000.  The note is due July 16, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.		-		-
On July 18, 2018, the Company entered into a variable convertible note for $88,000 with net proceeds of $88,000.  The note is due April 30, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		88,000		-
On August 30, 2018, the Company entered into a variable convertible note for $337,500 with net proceeds of $303,750.  The note is due February 28, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		337,500		-
On September 27, 2018, the Company entered into a variable convertible note for $93,000 with net proceeds of $93,000.  The note is due July 15, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		93,000		-
On October 23, 2018, the Company entered into a variable convertible note for $220,000 with net proceeds of $198,000.  The note is due December 14,2018 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		220,000		-
On November 12, 2018, the Company entered into a variable convertible note for $670,000 with net proceeds of $636,000.  The note is due November 12, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.		670,000		-
On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200.  The note is due September 7, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion.		130,000		-
Total convertible notes payable		4,037,587		4,042,356
Less: discount on convertible notes payable		(942,852)		(79,630)
Total convertible notes payable, net of discount		3,094,735		3,962,726
Less: current portion of convertible notes payable		(2,644,735)		(2,302,620)
Long-term portion of convertible notes payable	$	450,000	$	1,660,106

The discounts on convertible notes payable arise from stock issued with notes payable, beneficial conversion features, as well as conversion features of certain convertible notes being treated as derivative liabilities (see Note 11).  The discounts are being amortized over the terms of the convertible notes payable.  Amortization of debt discounts during the years ended December 31, 2018 and 2017 amounted to $1,428,954 and $89,292, respectively, and is recorded as interest expense in the accompanying consolidated statements of operations.  The unamortized discount balance for these notes was $942,852 as of December 31, 2018, which is expected to be amortized over the next 12 months.

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

Balance outstanding, December 31, 2016	$	2,007,557
Issuance of convertible notes payable for acquisition of VWES		1,500,000
Issuance of convertible notes payable for cash		836,000
Repayment of notes		(219,721)
Conversion of notes payable to common stock		(88,902)
Discount from issuance of common stock		(16,500)
Discount from beneficial conversion feature		(30,000)
Discount from derivative liabilities		(115,000)
Amortization of debt discounts		89,292
Balance outstanding, December 31, 2017	3,962,726
Issuance of convertible notes payable for acquisition of APF	450,000
Issuance of convertible notes payable for cash		2,355,950
Issuance for debt discounts		147,341
Extinguishment of convertible note		(1,500,000)
Repayment of notes		(1,417,133)
Conversion of notes payable to common stock		(50,133)
Discount from beneficial conversion feature		(2,282,970)
Amortization of debt discounts		1,428,954
Balance outstanding, December 31, 2018	$	3,094,735

XML

Note 8 - Stockholders' Equity

12 Months Ended

Dec. 31, 2018

Notes

Note 8 - Stockholders' Equity

Note 8 – Stockholders' Equity

Preferred Stock

The Company is authorized to issue 10,000,000 shares of $.0001 par value preferred stock. As of December 31, 2018 and December 31, 2017, no shares of preferred stock were outstanding.

Common Stock

Pursuant to the Second Amended and Restated Certificate of Incorporation, the Company is authorized to issue two classes of common stock: Class A common stock, which has one vote per share, and Class B common stock, which has ten votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the rights of the two classes of common stock will be identical.

The Company had the following transactions in its common stock during the year ended December 31, 2018:

•          Issued 499,999 shares of its Class A common stock in connection with a convertible note payable.  The note payable had an embedded conversion option that was a derivative, and the residual amount after allocating proceeds to the derivative was $0.  Accordingly, no discount was recognized.   

•          Issued 120,000 shares of its Class A common stock in connection with the conversion of convertible notes payable and accrued interest with a value of $15,600.

•          Issued 100,000 shares of the Company's Class A common stock related to the Amended Agreement with the seller of VWES.

•          Issued 76,670 shares of Class A common stock in connection with a convertible note payable.  The value of the shares amounted to $9,584 and has been recorded as a discount to the note payable. 

•          Issued 3,400,000 shares of Class B common stock to various employees, officers and board members as compensation.  The value of the shares amounted to $176,800 and has been recorded as a component of general and administrative expenses for the year ended December 31, 2018. 

•          Issued 250,000 shares of Class A common stock for the conversion of $7,250 of outstanding convertible notes payable.      

•          Issued 23,330 shares of Class A common stock with debt valued at $2,333. 

•          Issued 274,295 shares of Class A common stock for the conversion of $14,000 of outstanding convertible notes payable.     

•          Issued 195,924 shares of Class A common stock for the conversion of $10,000 of outstanding convertible notes payable.     

•          Issued 175,702 shares of Class A common stock for the conversion of $3,883 of outstanding convertible notes payable and $3,454 of accrued interest.   

•          Issued 1,250,000 shares of Class A common stock as an inducement for to investors to entering into convertible note agreements. 

The Company had the following transactions in its common stock during the year ended December 31, 2017:

·         Issued 578,640 shares of its Class A common stock for services.  Total expense for the shares issued for services was $62,084;

·         Issued 886,757 shares of its Class A common stock in connection with the conversion of convertible notes payable and accrued interest with a value of $99,573;

·         Issued 132,209 shares of the Company's restricted Class A common stock in private placement transactions to investors, in exchange for capital raised of $40,000; and

·         Issued 150,000 Class A common stock to a lender valued at $16,500.

Redeemable Common Stock

During 2017, the Company issued 379,403 shares of its Class A common stock in connection with the purchase of VWES.  Of these shares, 260,000 shares were redeemable at $4.25 per share at three different redemption periods:  130,000 shares at 12 months, 65,000 shares at 18 months and 65,000 shares at 24 months from the closing date of the purchase of VWES.  Additionally, 119,403 shares were redeemable at $3.35 per share at 12 months from the closing date of the purchase of VWES.  These shares were valued at the redemption value of $1,439,725.  The redemption right on these shares was cancelled in connection with the Amended Agreement entered on February 22, 2018 (see Note 9). 

Due to the nature of the issuance of stock for the VWES acquisition, it was historically recorded outside of permanent equity.  Subsequent to February 22, 2018 after the cancellation of the redemption rights, the stock was reclassified to equity in the accompanying consolidated balance sheet. 

Stock Options

The Company has issued stock options to purchase shares of the Company’s Class A common stock issued pursuant to the Company's 2016 Stock Option and Stock Award Plan (the "Plan").  The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant and on each modification date. The following key assumptions during the years ended December 31, 2018 and 2017:

	2018			2017
Risk free rate		2.38	%		2.38	%
Volatility		200	%		200	%
Expected terms (years)	6.25			6.25
Dividend rate		0	%		0	%

The following summarizes the stock option activity for the years ended December 31, 2018:

				Weighted-
			Weighted-	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
	Options		Price	Life (Years)		Value
Outstanding at December 31, 2016	-	$	0.00
Granted	1,344,000		0.57
Forfeited	(561,750)		0.77
Outstanding at December 31, 2017	782,250	$	0.42	9.44	$	-
Granted	1,064,000		0.07
Forfeited	(56,250)		0.81
Exercised	-		0.00
Outstanding at December 31, 2018	1,790,000	$	0.19	9.10	$	-
Vested and expected to vest
at December 31, 2018	1,790,000	$	0.19	9.10	$	-
Exercisable at December 31, 2018	391,969	$	0.32	8.67	$	-

The following table summarizes information about options outstanding and exercisable as of December 31, 2018:

		Options Outstanding				Options Exercisable
			Weighted		Weighted			Weighted
			Average		Average			Average
	Exercise	Number	Remaining		Exercise	Number		Exercise
	Price	of Shares	Life (Years)		Price	of Shares		Price
$	0.05	979,000	9.38	$	0.05	88,000	$	0.05
	0.10	85,000	9.28		0.10	10,625		0.10
	0.13	388,500	8.59		0.13	145,688		0.13
	0.26	114,000	8.34		0.26	49,875		0.26
	0.90	223,500	8.27		0.90	97,781		0.90
		1,790,000				391,969

During the years ended December 31, 2018 and 2017, stock option expense amounted to $71,223 and $87,136, respectively.  Unrecognized stock option expense as of December 31, 2018 amounted to $199,812, which will be recognized over a period extending through December 2022.   

Warrants

On April 9, 2018, the Company granted 153,340 warrants in connection with the issuance of a convertible note payable.  The warrants have a 3 year contractual life, an exercise price of $1 per share and are vested immediately.

On January 1, 2017, the Company granted 75,000 warrants to the seller of VWES.  The warrants have a 3 year contractual life, an exercise price of $4.25 per share and are vested immediately.  The warrants were accounted for as part of the purchase price of the acquisition of VWES.  On February 22, 2018, in connection with the Amended Agreement (see Note 9), the warrants were cancelled and replaced with 75,000 new warrants with an exercise price of $1 per share that were vested immediately and have a contractual life of 3 years.

During the year ended December 31, 2017, the Company granted an aggregate total of 2,001 warrants to individuals.  These warrants all have a 3 year contractual life, an exercise price of $2.00 per share and are vested immediately.

As of December 31, 2018, the Company had 230,341 warrants outstanding with a weighted average exercise price of $1.01 and a weighted average remaining life of 2.23 years.

XML

Note 9 - Business Combination

12 Months Ended

Dec. 31, 2018

Notes

Note 9 - Business Combination

Note 9 – Business Combinations

Venture West Energy Services

Effective January 1, 2017, the Company purchased 100% of the outstanding interests of Venture West Energy Services (“VWES”) (formerly Horizon Well Testing, LLC).

