Altitude International Inc (ALTD)

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WARNING- Long post but full of information

Since I am no longer Premium and will not come back to iHUB premium I only have a certain number of posts so I have to make them count. I may even leave all together. But that’s a decision for another day.

First C 2 da E-

Most people haven’t been involved in an uplisting. It’s promised so many times in stinky-pink land but rarely is it done. There is a reason. First- reality vs perception. It’s a great tagline. Business is so good we are looking at uplisting and the pumpers go crazy-right?

Facts are few companies have the core business model to accomplish this and meet the requirements of NASDAQ. There is much more transparency required to be listed on NASDAQ as you not only have SEC requirements but NASDAQ requirements to meet. Even fewer have the cash or money to invest in an uplisting. It’s expensive.

It’s also difficult because you are changing the type of investors or shareholders you are pitching to. Most OTC pinkies use iHub and Twitter to present their business to investors or stock boards. On NASDAQ you actually have analysts and companies like Seeking Alpha to present the business model or evaluate the earnings projections. See in this playing field, it’s not enough to just have an idea. You have to have a plan. And this plan has to be proven in firm numbers called revenues, market penetration, burn-rates, and margins, market cap, etc.
Most investors in stinky pink are momentum players. Their motto is “I don’t care how the business is doing, just give me an announcement to pump and get the crowd to follow”. They need the hype to satisfy the need to flip and move onto the next. They need the liquidity to fund their personal cash flow.

NASDAQ investors are more of a longer-hold type. There are mutual funds, analysts, and players that know going in it may take a year for the business model to develop and be put into place. They are investors not traders (for the most part). Big difference.

By saying this I’m not being negative to the OTC- it’s just reality. I’d be a hypocrite by being negative because I have taken advantage of “runners” and made my share of profits in companies I didn’t believe had the possibility of being successful but they know how to play the hype game. You have to consider all of this when doing your DD. You have to know what field you are playing on.

Changing to a different type of shareholder is not easy as evidenced by the last 8 months of ALTD trading. It’s why I also agree with IBB on some of his evaluations of pricing. What I do think is that pain has already occurred and the big boys have set the $.025-.035 as accumulation points. I may be wrong here but it seems to have a net at these points.

The reverse of course is a perception thing and is viewed differently in the two different playing fields of OTC and NASDAQ. I’m sure C 2 da E that you have been involved in many stocks that have done a reverse in OTC. It is perceived as a bad word for a good reason. In most cases, it is when the company checkbook is out of money and the outstanding share level has reached its max level. I call it wash, rinse, repeat. It is commonplace when the business model has failed and the company has the next big thing to hype to the investing public but needs the stock to pay people.

In NASDAQ land it is not so bad but a tool to meet certain requirements and reset the Capital structure of a company. The concept is legit- no one loses equity as the share price reflects the split. But in OTC it’s usually for the next round of dilution. In NASDAQ and in this deal- the management team has as much to lose as the shareholders. They have less shares and are now required under NASDAQ rules they have to have an independent Board of Directors (more on that later) which means they cannot just issue more shares like they can on OTC.
Management would only be doing this if they believed in their business model IMHO. So yes, in the markets we continually fight reality vs perception and the core base of retail investors which are used to playing in the OTC field see the word Reverse and it causes panic. In the NASDAQ world they evaluate the whys more. They also feed on it and why the big boys and the big institutions almost always win.

Finally the difference and negative impact of going to NASDAQ is the quiet period. You have to continue to trade in OTC while trying to uplist with the “I need news” momentum players of OTC. We have seen the result of decreasing share price over the last 6 months (May when first S-1 filed until now).

What has happened over that period of time?

1) They acquired Rush soccer- the largest Soccer club in the world- https://rushsoccer.com/

2) They signed a deal with 360 Player- a company that provides platforms for some of the largest and recognizable soccer clubs in the world- https://en-us.360player.com/

3) They acquired a world renown resort that they have operated their business on for the past 12 years. https://ih.advfn.com/stock-market/USOTC/altitude-pk-ALTD/stock-news/89022608/altitude-international-holdings-secures-world-clas

a. And did it with well-known names in the industry and NYSE companies- Wyndham and Storer Capital.
b. Partnered on a $90 million dollar deal with the other players making the announcements.

