UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
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EXPLANATORY NOTE
This Amendment No. 1 to the Annual Report on Form 20-F (the “Amendment”) is being filed to amend and supplement the Annual Report on Form 20-F for the fiscal year ended December 31, 2024, originally filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2025 (the “Original Filing”).
The purpose of this Amendment is to amend the following sections of the Original Filing: (i) Part I – Item 5. Operating and Financial Review and Prospects; (ii) Part I – Item 11. Quantitative and Qualitative Disclosure About Market Risk; and (iii) Part III – Item 18. Financial Statements.
The final version of the Original Filing was not provided to the Company’s independent registered public accounting firm (the “Auditor”) prior to filing. In addition, the Company did not receive authorization from the Auditor to include the audit report in the Original Filing. As a result, the version of the audit report included in the Original Filing was not final and did not include the additional language included under “Explanatory Paragraph” regarding segment reporting in Note 21 for the years ended December 31, 2023 and 2022 that is contained in the Auditor’s audit report included in this Amendment. Prior to filing the Original Filing, the Auditor had reviewed and approved several prior drafts of the Original Filing, including the audited financial statements, and the financial statements included in the Original Filing are consistent with such prior drafts in all material respects.
As a result of this oversight, the Company has also identified certain immaterial changes in the sections named above that will be made to the Original Filing. These changes relate to the addition of certain disclosures and revisions to numbers to reflect adjustments to number footings.
The Company has discussed this matter with the Auditor and is committed to maintaining robust disclosure controls and procedures and is taking steps to ensure that all future filings are provided to the Auditor in final form prior to submission to the SEC.
The Company does not believe that this procedural oversight or the immaterial changes, including those to the audit report, have any impact on the accuracy or reliability of its financial statements or other disclosures contained in the Original Filing.
This Amendment does not reflect events occurring after the filing of the Original Filing and does not modify or update the disclosure therein in any way except as described above. Accordingly, this Amendment should be read in conjunction with the Original Filing.
TABLE OF CONTENTS
| Page | |||
| PART I | |||
| Item 5. | Operating and Financial Review and Prospects | 1 | |
| 5.A. | Operating Results | 1 | |
| 5.B. | Liquidity and Capital Resources | 7 | |
| 5.C. | Research and Development, Patents and Licenses, etc. | 11 | |
| 5.D. | Trend Information | 11 | |
| 5.E. | Critical Accounting Estimates | 11 | |
| Item 11. | Quantitative and Qualitative Disclosures About Market Risk | 12 | |
| PART III | |||
| Item 17. | Financial Statements | 14 | |
| Item 18. | Financial Statements | 14 | |
| Item 19. | Exhibits | 14 |
i
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this Annual Report. This discussion may contain forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements because of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this Annual Report. See also “Introductory Notes—Forward-Looking Information.”
5.A. Operating Results
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) of Brera Holdings summarizes the significant factors affecting the Company’s operating results, financial condition, liquidity and cash flows as of and for the years ended December 31, 2024 and 2023. Certain information called for by this Item 5, including a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022 has been reported previously in our Annual Report on Form 20-F for the year ended December 31, 2023, under the section entitled “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Results of Operations—Comparison of the Years December 31, 2023 and 2022.” This MD&A should be read in conjunction with the Company’s consolidated financial statements and the related notes thereto for the year ended December 31, 2024 (the “2024 Financials”). Amounts are expressed in euros unless otherwise stated. This MD&A contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors. See also “Introductory Notes – Forward-Looking Information.”
The 2024 Financials and the financial information contained in this MD&A are prepared pursuant to International Financial Reporting Standards (“IFRS”) and in accordance with the standards of the United States Public Company Accounting Oversight Board. As permitted by the rules of the U.S. Securities and Exchange Commission for foreign private issuers, we do not reconcile our financial statements to United States generally accepted accounting principles.
This MD&A reports the Company’s activities through December 31, 2024, unless otherwise indicated. All figures are expressed in euros, unless otherwise noted.
Overview
Brera Holdings is an Irish holding company focused on MCO and expanding its global portfolio of men’s and women’s sports clubs with increased opportunities to earn tournament prizes, gain sponsorships, obtain transfer fees and provide other professional football- and sports-related consulting services.
We seek to build on the legacy and brand of Brera FC, the first football club that we acquired in July 2022. Brera FC, known as “The Third Team of Milan,” is an amateur football association which has been building an alternative football legacy since its founding in 2000. In March 2023, we expanded to Africa with the establishment of Brera Tchumene FC, a team admitted to the Second Division League in Mozambique, a country of nearly 32 million people, which was promoted to Mocambola (First Division for Mozambique), for the 2024 season. In April 2023, we acquired 90% of the European first division football team Fudbalski Klub Akademija Pandev in North Macedonia, a country with participation rights in two major UEFA competitions, the Europa League and the Europa Conference League, and rebranded the team Brera Strumica FC. In June 2023, we acquired, through open market purchases, a strategic stake in Manchester United PLC, which is listed on the New York Stock Exchange, and a portion of our stake was subject to a tender offer by Sir Jim Radcliffe and sold at a 74% realized gain in February 2024.
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In July 2023, we completed the acquisition of a majority ownership in the Italian Serie A1 women’s professional volleyball team, UYBA Volley S.s.d.a.r.l. In September 2023, we assumed control of Bayanzurkh Sporting Ilch FC, a team in the Mongolian National Premier League, which became Brera Ilch FC when the football season resumed in March 2024. In February 2024, we established the Brera Holdings Advisory Board, whose current members are MLS founder and World Cup director Alan Rothenberg, luxury lifestyle executive Massimo Ferragamo, sports business leaders Paul Tosetti and Marshall Geller, Italian football icon Giuseppe Rossi, and economist Arthur Laffer. In July 2024, we established a joint stock company for the North Macedonian women’s football club Tiverija Strumica, now known as Brera Tiverija FC, a wholly-owned subsidiary of Brera Strumica FC. In December 2024, we began our acquisition of approximately 52% of the Italian Serie B football club Juve Stabia. As of the date of this Annual Report, we have acquired approximately 38% of Juve Stabia.
Football is one of the most popular spectator sports on Earth, with a global market valued at $1.8 billion in 2019, projected to reach $3.8 billion by 2027, with Europe currently being the largest market (“Global football market by type, manufacturing process and distribution channel: global opportunity analysis and industry forecast, 2021–2027,” May 2021). We believe that the leaders in the football industry, as with all enterprises, must demonstrate an awareness of social issues. We believe that teams that do not demonstrate such awareness will not succeed, and that the European football industry is signaling a need for socially-impactful ways to expand access to capital and revenues.
With this in mind, we organized, promoted and participated in the FENIX Trophy, our newly formed non-professional pan-European football tournament recognized by UEFA. FENIX is an acronym for “Friendly European Non-professional Innovative Xenial”. The FENIX Trophy was intended to allow Brera FC to connect with the local community, increase our fanbase, and develop important relationships with other European football clubs. We believe that discussions about the FENIX Trophy spread awareness of these tenets of social impact football.
We also believe that the competition’s meaning goes beyond the game itself: It is an immersive experience meant to highlight the best practices within non-professional football: sportsmanship, bonds with the local community, sustainability, use of technology, and friendship among clubs. We therefore believe the FENIX Trophy will significantly support our social-impact football value proposition. The FENIX Trophy was inaugurated in 2021 with eight clubs participating and had its first tournament from September 2021 to June 2022. We believe that the initial competition exceeded our expectations of its value for our social-impact football brand. The tournament was a public relations success – the Final Eight of the FENIX Trophy tournament, which took place in Rimini, Italy in June 2022, enjoyed extensive national (SKY Sports TV) and international (ZDF) media coverage. We capitalized on this success and included an additional club in the FENIX Trophy’s 2022-2023 tournament, with the final four matches taking place in Milan, Italy in June 2023. For the FENIX Trophy’s 2023-2024 tournament, twelve clubs participated from across Europe, with the final four matches taking place in Desenzano del Garda, Italy in May 2024. For the FENIX Trophy’s 2024-2025 tournament, there are sixteen clubs participating from across Europe, with the final four matches taking place in Lake Iseo, Italy on May 10, 2025, and May 11, 2025.