Alpine 4 purchased 100% of the outstanding interests of VWES for $2,200,000 cash, two notes payable ($1,500,000 and $300,000), 379,403 shares of Alpine 4's Class A common stock, valued at $1,439,725, and 75,000 warrants, to purchase one share of Alpine 4 Class A common stock, valued at $40,941.  The $300,000 note bears interest at 1% and was payable in full by July 31, 2017 (see Note 6).  The $1,500,000 note is a convertible note with an option to convert at $8.50 into Alpine 4's Class A common stock.  The $1,500,000 note bears interest at 5% per annum and has a balloon payment due on the 18-month anniversary of the closing of the purchase.  There were also post-closing adjustments of $25,232.

A summary of the purchase price allocation at fair value is below.

	Purchase Allocation
Cash	$	262,384
Accounts Receivable, net		245,833
Property, Plant & Equipment		4,804,458
Intangibles		-
Goodwill		167,845
Accrued Expenses		(25,086	)
Total consideration	$	5,455,434

On February 22, 2018, the Company entered into an Amended Agreement with the seller of VWES.  Per the terms of the Amended Agreement, the two notes payable initially issued to the seller of VWES on January 1, 2017, for $1,500,000 and $300,000 were cancelled, along with the redemption rights associated with 379,403 shares the Company’s Class A common stock and 75,000 warrants, and replaced with a new Amended and Restated Secured Promissory Note for $3,000,000 (see Note 5).  The new note is due in semi-annual payments of $150,000 commencing on June 1, 2018, through June 1, 2020 and bears interest at 7% per annum.  If the note is paid was full on or before June 1, 2018, the balance due would be discounted by $500,000.  If the note is paid in full after June 1, 2018, and on or before December 1, 2018, the balance due will be discounted by $450,000.  If the note is paid in full after December 1, 2018, and on or before June 1, 2019, the balance due will be discounted by $350,000.  If the note is paid in full after June 1, 2019, and on or before December 1, 2019, the balance due will be discounted by $250,000.  If the note is paid in full after December 1, 2019, and on or before June 1, 2020, the balance due will be discounted by $200,000.

In connection with the Amended Agreement, the Company also issued an additional 100,000 shares of Class A common stock to the seller of VWES valued at $15,000, and granted new warrants effective February 22, 2018 to purchase 75,000 shares of common stock with an exercise price of $1.00 per share valued at $9,142 using the Black-Sholes model.  The warrants are immediately vested and have a contractual life of 3 years.  The Company also agreed to return the land and building acquired in the acquisition of VWES to the seller.  The land and building had an aggregate book value as of February 22, 2018 of $173,396, which approximated its fair value. 

The Company compared the value of the extinguished debt, returned land and building and cancelled stock and warrants to the value of the new Amended and Restated Secured Promissory Note and new instruments issued as of February 22, 2018.  The difference of $136,300 was reflected as a gain on extinguishment of debt during the accompanying consolidated statements of operations for the year ended December 31, 2018.  

The following is a summary of the non-cash items given as consideration to the seller of VEWS in connection with the Amended and Restated Secured Promissory Note, which is reflected in the supplemental disclosure of non-cash financing activities in the accompanying consolidated statement of cash flows for the year ended December 31, 2018.

		Non-Cash
		Consideration
Note payable	$	3,000,000
Common stock		15,000
Warrants		9,142
Land and building		173,396
Total	$	3,197,538

American Precision Fabricators (“APF”)

On April 5, 2018, the Company announced that it had entered into a Securities Purchase Agreement (the "SPA") with APF, an Arkansas corporation, and Andy Galbach ("Galbach") and Clarence Carl Davis, Jr. ("Davis"), the owners of APF (the "Sellers").  Pursuant to the SPA, the Company acquired 100% of the outstanding shares in APF.

The total purchase price of APF from the SPA amounted to $4,500,000, which consisted of aggregate cash consideration paid to the Sellers of $2,100,000, an aggregate of $1,950,000 of secured promissory notes due to the Sellers (see Note 5), and an aggregate of $450,000 of convertible promissory notes due to the Sellers (see Note 7).  At the closing date, the Company and the Sellers agreed to a reduction of the purchase price of $123,250, resulting from a net working capital adjustment which was deducted from the cash consideration due to the Sellers.  As a result, the total purchase price of APF was $4,376,750.      

A summary of the purchase price allocation at fair value is below.  The business combination accounting is not yet complete and the amounts assigned to assets acquired and liabilities assumed are provisional.  The Company is still in the process of obtaining and assessing documentation of the contracts for customer relationships.  Therefore, this may result in future adjustments to the provisional amounts as new information is obtained about facts and circumstances that existed at the acquisition date.

		Purchase Allocation
Accounts receivable	$	945,050
Inventory		675,074
Prepaid expenses and other current assets		250,040
Property and equipment		3,300,000
Goodwill		1,230,100
Accounts payable		(1,234,328)
Accrued expenses		(154,186)
Line of credit		(165,000)
Deferred tax liability		(470,000)
	$	4,376,750

In connection with the SPA, and as consideration for the Company to enter into the SPA, APF and Galbach entered into a Consulting Services Agreement (the "Consulting Agreement"), pursuant to which Galbach agreed for a period of 90 days following the closing date to provide strategic management services to APF, meet with APF's new management, and provide his knowledge in customer relations, trade and service implementation, and other business disciplines. Additionally, APF agreed to reimburse Galbach for his expenses incurred by Galbach in connection with providing the services under the Consulting Agreement.

Simultaneous with the purchase of APF, a building, owned by APF prior to the acquisition, was sold in a sale-leaseback transaction agreement, whereby the building was leased from the buyer for 15 years.  The proceeds from the sale-leaseback of $1,900,000 were used to fund the cash consideration to the sellers.  The building and the lease is being treated as a capital lease (see Note 4).   

The following are the unaudited pro forma results of operations for the three and years ended December 31, 2018 and 2017, as if APF had been acquired on January 1, 2017.  The pro forma results include estimates and assumptions which management believes are reasonable.  However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated.

		Pro Forma Combined Financials (Unaudited)
		Year Ended December 31, 2018		Year Ended December 31, 2017
Revenue	$	15,407,012	$	11,995,811
Net Loss from continuing operations	$	(3,189,893)	$	(1,649,423)
Net loss per shares from continuing operations	$	(0.12)	$	(0.07)

XML

Note 10 - Income Taxes

12 Months Ended

Dec. 31, 2018

Notes

Note 10 - Income Taxes

Note 10 – Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  A full valuation allowance is established against the remaining net deferred tax assets as of December 31, 2018 and 2017 based on estimates of recoverability.  The Company determined that such a valuation allowance was necessary given the current and expected near term losses and the uncertainty with respect to its ability to generate sufficient profits from its new business model. The Tax Cuts and Jobs Act was signed into law on December 22, 2017, and reduced the corporate income tax rate from 34% to 21%.  The Company's deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new tax law.

The following is a reconciliation of the difference between the effective and statutory income tax rates for years ended December 31:

		2018			2017
		Amount	Percent		Amount	Percent
Federal statutory rates	$	(1,660,684)	21.0%	$	(1,106,976)	34.0%
State income taxes		(474,481)	6.0%		(367,525)	11.3%
Permanent differences		890,348	-11.3%		4,103	-0.1%
Impact of change in tax rate		-			727,566	22.3%
Other		-			(27,282)	0.9%
Valuation allowance against net deferred tax assets		1,201,418	-15.2%		511,722	-14.9%
Effective rate	$	(43,399)	0.5%	$	(258,392)	53.5%

At December 31, 2018 and December 31, 2017, the significant components of the deferred tax assets are summarized below:

		2018		2017
Deferred income tax asset
Net operation loss carryforwards	$	2,607,105	$	1,253,964
Total deferred income tax asset		2,607,105		1,253,964
Less: valuation allowance		(2,607,105)		(1,253,964)
Total deferred income tax asset	$	-	$	-

At December 31, 2018 and December 31, 2017, the significant components of the deferred tax liabilities are summarized below:

		2018		2017
Deferred income tax liabilities:
Book to tax differences in intangible assets		608,304		181,703
Total deferred income tax asset	$	608,304	$	181,703

The deferred tax liability is mostly made up of the difference between book and tax values for property and equipment and intangible assets.

The Company has recorded as of December 31, 2018 and 2017 a valuation allowance of $2,607,105 and $1,253,964, respectively, as management believes that it is more likely than not that the deferred tax assets will not be realized in future years.  Management has based its assessment on the Company's lack of profitable operating history.

The Company annually conducts an analysis of its tax positions and has concluded that it had no uncertain tax positions as of December 31, 2018.

The Company has net operating loss carry-forwards of approximately $9.8 million.  Such amounts are subject to IRS code section 382 limitations and begin to expire in 2029.  The tax years from 2015 - 2018 are still subject to audit.

