UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant

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Filed by a Party other than the Registrant

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Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

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ALLIANCE MMA INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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(1)

Title of each class of securities to which transaction applies:
Common stock, $.001 par value

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(2)

Aggregate number of securities to which transaction applies:
100,000,000

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(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
$46.94 equals 1/3 of the par value of the securities to be received by the Registrant in the transaction.

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(4)

Proposed maximum aggregate value of transaction:
$46.94 equals 1/3 of the par value of the securities to be received by the Registrant in the transaction.

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(5)

Total fee paid:
No fee due as 1/50 of 1% of  $46.94 is less than $0.01.

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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(1)

Amount Previously Paid:

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(2)

Form, Schedule or Registration Statement No.:

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(3)

Filing Party:

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(4)

Date Filed:

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6.

To ratify the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018 (the “Auditor Ratification Proposal”).

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7.

To consider and approve by a nonbinding advisory vote, the compensation of our named executive officers as described in the accompanying proxy statement;

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8.

To recommend, by a nonbinding advisory vote, the frequency (every one, two or three years) of future advisory votes of stockholders on the compensation of our named executive officers;

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To consider and act on such other business as may properly come before the Meeting or any adjournment or postponement thereof.

Summary Term Sheet

AMMA proposal to acquire SCWorx

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Stock for Stock Acquisition — AMMA to acquire 100% of the issued and outstanding common stock of SCWorx, in exchange for AMMA common shares, as a result of which SCWorx will be wholly owned by AMMA

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Consideration to be paid by AMMA — AMMA to issue (i) SCWorx stockholders 100,000,000 pre-split shares of AMMA common stock (the quotient of  $50,000,000 (the agreed value of SCWorx) divided by a fixed price of  $0.50 per share for each share of AMMA common stock (the agreed value per AMMA share on the Closing Date)) and (ii) an SCWorx related party note holder approximately 190,000 Preferred Stock Units, comprised of 190,000 shares of Preferred Stock (face value of  $10 per share) and warrants to purchase 4,750,000 shares of common stock, in satisfaction of approximately $1.9 million of SCWorx indebtedness to such note holder.

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Reverse Stock Split — AMMA to effect a reverse stock split of AMMA common stock sufficient in the judgment of the Board of Directors to result in a minimum bid price of AMMA’s common stock of at least $4.00 per share at the closing of the Acquisition (anticipated to be in the range of between 1/15 and 1/25). Although the Board of Directors anticipates the reverse stock split ratio to be in the range of between 1/15 and 1/25, the actual reverse stock split ratio will be determined by the Board of Directors and may be significantly higher or lower than such anticipated range. Because the Board of Directors cannot predict with any certainty how AMMA’s stock price will react to the reverse stock split, the Board anticipates setting the reverse split ratio at a level mathematically calculated to result in a stock price above the minimum requirement of  $4.00 per share. For example, if AMMA’s stock price were $0.20 per share, to achieve a $4.00 post-split price, the theoretical reverse split ratio would be 1/20 ($4.00/$0.20). In this example, for the reasons described herein, the Board of Directors might set the reverse stock split ratio at 1/25 or some other ratio based on the considerations described herein.

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Change of Control of AMMA — Consummation of the SCWorx Acquisition and related transactions will result in a change of control of AMMA. It is anticipated that upon completion of the Acquisition, pre-existing AMMA shareholders and SCWorx shareholders would own about 14% and 86%, respectively, of AMMA’s issued and outstanding common stock (before giving effect to the exercise of outstanding rights to acquire common stock, including the securities underlying the Preferred Stock Units, other than the conversion of the convertible notes owing to SCWorx in the principal amount of up to $1.25 million and related interest)

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Below Market Issuance of Common Stock

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Issuance of Preferred Stock Units — AMMA proposes to issue up to a maximum 900,000 shares of Preferred Stock, convertible, upon stockholder approval, into common stock at a rate of  $0.20 per share (subject to adjustment), and warrants to purchase 22,500,000 shares of common stock, with an exercise price of  $0.30 per share (subject to adjustment). If AMMA issued the maximum number of shares of Preferred Stock and Warrants, the consideration for such Preferred Stock and Warrants is expected to be comprised of: (i) $6 million in cash and (ii) satisfaction of (a) approximately $1.9 million in indebtedness of SCWorx in connection with consummation of the Acquisition and (b) up to $1.1 million of indebtedness of AMMA.

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Refund of Unit Purchase Price — AMMA must refund the cash purchase price of the Units if either (i) its common stock is delisted from Nasdaq or trading is suspended or (ii) the stockholders of AMMA do not approve the Financing Proposal

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Automatic Conversion — Preferred Stock subject to automatic conversion under certain conditions if 20-day “VWAP” is greater than one hundred thirty percent (130%) of the conversion price (initially $0.20), for twenty consecutive trading days

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The Preferred Stock is also redeemable by the Company at 120% of face value under certain conditions

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The Preferred Stock conversion price and warrant exercise price are subject to reduction in the event the Company issues lower priced securities, subject to certain exceptions

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See the discussion under the caption “Terms of the Transaction” and “Summary of Preferred Stock Terms.”

AMMA’s common stock is traded on the Nasdaq Capital Market under the trading symbol “AMMA.” AMMA anticipates that the common stock of the combined company will be listed on the Nasdaq Capital Market following the completion of the Share Exchange under the trading symbol “WORX.” On December 17, 2018, the latest practicable date before the date of this document, the closing price of a share of AMMA common stock was $0.19.

Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend the annual meeting in person, please complete, date, sign and promptly return the accompanying proxy card in the enclosed postage paid envelope to ensure that your shares will be represented and voted at the Special Meeting. Shareholders may revoke proxies at any time before they are voted at the meeting. Voting by proxy will not prevent a shareholder from voting in person if such shareholder subsequently chooses to attend the Special Meeting.

We encourage you to read this proxy statement and its annex carefully.

AMMA’s board of directors unanimously recommends that AMMA shareholders vote “FOR” approval of each of the proposals.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in the Share Exchange or otherwise, or passed upon the adequacy or accuracy of this proxy statement. Any representation to the contrary is a criminal offense.

John Price
President and CFO
Alliance MMA Inc.

January 17, 2019

HOW TO OBTAIN ADDITIONAL INFORMATION

This proxy statement incorporates important business and financial information about AMMA that is not included or delivered herewith. If you would like to receive additional information or if you want additional copies of this document, agreements contained in the appendices or any other documents filed by AMMA with the Securities and Exchange Commission, such information is available without charge upon written or oral request. Please contact the following:

Principal Executive Office:
Alliance MMA, Inc.
590 Madison Avenue, 21 st Floor
New York, NY, 10022
Attn: John Price
Telephone: 212-739-7825

If you would like to request documents, please do so no later than January 22, 2019 to receive them before AMMA’s Special Meeting. Please be sure to include your complete name and address in your request. Please see “Where You Can Find Additional Information” to find out where you can find more information about AMMA. You should rely only on the information contained in this proxy statement in deciding how to vote on the Share Exchange and related proposals. Neither AMMA nor SCWorx has authorized anyone to give any information or to make any representations other than those contained in this proxy statement. Do not rely upon any information or representations made outside of this proxy statement. The information contained in this proxy statement may change after the date of this proxy statement. Do not assume after the date of this proxy statement that the information contained in this proxy statement is still correct.