4) Signed a well-known and respected investment banking firm- EF Hutton
Where have you ever seen this in OTC pink land? It is a rarity.
Now let’s get into some meat and see what the potential NASDAQ investors could see here and why these NYSE companies are partnering and have invested $90 million in this OTC Company ($55 for purchase, $25 million for PIP- Property Improvement Program and $15 million reserve fund).

Momentum players are used to this soaring the stock price and ask- what is wrong? But if you only 8-K this stuff who sees it? Only those already holding. New eyes don't see the news story.

10 Q- https://www.otcmarkets.com/filing/html?id=16163893&guid=N0_-kaYBuov1dth

First, each of the last 2 Q’s have been filed almost a week after the closing of the QTR. That tells me that ALTD has the staff and team in place and has been working on the financials constantly with the big boys and why they were willing to invest the $90 million.

It also correlates with the uplisting as they have to meet filing needs of the NASDAQ.

Let’s look at the coverage the last Q generated-

Seeking Alpha-
1. When was the last time you saw Seeking Alpha cover and OTC pink earnings? Well, here it is- https://seekingalpha.com/news/3901001-altitude-international-holdings-inc-reports-q3-results

2. Article and analysis of Q- https://seekingalpha.com/pr/19004626-altitude-international-holdings-provides-third-quarter-2022-corporate-update-ytd-revenues

3. Article when the S-1 was filed- https://seekingalpha.com/news/3905157-sports-education-provider-altitude-proposes-10m-offering-nasdaq-uplisting

AccessWire-

1. 10 Q article- https://www.accesswire.com/723689/Altitude-International-Holdings-Provides-Third-Quarter-2022-Corporate-Update-YTD-Revenues-Increase-40-to-77-Million

This is the type of coverage is what you see from a NASDAQ type company. On OTC you have Joe’s Stock Board or Penny Platinum plays (no disrespect to them and they are part of the OTC landscape) but when you have a quality IR firm like MZ Group, this is the type of coverage you get. While MZ may have its hands tied with the Quiet period, it is obvious that its connections in the industry are being utilized. I think more eyes get on this than a board on iHub IMHO.

I think I have covered in other posts the revenue increase and the highlights to that filing as has Seeking Alpha (the Year over Year Revenue Growth). They focused on the revenue growth and the increase in cash on hand. Let’s move on to the S-1

S-1/A- https://www.otcmarkets.com/filing/html?id=16187102&guid=C5_-kpRtlDscdth

Finally, the Amendment came out with pricing and more details from the May 5 filing. This is the important one because it means that EF Hutton believes they have approval for NASDAQ (why file this when the S-1 states they will not go through the offering unless they get approval for NASDAQ). Remember you have two regulatory agencies reviewing these filings and making comments- SEC and NASDAQ. Obviously, they are past the comments phase IMHO. Shouldbe soon C 2 da E

It's a long document. Nobody reads anymore. It again is the difference between OTC and NASDAQ playing fields. When you play with the big boys- they read EVERYTHING. Most on OTC can’t be bothered……give them a short PR they can hype. Unfortunately, most won’t read this post and if you have gotten to this place, this is where it gets really good.

Here are the nuggets-

The Board of Directors Question has been answered BIG TIME. Page 61-62 of the S-1/A. Have you looked at the nominees? WOW is all I can say. There are 3 nominees that have agreed to join and each one’s skills and background fill a significant need in the company and each one has been highly successful in his field.

