Alta Global Group Limited(MMA) - 2024 Q4 - Annual Report

Global Market and Industry Overview - The US martial arts and combat sports gym market generates over US $12.6 billion annually, with over 11.8 million people engaging in martial arts disciplines this year[153] - The global martial arts and combat sports industry is projected to generate over$ 12.6 billion in annual revenue in 2024, with over 45,597 gyms in the US alone[188] Warrior Training Program - The company has successfully run 206 Warrior Training Programs globally since 2018, engaging over 5,100 participants with an average gross revenue of A $1,496 per participant[157] - Alta's Warrior Training Program has been run in over 206 locations globally, with over 5,000 participants, significantly increasing revenue for partner gyms[196] - Warrior Training Program revenue represented over 70% of net revenues for FY2024 and FY2023[269] Partnerships and Collaborations - The company has partnered with UFC Gym to co-design the UFC Fight Fit Program, which can be rolled out across 150+ global locations[159] - Alta has partnered with over 650 gyms globally, including a global enterprise agreement with UFC Gym, which has 150+ locations across 38 countries[190] - The company signed a revenue share agreement with UFC Gym Group, potentially generating over US$ 7 million annually from the Warrior Training Program[179] - Revenue share agreement with UFC Gym Group expected to generate over US $7 million annually, with 30% going to the company[259] - The company partnered with combat sports figures like Rafael Cordeiro and Daniel Cormier to create online training content targeting beginners and seasoned athletes[254] - The company partnered with Eric Nicksick, Jessica-Rose Clark, and Gilbert Melendez to strengthen its connection to 640 million global MMA fans[258] Acquisitions - The company completed the acquisition of Steppen Pty Ltd, a fitness app with over 395,000 downloads and a database of 270,000 accounts[171] - The company acquired Mixed Martial Arts LLC, an MMA media company with 260,000 forum accounts, 350,000 monthly engaged sessions, and over 5 million Facebook followers[172] - Alta acquired mixedmartialarts.com in November 2023, which has over 260,000 forum accounts, 350,000 monthly sessions, and more than 5 million followers on Meta[197] - The company acquired Steppen Pty Ltd, a fitness technology company with over 395,000 app downloads and a database of 270,000 accounts, for US$ 64,977[250] - The company acquired Mixed Martial Arts LLC, an MMA media company with 260,000 forum accounts and 350,000 monthly engaged sessions, for US $250,000[251] - The company acquired Hype Kit, Inc., a digital marketing platform, for US$ 100,000 to enhance gym owner and coach tools[177] - Alta acquired Hype.CO in May 2024, a mobile marketing platform that helps gym owners and coaches cultivate relationships with fans and monetize their services[198] - The company acquired Hype Kit, Inc., a digital marketing platform, for US $100,000 to accelerate its technology roadmap and create cost synergies[256] Financial Performance and IPO - The company raised US$ 6,500,000 through its initial public offering, selling 1,300,000 shares at US $5.00 per share[174] - Alta closed its IPO on April 2, 2024, issuing and selling 1,300,000 Ordinary Shares, which began trading on the NYSE American under the symbol "MMA"[185] - The company completed its initial public offering in April 2024, raising US$ 6,500,000 by selling 1,300,000 shares at US $5.00 per share[253] - The company successfully listed on the NYSE and received net proceeds of US$ 5,767,887 (A $8,842,460) from the IPO[294] - The company recorded a loss after tax of A$ 14,408,346 for fiscal year 2024, compared to a loss of A $20,597,436 in fiscal 2023, with a cash balance of A$ 3,544,837 as of June 30, 2024[243] - Loss after tax decreased to A $14,408,346 in FY2024 from A$ 20,597,436 in FY2023, a 30% improvement[264] - Cash balance as of June 30, 2024, was A $3,544,837, a decrease of A$ 157,730 from June 30, 2023[266] - Net asset position improved to A $2,558,544 in FY2024 from a net liability of A$ 31,134,307 in FY2023[266] - Net revenue from program fees increased by 8% to A $392,307 in FY2024 compared to FY2023[282] - Share-based payment expenses increased by 91% to A$ 4,521,598 in FY2024[281] - Professional fees rose by 107% to A $1,790,344 in FY2024[281] - Total expenses decreased by 32% to A$ 14,970,658 in FY2024 compared to FY2023[281] - Other income decreased by 86% to A $170,005 in FY24, primarily due to a reduction in R&D tax incentives[284] - Employee