Form 8-K/A ALTITUDE INTERNATIONAL For: Mar 07

May 19, 2022 9:28 AM EDT

Get instant alerts when news breaks on your stocks. Claim your 1-week free trial to StreetInsider Premium here.

 

Exhibit 99.1

 

SOCCER PARTNERS AMERICA

 

Financial Statements

 

June 30, 2021

 

 
 

 

SOCCER PARTNERS AMERICA

 

Table of Contents

 

Statement of Financial Position – June 30, 2021 4
   
Statement of Activities and Net Deficit – For the Year Ended June 30, 2021 5
   
Statement of Cash Flows – For the Year Ended June 30, 2021 6
   

Notes to the Financial Statements

7

 

2

 

 

Your Vision Our Focus

 

 

Independent Auditors’ Report

 

To the Board of Directors

Soccer Partners America

 

Opinion

 

We have audited the accompanying financial statements of Soccer Partners America (the Company), which comprise the statement of financial condition as of June 30, 2021, and the related statements of activities and net deficit and cash flows for the year then ended, and the related notes to the financial statements.

 

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Responsibilities of Management for the Financial Statements

 

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the financial statements are issued.

 

Auditor’s Responsibilities for the Audit of the Financial Statements

 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

 

In performing an audit in accordance with GAAS, we:

 

Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

 

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

 

/s/ Turner, Stone & Company, L.L.P.

 

Certified Public Accountants

Dallas, Texas

May 18, 2022

 

Turner,Stone & Company, L.L.P.
Accountants and Consultants
12700 Park Central Drive, Suite 1400

Dallas, Texas 75251
Telephone: 972-239-1660 ⁄ Facsimile: 972-239-1665
Toll Free: 877-853-4195
Web site: turnerstone.com

 

 

INTERNATIONAL ASSOCIATION OF ACCOUNTANTS AND AUDITORS 

 

3

 

 

Soccer Partners America

Statement of Financial Position

June 30, 2021

 

ASSETS     
Current assets     
Cash  $329,539 
Accounts receivable, net   464,361 
Prepaid expenses   62,976 
Total current assets   856,876 
      
Fixed assets, net   1,887 
      
Total assets  $858,763 
      
LIABILITIES AND NET DEFICIT     
Current liabilities     
Accounts payable and accrued expenses  $28,422 
Deferred revenue   78,877 
Total current liabilities   107,299 
      
Non-current liabilities      
SBA loan   240,800 
Other loans payable   551,724 
Total non-current liabilities   792,524 
Total liabilities   899,823 
      
Commitments and contingencies (Note 5)   - 
      
Net deficit     
Without donor restrictions   (41,060)
Total net deficit   (41,060)
Total liabilities and net deficit  $858,763 

 

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

 

4

 

 

Soccer Partners America

Statement of Activities and Net Deficit

For the Year Ended June 30, 2021

 

   Without 
   Donor 
   Restrictions 
Income  $1,795,929 
      
Operating expenses     
Direct costs of income   667,963 
Salaries and expenses   528,950 
Marketing   19,492 
Bad debt expense    30,023
Other general and administrative    32,468  
Total operating expenses   1,278,896 
      
Operating income   517,033 
      
Change in net deficit    517,033  
      
Net deficit at beginning of year    (558,093 )
      
Net deficit at end of year  $(41,060)

 

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

 

5

 

 

Soccer Partners America

Statement of Cash Flows

For the Year Ended June 30, 2021

 

Cash flows from operating activities:     
Increase in net assets  $ 517,033  
Adjustments to reconcile increase in net assets to net cash used in operations:     
Gain on forgiveness of PPP loans   - 
Change in operating assets and liabilities:     
Accounts receivable   (325,380)
Prepaid expense   (62,976)
Other asset   83,935 
Accounts payable and accrued expenses   (95,083)
Deferred revenue   78,877 
Net cash provided by operating activities    196,406  
      
Cash flows used in investing activities:     
Purchase of fixed assets   (1,887)
Net cash used in investing activities   (1,887)
      
Cash flows from financing activities:     
Repayment of SBA loan    (50,000 )
Repayment of other loans payable   (49,776)
Net cash used in financing activities    (99,776 )
      
Net increase in cash   94,743 
      
Cash at beginning of year   234,796 
      
Cash at end of year  $329,539 
      
Cash paid for interest  $- 
Cash paid for taxes  $- 

 

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

 

6

 

 

SOCCER PARTNERS AMERICA

Notes to the Financial Statements

June 30, 2021

 

NOTE 1 – NATURE OF OPERATIONS

 

Company Background

 

Soccer Partners America (the “Company,” “we,” “us,” “our,” or “Rush Soccer”), was incorporated in the State of Colorado on October 1, 2005 as a not for profit corporation.

