UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D. C. 20549

 

FORM 10-Q/A

Amendment No. 1

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D. C. 20549

 

FORM 10-Q

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

For the quarterly period ended March 31, September 30, 2021

[  ] Transition report pursuant to Section 13 or 15(d) of the Exchange Act

For the transition period from _________ to _________.

ALTITUDE INTERNATIONAL HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

(f/ka/ Altitude International, Inc.)

New York000-5563913-3778988
(State or Other Jurisdiction(Commission(I.R.S. Employer
of Incorporation)File Number)Identification No.)

4500 SE Pine Valley Street, Port Saint Lucie, FL34952

(Address of Principal Executive Offices)

(772) (772) 323-0625

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES [X] NO [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

(Check One):

Large Accelerated filer [  ]Accelerated filer [  ]

Non-accelerated filer [X]

Smaller reporting company [X]

Emerging growth company [X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Regulation 12b-2 of the Exchange Act): YES [  ] NO [X]

Securities registered to Section 12(b) of the Act: None.

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 58,646,681 355,058,405 shares issued, issuable, and outstanding as of MayJanuary 6, 2021.2022.

 

 

 

Explanatory Note

The purpose of this Amendment No. 1 to Altitude International Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, filed with the Securities and Exchange Commission on November 19, 2021 (the “Form 10- Q”), is to amend the Form 10-Q to reflect the reverse merger with Altitude International Holdings, Inc. and Breunich Holdings, Inc. and the effect on the financials and other applicable disclosures.

TABLE OF CONTENTS

Page
PART I.FINANCIAL INFORMATION3
Item 1.Condensed Consolidated Financial Statements (unaudited)3
Condensed Consolidated Balance Sheets (unaudited)4
Condensed Consolidated Statements of Operations (unaudited)5
Condensed Consolidated Statement of Changes in Stockholders’ Equity (unaudited)6
Condensed Consolidated Statements of Cash Flows (unaudited)7
Notes to the Condensed Consolidated Financial Statements (unaudited)8
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations (including cautionary statement)1823
Item 3.Quantitative and Qualitative Disclosures about Market Risk1926
Item 4.Controls and Procedures2026
PART II.OTHER INFORMATION2127
Item 1.Legal Proceedings2027
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds2128
Item 3.Defaults Upon Senior Securities2129
Item 4.Mine Safety Disclosures2129
Item 5.Other Information2129
Item 6.Exhibits2229
Signatures2330

2

 

PART I. FINANCIAL INFORMATION

ITEM 1 - CONDENSED FINANCIAL STATEMENTS

ALTITUDE INTERNATIONAL HOLDINGS, INC.

(UNAUDITED)

Contents

Page
Condensed Consolidated Financial Statements (unaudited)
Condensed Consolidated Balance Sheets as of March 31,September 30, 2021, and December 31, 2020 (unaudited)4
Condensed Consolidated Statements of Operations for the three and nine months ended March 31,September 30, 2021, and 2020 (unaudited)5
Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three and nine months ended March 31,September 30, 2021, and 2020 (unaudited)6
Condensed Consolidated Statement of Cash Flows for the threenine months ended March 31,September 30, 2021, and 2020 (unaudited)7
Notes to Condensed Consolidated Financial Statements (unaudited)8-178-22

3

 

ALTITUDE INTERNATIONAL HOLDINGS, INC.

(f/k/a Altitude International, Inc.)

and Subsidiaries

Condensed Consolidated Balance Sheets

(unaudited)

 March 31, December 31,  

September 30,

2021

 

December 31,

2020

 
 2021  2020  (restated) (restated) 
ASSETS          

   

 
Current assets                
Cash $95,653  $485  $324,764  $134,003 
Accounts receivable  525,379   269,962 
Inventory  215,641   50,536 
Prepaid expense  42,709   3,000   167,896   202,003 
Total current assets  138,363   3,485   1,233,680   656,504 
                
Fixed assets, net  263,466   286,099 
Goodwill  

98,779,773

   - 
        
Total assets $138,363  $3,485  $100,276,919  $942,603 
                
LIABILITIES AND STOCKHOLDERS’ DEFICIT        
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)        
Current liabilities                
Notes payable - related party $5,700  $69,200  $-  $69,200 
Notes payable  20,800   20,800   100,800   965,163 
Accounts payable and accrued expenses  15,167   62,053   516,038   466,708 
Accounts payable and accrued expenses - related party  34,695   113,422   -   113,422 
Due to related party  109,328   - 
Stockholders' advance  36,211   36,211 
Stockholders’ advance  36,211   36,211 
Deferred revenue  126,037   -   1,370,871   1,378,502 
Total current liabilities  347,936   301,686   2,023,920   3,029,206 
        
Non-current liabilities        
Capital deficit  33,150   - 
Notes payable  847,554   263,300 
Total non-current liabilities  880,704   

263,300

 
Total liabilities  347,936   301,686   2,904,624   3,292,506 
                
Commitments and contingencies - Note 5        
Commitments and contingencies - Note 7  -   - 
                
Stockholders' deficit        
Preferred stock - no par value, 5,000,000 shares authorized, no shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively  -   - 
Common stock - no par value, 600,000,000 shares authorized, 58,646,681 and 51,537,764 shares issued, issuable, and outstanding at March 31, 2021 and December 31, 2020, respectively  6,165,212   3,091,136 
Stockholders’ equity (deficit)        
Preferred stock - 0 par value, 5,000,000 shares authorized, 51 and 0 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively  -   - 
Common stock - 0 par value, 600,000,000 shares authorized, 355,033,405 and 51,487,764 shares issued, issuable, and outstanding at September 30, 2021 and December 31, 2020, respectively  6,181,050   3,091,136 
Members’ deficit  

-

   

(1,981,343

)
Non-controlling members’ deficit  

-

   

(44,454

)
Additional paid in capital  (175,279)  (175,279)  

97,617,912

  (1,270,366)
Accumulated deficit  (6,199,507)  (3,214,058)  (6,426,667)  (2,144,876)
Total stockholders' deficit  (209,574)  (298,202)
Total liabilities and stockholders' deficit $138,362  $3,485 
Total stockholders’ equity (deficit)  

97,372,295

  (2,349,903)
Total liabilities and stockholders’ equity (deficit) $100,276,919  $942,603 

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

4

 

ALTITUDE INTERNATIONAL HOLDINGS, INC.

(f/k/a Altitude International, Inc.)

and Subsidiaries

Condensed Consolidated Statement of Operations

For the Three Months ended March 31,(unaudited)

(unaudited)

             
  For the Three Months Ended  For the Nine Months Ended 
  September 30,  September 30, 
  2021  2020  2021  2020 
             
Revenue $1,472,194  $828,107  $5,522,499  $4,091,315 
                 
Operating expenses                
Direct costs of revenue  215,714   235,459   924,110   622,654 
Professional fees  133,358   161,566   475,910   445,979 
Salary expenses  662,906   571,496   

2,642,602

   1,904,495 
Stock-based compensation  85,077   2,367   3,063,185   9,701 
Marketing expense  86,013   20,963   183,169   84,027 
Other general and administrative expenses  513,665   421,653   1,572,003   1,416,582 
Total operating expenses  1,696,733   1,413,504   8,860,978   4,483,438 
                
Loss from operations  (224,539)  (585,397)  (3,338,480)  (392,123)
                 
Other income (expenses)                
Gain (loss) on settlement of debt  -   (39,734)  41,254   (39,734)
Gain (loss) on disposal of assets  -   (24,861)  -   (24,861)
Gain on forgiveness of debt  -   -   -   10,000 
Impairment expense  -   -   

(978,795

)  - 
Interest expense  (1,779)  (13,763)  (5,770)  (46,576)
Total other income (expenses)  (1,779)  (78,358)  (943,311)   (101,171)
                 
Net loss $(226,320) $(663,755) $(4,281,791) $(493,294)
                 
Earnings per share - basic and fully diluted $(0.00) $(0.01) $(0.03) $(0.01)
                
Weighted average number of shares of common stock - basic and fully diluted  281,000,854   50,710,241   132,448,232   43,288,259 

  2021  2020 
       
Revenue $-  $593 
         
Operating expenses        
Professional fees  17,675   31,743 
Salary expenses  28,947   31,250 
Stock-based compensation  2,967,745   3,825 
Other general and administrative expenses  8,383   32,451 
Total operating expenses  3,022,750   99,269 
         
Loss from operations  (3,022,750)  (98,676)
         
Other income (expenses)        
Gain on settlement of debt  41,254   - 
Interest expense  (3,953)  (7,352)
Total other income (expenses)  37,301   (7,352)
         
Net loss $(2,985,449) $(106,028)
         
Earnings per share - basic and fully diluted $(0.05) $(0.00)
         
Weighted average number of shares of common stock - basic and fully diluted  55,241,426   36,100,583 

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

5

 

ALTITUDE INTERNATIONAL HOLDINGS, INC.

(f/k/a Altitude International, Inc.)

and Subsidiaries

Condensed Consolidated Statement of Changes in Stockholders'Stockholders’ Deficit

March 31,September 30, 2021 and 2020

(unaudited)

                    
 Common Stock Additional      Preferred Stock Common Stock Additional  Non-controlling     
   No Paid in Accumulated    No of No   No Paid in  Members’ Members’ Accumulated   
 Shares Par Value Capital Deficit Total  Shares Par Value Shares Par Value Capital  Deficit  Deficit Deficit Total 
                 (restated)  (restated)  (restated) (restated)  (restated)  (restated)  (restated) 
Balance, December 31, 2019  36,075,995  $2,669,024  $(183,183) $(2,885,511) $(399,670)  -  $               -   36,075,995  $2,669,024  $(183,183)   $

-

$              -  $(2,885,511) $(399,670)
Issuance of common stock for services  37,500   1,876   -   -   1,876   -   -   87,500   3,789   -  

-

 

-

  -   3,789 
Options exercised into common stock                            
Options exercised into common stock, shares                            
Issuance of common stock for acquisition                            
Issuance of common stock for acquisition, shares                            
Business combination                            
Business combination, shares                            
Acquisition of BHI                            
Acquisition of BHI, shares                            
Conversion of debt to common stock  -   -   15,336,769   416,848   39,734      456,582 
Amortization of stock options  -   -   1,949   -   1,949   -   -   -   -   5,912  - -  -   5,912 
Net loss for the period ended March 31, 2020  -   -   -   (106,028)  (106,028)
Balance, March 31, 2020  36,113,495  $2,670,900  $(181,234) $(2,991,539) $(501,873)
Net loss for the period ended September 30, 2020  -   -   -   -   -   -  

-

  

(493,294

)  

(493,294

)
Balance, September 30, 2020  -  $-   51,500,264  $3,089,661  $(137,537) $- $

-

 $(3,378,805) $(426,681)
                                                
Balance, December 31, 2020  51,487,764  $3,091,136  $(175,279) $(3,214,058) $(298,201)  -  $-   51,487,764  $3,091,136  $

(1,270,366

) $(1,981,343) $(44,454) $

(2,144,876

) $(2,349,903)
Issuance of common stock for services  6,727,500   2,967,746   -   -   2,967,746   -   -   7,127,500   2,953,985   -  - -  -   2,953,985 
Conversion of debt to common stock  181,417   87,080   -   -   87,080   -   -   181,417   87,080   -  - -  -   87,080 
Options exercised into common stock  250,000   19,250   -   -   19,250   -   -   250,000   19,250   -  - -  -   19,250 
Net loss for the period ended March 31, 2021  -   -   -   (2,985,449)  (2,985,449)
Balance, March 31, 2021  58,646,681  $6,165,212  $(175,279) $(6,199,507) $(209,574)
Acquisition of BHI  51   -   295,986,724   

29,599

   98,888,278  1,981,343 44,454  -   100,943,674 
Net loss for the period ended September 30, 2021  -   -   -   -   -   -  -  

(4,281,791

)  (4,281,791)
Balance, September 30, 2021  51  $-   355,033,405  $6,181,050  $

97,617,912

 $- $- $(6,426,667) $97,372,295

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

6

 

ALTITUDE INTERNATIONAL HOLDINGS, INC.

