tv510461-defm14a - none

TABLE OF CONTENTS

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

☒

Filed by a Party other than the Registrant

☐

Check the appropriate box:

☐

Preliminary Proxy Statement

☐

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

☒

Definitive Proxy Statement

☐

Definitive Additional Materials

☐

Soliciting Material under §240.14a-12

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):

☐

No fee required.

☒

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

(1)

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

(2)

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

(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.

(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.

(5)

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

☐

Fee paid previously with preliminary materials.

☐

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.

(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

TABLE OF CONTENTS

[MISSING IMAGE: lg_alliancemma-blkbg.jpg]

PROXY STATEMENT FOR SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF SHAREHOLDERS OF ALLIANCE MMA INC.

Proxy Statement dated January 17, 2019

Dear Shareholders:

You are cordially invited to attend the special meeting in lieu of annual meeting of shareholders (the “Special Meeting”) of Alliance MMA Inc. (“AMMA” or the “Company”), to be held 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) or at any adjournment or postponement thereof, for the purpose of considering and taking appropriate action with respect to those matters described below.

Holders of record of shares of AMMA’s common stock on December 17, 2018 (the “Record Date”), will be asked to approve the following matters:

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”).

The issuance of 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) (the “Preferred Stock Units”), 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.

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

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).

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.

TABLE OF CONTENTS

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”).

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

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;

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

•

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

•

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.

•

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.

•

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)

Below Market Issuance of Common Stock

•

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.

•

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

TABLE OF CONTENTS

•

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

•

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

•

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

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

TABLE OF CONTENTS

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, 21st 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.

TABLE OF CONTENTS

ALLIANCE MMA INC.

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

NOTICE OF SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF ALLIANCE
MMA INC. SHAREHOLDERS
To Be Held on January 30, 2019
2:00 pm Eastern Standard Time
Hyatt Place
Boca Raton/Downtown
100 E. Palmetto Park Rd.,
Boca Raton, Florida 33432

To Alliance MMA Inc. (“AMMA”) Shareholders:

A special meeting in lieu of annual meeting of shareholders of AMMA (the “Special Meeting”) will be held 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 for the following purposes:

To consider and vote upon 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”).

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.

To consider and vote upon 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

TABLE OF CONTENTS

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.

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).

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”).

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

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;

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.

TABLE OF CONTENTS

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

TABLE OF CONTENTS

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

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR AMMA SHAREHOLDERS

What is the purpose of this document?

Alliance MMA, Inc., a Delaware corporation, or AMMA, and SCWorx Corp., a privately-owned Delaware corporation, (or “SCWorx”), and its shareholders have agreed to a Share Exchange under the terms of a Share Exchange Agreement, dated as of August 20, 2018, as amended by Amendment No. 1 thereto, which we refer to as the Share Exchange Agreement or SEA, by and among AMMA, SCWorx, and the stockholders of SCWorx, pursuant to which AMMA will acquire all the issued and outstanding capital stock of SCWorx. In connection with the Acquisition and the related financing transaction, certain transactions must be approved by the AMMA shareholders, as follows:

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 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.

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.

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

The consummation of the transactions contemplated by the Share Exchange Agreement are referred to as the Share Exchange or Acquisition and the above proposals to approve the Share Exchange and related transactions, including the Financing Proposal, the change of control and the Stock Split

TABLE OF CONTENTS

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:

•

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)

•

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

•

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

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.

What is being voted on?

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

TABLE OF CONTENTS

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.

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

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).

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”).

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

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;

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

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.

TABLE OF CONTENTS

When and where is the Special Meeting?

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).

Who may vote at the Special Meeting of shareholders?

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.

What is the quorum requirement for the Special Meeting?

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.

What vote is required to approve the Proposals?

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.

How can I vote?

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.

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

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

TABLE OF CONTENTS

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.

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

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.

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

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:

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

When is the Share Exchange expected to occur?

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.

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

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

What happens if the Share Exchange is not consummated?

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.

TABLE OF CONTENTS

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

TABLE OF CONTENTS

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)

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

PROPOSAL TWO APPROVE BELOW MARKET ISSUANCE OF SECURITIES COMPRISING MORE THAN 20% OF AMMA OUTSTANDING STOCK

(Item 2 of Proxy Card)

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

PROPOSAL THREE APPROVE AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF AMMA TO EFFECT REVERSE STOCK SPLIT

(Item 3 of Proxy Card)

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

PROPOSAL FOUR TO INCREASE TO 3,000,000 ON A POST-SPLIT ADJUSTED BASIS THE NUMBER OF SHARES AVAILABLE UNDER THE 2016 EQUITY INCENTIVE PLAN

(Item 4 of Proxy Card)

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

PROPOSAL FIVE ELECTION OF DIRECTORS

(Item 5 on proxy card)

You will have the opportunity to elect the Board of Directors, currently consisting of FOUR members, at the Special Meeting. Each director will be elected 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.

The Board of Directors has nominated the following individuals, each of whom currently serves as a director, for election as directors at the Special Meeting.

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE NOMINEES LISTED BELOW.

Joseph Gamberale
Charles K. Miller
Joel D. Tracy
Burt A. Watson

Each nominee has extensive business experience, education and personal skills that qualifies him to serve as an effective Board member. The specific experience, qualifications and skills of each nominee are set described elsewhere in this Proxy Statement.

TABLE OF CONTENTS

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:

	2017			2016
Audit Fees		$	367,795		$	378,493
Audit Related Fees			—			—
Tax Fees			—			—
Total		$	367,795		$	378,493

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

PROPOSAL NO. 7 — ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

(Item 7 of Proxy Card)

TABLE OF CONTENTS

SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information from this proxy statement but may not contain all of the information that may be important to you. Accordingly, we encourage you to read carefully this entire proxy statement, including the Share Exchange Agreement (as amended) and the Securities Purchase Agreement for the Preferred Stock Units and the related Certificate of Designation of Preferred Stock and form of Warrant, each incorporated into this proxy statement by reference to the exhibits to the Company’s Current Report on Form 8-K filed with the SEC on December 19, 2018 before you decide how to vote.

The Parties

AMMA

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

Business of AMMA

Alliance MMA, Inc., or AMMA, was incorporated in Delaware on February 15, 2015.

AMMA has substantially curtailed its MMA related business operations, and its business currently is comprised solely of its MMA promotion ticket solution, CageTix. AMMA is also currently focused on completion of the SCWorx Acquisition.

Shares of AMMA’s common stock are quoted on the Nasdaq Stock Market, under the symbol “AMMA.”

SCWorx Corp.

c/o Alliance MMA Inc.

590 Madison Ave., 21st Floor
New York, New York, 10022
Attn: Mark Schessel
Telephone: 212-739-7825

Business of SCWorx

SCWorx is a privately held provider of data content and services related to the repair, normalization and interoperability of information for healthcare providers, as well as big data analytics for the healthcare industry.

SCWorx has developed and markets health care information technology solutions and associated services that improve healthcare processes and information flow within hospitals and other healthcare facilities. SCWorx’s software enables a healthcare provider to simplify and organize its data (“data normalization”), allows the data to be utilized across multiple internal software applications (“interoperability”) and provides the basis for sophisticated data analytics (“big data”). Customers use our software to achieve multiple operational benefits, such as supply chain cost reductions, decreased accounts receivables aging, accelerated and completed billing in less than 72 hours, contract optimization, increased supply chain management and total cost visibility via dynamic AI connections that automatically synchronize and maintain purchasing (“MMIS”), Clinical (“EMR”) and finance (“CDM”) systems. SCWorx’s customers include some of the most prestigious healthcare organizations in the United States.