XML

Note 11 - Industry Segments

12 Months Ended

Dec. 31, 2018

Notes

Note 11 - Industry Segments

Note 11 – Industry Segments

This summary presents the Company's segments, QCA and APF for the years ended December 31, 2018 and 2017: 

		Year Ended December 31, 2018
					Unallocated
					and		Total
		QCA	APF		Eliminations		Consolidated
Revenue	$	10,513,743	3,104,791	$	643,260	$	14,261,794
Segment gross profit		3,293,86	1,078,075		449,535		4,820,796
Segment depreciation and amortization		299,328	200,247		33,333		532,908
Segment interest expense		734,033	153,107		2,234,061		3,121,201
Segment net income (loss)		390,158	(455,125)		(2,931,926)		(2,996,893)

		As of December 31, 2018
						Unallocated
						and		Total
		QCA		APF		Eliminations		Consolidated
Accounts receivable, net	$	1,649,701	$	958,153	$	2,500	$	2,610,354
Goodwill		1,963,761		1,230,100		-		3,193,861
Total assets		10,767,883		6,159,098		1,013,695		17,940,676

		Year Ended December 31, 2017
				Unallocated
				and			Total
		QCA		Eliminations		Consolidated
Revenue	$	7,809,813	$	508,203	$	8,318,016
Segment gross profit		2,191,078		219,517		2,410,595
Segment depreciation and amortization		289,746		50,001		339,747
Segment interest expense		730,096		532,397		1,262,493
Segment net income (loss)		327,511		(1,614,287)		(1,286,776)

		As of December 31, 2017
				Unallocated
				and		Total
		QCA		Eliminations		Consolidated
Accounts receivable, net	$	1,545,422	$	15,058	$	1,560,480
Goodwill		1,963,761		-		1,963,761
Total assets		10,569,893		5,401,057		15,970,950

XML

Note 12 - Derivative Liabilities and Fair Value Measurements

12 Months Ended

Dec. 31, 2018

Notes

Note 12 - Derivative Liabilities and Fair Value Measurements

Note 12 – Derivative Liabilities and Fair Value Measurements

Derivative liabilities

The Company has issued convertible notes payable that were evaluated under the guidance in FASB ASC 815-40, Derivatives and Hedging, and were determined to have characteristics of derivative liabilities.  As a result of the characteristics of these notes, the conversion options relating to previously issued convertible debt and outstanding Class A common stock warrants were also required to be accounted for as derivative liabilities under ASC 815.   Under this guidance, this derivative liability is marked-to-market at each reporting period with the non-cash gain or loss recorded in the period as a gain or loss on derivatives. 

The valuation of our embedded derivatives is determined by using the Black-Scholes Option Pricing Model.  As such, our derivative liabilities have been classified as Level 2.

The Company estimated the fair value of the derivative liabilities using the Black-Scholes Option Pricing Model and the following key assumptions during the years ended December 31, 2018 and 2017:

	2018	2017
Risk free rate	2.63%	2.38%
Volatility	200%	200%
Expected terms (years)	0.5 to 3.0	0.5 to 2.67
Dividend rate	0%	0%

Fair value measurements

FASB 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.  FASB 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.  FASB 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.

If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument.

The following table provides a summary of the fair value of our derivative liabilities as of December 31, 2018 and 2017:

		Fair Value		Fair Value Measurements at
		As of		December 31, 2018
Description		December 31, 2018		Using Fair Value Hierarchy
				Level 1		Level 2		Level 3
Conversion feature on convertible notes	$	1,892,321	$	-	$	1,892,321	$	-
		Fair Value		Fair Value Measurements at
		As of		December 31, 2017
Description		December 31, 2017		Using Fair Value Hierarchy
				Level 1		Level 2		Level 3
Conversion feature on convertible notes	$	271,588	$	-	$	271,588	$	-

The below table presents the change in the fair value of the derivative liabilities during the years ended December 31, 2018:

Derivative liability balance, December 31, 2016	$	-
Issuance of derivative liability during the period		367,633
Derivative liability resolution		(222,099)
Change in derivative liability during the period		126,054
Derivative liability balance, December 31, 2017		271,588
Issuance of derivative liability during the period		2,282,970
Derivative liability resolution		(58,018)
Change in derivative liability during the period		(604,219)
Derivative liability balance, December 31, 2018	$	1,892,321

XML

Note 13 - Discontinued Operations

12 Months Ended

Dec. 31, 2018

Notes

Note 13 - Discontinued Operations

Note 13 – Discontinued Operations

In December 2018, the Company decided to shut down the operations of its VWES subsidiary.  In February 2019, VWES filed for Chapter 7 bankruptcy.

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

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

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

The assets and liabilities of the discontinued operations at December 31, 2018 and 2017 are summarized below:

			2018		2017
Current assets	$	121,296		$	574,174
Property and equipment		387,727			4,174,629
Goodwill			-		167,845
Total assets		509,023			4,916,648
Current liabilities		2,493,049			922,276
Notes payable - related party		43,500			343,500
Notes payable		215,898			2,079,198
Total liabilities		2,752,447			3,344,974

XML

Note 14 - Subsequent Events

12 Months Ended

Dec. 31, 2018

Notes

Note 14 - Subsequent Events

Note 14 – Subsequent Events

On January 9, 2019, the Company, announced that it had entered into a Securities Purchase Agreement (the "SPA") with Morris Sheet Metal Corp., an Indiana corporation (" MSM "), JTD Spiral, Inc. a wholly owned subsidiary of MSM, an Indiana corporation (" JTD Spiral "), Morris Enterprises LLC, an Indiana limited liability company ("Morris Enterprises ") and Morris Transportation LLC, an Indiana limited liability company (" Morris Transportation " and, with MSM, JTD Spiral, and Morris Enterprises, and James Morris, Daniel Morris and Timothy Morris.  The purchase price was $6,600,000 consisting of $3,150,000 in cash and the remainder financed with a seller note.

XML

Note 1 - Organization and Basis of Presentation: Basis of Presentation (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Basis of Presentation

Basis of presentation

The accompanying 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 U.S. GAAP.

XML

Note 2 - Summary of Significant Accounting Policies: Principles of Consolidation (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Principles of Consolidation

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2018 and 2017.  Significant intercompany balances and transactions have been eliminated.

XML

Note 2 - Summary of Significant Accounting Policies: Use of Estimates, Policy (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Use of Estimates, Policy

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.  These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances.  Actual results could differ from those estimates.

XML

Note 2 - Summary of Significant Accounting Policies: Reclassification (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Reclassification

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.

XML

Note 2 - Summary of Significant Accounting Policies: Advertising (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Advertising

Advertising

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

XML

Note 2 - Summary of Significant Accounting Policies: Cash, Policy (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Cash, Policy

Cash

Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days.   As of December 31, 2018 and 2017, the Company had no cash equivalents. 

The following table provides a reconciliation of cash and restricted cash reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows. 

		December 31,		December 31,
		2018		2017
Cash	$	207,205	$	128,512
Restricted cash included in other non-current assets		207,311		207,311
Total cash and restricted cash shown in consolidated statements of cash flows	$	414,516	$	335,823

XML

Note 2 - Summary of Significant Accounting Policies: Major Customers (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Major Customers

Major Customers

The Company had two customers that made up 29% and 27%, respectively, of accounts receivable as of December 31, 2018.  The Company had two customers that made up 41% and 13%, respectively, of accounts receivable as of December 31, 2017.

For the years ended December 31, 2018, the Company had two customers that made up 29% and 13% of total revenues.  For the years ended December 31, 2017, the Company had one customer that made up approximately 36% of total revenues. 

XML

Note 2 - Summary of Significant Accounting Policies: Accounts Receivable (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Accounts Receivable

Accounts Receivable

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis.  As of December 31, 2018 and 2017, allowance for bad debt was $0 and $0, respectively.

XML

Note 2 - Summary of Significant Accounting Policies: Inventory (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Inventory

Inventory

Inventory is valued at the lower of the inventory's cost (weighted average basis) or net realizable value. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower.  Inventory is segregated into four areas, raw materials, WIP, finished goods, and In-Transit.  Below is a breakdown of how much inventory was in each area as of December 31, 2018 and 2017:

		2018		2017
Raw materials	$	676,621	$	577,259
WIP		-		440,586
Finished goods		1,499,174		161,310
In Transit		-		33,391
	$	2,175,795	$	1,212,546

XML

Note 2 - Summary of Significant Accounting Policies: Property and Equipment (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Property and Equipment

Property and Equipment

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

Automobiles & Trucks	10 to 20 years
Buildings	39 years
Leasehold Improvements	15 years or time remaining on lease (whichever is shorter)
Equipment	10 years

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

Property and equipment consisted of the following as of December 31, 2018 and 2017:

		2018		2017
Automobiles and trucks	$	155,179	$	-
Machinery and equipment		2,548,855		1,276,779
Office furniture and fixtures		109,619		7,056
Building		5,795,000		3,895,000
Leasehold improvements		261,608		261,608
Less: Accumulated depreciation		(879,705)		(416,685)
	$	7,990,556	$	5,023,758

XML

Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Purchased Intangibles and Other Long-lived Assets

Purchased Intangibles and Other Long-Lived Assets

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

Customer List	15 years
Non-compete agreements	15 years
Software development	5 years

Intangible assets consisted of the following as of December 31, 2018 and 2017:

		2018		2017
Software	$	278,474	$	278,474
Noncompete		100,000		100,000
Customer lists		531,187		531,187
Less: Accumulated amortization		(232,451)		(157,039)
	$	677,210	$	752,622

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

Year Ending December 31,
2019	79,960
2020	79,960
2021	79,960
2022	46,361
2023	46,361
Thereafter	344,608
Total	677,210

Other Long-Term Assets

Other long-term assets consisted of the following as of December 31, 2018 and 2017:

		2018		2017
Restricted Cash	$	207,311	$	207,311
Deposits		50,927		50,927
Other		32,000		-
	$	290,238	$	258,238

Restricted cash consists of deposit account collateralizing letters of credit in favor of the counterparty in our lease financing obligation.