ALLIANCE MMA INC.

590 Madison Avenue, 21 st Floor
New York, NY, 10022
Attn: John Price
Telephone: (212)739-7825

15 million shares outstanding pre-split, there would be 1 million shares outstanding post-split. Stockholder approval of the Stock Split Proposal is required by the Delaware General Corporation Law. Although the Board of Directors anticipates that the reverse stock split ratio will be in the range of between 1/15 and 1/25, the actual reverse stock split ratio will be determined by the Board of Directors and may be significantly higher or lower than such anticipated range. Because the Board of Directors cannot predict with any certainty how AMMA’s stock price will react to the reverse stock split, the Board anticipates setting the reverse split ratio at a level mathematically calculated to result in a stock price above the minimum requirement of  $4.00 per share. For example, if AMMA’s stock price were $0.20 per share, to achieve a $4.00 post-split price, the theoretical reverse split ratio would be 1/20 ($4.00/$0.20). In this example, for the reasons described herein, the Board of Directors might set the reverse stock split ratio at 1/25 or some other ratio based on the considerations described herein.

All references to shares of AMMA common stock in the Proxy Statement refer to pre-split shares, except as otherwise noted.

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To consider and vote upon an amendment to AMMA’s 2016 Stock Option Plan to increase the number of shares of common stock available for issuance thereunder to 3,000,000 shares of common stock, on a post-split adjusted basis (the “Stock Option Plan Proposal”), as required by the Internal Revenue Code and Nasdaq Rule 5635(c).

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To elect four (4) members of the Board of Directors of AMMA, all of whom are current directors, to hold office until the next annual meeting or until their respective successors are duly elected and qualified, subject to earlier resignation or removal.

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To ratify the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018 (the “Auditor Ratification Proposal”).

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To consider and approve by a nonbinding advisory vote , the compensation of our named executive officers as described in the accompanying proxy statement;

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To recommend, by a nonbinding advisory vote , the frequency (every one, two or three years) of future advisory votes of stockholders on the compensation of our named executive officers;

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The Stockholders will consider and act on such other business as may properly come before the Meeting or any adjournment or postponement thereof.

Proposals 1 through 8 are sometimes collectively referred to herein as the “Proposals.”

The Board of Directors has fixed the close of business on December 17, 2018 as the record date (the “Record Date”) for the determination of stockholders entitled to receive notice of, and to vote at, the Special Meeting of Stockholders, or at any adjournments or postponements of the Special Meeting of Stockholders.

This notice provides only an overview of the information contained in the Proxy Statement and Proxy Card included in this mailing. Stockholders should read carefully the Proxy Statement and Proxy Card, along with our Periodic and Current Reports filed with the SEC, electronic versions of which are available at www.sec.gov.

Even if you plan to attend the Special Meeting, please mark, sign, date and return the enclosed Proxy Card in the enclosed postage-paid envelope. You may revoke your proxy by filing with the Company a written revocation or by submitting a duly executed Proxy Card bearing a later date. If you are present at the Meeting, you may revoke a previously submitted proxy and vote in person on each matter brought before the Meeting. You may also vote by phone or over the internet by following the instructions set forth on the Proxy Card.

If you plan to attend the Special Meeting, please bring the top of your Proxy Card along with your driver’s license or other government-issued identification in order to be admitted. If your shares are held by a broker-dealer or other financial institution in “street name”, you must also obtain written evidence of ownership with your name on it from such institution in order to enter the Meeting.

AMMA’s board of directors unanimously recommends that AMMA shareholders vote “FOR” approval of the Proposals.

By order of the Board of Directors,
 
John Price
President and CFO
Alliance MMA Inc.
 
January 17, 2019

PROXY STATEMENT
FOR SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 30, 2019

INFORMATION CONCERNING SOLICITATION AND VOTING

General

The attached proxy is solicited on behalf of the Board of Directors (the “Board”) of Alliance MMA, Inc., a Delaware corporation (“AMMA” or the “Company”), for use at the Special Meeting in lieu of Annual Meeting of Stockholders (the “Special Meeting”) to be held on January 30, 2019, at 2:00 p.m. Eastern Standard Time, or at any adjournment or postponement of this meeting, for the purposes set forth in this Proxy Statement and in the accompanying Notice of Special Meeting of Stockholders. The Special Meeting will be held at Hyatt Place Boca Raton/Downtown, 100 E. Palmetto Park Rd., Boca Raton, Florida 33432.

Our principal executive offices are located at 590 Madison Avenue, 21st Floor New York, New York 10022, and our telephone number is (212) 739-7825. You may find our SEC filings, including our annual reports on Form 10-K, on our website at www.alliancemma.com.

Revocability of Proxies

You may change your vote at any time prior to the vote at the Special Meeting. If you are a stockholder of record as of the Record Date, you may change your vote by granting a new proxy bearing a later date (which automatically revokes the earlier proxy), by providing a written notice of revocation to the Company at the address above prior to your shares being voted, or by attending the Special Meeting and voting in person. Attendance at the meeting will not cause your previously granted proxy to be revoked unless you specifically make that request. For shares you hold beneficially in the name of a broker, trustee or other nominee, you may change your vote by submitting new voting instructions to your broker, trustee or nominee, or, if you have obtained a legal proxy from your broker or nominee giving you the right to vote your shares, by attending the meeting and voting in person.

Voting and Solicitation

Only stockholders of record at the close of business on the Record Date will be entitled to notice of and to vote at the Special Meeting. Each holder of record of shares of common stock on that date will be entitled to one vote for each share held on all matters to be voted upon at the Special Meeting.

Properly delivered proxies will be voted at the Special Meeting in accordance with the specifications made. Where no specifications are given, such proxies will be voted “FOR” ALL the Proposals. It is not expected that any matters other than those referred to in this Proxy Statement will be brought before the Special Meeting. If, however, any matter not described in this Proxy Statement is properly presented for action at the Special Meeting, the persons named as proxies in the enclosed form of proxy will have authority to vote according to their own discretion.

The required quorum for the transaction of business at the Special Meeting is a majority of the votes eligible to be cast by holders of shares of common stock issued and outstanding on the Record Date. Shares that are voted “FOR,” “AGAINST,” “WITHHELD” or “ABSTAIN,” referred to as the Votes Cast, are treated as being present at the Special Meeting for purposes of establishing a quorum. An abstention will have the same effect as a vote against a proposal. Broker non-votes will be counted for purposes of

determining the presence or absence of a quorum for the transaction of business, but such non-votes will not be counted for purposes of determining the number of Votes Cast with respect to the particular proposal on which a broker has expressly not voted. Thus, a broker non-vote will not affect the outcome of the voting on a particular proposal. A “broker non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions with respect to that proposal from the beneficial owner.

If you hold your shares through a broker, bank or other nominee (“street name”) it is critical that you cast your vote if you want it to count. Thus, if you hold your shares in “street name” and you do not instruct your bank or broker how to vote in the election of directors, no vote will be cast on your behalf.

The cost of soliciting proxies will be borne by the Company. The Company may reimburse banks and brokers and other persons representing beneficial owners for their reasonable out-of-pocket costs. The Company may use the services of its officers, directors and others to solicit proxies, personally or by telephone, facsimile or electronic mail, without additional compensation.