(f/k/a Altitude International, Inc.)

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the ThreeNine Months ended March 31,September 30,

(unaudited)

       
  2021  2020 
  

(restated)

  (restated) 
Cash flows from operating activities:        
Net loss $(4,281,791) $(493,294)
Adjustments to reconcile net loss to net cash used in operations:        
Depreciation expense  22,633   31,365 
Amortization expense  -   460 
Loss on conversion of debt into common stock  -   

39,734

 
Gain on settlement of debt  (41,254)   - 
Stock-based compensation  3,063,185   9,701 

Impairment expense

  

978,795

   - 
Loss on disposal of assets  -   

24,861

 
Gain on forgiveness of debt  -   (10,000)
Change in assets and liabilities:        
Accounts receivable  (255,417)  94,966 
Inventory  (165,105)  

24,861

 
Prepaid expense  34,107  35,017 
Accounts payable and accrued expenses  49,328   (22,461)
Accounts payable and accrued expenses - related party  (113,422)  (60,226)
Deferred revenue  (7,631)  (486,427)
Net cash used in operating activities  (716,572)  (811,443)
         
Cash flows used in investing activities:        
Purchase of fixed assets  -   (10,792)
Net cash used in investing activities  -   (10,792)
         
Cash flows from financing activities:        
Proceeds from stock options exercised  19,250   - 
Proceeds from loan  957,283   872,826 
Proceeds from related party loans and advances  -   232,490 
Repayment of notes payable to related parties  (69,200)  (126,369)
Net cash provided by financing activities  907,333  978,947 
         
Net increase in cash  190,761   

156,712

         
Cash at beginning of period  134,003   268,359 
         
Cash at end of period $324,764  $425,071 
         
Cash paid for interest $-  $- 
Cash paid for taxes $-  $- 
         
Non-cash investing and financing activities:        
Conversion of related party debt to common stock $90,708  $416,848 

  2021  2020 
       
Cash flows from operating activities:        
Net loss $(2,985,449) $(106,028)
Adjustments to reconcile net loss to net cash used in operations:        
Depreciation expense  -   871 
Amortization expense  -   153 
Gain on settlement of debt  41,254   - 
Stock-based compensation  2,967,745   3,825 
Change in assets and liabilities:        
Prepaid expense  (39,709)  (8,425)
Accounts payable and accrued expenses  (46,886)  7,500 
Accounts payable and accrued expenses - related party  (96,401)  38,601 
Due to related party  109,328   - 
Deferred revenue  126,037   (593)
Net cash provided by (used in) operating activities  75,918   (64,096)
         
Cash flows from financing activities:        
Proceeds from stock options exercised  19,250   - 
Proceeds from related party loans and advances  -   57,989 
Net cash provided by financing activities  19,250   57,989 
         
Net increase (decrease) in cash  95,168   (6,107)
         
Cash at beginning of period  485   8,267 
         
Cash at end of period $95,653  $2,160 
         
Cash paid for interest $-  $- 
Cash paid for taxes $-  $- 
         
Non-cash investing and financing activities:        
Conversion of related party debt to common stock $90,708  $- 

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

7

 

ALTITUDE INTERNATIONAL HOLDINGS, INC.

(f/k/a Altitude International, Inc.)

and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

March 31,September 30, 2021

(unaudited)

NOTE 1 – NATURE OF OPERATIONS

Company Background

Altitude International Holdings, Inc. (f/k/a Altitude International, Inc., the “Company,” “we,” “us,” “our,” or “Altitude-NY”), was incorporated in the State of New York on July 13, 1994, as “Titan Computer Services, Inc.”

On June 27, 2017, the Company successfully closed a Share Exchange transaction (the “Share Exchange”) with the shareholders of Altitude International, Inc. (“Altitude”), a Wisconsin corporation. Altitude was incorporated on May 18, 2017, under the laws of the state of Wisconsin and has been operating as a wholly owned subsidiary of Altitude-NY since the Share Exchange. Altitude operates through Northern, Central, and South America sales to execute the current business plan of athletic training industry, specifically altitude training. Our objective is to be recognized as one of the upper tier specialty altitude training equipment providers in the Americas.

On February 13, 2018, the majority of the shareholders of the Company approved the amendment to the Articles of Incorporation to change the Company’s name from “Titan Computer Services, Inc.” to “Altitude International, Inc.” The purpose of the name change was to help further our brand identity and will reflect the major focus of our business operations, the manufacturing and distribution of products in the athletic training industry, specifically altitude training.

On February 14, 2020, the majority of shareholders of the Company and the Board of Directors authorized a change in the Company’s name to “Altitude International Holdings, Inc.” to reflect more diversified operations going forward. The Articles of Amendment finalizing this name change have not yet been filed by the Company.

On April 24, 2020, the Company formed a wholly owned subsidiary in Wisconsin called “Altitude Sports Management Corp.,” an entity that will providing fully integrated wealth, health, and career management services to its clients.

On August 21, 2020, the Company filed with the State of New York to change the name from Altitude International, Inc. to Altitude International Holdings, Inc.

Further, on January 17, 2021, Altitude International Holdings, Inc. (the “Company” or “Altitude”) entered into a Letter of Intent (the “LOI”) with Breunich Holdings, Inc., a privately held Delaware corporation (“BHI”). The LOI sets forth the headline terms of a proposed Share Exchange of Altitude with BHI through which 100%100% of the BHI shares will be exchanged for up to 80% of then-issued and outstanding shares of Altitude. Greg Breunich, the Company’s chief executive officer, chief financial officer and chairman, controls BHI.

Upon the terms and subject to the conditions set forth in the LOI, following the Share Exchange, (i) BHI and its subsidiaries will be wholly-owned subsidiaries of Altitude; (ii) BHI shareholders would own approximately 80%80% of the common shares of Altitude, and Altitude shareholders would own approximately 20%20% of the common shares of Altitude, with such percentages calculated on a fully diluted basis; and (iii) BHI has the right to appoint a majority of the directors of Altitude following the Share Exchange.

The completion of the Share Exchange would be subject to the satisfaction of specific conditions set forth in the LOI, including the completion of an audit of BHI and its subsidiaries and the parties first negotiating and executing a definitive Share Exchange agreement (the “Share Exchange Agreement”). These conditions may not ever be satisfied, the Company may never enter into a definitive Share Exchange Agreement with BHI, the Share Exchange with BHI may never be consummated, and even if it is, it may not be consummated on the terms described therein.

On February 10, 2021, Thethe Company filed with the State of New York to increase the authorized shares of common stock of the Company to 600,000,000 shares.

8

 

NatureOn May 28, 2021, the Company’s Board of Operations

The product designs to be licensed from Sporting Edge UK, Ltd (“Sporting Edge UK”) are proven and cover a wide range of room sizes. The only requirement is to change from metric to imperial sizes where necessary.

There are three unique elementsDirectors, as allowed in the Company’s Bylaws, approved an increase to the Altitude product:maximum number of individuals on the Board of Directors to thirteen.

Sophisticated Touch Screen control systems capable of integrating the control of simulated altitude, temperature and humidity.
A unique design of Air Separation Unit with only a single active part that provides for ultra-reliable operation and a design life of greater than fifteen years.
Proven training protocols that allow the desired training benefits to be achieved.

Altitude is transitioning to a more multi-discipline enterprise, blending performance-based education, sports, science, and technology. The targeted consumer segments include but are not limited to juniors, adults, professionals. ALTD’s multi-discipline approach consists of wholly owned stand-alone academies, wellness, and manufacturing/assembly facilities.

On July 6, 2021, Altitude International Holdings, Inc. (“Altitude” or the “Company”) entered into a Share Exchange Agreement (the “Agreement”) with Breunich Holdings, Inc., a Delaware entity (“BHI”). BHI is a holding company with seven operating LLCs, including CMA Soccer, LLC, ITA-USA Enterprise LLC, Trident Water LLC, North Miami Beach Academy LLC, NVL Volleyball Academy LLC, Six Log Cleaning and Sanitizing LLC, and Altitude Wellness LLC.

Pursuant to the terms of the Agreement, the Company agreed to issue 295,986,724 shares of its common stock to the shareholders of BHI in exchange for 100% ownership of BHI. The Company also agreed to issue 51 shares of its Series A preferred stock to Greg Breunich for his services as an officer of BHI.

Following the Agreement, BHI will be a wholly owned subsidiary of the Company, with each of its subsidiaries operating as wholly owned subsidiaries.

At the Closing of the Share Exchange Agreement on July 23, 2021, Altitude acquired 100% ownership of BHI. as a wholly owned subsidiary and its operating companies: CMA Soccer, LLC, ITA-USA Enterprise LLC, Trident Water LLC, North Miami Beach Academy LLC, NVL Volleyball Academy LLC, Six Log Cleaning and Sanitizing LLC, and Altitude Wellness LLC. The subsidiaries will be renamed to reflect the new corporate structure and the Altitude brand. For financial reporting purposes, the acquisition of BHI and the change of control in connection with the acquisition represented a “reverse merger” rather than a business combination, and BHI is deemed to be the accounting acquirer in the transaction. For the periods prior to September 30, 2021, the acquisition is being accounted for as a reverse merger and recapitalization. BHI is the acquirer for financial reporting purposes, and the Company (Altitude International Holdings, Inc.) is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the acquisition are those of BHI and ALTD consolidated.

On July 21, 2021, the Company filed a Certificate of Designation for Series A Preferred Stock.