XML

Note 2 - Summary of Significant Accounting Policies: Impairment of Long-lived Assets (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Impairment of Long-lived Assets

Impairment of Long-Lived Assets

The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, Accounting for the Impairment of Long-Lived Assets.  This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset.  During all periods presented, there have been no impairment losses, except to the impairment loss of $1,596,537 for the year ended December 31, 2018 related to the discontinued operation.

XML

Note 2 - Summary of Significant Accounting Policies: Goodwill (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Goodwill

Goodwill

In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable.  We assess potential impairment by considering present economic conditions as well as future expectations.  All assessments of goodwill impairment are conducted at the individual reporting unit level.  As of December 31, 2018 and 2017, the reporting units with goodwill were QCA and APF.

The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount.  Based on the qualitative criteria the company believes there not to be any triggers for potential impairment of goodwill and therefore the Company has recorded no impairment of goodwill in any period presented, except to the impairment of goodwill of $167,845 for the year ended December 31, 2018 related to the discontinued operation.

XML

Note 2 - Summary of Significant Accounting Policies: Fair Value Measurement (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Fair Value Measurement

Fair Value Measurement

The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes and line 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.  For additional information, please see Note 11 – Derivative Liabilities and Fair Value Measurements.

XML

Note 2 - Summary of Significant Accounting Policies: Revenue Recognition (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Revenue Recognition

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, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under ASC Topic 605. 

The Company recorded a net increase to its opening accumulated deficit of $178,202 as of January 1, 2018 due to the cumulative impact of adopting ASC Topic 606, with the impact related to recognition of revenue and costs relating to the sales of the 6^th Sense Auto service.  Under the new revenue standard, sales of the Company’s 6^th Sense Auto service, which includes a hardware and a monthly subscription component, are required to be treated as a single performance obligation and recognized over time.  As a result, the deferred revenue increased by $279,736 and capitalized contract costs increased by $101,534.  The impact to the consolidated statement of operations for the year ended December 31, 2018 was a net increase of $279,736 to revenue and a net increase of $101,534 to cost of revenue as a result of applying ASC Topic 606. 

Revenues under ASC Topic 606 are recognized when the promised goods or services are transferred to customers, in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services.  The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries.  

ALTIA

Revenues recorded by ALTIA relate primarily to the Company’s 6^th Sense Auto service.  The Company accounts for its revenue by deferring the total contract amount and recognizing the amounts over the monthly subscription period, ranging from 12 to 36 months.  

QCA

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

APF

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

XML

Note 2 - Summary of Significant Accounting Policies: Earnings Per Share Policy, Basic (Policies)	12 Months Ended
	Dec. 31, 2018
Policies
Earnings Per Share Policy, Basic	<p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;line-height:normal'><u>Earnings (loss) per share</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;line-height:normal'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;line-height:normal'>Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debentures, but they are anti-dilutive due to the net loss incurred.  </p>

XML

Note 2 - Summary of Significant Accounting Policies: Share-based Compensation, Option and Incentive Plans Policy (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Share-based Compensation, Option and Incentive Plans Policy

Stock-based compensation

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718-10, Compensation – Stock Compensation, and the conclusions reached by ASC 505-50, Equity – Equity-Based Payments to Non-Employees. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment is reached or completion of performance by the provider of goods or services as defined by ASC 505-50.

XML

Note 2 - Summary of Significant Accounting Policies: Income Tax, Policy (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Income Tax, Policy

Income taxes

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

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

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

XML

Note 2 - Summary of Significant Accounting Policies: Embedded Conversion Features (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Embedded Conversion Features

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings.  If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features.

XML

Note 2 - Summary of Significant Accounting Policies: Related Party Disclosure (Policies)

12 Months Ended

Dec. 31, 2018

Policies

Related Party Disclosure

Related Party Disclosure

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

XML

Note 2 - Summary of Significant Accounting Policies: New Accounting Pronouncements, Policy (Policies)

12 Months Ended

Dec. 31, 2018

Policies

New Accounting Pronouncements, Policy

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its financial statements.

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

XML

Note 2 - Summary of Significant Accounting Policies: Cash, Policy: Restrictions on Cash and Cash Equivalents (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Restrictions on Cash and Cash Equivalents

		December 31,		December 31,
		2018		2017
Cash	$	207,205	$	128,512
Restricted cash included in other non-current assets		207,311		207,311
Total cash and restricted cash shown in consolidated statements of cash flows	$	414,516	$	335,823

XML

Note 2 - Summary of Significant Accounting Policies: Inventory: Schedule of Inventory, Current (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Inventory, Current

		2018		2017
Raw materials	$	676,621	$	577,259
WIP		-		440,586
Finished goods		1,499,174		161,310
In Transit		-		33,391
	$	2,175,795	$	1,212,546

XML

Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Schedule of Property and Equipment, Estimated Useful Lives (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Property and Equipment, Estimated Useful Lives

Automobiles & Trucks	10 to 20 years
Buildings	39 years
Leasehold Improvements	15 years or time remaining on lease (whichever is shorter)
Equipment	10 years

XML

Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Property, Plant and Equipment

		2018		2017
Automobiles and trucks	$	155,179	$	-
Machinery and equipment		2,548,855		1,276,779
Office furniture and fixtures		109,619		7,056
Building		5,795,000		3,895,000
Leasehold improvements		261,608		261,608
Less: Accumulated depreciation		(879,705)		(416,685)
	$	7,990,556	$	5,023,758

XML

Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Finite Lived Intangible Assets, Estimated Useful Lives (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Finite Lived Intangible Assets, Estimated Useful Lives

Customer List	15 years
Non-compete agreements	15 years
Software development	5 years

XML

Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Intangible Assets

		2018		2017
Software	$	278,474	$	278,474
Noncompete		100,000		100,000
Customer lists		531,187		531,187
Less: Accumulated amortization		(232,451)		(157,039)
	$	677,210	$	752,622

XML

Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Year Ending December 31,
2019	79,960
2020	79,960
2021	79,960
2022	46,361
2023	46,361
Thereafter	344,608
Total	677,210

XML

Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Other Assets, Noncurrent (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Other Assets, Noncurrent

		2018		2017
Restricted Cash	$	207,311	$	207,311
Deposits		50,927		50,927
Other		32,000		-
	$	290,238	$	258,238

XML

Note 4 - Leases: Schedule of Future Minimum Lease Payments for Capital Leases (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Future Minimum Lease Payments for Capital Leases

Year Ending December 31,
2019		817,181
2020		836,022
2021		849,645
2022		865,351
2023		875,428
Thereafter		8,763,471
Total		13,007,098
Less: Current capital leases and financing transaction		(105,458)
Less: imputed interest		(4,606,464)
Non-current capital leases and financing transaction	$	8,295,176

XML

Note 4 - Leases: Lessee, Operating Lease, Disclosure (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Lessee, Operating Lease, Disclosure

Year Ending December 31,
2019	$	274,118
2020		282,342
2021		290,812
Thereafter		-
Total	$	847,272

XML

Note 5 - Notes Payable: Schedule of Notes Payable (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Notes Payable

		2018		2017
Lines of credit, current portion	$	2,504,440	$	1,657,610
Equipment loans, current portion		260,301		147,079
Term notes, current portion		880,862		10,000
Total current		3,645,603		1,814,689
Long-term portion		4,517,441		-
Total notes payable	$	8,163,044	$	1,814,689

XML

Note 5 - Notes Payable: Future Scheduled Maturities of Outstanding Notes Payable to Third Parties (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Future Scheduled Maturities of Outstanding Notes Payable to Third Parties

Year Ending December 31,
2019	$	3,645,603
2020		4,271,959
2021		178,607
2022		66,875
Total	$	8,163,044

XML

Note 6 - Notes Payable, Related Parties: Schedule of Notes Payable, Related Parties (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Notes Payable, Related Parties

		2018		2017
Notes payable; non-interest bearing; due upon demand; unsecured	$	4,500	$	4,500
Note payable; bearing interest at 8% per annum; due June 30, 2017; unsecured		7,500		7,500
Note payable; bearing at 30% per annum; due March 3, 2018; unsecured		-		11,500
Note payable; bearing at 20% per annum; due April 28, 2018; unsecured		-		20,000
Series of notes payable, bearing interest at rates from 10% to 15% per annum, with maturity dates from April 2018 to July 2018, unsecured		120,000		-
Total notes payable - related parties	$	132,000	$	43,500

XML

Note 7 - Convertible Notes Payable: Schedule of Convertible Notes Payable (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Convertible Notes Payable