Special Meeting of AMMA’s Stockholders; Required Vote

As of December 17, 2018, the record date, the directors and executive officers of AMMA, and their affiliates, owned and were collectively entitled to vote 1,060,220 shares or approximately 6% of the 17,494,852 outstanding shares of AMMA common stock.

TABLE OF CONTENTS

Approval of each of the Proposals will require the affirmative vote of the holders of a majority of the outstanding shares of common stock present and entitled to vote thereon as of the record date at the Special Meeting.

Terms of the Transaction

The Share Exchange and Related Transactions

On August 20, 2018, AMMA, SCWorx, and the SCWorx stockholders entered into the Share Exchange Agreement, as amended by Amendment No. 1 thereto (the “Share Exchange Agreement” or “SEA”) pursuant to which AMMA will acquire all the issued and outstanding common stock of SCWorx and SCWorx will be a wholly-owned subsidiary of AMMA.

If the Share Exchange Proposals are approved by AMMA’s stockholders, AMMA will (i) purchase all of the issued and outstanding shares of 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. The issuance of shares of AMMA to SCWorx shareholders and the note holder is being consummated on a private placement basis pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

Consummation of the Share Exchange Agreement is conditioned on, among other things, (a) holders of a majority of the outstanding shares of common stock of AMMA cast approving the Share Exchange in accordance with the AMMA Certificate of Incorporation; and (b) the existing AMMA shares of common stock shall have been continually listed on the Nasdaq Capital Market, the AMMA shares to be issued in the Share Exchange shall be approved for listing on the Nasdaq Capital Market as of the Share Exchange closing date, and, to the extent required by Nasdaq Marketplace Rule 5110, the Nasdaq Listing Application for the combined company shall have been approved for listing (subject to official notice of issuance).

The Share Exchange Agreement contains provisions requiring AMMA and SCWorx to cease all existing discussions or negotiations with any third parties in respect of any acquisition proposal, as defined in the Exchange Agreement, and prohibiting AMMA from seeking an acquisition proposal subject to specified exceptions described in the Share Exchange Agreement.

After the Share Exchange, AMMA’s current shareholders will own approximately 14% of AMMA, and the former stockholders of SCWorx will own approximately 86% of AMMA (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 $1.25 million and related interest).

Reverse Stock Split

Concurrent with the closing of the Share Exchange, AMMA 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 upon the closing of the Acquisition (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). 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

TABLE OF CONTENTS

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.

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

Preferred Stock Unit Financing

Stockholders are being asked to approve 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 of $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.

Additional terms:

•

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

•

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

On December 18, 2018, AMMA closed $5.5 million in aggregate proceeds from the sale of Preferred Stock Units, comprised of 550,000 shares of convertible preferred stock and warrants to purchase 13,750,000 shares of common stock. The face value of the Preferred stock will, upon stockholder approval of the Financing Proposal, be convertible into shares of common stock at a conversion price of $0.20 per share and the warrant exercise price is $0.30 per share (in each case, subject to adjustment). In addition, AMMA issued Preferred Stock Units, comprised of approximately 67,500 shares of convertible Preferred Stock and warrants to purchase 1,687,500 shares of common stock to AMMA creditors in satisfaction of approximately $675,000 of indebtedness.

The amount of cash raised from the Preferred Stock Units must be kept in a reserve account pending the closing of the Acquisition, at which time the funds will be available to the combined company to fund its business plan.

If the AMMA shareholders do not approve the Preferred Stock Units or trading in AMMA common stock is suspended or the Company is delisted from Nasdaq at any time within 90 days of closing the SCWorx acquisition, AMMA would be required to redeem the preferred stock at face value (this in effect amounts to a refund of the Preferred Stock Unit purchase price).

Vote Required

The consummation of the Share Exchange and related transactions is conditioned upon the majority of the common stock voted by AMMA’s shareholders present and entitled to vote at the Special Meeting voting in favor of the Share Exchange.

TABLE OF CONTENTS

As of December 17, 2018, the record date, there were 17,494,852 shares of AMMA common stock issued and outstanding. Only AMMA shareholders who hold common stock of record as of the close of business on December 17, 2018 are entitled to vote at the Special Meeting of shareholders or any adjournment of the Special Meeting. Approval of all Proposals, including the Share Exchange Proposals, requires the affirmative vote of the holders of a majority of the issued and outstanding AMMA common stock entitled to vote thereon as of the record date present in person or represented by proxy at the Special Meeting. Abstentions are considered present for the purposes of establishing a quorum but will have the same effect as a vote “AGAINST” a Proposal. Broker non-votes will be considered present for the purposes of establishing a quorum, but not eligible to vote the applicable Proposal. A broker non-vote will have no effect on any of the Proposals.

The closing of the Share Exchange is expected to occur as soon as practicable after the Special Meeting. Upon completion of the Share Exchange, the board of directors of Alliance MMA, Inc. will rename the company “SCWorx Corp.”

Recommendations of the AMMA Board of Directors and Reasons for the Share Exchange

In light of the deterioration of AMMA’s MMA business and its resulting lack of operating capital and inability to raise capital, after careful consideration of the terms and conditions of the Share Exchange Agreement, the board of directors of AMMA determined that Share Exchange and the transactions contemplated thereby are fair to and in the best interests of AMMA and its shareholders. The Board of Directors believes that the SCWorx Acquisition was the best option available to AMMA to maximize potential shareholder value.

In reaching its decision with respect to the Share Exchange and the related transactions, the board of directors of AMMA reviewed various industry and financial data and the due diligence and evaluation materials provided by SCWorx. The board of directors did not obtain a fairness opinion on which to base its assessment. AMMA’s board of directors recommends that AMMA shareholders vote FOR each of the following proposals:

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”).

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 of $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.

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

TABLE OF CONTENTS

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.

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).

For further discussion of the recommendations of the board of directors and its reasons for the Share Exchange, see the section entitled “AMMA’s Board’s Reasons for the Approval of the Share Exchange”.

Interests of Certain Directors, Officers, and Affiliates in the Share Exchange

When you consider the recommendation of AMMA’s board of directors in favor of adoption of the Share Exchange Proposals and other Proposals, you should keep in mind that AMMA’s directors and officers have interests in the Share Exchange and related transactions that may be different from, or in addition to, your interests as a shareholder. In particular, one of AMMA directors has acquired Preferred Stock Units in satisfaction of indebtedness owed to him by the Company, and the President of AMMA will continue on as an officer of the combined company.

Management After the Share Exchange

Effective as of the Share Exchange closing date, the board of directors of AMMA is expected to consist of four members, including Charles K. Miller, a current member of AMMA’s board and an independent director. The members designated by SCWorx are expected to include Marc Schessel, Ira Ritter, and Robert S. Christie. In addition to Mr. Miller, Messrs. Ritter and Christie are also expected to be independent directors. After the consummation of the Share Exchange, Marc Schessel is expected to be the Chief Executive Officer and John Price the President and Chief Financial Officer. Mr. Price is currently President and Chief Financial Officer of AMMA.

The foregoing persons will be responsible for the management of the combined company. See “Directors and Executive Officers after the Share Exchange” elsewhere in this proxy statement.