Nature of Operations

Altitude International Holdings, Inc. is a multi-faceted organization focused on integrating advanced training and hydration technology with specialized sports training.

Since 2017, Altitude has specialized in creating properly engineered, membrane-based designs for simulated altitude training equipment. The product line ranges from personal at home use machines to fully integrated environmental rooms and chambers, and has been used by colleges, an NFL team and NBA team.

On July 23, 2021, Altitude executed a Share Exchange Agreement with Breunich Holdings, Inc. (“BHI”) through which it acquired BHI and its several operating subsidiaries: Altitude Academies (formerly “ITA-USA Enterprise, LLC doing business as Club Med Academies”), Altitude Soccer (formerly “CMA Soccer, LLC”), Altitude Volleyball (formerly “NVL Academy LLC”), North Miami Beach Academy LLC, Altitude Water (formerly “Trident Water, LLC”), Six Log Cleaning & Sanitizing LLC, and Altitude Wellness. Since the Closing of the Share Exchange Agreement, Altitude operates in various business divisions through its subsidiaries, mainly within performance training and specialized academic environments. It also manages and operates a subsidiary that manufactures Pure Water Generators utilizing a patented ozonated water treatment technology. This technology produces pure, oxygenated drinking water from the humidity in the air.

Altitude International Holdings, Inc.

Altitude International Holdings, Inc. (“Altitude”) was incorporated on May 18, 2017, under the laws of the state of Wisconsin with 100,000,000 authorized common stock with $0.001$0.001 par value. On May 18, 2017, 6,102,000 shares of common stock at $0.001$0.001 (par) were issued as founder shares, valued at a total of $6,102$6,102 to 15 individuals. These shares were issued for future potential services from these various individuals and as of the date of this issuance, no value was placed on these future potential services and were therefore recorded at par value as stock-based compensation to the founders.

On June 27, 2017, after the closing of certain Stock Purchase Agreements, in private sale transaction and the Share Exchange Agreement, a change of control of the Company occurred and the new operational focus of the Company commenced. See Notes 6 and 8.

9

 

Altitude will operate through Northern, Central,

On February 13, 2018, the majority of the shareholders of the Company approved the amendment to the Articles of Incorporation to change the Company’s name from “Titan Computer Services, Inc.” to “Altitude International, Inc.” The purpose of the name change was to help further our brand identity reflect the major focus of our business operations, the manufacturing and South America to executedistribution of products in the current business plan of athletic training industry, specifically altitude training. Our objective is to be recognized as oneOn February 14, 2020, the majority of shareholders of the upper tier specialtyCompany and the Board of Directors authorized a change in the Company’s name to “Altitude International Holdings, Inc.” to reflect more diversified operations going forward. On August 21, 2020, the name change was effected with the State of New York.

Following the Share Exchange, the Company, through its operating subsidiary, Altitude, specializes in creating uniquely engineered, membrane-based designs for simulated altitude training equipment providers.environments. The product line ranges from personal at home use machines to fully integrated environmental rooms and chambers. Through a license agreement with Sporting Edge UK, a brand well-established in the United Kingdom, the Company intends to expand its technology into the American marketplace, where the appetite for increasing performance in elite athletes, professional sports, equine sports, and universities and colleges is immense.

Additionally, on April 24, 2020, the Company formed a wholly owned subsidiary in Wisconsin called “Altitude Sports Management Corp.,” an entity that will providing fully integrated wealth, health, and career management services to its clients.

On July 6, 2021, Altitude International Holdings, Inc. (“Altitude” or the “Company”) entered into a Share Exchange Agreement (the “Agreement”) with Breunich Holdings, Inc., a Delaware entity (“BHI”), and the shareholders of BHI. BHI is a holding company with seven operating LLCs, including CMA Soccer, LLC, ITA-USA Enterprise LLC, Trident Water LLC, North Miami Beach Academy LLC, NVL Volleyball Academy LLC, Six Log Cleaning and Sanitizing LLC, and Altitude Wellness LLC.

Pursuant to the terms of the Agreement, the Company agreed to issue 295,986,724 shares of its common stock to the shareholders of BHI in exchange for 100% ownership of BHI. The Company also agreed to issue 51 shares of its Series A preferred stock to Greg Breunich for his services as an officer of BHI.

At the Closing of the Share Exchange Agreement on July 23, 2021, Altitude acquired 100% ownership of BHI as a wholly - owned subsidiary and its six operating companies. BHI is now operating as a wholly owned subsidiary of the Company. Following the Closing of the Share Exchange Agreement, the Company has rebranded its subsidiaries’ operations.

Changes in Management and the Board of Directors

On January 25, 2019, Robert Kanuth was appointed as the Company’s new CEO and David Vincent resigned as CEO and was appointed as the Company’s Chief Technology Officer.

On June 27, 2019, Greg Anthony and Peter Sandore were elected to serve on the Board of Directors.

On August 20, 2019, Dave Vincent resigned as a director and CTO of the Company.

On September 19, 2019, Greg Anthony was appointed as President of the Company.

On July 6, 2020, Greg Whyte resigned as a director of the Company.

On July 6, 2020, Greg Whyte resigned as a director of the Company.

On July 28, 2020, Peter Sandore resigned as director of the Company.

On December 20, 2020, Greg Whyte, David Vincent, and Greg Breunich were appointed as directors of the Company to fill the vacancies left upon the resignation of its former directors.

10

 

On January 6, 2021, Robert Kanuth, Chief Executive Officer, Chief Financial Officer, and a member of the Board of Directors resigned as Chief Executive Officer and Chief Financial Officer of the Company. He also resigned as Chairman of the Board of Directors but remains a member of the Board of Directors of the Company.

On January 6, 2021, Greg Breunich was appointed Chief Executive Officer, Chief Financial Officer, and Chairman of the Board of Directors of the Company.

On February 2, 2021, Greg Anthony was appointed Chief Communications Officer and Company Spokesperson of the Company.

On March 19, 2021, Joseph B. Frost resigned as a director and officer of the Company.

On March 24, 2021, Gabe Jaramillo was appointed as Executive Vice President and Director of Tennis Training. On March 26, 2021, Mr. Jaramillo was appointed to the Board of Directors of the Company.

9

On July 23, 2021, Scott Del Mastro was appointed to the Board of Directors of the Company.

On October 7, 2021, David Vincent resigned as a director of the Company.

On October 22, 2021, Bob Kanuth and Lesley Visser resigned as directors of the Company.

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 December 31.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations, and cash flows of the Company for the respective periods being presented.

The unaudited condensed consolidated financial statements of the Company for the threenine month periods ended March 31,September 30, 2021, and 2020 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), 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, 2020, was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2021. These financial statements should be read in conjunction with that report.

The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with GAAP. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses or recognized when incurred. The consolidated financials include the accounts of the Company include the following entities most of which are directly or indirectly controlled by Greg Breunich, a related party and CEO of BHI:

11

 

ITA-USA Enterprise LLC, doing business as Club Med Academies and as Altitude Academies, specializes in training and education of young aspiring student-athletes from around the world, providing a pathway from middle school to college to the professional ranks. ITA-USA’s proprietary educational model currently focuses on sports and academics. The business model is scalable to other disciplines, i.e., the arts and science sectors. CMA is a tuition-based business hosting boarding and non-boarding students.

CMA Soccer, doing business as Altitude Soccer, the soccer division of Club Med Academies, hosts student-athletes from multiple nations worldwide like all other Club Med Academy sports. CMAS utilizes highly specialized training methodologies blending all of the critical elements required to build an elite-level player. Those who attend participate in a 10 hour per day regimen of soccer and academics. CMAS is a college and professional bound program placing its graduates in colleges throughout the United States and even some in the professional ranks throughout Europe, South America, and the USA.

NVL Academy, doing business as Altitude Volleyball, is CMA’s beach volleyball and indoor volleyball tuition-based operations. Most of the athletes, except for a few individuals, come from the USA. For the most part, Volleyball in the United States is a women’s sport. There is a significant opportunity for college scholarships for those attending. NVL Academy operates and functions like all other academy sports.

Trident Water manufactures Atmospheric Water Generators (“AWG’s”). They range from smaller residential, light commercial, and heavy-duty military-grade machines. The machines supply 12, 100, to 200 gallons per day. TWC’s patented purification process produces the purest of water that is then put through filters replenishing the calcium and magnesium minerals to make the finest drinking water on the market today.

North Miami Beach Academy, a local park operation with the City of North Miami Beach, provides junior, adult, and family programming for the city residents. In addition to the local park deliverables, NMBA operates a non-boarding tennis and academic academy.

Six Log Cleaning & Sanitizing, LLC provides a wide variety of services to its corporate customers, including but not limited to: general office cleaning, carpet cleaning, window cleaning, and other janitorial protocols. Fogging to prevent and protect against exposure to various bacteria, fungi, and viruses is another SLCS offering.

Altitude Technology manufactures air separation systems and chambers to regulate oxygen, carbon dioxide, humidity and temperature levels in Altitude’s hypoxic chamber training environments. Altitude’s chambers simulate altitudes from 0-39,000 feet, ideal for athletic training. Altitude’s chambers are currently utilized by the National Football League (NFL), the National Basketball Association (NBA), and university sports teams to train and develop their athletes.

All intercompany accounts and transactions are eliminated in consolidation.

Property and equipment

Property and equipment are stated at cost or fair value. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expenses as incurred. The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any gain or loss in included in the results of operations. The estimated useful lives of property and equipment are as follows:

SCHEDULE OF ESTIMATED USEFUL LIVES

Computers, software, and office equipment1 6 years
Machinery and equipment35 years
Leasehold improvementsLessor of lease term or estimated useful life

Leases

The Company currently follows the guidance in ASC 840 “Leases,” which requires us to evaluate the lease agreements the Company enters into to determine whether they represent operating or capital leases at the inception of the lease.

12

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods with those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard. On November 15, 2019, the FASB issued ASU 2019-10, which amends the effective dates for three major accounting standards. The ASU defers the effective dates for the credit losses, derivatives, and leases standards for certain companies. ASC 842 will be effective for the Company beginning on December 15, 2021. While we continue to evaluate the impact of the new standard, we expect the adoption of this guidance will not have any impact on our financial statements.

Inventory

The inventory is comprised of Atmospheric Water Generators (“AWG’s”) at Trident Water and are valued at the lower of cost or market. As of September 30, 2021, and December 31, 2020, the inventory was valued at $215,641 and $0, respectively.

Revenue Recognition

Sales, as presented in the Company’s consolidated statement of earnings, represents tuition revenue.

On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605. As of September 30, 2021 and December 31, 2020, respectively, the consolidated financial statements were not materially impacted as a result of the application of Topic 606 compared to Topic 605.