		2018		2017
Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 20% per annum, with due dates ranging from April 2016 through October 2017.  The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share.	$	25,000	$	40,000
Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019.  The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $10 per share.		1,654,588		1,827,108
Secured convertible note payable issued to the seller of VWES on January 1, 2017 for an aggregate of $1,500,000, bearing interest at 5% per annum, due in full on July 1, 2018.  The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $8.50 per share.  The amount was extinguished and replaced by the Amended and Restated Secured Promissory Note (see Note 9).		-		1,500,000
Series of convertible notes payable issued in January 2017, bearing interest at rates of 10% per annum, and due in January 2018.  The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share.		10,000		30,000
On July 13, 2017, the Company entered into a variable convertible note for $43,000 with net proceeds of $40,000.  The note is due April 30, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 38% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the note up to 180 days prior to the due date, with the prepayment penalty ranging from 10% to 27% depending on when prepaid.		-		43,000
On July 19, 2017, the Company entered into a variable convertible note for $115,000 with net proceeds of $107,000.  The note is due January 21, 2018 and bears interest at 10% per annum.  The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from July 19, 2017.  The Company issued 500,000 shares of Class A common stock to the note holder which are returnable if no event of default has occurred and the note is paid in full within 180 days of the note date.  Management had determined that it was probable that the Company would meet the conditions under the note and therefore the shares and the cost of issuance were not recorded.  During the three months ended March 31, 2018, the Company repaid the note and the shares were returned.		-		72,748
On September 5, 2017, the Company entered into a variable convertible note for $105,000 with net proceeds of $100,000.  The note is due September 5, 2018 and bears interest at 10% per annum.  After 180 days, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from September 5, 2017.  The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date.		-		105,000
On October 4, 2017, the Company entered into a variable convertible note for $60,000 with net proceeds of $55,000.  The note is due July 4, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 35% of the lowest trading price during the previous ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from October 4, 2017.  The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date.		-		60,000
On October 11, 2017, the Company entered into a variable convertible note for $58,500 with net proceeds of $55,500.  The note is due on July 20, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 38% of the average of the three lowest trading prices of the stock for ten days prior to conversion.    The Company can prepay the convertible note up to 180 days from October 11, 2017.  The prepayment penalty is equal to 10% to 27% of the outstanding note amount depending on the prepayment date.		-		58,500
On November 2, 2017, the Company entered into a variable convertible note for $115,000 with net proceeds of $107,000.  The note is due May 2, 2018 and bears interest at 10% per annum.  The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  The Company issued 150,000 shares to the lender with this note, which has been recorded as a discount.		-		115,000
On November 28, 2017, the Company entered into a variable convertible note for $105,000 with net proceeds of $100,000.  The note is due November 28, 2018 and bears interest at 10% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 35% of the average of the three lowest trading price during the previous ten days prior to conversion.  The Company can prepay the convertible note up to 180 days from November 28, 2017.  The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date.		-		105,000
On December 6, 2017, the Company entered into a variable convertible note for $86,000 with net proceeds of $79,000.  Additional borrowings of $64,000 were received under this convertible note in January 2018.  The note is due June 6, 2018 and bears interest at 10% per annum.  After 180 days at the maturity date, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.		-		86,000
On January 10, 2018, the Company entered into a variable convertible note for $150,000 with net proceeds of $135,000.  The note is due October 1, 2018 and bears interest at 12% per annum.  The note is immediately convertible into shares of Class A common stock at  the lesser of $0.16 per share or 60% of the lowest trading price the previous 25 days prior to conversion.  The Company can prepay the note within the first 90 days following January 10, 2018 with a prepayment penalty equal to 145% of the total outstanding balance.  The Company issued 333,333 shares to the lender with this note, which has been recorded as a discount.		95,000		-
On March 13, 2018, the Company entered into a variable convertible note for $128,000 with net proceeds of $125,000.  The note is due December 30, 2018 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of Class A common stock at a discount of 42% of the average of the 2 lowest trading price the previous 10 days prior to conversion.  The Company can prepay the note at a penalty ranging from 15% to 40%.		-		-
On April 3, 2018, the Company entered into a variable convertible note for $85,000 with net proceeds of $79,000.  The note is due January 2, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  In connection with this variable convertible note, the Company issued 386,363 shares of its Class A common stock, which has been recorded as a discount.		-		-
On April 5, 2018, the Company entered into convertible promissory notes for an aggregate principal amount of $450,000 as part of the consideration for the acquisition of APF (see Note 9).  The convertible notes are due in full in 36 months and bear interest at 4.25% per annum, and are convertible into shares of Class A common stock after 6 months from the issuance date at a rate of $1 per share.		450,000		-
On April 9, 2018, the Company entered into a variable convertible note for $124,199 with net proceeds of $115,000.  The note is due January 9, 2019 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.  In connection with this variable convertible note, the Company issued 76,670 shares of its Class A common stock, along with warrants to purchase 153,340 shares of Class A common stock at an exercise price of $1 per share which are immediately vested and have a 3 years contractual life.  The value of the common stock and warrants have been recorded as a discount.		61,699		-
On April 9, 2018, the Company entered into a variable convertible note for $37,800 with net proceeds of $35,000.  The note is due January 9, 2019 and bears interest at 12% per annum.  After 180 days, the note is convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.		37,800		-
On June 4, 2018, the Company entered into a variable convertible note for $165,000 with net proceeds of $151,500.  The note is due December 4, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.  The Company issued 850,000 shares of Class A common stock to the note holder which are returnable if no event of default has occurred and the note is paid in full within 180 days of the note date.		165,000		-
On July 16, 2018, the Company entered into a variable convertible note for $220,000 with net proceeds of $214,000.  The note is due July 16, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.		-		-
On July 18, 2018, the Company entered into a variable convertible note for $88,000 with net proceeds of $88,000.  The note is due April 30, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		88,000		-
On August 30, 2018, the Company entered into a variable convertible note for $337,500 with net proceeds of $303,750.  The note is due February 28, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		337,500		-
On September 27, 2018, the Company entered into a variable convertible note for $93,000 with net proceeds of $93,000.  The note is due July 15, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		93,000		-
On October 23, 2018, the Company entered into a variable convertible note for $220,000 with net proceeds of $198,000.  The note is due December 14,2018 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion.		220,000		-
On November 12, 2018, the Company entered into a variable convertible note for $670,000 with net proceeds of $636,000.  The note is due November 12, 2019 and bears interest at 10% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion.		670,000		-
On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200.  The note is due September 7, 2019 and bears interest at 12% per annum.  The note is immediately convertible into shares of the Company's Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion.		130,000		-
Total convertible notes payable		4,037,587		4,042,356
Less: discount on convertible notes payable		(942,852)		(79,630)
Total convertible notes payable, net of discount		3,094,735		3,962,726
Less: current portion of convertible notes payable		(2,644,735)		(2,302,620)
Long-term portion of convertible notes payable	$	450,000	$	1,660,106

XML

Note 7 - Convertible Notes Payable: Schedule of Acitivity of Convertible Notes Payable (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Acitivity of Convertible Notes Payable

Balance outstanding, December 31, 2016	$	2,007,557
Issuance of convertible notes payable for acquisition of VWES		1,500,000
Issuance of convertible notes payable for cash		836,000
Repayment of notes		(219,721)
Conversion of notes payable to common stock		(88,902)
Discount from issuance of common stock		(16,500)
Discount from beneficial conversion feature		(30,000)
Discount from derivative liabilities		(115,000)
Amortization of debt discounts		89,292
Balance outstanding, December 31, 2017	3,962,726
Issuance of convertible notes payable for acquisition of APF	450,000
Issuance of convertible notes payable for cash		2,355,950
Issuance for debt discounts		147,341
Extinguishment of convertible note		(1,500,000)
Repayment of notes		(1,417,133)
Conversion of notes payable to common stock		(50,133)
Discount from beneficial conversion feature		(2,282,970)
Amortization of debt discounts		1,428,954
Balance outstanding, December 31, 2018	$	3,094,735

XML

Note 8 - Stockholders' Equity: Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities (Tables)

12 Months Ended

Dec. 31, 2018

Stock Options

Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities

	2018			2017
Risk free rate		2.38	%		2.38	%
Volatility		200	%		200	%
Expected terms (years)	6.25			6.25
Dividend rate		0	%		0	%

XML

Note 8 - Stockholders' Equity: Schedule of Common Stock Outstanding Roll Forward (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Common Stock Outstanding Roll Forward

				Weighted-
			Weighted-	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
	Options		Price	Life (Years)		Value
Outstanding at December 31, 2016	-	$	0.00
Granted	1,344,000		0.57
Forfeited	(561,750)		0.77
Outstanding at December 31, 2017	782,250	$	0.42	9.44	$	-
Granted	1,064,000		0.07
Forfeited	(56,250)		0.81
Exercised	-		0.00
Outstanding at December 31, 2018	1,790,000	$	0.19	9.10	$	-
Vested and expected to vest
at December 31, 2018	1,790,000	$	0.19	9.10	$	-
Exercisable at December 31, 2018	391,969	$	0.32	8.67	$	-

The following table summarizes information about options outstanding and exercisable as of December 31, 2018:

		Options Outstanding				Options Exercisable
			Weighted		Weighted			Weighted
			Average		Average			Average
	Exercise	Number	Remaining		Exercise	Number		Exercise
	Price	of Shares	Life (Years)		Price	of Shares		Price
$	0.05	979,000	9.38	$	0.05	88,000	$	0.05
	0.10	85,000	9.28		0.10	10,625		0.10
	0.13	388,500	8.59		0.13	145,688		0.13
	0.26	114,000	8.34		0.26	49,875		0.26
	0.90	223,500	8.27		0.90	97,781		0.90
		1,790,000				391,969

XML

Note 9 - Business Combination: Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination (Tables)

12 Months Ended

Dec. 31, 2018

VWES

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

	Purchase Allocation
Cash	$	262,384
Accounts Receivable, net		245,833
Property, Plant & Equipment		4,804,458
Intangibles		-
Goodwill		167,845
Accrued Expenses		(25,086	)
Total consideration	$	5,455,434

APF

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

		Purchase Allocation
Accounts receivable	$	945,050
Inventory		675,074
Prepaid expenses and other current assets		250,040
Property and equipment		3,300,000
Goodwill		1,230,100
Accounts payable		(1,234,328)
Accrued expenses		(154,186)
Line of credit		(165,000)
Deferred tax liability		(470,000)
	$	4,376,750