No Dissenters’ or Appraisal Rights

Holders of AMMA common stock are not entitled to appraisal rights in connection with the Share Exchange.

Anticipated Accounting Treatment

The Share Exchange will be treated by AMMA as a reverse acquisition under the acquisition method of accounting in accordance with GAAP. For accounting purposes, SCWorx is considered to be acquiring AMMA in the Share Exchange. Therefore, the aggregate consideration paid in connection with the Share Exchange will be allocated to AMMA tangible and intangible assets and liabilities based on their fair market values. The assets and liabilities and results of operations of AMMA will be consolidated into the results of operations of SCWorx as of the completion of the Share Exchange.

TABLE OF CONTENTS

Material U.S. Federal Income Tax Consequences to holders of AMMA Common Stock in connection with the Share Exchange

The company believes that the Share Exchange will be tax free to the Company’s shareholders under IRC Sections 368(a)(1)(B) and 351.

YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX CONSEQUENCES OF THE SHARE EXCHANGE. THIS SUMMARY IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR SHAREHOLDER.

Regulatory Approvals

Consummation of the Share Exchange Agreement and related transactions is not subject to any additional federal or state regulatory requirements or approvals, including the Hart-Scott Rodino Antitrust Improvements Act of 1976, except for filings with the State of Delaware, the SEC and certain state “blue sky” filings necessary to effectuate the transactions contemplated by the Share Exchange Proposals.

AMMA must comply with applicable federal and state securities laws and the rules and regulations of the Nasdaq Capital Market in connection with the issuance of shares of AMMA common stock and the Preferred Stock Units and the filing of this proxy statement with the SEC.

Past Contacts, Transactions and Negotiations

The Company had no contacts, transactions or negotiations with SCWorx (or its affiliates) prior to May 2018. The Company commenced discussions with SCWorx in early May 2018. In June 2018, the Company and SCWorx executed a Securities Purchase Agreement (“SPA”) under which SCWorx agreed to purchase up to $1 million of convertible notes and warrants to purchase common stock (with a conversion/exercise price of $0.3725 per share (subject to adjustment). Through October 31, 2018, SCWorx had funded $750,000 of the aggregate $1 Million.

On December 18, 2018, the SPA was amended to increase the amount SCWorx could purchase by $250,000 to up to $1.25 million. The conversion/exercise price of the additional $500,000 convertible note is $0.20 per share). As of December 18, 2018, SCWorx has funded $275,000 of the remaining $500,000 and received (i) a $275,000 convertible promissory note, convertible into common shares at a conversion price of $0.20 per share, and warrants to purchase 343,750 common shares at an exercise price of $0.30 per share.

TABLE OF CONTENTS

PRO FORMA INFORMATION

Comparative Historical And Pro Forma Information

The unaudited pro forma condensed combined financial statements, as of September 30, 2018, have been prepared using the following assumptions:

•

Private placement of $5,500,000 of Series A Preferred Stock.

•

$318,000 of AMMA debt and accrued interest with board members will convert into 31,800 shares of AMMA Series A Preferred Stock including the issuance of 795,000 warrants with an exercise price of $0.30 per share.

•

$234,000 of AMMA debt with a third party will convert into 23,400 shares of AMMA Series A Preferred Stock including the issuance of 585,000 warrants with an exercise price of $0.30 per share.

•

$1.7 million of SCWorx related party debt and accrued interest will be satisfied through the issuance of 170,000 shares of AMMA Series A Preferred Stock including the issuance of 4,250,000 warrants with an exercise price of $0.30 per share.

•

$720,000 of AMMA debt to SCWorx will convert into 1,932,886 shares of AMMA common stock including the issuance of 483,221 warrants with an exercise price of $0.3725 per share.

•

$720,000 of SCWorx’s investment in AMMA and corresponding Note Payable on Alliance MMA’s books will be eliminated in consolidation.

•

$100,000 of payables related to discontinued operations will convert into 10,000 shares of AMMA preferred stock including the issuance of 250,000 warrants with an exercise price of $0.30 per share.

This information is only a summary and should be read together with the selected historical financial information summary included elsewhere in this proxy statement, and the historical financial statements of AMMA and SCWorx and related notes that are included elsewhere in this proxy statement. The unaudited AMMA and SCWorx’s pro forma combined per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement.

The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of AMMA and SCWorx would have been had the companies been combined during the period presented.

TABLE OF CONTENTS

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

TABLE OF CONTENTS

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

	Alliance MMA Inc. Historical Unaudited			SCWorx Corp. Historical Unaudited			Pro Forma Adjustments			Pro Forma Unaudited Combined Company
ASSET
Current assets:
Cash		$	4,787		$	21,578		$	5,500,000(1)		$	5,526,365
Accounts receivable, net			34,353			811,435			—			845,788
Investment in AMMA			—			720,000			(720,000)(2)			—
Due from shareholder			—			937,383			—			937,383
Prepaid and other assets			—			3,500			—			3,500
Total current assets			39,140			2,493,896			4,780,000			7,313,036
Unallocated purchase price			—			—			6,511,179(7)			6,511,179
Total assets		$	39,140		$	2,493,896		$	11,291,179		$	13,824,215
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Accounts payable and accrued expenses		$	579,216		$	466,144		$	(334,621)(3)		$	710,739
Notes payable – related parties			300,000			1,471,070			(1,771,070)(3)			—
Notes payable			920,000			—			(920,000)(2)(4)			—
Deferred revenue			—			495,432			—			495,432
Current liabilities – discontinued operations			425,604			—			(100,000)(5)			325,604
Total current liabilities			2,224,820			2,432,646			(3,125,691)			1,531,775
Total liabilities			2,224,820			2,432,646			(3,125,691)			1,531,775
Stockholder’s equity
Preferred Stock			—			—			7,905,691(1)(3)(4)(5)			7,905,691
Common stock			16,200			100			99,900(2)(6)			116,200
Additional paid-in capital			28,188,474			570,098			(23,979,075)(2)(6)(7)(8)			4,779,497
Shareholder distributions			—			(1,807)			—			(1,807)
Retained (deficit)			(30,390,354)			(507,141)			30,390,354			(507,141)
Total stockholders’ equity			(2,185,680)			61,250			14,416,870			12,292,440
Total liabilities and stockholder’s equity		$	39,140		$	2,493,896		$	11,291,179		$	13,824,215

(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

TABLE OF CONTENTS

(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

TABLE OF CONTENTS

SCWorx Inc.
(formerly Alliance MMA Inc.)
Pro Forma Condensed Combined Income Statement
For the Three Months ended September 30, 2018
(Unaudited)

	Alliance MMA Inc. Historical unaudited			SCWorx Corp. Historical unaudited			Pro Forma Adjustments(2)			Pro Forma Unaudited Combined Company
Revenue		$	27,868		$	1,102,810		$	—		$	1,130,678
Cost of revenue			—			100,448			—			100,448
Gross profit			27,868			1,002,362			—			1,030,230
General and administrative			743,494			160,567			—			904,061
Professional and consulting fees			193,784			—			—			193,784
Research and development			—			386,081			—			386,081
Total operating expenses			937,278			546,648			—			1,483,926
(Loss) income from operations			(909,410)			455,714			—			(453,696)
Net loss from discontinued operations, net of tax			(324,010)			—			324,010			—
Interest expenses			—			56,552			—			56,552
Income tax provision			—			—						—
Net (loss) income		$	(1,233,420)		$	399,162		$	324,010		$	(510,248)
Per share:
Weighted Average Shares Outstanding – Basic and Diluted			15,263,247			17,500			—			118,844,135(3)
(Loss) Income or Pro Forma Earnings Per Share – Basic and Diluted		$	(0.08)		$	22.81		$	—		$	(0.00)
Equivalent Pro Forma Earnings Per Share – Basic and Diluted(1)					$	0.004