Deferred Revenue

Our payment terms generally require a substantial initial deposit to confirm a reservation and tuition for the school year or training period. Historically, our deferred revenue balances are comprised solely of customer deposit balances and changes from period to period due to the seasonal nature of billings and cash collections, the amount of students in each program and the recognition of revenue. A deposit made to the Company for tuition is contractually non-refundable. As of September 30, 2021, and December 31, 2020, deferred revenue amounted to $1,370,871 and $0, respectively.

Stock-based Compensation

The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

Non-controlling interest

Non-controlling interest represents third-party ownership in the net assets and partnership interests in all of our consolidated subsidiaries. For financial reporting purposes, the assets and liabilities of our majority-owned subsidiary consolidated with those of the Company’s wholly owned subsidiaries, with any third-party investor’s interest shown as non-controlling interest.

13

Net Loss per Share

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled.

The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has 0 liability for uncertain tax positions as of September 30, 2021, and December 31, 2020. Interest and penalties, if any, related to unrecognized tax benefits would be recognized as interest expense. The Company does 0t have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the nine months ended September 30, 2021, and 2020.

Segment Information

In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the Company is required to report financial and descriptive information about its reportable operating segments. The Company has 1 operating segment as of September 30, 2021, and December 31, 2020.

Going Concern and Liquidity

We have incurred recurring losses since inception and expect to continue to incur losses as a result of legal and professional fees and our corporate general and administrative expenses. At March 31,September 30, 2021, we had $95,378 $324,764 in cash. Our net losses incurred for the threenine months ended March 31,September 30, 2021, were $2,985,449 $4,281,791 and working capital deficit was $209,574 $790,240at March 31,September 30, 2021. As a result, there is substantial doubt about our ability to continue as a going concern. In the event that we are unable to generate sufficient cash from our operating activities or raise additional funds, we may be required to delay, reduce or severely curtail our operations or otherwise impede our on-going business efforts, which could have a material adverse effect on our business, operating results, financial condition and long-term prospects. The Company expects to seek to obtain additional funding through increased revenues and future financings. There can be no assurance as to the availability or terms upon which such financing and capital might be available. The accompany financial statements have been prepared assuming that the Company will continues as a going concern.

Principles of ConsolidationRecent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Altitude. All significant intercompany balances and transactions have been eliminated in the consolidation. The consolidated financial statements included herein, presented in accordance with United States generally accepted accounting principles (“GAAP”) and stated in United States dollars, have been prepared by the Company, pursuantupdated guidance requires an entity to the rules and regulations of the Securities and Exchange Commission.

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 ofrecognize assets and liabilities arising from financing and disclosureoperating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of contingent liabilitiesthe new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard. On November 15, 2019, the FASB has issued ASU 2019-10, which amends the effective dates for three major accounting standards. The ASU defers the effective dates for the credit losses, derivatives, and leases standards for certain companies. Since the Company is privately held, the Company is eligible for deferring the adoption of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.ASC 842 to December 15, 2021.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Property, Plant and Equipment

Property and equipment 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:

Machinery and equipment

3-5 Years

1014

 

Intangible Assets

Costs incurredWhile we continue to file patent applications and acquired intangibles are capitalized whenevaluate the Company believes that there is a high likelihood that the patent will be issued and there will be future economic benefit associated with the patent. These costs will be amortized on a straight-line basis over a 20-year life from the date of patent filing. All costs associated with abandoned patent applications are expensed. In addition, the Company will review the carrying value of patents for indicators of impairment on a periodic basis and if it determines that the carrying value is impaired, it values the patent at fair value. As of December 31, 2020, the remaining carrying valueimpact of the patent was impaired. Asnew standard, we expect the adoption of March 31, 2021, the balance is $0.this guidance will have not have any impact on our financial statements.

In accordance with the provisions of the applicable authoritative guidance, the Company’s long-lived assetsGoodwill and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Intangible Assets

The Company assesses the recoverability of suchaccounts for intangible assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. The trademark was impaired as of December 31, 2020.

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 authoritative guidance issued by the FASB. Intangibles are valued at their fair market value and are amortized taking into account the character of the FASB ASC Topic 360-10, Property, Plant,acquired intangible asset and Equipment. Long livedthe expected period of benefit. The Company evaluates intangible assets are reviewed for impairment, at a minimum, on an annual basis and whenever events or changes in circumstances indicate that the carrying amount of an assetvalue may not be recoverable.recoverable from its estimated undiscounted future cash flows. Recoverability of intangible assets to be held and used is measured by a comparison of the carrying amount of an assetcomparing their net book value to the undiscounted future net cash flows expected to be generated by that asset. If the carrying amount of an asset exceeds its estimated futurerelated projected undiscounted cash flows an impairment charge is recognized byfrom these assets, considering a number of factors, including past operating results, budgets, economic projections, market trends, and product development cycles. If the amount by which the carrying amountnet book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. As of September 30, 2021, based on the assessment of Management, the Company determined that goodwill associated with share exchange in which BHI acquired all of its operating subsidiaries amounting to $960,000, had been impaired.

NOTE 3 – REVERSE MERGER

Acquisition of Breunich Holdings, Inc.

On July 6, 2021, Altitude International Holdings, Inc. (“Altitude” or the “Company”) entered into a Share Exchange Agreement (the “Agreement”) with Breunich Holdings, Inc., a Delaware entity (“BHI”). The Agreement closed on July 23, 2021. BHI is a holding company with seven operating LLCs, including CMA Soccer, LLC, ITA-USA Enterprise LLC, Trident Water LLC, North Miami Beach Academy LLC, NVL Volleyball Academy LLC, Six Log Cleaning and Sanitizing LLC, and Altitude Wellness LLC. These entities have since been rebranded with “Altitude”-specific names.

Pursuant to the terms of the Agreement, the Company issued 295,986,724 shares of its common stock to the shareholders of BHI in exchange for 100% ownership of BHI (the “Share Compensation”). The Company’s common stock is not historically traded at significant volume which has caused significant fluctuations in the price per share. For the initial valuation, the stock was valued at $0.331 per share per the closing price on July 22, 2021, or $97,971,606. Management has recorded a provisional goodwill, as of September 30, 2021, of $98,812,922, which is attributable to common synergies, the workforce, and may be adjusted based on management’s final determination of the fair value of the asset.assets and liabilities acquired.

 

Revenue RecognitionThe following table summarizes the consideration given for BHI and the fair values of the assets and liabilities assumed at the acquisition date.

SCHEDULE OF BUSINESS ACQUISITION

     
Consideration given:    
     
Common stock shares given $97,971,606 
Total consideration given $97,971,606 
     
Fair value of identifiable assets acquired, and liabilities assumed:    
Cash $615,035 
Accounts receivable  420,660 
Due from ALTD  231,968 
Inventory  192,038 
Prepaid expenses  122,187 
Fixed assets, net  266,981 
Other assets  1,816 
Accounts payable  (365,493)
Accrued expenses  (9,811)
Deferred revenue  (793,666)
Loans  (1,489,882)
Total identifiable net liabilities  (808,167)
Goodwill  98,779,773 
Total consideration $97,971,606 

Following the Agreement, BHI is a wholly owned subsidiary of the Company, with each of its subsidiaries operating as wholly owned subsidiaries.

Accounting Treatment of the Merger

 

Our sales are generated primarily from contracts with customers forFor financial reporting purposes, the design, development, manufacture,Share Exchange represented a “reverse merger” rather than a business combination and installation of simulated altitude athletic equipment. We provide our products under fixed-price contracts. Under fixed-price contracts, we agreePrivate Company was deemed to performbe the specified work for a pre-determined price. Toaccounting acquirer in 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 ittransaction. The Share Exchange 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 productsa reverse-merger and services in our contracts are typically not distinct from one another duerecapitalization.

Breunich Holdings, Inc. is deemed to their complex relationships, customization,be the acquirer for financial reporting purposes, and Altitude International Holdings, Inc. is treated as the acquired company. Consequently, the assets and liabilities and the significant contract management functions requiredoperations that are reflected in the historical financial statements prior to perform under the contract. Accordingly, our contractsShare Exchange are typically accounted for as one performance obligation.

We determinethose of BHI and are recorded at the transaction price for each contract based on the consideration we expect to receive for the products or services being provided under the contract.

We recognize revenue as performance obligations are satisfiedhistorical cost basis of BHI, 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.

For performance obligations recognized over time, revenue is recognized based on the extent of progress towardsfinancial statements after completion of the performance obligation, generally usingShare Exchange will include the percentage-of-completion cost-to-cost measureassets and liabilities of progress for our contracts because it best depictsALTD and BHI, and the transferhistorical operations of control toBHI and operations of both companies from the customerclosing date of the Share Exchange.

NOTE 4 – PROPERTY AND EQUIPMENT

The Company has fixed assets, net, of $263,466 and $0 as we incur costs on our contracts. Underof September 30, 2021, and December 31, 2020, respectively. For the percentage-of-completion cost-to-cost measurenine months ended September 30, 2021, and 2020, the Company has recorded depreciation expense of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs to complete the performance obligation.$3,516 and $1,745, respectively.

1115

 

Stock-Based CompensationNOTE 5 – NOTES PAYABLE

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. In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees except for certain circumstances. Any transition impact will be a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. We adopted this guidance on January 1, 2019 and the adoption of ASU No. 2018-07 did not have a material impact on our financial statements. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.

Fair Value of Financial Instruments

The book values of cash, prepaid expenses, 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.

Earnings (Loss) Per Share

Basic earnings (loss) per share are computed by dividing the net income by the weighted-average number of shares of common stock and common stock equivalents (primarily outstanding options and warrants). Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method. The calculation of fully diluted earnings per share assumes the dilutive effect of the exercise of outstanding options and warrants at either the beginning of the respective period presented or the date of issuance, whichever is later.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled.

The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liabilitynotes payable for uncertain tax positionsAltitude Holdings and Altitude International as of March 31, 2021. Interest and penalties in any, related to unrecognized tax benefits would be recognized as interest expense. The Company does not have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the three months ended March 31, 2021.follows:

12

ContingenciesNote payable

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options, which simplifies accounting for convertible instruments. The new guidance eliminates two of the three models in ASC 470-20 that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation. The guidance is effective for fiscal years beginning after December 15, 2023. The Company is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements.