Stockholder Proposals

Proposals of stockholders that are intended to be presented at our 2019 Annual Meeting of Stockholders in the proxy materials for such meeting must comply with the requirements of SEC Rule 14a-8 in order to be included in the Proxy Statement and proxy materials relating to our 2019 Annual Meeting of Stockholders.

TABLE OF CONTENTS

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Proposal, are sometimes referred to as the Share Exchange Proposals. The Share Exchange Agreement, as amended, is hereby incorporated into this proxy statement by reference to the exhibit to the Company’s Current Report on Form 8-K filed with the SEC on December 19, 2018. You are encouraged to read this proxy statement and all documents incorporated herein.

Pursuant to this Proxy Statement, AMMA shareholders are being asked to consider and approve the Share Exchange Proposals and related transactions, pursuant to which AMMA:

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has agreed to (i) purchase from the existing SCWorx stockholders all the issued and outstanding common stock of SCWorx, in exchange for 100,000,000 shares of AMMA’s common stock (the quotient of  $50,000,000 (the agreed value of SCWorx) divided by a fixed price of  $0.50 per share for each share of AMMA common stock (the agreed value per AMMA share on the Closing Date)) and (ii) issue an SCWorx related party note holder approximately 190,000 Preferred Stock Units, comprised of 190,000 shares of Preferred Stock (face value of  $10 per share) and warrants to purchase 4,750,000 shares of common stock, in satisfaction of approximately $1.9 million of SCWorx indebtedness to such note holder. Upon the closing of the Acquisition, pre-existing AMMA shareholders and SCWorx shareholders would own about 14% and 86%, respectively, of AMMA’s issued and outstanding common stock (before giving effect to the exercise of outstanding rights to acquire common stock, including the securities underlying the Preferred Stock Units, other than the conversion of the convertible notes owing to SCWorx in the principal amount of up to $1.25 million and related interest)

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is issuing Preferred Stock Units, at a per unit price of  $10, comprised in the aggregate of  (i) up to 900,000 shares of Preferred Stock, convertible, upon stockholder approval, into common stock at a rate of  $0.20 per share (subject to adjustment), and (ii) warrants to purchase up to 22,500,000 shares of common stock, with an exercise price of  $0.30 per share (subject to adjustment), for aggregate consideration of up to $9,000,000. The Preferred Stock and Warrants are expected to be issued in consideration of the following: (i) up to $6 million in cash and (ii) satisfaction of (a) approximately $1.9 million in indebtedness of SCWorx in connection with consummation of the Acquisition and (b) up to $1.1 million of indebtedness of AMMA

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will effect a reverse stock split of AMMA common stock sufficient in the judgment of the Board of Directors to result in a minimum bid price of AMMA’s common stock of at least $4.00 per share at the closing of the Acquisition (the reverse stock split ratio is anticipated to be in the range of between 1/15 and 1/25), although the actual reverse stock split ratio will be determined by the Board of Directors and may be significantly higher or lower than such anticipated range

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Shares of AMMA common stock are currently listed on the Nasdaq Stock Market.

This proxy statement also relates to the election of four directors, an amendment to AMMA’s 2016 Stock Option Plan to increase the number of shares of common stock available for issuance thereunder to 3,000,000 shares of common stock, on a post-split adjusted basis, and ratification of the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018, all as described herein.

This proxy statement contains important information about the proposed Share Exchange, Preferred Stock Unit financing, Stock Split and the other matters to be acted upon at the Special Meeting. You should read it carefully.

Q:

What is being voted on?

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A:

Below are all the proposals on which AMMA shareholders are being asked to vote (including the Share Exchange Proposals):

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1.

AMMA’s acquisition of SCWorx Corp., a Delaware corporation (“SCWorx”), pursuant to that certain share exchange agreement dated as of August 20, 2018 (the “Acquisition”) by and among AMMA, SCWorx and the stockholders of SCWorx, as amended by Amendment No. 1 thereto (the “Share Exchange Agreement” or “SEA”), as required by Nasdaq Rule 5635(a), and the resulting change of control of AMMA due to the issuance of AMMA shares to the stockholders of SCWorx in connection with the Acquisition, as required by Nasdaq Rule 5635(b) (the “Share Exchange Proposal”).

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2.

The issuance of Preferred Stock Units, at a per unit price of  $10, comprised in the aggregate of (i) up to 900,000 shares of Preferred Stock, face value $10 per share, convertible, upon stockholder approval, into common stock at a rate of  $0.20 per share (subject to adjustment), and (ii) warrants to purchase up to 22,500,000 shares of common stock, with an exercise price of  $0.30 per share (subject to adjustment), for aggregate consideration of up to $9,000,000, as a below market issuance (on an as converted basis) of more than 20% of the then issued and outstanding common shares of AMMA, as required by Nasdaq Rule 5635(d) (the “Financing Proposal”). The Preferred Stock and Warrants are expected to be issued in consideration of: (i) up to $6 million in cash and (ii) satisfaction of  (a) approximately $1.9 million in indebtedness of SCWorx in connection with consummation of the Acquisition and (b) up to $1.1 million of indebtedness of AMMA.

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An amendment to the certificate of incorporation of AMMA to effect a reverse stock split of AMMA common stock sufficient in the judgment of the Board of Directors to result in a minimum bid price of AMMA’s common stock of at least $4.00 per share at the closing of the Acquisition (the “Stock Split Proposal”) (the reverse stock split ratio is anticipated to be in the range of between 1/15 and 1/25 where the numerator is the number of new shares being issued and the denominator is the number of shares outstanding for which such number of new shares is being issued. By way of illustration, if the reverse split ratio is 1/15, then 1 new share will be issued in replacement for every 15 shares outstanding, so that if there were 15 million shares outstanding pre-split, there would be 1 million shares outstanding post-split, Stockholder approval of the Stock Split Proposal is required by the Delaware General Corporation Law. Although the Board of Directors anticipates that the reverse stock split ratio will be in the range of between 1/15 and 1/25, the actual reverse stock split ratio will be determined by the Board of Directors and may be significantly higher or lower than such anticipated range. Because the Board of Directors cannot predict with any certainty how AMMA’s stock price will react to the reverse stock split, the Board anticipates setting the reverse split ratio at a level mathematically calculated to result in a stock price above the minimum requirement of  $4.00 per share. For example, if AMMA’s stock price were $0.20 per share, to achieve a $4.00 post-split price, the theoretical reverse split ratio would be 1/20 ($4.00/$0.20). In this example, for the reasons described herein, the Board of Directors might set the reverse stock split ratio at 1/25 or some other ratio based on the considerations described herein.

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All references to shares of AMMA common stock in the Proxy Statement refer to pre-split shares, except as otherwise noted.

4.

An amendment to AMMA’s 2016 Stock Option Plan to increase the number of shares of common stock available for issuance thereunder to 3,000,000 shares of common stock, on a post-split adjusted basis (the “Stock Option Plan Proposal”) as required by the Internal Revenue Code and Nasdaq Rule 5635(c).

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5.

To elect four (4) members of the Board of Directors of AMMA, all of whom are current directors, to hold office until the next annual meeting or until their respective successors are duly elected and qualified or until their earlier resignation or removal.

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6.

To ratify the appointment of Friedman LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018 (the “Auditor Ratification Proposal”).

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7.

To consider and approve by a nonbinding advisory vote, the compensation of our named executive officers as described in the accompanying proxy statement;

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8.