(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

TABLE OF CONTENTS

SCWorx Inc.
(formerly Alliance MMA Inc.)
Pro Forma Condensed Combined Income Statement
For the Nine Months ended September 30, 2018
(Unaudited)

	Alliance MMA Inc. Historical unaudited			SCWorx Corp. Historical unaudited			Pro Forma Adjustments(2)			Pro Forma Unaudited Combined Company
Revenue		$	144,008		$	3,367,272		$	—		$	3,511,280
Cost of revenue			—			342,109			—			342,109
Gross profit			144,008			3,025,163			—			3,169,171
General and administrative			1,890,547			786,305			—			2,676,851
Impairment – intangible assets			231,037			—			—			231,037
Professional and consulting fees			1,014,947			—			—			1,014,947
Research and development			—			1,429,686			—			1,429,686
Total operating expenses			3,136,531			2,215,991			—			5,352,521
(Loss) income from operations			(2,992,523)			809,172			—			(2,183,350)
Net loss from discontinued operations, net of tax			(10,673,418)			—			10,673,418			—
Interest expenses			—			220,298			—			220,298
Income tax provision			—			—						—
Net (loss) income		$	(13,665,941)		$	588,874		$	10,673,418		$	(2,403,648)
Per share:
Weighted Average Shares Outstanding – Basic and Diluted			14,909,586			17,500			—			118,490,474(3)
(Loss) Income or Pro Forma Earnings Per Share – Basic and Diluted		$	(0.93)		$	33.65		$	—		$	(0.02)
Equivalent Pro Forma Earnings Per Share – Basic and Diluted(1)					$	0.01

(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

TABLE OF CONTENTS

Pro Forma Condensed Combined Income Statement
For the Year ended December 31, 2017

	Alliance MMA Inc. Historical Audited			SCWorx Corp. Historical Unaudited			Pro Forma Adjustments(2)			Pro Forma Unaudited, Combined Company
Revenue, net		$	4,217,704		$	2,528,013		$	(4,057,210)		$	2,688,507
Cost of revenue			2,691,398			331,915			(2,691,398)			331,915
Gross margin			1,526,306			2,196,098			(1,365,812)			2,356,592
General and administrative			8,141,113			874,974			(6,622,399)			2,393,688
Impairment – intangible assets			893,483			—			(893,483)			—
Impairment – goodwill			2,435,298			—			(2,435,298)			—
Litigation – settlement			250,000			—			—			250,000
Professional and consulting fees			1,080,011			—			(167,715)			912,296
Research and development			—			1,937,540			—			1,937,540
Total operating expenses			12,799,905			2,812,514			(10,118,895)			5,493,524
(Loss) from operations			(11,273,599)			(616,416)			8,753,083			(3,136,932)
Other expense			16,858			—			—			16,858
Interest expenses			—			132,096			—			132,096
Loss before income tax			(11,290,457)			(748,512)			8,753,083			(3,285,886)
Income tax provision			(688,106)			—			688,106			—
Net (loss)		$	(11,978,563)		$	(748,512)		$	9,441,189		$	(3,285,886)
Per share:
Weighted Average Shares Outstanding – Basic and Diluted			10,679,898			17,500			—			114,260,877(3)
(Loss) Income or Pro Forma Earnings Per Share – Basic and Diluted		$	(1.12)		$	(42.77)		$	—		$	(0.03)
Equivalent Pro Forma Earnings Per Share – Basic and Diluted(1)					$	(0.01)

(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)

(3)

Reflects share issuance and adjustment related to the SCWorx transaction.

See notes to unaudited pro forma condensed combined financial statements

TABLE OF CONTENTS

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).

TABLE OF CONTENTS

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”);

•

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.

TABLE OF CONTENTS

Facilities

AMMA maintains its principal executive offices at 590 Madison Avenue, 21st 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.

TABLE OF CONTENTS

PRICE RANGE OF SECURITIES AND DIVIDENDS

Shares of AMMA’s common stock are listed on the Nasdaq Stock Market, under the symbol “AMMA.” Shares of AMMA’s common stock commenced trading on October 6, 2016.

The table below sets forth the high and low sales prices per share of AMMA’s common stock, as reported on the Nasdaq Capital Market, for the period from October 6, 2016 (the date on which our common stock was first quoted on the Nasdaq Capital Market) through December 17, 2018.

	2016						2017						2018
	High			Low			High			Low			High			Low
First Quarter			**			**		$	3.97		$	2.60		$	1.50		$	0.45
Second Quarter			**			**		$	2.68		$	0.89		$	0.62		$	0.31
Third Quarter			**			**		$	2.40		$	0.96		$	0.42		$	0.16
Fourth Quarter		$	4.65		$	3.40		$	2.05		$	1.16		$	0.38*		$	0.19*

Through December 17, 2018

Commencing October 6, 2016

As of the record date for the Special Meeting, December 17, 2018, the outstanding shares of AMMA’s common stock were held by approximately 78 shareholders of record, and the shares of common stock of SCWorx were held by 19 shareholders of record.

Shares of SCWorx’ common stock do not publicly trade, and no established trading market for SCWorx’ shares of common stock is expected to develop. Upon the completion of the Share Exchange, AMMA will change its name to “SCWorx, Corp.” and AMMA and SCWorx anticipate that the common stock of the combined company will be listed on the Nasdaq Capital Market under the trading symbol “WORX.” The closing price of AMMA common stock on August 23, 2018 (which is the date immediately prior to public announcement of the Share Exchange), as reported on the Nasdaq Capital Market, was $0.19 per share. The closing price of AMMA common stock on December 17, 2018, as reported on the Nasdaq Capital Market, was $0.20 per share.

Neither AMMA nor SCWorx has paid any cash dividends on its common stock to date and neither intends to pay cash dividends prior to the completion of the Share Exchange or thereafter. Payment of any future dividends or distributions to AMMA’s shareholders or SCWorx’s stockholders, as applicable, will be at the discretion of AMMA’s board of directors and SCWorx’s board of directors, if and as applicable, and will depend on a number of factors, including future earnings, capital requirements, financial conditions and future prospects and other factors the board of directors may deem relevant. Furthermore, our ability to pay dividends is limited by the Delaware General Corporation Law, which provides that a corporation may pay dividends only out of existing “surplus,” which is defined as the amount by which a corporation’s net assets exceeds its stated capital.

Following the completion of the Share Exchange, the declaration of dividends will be at the discretion of the combined company’s board of directors and will be determined after consideration of various factors, including earnings, cash requirements, the financial condition of the combined company, applicable state law and government regulations, and other factors deemed relevant by the combined company’s board of directors.

TABLE OF CONTENTS

Alliance MMA, Inc.