XML

Note 9 - Business Combination: Schedule of Noncash or Part Noncash Acquisitions (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Noncash or Part Noncash Acquisitions

		Non-Cash
		Consideration
Note payable	$	3,000,000
Common stock		15,000
Warrants		9,142
Land and building		173,396
Total	$	3,197,538

XML

Note 9 - Business Combination: Business Acquisition, Pro Forma Information (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Business Acquisition, Pro Forma Information

		Pro Forma Combined Financials (Unaudited)
		Year Ended December 31, 2018		Year Ended December 31, 2017
Revenue	$	15,407,012	$	11,995,811
Net Loss from continuing operations	$	(3,189,893)	$	(1,649,423)
Net loss per shares from continuing operations	$	(0.12)	$	(0.07)

XML

Note 10 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Effective Income Tax Rate Reconciliation

		2018			2017
		Amount	Percent		Amount	Percent
Federal statutory rates	$	(1,660,684)	21.0%	$	(1,106,976)	34.0%
State income taxes		(474,481)	6.0%		(367,525)	11.3%
Permanent differences		890,348	-11.3%		4,103	-0.1%
Impact of change in tax rate		-			727,566	22.3%
Other		-			(27,282)	0.9%
Valuation allowance against net deferred tax assets		1,201,418	-15.2%		511,722	-14.9%
Effective rate	$	(43,399)	0.5%	$	(258,392)	53.5%

XML

Note 10 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Deferred Tax Assets and Liabilities

		2018		2017
Deferred income tax asset
Net operation loss carryforwards	$	2,607,105	$	1,253,964
Total deferred income tax asset		2,607,105		1,253,964
Less: valuation allowance		(2,607,105)		(1,253,964)
Total deferred income tax asset	$	-	$	-

At December 31, 2018 and December 31, 2017, the significant components of the deferred tax liabilities are summarized below:

		2018		2017
Deferred income tax liabilities:
Book to tax differences in intangible assets		608,304		181,703
Total deferred income tax asset	$	608,304	$	181,703

XML

Note 11 - Industry Segments: Schedule of Segment Reporting Information, by Segment (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Segment Reporting Information, by Segment

		Year Ended December 31, 2018
					Unallocated
					and		Total
		QCA	APF		Eliminations		Consolidated
Revenue	$	10,513,743	3,104,791	$	643,260	$	14,261,794
Segment gross profit		3,293,86	1,078,075		449,535		4,820,796
Segment depreciation and amortization		299,328	200,247		33,333		532,908
Segment interest expense		734,033	153,107		2,234,061		3,121,201
Segment net income (loss)		390,158	(455,125)		(2,931,926)		(2,996,893)

		As of December 31, 2018
						Unallocated
						and		Total
		QCA		APF		Eliminations		Consolidated
Accounts receivable, net	$	1,649,701	$	958,153	$	2,500	$	2,610,354
Goodwill		1,963,761		1,230,100		-		3,193,861
Total assets		10,767,883		6,159,098		1,013,695		17,940,676

		Year Ended December 31, 2017
				Unallocated
				and			Total
		QCA		Eliminations		Consolidated
Revenue	$	7,809,813	$	508,203	$	8,318,016
Segment gross profit		2,191,078		219,517		2,410,595
Segment depreciation and amortization		289,746		50,001		339,747
Segment interest expense		730,096		532,397		1,262,493
Segment net income (loss)		327,511		(1,614,287)		(1,286,776)

		As of December 31, 2017
				Unallocated
				and		Total
		QCA		Eliminations		Consolidated
Accounts receivable, net	$	1,545,422	$	15,058	$	1,560,480
Goodwill		1,963,761		-		1,963,761
Total assets		10,569,893		5,401,057		15,970,950

XML

Note 12 - Derivative Liabilities and Fair Value Measurements: Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities (Tables)

12 Months Ended

Dec. 31, 2018

Derivative Liabilities

Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities

	2018	2017
Risk free rate	2.63%	2.38%
Volatility	200%	200%
Expected terms (years)	0.5 to 3.0	0.5 to 2.67
Dividend rate	0%	0%

XML

Note 12 - Derivative Liabilities and Fair Value Measurements: Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

		Fair Value		Fair Value Measurements at
		As of		December 31, 2018
Description		December 31, 2018		Using Fair Value Hierarchy
				Level 1		Level 2		Level 3
Conversion feature on convertible notes	$	1,892,321	$	-	$	1,892,321	$	-
		Fair Value		Fair Value Measurements at
		As of		December 31, 2017
Description		December 31, 2017		Using Fair Value Hierarchy
				Level 1		Level 2		Level 3
Conversion feature on convertible notes	$	271,588	$	-	$	271,588	$	-

XML

Note 12 - Derivative Liabilities and Fair Value Measurements: Schedule of Derivative Liabilities at Fair Value (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Schedule of Derivative Liabilities at Fair Value

Derivative liability balance, December 31, 2016	$	-
Issuance of derivative liability during the period		367,633
Derivative liability resolution		(222,099)
Change in derivative liability during the period		126,054
Derivative liability balance, December 31, 2017		271,588
Issuance of derivative liability during the period		2,282,970
Derivative liability resolution		(58,018)
Change in derivative liability during the period		(604,219)
Derivative liability balance, December 31, 2018	$	1,892,321

XML

Note 13 - Discontinued Operations: Disposal Groups, Including Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2018

Tables/Schedules

Disposal Groups, Including Discontinued Operations

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

The assets and liabilities of the discontinued operations at December 31, 2018 and 2017 are summarized below:

			2018		2017
Current assets	$	121,296		$	574,174
Property and equipment		387,727			4,174,629
Goodwill			-		167,845
Total assets		509,023			4,916,648
Current liabilities		2,493,049			922,276
Notes payable - related party		43,500			343,500
Notes payable		215,898			2,079,198
Total liabilities		2,752,447			3,344,974

XML

Note 2 - Summary of Significant Accounting Policies: Cash, Policy: Restrictions on Cash and Cash Equivalents (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Cash	$ 207,205	$ 128,512
Other non-current assets	290,238	258,238
Restricted Cash and Cash Equivalents	414,516	335,823
Restricted Cash
Other non-current assets	$ 207,311	$ 207,311

XML

Note 2 - Summary of Significant Accounting Policies: Major Customers (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Accounts Receivable Concentration Risk
Concentration Risk, Customer	The Company had two customers that made up 29% and 27%, respectively, of accounts receivable	The Company had two customers that made up 41% and 13%, respectively, of accounts receivable
Revenues Concentration Risk
Concentration Risk, Customer	the Company had two customers that made up 29% and 13% of total revenues	the Company had one customer that made up approximately 36% of total revenues

XML

Note 2 - Summary of Significant Accounting Policies: Accounts Receivable (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Details
Accounts Receivable, Allowance for Credit Loss	$ 0	$ 0

XML

Note 2 - Summary of Significant Accounting Policies: Inventory: Schedule of Inventory, Current (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Details
Inventory, Raw Materials, Gross	$ 676,621	$ 577,259
Inventory, Work in Process, Gross	0	440,586
Inventory, Finished Goods, Gross	1,499,174	161,310
Inventory, In Transit, Gross	0	33,391
Inventory	$ 2,175,795	$ 1,212,546

XML

Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Schedule of Property and Equipment, Estimated Useful Lives (Details)	12 Months Ended
	Dec. 31, 2018
Vehicles | Minimum
Property, Plant and Equipment, Useful Life	10 years
Vehicles | Maximum
Property, Plant and Equipment, Useful Life	20 years
Building
Property, Plant and Equipment, Useful Life	39 years
Leaseholds and Leasehold Improvements
Property, Plant and Equipment, Useful Life	15 years
Equipment
Property, Plant and Equipment, Useful Life	10 years

XML

Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Property, Plant and Equipment (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Property and equipment, net	$ 7,990,556	$ 5,023,758
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	879,705	416,685
Vehicles
Property and equipment, net	155,179	0
Machinery and Equipment
Property and equipment, net	2,548,855	1,276,779
Furniture and Fixtures
Property and equipment, net	109,619	7,056
Building
Property and equipment, net	5,795,000	3,895,000
Leaseholds and Leasehold Improvements
Property and equipment, net	$ 261,608	$ 261,608

XML

Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Finite Lived Intangible Assets, Estimated Useful Lives (Details)	12 Months Ended
	Dec. 31, 2018
Software Development
Finite-Lived Intangible Asset, Useful Life	5 years
Customer Lists
Finite-Lived Intangible Asset, Useful Life	15 years
Noncompete Agreements
Finite-Lived Intangible Asset, Useful Life	15 years

XML

Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Intangible Assets (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Intangible asset, net	$ 677,210	$ 752,622
Finite-Lived Intangible Assets, Accumulated Amortization	(232,451)	(157,039)
Computer Software, Intangible Asset
Intangible asset, net	278,474	278,474
Noncompete Agreements
Intangible asset, net	100,000	100,000
Customer Lists
Intangible asset, net	$ 531,187	$ 531,187

XML

Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details)	12 Months Ended
	Dec. 31, 2018 USD ($)
Details
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	$ 79,960
Finite-Lived Intangible Assets, Amortization Expense, Year Two	79,960
Finite-Lived Intangible Assets, Amortization Expense, Year Three	79,960
Finite-Lived Intangible Assets, Amortization Expense, Year Four	46,361
Finite-Lived Intangible Assets, Amortization Expense, Year Five	46,361
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	344,608
Amortization of Intangible Assets	$ 677,210