 

On March 7, 2022, Rush Soccer and Altitude International Holdings, Inc. (“Altitude Holdings”) and CMA Soccer LLC, a subsidiary of Altitude Holdings (collectively “Altitude”) entered into a Consulting, Management and License Agreement. As part of the agreement, certain members of the management of Soccer Partners were granted a combined total of 10,000,000 shares of common stock of Altitude Holdings and employment agreements for five individuals. Additionally, over a 20-year period, Altitude will pay the Company $20,000 annually, for a total of $400,000. See Note 7.

 

Nature of Operations

 

Rush Soccer is a multi-faceted organization focused on worldwide soccer leagues and assisting youth clubs around the United States grow and provide better services for its members. The Company organizes and manages tournaments, sells uniforms and offers membership in its programs.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America and has a year-end of June 30.

 

Financial Statement Presentation

 

Under Accounting Standards Codification (“ASC”) Topic 958, Not-for-Profit Entities, the Company is required to evaluate whether the resource provider is receiving commensurate value in a transfer of assets transaction and whether contributions are conditional or unconditional.

 

Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets/deficit and changes therein are classified as follows:

 

Net Assets/Deficit With Donor Restrictions – Net assets/deficit subject to donor-imposed stipulations that may or will be met by actions of the Company and/or the passage of time.

 

Net Assets/Deficit Without Donor Restrictions – Net assets/deficit not subject to donor-imposed stipulations. Net assets/deficit that are without donor restriction but have been designated for a particular purpose by the finance committee, if any, are reflected as Designated Net Assets/Deficit.

 

Revenues are reported as increases in net assets or decreases in net deficit without donor restrictions unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in net assets without donor restrictions. Expirations of temporarily restricted net assets/deficit (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications between the applicable classes of net assets/deficit. Contribution of assets other than cash are recorded at their estimated fair value.

 

7

 

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

Cash is comprised of cash balances. Cash is held at major financial institutions and is subject to credit risk to the extent that those balances exceed applicable Federal Deposit Insurance Corporation (“FDIC”) of $250,000. The Company had material balances in excess of the insured limits as of June 30, 2021 of approximately $79,539.

 

Accounts Receivable

 

Accounts receivable for the rebate for soccer kits purchased by club members and membership rebates are recorded by the Company. As of June 30, 2021, the balance was $464,361 of which $461,535 is due from Capelli Sport, a related party (see Note 6).

 

Bad debt expense is determined based on the aging of accounts receivable and subsequent collections. Typically, receivables aged 60 days, or more is reviewed for determination. Receivables over 90 days, unless payment terms with some payments made to date, are reserved as additional allowance for doubtful accounts. The allowance for doubtful accounts at June 30, 2021 is $0.

 

Fixed Assets

 

Fixed assets are stated at cost, net of accumulated depreciation. Expenditures that extend the life, increase the capacity, or improve the efficiency of property and equipment are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Depreciation is recognized using the straight-line method over the following approximate useful lives: 

 

Computers, software, and office equipment 1 – 6 years
Machinery and equipment 3 – 5 years

 

Impairment of Long-Lived Assets

 

The Company’s long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance with the guidance of the FASB ASC Topic 360-10, Property, Plant, and Equipment. Long lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by that asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

 

Revenue Recognition

 

Our sales are generated from three revenue streams: 1) hosting events, 2) membership fees, and 3) selling uniforms.

 

We account for a contract after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

 

We determine the transaction price for each contract based on the consideration we expect to receive for the products or services being provided under the contract. Revenue is recognized at the time of performance in regard to certain events.

 

Our event revenues are related to soccer tournaments. Our performance obligations are met when the tournament is complete.

 

8

 

 

Our membership fees are related to a business-to-business transaction and the invoice is due upon receipt. The Company bills its affiliated clubs for being part of the “Rush Soccer” brand. Every club that partners with Rush Soccer pays $12 per player annually which affords the club to have access to the Rush Soccer programs and services. The individual clubs choose which programs best fits their business needs and utilizes the Company’s resources when it is best for their business and membership.

 

Our uniform sales are related to the purchase by consumers of uniforms. Our performance obligations are met when the uniform is sent to the purchaser.

 

Blue Sombrero makes up approximately 12% of the revenue of the Company for the year ended June 30, 2021.

 

Deferred Revenue

 

Our payment terms generally require an initial deposit to confirm a reservation for hosted events. Historically, the Company’s deferred revenue balances have been comprised solely of customer deposit balances and changes from period to period due to the seasonal nature of the event cycle. Deposits for any event and/or program are the normal course of business. As of June 30, 2021, deferred revenue amounted to $78,877.