Financial Statements of AMMA

Condensed Consolidated Balance Sheets
(Unaudited)

	September 30, 2018			December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents		$	4,787		$	42,848
Accounts receivable, net			34,353			—
Current assets – discontinued operations			—			602,386
Total current assets			39,140			645,234
Intangible assets, net			—			271,870
Long-term assets – discontinued operations			—			8,838,224
TOTAL ASSETS		$	39,140		$	9,755,328
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	579,216		$	843,554
Notes payable – related party			300,000			—
Notes payable			920,000			300,000
Current liabilities – discontinued operations			425,604			453,352
Total current liabilities			2,224,820			1,596,906
Long-term liabilities – discontinued operations			—			23,943
TOTAL LIABILITIES			2,224,820			1,620,849
Commitments and contingencies
Stockholders’ (deficit) equity:
Preferred stock, $.001 par value; 5,000,000 shares authorized at September 30, 2018 and December 31, 2017; no shares issued and outstanding			—			—
Common stock, $.001 par value; 45,000,000 shares authorized at September 30, 2018 and December 31, 2017; 16,200,369 and 12,662,974 shares issued and outstanding, respectively			16,200			12,663
Additional paid-in capital			28,188,474			24,646,229
Accumulated deficit			(30,390,354)			(16,524,413)
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY			(2,185,680)			8,134,479
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY		$	39,140		$	9,755,328

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

TABLE OF CONTENTS

Alliance MMA, Inc.

Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Revenue, net		$	27,868		$	40,293		$	144,008		$	160,494
Gross margin			27,868			40,293			144,008			160,494
Operating expenses:
General and administrative			743,494			512,145			1,890,547			1,518,714
Impairment – intangible assets			—			—			231,037			—
Professional and consulting fees			193,784			218,320			1,014,947			912,296
Total operating expenses			937,278			730,465			3,136,531			2,431,010
Loss from operations before income tax benefit			(909,410)			(690,172)			(2,992,523)			(2,270,516)
Income tax benefit			—			—			—			—
Net loss from continuing operations			(909,410)			(690,172)			(2,992,523)			(2,270,516)
Net loss from discontinued operations, net of tax			(324,010)			(1,771,882)			(10,673,418)			(4,865,446)
Net loss		$	(1,233,420)		$	(2,462,054)		$	(13,665,941)		$	(7,135,962)
Loss per share:
Loss from continuing operations:
Basic and diluted		$	(0.06)		$	(0.06)		$	(0.21)		$	(0.24)
Loss from discontinued operations:
Basic and diluted		$	(0.02)		$	(0.17)		$	(0.72)		$	(0.50)
Net Loss:
Basic and diluted		$	(0.08)		$	(0.23)		$	(0.93)		$	(0.74)
Weighted average number of shares used in per share calculation, basic and diluted			15,263,247			10,714,200			14,909,586			9,608,042

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

TABLE OF CONTENTS

Alliance MMA, Inc.

Condensed Consolidated Statement of Changes In Stockholders’ (Deficit) Equity
(Unaudited)

	Preferred Stock					Common Stock					Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ (Deficit) Equity
	Shares		Amount			Shares		Amount			Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ (Deficit) Equity
Balance – December 31, 2016		—		$	—		9,022,308		$	9,022		$	18,248,582		$	(4,545,850)		$	13,711,754
Stock based compensation related to employee stock option grants		—			—		—			—			121,442			—			121,442
Stock based compensation related to employee stock option grant – discontinued operations		—			—		—			—			427,155			—			427,155
Issuance of common stock related to acquisition of discontinued operations		—			—		1,621,905			1,622			3,443,168			—			3,444,790
Stock based compensation related to warrant issued for consulting services		—			—		—			—			169,401			—			169,401
Stock based compensation related to common stock issued for consulting services		—			—		150,000			150			148,350			—			148,500
Issuance of common stock units and warrants related to private placement		—			—		1,868,761			1,869			2,010,631			—			2,012,500
Stock based compensation related to option award for consulting services		—			—		—			—			77,500			—			77,500
Net loss		—			—		—			—			—			(11,978,563)			(11,978,563)
Balance – December 31, 2017		—		$	—		12,662,974		$	12,663		$	24,646,229		$	(16,524,413)		$	8,134,479
Stock based compensation related to employee and board of directors stock option grants		—			—		—			—			368,423			—			368,423
Stock based compensation related to employee stock option grant – discontinued operations		—			—		—			—			198,822			—			198,822
Stock based compensation related to repricing of employee warrant grant – discontinued operations		—			—		—			—			10,000			—			10,000
Stock based compensation related to issuance of common shares to former employees – discontinued operations		—			—		—			—			121,000			—			121,000
Stock based compensation related to issuance of shares in relation to legal settlement with shareholder		—			—		—			—			240,000			—			240,000
Stock based compensation related to warrants issued for consulting services		—			—		—			—			63,580			—			63,580
Stock based compensation related to common shares and warrants issued to debt holder		—			—		200,000			200			66,300			—			66,500
Non-cash dividend		—			—		—			—			200,000			(200,000)			—
Issuance of common stock related to public offering		—			—		2,200,000			2,200			1,943,800			—			1,946,000
Exercise of common stock warrants		—			—		1,056,750			1,057			305,400			—			306,457
Exercise of common stock options		—			—		80,645			80			24,920			—			25,000
Net loss		—			—		—			—			—			(13,665,941)			(13,665,941)
Balance – September 30, 2018		—		$	—		16,200,369		$	16,200		$	28,188,474		$	(30,390,354)		$	(2,185,680)

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

TABLE OF CONTENTS

Alliance MMA, Inc.

Condensed Consolidated Statements of Cash Flows
(Unaudited)

	Nine Months Ended September 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(13,665,941)		$	(7,135,962)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment – Intangible assets			231,037			—
Stock-based compensation			738,503			408,983
Amortization of acquired intangibles			40,833			57,137
Loss from discontinued operations			10,673,418			4,865,446
Changes in operating assets and liabilities:
Accounts receivable			(34,353)			—
Accounts payable and accrued liabilities			(239,338)			371,752
Net cash used in operating activities of continuing operations			(2,255,841)			(1,432,644)
Net cash used in operating activities of discontinued operations			(932,828)			(3,148,110)
Net cash used in operating activities			(3,188,669)			(4,580,754)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used in investing activities of discontinued operations			(21,849)			(1,008,950)
Net cash used in investing activities			(21,849)			(1,008,950)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock			1,946,000			1,525,000
Proceeds from exercise of stock option and warrants			306,457			—
Proceeds from notes payable			1,010,000			—
Proceeds from notes payable – related party			300,000			—
Payment on loan payable			(390,000)			—
Net cash provided by financing activities of continuing operations			3,172,457			1,525,000
Net cash provided by financing activities of discontinued operations			—			—
Net cash provided by financing activities			3,172,457			1,525,000
NET INCREASE DECREASE IN CASH			(38,061)			(4,064,704)
CASH – BEGINNING OF PERIOD			42,848			4,567,575
CASH – END OF PERIOD		$	4,787		$	502,871
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest		$	45,625		$	—
Cash paid for taxes		$	—		$	—
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued in conjunction with acquisition of SuckerPunch		$	—		$	1,328,847
Stock issued in conjunction with acquisition of Fight Time Promotions			—			287,468
Stock issued in conjunction with acquisition of National Fighting Championships			—			366,227
Stock issued in conjunction with acquisition of Fight Club OC			—			810,810
Stock issued in conjunction with acquisition of Sheffield video Library			—			8,500
Non-cash dividend			200,000			—
Exercise of stock option in settlement of payable balance			25,000			—

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

TABLE OF CONTENTS

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”);

•

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

TABLE OF CONTENTS

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

•

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.

