Here’s your questions followed by my answers.
First, that language is in an SEC filing, so I would hardly say those statements are meaningless. You can't discount them because you dislike them, they are valid and need to be taken into account.
SS: That exact language has been in SEC filings for the last 4 years. Since ALPP started filing. The language has been there since $ALPP was an $8M Company with 1 subsidiary. Now $ALPP is a $43M Company with 6 subsidiaries.
The point is that calling out the boilerplate language in isolation is ignoring the empirical evidence of what ALPP has accomplished for 4 years while the language has been sitting there the whole time.
Kent Wilson grew the top line by 437% while the accountants (to cover their own backsides) required this generic language about risk to be included in SEC filings.
Yes there is risk. Yes there is risk in ALPP. But where is there not risk? Are there any OTC companies (or any investments at all) that don’t have risk associated with them? If yes please let me know what they are so I can buy some.
My point is that if someone is going to call out generic language about risk that’s been there for 4 years, it’s only prudent to give ALPP credit for what ACTUALLY HAPPENED, during that same 4 year period.
And what actually happened was the top like grew 437% while the accountants talked about risk.
There is still risk. But Wilson and the team at ALPP have shown 4 years of evidence that they can grow and operate within that risk profile. And IMO that’s going to continue.
In fact, IMO it’s about to get a lot easier for them due to the higher quality financing they can now obtain and the increased attention that comes with size. Many investors won’t even look at a company under $50M. $ALPP is about to cross that threshold and open those doors.
So yes, consider the language about risk. But also consider the evidence of success that’s occurred during the last 4 years as a foundation of what’s to come.
Second, no the RS is not a mathematical nothing to everybody. It's especially not when you see management protecting shares from it, this isn't exactly a great way to build confidence for primary holders which right now is retail. What you are suggesting with LPC nearly equates to abusing retail for insider gains.
SS: Theres a couple of related issues here which IMO are being overlooked in our daily discussions.
First, ALPP needs a Market Cap of sufficient size to uplist. Regardless of whether someone wants to “blame” management or the OTC markets (or both), no one can dispute that ALPP has been unable to reach and sustain the necessary market cap thus far on the OTC.
By reversing the A shares (if it becomes necessary), but not B and C shares, the necessary market cap for uplist can be obtained.
Now enters the argument which you’ve made: “that’s not fair.” “Management is protecting their shares and hurting shareholders” etc.
First, let’s say that a shareholder holds only A shares. And they have invested $1,000 dollars. If there is a reverse split (regardless of size), the investors position will still be worth $1,000 dollars after the RS. The dollar value of their position does not change. (Owning 1,000 shares at $1 has the same Dollar Value as owning 200 shares at $5).
I’m confident most people understand that part (although I’ve actually seen some that don’t get that math.)
So then the next argument is, ok, yes I get that the Dollar Value of my position is unaffected by any RS, but my percentage ownership in the company is going to be reduced.
Now that statement is true. To use a pie example, the proposed RS scenario would make the entire pie (the market cap) larger.
And while the A shareholder’s slice of pie remains exactly the same size (like it stays at $1,000 dollar value) the slice now represents a smaller percentage of the entire pie. And again, that’s true.
I can understand that at first glance, that may seem “unfair.”
Here’s how I view it. And I understand that not everyone will agree with me or accept this perspective.
ALPP is an acquisitive company. That’s the business model. It would be nice if ALPP had an endless checkbook of cash where they could just write checks and pick up companies left and right. But they don’t. This company has been built up to $43M starting with nothing, essentially.
Without cash, there’s only two possible sources of money. Debt or Equity.
Historically ALPP has used debt. Debt was all that was available to ALPP over the past few years. For two basic reasons. 1. they were small and 2. no proven track record.
Today, ALPP has grown to a sufficient size and has a 4 year proven track record, so it’s finally acquired its first round of Equity financing. That’s the Lincoln deal.
In order to increase growth significantly going forward, ALPP is going to need two things. 1. More equity financing and 2 debt financing on increasingly favorable terms.
Both of these things are much easier to obtain when listed on a national exchange like the NYSE.
For example, ALPP has 3 driver acquisitions under DD with multimillion dollar (even billion dollar) technology potential.