 

Fair Value of Financial Instruments

 

The book values of cash, accounts receivable, and accounts payable approximate their respective fair values due to the short-term nature of these instruments. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs).

 

The hierarchy consists of three levels

 

  Level one — Quoted market prices in active markets for identical assets or liabilities;
  Level two — Inputs other than level one inputs that are either directly or indirectly observable; and
  Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

 

Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter.

 

Income Taxes

 

The company is a non-for-profit company exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and classified by the Internal Revenue Services as other than a private foundation.

 

Recent Accounting Pronouncements

 

Recently Issued Accounting Standards: Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

 

NOTE 3 – FIXED ASSETS

 

The Company has fixed assets related to computer and equipment, and machinery and equipment. The depreciation of the equipment is over a three-year period. As of June 30, 2021, the Company had fixed assets, net of accumulated depreciation, of $1,887. The fixed assets are as follows:

 

   June 30, 2021 
Computer and equipment  $507 
Machinery and equipment   1,380 
Total fixed assets   1,887 
Less: Accumulated depreciation   - 
Total fixed assets, net  $1,887 

 

9

 

 

Depreciation for the year ended June 30, 2021 was $0.

 

NOTE 4 – NOTES PAYABLE

 

On April 10, 2020, the Company received $140,800 from the United States Small Business Administration (“SBA”) under the Paycheck Protection Program (“PPP”). The note had interest of 1%. This note was forgiven on January 19, 2021. The forgiveness was treated as grant income in the period they were received.

 

On June 15, 2020, the Company received $150,000 from the SBA. The promissory note requires monthly payments of $641, to begin twelve months from the date of the promissory note. The promissory note matures on June 15, 2050 and bears interest of 2.75%. The promissory note is secured by the assets of the Company. This promissory note was issued under the disaster loan program in connection with the COVID-19 emergency. At June 30, 2021, the balance was $100,000.

 

On January 23, 2021, the Company received $140,800 from the SBA under PPP. The note had interest of 1%. This note was forgiven on September 1, 2021 (see Note 7). The forgiveness was treated as grant income in the period they were received. At June 30, 2021, the balance was $140,800.

 

NOTE 5 – COMMITMENTS AND CONTINGENCIES

 

The Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition and cash flows.

 

NOTE 6 – RELATED PARTY TRANSACTIONS

 

The Company conducts business with Capelli Sport. Elizabeth Altirs is a co-Founder and Creative Director of Capelli Sport and is a member of the Board of Directors of the Company.

 

As of June 30, 2021 and 2020, $461,535 and $82,508, respectively, is due from Capelli Sport as recorded in accounts receivable (see Note 2). In fiscal year 2021, the Company applied $49,776 of accounts receivable from Capelli Sport as a reduction to the balance of the advances made by Capelli Sport. In other loans payable, $551,724 and $601,500, respectively, is due to Capelli Sport related to advances.

 

The Company recorded income of $824,521 (45.9% of income) related to Capelli Sport and approximately 99% of the accounts receivable of the Company at June 30, 2021.

 

The Company utilizes an American Express credit card which has cards issued to three employees. The credit card account is personally guaranteed by Justin Miller, Chief Operating Officer of the Company.

 

NOTE 7 – SUBSEQUENT EVENTS

 

On September 1, 2021, the SBA loan under PPP, dated January 23, 2021, was forgiven (see Note 4).

 

On March 7, 2022, Rush Soccer and Altitude International Holdings, Inc. (“Altitude Holdings”) and CMA Soccer LLC, a subsidiary of Altitude Holdings (collectively “Altitude”) entered into a Consulting, Management and License Agreement. As part of the agreement, certain members of the management of Soccer Partners were granted a combined total of 10,000,000 shares of common stock of Altitude Holdings and employment agreements for five individuals. Additionally, over a 20-year period, Altitude will pay the Company $20,000 annually, for a total of $400,000.

 

10

  

 

Exhibit 99.2

 

SOCCER PARTNERS AMERICA

 

Condensed Financial Statements

 

March 31, 2022

 

(unaudited)

 

 
 

 

SOCCER PARTNERS AMERICA

 

Table of Contents

 

Condensed Statement of Financial Position – March 31, 2022 and June 30, 2021 (unaudited) 3
   
Condensed Statement of Activities and Net Assets (Deficit) – For the Nine Months Ended March 31, 2022 and 2021 (unaudited) 4
   
Condensed Statement of Cash Flows – For the Nine Months Ended March 31, 2022 and 2021 (unaudited) 5
   
Notes to the Condensed Financial Statements 6

 

2
 

 

Soccer Partners America

Condensed Statement of Financial Position

(unaudited)

 

   March 31, 2022   June 30, 2021 
ASSETS          
Current assets          
Cash  $759,695   $329,539 
Accounts receivable, net   581,645    464,361 
Prepaid expenses   433,645    62,976 
Total current assets   1,774,985    856,876 
           
