EX-99.3 4 ex99-3.htm

 

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.