We believe the FENIX Trophy combines the best features of great international football with the spirit of non-professional football. Key matches from across Europe streamed live on the FENIX Trophy TV YouTube Channel are accompanied by values such as hospitality and sharing between the clubs. The clubs don’t just meet during the game; they share fun and inspirational moments before and after, promoting cultural exchange and creating a friendly environment for clubs, players and supporters. Brera’s continuing objective is to make the FENIX Trophy an extraordinary social impact football experience with a concrete economic value for the major companies seeking to invest in ESG through sport.
We also believe that social awareness and impact has become a growing public focus due to the 2022 FIFA World Cup. As such, while the “transfer market,” in which teams can transfer players and managers in exchange for significant compensation both to the transferring teams and the transferred individuals, is expected to continue, we believe that it must ultimately be part of a vision of football that includes a bottom-up nurturing of players, including those from disadvantaged backgrounds or communities, such as those historically and currently competing for Brera FC. In October 2022, the Internet Marketing Association at its IMPACT 22 Conference named Brera FC as its award recipient for “Social Impact Through Soccer,” recognizing the Company’s focus at an international level with this distinction. We intend to be a leader in guiding the industry toward a more inclusive approach to professional football, through the use of unconventional routes and undiscovered markets with the aim to unleash their full potential.
To that end, we are developing our “Global Sports Group” portfolio of professional football and other sports clubs. Our Global Sports Group will be modeled on the collaborative, brand-aligned holding company structure of Manchester, England-based City Football Group Limited. Under our Global Sports Group structure, we have acquired or intend to acquire top-division football and other sports teams in Africa, South America, Eastern Europe, and potentially other emerging markets, and give them access to the global transfer market.
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The Company is focused on bottom-up value creation from undervalued sports clubs and talent, innovation-powered business growth, and socially-impactful outcomes. We expect that our experience with innovative capital-raising and revenue-generating activities will draw further revenue in the form of consulting opportunities from football and other sports clubs, associations, investors and others. Our revenue currently depends on our business strategy and marketing consultancy services which we provide to commercial clients mainly in the digital media and broadband sectors, our football school services and our newly formed tournament, the FENIX Trophy. We expect that our future revenues will depend on expanding these services, acquiring professional football and other sports clubs, qualifying for or winning football and other sports tournaments and earning tournament prizes, successfully providing transfer market services, and entering into sponsorship agreements.
Recent Developments
On January 10, 2025, we entered into a restated sale and purchase and investment agreement (the “Restated Agreement”) with XX Settembre relating to the acquisition of Juve Stabia, which amended the SPI Agreement. Pursuant to the Restated Agreement, we will acquire from XX Settembre over four closings, on December 31, 2024, January 10, 2025, January 31, 2025, and March 31, 2025, a total of 51.73% of the Share Capital. We will own 21.74%, 34.61%, 38.46%, and 51.73% of Juve Stabia’s share capital as a result of each closing, respectively. As consideration for the Share Capital, the Company will pay XX Settembre an aggregate purchase price of €3,000,000 using a combination of cash and the issuance of Class B Ordinary Shares, which will be calculated using the exchange rate of $1.04 per €1.00. On December 31, 2024, we issued XX Settembre €1,000,000 in Class B Ordinary Shares at a price per share of $0.65. On January 10, 2025, we issued XX Settembre €500,000 in Class B Ordinary Shares at a price per share of $0.65. At the third closing on January 31, 2025, we agreed to pay XX Settembre €500,000 in cash. At the final closing on March 31, 2025, we agreed to pay XX Settembre €500,000 in cash and issue €500,000 in Class B Ordinary Shares at a price per share equal to the VWAP of the Class B Ordinary Shares, calculated over the 15 trading days immediately preceding the second business day preceding the final closing. In addition, we agreed to increase the share capital of Juve Stabia by an aggregate amount of €4,500,000. On December 31, 2024, we paid Juve Stabia €500,000 in cash and issued €1,000,000 in Class B Ordinary Shares at a price per share of $0.65. On January 10, 2025, we paid Juve Stabia €500,000 in cash and issued €1,000,000 in Class B Ordinary Shares at a price per share of $0.65. At the final closing on March 31, 2025, we agreed to pay Juve Stabia €1,500,000 in cash. Furthermore, the Restated Agreement provided for bonus payments of (i) €500,000 in Class B Ordinary Shares payable to XX Settembre if Juve Stabia accesses the promotion playoffs to Serie A in the 2024-25 season and (ii) €5,000,000 in Class B Ordinary Shares payable to XX Settembre if Juve Stabia is promoted to Serie A at the conclusion of the 2024-25 season. As of the date of this Annual Report, the final closing scheduled for March 31, 2025 has not yet occurred.
On January 15, 2025, we received formal notice from Nasdaq that Nasdaq has granted our request for a second 180-day period, through July 14, 2025, to evidence compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). We intend to monitor its stock price and to consider all available options to regain compliance with the Rule prior to July 14, 2025, including via implementation of a reverse stock split.
On February 7, 2025, February 12, 2025, February 21, 2025, March 6, 2025, March 21, 2025, March 27, 2025, and March 31, 2025, we completed additional closings of our Series A Preferred Shares financing, raising aggregate gross proceeds of $932,000 through the issuance of 186,400 Series A Preferred Shares at an offering price of $5.00 per share, bringing the total sold to date to 731,400 shares and $3,657,000 raised, from 35 accredited investors.
On February 11, 2025, we entered into an amendment agreement and third closing memorandum (the “Amendment Agreement”) with XX Settembre, which amended the SPI Agreement, as amended by the Restated Agreement, relating to the acquisition of Juve Stabia. Pursuant to the Amendment Agreement, among other things, the third closing date was modified from January 31, 2025 to February 11, 2025. As a result, at the third closing on February 11, 2025, we paid XX Settembre €500,000 in cash and acquired additional share capital in Juve Stabia bringing the Company’s aggregate equity ownership to 38.46% of the issued and outstanding share capital of Juve Stabia.
On February 21, 2025, Pierre Galoppi gave written notice of his resignation from our board of directors effective immediately. Mr. Galoppi will continue to serve as our Chief Executive Officer and Interim Chief Financial Officer.
On March 6, 2025, we issued 100,000 Class B Ordinary Shares under the 2022 Plan to a member of our Advisory Board.
On March 31, 2025, we issued an aggregate of 500,000 Class B Ordinary Shares under the 2022 Plan to members of our Advisory Board.
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Principal Factors Affecting Our Financial Performance
Our operating results are primarily affected by the following factors:
| ● | our ability to acquire new fans, supporters and sponsors or retain existing ones; |
| ● | our ability to offer competitive pricing for our products and services; |
| ● | our ability to broaden product and service offerings; |
| ● | whether successful or significant playing seasons or competitions occur during the relevant reporting periods; |
| ● | general economic conditions affecting the discretionary income of fans, supporters and sponsors; |
| ● | industry demand and competition; and |
| ● | market conditions and our market position. |
Emerging Growth Company
Upon the completion of this offering, we will qualify as an “emerging growth company” under the JOBS Act. As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year during which we have total annual gross revenues of at least $1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the completion of our initial public offering; (iii) the date on which we have, during the preceding three year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which could occur if the market value of our ordinary shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.
Results of Operations
The following sets forth a summary of the Company’s consolidated results of operations for the periods indicated. The information should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report. Our historical results presented below are not necessarily indicative of the results that may be expected for any future period.