Fixed assets, net   4,065    1,887 
           
Total assets  $1,779,050   $858,763 
           
LIABILITIES AND NET ASSETS (DEFICIT)          
Current liabilities          
Accounts payable and accrued expenses  $30,168   $28,422 
Deferred revenue   482,480    78,877 
Total current liabilities   512,648    107,299 
           
Non-current liabilites          
SBA loan   100,000    240,800 
Other loans payable   501,724    551,724 
Total non-current liabilities   601,724    792,524 
Total liabilities   1,114,372    899,823 
           
Commitments and contingencies (Note 5)   -    - 
           
Net assets (deficit)          
Without donor restrictions   664,678    (41,060)
Total net assets (deficit)   664,678    (41,060)
Total liabilities and net assets (deficit)  $1,779,050   $858,763 

 

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

 

3
 

 

Soccer Partners America

Condensed Statement of Activities and Net Assets

For the Nine Months Ended March 31,

(unaudited)

 

   Unrestricted 
   2022   2021 
Income  $2,392,097   $1,196,327 
           
Operating expenses          
Direct costs of income   1,117,086    541,669 
Salaries and expenses   591,495    392,930 
Marketing   20,545    15,737 
Bad debt expense   3,866    500,000 
Other general and administrative    135,347     122,955 
Total operating expenses    1,868,339      1,573,291  
           
Operating income   523,757    (376,964)
           
Other income (expense)          
Gain on payment on bad debt expense   41,180    - 
Gain on forgiveness of PPP loan   140,800    140,800 
Total other income (expense)   181,980    140,800 
           
Change in net assets (deficit)   705,738    (236,164)
           
Net deficit at beginning of year   (41,060)    (558,093 )
           
Net assets (deficit) at end of year  $664,678   $ (794,257 )

 

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

 

4
 

 

Soccer Partners America

Condensed Statement of Cash Flows

For the Nine Months Ended March 31,

(unaudited)

 

   2022   2021 
Cash flows from operating activities:          
Increase in net assets (deficit)  $705,738   $(236,164)
Adjustments to reconcile increase in net assets (deficit) to net cash used in operations:          
Bade debt expense   -    587,310 
Gain on forgiveness of PPP loans   (140,800)   - 
Change in operating assets and liabilities:          
Accounts receivable   (117,284)   7,083 
Prepaid expense   (370,669)   (8,197)
Accounts payable and accrued expenses   1,746    (112,151)
Deferred revenue   403,603    8,547 
Net cash provided by operating activities   482,334    246,428 
           
Cash flows used in investing activities:          
Purchase of fixed assets   (2,178)   (509)
Net cash used in investing activities   (2,178)   (509)
           
Cash flows from financing activities:          
Repayment of SBA loan   -    (50,000)
Repayment of other loans payable   (50,000)   (49,776)
Net cash provided by financing activities   (50,000)   (99,776)
           
Net increase in cash   430,156    146,143 
           
Cash at beginning of year   329,539    234,796 
           
Cash at end of year  $759,695   $380,939 
           
Cash paid for interest  $-   $- 
Cash paid for taxes  $-   $- 

 

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

 

5
 

 

SOCCER PARTNERS AMERICA

Notes to the Condensed Financial Statements

March 31, 2022

(unaudited)

 

NOTE 1 – NATURE OF OPERATIONS

 

Company Background

 

Soccer Partners America (the “Company,” “we,” “us,” “our,” or “Rush Soccer”), was incorporated in the State of Colorado on October 1, 2005 as a not for profit corporation.

 

On March 7, 2022, Rush Soccer and Altitude International Holdings, Inc. (“Altitude Holdings”) and CMA Soccer LLC, a subsidiary of Altitude Holdings (collectively “Altitude”) entered into a Consulting, Management and License Agreement. As part of the agreement, certain members of the management of Soccer Partners were granted a combined total of 10,000,000 shares of common stock of Altitude Holdings and employment agreements for five individuals. Additionally, over a 20-year period, Altitude will pay the Company $20,000 annually, for a total of $400,000. See Note 7.

 

Nature of Operations

 

Rush Soccer is a multi-faceted organization focused on worldwide soccer leagues and assisting youth clubs around the United States grow and provide better services for its members. The Company organizes and manages tournaments, sells uniforms and offers membership in its programs.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America and has a year-end of June 30.

 

Financial Statement Presentation

 

Under Accounting Standards Codification (“ASC”) Topic 958, Not-for-Profit Entities, the Company is required to evaluate whether the resource provider is receiving commensurate value in a transfer of assets transaction and whether contributions are conditional or unconditional.