salaries and benefits increased by A$ 1,284,937 in FY24 due to new hires and salary increases[287] - Share-based compensation expenses increased by A $2,156,214 in FY24 due to the issuance of restricted share units and other incentives[288] - Net cash used in operating activities increased by A$ 3,830,328 to A $9,386,196 in FY24, driven by IPO-related costs and increased payments to suppliers and employees[298] - The company had a cash balance of A$ 3,544,837 as of June 30, 2024, compared to A $3,702,567 in 2023[294] - The company incurred a loss after tax of A$ 14,408,346 in FY24, compared to A $20,597,436 in FY23[316] - The company's ability to continue as a going concern is dependent on raising additional funds through equity or debt financing[319] Product and Platform Development - The Alta Community platform has been launched, offering a cloud-based community growth and management tool with a monthly subscription model[160] - Alta's subscription-based products and services range from$ 0 to $170 per month, with its B2B SaaS offering Hype capturing up to 5% of all transactions processed through its platform[195] - Alta's platform integrates B2C and B2B subscriptions with transaction fees, driving sustained growth across the ecosystem by capturing value from every transaction[211] - Research and Development expenses are focused on developing a cloud-based platform connecting consumers with gyms and integrating payment technology[307] - The company plans to continue investing in R&D to enhance product management, user experience, and software engineering to expand platform functionality[306] Brand Ambassadors and Marketing - Conor McGregor was appointed as a global ambassador, receiving 700,000 performance share rights tied to share price milestones[181] - Conor McGregor appointed as global ambassador, receiving 700,000 performance share rights tied to share price milestones[260] Operational Expansion - The company expanded its gym footprint into Illinois, Arizona, and Hawaii, and partnered with major martial arts academies such as Renzo Gracie, American Top Team, and American Kickboxing Academy[244] - Alta's global expansion includes partnerships in North America, the UK, Ireland, Australia, New Zealand, and Mexico, with plans to roll out services across UFC Gym's 150+ locations[208] Digital Content and Training - The company launched the Alta Academy in July 2023, expanding digital content and online training into disciplines like jiu jitsu, boxing, wrestling, and Muay Thai[245][246] - The company launched ticketing services for live Alta events and seminars, including the Warrior Training Program finale events[252] Accounting and Financial Policies - Revenue recognition for program fees is based on the delivery of rights to use licenses and training programs to gyms, which is considered the point when gyms gain control of the promised service[324] - Variable consideration is estimated based on past experience with canceled contracts, and revenue is recognized only if it is highly probable that no significant reversal will occur[325] - Share-based payment transactions are measured using the Black-Scholes model, and their fair value is determined at the grant date, potentially impacting profit or loss and equity[326] - Deferred tax assets are recognized only if future taxable profits are probable, and no deferred tax assets have been recognized from brought forward losses[327] - Intangible assets acquired in business combinations are measured at fair value, while separately acquired intangible assets are recognized at cost, with finite-life assets amortized over their useful life[329] - Trademarks and capitalized web development costs are amortized over their expected benefit periods of 10 years and recognized in profit and loss[330] - Software costs are amortized over a finite life of four years, and non-financial assets are assessed for impairment at each reporting date[331] - Trade receivables are assessed for impairment at each reporting date, with provisions for refunds raised accordingly[332] - Finance costs related to qualifying assets are capitalized, while other finance costs are expensed in the period incurred, and derivative liabilities are revalued at each reporting date[333] Employee and Executive Compensation - Alta employs 24 employees as of June 30, 2024, with 4 in product development, 14 in sales and marketing, and 6 in corporate office roles[215] - Aggregate cash remuneration for executive officers for the fiscal year ended June 30, 2024, was A$ 731,589, including A $668,859 in cash and A$ 62,730 in superannuation[348]