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 – SCHEDULE OF NOTES PAYABLE

  September 30, 2021  December 31, 2020 
  Accrued  Accrued             
  Principal  Interest  Total  Principal  Interest  Total 
Joseph B. Frost $-  $-  $-  $40,000  $22,723  $62,723 
Joseph B. Frost  -   -   -   500   86   586 
Joseph B. Frost  -   -   -   10,000   4,853   14,853 
Joseph B. Frost  -   -   -   13,000   6,231   19,231 
Robert Kanuth  -   -   -   1,500   88   1,588 
Robert Kanuth  -   -   -   4,200   240   4,440 
Total $-  $-  $-  $69,200  $34,221  $103,421 

Note payable                  
  March 31, 2021  December 31, 2020 
     Accrued        Accrued    
  Principal  Interest  Total  Principal  Interest  Total 
Joseph B. Frost $-  $-  $-  $40,000  $22,723  $62,723 
Joseph B. Frost  -   -   -   500   86   586 
Joseph B. Frost  -   -   -   10,000   4,853   14,853 
Joseph B. Frost  -   -   -   13,000   6,231   19,231 
Robert Kanuth  1,500   118   1,618   1,500   88   1,588 
Robert Kanuth  4,200   323   4,523   4,200   240   4,440 
Total $5,700  $441  $6,141  $69,200  $34,221  $103,421 

On March 2, 2018, Frost, then a director, loaned the Company $40,000$40,000 in the form of a promissory note. The note bears interest of 20%20% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. In February 2021, the Company paid this note and accrued interest.

On July 30, 2018, Frost, then a director, loaned the Company $10,000 in the form of a promissory note. The note bears  interest of 20%20% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. In February 2021, the Company paid this note and accrued interest.

On August 10, 2018, Frost, a director, loaned the Company $13,000$13,000 in the form of a promissory note. The note bears interest of 20%20% and has the term of six months, at which time all principal and interest will be paid in a balloon payment. In February 2021, the Company paid this note and accrued interest.

13

On November 5, 2018, Frost, a director, loaned the Company $500$500 in the form of a promissory note. The note bears interest of 8%8% and has the term of six months, at which time all principal and interest will be paid in a balloon payment. In February 2021, the Company paid this note and accrued interest.

On January 24, 2019,April 9, 2020, Kanuth, an officer and director, loaned the Company $11,000$1,500 in the form of a promissory note. The note bears interest of 8%8% and has the term of one year at which time all principal and interest will be paid in a balloon payment. On July 15, 2019, the principal of $11,000 and accrued interest of $319 was converted into common stock of the Company. On April 7, 2020, the accrued interest balance was converted into common stock of the Company (see Note 6).

On February 4, 2019, Kanuth, an officer and director, loaned the Company $13,197 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On July 15, 2019, the principal of $13,197 was converted into common stock of the Company. On April 7, 2020, the accrued interest balance was converted into common stock of the Company (see Note 6).

On February 4, 2019, Kanuth, an officer and director, loaned the Company $5,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On July 15, 2019, the principal of $5,000 was converted into common stock of the Company. On April 7, 2020, the accrued interest balance was converted into common stock of the Company (see Note 6).

On April 30, 2019, Kanuth, an officer and director, loaned the Company $6,514 in the form of a promissory note. The note bears interest of 8% and has the term of one year,, at which time all principal and interest will be paid in a balloon payment. On April 7,30, 2021, the principal and interest were paid in full.

On April 15, 2020, the balance was converted into common stock of the Company (see Note 6).

On May 23, 2019, Kanuth, an officer and director, loaned the Company $6,544$4,200 in the form of a promissory note. The note bears interest of 8%8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020,30, 2021, the balance was converted into common stock of the Company (see Note 6).

On August 13, 2019, Kanuth, an officer and director, loaned the Company $10,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will bewere paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).full.

On September 5, 2019, Kanuth, an officer and director, loaned the Company $20,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On September 16, 2019, Kanuth, an officer and director, loaned the Company $10,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On October 16, 2019, Kanuth, an officer and director, loaned the Company $30,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On October 31, 2019, Kanuth, an officer and director, loaned the Company $8,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On November 8, 2019, Kanuth, an officer and director, loaned the Company $70,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On November 25, 2019, Kanuth, an officer and director, loaned the Company $9,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On December 17, 2019, Kanuth, an officer and director, loaned the Company $20,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

14

On January 3, 2020, Kanuth, an officer and director, loaned the Company $10,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On February 8, 2020, Kanuth, an officer and director, loaned the Company $4,860 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On February 26, 2020, Kanuth, an officer and director, loaned the Company $10,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On March 18, 2020, Kanuth, an officer and director, loaned the Company $30,000 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On March 31, 2020, Kanuth, an officer and director, loaned the Company $3,129 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020, the balance was converted into common stock of the Company (see Note 6).

On April 9, 2020, Kanuth, an officer and director, loaned the Company $1,500 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. As of March 31, 2021, the principal balance was $1,500 and the accrued interest was $118. See Note 7.

On April 15, 2020, Kanuth, an officer and director, loaned the Company $4,200 in the form of a promissory note. The note bears interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. As of March 31, 2021, the principal balance was $4,200 and the accrued interest was $323. See Note 7.

On May 5, 2020, the Company received $20,800$20,800 in the form of a loan through the CARES Act Paycheck Protection Program. The balance at March 31,September 30, 2021 was $20,800.$20,800.

As of September 30, 2020 and December 31, 2020, the balances of notes payable for BHI were $948,354 and $1,177,068, respectively, comprised as follows:

On January 11, 2019, ITA-USA Enterprise entered into a Revolving Loan Commitment (the “Credit Agreement”) with Feenix Payment Systems, which provided for total borrowings of up to $200,000. During 2020, ITA-USA Enterprise converted the credit agreement into a Term Loan Commitment (the “Loan Note”) in the amount of $200,000. The loan note bears interest at a rate of 12% per year. Loan payments are interest only with the principal balance due at the maturity date. As of September 30, 2021 and December 31, 2020, the balances of loan notes payable were $200,000 and $200,000, respectively. The loan note matured on January 15, 2021. On January 15, 2021, the Company converted the loan to a 24-month terms loan. The balance on this note payable was paid on June 20, 2021.

In January 11, 2019, ITA-USA Enterprise entered into a Term Loan Commitment (the “Loan Note”) with Feenix Payment Systems, which provides for a loan of $300,000. The loan note has a three-year term and bears interest at a rate of 8.5% per annum. The loan note may be prepaid at any time prior to maturity with no prepayment penalties. As of September 30, 2021, and December 31, 2020, the balances of the loan note payable were $111,754 and $169,208, respectively.

16

On October 31, 2011, ITA-USA Enterprise entered into a Promissory Loan (the “Loan Note”) with Grand Slam Partners, which provides for a loan of $735,714. Beginning on December 31, 2012, and on or before December 31st thereafter until the loan note is paid in full, Payor shall pay an annual lump sum payment at the conclusion of each calendar year equal to the greater of 25% of net profits of the corresponding calendar year or $30,000 (“Scheduled Annual Payment”). The Loan Note may be prepaid at any time prior to maturity with no prepayment penalties. As of September 30, 2021, and December 31, 2020, the balances of the loan note payable were $442,637 and $494,560, respectively.

NOTE 46COMMITMENTS 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. As of May 6,November 15, 2021, the Company did not have any legal actions pending against it.

On June 27, 2017, Altitude entered a license agreement with Sporting Edge UK (see Note 1), Sporting Edge UK is the sole and exclusive owner of and has the right to license to licensee the ability to manufacture and sell rights to the full range of membrane-based systems for the production of reduced oxygen environments and associated services as well as the use of patents and trademarks held by Sporting Edge UK or Vincent.

On January 24, 2019, Altitude and Sporting Edge UK entered into a Revised Licensing Agreement that grants a license to Altitude to use Sporting Edge UK’s proprietary technology related to properly engineered, membrane-based designs for simulated altitude training equipment. The annual license fee under the revised agreement is $1.00 per year. The product line ranges from personal at home use machines to fully integrated environmental rooms and chambers. Altitude has the licensing rights to use all technology to manufacture the products and to sell them (directly or through distributors) in the following territories:

The Continent of North America, Central America, The Continent of South America.
Other territories as may be agreed from time to time, on a temporary or permanent basis.

All amounts due under the 2017 license agreement were waived, as were all royalty fees.

As of September 30, 2021, and December 31, 2020, the Company had leases for three facilities. ITA pays $41,762 in annual rent for its facilities located in Port St. Lucie, FL. The leases run through August 2022 with an optional renewal clause.

NOTE 57RELATED PARTY TRANSACTIONS

As of March 31,On April 30, 2021, the Company paid Robert Kanuth $20,000 as a director of the Company, issettlement for all liabilities owed $14,254 in accrued expenses and $6,141 in notes payable and the related accrued interest.to him which totaled $20,395. See Note 7.4.

As of March 31, 2021, Breunich Holding Inc., which is controlled by Greg Breunich, the chief executive officer, chief financial officer and chairman of the Company, is owed $109,328. The payable is non-interest bearing.

1517

 

NOTE 68STOCKHOLDERS’ EQUITY

Preferred Stock

On February 5, 2015, the Board of Directors of the Company authorized 5,000,000 shares of preferred stock with no0 par value. Each share of the preferred stock is entitled to one vote and is convertible into one share of common stock.stock.

On July 23, 2021, the Company issued 51 shares of preferred stock to Gregory Breunich for services rendered to the Company.

As of March 31,September 30, 2021, and December 31, 2020, the Company has nohad 51 shares of preferred stock and 0 shares of preferred stock issued and outstanding.outstanding, respectively.

Common Stock

Altitude was incorporated on May 18, 2017, under the laws of the state of Wisconsin with 100,000,000 authorized common stock with $0.001$0.001 par value. The shareholders have one vote per share of common stock.stock.

After the closing of certain Stock Purchase Agreements, in private sale transaction and the Share Exchange Agreement, the Company’s common stock had no par value and is registered in New York.

On February 10, 2021, the Company filed amended Articles of Incorporation with the State of New York to amend its authorized shares of common stock by an additional 530,000,000 whereas the total authorized is a total of 605,000,000 shares of capital stock consisting of (i) 600,000,000 shares of common stock, no0 par value, and (ii) 5,000,000 shares of preferred stock, no0 par value.

On January 1, 2020,2021, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for January 2020.2021. The common stock of the Company is thinly traded and had a value of $0.0401$0.103 per share, therefore the Company recorded the transaction at $501.$1,288.

On February 1, 2020,2021, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for February 2020.2021. The common stock of the Company is thinly traded and had a value of $0.07$0.295 per share, therefore the Company recorded the transaction at $875.$3,687.

On March 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for March 2020. The common stock of the Company is thinly traded and had a value of $0.04 per share, therefore the Company recorded the transaction at $500.

On April 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for April 2020. The common stock of the Company is thinly traded and had a value of $0.025 per share, therefore the Company recorded the transaction at $313.

On April 7, 2020, Kanuth converted $257,916 of notes and accrued interest into 7,390,144 shares of common stock of the Company, at the current market price of $0.345.

On May 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for May 2020. The common stock of the Company is thinly traded and had a value of $0.051 per share, therefore the Company recorded the transaction at $638.