 

Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets/deficit and changes therein are classified as follows:

 

Net Assets/Deficit With Donor Restrictions – Net assets/deficit subject to donor-imposed stipulations that may or will be met by actions of the Company and/or the passage of time.

 

Net Assets/Deficit Without Donor Restrictions – Net assets/deficit not subject to donor-imposed stipulations. Net assets/deficit that are without donor restriction but have been designated for a particular purpose by the finance committee, if any, are reflected as Designated Net Assets/Deficit.

 

Revenues are reported as increases in net assets or decreases in net deficit without donor restrictions unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in net assets without donor restrictions. Expirations of temporarily restricted net assets/deficit (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications between the applicable classes of net assets/deficit. Contribution of assets other than cash are recorded at their estimated fair value.

 

6
 

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

Cash is comprised of cash balances. Cash is held at major financial institutions and is subject to credit risk to the extent that those balances exceed applicable Federal Deposit Insurance Corporation (“FDIC”) of $250,000. The Company had material balances in excess of the insured limits as of March 31, 2022 and June 30, 2021 of approximately $509,695 and $79,539, respectively.

 

Accounts Receivable

 

Accounts receivable for the rebate for soccer kits purchased by club members and membership rebates are recorded by the Company. As of March 31, 2022, the balance was $581,645 of which $565,642 is due from Capelli Sport. As of June 30, 2021, the balance was $464,361 of which $461,535 is due from Capelli Sport, a related party (see Note 6).

 

Bad debt expense is determined based on the aging of accounts receivable and subsequent collections. Typically, receivables aged 60 days, or more is reviewed for determination. Receivables over 90 days, unless payment terms with some payments made to date, are reserved as additional allowance for doubtful accounts. The allowance for doubtful accounts at March 31. 2022 and June 30, 2021 was $0 and $0, respectively.

 

Fixed Assets

 

Fixed assets are stated at cost, net of accumulated depreciation. Expenditures that extend the life, increase the capacity, or improve the efficiency of property and equipment are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Depreciation is recognized using the straight-line method over the following approximate useful lives: 

 

Computers, software, and office equipment 1 – 6 years
Machinery and equipment 3 – 5 years

 

Impairment of Long-Lived Assets

 

The Company’s long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance with the guidance of the FASB ASC Topic 360-10, Property, Plant, and Equipment. Long lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by that asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

 

Revenue Recognition

 

Our sales are generated from three revenue streams: 1) hosting events, 2) membership fees, and 3) selling uniforms.

 

We account for a contract after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

 

We determine the transaction price for each contract based on the consideration we expect to receive for the products or services being provided under the contract. Revenue is recognized at the time of performance in regard to certain events.

 

7
 

 

Our event revenues are related to soccer tournaments. Our performance obligations are met when the tournament is complete.

 

Our membership fees are related to a business-to-business transaction and the invoice is due upon receipt. The Company bills its affiliated clubs for being part of the “Rush Soccer” brand. Every club that partners with Rush Soccer pays $12 per player annually which affords the club to have access to the Rush Soccer programs and services. The individual clubs choose which programs best fits their business needs and utilizes the Company’s resources when it is best for their business and membership.

 

Our uniform sales are related to the purchase by consumers of uniforms. Our performance obligations are met when the uniform is sent to the purchaser.

 

Blue Sombrero makes up approximately 12% of the revenue of the Company for the year ended June 30, 2021.

 

Deferred Revenue

 

Our payment terms generally require an initial deposit to confirm a reservation for hosted events. Historically, the Company’s deferred revenue balances have been comprised solely of customer deposit balances and changes from period to period due to the seasonal nature of the event cycle. Deposits for any event and/or program are the normal course of business. As of March 31, 2022 and June 30, 2021, deferred revenue amounted to $482,480 and $78,877, respectively.

 

Fair Value of Financial Instruments

 

The book values of cash, accounts receivable, and accounts payable approximate their respective fair values due to the short-term nature of these instruments. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs).

 

The hierarchy consists of three levels

 

  Level one — Quoted market prices in active markets for identical assets or liabilities;
  Level two — Inputs other than level one inputs that are either directly or indirectly observable; and
  Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

 

Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter.

 

Income Taxes

 

The company is a non-for-profit company exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and classified by the Internal Revenue Services as other than a private foundation.

 

Recent Accounting Pronouncements

 

Recently Issued Accounting Standards: Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

 

8
 

 

NOTE 3 – FIXED ASSETS

 

The Company has fixed assets related to computer and equipment, and machinery and equipment. The depreciation of the equipment is over a three-year period. As of March 31, 2022 and June 30, 2021, the Company had fixed assets, net of accumulated depreciation, of $4,065 and $1,887, respectively. The fixed assets are as follows:

 

   March 31, 2022   June 30, 2021 
Computer and equipment  $507   $507 
Machinery and equipment   3,558    1,380 
Total fixed assets   4,065    1,887 
Less: Accumulated depreciation   -    - 
Total fixed assets, net  $4,065   $1,887 

 

Depreciation for the nine months ended March 31, 2022 and 2021 was $0 and $0, respectively.