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Comparison of Years Ended December 31, 2024 and 2023
The following table sets forth key components of our results of operations during the years ended December 31, 2024 and 2023.
| Years Ended December 31, | ||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||
| € | $ | % of Revenue | € | % of Revenue | ||||||||||||||||
| Revenue | 2,886,118 | 3,130,760 | 100 | % | 1,147,492 | 100 | % | |||||||||||||
| Cost of revenue | (222,426 | ) | (241,280 | ) | (8 | )% | (100,877 | ) | (9 | )% | ||||||||||
| General and administrative expenses | (8,219,732 | ) | (8,916,479 | ) | (285 | )% | (6,417,782 | ) | (559 | )% | ||||||||||
| Operating loss | (5,556,040 | ) | (6,026,999 | ) | (193 | )% | (5,371,167 | ) | (468 | )% | ||||||||||
| Income from grants and donations | 556,580 | 603,759 | 19 | % | 336,849 | 29 | % | |||||||||||||
| Other income (expense) | 3,482 | 3,777 | 0 | % | (2,951 | ) | 0 | % | ||||||||||||
| Net fair value gain (loss) on financial assets at fair value through the profit and loss | (7,223 | ) | (7,835 | ) | 0 | % | 9,436 | 1 | % | |||||||||||
| Impairment on property, plant and equipment | - | - | 0 | % | (2,660 | ) | 0 | % | ||||||||||||
| Change in warrant expense | (14,183 | ) | (15,385 | ) | 0 | % | 163,827 | 14 | % | |||||||||||
| Finance costs | (72,614 | ) | (78,769 | ) | (3 | )% | (3,914 | ) | 0 | % | ||||||||||
| Loss before income taxes | (5,089,998 | ) | (5,521,452 | ) | (176 | )% | (4,870,580 | ) | (424 | )% | ||||||||||
| Provision for income taxes expenses | 41,137 | 44,624 | 1 | % | (41,085 | ) | (4 | )% | ||||||||||||
| Net loss | (5,048,861 | ) | (5,476,828 | ) | (175 | )% | (4,911,665 | ) | (428 | )% | ||||||||||
Revenue
In 2023, we transitioned our business model into acquiring and operating professional sports teams worldwide. The principal activities of our Company for the years ended December 31, 2024 and 2023 were advertising and sponsorships associated with the operation of our international sports teams. Under the current business model, commercial revenue (whether settled in cash or value in kind) mainly comprises the exploitation of the Brera brand through sponsorships, advertising and other commercial agreements. Revenue for the years ended December 31, 2024 and 2023 was €2,886,118 and €1,147,492, respectively, representing an increase of €1,738,626 or 152%. The increase was principally because we experienced a full year’s revenue for the year ended December 31, 2024 from the sports teams of our two major subsidiaries, FKAP and UYBA, versus partial year’s revenue from these subsidiaries in the year ended December 31, 2023. For the year ended December 31, 2024, our four largest revenue streams were sponsorships (€1,494,815), player transfers (€406,988), consulting (€275,000) and media and television rights (€243,000). For the year ended December 31, 2023, our three largest revenue streams were sponsorships (€745,452), player transfers (€122,159) and ticketing (€174,247).
Segment Reporting
Basis of Segmentation
Below is a description of segments based on revenue streams and basis of measurement
| Segments | Revenue Stream (Basis of Measurement) | Description | |||
| Sponsorships | Stream 1 - Sponsorships | This segment represents revenue generated from sponsorship agreements, primarily derived from providing exposure to the sponsor’s brand through promotional activities, event placements, free tickets, and participation rights in sponsored events. | |||
| Ticketing, short-leases, store and youth league | Stream 2 - Ticketing Stream 3 - Short-term leases for non-volleyball events Stream 4 - Store Stream 5 - Youth league |
This segment includes the following revenue streams: Revenue Stream 2: Sales of event tickets. Revenue Stream 3: Renting the arena for non-volleyball events hosted by UYBA. Revenue Stream 4: Merchandise sales. Revenue Stream 5: Revenue from youth training programs conducted during the sports season, typically spanning from September to October. |
|||
| Player Transfers | Stream 6 - Player transfers | This segment consists of revenue generated from transferring players to other clubs. | |||
| Others | Stream 7 - Others | This segment encompasses various other revenue streams, including consulting services, one-off events, and similar activities. | |||
| Subsidies, grants and donations | Stream 8 - Subsidies, grants and donations | This segment is comprised of revenue received through grants, subsidies, and donations, typically earned by meeting specific eligibility criteria by FKAP. |
5
Our management reporting framework, including the assumptions and methodologies applied, is regularly reviewed to ensure their continued validity and relevance. The capital attribution methodologies rely on several key assumptions, which are periodically reassessed and updated as needed.
For the year ended December 31, 2024, the Company’s revenue, expenses, net segment profit or loss, and assets and liabilities came from the following segments:
| Segments | Total Revenue | Total Expenses | Operating Profit/(Loss) | Other Income (Expenses) | Provision for Income Taxes | Segment Profit/(Loss) | ||||||||||||||||||
| Sponsorships | € | 1,494,814 | € | (4,561,487 | ) | € | (3,066,673 | ) | € | 224,603 | € | 31,023 | € | (2,811,047 | ) | |||||||||
| Ticketing, short-leases, store and youth league | 355,727 | (1,173,919 | ) | (818,192 | ) | 53,518 | 7,381 | (757,293 | ) | |||||||||||||||
| Player transfers | 406,988 | (1,079,086 | ) | (672,098 | ) | 76,166 | 564 | (595,368 | ) | |||||||||||||||
| Others | 628,589 | (1,627,666 | ) | (999,077 | ) | 111,755 | 2,169 | (885,153 | ) | |||||||||||||||
| € | 2,886,118 | € | (8,442,158 | ) | € | (5,556,040 | ) | € | 466,042 | € | 41,137 | € | (5,048,861 | ) | ||||||||||
| Segment | Segment Assets | Segment Liabilities | ||||||
| Sponsorships | € | 4,361,641 | € | 5,676,164 | ||||
| Ticketing, short-leases, store and youth league | 849,759 | 251,541 | ||||||
| Player transfers | 861,028 | 217,622 | ||||||
| Others | 4,045,865 | 154,368 | ||||||
| € | 10,118,293 | € | 6,229,695 | |||||
Revenue for the year ended December 31, 2024, revenue by geographic region consisted of:
| Region | Revenue | |||
| Italy | € | 2,195,952 | ||
| North Macedonia | 490,166 | |||
| Ireland | 200,000 | |||
| Total | € | 2,886,118 | ||
Cost of Revenue
Cost of revenue for the years ended December 31, 2024 and 2023 was €222,426 and €100,877, respectively, representing an increase of €121,549 or 121%. The increase was primarily caused by higher revenue for the year ended December 31, 2024.
General and Administrative Expenses
General and administrative expenses consisted of professional and consultancy fees, advertising, director remuneration and benefits, rental expenses, utilities, depreciation, travel and entertainment and other miscellaneous expenses. General and administrative expenses for the years ended December 31, 2024 and 2023 were €8,219,732 and €6,417,782, respectively, an increase of €1,801,950 or 28%. The increase was mainly caused by an increase in revenue resulting from an increase in business activity. In addition, for the year ended December 31, 2024, we experienced general and administrative expenses for our two major subsidiaries for a full year compared to a partial year for the year ended December 31, 2023. Comparing expenses for the years ended December 31, 2024 and 2023, major increases occurred in share-based expenses (€771,011), legal and professional fees (€687,422), player management costs (€497,996), utilities and rent (€278,391) and depreciation and amortization (€323,376). These increases were somewhat offset by decreases in stamp duties and other taxes (€400,296) and bad debts (€416,796).
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Operating Loss
Operating loss for the years ended December 31, 2024 and 2023 was €5,556,040 and €5,371,167, respectively, an increase of €184,873 or 3%. The increase in operating loss results from the factors described under the revenue, cost of revenue and general and administrative expenses sections above.