TABLE OF CONTENTS

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.

TABLE OF CONTENTS

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.

TABLE OF CONTENTS

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.

TABLE OF CONTENTS

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).

TABLE OF CONTENTS

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.

TABLE OF CONTENTS

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

The results from discontinued operations were as follows:

	Three Months Ended						Nine Months Ended
	September 30, 2018			September 2017			September 30, 2018			September 30, 2017
Revenue, net		$	—		$	1,010,157		$	1,663,382		$	2,759,166
Cost of revenue			—			774,671			1,084,028			1,881,153
Gross margin			—			235,486			579,354			878,013
Operating expenses:
General and administrative			300,754			1,240,415			4,206,288			4,975,580
Professional and consulting fees			—			—			—			471
Other (income) expense			—			(672)			—			(217)
Total operating expenses			300,754			1,239,743			4,206,288			4,975,834
Loss from operations			(300,754)			(1,004,257)			(3,626,934)			(4,097,821)
Gain on disposal			96,746			—			764,064			—
Loss on disposal			(120,002)			—			(7,834,491)			—
Loss before provision for income tax			(324,010)			(1,004,257)			(10,697,361)			(4,097,821)
Income tax (provision) benefit			—			(767,625)			23,943			(767,625)
Loss from discontinued operations		$	(324,010)		$	(1,771,882)		$	(10,673,418)		$	(4,865,446)

As part of the cessation of its professional MMA promotion business in the second quarter 2018, the Company disposed of all long-lived fixed assets and realized a loss on disposal of approximately $223,000, the Company also impaired or wrote off intangible assets and goodwill and realized a loss on disposal of $6.9 million, wrote off receivables of $190,000 and other assets of $19,000, which is included as a component of net loss from discontinued operations, net of tax for the nine months ended September 30, 2018.

During the second quarter 2018, the Company sold all the professional MMA promotion businesses, except for Victory, FT and NFC, to the former business owners and terminated/settled existing employment agreements. In relation to the promotion business disposals, the Company settled the $310,000 earn-out liability related to the Shogun acquisition with the issuance of 366,072 common stock options with a Black-Scholes value of $94,000, issued 30,000 common stock options to a promoter as severance, and incurred approximately $246,000 of additional liabilities related to severance payments to former employees. The Company realized a gain of approximately $160,000 related to the settlement of outstanding accounts payable and a gain of approximately $276,000 related to settlement with a promoter of customer prepayments and recorded a $15,000 receivable from the promoter related to the sale of the business. On July 30, 2018, the Company entered a settlement agreement, effective as of May 31, 2018, with a former employee, in relation to the termination of his employment. The Company agreed to pay the former employee $129,800 and issue a fully vested stock option grant dated July 30, 2018 for 75,000 common shares with a life of 5 years and exercise price of $0.20. In June 2018, the Company abandoned the Cherry Hill, New Jersey promotion office and recorded a $167,500 charge for the remaining contractual lease payments, refer to “Note 7 Commitments and contingencies”.

In July 2018, the Company entered a separation agreement with a former employee and agreed to pay $50,000 in exchange for terminating the employment agreement. On September 26, 2018, the Company entered an agreement to sell the Athlete Management business, SuckerPunch, to the former business owners, the agreement had an effective date of July 1, 2018. The parties agreed to terminate/settle the existing employment agreements. One of the former employees was paid severance until August 31, 2018 and issued the remaining 108,289 common shares held in escrow related to the SuckerPunch acquisition.

TABLE OF CONTENTS

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

The Company recognized a stock-based compensation charge of $31,000 related to the issuance of the 108,289 common shares. The other former employee was paid severance through September 15,2018 and had his warrant to purchase 93,583 common shares repriced from $3.74 to $0.3725. The Company recognized a stock-based compensation charge of $10,000 related to the repricing of the common stock warrant. The Company recognized a $70,000 loss in relation to the disposal of the SuckerPunch business. In conjunction with the settlement with the former owner of Fight Club OC, Roy Englebrecht, the shares held in escrow were released as part of the separation agreement. The Company recorded stock based compensation expense of $55,000, the fair value of the shares on the date the agreement was entered. In September 2018, the Company sold the Victory name and related business assets to a vendor in settlement of an outstanding payable balance of $33,064. In September 2018, the Company sold Fight Time to the former business owner and terminated the existing settlement arrangement resulting in a gain of $16,667. In October 2018, the Company resolved its outstanding litigation with Mazzeo Song LLP resulting in the Company agreeing to pay $35,000 in settlement of the outstanding payable balance. The Company realized a $47,000 gain during the third quarter 2018 on the settlement as all invoices had previously been accrued. On November 12, 2018 the Company entered into a separation agreement with the former promoter of Victory and agreed to issue the 121,699 shares held in escrow related to the Victory acquisition. The effective date of the agreement was September 30, 2018 and as a result the Company recognized $35,000 of stock-based compensation expense.

As of September 30, 2018, the Company has sold all the professional MMA promotion businesses, except for NFC.

The current assets, long-term assets, current liabilities and long-term liabilities of discontinued operations were as follows:

	September 30, 2018			December 31, 2017
Cash		$	—		$	305,349
Accounts receivable, net			—			225,787
Other receivables			—			71,250
Current assets – discontinued operations		$	—		$	602,386

	September 30, 2018			December 31, 2017
Property and equipment, net		$	—		$	259,463
Intangible assets, net			—			2,615,224
Goodwill			—			5,963,537
Long-term assets – discontinued operations		$	—		$	8,838,224

	September 30, 2018			December 31, 2017
Accounts payable		$	8,074		$	67,761
Accrued liabilities			417,530			385,591
Current liabilities – discontinued operations		$	425,604		$	453,352

	September 30, 2018			December 31, 2017
Long-term deferred tax liability		$	—		$	23,943
Long-term liabilities – discontinued operations		$	—		$	23,943

TABLE OF CONTENTS

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

Note 4. Business Combinations

During 2017, we completed several business acquisitions. We have included the financial results of these business acquisitions in our unaudited condensed consolidated financial statements from their respective dates of acquisition. Goodwill generated from all business acquisitions was primarily attributable to expected synergies from future growth and potential monetization opportunities.

All acquisitions have been accounted for as business acquisitions, under the acquisition method of accounting.

In connection with respective asset purchase agreements, the Company entered into trademark license agreements to license the trademark used by the underlying MMA business.

The Company completed no acquisitions during the nine months ended September 30, 2018.

The following acquisitions were completed during 2017:

SuckerPunch

On January 4, 2017, Alliance MMA acquired the stock of Roundtable Creative, Inc., a Virginia corporation d/b/a SuckerPunch Entertainment, a leading fighter management and marketing company, for an aggregate purchase price of $1,686,347, of which $357,500 was paid in cash, $1,146,927 was paid with the issuance of 307,487 shares of Alliance MMA common stock valued at $3.73 per share, the fair value of Alliance MMA common stock on January 4, 2017, and $181,920 was paid with the issuance of a warrant to acquire 93,583 shares of the Company’s common stock.

Fight Time

On January 18, 2017, Alliance MMA acquired the mixed martial arts promotion business of Fight Time Promotions, LLC (“Fight Time”) for an aggregate consideration of $371,468, of which $84,000 was paid in cash and $287,468 was paid with the issuance of 74,667 shares of the Alliance MMA’s common stock valued at $3.85 per share, the fair value of Alliance MMA common stock on January 18, 2017.