These acquisitions are likely going to require equity financing to consummate. And that quality of equity financing just isn’t available to companies on the OTC. It’s just not.
So now, let’s circle back to the original question of is it “unfair” that even though an A shareholders slice is exactly the same dollar size (i.e $1,000 in our example), the slice is smaller on a percentage basis relative to the whole pie.
If ALPP stays in the OTC, it’s not going to be able to grow nearly as fast as in the NYSE. So if I’m a 1% holder of ALPP now, then I’m a 1% holder of a company that is potentially growing slowly, going forward.
Alternatively if ALPP uplists, and doing so reduces my slice of pie to .75% ownership, but ALPP can then grow from $43M to $250M, $500M or more, much more quickly and easily, then I’m a .75% holder in an extremely larger, more profitable, faster growing company. A company where the stock price will appreciate significantly faster.
It may sound better to be a slightly larger % holder in a company suck in the OTC rut. But IMO, it’s better to be a slightly smaller % holder in a fast growing, high attention company blasting on the NYSE. I understand some won’t agree with that.
In addition, I believe ALPP understands that some people won’t agree with my reasoning above, and that’s why it sounds like they are planning to offer another 10% share dividend to everybody.
What this will do is make everybody’s slice of pie larger. The A shareholder with the $1,000 investment will end up with $1,100 after the uplist is complete.
So all ALPP investors will actually see a Dollar Value increase in their position, even if their overall ownership percentage decreases slightly.
Third, I agree with you -- leadership should be rewarded if the company is doing well, but it shouldn't be rewarded based on an uplist that involves devaluing primary holders stock while the company is still struggling to be profitable.
SS: I believe I covered most of this in the response to question 2, but I’ll add this. While it might seem like management is getting an “instant reward,” I believe their reward is ultimately deferred, pending the ultimate success of the company over the coming years.
Management has never sold a share in 4 years, despite having significant time to do so at PPS higher than today.
This argument is similar to Question 1. Yes they could technically convert some B shares to A shares (which would actually require an A share A/S increase since there wouldn’t be enough authorized at this point anyway), but people need to consider 4 years of evidence that says management is here for the long haul. They have every intention of building a $1B+ company. They’re not here to cash out for peanuts.
Also, the ability of management to sell shares is highly restricted. To the. Eat of my knowledge, there are certain forms which have to be filed with the SEC simply to authorize the ability to sell, and then there are only certain windows of time throughout the year in which they can actually sell. These windows are public information known in advance. And the necessary paperwork hasn’t even been filed. These guys are here for the long haul.
The notion that, for any company, management is just running around selling shares willy nilly, is just OTC scare tactics preying on the uninformed.
Fourth, why was abandoning Crow smart? Can you share your information on the reasoning? What are you basing this on that can be factually validated?
SS: No I don’t have any insider information. My view is simple. One of the parties, perhaps it was Crow, had a change of heart. For whatever reason.
If it was Crow, the clearly Kent trying to “force” the deal through legal means (if perhaps it had reached that point) would have been a bad idea.
Disgruntled legacy employees who don’t want to be acquired can be disastrous. Better to just move on to the next acquisition.
And if Kent was the one who pulled out of the deal, then I trust he has his reasons.
These deals take months of time to put together. Kent spent significant time on this, and if he changed his mind, it was only to protect shareholders.
Here’s my summary reasoning. $ALPP is a pretty unusual opportunity to find on the OTC.
Is it perfect? No.
Has everything been executed perfectly? No.
Is IR perfect? No.
Is the balance sheet beautiful? No.
(But I do believe we’re in for some impressive debt reduction coming up)
Have there been bumps in the road here? Many.
But the risk/reward profile here is very favorable here. $ALPP has defied all odds and is finally emerging into the light.
Yes the pps has been volatile in recent months. But where is it not volatile on the OTC?
If people don’t want to believe in this company or support their growth (with huge personal profit potential to go along with it), that’s their choice. Nothing I can say will convince them.
But there are in fact 240+ people working their backsides off to build this company and it would be nice if people didn’t trash their efforts daily simply because those people got caught up in OTC hype and bought in at the previous pps peak. That could have happens on any ticker.
If you believe in the underlying business here, this is a rare investment opportunity with huge reward potential, regardless if someone got in above today’s price.
ALPP