1. Paul Nussbaum- This guy is a pioneer in the hospitality industry. Here is what the S-1/A says about him-
“Mr. Nussbaum, 75, combines over 30 years of experience in the hospitality industry. Currently, he is Chairman of Waramaug Hospitality LLC, a privately held hotel owner and asset manager, which he founded in 2011. In the 1990s he served as founder, chairman and chief executive officer of Patriot American Hospitality, Inc. (NYSE: PAH), a paired shared real estate trust (and its predecessor Patriot American Group) which owned the Wyndham, Grand Bay, Maimaison, Summerfield, and Clubhouse proprietary brands and as Chairman of its successor, Wyndham International (NYSE: WYN). Mr. Nussbaum has a B.A. from the State University of New York at Buffalo and a J.D. from Georgetown University Law Center. His numerous prior educational, philanthropic and eleemosynary activities include service as a Trustee of Colby College in Waterville, Maine, and Zale Lipshy University Hospital in Dallas, Texas; Board of Visitors for the Georgetown University Law Center; Board of Advisors for the Wharton Real Estate Center of the University of Pennsylvania; Governor of the Dallas Symphony Orchestra; Life Fellow, American Bar Association; Member of the Urban Land Institute; Fellow of the American College of Real Estate Lawyers and the Dallas Citizens Council. He has been the recipient of the Centennial Humanitarian Award by the National Jewish Hospital, the Ellis Island Medal of Honor, Distinguished Alumni Awards from both of his alma maters and the Julian Park Award from SUNY Buffalo. Mr. Nussbaum has received an Honorary M.A. from Colby College and an Honorary PH.D. from Johnson & Wales University.”

A. Made the Wyndham brand.
B. Another NYSE status company/group involved with ALTD.
This is a great addition to help lead this Wyndham property and has experience in this field.

2. David Bain- Huge experience in the financial/brokerage sector. Another area important to the growth of ALTD. Again here is what the S-1/A says-

“Mr. Bain, 49, has over 22 years of experience as a research analyst and managing director of investment banking focused on the leisure and hospitality industry. Since 2021, Mr. Bain has served as a senior research analyst at B. Riley Securities in Newport Beach, California. Previously, he was with a managing director with ROTH Capital Partners, Sterne Agree CRT (now Stifel) and Merriman, Curhan and Ford, working extensively with public and private leisure companies and institutional investors. Mr. Bain has a JD with an emphasis in corporate law from Loyola Law School in Los Angeles, California, MBA from Pepperdine University with a major in finance, and a BA in history from the University of California, Los Angeles (UCLA). Mr. Bain is an active member of the American Bar Association, the California Bar Association, the Business Law Association, and the Public Interest Law Association. He was a scholarship athlete while at UCLA.”

Are you kidding me? Financial background in the hospitality industry. ROTH Capital Partners and now a research analyst at B. Riley Securities. This is a PERFECT fit. Breunich knows how to build a team.

A. Rated in the top 3% of analysts in the hospitality gaming sector- https://www.wallstreetzen.com/analysts/david-bain
87 out of 4,097 with an average return of 43%. With those numbers he’s joining the ALTD Board?

B. 2017 announcement of joining Roth as Senior Analyst- https://www.wallstreetzen.com/analysts/david-bain

C. B. Riley Securities Announcement of Bain joining- https://www.abladvisor.com/news/30710/b-riley-securities-announces-key-additons-promotions-to-equity-research-divisio

So now on top of the person who is a pioneer in the Hotel/Hospitality industry joining the Board you have the top analyst with top notch NYSE Firms joining as well.

3. Jeffrey B. McNeal- maybe not the glitz of the other two but needed in the operations and oversight of the financials. Here is the Bio-

“Mr. McNeal, 60, combines 40 years of experience in finance serving as chief financial officer of several companies. He currently is the senior vice president of financial services for MCR Health, Inc., in Bradenton, FL and has served in that role since 2010. From 1998 through 2008, Mr. McNeal served as chief financial officer of IMG working with Mr. Breunich. He received a BSA in accounting from Christopher Newport University in 1989 and MBA from the University of Tampa in 1994. Mr. McNeal is a licensed CPA and an insurance, real estate, and mortgage broker. He is also a veteran from the United States Army.”

A. With Greg at IMG when they built the premier academy at that time

B. Currently with MCR Health- not a small organization that provided $59 million in Health Care for uninsured- https://mcr.health/ Not a small company.