National Fighting Championships

On May 12, 2017, Alliance MMA acquired the mixed martial arts promotion business of Undisputed Productions, LLC, doing business as National Fighting Championships or NFC for an aggregate consideration of $506,227, of which $140,000 was paid in cash and $366,227 was paid with the issuance of 273,304 shares of Alliance MMA common stock valued at $1.34 per share, the fair value of Alliance MMA common stock on May 12, 2017.

Fight Club Orange County

On June 14, 2017, Alliance MMA acquired the mixed martial arts promotion business of The Englebrecht Company, Inc., doing business as Roy Englebrecht Promotions and Fight Club Orange County, for an aggregate consideration of $1,018,710, of which $207,900 was paid in cash and $810,810 was paid with the issuance of 693,000 shares of the Company’s common stock valued at $1.17 per share, the fair value of Alliance MMA common stock on June 14, 2017.

Victory Fighting Championship

On September 28, 2017, Alliance MMA acquired the mixed martial arts promotion business of Victory Fighting Championship, LLC, doing business as Victory Fighting Championship, for an aggregate consideration of $822,938, of which $180,000 was paid in cash and $642,938 was paid with the issuance of 267,891 shares of the Company’s common stock valued at $2.40 per share, the fair value of Alliance MMA common stock on September 28, 2017.

TABLE OF CONTENTS

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

Final Purchase Allocation — SuckerPunch

As consideration for the acquisition of SuckerPunch, the Company delivered the following amounts of cash and shares of common stock.

			Cash						Shares						Warrant Grant						Consideration Paid
SuckerPunch				$	357,500						307,487						93,583					$	1,686,347

In connection with the acquisition, 108,289 shares of the 307,487 shares of common stock that were issued as part of the purchase price were placed into escrow to guarantee the financial performance of SuckerPunch post-closing. Accordingly, if the gross profit was less than $265,000 during fiscal year 2017, all 108,289 shares held in escrow would have been forfeited. During the third quarter 2018, Management entered a separation agreement with the former owner of SuckerPunch and released the shares held under escrow, and recorded stock based compensation expense of $31,000, the fair value of the shares on the date the agreement was entered.

The following table reflects the final allocation of the purchase price for SuckerPunch to identifiable assets, intangible assets, goodwill and identifiable liabilities:

	Final Fair Value
Cash		$	—
Accounts receivable, net			—
Intangible assets			210,000
Goodwill			1,522,605
Total identifiable assets		$	1,732,605
Total identifiable liabilities			(46,258)
Total purchase price		$	1,686,347

During the three months ended June 30, 2018, the Company recognized an impairment charge of the net intangible assets and goodwill and fully wrote off these assets. The impairment charge is a component of net loss from discontinued operations, net of tax for the nine months ended September 30, 2018.

Final Purchase Allocation — Fight Time Promotions

As consideration for the acquisition of the MMA promotion business of Fight Time, the Company delivered the following amounts of cash and shares of common stock.

			Cash						Shares						Consideration Paid
Fight Time				$	84,000						74,667					$	371,468

In connection with the business acquisition, 28,000 shares of the 74,667 shares of common stock that were issued as part of the purchase price were placed into escrow to guarantee the financial performance of Fight Time post-closing. If the gross profit of Fight Time was less than $60,000 during fiscal year 2017, all 28,000 shares held in escrow were to be forfeited. During the first quarter 2018, Management entered a separation agreement with the former owner of Fight Time and released the shares held under escrow.

TABLE OF CONTENTS

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

The following table reflects the final allocation of the purchase price for the business of Fight Time to identifiable assets, intangible assets, goodwill and identifiable liabilities:

	Final Fair Value
Cash		$	—
Accounts receivable			—
Intangible assets			140,000
Goodwill			231,468
Total identifiable assets		$	371,468
Total identifiable liabilities			—
Total purchase price		$	371,468

During the year ended December 31, 2017 the Company recognized an impairment charge of the intangible assets and goodwill and fully wrote off these assets.

Final Purchase Allocation — National Fighting Championships

As consideration for the acquisition of the MMA promotion business of NFC, the Company delivered the following amounts of cash and shares of common stock.

			Cash						Shares						Consideration Paid
NFC				$	140,000						273,304					$	506,227

In connection with the business acquisition, 81,991 shares of the 273,304 shares of common stock that were issued as part of the purchase price were placed into escrow to guarantee the financial performance of NFC post-closing. Accordingly, if the gross profit of NFC was less than $100,000 during the 12-month period following the acquisition, all 81,991 shares held in escrow will be forfeited. The Company is currently in negotiations with the former owner of NFC to dispose of this business.

The following table reflects the final allocation of the purchase price for the business of NFC to identifiable assets, intangible assets, goodwill and identifiable liabilities:

	Final Fair Value
Cash		$	—
Accounts receivable			—
Fixed assets			20,000
Intangible assets			180,000
Goodwill			306,227
Total identifiable assets		$	506,227
Total identifiable liabilities			—
Total purchase price		$	506,227

In conjunction with the cessation of the MMA operations, the Company wrote off the residual intangible and tangible assets which is included as a component of discontinued operations — loss on disposal, for the nine months ended September 30, 2018.

TABLE OF CONTENTS

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

Final Purchase Allocation — Fight Club OC

As consideration for the acquisition of the MMA promotion business of Fight Club OC, the Company delivered the following amounts of cash and shares of common stock.

			Cash						Shares						Consideration Paid
Fight Club OC				$	207,900						693,000					$	1,018,710

Among the assets purchased is a cash balance of $159,000 related to customer deposits on ticket sales for future 2017 MMA promotion events. In connection with the business acquisition, 258,818 shares of the 693,000 shares of common stock that were issued as part of the purchase price were placed into escrow to guarantee the financial performance of Fight Club OC post-closing. Accordingly, in the event the gross profit of Fight Club OC was less than $148,500 during the 12-month period following the acquisition, all 258,818 shares held in escrow would have been forfeited. In conjunction with the settlement with the former owner of Fight Club OC, Roy Englebrecht, the shares held in escrow were released as part of the separation agreement. The Company recorded stock based compensation expense of $55,000, the fair value of the shares on the date the agreement was entered.

The following table reflects the final allocation of the purchase price for the business of the Fight Club OC to identifiable assets, intangible assets, goodwill and identifiable liabilities, and preliminary pro forma intangible assets and goodwill:

	Final Fair Value
Cash		$	159,000
Accounts receivable			—
Intangible assets			270,000
Goodwill			748,710
Total identifiable assets		$	1,177,710
Total identifiable liabilities			(159,000)
Total purchase price		$	1,018,710

Final Purchase Allocation — Victory Fighting Championship

As consideration for the acquisition of the MMA promotion business of Victory, the Company delivered the following amounts of cash and shares of common stock.

			Cash						Shares						Consideration Paid
Victory Fighting Championship				$	180,000						267,891					$	822,938

In connection with the business acquisition, 121,699 shares of the 267,891 shares of common stock that were issued as part of the purchase price were placed into escrow to guarantee the financial performance of Victory post-closing. Accordingly, in the event the gross profit of Victory is less than $140,000 during the 12-month period following the acquisition, all 121,699 shares held in escrow would have been forfeited. Additionally, 146,192 shares were placed into a separate escrow to indemnify the Company for potential additional expenses incurred by Victory prior to the acquisition and to cover any uncollectible accounts receivable. During the third quarter 2018, Management entered a separation agreement with the former owner of Victory and released the shares held under escrow, and recorded stock based compensation expense of $35,000, the fair value of the shares on the date the agreement was entered.