XML

Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Other Assets, Noncurrent (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Other non-current assets	$ 290,238	$ 258,238
Deposits
Other non-current assets	50,927	50,927
Other
Other non-current assets	32,000	0
Restricted Cash
Other non-current assets	$ 207,311	$ 207,311

XML

Note 2 - Summary of Significant Accounting Policies: Impairment of Long-lived Assets (Details)	12 Months Ended
	Dec. 31, 2018 USD ($)
Details
Impairment loss related to the discontinued operation	$ 1,596,537

XML

Note 2 - Summary of Significant Accounting Policies: Goodwill (Details)	12 Months Ended
	Dec. 31, 2018 USD ($)
Details
Impairment of goodwill related to the discontinued operation	$ 167,845

XML

Note 2 - Summary of Significant Accounting Policies (Details) - shares	Dec. 31, 2018	Dec. 31, 2017
Redeemable Class A Common Stock
Common Stock, Shares, Issued	0	379,403

XML

Note 2 - Summary of Significant Accounting Policies: Revenue Recognition (Details)	12 Months Ended
	Dec. 31, 2018 USD ($)
Adoption of ASC 606	$ 178,202
Increase decrease in capitalized contract costs as a result of applying ASC Topic 606	101,534
Increase decrease in deferred revenue as a result of applying ASC Topic 606	279,736
Increase decrease in cost of revenue as a result of applying ASC Topic 606	$ 101,534

XML

Note 4 - Leases: Schedule of Future Minimum Lease Payments for Capital Leases (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Details
Capital Leases, Future Minimum Payments Due, Next Twelve Months	$ 817,181
Capital Leases, Future Minimum Payments Due in Two Years	836,022
Capital Leases, Future Minimum Payments Due in Three Years	849,645
Capital Leases, Future Minimum Payments Due in Four Years	865,351
Capital Leases, Future Minimum Payments Due in Five Years	875,428
Capital Leases, Future Minimum Payments Due Thereafter	8,763,471
Capital Leases, Future Minimum Payments Due	13,007,098
Financing lease obligation, current portion	(105,458)	$ (24,590)
Imputed Interest on Capital Lease	(4,606,464)
Financing lease obligations, net of current portion	$ 8,295,176	$ 6,560,112

XML

Note 4 - Leases (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Proceeds from sale leaseback transaction	$ 1,900,000	$ 0
Capital Lease Obligations	1,763,903
Operating Leases, Rent Expense	447,595	$ 468,673
San Jose, CA
Monthly Operating Lease Obligation	21,500
San Jose, CA 2
Monthly Operating Lease Obligation	$ 5,000

XML

Note 4 - Leases: Lessee, Operating Lease, Disclosure (Details) - San Jose, CA	Dec. 31, 2018 USD ($)
Operating Leases, Future Minimum Payments, Next Rolling Twelve Months	$ 274,118
Operating Leases, Future Minimum Payments, Due in Two Years	282,342
Operating Leases, Future Minimum Payments, Due in Three Years	290,812
Operating Leases, Future Minimum Payments, Due Thereafter	0
Operating Leases, Future Minimum Payments Due	$ 847,272

XML

Note 5 - Notes Payable: Schedule of Notes Payable (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Notes payable, current portion	$ 3,645,603	$ 1,814,689
Notes Payable	8,163,044	1,814,689
Lines of Credit
Notes payable, current portion	2,504,440	1,657,610
Equipment Loans
Notes payable, current portion	260,301	147,079
Short Term Notes
Notes payable, current portion	880,862	10,000
Equipment, Noncurrent
Long-term Debt	$ 4,517,441	$ 0

XML

Note 5 - Notes Payable: Future Scheduled Maturities of Outstanding Notes Payable to Third Parties (Details)	12 Months Ended
	Dec. 31, 2018 USD ($)
Details
Future Maturities of Outstanding Notes Payable, Third Parties, Remainder of Current Year	$ 3,645,603
Future Maturities of Outstanding Notes Payable, Third Parties, Year Two	4,271,959
Future Maturities of Outstanding Notes Payable, Third Parties, Year Three	178,607
Future Maturities of Outstanding Notes Payable, Third Parties, Year Four	66,875
Future Maturities of Outstanding Notes Payable, Third Parties	$ 8,163,044

XML

Note 6 - Notes Payable, Related Parties: Schedule of Notes Payable, Related Parties (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Notes payable, related parties, current portion	$ 132,000	$ 43,500
Notes Payable 1
Notes payable, related parties, current portion	4,500	4,500
Notes Payable 2
Notes payable, related parties, current portion	7,500	7,500
Notes Payable 3
Notes payable, related parties, current portion	0	11,500
Notes Payable 4
Notes payable, related parties, current portion	0	20,000
Notes Payable 5
Notes payable, related parties, current portion	$ 120,000	$ 0

XML

Note 7 - Convertible Notes Payable: Schedule of Convertible Notes Payable (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Convertible Notes Payable	$ 4,037,587	$ 4,042,356
Debt Instrument, Unamortized Discount	(942,852)	(79,630)
Convertible Notes Payable, net of discount	3,094,735	3,962,726	$ 2,007,557
Convertible notes payable, current	(2,644,735)	(2,302,620)
Convertible notes payable, net of current portion	450,000	1,660,106
Convertible Notes Payable 1
Convertible Notes Payable	25,000	40,000
Convertible Notes Payable 2
Convertible Notes Payable	1,654,588	1,827,108
Convertible Notes Payable 3
Convertible Notes Payable	0	1,500,000
Convertible Notes Payable 4
Convertible Notes Payable	10,000	30,000
Convertible Notes Payable 5
Convertible Notes Payable	0	43,000
Convertible Notes Payable 6
Convertible Notes Payable	0	72,748
Convertible Notes Payable 7
Convertible Notes Payable	0	105,000
Convertible Notes Payable 8
Convertible Notes Payable	0	60,000
Convertible Notes Payable 9
Convertible Notes Payable	0	58,500
Convertible Notes Payable 10
Convertible Notes Payable	0	115,000
Convertible Notes Payable 11
Convertible Notes Payable	0	105,000
Convertible Notes Payable 12
Convertible Notes Payable	0	86,000
Convertible Notes Payable 13
Convertible Notes Payable	95,000	0
Convertible Notes Payable 14
Convertible Notes Payable	0	0
Convertible Notes Payable 15
Convertible Notes Payable	0	0
Convertible Notes Payable 16
Convertible Notes Payable	450,000	0
Convertible Notes Payable 17
Convertible Notes Payable	61,699	0
Convertible Notes Payable 18
Convertible Notes Payable	37,800	0
Convertible Notes Payable 19
Convertible Notes Payable	165,000	0
Convertible Notes Payable 20
Convertible Notes Payable	0	0
Convertible Notes Payable 21
Convertible Notes Payable	88,000	0
Convertible Notes Payable 22
Convertible Notes Payable	337,500	0
Convertible Notes Payable 23
Convertible Notes Payable	93,000	0
Convertible Notes Payable 24
Convertible Notes Payable	220,000	0
Convertible Notes Payable 25
Convertible Notes Payable	670,000	0
Convertible Notes Payable 26
Convertible Notes Payable	$ 130,000	$ 0

XML

Note 7 - Convertible Notes Payable: Schedule of Acitivity of Convertible Notes Payable (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Details
Convertible Notes Payable, net of discount	$ 3,094,735	$ 3,962,726	$ 2,007,557
Issuance of convertible note for acquisition	450,000	1,500,000
Issuance of convertible notes payable for cash	2,355,950	836,000
Repayments of convertible notes payable	(1,417,133)	(219,721)
Conversion of notes payable to common stock	(50,133)	(88,902)
Common stock issued for convertible note discount	(11,917)	(16,500)
Discount from beneficial conversion feature	(2,282,970)	(30,000)
Discount from derivative liabilities		(115,000)
Amortization of debt discounts	1,428,954	$ 89,292
Issuance for debt discounts	147,341
Extinguishment of convertible note	$ (1,500,000)

XML

Note 8 - Stockholders' Equity (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
REDEEMABLE COMMON STOCK	$ 0	$ 1,439,725
Stock Options Expense	$ 71,223	$ 87,136
Redeemable Class A Common Stock
Common Stock, Shares, Issued	0	379,403
Stock Issuance 1
Stock Issued During Period, Shares, New Issues	499,999
Stock Issuance 2
Stock Issued During Period, Shares, New Issues	120,000
Stock Issuance 3
Stock Issued During Period, Shares, New Issues	100,000
Stock Issuance 4
Stock Issued During Period, Shares, New Issues	76,670
Stock Issuance 5
Stock Issued During Period, Shares, New Issues	3,400,000
Stock Issuance 6
Stock Issued During Period, Shares, New Issues	250,000
Stock Issuance 7
Stock Issued During Period, Shares, New Issues	23,330
Stock Issuance 8
Stock Issued During Period, Shares, New Issues	274,295
Stock Issuance 9
Stock Issued During Period, Shares, New Issues	195,924
Stock Issuance 10
Stock Issued During Period, Shares, New Issues	175,702
Stock Issuance 11
Stock Issued During Period, Shares, New Issues	1,250,000
Stock Issuance 12
Stock Issued During Period, Shares, New Issues		578,640
Stock Issuance 13
Stock Issued During Period, Shares, New Issues		886,757
Stock Issuance 14
Stock Issued During Period, Shares, New Issues		132,209
Stock Issuance 15
Stock Issued During Period, Shares, New Issues		150,000