C. Brings background in the Academy business and healthcare which is perfect for the wellness centers and working with Non-Profits for the Water business.

D. More hands on needs then the other two new Board Members.

This is exactly what I was looking for and very pleased with the results. No fluff. High-quality Board Members and experts in the fields of Altitude International.

Other tidbits-

1. North Miami Beach Academy- Page 51-52 – In addition to the park (which is up for bid) they are now operating on FIU Campus- a huge growth opportunity for those kids in Miami area. Here is the quote from the S-1-

“NMBA was formed in Florida in May 2017. Through a bid process, the City of North Miami Beach awarded NMBA the right to operate a stand-alone academy at Judge Arthur Snyders Tennis Center. The bid process occurs every three to four years. The bid is currently underway for another term. In the event, Altitude is not successful winning the re-bid, we have already taken precautions and moved the education component of the business and secured the tennis courts at Florida International University Bay Biscayne campus (“FIU”) in North Miami. The new relationship with FIU may prove to be a long-term academy operation for Altitude whether we win or lose the bid.


NMBA is a unique academy operation in the heart of North Miami Beach. The market initiative targets a 20-minute radius around the Academy address. The location is very close to Aventura, Sunny Isles, and Bal Harbor. The demographics in this area have an extremely high culturally diverse draw and a broad array of wealthy customers. Word of mouth, websites, social media channels, and the high demographic local market deliver the traffic for this business. The business has significant margin opportunities on small revenue, low volume, and low cost. Public park relationships represent a significant growth opportunity for Altitude’s academy businesses.”

2. Altitude has been advised that EF Hutton will make a market in the stock- pg 84- “We have been advised by EF Hutton that the underwriters intend to make a market in our shares of Common Stock but that they are not obligated to do so and may discontinue making a market at any time without notice.”

3. Lock up agreements for management and 5% holders- pg 86- “The Company, each of our directors and executive officers, and our 5% and greater stockholders, have agreed not to, subject to certain limited exceptions, offer, pledge, sell, contract to sell, grant any option to purchase, or otherwise dispose of our Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, or to enter into any hedge or other arrangement or any transaction that transfers, directly or indirectly, the economic consequence of ownership of the shares of our Common Stock, in the case of the Company for a period of 180 days after the date of this prospectus, and in the case of our directors and executive officers and our 5% and greater stockholders for a period of 180 days after the date of this prospectus, without the prior written consent of EF Hutton.”

In conclusion (sorry but this requires a long dive and lack of posts means I have to do longer posts although I am getting sick of iHub and may move on) it seems that ALTD may be the OTC unicorn. The company that actually uplists. We’ve all heard companies promise this but this is one company that has taken the steps to follow through and has filed the documents to do it. It’s not words-its action. All with the appropriate regulatory filings.

Building a business (for those of you who have done it) is not easy. Especially in the environment, we have seen over the past 2 years- COVID, economy in a recession, interest rates rising, and the stock market in a downturn. That being said I have done significant DD over these two years.

I am obviously down in my investment in ALTD. I went from significantly up and then breaking all of my trading rules (averaging up, never falling in love with a stock, etc) to significantly down. I tried to identify the risks and the strengths of this company. I think I did that but didn’t listen at times.

The strengths were the business model, the experience in the team, and the micro-economy these subsidiaries create in many areas that are recession-proof (education, water, sanitation). The negative was the lack of public company experience of management. I think I was right on both counts as the S-1/A shows.

Greg and his team built the premier academy at IMG and he built the foundation at Club Med Academies which is now Altitude Academies. He has grown revenue in a difficult time and put some very significant pieces together over the past year (Rush and the property).

He also did a bad deal on the merger as the stock should have been reversed then IMHO.

Everyone can point fingers but you cannot run a company and grow without making mistakes. I made mistakes in my trading as well. What is important to me as an investor/shareholder is how these things are handled and whether they are committed to building the business. From what I’ve seen IMHO the answer is yes.

There is still a long way to go and many hurdles to overcome but I believe it is going in the right direction. Happy Veterans Day to all who served.