Income from Grants and Donations
Income from grants and donations, which mainly consisted of miscellaneous income or expenses relating to the acquisition and management of sports teams, was €556,580 for the year ended December 31, 2024 compared to €336,849 for the comparable period in 2023, an increase of €219,731 or 65%. This increase is primarily due to an increased level of grants and donations received by our subsidiary FKAP.
Finance Costs
Finance costs consisted of loan interest expenses from the Company’s small and medium enterprises guarantee fund loan, a loan from a shareholder and the interest expense on lease liabilities in relation to the rental of office and vehicles. Finance costs for the years ended December 31, 2024 and 2023 were €72,614 and €3,914, respectively, an increase of €68,700 or 1,755%. The increase was mainly due to the interest on lease liabilities and long-term debt.
Loss Before Income Taxes
Loss before income taxes for the years ended December 31, 2024 and 2023 was €5,089,998 and €4,870,580, respectively, an increase of €219,418 or 5%. The increase was mainly due to the Company’s growth through the acquisitions of FKAP and UYBA and the factors discussed above.
Provision for Income Taxes Expenses
Provision for income taxes expenses for the year ended December 31, 2024 was a benefit of €41,137 compared to a provision of €41,085 for the year ended December 31, 2023. The change was the result of a change in accounting estimate due to the loss for the Company and each subsidiary resulting in no tax due.
Net Loss
Net loss for the years ended December 31, 2024 and 2023 was €5,048,861 and €4,911,665, respectively, an increase of €137,196 or 3%. The increase was the result of the various factors discussed above.
Comparison of the Years Ended December 31, 2023 and 2022
For a discussion of our statements of operations for the years ended December 31, 2023 and 2022, see the section “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Results of Operations—Comparison of the Years December 31, 2023 and 2022” in our Annual Report on Form 20-F for the year ended December 31, 2023.
5.B. Liquidity and Capital Resources
As of December 31, 2024 and 2023, we had cash and cash equivalents of €1,531,994 (approximately $1,661,854) and €2,293,518 (approximately $2,479,981), respectively. As of April 30, 2025, we had cash and cash equivalents of €325,488. To date, we have financed our operations primarily through revenue generated from operations, loans and shares issued for cash.
As of December 31, 2024 and 2023, we had cash deposits in a non-traditional bank, Wise Europe SA, amounting to €1,223,864 (approximately $1,327,605) and €1,570,907 (approximately $1,735,777), respectively. These deposits are not insured by the local government. The Company performed a detailed credit risk assessment concerning the uninsured deposit made in Wise Europe SA and determined that the credit risk is low, based on the following factors: (i) Wise Europe SA safeguards its customers’ funds by holding them in a mix of cash in leading commercial banks and low-risk liquid assets, as required by its regulatory obligations; (ii) Wise Europe SA is authorized by the National Bank of Belgium (“NBB”), which ensures that the bank operates under the regulations and guidelines set by the NBB; and (iii) the Company has not experienced losses on these bank accounts and does not believe it is exposed to any significant credit risk with respect to these bank accounts.
7
In December 2024, the Company completed two closings of a private placement offering under which we sold 545,000 Series A Preferred Shares at an offering price of $5.00 per share for total gross proceeds of $2,725,000 (approximately €2,622,966). See Note 18 to the accompanying consolidated financial statements for further information. We used the proceeds from this offering to fund the initial portions of our acquisition of Juve Stabia, as well as to fund certain working capital requirements.
Management has prepared estimates of operations and believes that sufficient funds will be generated from operations to fund our operations and to service our debt obligations for at least the next three months. We will require additional future cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects. Daniel Joseph McClory, our Executive Chairman, has provided the board of directors with a written commitment letter indicating his intention to fund the Company as needed for the foreseeable future to the extent that revenues from existing operations or alternative funding is not available.
The accompanying consolidated financial statements have been prepared on a going concern basis under which we are expected to be able to realize our assets and satisfy our liabilities in the normal course of business.
Going Concern
In early 2022, Russia initiated a war on Ukraine. This has led to volatility in both the commodity and equity markets and, in part, contributed to a steep rise in the global rate of inflation. Central banks have responded by increasing interest rates. The board of directors are monitoring the impact of these events and working with their advisers to ensure the continued smooth running of the business.
In preparing the consolidated financial statements, the Company’s management has given careful consideration to the future liquidity of the Company. During the year ended December 31, 2024, the Company incurred a net loss of €5,048,861 and had net cash used in operations of €3,121,362. While the Company had shareholders’ equity of €3,818,597 as of December 31, 2024, the Company also had deficit working capital of €1,272,424.
In accordance with International Accounting Standards (“IAS”) 1 Presentation of Financial Statement, management is required to perform a two-step analysis over the Company’s ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the period-end date. If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt. Management has evaluated the adverse conditions noted above and although the adverse conditions were expected due primarily to the fact that the Company is in early stages of growth and transformation, the conditions have raised substantial doubt about the entity’s ability to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through public offerings, private equity offerings, debt financing, and government or other third-party funding. To that end, in December 2024, February 2025, and March 2025, the Company completed closings of a private placement offering under which we sold 731,400 Series A Preferred Shares at an offering price of $5.00 per share for total gross proceeds of $3,657,000. The total gross proceeds are prior to deducting offering expenses. Each Series A Preferred Share is convertible into eight (8) Class B Ordinary Shares at the option of the holder. We used the net proceeds from this offering to fund the initial portions of our acquisition of Juve Stabia, as well as to fund our working capital requirements. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.
8
The inability to obtain future additional funding could impact the Company’s financial condition and ability to pursue its business strategies, including being required to delay, reduce or eliminate some of its business development projects, or being unable to continue operations or continue as a going concern. The dependency on raising additional capital indicates that a material uncertainty exists that may cast significant doubt (or substantial doubt as contemplated by PCAOB standards) on the Company’s ability to continue as a going concern and therefore the Company may be unable to realize the assets and discharge the liabilities in the normal course of business.
The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business and do not include any adjustments that would result if the Company were unable to continue as a going concern. Management has evaluated the adverse conditions noted above and concluded there is substantial doubt about the Company’s ability to continue as a going concern.
Summary of Cash Flow
The following table sets forth a summary of the Company’s consolidated cash flows for the years ended December 31, 2024 and 2023.The information should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report. Our historical results presented below are not necessarily indicative of cash flows that may be expected for any future period.
| Years Ended December 31, | ||||||||||||
| 2024 | 2024 | 2023 | ||||||||||
| Statements of Operations Data | € | $ | € | |||||||||
| Net cash used in operating activities | (3,121,362 | ) | (3,385,945 | ) | (2,418,524 | ) | ||||||
| Net cash used in investing activities | (294,845 | ) | (319,838 | ) | (2,009,785 | ) | ||||||
| Net cash provided by financing activities | 2,677,144 | 2,904,073 | 6,364,969 | |||||||||
| Net increase (decrease) in cash | (739,063 | ) | (801,710 | ) | 1,936,661 | |||||||
| Cash, beginning of year | 2,293,518 | 2,487,928 | 347,229 | |||||||||
| Cash paid for acquisitions less cash acquired | - | - | (30,491 | ) | ||||||||
| Effect of foreign exchange rate changes | (22,461 | ) | (24,365 | ) | 40,119 | |||||||
| Cash, end of year | 1,531,994 | 1,661,853 | 2,293,518 | |||||||||
To date the Company has financed its operations primarily through revenue generated from operations, loans and shares issued for cash.