 

NOTE 4 – NOTES PAYABLE

 

On April 10, 2020, the Company received $140,800 from the United States Small Business Administration (“SBA”) under the Paycheck Protection Program (“PPP”). The note had interest of 1%. This note was forgiven on January 19, 2021. The forgiveness was treated as grant income in the period they were received.

 

On June 15, 2020, the Company received $150,000 from the SBA. The promissory note requires monthly payments of $641, to begin twelve months from the date of the promissory note. The promissory note matures on June 15, 2050 and bears interest of 2.75%. The promissory note is secured by the assets of the Company. This promissory note was issued under the disaster loan program in connection with the COVID-19 emergency. At March 31, 2022 and June 30, 2021, the balance was $100,000 and $100,000, respectively.

 

On January 23, 2021, the Company received $140,800 from the SBA under PPP. The note had interest of 1%. This note was forgiven on September 1, 2021 (see Note 7). The forgiveness was treated as grant income in the period they were received. At March 31, 2022 and June 30, 2021, the balance was $0 and $140,800, respectively.

 

NOTE 5 – COMMITMENTS AND CONTINGENCIES

 

The Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition and cash flows.

 

NOTE 6 – RELATED PARTY TRANSACTIONS

 

The Company conducts business with Capelli Sport. Elizabeth Altirs is a co-Founder and Creative Director of Capelli Sport and is a member of the Board of Directors of the Company as of June 30, 2021. The related party ceased on March 7, 2022 related to the acquisition by Altitude (see Note 1).

 

The Company utilizes an American Express credit card which has cards issued to three employees. The credit card account is personally guaranteed by Justin Miller, Chief Operating Officer of the Company.

 

NOTE 7 – SUBSEQUENT EVENTS

 

None.

 

9

 

Exhibit 99.3

 

ALTITUDE INTERNATIONAL HOLDINGS, INC.

UNAUDITED PRO-FORMA CONDENSED COMBINED

FINANCIAL INFORMATION

 

INTRODUCTION

 

On March 7, 2022, Altitude International Holdings, Inc. (the “Company”) and its wholly owned subsidiary CMA Soccer, LLC (“CMAS”), entered into a Consulting, Management and License Agreement (the “Agreement”) with Soccer Partners America, a Colorado not-for-profit corporation (“RUSH Soccer”).

 

RUSH Soccer is a national competitive youth soccer club that administers boys’ and girls’ teams internationally (the “RUSH Programs”) with proprietary training methodology, documentation and materials (the “RUSH Materials”), proprietary technologies and platforms (the “RUSH Technologies”), and a database of individuals (the “RUSH Database”).

 

Pursuant to the terms of the Agreement, CMAS agreed to administer, deliver and develop the RUSH Programs for an initial term of ten years, with automatic renewals for two five-year terms. RUSH Soccer has granted CMAS an exclusive license to use the RUSH name, logo, the RUSH Materials and the RUSH Technologies in connection with the operation, marketing and exploitation of full time, school semester, school year and short time weekly, junior, adult, professional and family, boarding and non-boarding soccer programs.

 

CMAS agreed to pay RUSH Soccer a fee of $20,000 per year annually during the term of the Agreement.

 

CMAS and the Company agreed to engage certain key personnel from RUSH Soccer as consultants for CMAS.

 

Additionally, the Company, CMAS and RUSH Soccer agreed to establish a RUSH-branded men’s professional soccer team (the “Pro Team”) that shall be a wholly owned subsidiary of CMAS and shall be managed by Schulz. The Company, CMAS and RUSH Soccer agree to work together to raise $3,000,000, $2,700,000 of which shall be used for the establishment and operation of the Pro Team and $300,000 of which will be used for the administration of the RUSH Programs. If the amount for the Pro Team is not raised within the first three years of the Agreement, RUSH Soccer may terminate the Agreement with 60 days’ notice.

 

The following unaudited pro-forma condensed combined financial information is based on the historical financial statements of the Company and the historical financial statements of RUSH Soccer.

 

The unaudited pro-forma condensed combined statement of operations for the three months ended March 31, 2022, reflects the acquisition as if it occurred on January 1, 2022 and are based on the historical consolidated financial statements of the Company and RUSH Soccer, as adjusted to give effect to the Agreement. The unaudited condensed balance sheet as of March 31, 2022, as reflected in the Form 10-Q for the period ended March 31, 2022, presents an unaudited condensed consolidated balance sheet of the Company and RUSH Soccer as of March 31, 2022.