XML

Note 8 - Stockholders' Equity: Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities (Details) - Stock Options	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Fair Value Assumptions, Risk Free Interest Rate	2.38	2.38
Fair Value Assumptions, Weighted Average Volatility Rate	200	200
Fair Value Assumptions, Expected Term	6 years 3 months	6 years 3 months

XML

Note 8 - Stockholders' Equity: Schedule of Common Stock Outstanding Roll Forward (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	1,064,000	1,344,000
Share-Based Compensation Arrangement By Share-Based Payment Award, Options Granted, Weighted Average Exercise Price	$ 0.07	$ 0.57
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period	(56,250)	(561,750)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price	$ 0.81	$ 0.77
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	1,790,000	782,250
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.19	$ 0.42
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	9 years 1 month 6 days	9 years 5 months 8 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	1,790,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price	$ 0.19
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	9 years 1 month 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	391,969
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.32
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	8 years 8 months 1 day
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	$ 0
Stock Option 1
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	979,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.05
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	9 years 4 months 17 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	88,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.05
Stock Option 2
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	85,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	9 years 3 months 11 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	10,625
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.10
Stock Option 3
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	388,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.13
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	8 years 7 months 2 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	145,688
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.13
Stock Option 4
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	114,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.26
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	8 years 4 months 2 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	49,875
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.26
Stock Option 5
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	223,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.90
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	8 years 3 months 7 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	97,781
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.90

XML

Note 9 - Business Combination (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
REDEEMABLE COMMON STOCK	$ 0	$ 1,439,725
Issuance Of Note Payable For Acquisitions	1,950,000	300,000
Issuance of convertible note for acquisition	$ 450,000	$ 1,500,000
Redeemable Class A Common Stock
Common Stock, Shares, Outstanding	0	379,403

XML

Note 9 - Business Combination: Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details)	12 Months Ended
	Dec. 31, 2018 USD ($)
VWES
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	$ 5,455,434
APF
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	4,376,750
Business Acquisition, Cash | VWES
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	262,384
Business Acquisition, Accounts Receivable | VWES
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	245,833
Business Acquisition, Accounts Receivable | APF
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	945,050
Business Acquisition, Property Plant Equipment | VWES
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	4,804,458
Business Acquisition, Property Plant Equipment | APF
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	3,300,000
Business Acquisition, Goodwill | VWES
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	167,845
Business Acquisition, Goodwill | APF
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	1,230,100
Business Acquisition, Accrued Expenses | VWES
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	(25,086)
Business Acquisition, Accrued Expenses | APF
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	(154,186)
Business Acquisition, Inventory | APF
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	675,074
Business Acquisition, Prepaid Expenses and Other Current Assets | APF
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	250,040
Business Acquisition, Accounts Payable | APF
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	(1,234,328)
Business Acquisition, Line of Credit | APF
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	(165,000)
Business Acquisition, Deferred Tax Liability | APF
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	$ (470,000)

XML

Note 9 - Business Combination: Schedule of Noncash or Part Noncash Acquisitions (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Details
Noncash or Part Noncash Acquisition, Note Payable	$ 3,000,000
Noncash Or Part Noncash Acquisition, Common Stock	15,000
Noncash Or Part Noncash Acquisition, Warrants	9,142
Noncash Or Part Noncash Acquisition, Land and Building	173,396
Notes payable and redeemable common stock restructuring	$ 3,197,538	$ 0

XML

Note 9 - Business Combination: Business Acquisition, Pro Forma Information (Details) - USD ($)	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Details
Business Acquisition, Pro Forma Revenue	$ 15,407,012	$ 11,995,811
Business Acquisition, Pro Forma Net Income (Loss)	$ (3,189,893)	$ (1,649,423)
Basic Earnings Per Share, Pro Forma	$ (0.12)	$ (0.07)

XML

Note 10 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Details
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount	$ (1,660,684)	$ (1,106,976)
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	34.00%
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount	$ (474,481)	$ (367,525)
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent	6.00%	11.30%
Permanent differences - amount	$ 890,348	$ 4,103
Permanent differences	(11.30%)	(0.10%)
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount	$ 0	$ 727,566
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent		22.30%
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount	0	$ (27,282)
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent		0.90%
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount	$ 1,201,418	$ 511,722
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent	(15.20%)	(14.90%)
Income tax (benefit)	$ (43,399)	$ (258,392)
Effective Income Tax Rate Reconciliation, Percent	0.50%	53.50%

XML

Note 10 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Details
Deferred Tax Assets, Operating Loss Carryforwards	$ 2,607,105	$ 1,253,964
Deferred Tax Assets, Gross	2,607,105	1,253,964
Deferred Tax Assets, Valuation Allowance, Current	(2,607,105)	(1,253,964)
Book to tax differences for tangible and intangible assets	608,304	181,703
Deferred tax liability	$ 608,304	$ 181,703

XML

Note 10 - Income Taxes (Details) $ in Millions	Dec. 31, 2018 USD ($)
Details
Operating Loss Carryforwards	$ 9.8

XML

Note 11 - Industry Segments: Schedule of Segment Reporting Information, by Segment (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Revenue	$ 14,261,794	$ 8,318,016
Gross Profit	4,820,796	2,410,595
Interest Expense	3,121,201	1,262,493
Net loss	(7,908,017)	(2,997,420)
Accounts receivable	2,610,354	1,560,480
Goodwill	3,193,861	1,963,761
TOTAL ASSETS	17,940,676	15,970,950
QCA
Revenue	10,513,743	7,809,813
Gross Profit	329,386	2,191,078
Depreciation, Depletion and Amortization, Nonproduction	299,328	289,746
Interest Expense	734,033	730,096
Net loss	390,158	327,511
Accounts receivable	1,649,701	1,545,422
Goodwill	1,963,761	1,963,761
TOTAL ASSETS	10,767,883	10,569,893
APF
Revenue	3,104,791
Gross Profit	1,078,075
Depreciation, Depletion and Amortization, Nonproduction	200,247
Interest Expense	153,107
Net loss	(455,125)
Accounts receivable	958,153
Goodwill	1,230,100
TOTAL ASSETS	6,159,098
Unallocated and Eliminiations
Revenue	643,260	508,203
Gross Profit	449,535	219,517
Depreciation, Depletion and Amortization, Nonproduction	33,333	50,001
Interest Expense	2,234,061	532,397
Net loss	(2,931,926)	(1,614,287)
Accounts receivable	2,500	15,058
Goodwill	0	0
TOTAL ASSETS	1,013,695	5,401,057
Total Consolidated
Revenue	14,261,794	8,318,016
Gross Profit	4,820,796	2,410,595
Depreciation, Depletion and Amortization, Nonproduction	532,908	339,747
Interest Expense	3,121,201	1,262,493
Net loss	(2,996,893)	(1,286,776)
Accounts receivable	2,610,354	1,560,480
Goodwill	3,193,861	1,963,761
TOTAL ASSETS	$ 17,940,676	$ 15,970,950

XML

Note 12 - Derivative Liabilities and Fair Value Measurements: Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities (Details) - Derivative Liabilities	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Fair Value Assumptions, Risk Free Interest Rate	0.0263	0.0238
Fair Value Assumptions, Weighted Average Volatility Rate	2.0000	2.0000
Minimum
Fair Value Assumptions, Expected Term	6 months	6 months
Maximum
Fair Value Assumptions, Expected Term	3 years	2 years 8 months 1 day

XML

Note 12 - Derivative Liabilities and Fair Value Measurements: Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Derivative Liability	$ 1,892,321	$ 271,588	$ 0
Fair Value, Inputs, Level 2
Derivative Liability	$ 1,892,321	$ 271,588

XML

Note 12 - Derivative Liabilities and Fair Value Measurements: Schedule of Derivative Liabilities at Fair Value (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Details
Derivative Liability	$ 1,892,321	$ 271,588	$ 0
New derivative liabilities from embedded conversion features, net	2,282,970	367,633
Derivative liability resolution	(58,018)	(222,099)
Change in value of derivative liability	$ (604,219)	$ 126,054

XML

Note 13 - Discontinued Operations: Disposal Groups, Including Discontinued Operations (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Revenue	$ 14,261,794	$ 8,318,016
Cost of revenue	9,440,998	5,907,421
Gross Profit	4,820,796	2,410,595
Total operating expenses	5,470,148	2,814,111
Loss from operations	(649,352)	(403,516)
Total other expenses	(2,390,940)	(1,141,652)
Net loss	(7,908,017)	(2,997,420)
Total current assets	5,401,084	3,630,097
Property and equipment, net	7,990,556	5,023,758
Goodwill	3,193,861	1,963,761
TOTAL ASSETS	17,940,676	15,970,950
Total current liabilities	15,568,183	9,987,022
Notes payable, related parties, current portion	132,000	43,500
Notes payable, current portion	3,645,603	1,814,689
TOTAL LIABILITIES	29,439,104	18,388,986
VWES
Revenue	3,040,458	1,773,474
Cost of revenue	2,974,313	2,288,815
Gross Profit	66,145	(515,341)
Total operating expenses	5,045,078	890,856
Loss from operations	(4,978,933)	(1,406,197)
Total other expenses	67,809	(304,447)
Net loss	(4,911,124)	(1,710,644)
Total current assets		574,174
Property and equipment, net		4,174,629
Goodwill	$ 0	167,845
TOTAL ASSETS		4,916,648
Total current liabilities		922,276
Notes payable, related parties, current portion		343,500
Notes payable, current portion		2,079,198
TOTAL LIABILITIES		$ 3,344,974