Net cash used in operating activities for the years ended December 31, 2024 and 2023, respectively, are comprised of the following:
| Years Ended December 31, | ||||||||||||
| 2024 | 2023 | Change | ||||||||||
| € | € | € | ||||||||||
| Net loss | (5,048,861 | ) | (4,911,665 | ) | (137,196 | ) | ||||||
| Non-cash portion of net loss | 1,468,213 | 639,569 | 828,644 | |||||||||
| Working capital items | 459,286 | 1,853,572 | (1,394,286 | ) | ||||||||
| Total | (3,121,362 | ) | (2,418,524 | ) | (702,838 | ) | ||||||
The change in our net loss is described above under Results of Operations. The change in the non-cash portion of the net loss is principally due to the amounts of share-based compensation of €961,099 for the year ended December 31, 2024 versus €280,145 for the year ended December 31, 2023, which increase was the result of share awards issued in the year ended December 31, 2024. In addition, there was an increase in depreciation and amortization of €323,377 for the year ended December 31, 2024 as it included a full year of our two major subsidiaries activities versus a partial year for the year ended December 31, 2023. Finally, for the year ended December 31, 2024, contingent consideration was €100,000 lower than the previous year and there was a gain on a modification of a lease in the amount of €73,444 where none existed in the previous year.
The decrease in changes of working capital items between the year ended December 31, 2024 and 2023 of €1,394,286 was the result of decreases in changes in accounts receivable (€246,665), deposits (€208,796), loans receivable (€180,495), accounts payable including a bank overdraft (€80,349), deferred revenue (€412,532), and deferred taxes (€262,684).
Net cash used in investing activities was €294,845 and €2,009,785 for the years ended December 31, 2024 and 2023, respectively. Net cash used in investing activities for the year ended December 31, 2023 was primarily due to the acquisition of FKAP and UYBA while the net cash used in investing activities for the year ended December 31, 2024 was mainly for the purchase of property, plant and equipment.
9
Net cash provided by financing activities was €2,553,228 and €6,364,969 for the years ended December 31, 2024 and 2023, respectively. The net cash provided by financing activities was the result of shares sold for cash. In December 2024, we sold 545,000 Series A Preferred Shares for net proceeds of €2,622,966. In January 2023, we sold 1,500,000 Class B Ordinary Shares in our public offering for net proceeds of €6,777,120.
Contractual Obligations
As of December 31, 2024, our future contractual obligations consisted of:
| Year Ending December 31, 2025 | Year Ending December 31, 2026 | Year Ending December 31, 2027 | Year Ending December 31, 2028 | Year Ending December 31, 2029 | After December 31, 2029 | Total | ||||||||||||||||||||||
| € | € | € | € | € | € | € | ||||||||||||||||||||||
| Operating lease commitments | 242,810 | 45,000 | 45,000 | 45,000 | 45,000 | 436,250 | 859,060 | |||||||||||||||||||||
| Contingent consideration (FKAP) | 23,000 | 20,000 | 17,000 | 14,000 | 12,000 | 34,000 | 120,000 | |||||||||||||||||||||
| Loan from director | 852 | 91,963 | - | - | - | - | 92,815 | |||||||||||||||||||||
| Other loans payable | 140,673 | 62,500 | - | - | - | - | 203,173 | |||||||||||||||||||||
| 407,335 | 219,463 | 62,000 | 59,000 | 57,000 | 470,250 | 1,275,048 | ||||||||||||||||||||||
Other than indicated above, on December 31, 2024, we had no other long-term contractual obligations.
Commitments and Contingencies
Capital Expenditures
During the years ended December 31, 2024 and 2023, we made capital expenditures of €199,175 and €199,947, respectively. At this time, we do not have any contractual obligations for ongoing capital expenditures.
Lease Commitments
We entered into lease agreements for office space, garage, motor vehicles and office equipment with expiration dates ranging from 2024 to 2039. The Company’s commitments for minimum lease payments under these leases as of December 31, 2024 are as follows:
| Minimum Lease Payment | ||||
| € | ||||
| Year ending December 31, 2025 | 161,235 | |||
| Year ending December 31, 2026 | 45,000 | |||
| Year ending December 31, 2027 | 45,000 | |||
| Year ending December 31, 2028 | 45,000 | |||
| Year ending December 31, 2029 | 45,000 | |||
| After the year ending December 31, 2029 | 436,250 | |||
| Total | 777,485 | |||
During the year ended December 31, 2024, the Company incurred expenses related to short-term lease agreements totalling €120,271. These expenses are in addition to the Company’s existing long-term lease commitments.
10
Legal Contingencies
We are currently not a defendant to any material legal proceedings, investigation, or claims.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
5.C. Research and Development, Patents and Licenses, etc.
See “Item 4. Information on the Company—B. Business Overview.”
5.D. Trend Information
Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demand, commitments or events that are reasonably likely to have a material effect on our net revenues and income from operations, profitability, liquidity, capital resources, or would cause reported financial information not to be indicative of future operation results or financial condition.
5.E. Critical Accounting Estimates
The following discussion relates to critical accounting policies for our company. The preparation of financial statements in conformity with IFRS requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:
Judgments, Assumptions and Estimation Uncertainties
Information about judgments, assumptions and estimation uncertainties made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is included in the following notes to the consolidated financial statements accompanying this Annual Report.
| - | Reverse recapitalization – See Note 1. The acquisition of Brera Milano was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with the guidance in paragraphs B19–B27 of IFRS 3 for reverse acquisitions. Brera Milano was determined to be the accounting acquirer based upon the terms of the acquisition and other factors including: (i) former Brera Milano shareholders owning approximately 35% of the combined company (on a fully diluted basis) immediately following the closing of the acquisition and are the largest shareholders’ party of the Company, (ii) former Brera Milano shareholder, Alessandro Aleotti, being appointed as the Chief Strategy Officer and a director of the Company, and (iii) former Brera Milano shareholder, Sergio Carlo Scalpelli, being appointed as the Chief Executive Officer and a director of the Company; (iv) shareholders of the Company other than the former Brera Milano shareholders continuing as passive investors; and (v) the combined company continuing the football related business with Brera Milano shareholders being the major subject matter experts of this industry in the Company and having the power to direct the development and operations of the combined company after the acquisition. |
| Prior to the acquisition of Brera Milano, the Company was a shell corporation established in 2022 with no operations at incorporation date. The Company has issued shares to the existing shareholders, and it is not qualified as a business under the definition of IFRS 3. With reference to IFRS 3 Appendix B, this would not constitute a business combination since there is no substantive change in the reporting entity or its assets and liabilities. Accordingly, the Company’s consolidated financial statements represent a continuation of the financial statement of Brera Milano and the assets and liabilities are presented at their historical carrying values. |
11
| - | Provision for doubtful accounts – See Notes 2 and 11. Significant assumptions for measurement used by management in estimating the expected credit loss include weighted-average loss rate or default rate, current and future financial situation of debtors for individual receivables that management is aware will be difficult to collect, and future general economic conditions. |
| - | Share-based compensation – See Notes 2 and 18. Management uses significant assumptions to measure the fair value of options and warrants, including the use of the Black-Scholes pricing model. The Black-Scholes model has its own set of assumptions including volatility of the underlying shares. |
| - | Leases – See Note 2. Management makes significant assumptions regarding lease terms, exercise options and present value methodologies in determining the value of its right-of-use assets. |
| - | Intangible assets – See Note 2. Management makes significant assumptions regarding lease terms, exercise options and present value methodologies. |
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Brera’s activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest rate risk), credit risk and concentration risk. The overall risk management strategy focuses on the unpredictability of the finance markets and seeks to minimize the potential adverse effects on financial performance. Risk management is carried out under the direction of the board of directors.
Risk Management Overview
Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign exchange rates as well as, to a lesser extent, inflation and credit and concentration risks. This section provides information about our exposure to each of these risks, our objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout the consolidated financial statements.
Interest Rate Risk
We are exposed to market risks in the ordinary course of our business. Our primary interest rate relates to interest-bearing long-term borrowings. The effect of rising interest rates on our financial condition is expected to be negligible given that we do not have material debt or accounts receivable.