On June 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for June 2020. The common stock of the Company is thinly traded and had a value of $0.047 per share, therefore the Company recorded the transaction at $588.

On July 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for July 2020. The common stock of the Company is thinly traded and had a value of $0.03 per share, therefore the Company recorded the transaction at $375.

On July 9, 2020, Frost converted $158,932 of debt into 7,946,625 shares of common stock. The conversion was at a discount whereas the fair market value was $198,666. The Company recognized a loss of $39,734 related to the discount.

On August 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for October 2020. The common stock of the Company is thinly traded and had a value of $0.05 per share, therefore the Company recorded the transaction at $375.

16

On November 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for November 2020. The common stock of the Company is thinly traded and had a value of $0.043 per share, therefore the Company recorded the transaction at $538.

On December 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for December 2020. The common stock of the Company is thinly traded and had a value of $0.045 per share, therefore the Company recorded the transaction at $563.

On February 2, 2021, the Company issued shares of common stock for services as follows: Elizabeth K. Stahl, 40,000;40,000; Robin K. Walker, 100,000;100,000; Greg Whyte,1,500,000;Whyte,1,500,000; and Greg Anthony, 5,000,000.5,000,000.

On February 8, 2021, Frost exercised 250,000 options at $0.077$0.077 per share for $19,250.$19,250.

On March 1, 2021, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for March 2021. The common stock of the Company is and had a value of $0.708 per share, therefore the Company recorded the transaction at $8,850.

On April 1, 2021, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for April 2021. The common stock of the Company is and had a value of $0.408 per share, therefore the Company recorded the transaction at $5,100.

On May 1, 2021, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for May 2021. The common stock of the Company is and had a value of $0.22 per share, therefore the Company recorded the transaction at $2,750.

On June 1, 2021, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for June 2021. The common stock of the Company is and had a value of $0.201 per share, therefore the Company recorded the transaction at $2,512.

On July 1, 2021, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for June 2021. The common stock of the Company is and had a value of $0.201 per share, therefore the Company recorded the transaction at $2,478.

18

 

On July 6, 2021, the Company issued 50,000 shares of common stock to Jeff Deforrest for services. The shares were valued at $0.21 each for a total value of $10,500.

On July 6, 2021, the Company issued 300,000 shares to FMW Media Corp, LLC. The shares were valued at $0.21 each for a total value of $63,000.

On July 23, 2021, the Company issued 295,986,724 shares of common stock in conjunction with the Share Exchange Agreement with BHI (see Note 3).

On August 1, 2021, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for June 2021. The common stock of the Company is and had a value of $0.201 per share, therefore the Company recorded the transaction at $5,375.

On September 1, 2021, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for June 2021. The common stock of the Company is and had a value of $0.201 per share, therefore the Company recorded the transaction at $3,725.

As of March 31,September 30, 2021, and December 31, 2020, the Company has 51,500,264 and 36,075,995355,033,405 shares of nocommon stock and 51,487,764 shares of common stock of 0 par common stock issued, issuable, and outstanding.

Stock Option Plan

On February 13, 2018, the Company’s shareholders and Board of Directors approved the 2017 Incentive Stock Plan.

On January 25, 2019, the Company issued 250,000 options to Vincent. The options vest at a rate of 25% every six months after the grant date and expire upon termination of employment. The exercise price is $0.077.$0.077. The Black-Scholes calculation valued the options at $15,809,$15,809, or $0.06$0.06 per share. As of March 31,September 30, 2021, $5,912$5,912 was amortized. These options expired three months following Vincent’s resignation because they were not exercised prior to that time.

On January 25, 2019, the Company issued 250,000 options to Frost. The options vest at a rate of 25% every six months after the grant date and expire upon termination of employment. The exercise price is $0.077.$0.077. The Black-Scholes calculation valued the options at $15,809,$15,809, or $0.06$0.06 per share. On February 8, 2021, Frost exercised the options at $0.077$0.077 per share for $19,250.$19,250.

There are currently no stock options currently issued and outstanding under the 2017 Plan, as all 250,000 remaining stock options issued and outstanding were exercised on February 8, 2021.

NOTE 9 – RESTATEMENT

Balance Sheet, Statement of Stockholders’ Equity (Deficit) and Statement of Cash Flows

In connection with the financial review as of September 30, 2021, certain errors associated with the Company’s accounting for the acquisition of Breunich Holdings, Inc. were required to be restated. The errors related to the recording of the Company’s financials for the nine months ended September 30, 2021, and 2020. Subsequent to the filing, it was determined that the reported financials should have been reported as follows:

On July 23, 2021, Altitude International Holdings, Inc. acquired all of the outstanding common stock of Breunich Holdings, Inc. For accounting purposes, the acquisition should have been treated as a reverse merger recognizing that the acquiring company was an operational company.

The following tables presents the impact of the misclassification on the Company’s previously reported unaudited consolidated balance sheets, unaudited consolidated statement of stockholders’ equity (deficit) and unaudited consolidated statement of cash flows.

SCHEDULE OF RESTATEMENT OF FINANCIAL STATEMENTS

  Reported  Adjustments  Restated  Reported  Adjustments  Restated 
  September 30, 2021  December 30, 2020 
  As     As  As     As 
  Reported  Adjustments  Restated  Reported  Adjustments  Restated 
ASSETS                        
Current assets                        
Cash $324,764  $-  $324,764  $485  $133,518  $134,003 
Accounts receivable  525,379   -   525,379   -   269,962   269,962 
Inventory  215,641   -   215,641   -   50,536   50,536 
Prepaid expense  167,896   -   167,896   3,000   199,003   202,003 
Total current assets  1,233,680   -   1,233,680   3,485   653,019   656,504 
                         
Fixed assets, net  263,466   -   263,466   -   286,099   286,099 
                         
Goodwill  -   98,779,773   98,779,773   -   -   - 
                         
Total assets $1,497,146  $98,779,773  $100,276,919  $3,485  $939,118  $942,603 
                         
LIABILITIES AND STOCKHOLDERS’ DEFICIT                        
Current liabilities                        
Notes payable - related party $-  $-  $-  $69,200  $-  $69,200 
Notes payable  100,800   -   100,800   20,800   913,768   934,568 
Accounts payable and accrued expenses  516,038   -   516,038   62,053   404,655   466,708 
Accounts payable and accrued expenses - related party  -   -   -   113,422   -   113,422 
Stockholders’ advance  36,211   -   36,211   36,211   -   36,211 
PPP loan  -   -   -   -   30,595   30,595 
Deferred revenue  1,370,871   -   1,370,871   -   1,378,502   1,378,502 
Total current liabilities  2,023,920   -   2,023,920   301,686   2,727,520   3,029,206 
                         
Non-current liabilities                        
Capital deficit  33,150   -   33,150   -   -   - 
Notes payable  847,554   -   847,554   -   263,300   263,300 
Total non-current liabilities  880,704   -   880,704   -   263,300   263,300 
Total liabilities  2,904,624   -   2,904,624   301,686   2,990,820   3,292,506 
                         
Stockholders’ deficit                        
Preferred stock  -   -   -   -   -   - 
Common stock  6,181,050   -   6,181,050   3,091,136   -   3,091,136 
Members’ deficit  -   -   -   -   (1,981,343)  (1,981,343)
Additional paid in capital  (1,161,861)  98,779,773   97,617,912   (175,279)  (1,095,087)  (1,270,366)
Non-controlling members’ deficit  -   -   -   -   (44,454)  (44,454)
Accumulated deficit  (6,426,667)  0   (6,426,667)  (3,214,058)  1,069,182   (2,144,876)
Total stockholders’ equity (deficit)  (1,407,478)  98,779,773   97,372,295   (298,201)  (2,051,702)  (2,349,903)
Total liabilities and stockholders’ deficit $1,497,146  $98,779,773  $100,276,919  $3,485  $939,118  $942,603 

19

SCHEDULE OF RESTATEMENT OF STOCKHOLDERS EQUITY

  Shares  Par Value  Shares  Par Value  Capital  Deficit  Deficit  Deficit  Total 
                    Non       
  Preferred Stock  Common Stock  Additional     controlling       
  No of  No     No  Paid in  Members’  Members’  Accumulated    
  Shares  Par Value  Shares  Par Value  Capital  Deficit  Deficit  Deficit  Total 
As Reported
Balance, December 31, 2019  -  $               -   36,075,995  $2,669,024  $(183,183) $                    -  $    -  $(2,885,511) $(399,670)
Issuance of common stock for services  -   -   87,500   3,789   -   -   -   -   3,789 
Conversion of debt to common stock  -   -   15,336,769   416,848   39,734   -   -   -   456,582 
Business combination  -   -   -   -   (575,911)  -   -   575,911   - 
Amortization of stock options  -   -   -   -   5,912   -   -   -   5,912 
Net loss for the period ended September 30, 2020           -   -   -   -   -   -   -   (844,474)  (844,474)
Balance, September 30, 2020  -  $-   51,500,264  $3,089,661  $(713,446) $-  $-  $(3,154,074) $(777,859)

  S   1   S   2   3   4   5   6   7 
Adjustments
Balance, December 31, 2019                   -  $-   -  $-  $-  $-  $-  $-  $- 
Issuance of common stock for services  -   -   -   -   -   -   -   -   - 
Conversion of debt to common stock  -   -   -   -   -               - 
Business combination  -   -   -   -   575,911   -   -   (575,911)  - 
Amortization of stock options  -   -   -   -   -   -   -   -   - 
Net loss for the period ended September 30, 2020  -   -   -   -   -   -   -   351,178   351,178 
Balance, September 30, 2020  -  $-   -  $-  $575,911  $-  $-  $(224,733) $351,178 

  S   1   S   2   3   4   5   6   7 
As Restated
Balance, December 31, 2019                         -  $-   36,075,995  $2,669,024  $(183,183) $-  $-  $(2,885,511) $(399,670)
Beginning balance                         -  $-   36,075,995  $2,669,024  $(183,183) $-  $-  $(2,885,511) $(399,670)
Issuance of common stock for services  -   -   87,500   3,789   -   -   -   -   3,789 
Conversion of debt to common stock  -   -   15,336,769   416,848   39,734               456,582 
Amortization of stock options  -   -   -   -   5,912   -   -   -   5,912 
Net loss for the period ended September 30, 2020  -   -   -   -   -   -   -   (493,294)  (493,294)
Balance, September 30, 2020  -  $-   51,500,264  $3,089,661  $(137,537) $-  $-  $(3,378,805) $(426,681)
Ending balance  -  $-   51,500,264  $3,089,661  $(137,537) $-  $-  $(3,378,805) $(426,681)

20

SCHEDULE OF RESTATEMENT OF CASHFLOW

  Reported  Adjustments  Restated  Reported  Adjustments  Restated 
  For the Nine Months Ended September 30, 2021  For the Nine Months Ended September 30, 2020 
  As Reported  Adjustments  Restated  As Reported  Adjustments  Restated 
                   
