F-1/A: Alta Global Group Eyes US Expansion with $11.5 Million IPO

Alta Global Group, an Australian martial arts and combat sports technology company, is seeking to raise capital through a US IPO to fuel product development and scale its platform.

Summary

• Alta Global Group Limited, an Australian technology company, is planning an initial public offering in the United States.
• The company aims to raise capital to expand its platform for the martial arts and combat sports industry.
• The IPO will offer 2,000,000 ordinary shares with an anticipated price between US$4.00 and US$6.00 per share.
• The company expects its ordinary shares to trade on the NYSE American under the symbol MMA, but this is not guaranteed.
• Alta Global Group has granted underwriters a 45-day option to purchase up to 300,000 additional ordinary shares to cover over-allotments.
• The company intends to use the net proceeds for product development, scaling sales and marketing, redeeming a convertible note facility, and for general working capital.
• As of November 2023, Alta Global Group's platform includes a curated gym network database of 4,191 gyms, with 379 active gyms registered on trainalta.com.
• The platform also boasts over 543,518 monthly users, over 690,000 combined monthly website sessions, and over 5,000,000 total social media followers.
• Since 2018, the company has run over 206 Warrior Training Programs globally, with over 5,107 participants subscribing to the program.
• The company has also launched the Alta Academy, an online platform with over 3,500 coaching tutorial videos, and the Alta Community platform, a cloud-based community management software.
• In September 2023, Alta Global Group completed the acquisition of the assets of Steppen Pty Ltd, a fitness technology company, and in October 2023, the assets of Mixed Martials Arts LLC, an independent MMA media company.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While the company has a strong vision and has made progress in expanding its platform, it is also facing significant financial challenges, including operating losses and substantial doubt about its ability to continue as a going concern. The company's reliance on raising additional capital adds further uncertainty.

Positives

• The company has a large curated gym network database of 4,191 gyms.
• The platform has a substantial user base with over 543,518 monthly users.
• The company has a proven track record with over 206 Warrior Training Programs run globally.
• The company has expanded its offerings through the launch of Alta Academy and Alta Community platforms.
• The company has acquired Steppen Pty Ltd and Mixed Martials Arts LLC to further diversify its business.

Risks

• The company will require substantial capital to finance its operations.
• The company has incurred operating losses in the past and may incur operating losses in the future.
• There is substantial doubt about the company's ability to continue as a going concern.
• Changes in public and consumer tastes and preferences could reduce demand for the company's services.
• The company's in-gym programming may be materially impacted by the ongoing COVID-19 pandemic.
• The company's ability to generate revenue is subject to many factors beyond its control.
• The company relies on technology, and failure to protect its technology could adversely affect its business.
• Unauthorized disclosure of sensitive information could harm the company's business.
• Exchange rates may cause fluctuations in the company's results of operations.
• The company's partner gyms could take actions that harm its business.
• The company's success depends substantially on the value of its brand.
• The company relies on contracts and relationships, and termination of any such contract or relationship may have a material adverse effect on its business.
• The company's planned growth could place strains on its management, employees, information systems, and internal controls.
• The company's partner gyms may be unable to attract and retain members.
• If the company is unable to identify and secure suitable partner gyms, its revenue growth rate and profits may be negatively impacted.
• The company and its partner gyms could be subject to claims related to health and safety risks.
• If the company is unable to retain its key employees, it may not be able to successfully manage its business.
• Use of social media may adversely impact the company's reputation or subject it to fines.
• The company may be unsuccessful in any strategic acquisitions and investments.
• The company is subject to risks associated with operating in international markets.
• The company may not be able to attract and retain key professional fighters or coaches.
• The company's expansion into new markets may present increased risks.
• The company's MMA Final Fight Night events are subject to governmental and state athletic commission regulation.
• The company is an emerging growth company, and its election to comply with reduced disclosure requirements may make its Ordinary Shares less attractive to investors.
• If the company fails to establish and maintain proper internal controls, its ability to produce accurate financial statements could be impaired.
• Because there is no existing market for the company's Ordinary Shares, the initial public offering price may not be indicative of the market price after this offering.
• The company will incur increased costs as a result of becoming a listed public company.
• The company may issue additional Ordinary Shares in the future, which may dilute existing shareholders.
• As a foreign private issuer, the company is permitted and expects to follow certain home country corporate governance practices in lieu of certain NYSE American requirements applicable to domestic issuers.
• As a foreign private issuer, the company is permitted to file less information with the SEC than a domestic issuer.
• The company may lose its foreign private issuer status, which would then require it to comply with the Exchange Act's domestic reporting regime.
• The NYSE American may delist the company's Ordinary Shares from trading on its exchange.
• Anti-takeover provisions in the company's Constitution and its right to issue preference shares could make a third-party acquisition difficult.
• You will have limited ability to bring an action against us or against our directors and officers, or to enforce a judgment against us or them, because we are incorporated in Australia and certain of our directors and officers reside outside the United States.
• Investors purchasing the Ordinary Shares will suffer immediate and substantial dilution.
• The market price of our Ordinary Shares could be adversely affected by future sales and distributions of our Ordinary Shares or the perception that such sales and distributions may occur.
• If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.
• We are not likely to issue dividends for the foreseeable future.
• Australian companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their interests.

