The statements contained in the following MD&A and elsewhere throughout this
Quarterly Report on Form 10-K, including any documents incorporated by
reference, that are not historical facts, including statements about our beliefs
and expectations, are "forward-looking statements" within the meaning of the
These forward-looking statements, which reflect our management's beliefs,
objectives, and expectations as of the date hereof, are based on the best
judgement of our management. All forward-looking statements speak only as of the
date on which they are made. Such forward-looking statements are subject to
certain risks, uncertainties and assumptions relating to factors that could
cause actual results to differ materially from those anticipated in such
statements, including, without limitation, the following: economic, social and
political conditions, global economic downturns resulting from extraordinary
events such as the COVID-19 pandemic and other securities industry risks;
interest rate risks; liquidity risks; credit risk with clients and
counterparties; risk of liability for errors in clearing functions; systemic
risk; systems failures, delays and capacity constraints; network security risks;
competition; reliance on external service providers; new laws and regulations
affecting our business; net capital requirements; extensive regulation,
regulatory uncertainties and legal matters; failure to maintain relationships
with employees, customers, business partners or governmental entities; the
inability to achieve synergies or to implement integration plans and other
consequences associated with risks and uncertainties detailed in our filings
with the
We caution that the foregoing list of factors is not exclusive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by the federal securities laws.
Certain information contained in this discussion and elsewhere in this report
may include "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and is subject to the safe harbor
created by that act. The safe harbor created by the Private Securities
Litigation Reform Act will not apply to certain "forward looking statements"
because we issued "penny stock" (as defined in Section 3(a)(51) of the
Securities Exchange Act of 1934 and Rule 3(a)(51-1) under the Exchange Act)
during the three year period preceding the date(s) on which those forward
looking statements were first made, except to the extent otherwise specifically
provided by rule, regulation or order of the
? Our ability to raise capital necessary to sustain our anticipated operations and implement our business plan, ? Our ability to implement our business plan, ? Our ability to generate sufficient cash to survive, ? The degree and nature of our competition, ? The lack of diversification of our business plan, ? The general volatility of the capital markets and the establishment of a market for our shares, and ? Disruption in the economic and financial conditions primarily from the impact of past terrorist attacks inthe United States , threats of future attacks, police, and military activities overseas and other disruptive worldwide political and economic events and environmental weather conditions. 29
We are also subject to other risks detailed from time to time in our other
filings with
Plan of Operation
The 2022 operational plan consists of:
1. Continue establishing and expanding the different segments associated with the
expanded ALTD operations. The divisions include:
a. Altitude Chamber Technology Division
b. Tennis, Golf, Basketball, and Academic Academies Division
c. Soccer Academy Division, including RUSH Soccer
d. Water Manufacturing / Technology Division
e. Cleaning and Sanitation Division
f. Altitude Wellness Division
g. Altitude Online Learning Division
2. Adopt a comprehensive branding, marketing, digital and social media strategy
for the revenue lines above.
3. Update a back-office administration plan and adopt a staffing and management
hierarchy for the multi-discipline operation.
4. Plan to expand in complementary ways, including establishing a basketball
division (estimated to be ready for student athletes in 2022) and swimming and lacrosse divisions) estimated to be ready for student athletes in 2023). 30
Commercial operations are in
No assurances can be given that any of these plans will come to fruition or that if implemented that they will necessarily yield positive results.
Impact of COVID-19 Pandemic
In response to the COVID-19 pandemic, during 2020 and continuing in 2021, the Company established policies and protocols to address safety considerations. The extent to which the COVID-19 pandemic will continue to affect the Company's business, financial condition, liquidity, and the Company's operating results will depend on future developments, which are highly uncertain and cannot be predicted.
Off-balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Results of Operations
For the year ended
Revenues
We had
Direct Costs of Revenue
Direct costs of revenue for the period ended
Operating Expenses
Operating expenses for the period ended
Other Income (Expenses)
Other income for the period ended
Net Loss
Net loss for the period ended
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Liquidity and Capital Resources
We had a cash balance of
The Company's anticipated capital requirements for the next 12 months will
consist of expenses of being a public company and general and administrative
expenses all of which we currently estimate will cost
Going Concern
Several conditions and events cast substantial doubt about the Company's ability
to continue as a going concern. On a consolidated basis, the Company has
incurred significant operating losses since inception. For the year ended
Sources and Uses of Cash
Operating activities during the period ended
In 2020, the Company was impacted by the COVID-19 pandemic and in 2021, the Company was going back to a near pre-COVID-19 level.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Critical Accounting Policies
Use of Estimates. The preparation of financial statements in conformity with
accounting principles generally accepted in
Changes in Accounting Principles. No significant changes in accounting principles were adopted during fiscal 2020 and 2019.
Impairment of Long-Lived Assets. The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, "Accounting for the Impairment or Disposal 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. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
32
Fair Value of Financial Instruments and Fair Value Measurements. The Company measures their financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses and short-term loans the carrying amounts approximate fair value due to their short maturities.
We have adopted accounting guidance for financial and non-financial assets and liabilities. The adoption did not have a material impact on our results of operations, financial position, or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
Revenue Recognition. Our sales are generated from three revenue streams: 1) contracts with customers for the design, development, manufacture, and installation of simulated altitude athletic equipment, 2) sports training and academic tuition, and 3) water filtration systems. For the simulated athletic equipment and the water filtration systems, we provide our products under fixed-price contracts. Under fixed-price contracts, we agree to perform the specified work for a pre-determined price. To the extent our actual costs vary from the estimates upon which the price was negotiated, we will generate more or less profit or could incur a loss.
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 evaluate the products or services promised in each contract at inception to determine whether the contract should be accounted for as having one or more performance obligations. The products and services in our contracts are typically not distinct from one another due to their complex relationships, customization, and the significant contract management functions required to perform under the contract. Accordingly, our contracts are typically accounted for as one performance obligation, except for the simulated altitude athletic equipment whereas there is a service obligation over a period of time.
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.
In regard to the simulated altitude athletic equipment and the water filtration systems, we recognize revenue as performance obligations are satisfied and the customer obtains control of the products and services. In determining when performance obligations are satisfied, we consider factors such as contract terms, payment terms and whether there is an alternative future use of the product or service. Substantially all of our revenue is recognized over time as we perform under the contract because if our customer were to terminate the contract for reasons other than our non-performance, we would have the right to recover damages which would include, among other potential damages, the right to payment for our work performed to date plus a reasonable profit to deliver products or services that do not have an alternative use to us.
In regard to the sports training and academics tuition revenue recognition policy, the tuition is recognized over the course of the training period which is typically a semester. In determining when performance obligations are satisfied, we consider factors as to actual attendance at the academy. We would have the right to recover damages which would include, among other potential damages, the right to payment for our work performed to date.
Stock-Based Compensation. The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.
Allowance for Doubtful Accounts. The Company establishes an allowance for
doubtful accounts to ensure trade receivable are not overstated due to
non-collectability. The Company's allowance is based on a variety of factors,
including age of the receivable, significant one-time events, historical
experience, and other risk considerations. The Company had an allowance at
Inflation
In the opinion of management, inflation has not had a material effect on the Company's financial condition or results of its operations.
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