Foreign Currency Exchange Risk
The majority of our cash flows, financial assets and liabilities are denominated in euros, which is our functional and reporting currency. We are exposed to financial risk related to the fluctuation of foreign exchange rates and the degree of volatility of those rates. Currency risk is limited to the proportion of our business transactions denominated in currencies other than the euro, primarily for capital expenditures, potential future debt, if any, and various operating expenses such as salaries and professional fees. We do not currently use derivative financial instruments to reduce our foreign exchange exposure and management does not believe our current exposure to currency risk to be significant.
12
The Company carries the majority of its funds in dollars. A 10.0% appreciation of the dollar against the euro, from the exchange rate of €0.9662 per $1.00 as of December 31, 2024 to a rate of €1.0628 per $1.00, will result in an increase of approximately €145,921 in our cash equivalent position. Conversely, a 10.0% depreciation of the dollar against the euro, from the exchange rate of €0.9662 per $1.00 as of December 31, 2024 to a rate of €0.869 per $1.00, will result in a decrease of approximately €146,823 in our cash equivalent position.
Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.
Credit Risk
Credit risk is the risk of financial loss to us if a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from our cash held with banks and other financial intermediaries.
The carrying amount of the cash represented the maximum credit exposure which amounted to €1,223,864 and €2,293,518 as of December 31, 2024 and 2023, respectively.
We had assessed no significant increase in credit risk from initial recognition based on the availability of funds, the regulatory and economic environment of the financial intermediary. As a result, the loss allowance recognized during the period was limited to 12 months expected credit losses. Based on historical information, and adjusted for forward-looking expectations, we had assessed a zero-loss allowance on this cash balance as of December 31, 2024 and 2023, respectively.
Concentration of Credit Risk
Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash deposits and accounts receivable. The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high-quality insured financial institutions. However, cash balances in excess of the amount covered by the statutory Deposit Guarantee Scheme in Italy (i.e., €100,000) are at risk. As of December 31, 2024 and 2023, the Company had approximately €1,223,864 and €1,853,518, respectively, in excess of insured limits.
Concentration Risk
No customer accounted for over 10% of the Company’s total revenue for the years ended December 31, 2024 and 2023.
13
PART III
ITEM 17. FINANCIAL STATEMENTS
The Company has elected to provide financial statements pursuant to Item 18.
ITEM 18. FINANCIAL STATEMENTS
Our audited financial statements are included as the “F” pages attached to this Annual Report.
All financial statements in this Annual Report, unless otherwise stated, are presented in accordance with IFRS.
ITEM 19. EXHIBITS
| Exhibit No. | Description | |
| 12.1* | Certification of the Chief Executive Officer (Principal Executive Officer) and Interim Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended | |
| 13.1** | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 15.1* | Consent of Reliant CPA PC | |
| 15.2* | Consent of TAAD LLP | |
| 101.INS | Inline XBRL Instance Document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith. |
| ** | Furnished herewith. |
14
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| BRERA HOLDINGS PLC | ||
| Date: May 28, 2025 | By: | /s/ Pierre Galoppi |
| Name: | Pierre Galoppi | |
| Title: | Chief Executive Officer (Principal Executive Officer) | |
15
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Consolidated Financial Statements for the Years Ended December 31, 2024, 2023 and 2022 | Page | |
| Report of Independent Registered Public Accounting Firm (PCAOB ID Number: | F-2 | |
| Report of Independent Registered Public Accounting Firm (PCAOB ID Number: 5854) | F-3 | |
| Financial Statements: | ||
| Consolidated Statements of Financial Position | F-4 | |
| Consolidated Statements of Profit or Loss | F-5 | |
| Consolidated Statements of Changes in Shareholders’ Equity | F-6 | |
| Consolidated Statements of Cash Flows | F-7 | |
| Notes to Consolidated Financial Statements | F-8 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the board of directors of Brera Holdings PLC
Opinion on the Financial Statements
We have audited the accompanying consolidated statement of financial position of Brera Holdings PLC (the “Company”), as of December 31, 2024, the related consolidated statements of profit or loss, changes in shareholders’ equity and cash flows for the year ended December 31, 2024, and related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with the International Financial Reporting Standards as issued by the International Accounting Standards Board. The December 31, 2023 and 2022 financial statements were audited by another auditor.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Explanatory Paragraph
As discussed in Note 21 to the consolidated financial statements, the Company disclosed Segment Reporting for the first time in the December 31, 2024 consolidated financial statements for all periods presented. The December 31, 2023 and 2022 financial statements were audited by another auditor who had not performed any procedures on the Segment Reporting. We also audited the disclosures described in Note 21 that were applied to the 2023 and 2022 financial statements. In our opinion, such disclosures are appropriate and have been properly applied.
/s/ Reliant CPA PC
Served as Auditor since 2024
May 28, 2025
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Shareholders of Brera Holdings PLC and subsidiaries (FKA Brera Holdings Limited)
Opinion on the Financial Statements
We have audited the accompanying consolidated financial position of Brera Holdings PLC and subsidiaries (the Company) as of December 31, 2023 and 2022, and the related consolidated statements of profit or loss, changes in shareholders’ equity, and cash flows for the years ended December 31, 2023 and 2022, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022, in conformity with International Financial Reporting Standard as issued by the Internation Accounting Standards Board.
Going Concern Matter
These accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Notes 2 to the consolidated financial statements, the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Notes 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ TAAD LLP
We have served as the Company’s auditor since 2022. In September 2024, we became the predecessor auditor.
Diamond Bar
July 19, 2024
F-3
BRERA HOLDINGS PLC
Consolidated Statements of Financial Position
| December 31, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | € | € | ||||||
| Trade and other receivables – non-related parties | ||||||||
| Trade and other receivables – related parties | ||||||||
| Inventory | ||||||||
| Deposits and prepayments | ||||||||
| Loan receivable – related parties | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | ||||||||
| Right-of-use assets, net | ||||||||
| Financial assets at fair value through profit and loss | ||||||||
| Goodwill | ||||||||
| Intangible assets | ||||||||
| Investment accounted for using the equity method | ||||||||
| Total non-current assets | ||||||||
| Total assets | € | € | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Trade and other payables – non-related parties | € | € | ||||||
| Trade and other payables – related parties | ||||||||
| Deferred revenue | ||||||||
| Lease liabilities | ||||||||
| Loan payable – non-related party | ||||||||
| Director loan – related party | ||||||||
| Bank overdraft | ||||||||
| Income tax payable | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Trade and other payables – non-related parties | ||||||||
| Lease liabilities | ||||||||
| Loan payable | ||||||||
| Director loan – related party | ||||||||
| Warrant liabilities | ||||||||
| Deferred taxes | ||||||||
| Contingent consideration | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
Commitment and contingency, see Note 29 | ||||||||
| Shareholders’ equity: | ||||||||
| Series A Preferred Shares, nominal value US$ | ||||||||
| Ordinary shares – Class A, nominal value US$ | ||||||||
| Ordinary shares – Class B, nominal value US$ | ||||||||
| Subscription receivable | ( | ) | ||||||
| Foreign exchange reserve | ||||||||
| Capital reserves | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Non-controlling interest | ( | ) | ||||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | € | € | ||||||
See accompanying notes to the consolidated financial statements.
F-4
BRERA HOLDINGS PLC
Consolidated Statements of Profit or Loss
For the year ended | For the year ended December 31, 2023 | For the year ended December 31, 2022 | ||||||||||
| Revenue – non-related parties | € | € | € | |||||||||
| Revenue – related parties | ||||||||||||
| Cost of revenue – non-related parties | ||||||||||||
| Cost of revenue – related parties | ||||||||||||
| Gross profit | ||||||||||||
| Operating expenses: | ||||||||||||
| General and administrative expense – non-related parties | ||||||||||||
| General and administrative expense – related parties | ||||||||||||
| Total operating expenses | ||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expense): | ||||||||||||
| Net fair value gain and loss on financial assets at fair value through profit and loss – non-related parties | ( | ) | ||||||||||
| Net fair value gain and loss on financial assets at fair value through profit and loss – related parties | ||||||||||||
| Change in fair value of warrant liability | ( | ) | ||||||||||
| Finance costs – non-related parties | ( | ) | ( | ) | ( | ) | ||||||
| Finance costs – related parties | ( | ) | ||||||||||
| Impairment of property, plant and equipment | ( | ) | ||||||||||
| Other income | ||||||||||||
| Income related to change in fair value of contingent consideration – related party | ||||||||||||
| Total other income (expense), net | ( | ) | ||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ||||||
| Provision for income taxes | ( | ) | ||||||||||
| Net loss | € | ( | ) | € | ( | ) | € | ( | ) | |||
| Attributable to the company | € | ( | ) | € | ( | ) | € | ( | ) | |||
| Attributable to non-controlling interest | € | ( | ) | € | ( | ) | € | |||||
| Other comprehensive income (loss): | ||||||||||||
| Foreign currency translation adjustments | ( | ) | ||||||||||
| Total comprehensive loss | € | ( | ) | € | ( | ) | € | ( | ) | |||
| Weighted average shares outstanding – basic and diluted: | ||||||||||||
| Ordinary shares – Class A | ||||||||||||
| Ordinary shares – Class B | ||||||||||||
| Loss per share – basic and diluted: | ||||||||||||
| Ordinary shares – Class A | € | ( | ) | € | ( | ) | € | ( | ) | |||
| Ordinary shares – Class B | € | ( | ) | € | ( | ) | € | ( | ) | |||
See accompanying notes to the consolidated financial statements.
F-5
BRERA HOLDINGS PLC
Consolidated
Statements of Changes in Shareholders’ Equity
For the Years Ended December 31, 2024, 2023 and 2022
| Series A | Class A | Class B | Non- | |||||||||||||||||||||||||||||||||||||||||
| Preferred Shares | Ordinary Shares | Ordinary Shares | Subscription | Capital | Accumulated | Controlling | Shareholders’ | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Receivable | Reserves | Deficit | Interest | Equity | ||||||||||||||||||||||||||||||||||
| Balance – December 31, 2021 | € | € | € | € | ( | ) | € | € | ( | ) | € | € | ( | ) | ||||||||||||||||||||||||||||||
| Shares issued for cash | - | |||||||||||||||||||||||||||||||||||||||||||
| Surrender of shares | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
| Imputed interest | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Exchange difference arising from translation | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance – December 31, 2022 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Shares issued for cash | ||||||||||||||||||||||||||||||||||||||||||||
| Share options | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Shares issued for services | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Exchange difference arising from translation | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Non-controlling interests on acquisition of subsidiaries | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
| Balance – December 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Shares issued for cash | ||||||||||||||||||||||||||||||||||||||||||||
| Subscription receivable payment | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Share options | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Shares issued for services | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Equity contribution by non-controlling interest | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Shares issued for investment in Juve Stabia football club | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Related party debt exchange agreement | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Shares converted from Class A to Class B | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Obligation to issue shares | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Exchange difference arising from translation | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Non-controlling interest debt conversion | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | ( | ) | ( | ) | ( | ||||||||||||||||||||||||||||||||||||
| Balance – December 31, 2024 | € | € | € | € | € | € | ( | ) | € | ( | ) | € | ||||||||||||||||||||||||||||||||
See accompanying notes to the consolidated financial statements.
F-6
BRERA HOLDINGS PLC
Consolidated Statements of Cash Flows
| For the year ended December 31, 2024 |
For the year ended December 31, 2023 |
For the year ended December 31, 2022 |
||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | € | ( |
) | € | ( |
) | € | ( |
) | |||
| Adjust net loss for items not involving cash: | ||||||||||||
| Depreciation on property, plant and equipment | ||||||||||||
| Amortization of right-of-use assets and intangible assets | ||||||||||||
| Gain on modification of lease, net | ( |
) | ( |
) | ||||||||
| Fair value gain (loss) on financial assets at fair value through profit and loss | ||||||||||||
| Change in provisions | ( |
) | ( |
) | ||||||||
| Loss on disposal of intangible assets | ||||||||||||
| Change in fair value in warrant liabilities | ||||||||||||
| Change in warrant expense | ( |
) | ||||||||||
| Share-based compensation – services | ||||||||||||
| Share-based compensation – options | ||||||||||||
| Change in contingent consideration | ( |
) | ||||||||||
| Bad debt written off | ||||||||||||
| Non-cash interest | ||||||||||||
| Interest paid on long term borrowing | ( |
) | ||||||||||
| Changes in non-cash working capital items: | ||||||||||||
| Trade and other receivables – non-related parties | ( |
) | ( |
) | ||||||||
| Trade and other receivables – related parties | ( |
) | ||||||||||
| Inventory | ( |
) | ||||||||||
| Deposits and prepayments | ( |
) | ||||||||||
| Loan receivable | ( |
) | ( |
) | ||||||||
| Trade and other payables – non-related parties | ||||||||||||
| Trade and other payables – related parties | ||||||||||||
| Deferred revenue | ( |
) | ||||||||||
| Change in tax liabilities | ( |
) | ||||||||||
| Change in bank overdraft | ||||||||||||
| Change in other financial liability | ||||||||||||
| Deferred taxes | ( |
) | ||||||||||
| Tax paid | ( |
) | ||||||||||
| Net cash used in operations | ( |
) | ( |
) | ( |
) | ||||||
| Cash flows from investing activities: | ||||||||||||
| Acquisition of subsidiaries | ( |
) | ( |
) | ( |
) | ||||||
| Purchase of property, plant and equipment | ( |
) | ( |
) | ( |
) | ||||||
| Purchase of intangibles | ( |
) | ( |
) | ||||||||
| Proceeds from financial assets at fair value through profit and loss | ( |
) | ||||||||||
| Net cash provided by (used in) investing activities | ( |
) | ( |
) | ( |
) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from sale of ordinary shares | ||||||||||||
| Proceeds from sale of preferred shares | ||||||||||||
| Proceeds from the issuance of debt | ||||||||||||
| Repayment of lease liabilities | ( |
) | ( |
) | ( |
) | ||||||
| Interest paid on lease liabilities | ( |
) | ( |
) | ( |
) | ||||||
| Repayment of loan from shareholder | ( |
) | ||||||||||
| Partial repayment of debt | ( |
) | ( |
) | ( |
) | ||||||
| Net cash provided by (used in) financing activities | ||||||||||||
| Net increase (decrease) in cash | ( |
) | ||||||||||
| Cash, beginning of period | ||||||||||||
| Cash paid for acquisitions less cash acquired | ( |
) | ||||||||||
| Effect of foreign exchange rate changes | ( |
) | ||||||||||
| Cash, end of period | € | € | € | |||||||||
| Supplemental disclosures of cash flow information | ||||||||||||
| Right-of-use assets obtained in exchange for lease liabilities | € | € | € | |||||||||
| Change in lease liabilities for modification of lease | € | € | € | |||||||||
See accompanying notes to the consolidated financial statements.
F-7
BRERA HOLDINGS PLC
Notes to Consolidated Financial Statements
Note 1 – General Information and Reorganization Transactions
Brera Holdings PLC (FKA Brera Holdings Limited) (“Brera Holdings” or the “Company”), a public company limited by shares, was incorporated in Ireland on June 30, 2022.
The sole subscriber to the incorporation constitution
of the Company was Goodbody Subscriber One Limited who subscribed for one (1) ordinary share for EUR
On July 29, 2022, the Company finalized an agreement for the purchase of all the shares of Brera Milano S.r.1. (“Brera Milano”) with Marco Sala, Stefano Locatelli, Alessandro Aleotti, Christian Rocca, Sergio Carlo Scalpelli, and MAX SRL (the “Milano Acquisition”). Brera Milano is an Italian limited liability company (società a responsabilità limitata) formed on December 20, 2016. Pursuant to the terms of the Milano Acquisition, Brera Milano became a wholly owned subsidiary of the Company. Brera Milano is engaged in a range of businesses including football (soccer) division progression, global player transfer services, sponsorship services, and football and volleyball school services and consulting services on football projects.