To recommend, by a nonbinding advisory vote, the frequency (every one, two or three years) of future advisory votes of stockholders on the compensation of our named executive officers;

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Q:

Do any of AMMA’s directors or officers have interests that may conflict with my interests with respect to the Share Exchange?

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A:

AMMA’s directors and officers have interests in the Share Exchange and related transactions that may be different from your interests as a shareholder, including but not limited to the following interests: one of AMMA directors has acquired Preferred Stock Units in satisfaction of indebtedness owed to him by the Company and AMMA’s President will continue as an officer of the combined company.

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Q:

When and where is the Special Meeting?

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A:

The Special Meeting will take place at Hyatt Place Boca Raton/Downtown, 100 E. Palmetto Park Rd., Boca Raton, Florida 33432 on January 30, 2019, at 2:00 p.m. (Eastern Standard Time).

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Q:

Who may vote at the Special Meeting of shareholders?

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A:

Only holders of record of AMMA common stock as of the close of business on December 17, 2018 may vote at the Special Meeting of shareholders. As of the record date, 17,494,852 shares of AMMA common stock outstanding and entitled to vote. Please see “Special Meeting of AMMA Shareholders — Record Date; Who is Entitled to Vote” for further information.

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Q:

What is the quorum requirement for the Special Meeting?

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A:

Shareholders representing at least a majority of the AMMA common stock issued and outstanding as of the record date and entitled to vote at the Special Meeting must be present in person or represented by proxy in order to hold the Special Meeting and conduct business. This is called a quorum. AMMA common stock will be counted for purposes of determining if there is a quorum if the shareholder (i) is present and entitled to vote at the meeting, or (ii) has properly submitted a proxy card. In the absence of a quorum, shareholders representing a majority of the votes present in person or represented by proxy at such meeting, may adjourn the meeting until a quorum is present.

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Q:

What vote is required to approve the Proposals?

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A:

Approval of the Share Exchange Proposals and the other Proposals will each require the affirmative vote of the holders of a majority of the issued and outstanding shares of common stock of AMMA present and entitled to vote thereon as of the record date at the Special Meeting of AMMA shareholders. Attending the Special Meeting of AMMA shareholders either in person or by proxy and abstaining from voting will have the same effect as voting against all the Proposals and, assuming a quorum is present, broker non-votes will have no effect on the Share Exchange Proposals or the other Proposals.

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Q:

How can I vote?

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A:

If you were a holder of record AMMA common stock on December 17, 2018, the record date for the Special Meeting of AMMA shareholders, you may vote with respect to the applicable proposals in person at the Special Meeting of AMMA shareholders, or by submitting a proxy by mail in accordance with the instructions provided to you under “Special Meetings of AMMA shareholders.” If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, your broker or bank or other nominee may provide us with voting instructions (including any telephone or Internet voting instructions). You should contact your broker, bank or nominee in advance to ensure that votes related to the shares you beneficially own will be properly counted. In this regard, you must provide the record holder of your shares (broker, bank or nominee) with instructions on how to vote your shares or, if you wish to attend the Special Meeting of AMMA shareholders and vote in person, obtain a proxy from your broker, bank or nominee.

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Q:

If my shares are held in “street name” by my bank, brokerage firm or nominee, will they automatically vote my shares for me?

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A:

No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. AMMA believes the Proposals are non-discretionary and, therefore, your broker, bank or nominee cannot vote your shares without your instruction. Broker non-votes will not be considered present for the purposes of establishing a quorum and will have no effect on the Proposals. If you do not provide instructions with your proxy, your bank, broker or other nominee may submit a proxy card expressly indicating that it is NOT voting your shares; this indication that a

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bank, broker or nominee is not voting your shares is referred to as a “broker non-vote.” Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your AMMA shares in accordance with directions you provide.

Q:

What if I abstain from voting or fail to instruct my bank, brokerage firm or nominee?

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A:

AMMA will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for the purposes of determining whether a quorum is present at the Special Meeting of AMMA shareholders. For purposes of approval, an abstention on any Proposals will have the same effect as a vote “AGAINST” such Proposal.

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Q:

Can I change my vote after I have mailed my proxy card?

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A:

Yes. You may change your vote at any time before your proxy is voted at the Special Meeting. You may revoke your proxy by executing and returning a proxy card dated later than the previous one, or by attending the Special Meeting in person and casting your vote by ballot or by submitting a written revocation stating that you would like to revoke your proxy that we receive prior to the Special Meeting. If you hold your shares through a bank, brokerage firm or nominee, you should follow the instructions of your bank, brokerage firm or nominee regarding the revocation of proxies. If you are a record holder, you should send any notice of revocation or your completed new proxy card, as the case may be, to:

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590 Madison Avenue, 21 st Floor
New York, New York, 10022
Telephone: 212-739-7825
Attn: John Price

Q:

When is the Share Exchange expected to occur?

​

A:

Assuming the requisite shareholder approvals are received, AMMA expects that the Share Exchange will occur no later than January 31, 2019, though it could be later.

​

Q:

May I seek statutory appraisal rights or dissenter rights with respect to my shares?

​

A:

No. Appraisal rights are not available to holders of AMMA common stock in connection with the proposed Share Exchange.

​

Q:

What happens if the Share Exchange is not consummated?

​

A:

If the Share Exchange were not consummated, AMMA would not move forward with the acquisition of SCWorx or its business, as described further herein, and AMMA would probably be delisted from the Nasdaq Capital Market. As a result, AMMA and its board of directors would need to reassess its go-forward operating plans. In addition, AMMA would have to return to investors the aggregate $5.5 million cash purchase price paid for the Preferred Stock Units and the debt that was settled through the issuance of Preferred Stock Units would be reinstated and become due.

​

5

DELIVERY OF DOCUMENTS TO AMMA SHAREHOLDERS

Pursuant to the rules of the SEC, AMMA and services that it employs to deliver communications to its shareholders are permitted to deliver to two or more shareholders sharing the same address a single copy of the proxy statement, unless AMMA has received contrary instructions from one or more of such shareholders. Upon written or oral request, AMMA will deliver a separate copy of the proxy statement to any shareholder at a shared address to which a single copy of the proxy statement was delivered and who wishes to receive separate copies in the future. Shareholders receiving multiple copies of the proxy statement may likewise request that AMMA deliver single copies of the proxy statement in the future. Shareholders may notify AMMA of their requests by contacting AMMA as follows:

Alliance MMA Inc.
590 Madison Avenue, 21 st Floor
New York, New York, 10022
Attn: John Price
Telephone: 212-739-7825

6

PROPOSALS TO BE VOTED ON

PROPOSAL ONE ACQUISITION OF SCWORX PURSUANT TO SHARE EXCHANGE AGREEMENT (INCLUDING THE RESULTING CHANGE OF CONTROL OF AMMA)

(Item 1 of Proxy Card)

7

PROPOSAL SIX APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

(Item 6 of Proxy Card)

The Audit Committee of the Board of Directors has selected Friedman LLP (“Friedman”), an independent registered public accounting firm, to audit the financial statements of the Company for the year ending December 31, 2018. The Company is submitting its selection of Friedman for ratification by the stockholders at the Special Meeting. Friedman has served as our independent registered public accounting firm since February 2015. The Company’s bylaws do not require that stockholders ratify the selection of Friedman as the Company’s independent registered public accounting firm; however, the Company is submitting the selection of Friedman to stockholders for ratification as a matter of good corporate practice.

