| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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. The
unaudited condensed consolidated financial statements of the Company for the three month periods ended March 31, 2022, and 2021 have
been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information
and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. Accordingly, they do not include all the information
and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
However, such information reflects all adjustments (consisting solely of normal recurring adjustments unless otherwise indicated),
which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations.
Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet
information as of December 31, 2021, was derived from the audited financial statements included in the Company’s financial statements
as of and for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the Securities
and Exchange Commission (the “SEC”) on March 15, 2022. These financial statements should be read in conjunction with that
report. Principles
of Consolidation The
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, pursuant to the rules and regulations of the Securities and Exchange Commission. ITA-USA
Enterprise LLC, CMA
Soccer LLC NVL
Academy LLC Trident
Water LLC North
Miami Beach Academy LLC Six
Log Cleaning & Sanitizing, LLC Altitude
International, Inc. Altitude
Wellness LLC Altitude
Online Learning LLC Altitude
Sports Management Corp. All
intercompany accounts and transactions are eliminated in consolidation. 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. On March 31, 2022, we had $ 916,350
in cash. Our net losses incurred for the three
months ended March 31, 2022 were $ 304,282 and the working capital deficit was $ 594,933
at March 31, 2022. 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. Use
of Estimates The
preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent
liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Cash
and Cash Equivalents Cash
is comprised of cash balances. Cash is held at major financial institutions and is subject to credit risk to the extent that those balances
exceed applicable Federal Deposit Insurance Corporation (“FDIC”) of $ 250,000 666,350 173,000 Accounts
Receivable Accounts
receivable for tuition and for the soccer league is recorded by the Company. As of March 31, 2022, and December 31, 2021, the net balances
were $ 401,463 91,520 ,
net of allowances. There were allowances for doubtful accounts of $ 203,736
and
$ 205,455
at March 31, 2022 and December 31, 2021, respectively. The credit terms provided are as follows:
1. Altitude
Academies – The tuition is paid typically in two installments but, on a case-by-case
basis, modifications do occur.
2. Rush
Soccer – Rebates for soccer kits purchased by club members and membership
rebates.
3. Altitude
Water – The normal credit terms is 50% down with final payment upon delivery.
4. Altitude
Chambers – The normal credit terms is 50% down with progress payments until final payment upon delivery. Bad
debt expense is determined based on the aging of accounts receivable and subsequent collections. Typically, receivables aged 60 days,
or more is reviewed for determination. Receivables over 90 days, unless payment terms with some payments made to date, are reserved as
additional allowance for doubtful accounts. Fixed
Assets Fixed
assets are stated at cost, net of accumulated depreciation. Expenditures that extend the life, increase the capacity, or improve the
efficiency of property and equipment are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Depreciation
is recognized using the straight-line method over the following approximate useful lives: SCHEDULE OF ESTIMATED USEFUL LIVES
Computers,
software, and office equipment 1 6
Machinery
and equipment 3 5
Leasehold
improvements Lesser
of lease term or estimated useful life
Operating
/ shop equipment 4 7
Transportation
equipment 5 6 Leases In
February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU
2016-02”) as codified in Accounting Standards Codification (“ASC”) No. 842 (“ASC 842”). ASU 2016-02, ASC
842, and additional issued guidance are intended to improve financial reporting of leasing transactions by requiring organizations that
lease assets to recognize assets and liabilities for the rights and obligations created by leases that extend more than twelve months.
As a result of the adoption of the new lease accounting guidance using the effective date transition method, on January 1, 2019, the
Company did not have any lease obligations that extended more than twelve months. We
include options to extend or terminate the lease in the lease term for accounting considerations, when it is reasonably certain that
we will exercise that option. Our leases have remaining lease terms of less than 1 year. Lease expense for lease payments is recognized
on a straight-line basis over the lease term. We do not recognize leases with an initial term of twelve months or less on the balance
sheet and instead recognize the related lease payments as expense in the consolidated statements of income on a straight-line basis over
the lease term. We account for lease and non-lease components as a single lease component for all asset classes. Our lease agreements
do not contain any material residual value guarantees or material restrictive covenants. Inventory
and Direct Costs of Revenue The
inventory is comprised of Atmospheric Water Generators (“AWG’s”) at Trident and chamber related parts at Altitude International
and are valued at the lower of cost or market. As of March 31, 2022, and December 31, 2021, the inventory was valued at $ 145,879
and $ 161,235 ,
respectively. Inventory
is comprised of: SCHEDULE OF INVENTORY
Finished Goods $ 22,500
Parts 123,379
Total $ 145,879 Impairment
of Long-Lived Assets The
Company’s long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance with
the guidance of the FASB ASC Topic 360-10, Property, Plant, and Equipment. Long lived assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated
by that asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized
by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Revenue
Recognition Our
sales are generated from six revenue streams: 1) contracts with customers for the design, development, manufacture, and
installation of simulated altitude athletic equipment, 2) sports training and academic tuition, and 3) hosting events, 4)
membership fees, 5) uniform sales, and 6) sale of atmospheric water generators. For the simulated athletic equipment and
the water filtration systems, we provide our products under fixed-price contracts. Under fixed-price contracts, we agree to perform
the specified work for a pre-determined price. To the extent our actual costs vary from the estimates upon which the price was
negotiated, we will generate more or less profit or could incur a loss. We
account for a contract after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment
terms are identified, the contract has commercial substance and collectability of consideration is probable. We
evaluate the products or services promised in each contract at inception to determine whether the contract should be accounted for as
having one or more performance obligations. The products and services in our contracts are typically not distinct from one another due
to their complex relationships, customization, and the significant contract management functions required to perform under the contract.