 

The unaudited pro-forma condensed combined balance sheet as of December 31, 2021 and the unaudited pro-forma condensed combined statement of operations for the year ended December 31, 2021 reflects the acquisition as if it occurred on January 1, 2021 and are based on historical consolidated financial statements of the Company and unaudited condensed financial statements of RUSH Soccer, as adjusted to give effect to the Agreement.

 

The unaudited pro-forma condensed combined financial information should be read in conjunction with the audited financial statements and related disclosures contained in the Company’s Annual Report filed with the SEC on Form 10-K for the year ended December 31, 2021, and the audited financial statements of RUSH Soccer that are attached to this Form 8-K/A as an exhibit.

 

 

 

 

The unaudited pro-forma condensed combined financial information is presented for illustrative purposes only and are not necessarily indicative of the results of operations and financial position that would have been achieved had the acquisition been completed and taken place on the dates indicated or the future consolidated results of operations or financial position of the Company.

 

UNAUDITED PRO-FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
    For the Three Months Ended March 31, 2022  
          Rush     Pro-forma        
    ALTD     Soccer     Adjustments     Total  
Revenue and income, net   $ 2,065,772     $ 420,293     $         -     $ 2,486,065  
Operating expenses                                
Direct costs of revenue     672,706       267,418       -       940,124  
Professional fees     309,496       161,460       -       470,956  
Salary and related expenses     638,501       215,992       -       854,493  
Stock-based compensation     85,900       -       -       85,900  
Marketing expense     47,430       8,390       -       55,820  
Rent expense     172,550       -       -       172,550  
Other general and administrative expenses     382,204       58,419       -       440,623  
Total operating expenses     2,308,787       711,679       -       3,020,466  
Loss from operations     (243,015 )     (291,386 )     -       (534,401 )
Other income (expense)                                
Interest expense     (15,972 )     -       -       (15,972 )
Total other income (expense)     (15,972 )     -       -       (15,972 )
Net loss   $ (258,987 )   $ (291,386 )   $ -     $ (550,373 )
Net loss per common share - basic and fully diluted   $ (0.00 )                   $ (0.00 )
Weighted average number of common shares outstanding during the period - basic and fully diluted     360,995,488                       370,995,488  

 

 

 

 

UNAUDITED PRO-FORMA CONDENSED COMBINED BALANCE SHEETS
    December 31, 2021  
          Rush         Pro-forma        
    ALTD     Soccer         Adjustments     Total  
ASSETS                            
Current assets                                    
Cash   $ 423,165     $ 854,770         $ -     $ 1,277,935  
Accounts, receivable, net     91,520       890,606           -       982,126  
Inventory     161,235       -           -       161,235  
Prepaid expense     88,134       59,618           -       147,752  
Total current assets     764,054       1,804,994           -       2,569,048  
Fixed assets, net     71,036       4,065           -       75,101  
Intangible assets, net     287,500       -           -       287,500  
Goodwill     29,493,398       -     (a)     956,000       30,449,398  
Total assets   $ 30,615,988     $ 1,809,059         $ 956,000     $ 33,381,047  
                                     
LIABILITIES AND STOCKHOLDERS’ EQUITY                                    
Current liabilities                                    
Accounts payable and accrued expenses   $ 436,896     $ 42,279     (a)   $ 20,000     $ 499,175  
Stockholders’ advance     36,211       -           -       36,211  
PPP loan     20,800       140,800           -       161,600  
Loan payable     -       501,724           -       501,724  
Deferred revenue     1,388,126       208,992           -       1,597,118  
Total current liabilities     1,882,033       893,795           20,000       2,795,828  
Non-current liabilties                                 -  
Other non-current liability     -       -     (a)     380,000       380,000  
Notes payable, net of current portion     1,288,887       100,000           -       1,388,887  
Total non-current liabilities     1,288,887       100,000           380,000       1,768,887  
Total liabilities     3,170,920       993,795           400,000       4,564,715  
                                     
Stockholders’ equity                                    
Preferred stock     -       -           -       -  
Common stock     30,362,949       -     (a)     556,000       30,918,949  
Net assets without donor restrictions     -       815,264           -       815,264  
Accumulated deficit     (2,917,881 )     -           -       (2,917,881 )
Total stockholders’ equity     27,445,068       815,264           556,000       28,816,332  
Total liabilities and stockholders’ equity   $ 30,615,988     $ 1,809,059         $ 956,000     $ 33,381,047  

 

 

 

 