If the stockholders do not ratify the selection, the Audit Committee will reconsider whether to retain Friedman. Even if the selection is ratified, the Audit Committee at its discretion may change the appointment at any time if the committee determines that such a change would be in the best interests of the Company and its stockholders.

Principal Accountant Fees and Services

During 2017 and 2016, fees for services provided by Friedman were as follows:

Audit Fees include amounts related to the audit of the Company’s annual financial statements and internal control over financial reporting, and quarterly review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q.

Audit Related Fees include amounts related to accounting consultations and services.

Tax Fees include fees billed for tax compliance, tax advice and tax planning services.

There were no other fees billed by Friedman for services rendered to the Company, other than the services described above, in 2017 and 2016.

The Audit Committee pre-approves all audit and permissible non-audit services provided by the Company’s independent registered public accounting firm. These services may include audit services, audit-related services, tax and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. During 2017, services provided by Friedman were pre-approved by the Audit Committee in accordance with this policy.

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” PROPOSAL SIX

8

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.

PROPOSAL NO. 8 — ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

(Item 8 of Proxy Card)

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE TO HOLD AN ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS EVERY TWO YEARS.

9

10

11

12

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13

14

15

16

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

AMMA is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the transactions contemplated by the Share Exchange Proposals.

The following unaudited pro forma condensed combined balance sheet as of September 30, 2018 combines the unaudited historical consolidated balance sheet of AMMA as of September 30, 2018 with the unaudited historical consolidated balance sheet of SCWorx as of September 30, 2018, giving effect to the transactions as if they had been consummated as of that date.

The following unaudited pro forma condensed combined income statement for the nine months ended September 30, 2018 combines the unaudited historical condensed consolidated statement of operations of AMMA for nine months ended September 30, 2018 with the unaudited historical consolidated income statement of SCWorx for the nine months ended September 30, 2018, giving effect to the transactions as if they had been consummated as of January 1, 2017.

The following unaudited pro forma condensed combined income statement for the year ended December 31, 2017 combines the audited historical condensed consolidated statement of operations of AMMA for year ended December 31, 2017 with the unaudited historical consolidated income statement of SCWorx for the year ended December 31, 2017, giving effect to the transactions as if they had been consummated as of January 1, 2017.

The historical financial information has been adjusted to give effect to pro forma events that are related and/or directly attributable to the transactions, are factually supportable and are expected to have a continuing impact on the combined results. The adjustments presented on the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the transactions.

The historical financial information of SCWorx was derived from the unaudited consolidated financial statements of SCWorx for the nine months ended September 30, 2018, and the unaudited consolidated financial statements of SCWorx for the year ended December 31, 2017 included elsewhere in this proxy statement. The historical financial information of AMMA was derived from the unaudited condensed consolidated financial statements of AMMA for the nine months ended September 30, 2018 and the audited financial statements of AMMA for the year ended December 31, 2017 included elsewhere in this proxy statement. This information should be read together with SCWorx’s and AMMA’ unaudited/audited financial statements, as applicable, and related notes, “ SCWorx Management’s Discussion and Analysis of Financial Condition and Results of Operations ,” “ Other Information Related to AMMA — AMMA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and other financial information included elsewhere in this proxy statement.

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience. AMMA and SCWorx have not had any historical relationship prior to the transactions, except that SCWorx loaned AMMA $720,000 as of September 30, 2018 and an additional $530,000 through the date of this Proxy Statement ($1.25 million in the aggregate), the conversion of which is part of the pro forma adjustments required to eliminate activities between the companies.

The transactions will be accounted for as a “reverse merger” and recapitalization at the date of the consummation of the transaction since the shareholders of SCWorx will own at least 80% of the outstanding common shares of AMMA immediately following the completion of the transactions and SCWorx’s operations will be the operations of AMMA following the transactions. Accordingly, SCWorx will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of SCWorx. As a result, the assets and liabilities and the historical operations that will be reflected in the AMMA financial statements after consummation of the transactions will be those of

17

SCWorx and will be recorded at the historical cost basis of SCWorx. AMMA’s assets, liabilities and results of operations will be consolidated with the assets, liabilities and results of operations of SCWorx upon consummation of the transactions.

18

Pro Forma Condensed Combined Balance Sheet
As of September 30, 2018
(Unaudited)

(1)

Represents the private placement of  $5.5 million of preferred stock with a face value of  $10 per share or 550,000 Series A preferred shares.

​

(2)

Represents the elimination of intercompany balances, $720,000 note payable to SCWorx on Alliance MMA’s books and $720,000 investment in AMMA on SCWorx books. Upon closing of the merger transaction the balance of the note payable will convert into 1,932,885 common shares of Alliance MMA stock, recorded as common stock par $1,933 and additional paid in capital $718,067 which also will be eliminated in consolidation. It is the intention of SCWorx management to dividend the AMMA shares to the current SCWorx shareholders.

​

See notes to unaudited pro forma condensed combined financial statements

19

(3)

Represents the conversion of the outstanding notes payable – related party balance and accrued interest into Series A preferred shares. Alliance MMA has $300,000 of notes payable-related party and $17,659 of accrued interest that will convert into Series A Preferred stock and SCWorx has $1,471,070 of notes payable-related party and $282,537 of accrued interest that will convert into Series A preferred stock.

​

(4)

Represents the conversion of the outstanding $200,000 notes payable and $34,425 accrued interest into Series A preferred stock.

​

(5)

Represents the conversion of  $100,000 of payables related to discontinued operations into Series A preferred stock.

​

(6)

The unaudited Condensed Combined Balance Sheet has been adjusted to eliminate SCWorx’s common stock.

​

(7)

Represent the unallocated purchase price of SCWorx’s acquisition of Alliance MMA (treated as an acquisition of Alliance for accounting purposes). The final purchase price allocation, which will be based upon a third party valuation and will result in the allocation of tangible and intangible assets different than presented in this Pro Forma Condensed Combined Balance Sheet. Also includes the issuance of 100,000,000 common shares to existing SCWorx shareholders.

​

(8)

The unaudited Condensed Combined Balance Sheet has been adjusted to eliminate Alliance MMA’s historical retained deficit.

​

See notes to unaudited pro forma condensed combined financial statements

20

(1)

Equivalent pro forma net earnings per share of SCWorx was calculated by multiplying the share exchange ratio between AMMA and SCWorx (approximately 5,714 to 1) by pro forma income per share.

​

(2)

There are no anticipated pro forma adjustments expected between AMMA and SCWorx, we are not reflecting amortization related to purchase accounting as the purchase price in unallocated. Represents the elimination of the historical Alliance MMA business that was discontinued during 2018.

​

(3)

Reflects share issuance and adjustment related to the SCWorx transaction.

​

See notes to unaudited pro forma condensed combined financial statements

21

(1)

Equivalent pro forma net earnings per share of SCWorx was calculated by multiplying the share exchange ratio between AMMA and SCWorx (approximately 5,714 to 1) by pro forma income per share.

​

(2)

There are no anticipated pro forma adjustments expected between AMMA and SCWorx, we are not reflecting amortization related to purchase accounting as the purchase price is unallocated. Represents the elimination of the historical Alliance MMA business that was discontinued during 2018.

​

(3)

Reflects share issuance and adjustment related to the SCWorx transaction.