Cash flows from operating activities:                        
Net loss $(4,281,791) $-  $(4,281,791) $(493,294) $-  $(493,294)
Adjustments to reconcile net loss to net cash used in operations:                        
Depreciation expense  3,516   19,117   22,633   1,745   29,620   31,365 
Amortization expense  -   -   -   460   -   460 
Business combination  -   -   -   224,731   -   - 
Loss on conversion of debt into common stock  -   -   -   -   -   39,734 
Gain on settlement of debt  41,254   (82,508)  (41,254)  39,734   (39,734)  - 
Stock-based compensation  3,063,185   -   3,063,185   9,701   -   9,701 
Impairment expense  978,795   -   978,795   -   -   - 
Loss on disposal of assets  -   -   -   -   24,861   24,861 
Gain on forgiveness of debt  -   -   -   -   (10,000)  (10,000)
Change in assets and liabilities:                        
Accounts receivable  (147,710)  (107,707)  (255,417)  -   94,966   94,966 
Inventory  (23,603)  (141,502)  (165,105)  -   24,861   24,861 
Prepaid expense  (42,709)  76,816   34,107   4,121   30,896   35,017 
Accounts payable and accrued expenses  1,732   47,596   49,328   14,317   (36,778)  (22,461)
Accounts payable and accrued expenses - related party  (113,422)  -   (113,422)  114,277   (174,503)  (60,226)
Deferred revenue  572,497   (580,128)  (7,631)  (1,189)  (485,238)  (486,427)
Net cash provided by (used in) operating activities  51,743   (768,315)  (716,572)  (85,397)  (541,049)  (811,443)
                         
Cash flows used in investing activities:                        
Acquisition of BHI, net  759,658   (759,658)  -   -   -   - 
Purchase of fixed assets  -   -   -   -   (10,792)  (10,792)
Net cash used in investing activities  759,658   (759,658)  -   -   (10,792)  (10,792)
                         
Cash flows from financing activities:                        
Proceeds from stock options exercised  19,250   -   19,250   -   -   - 
Proceeds from loan  -   957,283   957,283   20,800   852,026   872,826 
Proceeds from related party loans and advances  -   -   -   57,989   174,501   232,490 
Repayment of notes payable to related parties  (506,371)  437,171   (69,200)  -   (126,369)  (126,369)
Net cash provided by (used in) financing activities  (487,121)  1,394,454   907,333   78,789   900,158   978,947 
                         
Net increase (decrease) in cash  324,279   (133,518)  190,761   (6,608)  348,317   156,712 
                         
Cash at beginning of period  485   133,518   134,003   8,267   260,092   268,359 
                         
Cash at end of period $324,764  $-  $324,764  $1,659  $608,409  $425,071 
                         
Cash paid for interest $-  $-  $-  $-  $-  $- 
Cash paid for taxes $-  $-  $-  $-  $-  $- 
                         
Non-cash investing and financing activities:                        
Conversion of related party debt to common stock $90,708  $-  $90,708  $416,848  $-  $416,848 

21

NOTE 710SUBSEQUENT EVENTS

On December 20, 2021, Altitude International Holdings, Inc (the “Company”) and its wholly-owned subsidiary, Trident Water, LLC, entered into a Loan Agreement with FVP Servicing, LLC, a Delaware limited liability company (“FVP”). Under the terms of the Loan Agreement, the Company received a loan from FVP in the amount of $500,000 in the form of a promissory note secured by the assets of the Company and its wholly-owned subsidiaries and guaranteed by the Company and its subsidiaries. The note bears interest at twelve percent per annum and the maturity date of the note is December 20, 2023. The Company will pay FVP interest-only payments monthly for the first twelve months of the term, and will then pay accrued interest plus $20,833.33 in principal monthly for the last twelve months of the term.

 

The Company has evaluated subsequent events throughLoan Agreement and associated documents closed on Wednesday, December 22, 2021 and the date the financial statements were issued and filed with the Securities and Exchange Commission. loan was funded on that date.

The Company has determined that there are no other such events that warrant disclosure or recognition in the financial statements, except as stated herein.

On April 30, 2021, the Company paid Robert Kanuth $20,000 as a settlement for all liabilities owed to him which totalled $20,395. See Notes 3 and 5.

The outbreak of the coronavirus (COVID-19) resulted in increased travel restrictions, and shutdown of businesses, which may cause slower recovery of the economy. We may experience impact from quarantines, market downturns and changes in customer behavior related to pandemic fears and impact on our workforce if the virus continues to spread. In addition, one or more of our customers, partners, service providers or suppliers may experience financial distress, delayed or defaults on payment, file for bankruptcy protection, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. The extent to which the coronavirus impacts our results will depend on future developments and reactions throughout the world, which are highly uncertain and will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus. It is likely to result in a potential material adverse impact on our business, results of operations and financial condition. Wider-spread COVID-19 globally could prolong the deterioration in economic conditions and could cause decreases in or delays in advertising spending and reduce and/or negatively impact our short-term ability to grow our revenues. Any decreased collectability of accounts receivable, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions could negatively impact our results of operations.

1722

 

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The statements contained in the following MD&A and elsewhere throughout this Quarterly Report on Form 10-Q, 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 U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar words or expressions. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements.

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 SEC, including our most recent filings on Forms 10-K and 10-Q.

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.

This discussion should be read in conjunction with our financial statements on our 2020 Form 10-K, and our financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q.

Results of Operations

For the three months ended March 31,September 30, 2021, compared to the three months ended March 31,September 30, 2020

Revenue

The Company had revenue of $0$1,472,194 for the three months ended March 31,September 30, 2021, compared to $593$828,107 for the comparable period in 2020.The increase in 2021 compared to 2020 is due to 2020 being impacted by COVID-19 restrictions whereas 2021 reflects the rebound in the tuition business as the Company works its way out of the impact of COVID-19.

Direct Costs of Revenue

The Company had direct costs of revenue of $215,714 for the three months ended September 30, 2021, compared to $235,459 for the comparable period in 2020. In 2020, direct costs of revenue were at a higher percentage of sales, compared to the same period in 2021. In 2021 the Company was able to reduce the expenses related to sales due to a renegotiated contract.

Operating Expenses

The Company had operating expenses of $3,022,750$1,696,732 for the three months ended March 31,September 30, 2021, compared to $99,269$1,413,504 for the three months ended March 31,September 30, 2020. The increase was primarily due to stock-based compensation of $2,967,745$85,077 for the three months ended September 30, 2021 compared to $3,825$2,367 for the same period in 2020. The operating expenses for the three months ended September 30, 2021 are comprised of the following: direct costs of revenue, $215,714, professional fees, $133,358, salary expenses, $662,906, stock-based compensation, $85,077, marketing expense, $86,013, and other general and administrative, $513,665.

23

 

Net Loss

The Company had a net loss of $2,985,449$226,319 for the three months ended March 31,September 30, 2021, compared to $106,028$663,755 for the three months ended March 31,September 30, 2020.

For the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020

Revenue

The Company had revenue of $5,522,499 for the nine months ended September 30, 2021, compared to $4,091,315 for the comparable period in 2020. The increase in 2021 compared to 2020 is due to 2020 being impacted by COVID-19 restrictions whereas 2021 reflects the rebound in the tuition business as the Company works its way out of the impact of COVID-19.

Direct Costs of Revenue

The Company had direct costs of revenue of $924,110 for the nine months ended September 30, 2021, compared to $622,654 for the comparable period in 2020. As a percentage of revenue, the expenses were relatively the same between 2021 and 2020.

Operating Expenses

The Company had operating expenses of $8,860,978 for the nine months ended September 30, 2021, compared to $4,483,438 for the nine months ended September 30, 2020. The increase was primarily due to stock-based compensation of $3,063,185 for the nine months ended September 30, 2021 compared to $9,701 for the same period in 2020 and the increase in salaries from $1,904,495 for the nine months ended September 30, 2020 compared to $2,642,602 for the nine months ended September 30, 2021 due to increased services as the Company is coming out of the impact of COVID-19. The operating expenses for the nine months ended September 30, 2021 are comprised of the following: direct costs of revenue, $924,110, professional fees, $475,910, salary expenses, $2,642,602, stock-based compensation, $3,063,185, marketing expense, $183,169, and other general and administrative, $1,572,003.

Net Loss

The Company had a net loss of $4,281,791 for the nine months ended September 30, 2021, compared to $493,294 for the nine months ended September 30, 2020.

Liquidity and Capital Resources

As of March 31,September 30, 2021, the Company had cash and cash equivalents of $95,378.$324,764. We do not have sufficient resources to effectuate our business. We expect to incur a minimum of $320,000 in expenses offset by revenues during the next twelve months of operations. We estimate that these expenses will be comprised primarily of general expenses including overhead, legal and accounting fees. To maintain our plan of growth, we need to raise a minimum of an additional $750,000. These factors raise substantial doubts about the Company’s ability to continue as a going concern.

Operations providedused cash of $75,918$716,572 for the threenine months ended March 31,September 30, 2021. The positive cash flow from operating activities for the three months ended March 31, 2021 is attributable to the conversion of debt into common stock.

 

We used cash in investing for financing activities of $0 for the threenine months ended March 31,September 30, 2021.

18

 

We had cash provided by financing activities for the threenine months ended March 31,September 30, 2021, of $19,250.$907,333.

We will have to raise funds to pay for our expenses. We may have to borrow money from shareholders or issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds for our operations will have a severe negative impact on our ability to remain a viable company.

Plan of Operation

The Company produces systems under license from Sporting Edge UK. These systems include the control of simulated altitude as a minimum and often the simultaneous control of temperature and humidity, providing a full environmental capability. Also included in the license are the Training Protocols that Sporting Edge UK has established to ensure that the optimum results are achieved by athletes using the altitude facilities.

The 2021 operational plan consists of:

1.Establishing the different classes associated with the expanded ALTD operations. The divisions to include:

Altitude Chamber Technology Division

Tennis, Golf, Basketball, and Academic Academies Division

Soccer Academy Division

Water Manufacturing/Technology Division

Cleaning and Sanitation Division

Altitude Wellness Division

2.Adopt a comprehensive branding, marketing, digital and social media strategy for the revenue lines above.

3.Update back-office administrative plan and adopt a staffing and management hierarchy for the multi-discipline operation.

On February 17, 2021, Altitude International Holdings, Inc. entered intois a Proposal for Servicesmulti-faceted organization focused on integrating advanced training and hydration technology with Orlando Magic Ltd. through which the Company agreed to manufacture, install and commission an altitude chamber at the Orlando Magic Training Facility in Orlando, FL. On February 22, 2022, the Company entered into a Sponsorship Agreement with the Orlando Magic.

specialized sports training. Commercial operations are centered in Florida.