UNAUDITED PRO-FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
   For the Year Ended December 31, 2021 
       Rush   Pro-forma     
   ALTD   Soccer   Adjustments   Total 
Revenue and income, net  $6,595,867   $2,998,214   $            -   $9,594,081 
Operating expenses                    
Direct costs of revenue   2,862,941    987,309    -    3,850,250 
Professional fees   407,401    17,050    -    424,451 
Salary expenses   2,396,915    651,293    -    3,048,208 
Stock-based compensation   657,947    -    -    657,947 
Marketing expense   240,080    20,109    -    260,189 
Rent expense   648,080    -    -    648,080 
Other general and administrative expenses   1,804,505    580,005    -    2,384,510 
Total operating expenses   9,017,869    2,255,766    -    11,273,635 
Income (loss) from operations   (2,422,002)   742,448    -    (1,679,554)
Other income (expense)                    
Loss on settlement of debt   (11,754)   -    -    (11,754)
Gain on forgiveness of PPP loans   614,972    -    -    614,972 
Interest expense   (22,833)   -    -    (22,833)
Other income (expense)   580,385    -    -    580,385 
Net income (loss)  $(1,841,617)  $742,448   $-   $(1,099,169)
Net loss per common share - basic and fully diluted  $(0.01)            $(0.01)
Weighted average number of common shares outstanding during the period - basic and fully diluted     189,059,461                       199,059,461  

 

 

 

 

NOTE 1 - BASIS OF PRESENTATION

 

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America and has a year-end of December 31.

 

The unaudited pro-forma condensed combined statements of operations of the Company and RUSH Soccer for the three-month period ended March 31, 2022 and the unaudited pro-forma condensed combined financial statements of the Company and RUSH Soccer for the year ended December 31, 2021 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments unless otherwise indicated), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2021, was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2022. These financial statements should be read in conjunction with that report.

 

NOTE 2 - DESCRIPTION OF THE TRANSACTION

 

On March 7, 2022, the Company and its wholly owned subsidiary CMAS, entered into a Consulting, Management and License Agreement (the “Agreement”) with Soccer Partners America, a Colorado not-for-profit corporation (“RUSH Soccer”).

 

RUSH Soccer is a national competitive youth soccer club that administers boys’ and girls’ teams internationally (the “RUSH Programs”) with proprietary training methodology, documentation and materials (the “RUSH Materials”), proprietary technologies and platforms (the “RUSH Technologies”), and a database of individuals (the “RUSH Database”).

 

Pursuant to the terms of the Agreement, CMAS agreed to administer, deliver and develop the RUSH Programs for an initial term of ten years, with automatic renewals for two five-year terms. RUSH Soccer has granted CMAS an exclusive license to use the RUSH name, logo, the RUSH Materials and the RUSH Technologies in connection with the operation, marketing and exploitation of full time, school semester, school year and short time weekly, junior, adult, professional and family, boarding and non-boarding soccer programs.

 

CMAS agreed to pay RUSH Soccer a fee of $20,000 per year annually during the term of the Agreement.

 

CMAS and the Company agreed to engage certain key personnel from RUSH Soccer as consultants for CMAS.

 

Additionally, the Company, CMAS and RUSH Soccer agreed to establish a RUSH-branded men’s professional soccer team (the “Pro Team”) that shall be a wholly owned subsidiary of CMAS and shall be managed by Schulz. The Company, CMAS and RUSH Soccer agree to work together to raise $3,000,000, $2,700,000 of which shall be used for the establishment and operation of the Pro Team and $300,000 of which will be used for the administration of the RUSH Programs. If the amount for the Pro Team is not raised within the first three years of the Agreement, RUSH Soccer may terminate the Agreement with 60 days’ notice.

 

 

 

 

NOTE 3 - PURCHASE PRICE ALLOCATION

 

The following table summarizes the consideration given for Altitude and the fair values of the assets and liabilities assumed at the acquisition date.

 

Consideration given:        
         
Common stock shares given   $ 556,000  
Future consideration     400,000  
Total consideration given   $ 956,000  
         
Fair value of identifiable assets acquired, and liabilities assumed:        
Cash   $ 1,216,126  
Accounts receivable     447,941  
Prepaid expenses     118,150  
Other current assets     800  
Fixed assets, net     4,065  
Loan payable     (501,724 )
Accounts payable and accrued expenses     (176,275 )
Deferred revenue     (219,917 )
Note payable     (100,000 )
Total identifiable net asset     789,166  
Goodwill     166,834  
Total consideration   $ 956,000  

 

NOTE 4 – ADJUSTMENTS TO FINANCIAL INFORMATION

 

Explanation of Pro-Forma Adjustments

 

The pro-forma adjustments reflect the accounting for the acquisition should it have occurred on January 1, 2022 (for the period ended March 31, 2022) or January 1, 2021 (for the year ended December 31, 2021). The adjustments account for the consideration as reflect in Note 3.

 

 

 



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings