Company Overview Alliance MMA, Inc. (NASDAQ: AMMA) Alliance MMA (NASDAQ: AMMA) is a professional mixed martial arts (MMA) company that brings together the best regional productions. It was incorporated in 2015 for acquiring businesses that engage in the promotion of MMA events, known June 8, 2017 as promotions. Alliance MMA is the only publicly-traded MMA promotions Current Price: $1.15 company. Target Price: $3.70 Valuation Market Data We are valuing AMMA using a 4.0 P/S multiple applied to our FY19 sales estimate Fiscal Year December of $16.8 million. This gives us a near-term target price of $ 3.70 per share. Industry Mixed Martial Arts Market Cap $10.81M Investment Highlights Insider Ownership 6.8% Shares Outstanding 9.4M Equity Float 8.1M • Alliance MMA is the first publicly-traded Mixed Martial Arts (MMA) Avg. Volume (3 mo.) 1.4M company As of June 9, 2017 o First of its kind to bring together the top regional MMA promotions in the US • Mixed Martial Arts is a multi-billion-dollar industry Income Statement Snapshot TTM o UFC is valued at $4.5 billion and generated about $600 million in revenue in Revenue $0.76M FY15 Net Loss ($2. 3M) • AMMA generated $755,000 in revenue in 1Q17; Gross profit margin was Balance Sheet Snapshot 38% MRQ o The Company grew revenue 28% QoQ and produced a total of 13regional Cash $2.8M MMA promotions across the country Debt $0.0M • AMMA’s acquisitions are high profile MMA brands that have a solid fan base and great management • AMMA is on road to generate record revenue in FY17 o The Company has completed 12 events year-to-date and has at least 45 additional events scheduled for the remainder of FY17 • AMMA is a stepping stone for the next generation of fighters and champions for the UFC and other premier MMA promotions • Company’s management team has extensive industry experience with major MMA brands Alliance MMA is the first publicly-traded Mixed Martial Arts (MMA) company. AMMA has a first mover advantage, bringing together top local and regional MMA promotions (events) in the US. The Company completed its NASDAQ IPO in October 2016 and raised approximately $10 million from the IPO, selling a total of 2.2 million shares, and forming the largest group of regional MMA promotions in the US. Since its inception, the Company has acquired nine MMA organizations and added existing MMA business support units, such as SuckerPunch, Alliance Sports Media, and CageTix. Operating as a centralized management organization, AMMA applies industry best practices to maximize profitability. Headquartered in New York, AMMA currently operates promotions in ten of the top 20 major media markets cities and plans to expand into 20 cities nationally by the end of 2017. The expanding national footprint will allow the company to increase its viewership, number of events, customer base, number of contracted fighters, and sponsorship deals; thus, increasing the overall revenue run rate. Figure 1: AMMA’s MMA Event The Company’s core mission is to identify and cultivate the next generation of fighters and champions for the Ultimate Fighting Championship (UFC) and other MMA promotions. It provides a platform to fighters between the ages of 18-34 as the go to brand for those seeking the “College Hoops” of MMA and ultimately providing them a platform to reach their true potential and advance to the sport’s highest level of professional MMA competition. Mixed Martial Arts is a multi-billion-dollar industry. Ultimate Fighting Championship (UFC) was an MMA fight club purchased by casino moguls Frank and Lorenzo Fertitta. Over a period of 15 years, the Fertitta brothers grew the club into a $4.2 billion sports empire. The closest competitor to UFC, World Wrestling Entertainment (WWE), is valued at $1.5 billion. UFC generated about $600 million in revenue in FY15 and signed a $700 million, seven-year broadcasting deal signed with FOX. MMA events bring celebrities, high rollers, and rabid fans into an arena much like a gladiator event. Typical UFC events have a seating capacity of between 15,000-20,000. UFC draws its revenue from various sources including ticketing, TV advertisements, sponsorships, and other celebrity deals. Figure 2: UFC Fighters in Action In mid-2016, the Fertitta brothers sold UFC for a staggering $4.2 billion, cashing out for a significant ROI (they bought the club out of bankruptcy for $2 million in 2001). UFC has viewership in more than 150 countries around the globe, reaching 1.1 billion households. UFC stages an average of 40 events each year across the US, with approximately 550 fighters participating. AMMA’s business model is similar to UFC’s model. Long-term, AMMA has the potential to generate rapid revenue growth with its events operating in regional markets across the United States, in addition to the international expansion. The Company’s near-term strategy is to acquire or create regional MMA promotions in top 20 media markets across the U.S. It will target high- revenue opportunities with proven marketing and audience reach. As the Company expands its national footprint it will seek to secure high-value sponsorship agreements with prominent consumer brands. AMMA’s management acts as an umbrella over its regional events which are managed locally. Also, by targeting young aspiring MMA fighters in regional markets who strive to make it to the UFC and other top-tier MMA promotions, AMMA has a significant opportunity to showcase future fighters to fighter management firms and managers; thus, providing a source for in-house talent development that will reap ongoing benefits. AMMA generated $755,000 in revenue in 1Q17; Gross profit margin was 38%. AMMA grew revenue 28% QoQ in 1Q17 and produced a total of 13 regional MMA promotions. The Company has demonstrated the ability to produce high gross margins (38% in 1Q17) and we believe margins will continue to improve going forward, driven primarily by lower relative costs as they achieve business efficiencies with further benefit from the addition of new events and increased ticket sales. During the first quarter, the Company continued to incur expenses related to building out the necessary infrastructure to support future growth, including recruiting key executives and support personnel staff. The Company has multiple potential sources of revenue: 1. Regional MMA Events 2. Media Distribution 3. National Sponsorships 4. Fighter Management Regional MMA events generate revenue via ticket sales, venue fees from casinos and local and regional sponsorship agreements. This also may include revenue from food, beverage, merchandise sales and ticket services such as CageTix. CageTix is an electronic ticking platform that focuses specifically on Mixed Martial Arts. This service allows consumers to target a specific athlete in an MMA promotion and award that athlete with a percentage of the ticket sale; consumers can put money directly into the pocket of the fighter. Since its inception, CageTix has been used in 1,200 MMA events and currently services 64 MMA promotions, operating in 106 cities. In 2014, CageTix sold over 15,883 tickets to 6,291 customers. The acquisition of CageTix will further accelerate revenue growth for AMMA. Media Distribution revenue is generated from monetization of events through broadcast television advertising, internet streaming pay-per-view fees, distribution and licensing of content. AMMA’s MMA Promotions Operating States Cage Fury Fighting Championship Pennsylvania/ New Jersey Shogun Fights Maryland Hosier Fight Club Illinois/Indiana V3 Fights Tennessee/ Mississippi Combat Games Washington Iron Tiger Fight Series Ohio Fight Time Promotions Florida National Fighting Championship Georgia “TBD” (Eric Del Fierro*) California “TBD” (John Prisco*) Florida Table 1: Current Alliance MMA Promotions *Eric Del Fierro, founder of Total Combat which produced 35 MMA promotions in Southern California and Mexico, joined the Company as its General Manager in the San Diego, California market *John Prisca, founder of Extreme Fighting Championships (XFC), has joined the Company to spearhead its promotional debut in the Tampa, Florida market Fighter Management revenue is earned from fighter purse commissions at the completion of events. This also includes third-party pay-per-view sales, personal brand sponsorships, and other ancillary activities. Also, the acquisition of SuckerPunch provides the company with significant fighter management revenue. SuckerPunch has 100+ fighters under contract, and approximately dozen of its fighters have are fighting at the UFC level. The Company emphasizes the importance of General Managers (GMs) for each of promotions. GMs are responsible for business development, matchmaking fighters, regulatory compliance with local and state commissioners, venue selection, fighter relations, and regional sponsorship deals. Figure 3: AMMA Fighters in Action AMMA plans to pursue opportunities in Asia, Europe, Middle East, Africa, Central and South America. Scott Sheeley, the former owner of Iron Tiger Fight Series, will lead the expansion into new international markets. AMMA’s near-term goal is to secure 20 regional MMA promotion markets by the end of FY17. Long-term the company aims to host more than 125 events per year, with more than 1,000 contracted fighters. We believe that the company will have made substantial progress into international markets, securing major brand sponsorship revenue for live MMA events, digital media and Alliance MMA fighters by the end of FY18. AMMA’s acquisitions are high profile MMA brands that have a solid fan base and great management. Each of the Company’s acquisitions are high profile MMA brands that have a solid fan base and great management. This provides the Company with necessary cash flows to continue its business expansion. Some highlights on its acquisitions: Cage Fury Fighting Championship (CFFC) operates in Pennsylvania and New Jersey. It is ranked in the top 10 of all regional MMA brands and has promoted over 60 professional MMA events.