​

See notes to unaudited pro forma condensed combined financial statements

22

(1)

Equivalent pro forma net earnings per share of SCWorx was calculated by multiplying the share exchange ratio between AMMA and SCWorx (approximately 5,714 to 1) by pro forma income per share.

​

(2)

There are no anticipated pro forma adjustments expected between AMMA and SCWorx, we are not reflecting amortization related to purchase accounting as the purchase price is unallocated. Represents the elimination of the historical Alliance MMA business that was discontinued during 2018.

​

(3)

Reflects share issuance and adjustment related to the SCWorx transaction.

​

See notes to unaudited pro forma condensed combined financial statements

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NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION

1. Description of Transaction

On August 20, 2018, AMMA, SCWorx, and the stockholders of SCWorx, entered into the Share Exchange Agreement, as amended by Amendment No. 1 thereto (the “Share Exchange Agreement” or “SEA”), pursuant to which SCWorx will become a wholly owned subsidiary of AMMA. See “The Share Exchange Agreement — Share Exchange with SCWorx; Share Exchange Consideration” for more detailed information. The Share Exchange consideration consists of  (i) 100,000,000 shares of AMMA common stock and (ii) Preferred Stock Units, comprised of approximately 190,000 shares of Preferred Stock (face value of  $10 per share) and warrants to purchase 4,750,000 shares of common stock, to be issued to an SCWorx related party note holder in satisfaction of approximately $1.9 million of SCWorx indebtedness as the closing date (as of September 30, 2018, this indebtedness was approximately $1.7 million).

The SCWorx stockholders will own approximately 86% of AMMA’s shares to be outstanding immediately after the transactions, and the AMMA’s shareholders will own approximately 14% of AMMA’s outstanding shares (before giving effect to the exercise of outstanding rights to acquire AMMA common stock, including the Preferred Stock Units, other than the conversion of the convertible notes owing to SCWorx in the principal amount of up to $1.25 million and related interest).

2. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments

The Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 assumes the Company completes the $5.5 million private placement of Series A preferred stock which includes 50% warrant coverage of purchase 13,750,000 common shares. The preferred stock coverts into common shares of AMMA at $0.20 per share. Additionally, we anticipate the holders of the outstanding debt with Alliance MMA convert their debt and accrued interest into shares of Series A preferred stock with a face value of $10 per shares. As of September 30, 2018, the balance of notes payable and accrued interest with our Board members totaled $318,000 and notes payable and accrued interest with a third party totaled $234,000. In addition, in connection with the acquisition transaction, AMMA will issue Preferred Stock Units, comprised of approximately 190,000 shares of Preferred Stock (face value of  $10 per share) and warrants to purchase 4,750,000 shares of common stock, to an SCWorx related party note holder in satisfaction of approximately $1.9 million of SCWorx indebtedness as the closing date (as of September 30, 2018, this indebtedness was approximately $1.7 million).

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AMMA’S BUSINESS

Overview

Nature of Business

Alliance MMA, Inc. (“Alliance” or the “Company”) has been a sports media company. It was formed in Delaware in February 2015. The Company completed its Initial Public Offering (“IPO”) in October 2016 and began to execute its initial business strategy to acquire regional MMA promotions to form a professional MMA fight league. A total of ten regional MMA promotions were acquired. Additionally, the Company acquired a ticketing software business focused on the MMA industry, an athlete management business, and video production and distribution company to compliment the MMA fight league.

Alliance MMA acquired the following businesses to execute its initial business strategy:

Promotions

•

CFFC Promotions (“CFFC”);

​

•

Hoosier Fight Club (“HFC”);

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•

COmbat GAmes MMA (“COGA”);

​

•

Shogun Fights (“Shogun”);

​

•

V3 Fights (“V3”);

​

•

Iron Tiger Fight Series (“IT Fight Series” or “ITFS”);

​

•

Fight Time Promotions (“Fight Time”);

​

•

National Fighting Championships (“NFC”);

​

•

Fight Club Orange County (“FCOC” or “Fight Club OC”); and

​

•

Victory Fighting Championship (“Victory”).

​

Ticketing

•

CageTix.

​

Sports Management

•

SuckerPunch Holdings, Inc. (“SuckerPunch”).

​

Video Production and Distribution

•

Go Fight Net, Inc. (“GFL”)

​

As an adjunct to the promotion business, Alliance provided video distribution and media archiving through Alliance Sports Media (“ASM”) formerly GFL.

Cessation of MMA operations

On May 25, 2018, management and the Board of Directors committed the Company to an exit/disposal plan of the MMA promotion business because it did not believe the MMA business unit could generate sufficient operating cash flows to fund the ongoing operations.

The Company has since disposed of all of its MMA related businesses except for its Ticketing operations, represented by CageTix.

Our management is currently focused on sustaining the CageTix operation and consummation of the SCWorx Acquisition and related transactions.

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Facilities

AMMA maintains its principal executive offices at 590 Madison Avenue, 21 st Floor, New York, New York 10022, Telephone: (212) 739-7825. These premises are leased from a third party on a month to month basis for about $400 per month. The lease allows for the limited use of private offices, conference rooms, mail handling, videoconferencing, and certain other business services.

In November 2016, the Company entered a sublease agreement for office and video production space in Cherry Hill, New Jersey. The lease expires on June 30, 2019. We abandoned this facility in June, 2018.

Employees

AMMA currently has one executive officer and one additional employee.

Legal Proceedings

In June 2018, the landlord of our Cherry Hill, New Jersey office filed suit against the Company for non-payment of rent. In October, 2018, the Landlord moved to enter a default judgment against the Company. Currently, the Company is attempting to settle the remaining payments due under the lease.

On December 19, 2018, the Company’s former CEO, Robert L. Mazzeo, who resigned on May 25, 2018, served a complaint against the Company in the United States District Court for the Sothern District of NY. Mazzeo alleges that he (i) was fraudulently induced to become the CEO of the Company and (ii) entered into an employment contract with the Company and that the Company breached said alleged contract. Mazzeo seeks damages in “excess of  $500,000”. The Company believes that the lawsuit is frivolous and violative of Rule 11 of the Federal Rules of Civil Procedure. In addition to mounting a vigorous defense, the Company intends to pursue affirmative claims against Mr. Mazzeo.

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AMMA Securities Authorized for Issuance Under Equity Compensation Plans:

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

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

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

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Alliance MMA, Inc.

Condensed Consolidated Statements of Cash Flows
(Unaudited)

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

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Alliance MMA, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Note 1. Description of Business and Basis of Presentation

Nature of Business

Alliance MMA, Inc. (“Alliance” or the “Company”) is a sports media company formed in Delaware in February 2015. The Company completed its Initial Public Offering (“IPO”) in October 2016 and began to execute its initial business strategy to acquire regional MMA promotions to form a professional MMA fight league. A total of ten regional MMA promotions were acquired. Additionally, the Company acquired a ticketing software business focused on the MMA industry, an athlete management business, and video production and distribution company to compliment the MMA fight league.

Alliance MMA acquired the following businesses to execute its initial business strategy:

Promotions

•

CFFC Promotions (“CFFC”);

​

•

Hoosier Fight Club (“HFC”);

​

•

COmbat GAmes MMA (“COGA”);

​

•

Shogun Fights (“Shogun”);

​

•

V3 Fights (“V3”);

​

•

Iron Tiger Fight Series (“IT Fight Series” or “ITFS”);

​

•

Fight Time Promotions (“Fight Time”);

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•

National Fighting Championships (“NFC”);

​

•

Fight Club Orange County (“FCOC” or “Fight Club OC”); and

​

•

Victory Fighting Championship (“Victory”).