Future Outlook

The company expects that the next phase of its growth will be driven by expanding its product set to meet the demand of the martial arts and combat sports community.

Industry Context

The document highlights the growing popularity of MMA and combat sports, with significant sector tailwinds created by major professional leagues. The company aims to capitalize on this trend by converting fan interest into engagement with its online and in-gym fitness and training experiences.

Comparison to Industry Standards

• The document mentions IBISWorld statistics indicating over 45,597 martial arts and combat sports gyms in the US alone, expected to generate over US$12.6 billion in annual revenue in 2023.
• It also cites Sports & Fitness Industry Associations Single Sport Reports for Martial Arts and Boxing Fitness, expecting more than 11.8 million people to engage in various martial arts and combat sports disciplines in 2023.
• The document does not provide a direct comparison to specific companies, but it positions Alta Global Group as a first mover in aggregating the vast and attractive martial arts and combat sports sector.

Management Changes

Related Party Transactions

• For the fiscal year ending June 30, 2023, Mr. Taylor reinvested into the Company 100% of his board fees earned from July 1, 2022 to March 31, 2023, and 50% of his board fees earned from April 1, 2023 to June 30, 2023, totaling A$131,250 via the purchase of 131,250 Series A Extension Notes.
• For the fiscal year ending June 30, 2023, Mr. Williams reinvested into the Company 100% of his board fees earned from July 1, 2022 to March 31, 2023, and 50% of his board fees earned from April 1, 2023 to June 30, 2023, totaling A$65,625 via the purchase of 65,625 Series A Extension Notes.
• On March 1, 2023, Mr. Langton, through Snowflower Holdings Pty Ltd (Snowflower Family Trust) was issued options exercisable for a total of 20,622 Ordinary Shares, at an exercise price of A$0.29 per Ordinary Share, which vest 3 years from the issue date, being March 1, 2026.
• On March 1, 2023, Mr. Benbow, through ABRB Pty Ltd (Benbow Trust), was issued options exercisable for a total of 27,728 Ordinary Shares, at an exercise price of A$0.29 per Ordinary Share, which vest 3 years from the issue date, being March 1, 2026.
• On March 1, 2023, Mr. Hart, through the J Hart Family Trust, was issued options exercisable for a total of 10,132 Ordinary Shares, at an exercise price of A$0.29 per Ordinary Share, which vest 3 years from the issue date, being March 1, 2026.
• On March 1, 2023, Mr. Java, though 3213 Ventures Pty Ltd (Java Holdings Trust), was issued options exercisable for a total of 160,000 Ordinary Shares, at an exercise price of A$0.29 per Ordinary Share, which vest 3 years from the issue date, being March 1, 2026.
• Tanya Langton, our Head of Global Events and Logistics and the spouse of our Chief Executive Officer Nick Langton received compensation consisting of (i) short term benefits in the amount of $153,999 for the year ending June 30, 2023, as compared with $177,860 for the year ended June 30, 2022, (ii) post-employment benefits of $13,989 for the year ending June 30, 2023, as compared with $15,269 for the year ending June 30, 2022, and (iii) share based payments in the amount of $141,585 for the year ending June 30, 2023, as compared with $115,129 for the year ending June 30, 2022.
• On March 1, 2023, Mrs. Langton, was issued options exercisable for a total of 4,060 Ordinary Shares, at an average exercise price of $0.29 per Ordinary Share, which vest on March 1, 2026.

Stakeholder Impact

• Shareholders will experience dilution as a result of the IPO.
• Shareholders will be subject to the risks associated with investing in a company with a limited operating history and significant financial challenges.
• Employees may benefit from the company's growth and expansion, but they also face the risk of job losses if the company is not successful.
• Customers may benefit from the company's expanded platform and offerings, but they also face the risk of service disruptions if the company is not able to manage its growth effectively.
• Partner gyms may benefit from the company's increased marketing and sales efforts, but they also face the risk of losing members if the company's platform is not successful.

Next Steps

• The company intends to apply to list its Ordinary Shares on the NYSE American under the symbol MMA.
• The company plans to continue Steppen App's operations and integrate key aspects of its proprietary Apple mobile application technology.
• The company plans to further remediate the identified material weaknesses by implementing the following controls: Delegation of authority, documenting stringent controls throughout the business, Upgrading our financial reporting close process, Documenting our internal control policies and procedures and designing an education process for the entire Company to ensure policies and procedures are understood and adhered to by all, Establishing effective monitoring and oversight controls for non-recurring and complex transactions to ensure the accuracy and completeness of our companys consolidated financial statements and related disclosures.

Key Dates

Keywords

martial arts, combat sports, technology platform, IPO, initial public offering, fitness, gyms, Alta Global Group, MMA, training programs, community, subscriptions