Accordingly, our contracts are typically accounted for as one performance obligation, except for the simulated altitude athletic equipment
whereas there is a service obligation over a period of time. We
determine the transaction price for each contract based on the consideration we expect to receive for the products or services being
provided under the contract. In
regard to the simulated altitude athletic equipment and the atmospheric water generators (“AWG”), we recognize
revenue as performance obligations are satisfied and the customer obtains control of the products and services. In determining when performance
obligations are satisfied, we consider factors such as contract terms, payment terms and whether there is an alternative future use of
the product or service. Substantially all of our revenue is recognized over time as we perform under the contract because if our customer
were to terminate the contract for reasons other than our non-performance, we would have the right to recover damages which would include,
among other potential damages, the right to payment for our work performed to date plus a reasonable profit to deliver products or services
that do not have an alternative use to us. In
regard to the sports training and academics tuition revenue recognition policy, the tuition is recognized over the course of the training
period which is typically a semester. In determining when performance obligations are satisfied, we consider factors as to actual attendance
at the academy. In regard to the revenue associated with Rush Soccer, the revenue related
to events is recognized at the time of the event. The revenue associated with uniforms is recognized at the time of delivery. Membership
fees are recognized at the beginning of the membership period. In regard to the simulated athletic equipment and the atmospheric water
generators, the revenue is recognized upon delivery and/or installation, specific to the customer. 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 number of students in each program and the recognition of revenue. A
deposit made to the Company for tuition is contractually non-refundable. As of March 31, 2022, and December 31, 2021, deferred revenue
amounted to $ 1,889,673 and $ 1,388,126 ,
respectively. Stock-Based
Compensation The
Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to
recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees.
The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods
using the straight-line attribution method. Fair
Value of Financial Instruments The
book values of cash, accounts receivable, and accounts payable approximate their respective fair values due to the short-term nature
of these instruments. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs)
and an entity’s own assumptions (unobservable inputs). The
hierarchy consists of three levels
● Level
one — Quoted market prices in active markets for identical assets or liabilities;
● Level
two — Inputs other than level one inputs that are either directly or indirectly observable; and
● Level
three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect
those assumptions that a market participant would use. Determining
which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures
each quarter. 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. The Company does not have any dilutive shares of common stock as of March 31, 2022,
or December 31, 2021. 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 liability for uncertain tax positions as of March 31, 2022. 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, 2022. Goodwill
and Intangible Assets The
Company accounts for intangible assets in accordance with the authoritative guidance issued by the FASB. Intangibles are valued at their
fair value and are amortized taking into account the character of the acquired intangible asset and the expected period of benefit. The
Company evaluates intangible assets for impairment, at a minimum, on an annual basis and whenever events or changes in circumstances
indicate that the carrying value may not be recoverable from its estimated undiscounted future cash flows. Recoverability of intangible
assets is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering
a number of factors, including past operating results, budgets, economic projections, market trends, and product development cycles.
If the net 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. The Company tests its goodwill using a market-based approach to determine the estimated
fair value of the reporting unit as to which the goodwill has been allocated. As of March 31, 2022, based on the assessment of Management,
the Company determined that goodwill associated with the share exchange in which the Company acquired BHI amounting to $ 29,493,398 .
The Company will evaluate goodwill annually for any impairment. The Company also determined that the acquisition of Soccer Partners (see
Note 4) had provisional goodwill of $ 166,834 .
The Company will have an independent valuation of the acquisition to determine any change in the estimated amount recorded. Recent
Accounting Pronouncements In
August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options 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. |