​

Ticketing

•

CageTix.

​

Sports Management

•

SuckerPunch Holdings, Inc. (“SuckerPunch”).

​

Video Production and Distribution

•

Go Fight Net, Inc. (“GFL”)

​

As an adjunct to the promotion business, Alliance provided video distribution and media archiving through Alliance Sports Media (“ASM”) formerly GFL.

Change in Management and Cessation of MMA Promotion and Athlete Management operations

On February 7, 2018, the Company’s Chief Executive Officer, Paul Danner, resigned his position but remained Chairman of the Board and Director through May 1, 2018. Also, on February 7, 2018, the Company terminated the employment of the Company’s President, Robert Haydak, and its Chief Marketing Officer, James Byrne and named Robert Mazzeo as the Company’s acting Chief Executive Officer. Effective May 23, 2018, board of directors’ member, Renzo Gracie, resigned. On May 24, 2018, Robert Mazzeo resigned as Chief Executive Officer. On May 25, 2018, management and the Board of Directors committed the Company to an exit/disposal plan of the MMA promotion business because it did not believe the MMA business unit could generate sufficient operating cash flows to fund the ongoing

33

Alliance MMA, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

operations. On June 6, 2018, the Company’s board of directors appointed John Price, the Company’s CFO, Co-President of the Company. On September 13, 2018, management and the board of directors extended the exit/disposal plan to the Athlete Management business unit because it did not believe it could generate positive cash flows. On September 26, 2018 the Company entered an agreement to sell SuckerPunch to the former owners. The effective date of the transaction was July 1, 2018.

As of the date of this filing, the Company has disposed of the following businesses:

•

CFFC

​

•

HFC

​

•

COGA

​

•

Shogun

​

•

V3

​

•

ITFS

​

•

Fight Time

​

•

NFC

​

•

FCOC

​

•

Victory

​

•

ASM

​

•

GFL

​

•

SuckerPunch

​

The Company is currently focused on its CageTix business and completing the acquisition of SCWorx.

Liquidity and Going Concern

The Company’s primary need for liquidity is to fund the working capital needs of the business, and general corporate purposes. The Company has incurred losses and experienced negative operating cash flows since the inception of operations in October 2016.

In August 2017, the Company completed a capital raise of  $1.5 million through the private placement of 1,500,000 units, which consisted of one share of common stock and a warrant to purchase one share of common stock at an exercise price of  $1.50. The funds were used for operating capital and a business acquisition.

In October and November 2017, the Company completed a capital raise of  $487,500 through the private placement of 390,000 units, which consisted of one share of common stock and 0.50 of a warrant to purchase one share common stock at an exercise price of  $1.75, (an aggregate of 195,000 warrants). The funds were used for operating capital.

In December 2017, the Company issued a promissory note to an individual for $300,000 of borrowings for operating capital leading up to our further public offering in January 2018.

In January 2018, the Company completed a capital raise of  $2.15 million gross, through the public placement of 2,150,000 units, which consisted of one share of common stock and .90 of a warrant to purchase common stock at an exercise price of  $1.10, (an aggregate of 1,935,000 warrants). The warrant exercise price ratcheted down to $0.31 in June 2018 and down to $0.29 in July 2018 which is the floor price of the ratchet. The funds were used for operating capital.

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Alliance MMA, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

In February 2018, the underwriter exercised their overallotment option resulting in the sale of an additional 50,000 shares for $50,000 and issuance of an additional 272,500 warrants.

In January 2018, the Company paid $345,000 to the promissory note holder of December 2017 as full payment of principal and interest.

In April 2018, the Company issued a promissory note to each of Joseph Gamberale and Joel Tracy, board members, for $150,000, respectively, for total borrowings of  $300,000. The funds were used for operating capital.

In May 2018, the Company issued a promissory note to an individual for $200,000 of borrowings for operating capital. In September 2018, the Company agreed to issue the note holder 200,000 common shares and 50,000 warrants with an exercise price of  $0.29 and term of five years in exchange for the noteholder’s agreement to convert all interest under the loan into shares of the Company’s common stock, and extend the note to December 31, 2018.

In June 2018, the Company entered into a Securities Purchase Agreement (“SPA”) with SCWorx Acquisition Corp. (“SCWorx”), under which it agreed to sell up to $1 million in principal amount of convertible notes and warrants to purchase up to 671,142 shares of common stock. The note is convertible into shares of common stock at a conversion price of  $0.3725 and the warrants have an exercise price of $0.3725.

On June 29, 2018, the Company sold SCWorx convertible notes in the principal amount of  $500,000 and warrants to purchase 335,570 shares of common stock, for an aggregate purchase price of  $500,000. The Note bears interest at 10% annually and matures on June 27, 2019. The warrant has an exercise price of $0.3725, term of five years and was vested upon grant. SCWorx agreed in the SPA to fund (i) a second tranche of  $250,000 upon the signing of a merger agreement with the Purchaser and (ii) a third tranche of $250,000 upon mutual agreement of the Purchaser and Company.

On August 20, 2018, the Company entered into the Stock Exchange Agreement (“SEA”) with SCWorx. Under the Agreement, the Company agreed to purchase from the SCWorx shareholders all the issued and outstanding capital stock of SCWorx, in exchange for which the Company agreed to issue at the closing that number of shares of Company common stock equal to the quotient of  $50,000,000 divided by the closing price of the Company’s common stock upon the completion of the acquisition subject to a cap of $0.67 per share.

Pursuant to the SPA, on July 31, 2018, the Company sold SCWorx convertible notes in the principal amount of  $60,000 and warrants to purchase 40,269 shares of common stock, for an aggregate purchase price of  $60,000. The Note bears interest at 10% annually and matures on July 31, 2019. The warrant has an exercise price of  $0.3725, term of five years and was vested upon grant.

Pursuant to the SPA, on August 21, 2018 and October 16, 2018, SCWorx funded $160,000 and $30,000, respectively, of the remaining $190,000 of the $250,000 tranche which was due upon execution of the Stock Exchange Agreement with SCWorx, and the Company issued warrants to SCWorx to purchase 127,517 and 20,134 shares of common stock, respectively. The warrants have an exercise price of  $0.3725, term of five years and were vested upon grant. As of September 30, 2018 SCWorx has funded $720,000. To date SCWorx has funded $800,000 of the aggregate $1 million contemplated by the SCWorx SPA.

Beginning in August 2018, warrant holders from the January 2018 public placement began to exercise their warrant holdings. For the three months ended September 30, 2018, the Company received $306,457 in relation to the exercise of 1,056,750 warrants, resulting in the issuance of the same number of common shares.

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Alliance MMA, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

The Company currently has virtually no cash on hand, has an accumulated deficit of approximately $30.0 million, has consistently experienced quarterly net losses and negative cash flows, and is operating with negative working capital, all indicating there is substantial doubt with respect to our ability to continue as a going concern. As of the date of this filing, the Company has insufficient cash to support the business for the one year period following the date of this report. Unless the Company can generate sufficient revenue to cover operating costs, which it has not been able to do, it will need to continue to raise capital by selling shares of common stock or by borrowing funds. Management cannot provide any assurances that the Company will generate sufficient revenue to continue as a going concern or that it will be successful in raising capital on commercially reasonable terms or at all.