24

 

Since 2017, Altitude has specialized in creating properly engineered, membrane-based designs for simulated altitude training equipment. The product line ranges from personal at home use machines to fully integrated environmental rooms and chambers. The Company has access to facilities that have been sold in the US to demonstrate system design and function.

Customer support and installation activities will be carried out by Altitude International staff.

The Company has installedsold chambers to a chamber at Tulane University.college, an NBA team and an NFL team.

Since the Share Exchange Agreement with Breunich Holdings, Inc. (“BHI”) closed in July 2021, the Company has expanded its operations through its acquisition of BHI and its several operating subsidiaries: Altitude Academies (formerly “ITA-USA Enterprise, LLC D.B.A. Club Med Academies”), Altitude Soccer (formerly “CMA Soccer, LLC”), Altitude Volleyball (formerly “NVL Academy LLC”), North Miami Beach Academy LLC, Altitude Water (formerly “Trident Water, LLC”), Six Log Cleaning & Sanitizing LLC, and Altitude Wellness.

Altitude now operates in various business divisions through its subsidiaries, mainly within performance training and specialized academic environments. It also manages and operates a subsidiary that manufactures Pure Water Generators utilizing a patented ozonated water treatment technology. This technology produces pure, oxygenated drinking water from the humidity in the air.

It’s “business as usual” with the Academy tuition operations. The Company has installedis seeing signs of its full-time enrollment momentum heading back toward pre-COVID levels. The short-time weekly tuition volume and revenue this past August was another indication that customers are actively getting back on track with travel and boarding options for their children. The capture rates are up across the board on less volume with the exception of Altitude Soccer which went through a chambertransition losing two of its top-tier coaches during the height of our annual re-enrollment period. Despite this temporary obstacle, the Company rebounded making replacements of equal talent quickly while at the Miami Dolphins facility.same time increasing enrollment.

Commercial operationsAltitude Academies’ new recruiting relationship has proven positive. Already, the group has sent ten full-time student athletes from Brazil, Ecquador, Boliva, and the Philippines. The majority of the customers recruited are centeredsoccer players, although there were two golfers and plan to send ten full-time athletes that will start this Spring semester. All of these new students will likely attend on multi-year stays. The group activity as well as the professional soccer pre-season team activity has re-engaged.

Altitude recently established a relationship with the team that will be managing Altitude Wellness, allowing a recurring revenue strategy for the altitude chamber business and moving beyond Altitude’s previous one-time sales model. The Altitude Wellness program format will be a blend of membership, private pay and insurance reimbursable rehab services

Altitude Water has made significant strides with their manufacturing, assembly and production capabilities. The relationship with our sales arm, RussKapp has proven productive with the military, with multiple sales. RussKapp has also made purchases of Altitude machines that are going in Florida.

In April 2020, the Company formed a wholly owned subsidiary, Altitude Sports Management Corp.

The Companyregional government facilities. This segment has experienced supply change challenges but has been impacted byinnovative in securing promising alternate sources to deal with the COVID-19 pandemic,global situation. Our water business is expanding into new market segments.

Altitude Online Learning LLC was recently established to support and someaddress the global demand in distance learning. This is an natural extension to our existing brick-and-mortar academic operations. Through our corporation system status, Altitude Online Learning is fully accredited. The economics of its earlier plansan online distance school presents significant potential opportunity. Now students from around the world will have the opportunity to further diversify its operationsearn an American diploma in their home countries while attending Altitude Online Learning.

In summary, after completing the acquisition of BHI, Altitude’s marketing team has spent the past months integrating the re-branding and expand its operating subsidiaries have been paused due torevamping process of the economic uncertainty.Altitude and all of the subsidiaries. This initiative consisted of the updating or new creation of all websites, social media platforms, ad campaigns, collateral material, apparel, and gear, all of which, now reflect the Altitude name and new initiatives of the company. From this point forward, our energies will be focused on synergistic acquisitions and partnerships, as evidenced with the addition of Altitude Wellness and Altitude Online Learning. We are currently evaluating other opportunities in the Academy, learning, and wellness sectors.

25

 

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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not required.

19

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to the chief executive and interim chief financial officer to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are not effective as of such date. The Chief Executive Officer and Chief Financial Officer have determined that the Company continues to have the following deficiencies which represent a material weakness:

The Company does not have a majority of independent directors;

26

Lack of in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;
Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting; and
Insufficient written policies and procedures over accounting transaction processing and period end financial disclosure and reporting processes.
To remediate our internal control weaknesses, management intends to implement the following measures: as funding permits, the Company will add sufficient accounting personnel to properly segregate duties and to effect a timely, accurate preparation of the financial statements; the Company will hire staff technically proficient at applying U.S. GAAP to financial transactions and reporting; and upon the hiring of additional accounting personnel, the Company will develop and maintain adequate written accounting policies and procedures.

The additional hiring is contingent upon The Company’s efforts to obtain additional funding through equity or debt and the results of its operations. Management hopes to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

Limitations on the Effectiveness of Controls

The Company’s officers do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

20

Changes in Internal Control Over Financial Reporting

During the fiscal quarter covered by this Quarterly Report, there has been noa significant change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. With the acquisition of Breunich Holdings, Inc., the Company now has a staffed accounting department with separation of duties.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. Except as set forth below, we are currently not aware of any such pending or threatened legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

Item 1A. Risk Factors

As a smaller reporting company, we are not required to include disclosure under this item. We refer readers to our Form 10-K for additional risk factor disclosures.

27

 

An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations.

The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management, support staff and professional advisors. These factors, in turn, may not only impact our operations, financial condition and demand for our goods and services but our overall ability to react timely to mitigate the impact of this event. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On February 10,July 1, 2021, the Company issued 12,500 shares of common stock to certain individualsits legal counsel for their serviceservices rendered to the Company. Gregory C. Anthony was issued 5,000,000 restricted shares of common stock, Greg Whyte was issued 1,500,000 restricted shares of common stock, certain consultants were issued 140,000 restricted shares of common stock and its legal counsel was issued 37,500 restricted shares of common stock. These shares were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended pursuant to Section 4(a)(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering.

 

On February 8,July 6, 2021, Frost exercised 250,000 options at $0.077 per sharethe Company issued 50,000 shares of common stock to Jeff Deforrest for $19,250. services rendered to the Company. These shares were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended pursuant to Section 4(a)(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering.

On March 9, 2021, Frost converted $90,708 of payable due to him in exchange for 181,417 shares of common stock of the Company. The issuance was made in reliance on the exemption from registration provided by Sections 3(a)(9) and 4(a)(2) of the Securities Act as the common stock was issued in exchange for debt securities of the Company held by the Investor, there was no additional consideration for the exchange, there was no remuneration for the solicitation of the exchange, there was no general solicitation, and the transactions did not involve a public offering.

On March 9,July 6, 2021, the Company issued 25,000300,000 shares of common stock its legal counselto FMW Media Corp, LLC for services rendered to the CompanyCompany. These shares were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended pursuant to Section 4(a)(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering.

On July 23, 2021, pursuant to the Share Exchange Agreement with Breunich Holdings, Inc., on July 23, 2021, the Company issued 295,986,724 shares of its restricted common stock to the shareholders in BHI on a pro rata basis. These shares were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended pursuant to Section 4(a)(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering.

Effective July 23, 2021, the Company issued fifty-one shares of the Company’s Series A Preferred Stock to Greg Breunich for his services as an officer of the Company. These shares were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended pursuant to Section 4(a)(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering.

On August 1, 2021, the Company issued 12,500 shares of common stock its legal counsel for services rendered to the Company. These shares were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended pursuant to Section 4(a)(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering.

On September 1, 2021, the Company issued 12,500 shares of common stock its legal counsel for services rendered to the Company. These shares were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended pursuant to Section 4(a)(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering.

On October 1, 2021, the Company issued 12,500 shares of common stock its legal counsel for services rendered to the Company. These shares were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended pursuant to Section 4(a)(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering.

28

On November 1, 2021, the Company issued 12,500 shares of common stock its legal counsel for services rendered to the Company. These shares were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended pursuant to Section 4(a)(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information

On December 20, 2021, Altitude International Holdings, Inc (the “Company”) and its wholly-owned subsidiary, Trident Water, LLC, entered into a Loan Agreement with FVP Servicing, LLC, a Delaware limited liability company (“FVP”). Under the terms of the Loan Agreement, the Company received a loan from FVP in the amount of $500,000 in the form of a promissory note secured by the assets of the Company and its wholly-owned subsidiaries and guaranteed by the Company and its subsidiaries. The note bears interest at twelve percent per annum and the maturity date of the note is December 20, 2023. The Company will pay FVP interest-only payments monthly for the first twelve months of the term, and will then pay accrued interest plus $20,833.33 in principal monthly for the last twelve months of the term.

 

None.The Loan Agreement and associated documents closed on Wednesday, December 22, 2021 and the loan was funded on that date.

21

Item 6. Exhibits

Exhibit
NumberDescription
3.1Articles of Incorporation (incorporated by reference from the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 19, 2016).
3.1.1Amended Articles of Incorporation (incorporated by reference from the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 19, 2016).
3.1.2Articles of Incorporation of Altitude International (incorporated by reference to the form 8-K filed by the Company on July 3, 2017).
3.2Amended Articles of Incorporation filed on June 4, 2018 (incorporated by reference to the form 8-K filed on August 8, 2018).
10.1Share Exchange Agreement (incorporated by reference to exhibit 3.2 to the form 8-K filed by the Company on July 3, 2017).
10.2Licensing Agreement (incorporated by reference to exhibit 10.1 to the form 8-K filed by the Company on July 3, 2017).
10.3Sole Distribution Agreement (incorporated by reference to exhibit 10.2 to the form 8-K filed by the Company on July 3, 2017).
31.110.4Share Exchange Agreement dated July 6, 2021 and effective July 23, 2021 (incorporated by reference to exhibit 10.1 to the Form 8-K filed by the Company on July 26, 2021).
31.1Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
32.2Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101 INSInline XBRL Instance Document *
101 SCHInline XBRL Taxonomy Extension Schema Document *
101 CALInline XBRL Taxonomy Calculation Linkbase Document *
101 DEFInline XBRL Taxonomy Extension Definition Linkbase Document *
101 LABInline XBRL Taxonomy Labels Linkbase Document *
101 PREInline XBRL Taxonomy Presentation Linkbase Document *
104Cover Page Interactive Data File (embedded within the Inline XBRL document)

*Filed Herewith.

2229

 

SIGNATURES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURETITLEDATE
/s/ Greg BreunichPrincipal Executive Officer and Principal FinancialMay 6, 2021

January 11, 2022

Greg Breunichand Accounting Officer

2330