TABLE OF CONTENTS

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

The following table reflects the final allocation of the purchase price for the business of Victory to identifiable assets, intangible assets, goodwill and identifiable liabilities:

	Final Fair Value
Cash		$	—
Accounts receivable			32,180
Fixed assets			30,000
Intangible assets			290,000
Goodwill			578,167
Total identifiable assets		$	930,347
Total identifiable liabilities			(107,409)
Total purchase price		$	822,938

Note 5. Goodwill and Purchased Identifiable Intangible Assets

Goodwill

In May 2018, the Company ceased all professional MMA promotion operations and committed to an exit/disposal plan of the promotion businesses. In September 2018, the Company ceased all athlete management operations and extended its exit/disposal plan to SuckerPunch. In conjunction with the discontinued operations, $5,963,537 of Goodwill was classified as a component of long term assets — discontinued operations within the December 31, 2017, condensed consolidated balance sheet, which was subsequently impaired during the second quarter 2018. Refer to “Note 3 Discontinued Operations”.

During the second quarter of 2018, the Company recorded a goodwill impairment charge related to the SuckerPunch acquisition of $1.5 million, which is included as a component of net loss from discontinued operations, net of tax for the nine months ended September 30, 2018.

Intangible Assets

During the second quarter of 2018, the Company recorded an intangible impairment charge of $231,037 related to the write down of the ticketing software and promoter relationships acquired intangible assets from the CageTix business acquisitions, which is included as a component of operating expenses for the nine months ended September 30, 2018.

During the second quarter of 2018, the Company recorded an intangible impairment charge of $182,546 related to the write down of the trademark and brand, fighter contracts, and sponsor relationships acquired intangible assets from the SuckerPunch business acquisitions, which is included as a component of net loss from discontinued operations, net of tax for the nine months ended September 30, 2018.

The change in the carrying amounts of intangible assets for the nine months ended September 30, 2018 is as follows:

Balance as of December 31, 2017	$	271,870
Amortization		40,833
Impairment – intangibles (CageTix)		231,037
Balance as of September 30, 2018	$	—

TABLE OF CONTENTS

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

Identified intangible assets consist of the following:

		September 30, 2018												December 31, 2017
Intangible assets	Useful Life	Gross Assets			Accumulated Amortization			Impairment			Net			Gross Assets			Accumulated Amortization			Net
Ticketing software	3 years		$	90,000		$	(52,500)		$	(37,500)		$	—		$	90,000		$	(37,500)		$	52,500
Promoter relationships	6 years			277,099			(83,562)			(193,537)			—			277,099			(57,729)			219,370
Total intangible assets, gross			$	367,099		$	(136,062)		$	(231,037)		$	—		$	367,099		$	(95,229)		$	271,870

Amortization expense for the three months ended September 30, 2018 and 2017, was $0 and $19,046, respectively.

Amortization expense for the nine months ended September 30, 2018 and 2017, was $40,833 and $57,137, respectively.

In May 2018, the Company ceased all professional MMA promotion operations and committed to an exit/disposal plan of the promotion business. In conjunction with the discontinued operations, $2,615,224 million of intangible assets, net, were classified as long term assets — discontinued operations within the December 31, 2017, condensed consolidated balance sheet, which were disposed of during the second quarter 2018.

As of September 30, 2018, the balance of intangible assets was $0.

Note 6. Debt

Notes Payable

In December 2017, the Company issued a promissory note to an individual for $300,000 of borrowings for operating capital leading up to our public offering in January 2018. The note had a maturity of 30 days, an annual interest rate of 40%, and was paid in full at maturity in January 2018 including interest of $45,000. The note was personally guaranteed by Joseph Gamberale, one of our board members.

In May 2018, the Company issued a promissory note to an individual for $90,000 of borrowings for operating capital. The note had a maturity of June 30, 2018, an annual interest rate of 6%, and was paid in full in June 2018, including interest of $625. The note was secured by our common shares in Round Table Creative, Inc.

On May 9, 2018, the Company borrowed $200,000 from an individual pursuant to a promissory note. The note bears interest at 40% annually and initially matured on June 25, 2018. In June 2018, the note holder agreed to extend the maturity to December 31, 2018. In September 2018, the Company agreed to issue the note holder 200,000 common shares with a fair value of $58,000 and 50,000 warrants with an exercise price of $0.29, term of 5 years, and Black-Scholes fair value of $8,500, in exchange for the note holder’s agreement to convert all interest under the loan into common stock and extend the note to December 31, 2018. Mr. Gamberale personally guaranteed the note and Mr. Gamberale and Mr. Tracy agreed to subordinate their existing notes to the repayment of this note. Interest expense for the three and nine months ended September 30, 2018 was $22,471 and $34,425, respectively.

On June 28, 2018, the Company entered into a Securities Purchase Agreement with SCWorx, under which the Company agreed to sell up to $1M 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 bears interest at 10% annually. The Warrants are exercisable for shares of common stock at an exercise price of $0.3725.

	PAGE
QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR AMMA SHAREHOLDERS		1
DELIVERY OF DOCUMENTS TO AMMA SHAREHOLDERS		6
PROPOSALS TO BE VOTED ON		7
SUMMARY OF THE PROXY STATEMENT		10
PRO FORMA INFORMATION		16
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION		17
AMMA’S BUSINESS		25
PRICE RANGE OF SECURITIES AND DIVIDENDS		27
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF AMMA		96
SCWORX BUSINESS		106
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SCWORX CORP		111
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		144
SPECIAL MEETING OF AMMA SHAREHOLDERS		145
PROPOSAL 1 — THE SHARE EXCHANGE PROPOSAL		150
PROPOSAL 2 — THE FINANCING PROPOSAL		154
PROPOSAL 3 — THE STOCK SPLIT PROPOSAL		156
PROPOSAL 4 — APPROVAL OF THE SECOND AMENDED AND RESTATED 2016 EQUITY INCENTIVE PLAN		161
PROPOSAL 5 — ELECTION OF DIRECTORS		165
PROPOSAL 6 — APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		167
PROPOSAL NO. 7 — ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS		167
PROPOSAL NO. 8 — ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS		168
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF AMMA PRIOR TO THE SHARE EXCHANGE		170
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF SCWORX PRIOR TO THE SHARE EXCHANGE		171
DIRECTORS, EXECUTIVE OFFICERS, EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE		172
CERTAIN TRANSACTIONS		181
DESCRIPTION OF AMMA’S SECURITIES		182
EXPERTS		184
SHAREHOLDER PROPOSALS AND OTHER MATTERS		184
WHERE YOU CAN FIND ADDITIONAL INFORMATION		184
HOUSEHOLDING		184
FUTURE SHAREHOLDER PROPOSALS		185
STOCKHOLDER PROPOSALS FOR 2019 ANNUAL MEETING OF STOCKHOLDERS		185
INFORMATION INCORPORATED BY REFERENCE		185
ANNEX A		A-1
ANNEX B		B-1

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)			(c)
Equity compensation plans approved by security holders		1,941,072		$	0.89		58,928
Equity compensation plans not approved by security holders		—			—		—
Total		1,941,072		$	0.89		58,928