Basis of Presentation and Principles of Consolidation

The accompanying interim unaudited condensed consolidated financial statements as of September 30, 2018 and December 31, 2017, and for the three and nine months ended September 30, 2018 and 2017, have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) for interim financial information. The amounts as of December 31, 2017 have been derived from the Company’s annual audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly the financial position of the Company and its results of operations, changes in stockholders’ equity and cash flows as of and for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the annual audited financial statements and notes thereto as of and for the year ended December 31, 2017, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed on April 16, 2018 (the “Form 10-K”). The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2018 or any future period and the Company makes no representations related thereto.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the unaudited condensed consolidated financial statements and accompanying notes. These estimates relate to revenue recognition, the valuation and recognition of stock-based compensation expense, loss contingencies, discontinued operations and income taxes. Actual results could differ materially from those estimates.

Note 2. Summary of Significant Accounting Policies

There have been no significant changes in the Company’s significant accounting policies during the nine months ended September 30, 2018, as compared to the Significant Accounting Policies described in the Form 10-K with the exception of the revenue recognition policy.

Revenue Recognition

Ticket Service Revenue (Current Operations)

The Company acts as a ticket agent for third-party ticket sales and charges a fee per transaction for collecting the cash on ticket sales and remits the remaining net amount to the third-party promoter upon completion of the event or request from the promoter. The Company’s ticket service fee is recognized when it satisfies the performance obligation by transferring control of the purchased ticket to a customer.

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Alliance MMA, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

Promotion Revenue (Discontinued Operations)

The Company recognized revenue, net of sales tax, when it satisfied a performance obligation by transferring control over a product or service to a customer. Revenue from admission, sponsorship, pay per view (“PPV”), apparel, and concession were recognized at a point in time when an event was exhibited to a customer live or PPV, and when a customer took possession of apparel or food and beverage offerings. Promotion revenue is a component of discontinued operations.

Fighter Commission Revenue (Discontinued Operations)

The Company recognized revenue when it satisfied a performance obligation by transferring control over a product or service to a customer. The Company recognized commission revenue upon the completion of a contracted athlete’s performance.

Business Combinations

The Company includes the results of operations of the businesses that it has acquired in its consolidated results as of the respective dates of acquisition.

The Company allocates the fair value of the purchase consideration of its acquisitions to the tangible assets, liabilities and intangible assets acquired, based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The primary items that generate goodwill include the value of the synergies between the acquired businesses and Alliance as well as the acquired assembled workforce, neither of which qualifies as an identifiable intangible asset. The fair value of contingent consideration associated with acquisitions is remeasured each reporting period and adjusted accordingly. Acquisition and integration related costs are recognized separately from the business combination and are expensed as incurred.

For additional information regarding the Company's acquisitions, refer to “Note 4 — Business Combinations.”

Goodwill

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and identified intangible assets acquired under a business combination. Goodwill also includes acquired assembled workforce, which does not qualify as an identifiable intangible asset. The Company reviews impairment of goodwill annually in the fourth quarter, or more frequently if events or circumstances indicate that the goodwill might be impaired. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary. If, based on the qualitative assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company proceeds to perform the quantitative goodwill impairment test. The Company first determines the fair value of a reporting unit using weighted results derived from an income approach and a market approach. The income approach is estimated through the discounted cash flow method based on assumptions about future conditions such as future revenue growth rates, new product and technology introductions, gross margins, operating expenses, discount rates, future economic and market conditions, and other assumptions. The market approach estimates the fair value of the Company’s equity by utilizing the market comparable method which is based on revenue multiples from comparable companies in similar lines of business. The Company then compares the derived fair value of a reporting unit with its carrying amount. If the carrying value of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

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Alliance MMA, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

For the year ended December 31, 2017, the Company recorded a goodwill impairment of  $2.4 million within the Company’s promotion segment in relation to the GFL and Fight Time reporting units. The impairment was identified as part of management’s review of impairment indicators in the fourth quarter. Accordingly, it was determined that the recoverable value of the reporting units was less than the carrying value and, therefore, an impairment loss was recorded.

Purchased Identified Intangible Assets

Identified finite-lived intangible assets consist of acquired video library intellectual property, venue contracts/relationships, ticketing software, tradenames, fighter contracts, promoter relationships and sponsor relationships resulting from business combinations. The Company’s identified intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from two to ten years. The Company makes judgments about the recoverability of finite-lived intangible assets whenever facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, the Company assesses recoverability by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, the Company would accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life. The Company evaluates the carrying value of indefinite-lived intangible assets on an annual basis, and an impairment charge would be recognized to the extent that the carrying amount of such assets exceeds their estimated fair value. For further discussion of goodwill and identified intangible assets, see “Note 5 — Goodwill and Purchased Identified Intangible Assets.”

For the year ended December 31, 2017, the Company recorded an intangible impairment of  $893,000 related to the impairment of all video library assets acquired from GFL, the promotion businesses, and asset purchases, as well as the venue relationship and trade-name of the Fight Time Promotion.

Long-Lived Assets

Long-lived assets that are held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability of long-lived assets is based on an estimate of the undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the difference between the fair value of the asset and its carrying value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value.

Loss Contingencies

We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the possible loss in the notes to the consolidated financial statements. We review the developments in our contingencies that could affect the amount of the provisions that has been previously recorded, and the matters and related possible losses disclosed. We make adjustments to our provisions and changes to our disclosures accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount.

Stock-Based Compensation

The Company accounts for stock-based compensation expense in accordance with the authoritative guidance on share-based payments. The Company early adopted ASU No. 2017-11, Earnings per share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815).

38

Alliance MMA, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

Under the provisions of the guidance, stock-based compensation expense is measured at the grant date based on the fair value of the option or warrant using a Black-Scholes option pricing model and is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The fair value of the Company’s stock awards for non-employees is estimated based on the fair market value on each vesting date, accounted for under the variable-accounting method.

The authoritative guidance on share-based payments also requires that the Company measure and recognize stock-based compensation expense upon modification of the term of the stock award. The stock-based compensation expense for such modification is the sum of any unamortized expense of the award before modification and the modification expense. The modification expense is the incremental amount of the fair value of the award before the modification and the fair value of the award after the modification, measured on the date of modification. In the case when the modification results in a longer requisite period than in the original award, the Company has elected to apply the pool method where the aggregate of the unamortized expense and the modification expense is amortized over the new requisite period on a straight-line basis. In addition, any forfeiture will be based on the original requisite period prior to the modification.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date.

A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented.

Note 3. Discontinued Operations

On May 25, 2018, the Company commenced cessation of all the professional MMA promotion operations and supporting functions including ASM and began a plan of disposition. This action included the termination of all promotion and support employees. As of June 30, 2018, all the MMA promotions were either disposed or ceased operations. On September 13, 2018, the Company commenced cessation of the Athlete Management operations and began a plan of disposition. This action included the termination of all Athlete Management employees. As of September 30, 2018, the Athlete Management business unit was disposed.

The Company has reported the results of operations and financial position of the discontinued Professional MMA Promotion and Athlete Management businesses in discontinued operations within the condensed consolidated statements of operations and condensed consolidated balance sheets for all periods presented.

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