Pursuant to the terms of the Milano Acquisition,
the Company agreed to contribute EUR
The Milano Acquisition was accounted for as a
reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with the guidance in paragraphs B19–B27
of IFRS 3 for reverse acquisitions. Brera Milano was determined to be the accounting acquirer based upon the terms of the Milano Acquisition
and other factors including: (i) former Brera Milano shareholders owning approximately
Prior to the Milano Acquisition, the Company was a shell corporation established in 2022 with no operations at incorporation date. The Company has issued shares to the existing shareholders, and it is not qualified as a business under the definition of IFRS 3. With reference to IFRS 3 Appendix B, this would not constitute a business combination since there is no substantive change in the reporting entity or its assets and liabilities. Accordingly, the Company’s consolidated financial statements represent a continuation of the financial statement of Brera Milano and the assets and liabilities are presented at their historical carrying values.
Business
Our business strategy is to develop a “Global Sports Group” portfolio of professional sporting clubs. Under our Global Sports Group structure, we intend to acquire top-division sporting teams in Africa, South America, Eastern Europe, and potentially other emerging markets, and give them access to the global transfer market. We likewise expect that acquisitions of Eastern European and other non-mainstream market teams will enable us to compete and potentially win significant revenue in Union of European Football Associations (“UEFA”) and potentially other regional competitions.
In September 2023, Brera Milano assumed control of Bayanzurkh Sporting Ilch FC, an association operating a team in the Mongolian National Premier League. The team was rebranded Brera Ilch FC when the football season resumed in March 2024.
F-8
Brera FC, our Italian amateur football team, is an association under the control of Brera Milano. Brera Milano had paused operations of Brera FC for one year while Brera Milano established a wholly-owned subsidiary named Brera SSD and, in the summer of 2024, Brera SSD resumed operations of Brera FC with Brera SSD as its operating entity. Brera FC will continue playing at the famous Arena Civica in Milan.
During the years ended December 31, 2024 and 2023, we made the following acquisitions and investments.
Acquisition of FKAP
In April 2023, we acquired
The FKAP Acquisition is in continuation of our strategy to develop a “Global Sports Group” portfolio of professional sporting clubs. Under our Global Sports Group structure, we intend to acquire top-division football teams in Africa, South America, Eastern Europe, and potentially other emerging markets, and give them access to the global transfer market. We likewise expect that acquisitions of Eastern European and other non-mainstream market teams will enable us to compete and potentially win significant revenue in UEFA and potentially other regional competitions. We believe that FKAP, with both its football club and deep and talented roster of players, is an ideal strategic fit as we expand our portfolio.
In June 2024, we established a joint stock company for the North Macedonian women’s football club Tiverija Strumica, now known as Brera Tiverija FC, a wholly-owned subsidiary of FKAP.
See Note 3 for further information concerning the FKAP Acquisition.
Acquisition of UYBA
In July 2023, we acquired
We believe that UYBA, with both its volleyball club and deep and talented roster of players, is an ideal strategic fit as we expand our Global Sports Group portfolio.
See Note 3 for further information concerning the UYBA Acquisition.
Investment in Juve Stabia
On December 9, 2024, the Company announced that
it had agreed to acquire a majority ownership interest in Italian Serie B football club Juve Stabia through its owner and manager S.S.
Juve Stabia S.r.l. (“Juve Stabia” or “the Club”), through share capital and reserve increases in the Club. Our
investment will consist of both payments of cash and issuances of our Nasdaq-listed shares in a multi-step process that will ultimately
give the Company a total of approximately
See Note 4 for further information concerning the investment in Juve Stabia.
Initial Public Offering
On January 26, 2023, we entered into an underwriting
agreement (the “Underwriting Agreement”) with Revere Securities, LLC, as representative of the underwriters named on Schedule
1 thereto (the “Representative”), relating to the Company’s initial public offering (the “Offering”) of
F-9
The Offering Shares commenced trading on the
Nasdaq Capital Market under the symbol “BREA”. The closing of the Offering took place on January 31, 2023. After deducting
underwriting discounts and commissions and non-accountable expense allowance, the Company received net proceeds of approximately US$
The Company also issued the Representative a warrant
to purchase up to
The Offering Shares were offered and sold and the Representative’s Warrant was issued pursuant to the Company’s Registration Statement on Form F-1 (File No. 333-268187), as amended (the “Registration Statement”), initially filed with the U.S. Securities and Exchange Commission (the “Commission”) on November 4, 2022, and declared effective by the Commission on January 26, 2023, and the final prospectus filed with the Commission on January 30, 2023 pursuant to Rule 424(b)(4) of the Securities Act. The Offering Shares, Representative’s Warrant and the Class B Ordinary Shares underlying the Representative’s Warrant were registered as a part of the Registration Statement. The Company has used the net proceeds from the Offering to purchase acquisition or management rights of football clubs; continued investment in social impact football; sales and marketing; and working capital and general corporate purposes.
The Underwriting Agreement contained customary representations, warranties and covenants by the Company, customary conditions to closing, indemnification obligations of the Company and the underwriters, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
These consolidated financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC). Our year end is December 31. These consolidated financial statements include the accounts of the parent company and its subsidiaries constituting the Company. All intercompany transactions and balances have been eliminated.
Subsidiaries are all entities (including structured entities) over which the Company has control. The Company controls an entity where the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. The Company reassesses whether or not it controls an investee on a periodic basis, and they are deconsolidated from the date that control ceases.
The consolidated statements of financial position have been prepared based on the nature of the transactions, distinguishing: (a) current assets from non-current assets, where current assets are intended as the assets that should be realized, sold or used during the normal operating cycle, or the assets owned with the aim of being sold in the short term (within 12 months); (b) current liabilities from non-current liabilities, where current liabilities are intended as the liabilities that should be paid during the normal operating cycle, or over the 12-month period subsequent to the reporting date.
The consolidated statements of profit or loss have been prepared based on the function of the expenses.
The consolidated statements of cash flows have been prepared using the indirect method.
The consolidated financial statements present all amounts rounded to the nearest euro (“EUR” or “€”), unless otherwise stated. They also present comparative information with respect to previous periods.
F-10
Profit or loss and each item of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Company’s accounting policies.
All intercompany assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Company are eliminated in consolidation.
Non-controlling interests in subsidiaries are presented separately from the Company’s equity therein, which represent present ownership interests entitling their holders to a proportionate share of net assets of the relevant subsidiaries upon liquidation.
The following table lists the group companies in the Company.
| Company name | Jurisdiction | Incorporation Date | Ownership | |||
| Brera Holdings PLC | ||||||
| Brera Milano Srl | ||||||
| Brera FC | ||||||
| Fudbalski Klub Akademija Pandev | ||||||
| UYBA Volley S.s.d.a.r.l | ||||||
| Tiverija Brera AD Strumica |
Functional and Presentation Currency
The financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). These consolidated financial statements are presented in euro (the Company’s presentation currency).
| Entity | Functional Currency | |
| Brera Holdings. PLC | ||
| Brera Milano S.r.l. | ||
| Brera FC | ||
| Fudbalski Klub Akademija Pandev | ||
| UYBA Volley S.s.d.a.r.l | ||
| Tiverija Brera AD Strumica |
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates, are generally recognized in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the fair value gain or loss, and translation differences on non-monetary assets such as equities classified as at fair value through other comprehensive income are recognized in other comprehensive income.
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
| ● | assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet and at historical rates for equity. |
F-11
| ● | income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and |
| ● | all resulting exchange differences are recognized in other comprehensive income. |
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognized in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.
Going Concern Assumption
In early 2022, Russia initiated a war on Ukraine. This has led to volatility in both the commodity and equity markets and, in part, contributed to a steep rise in the global rate of inflation. Central banks have responded by increasing interest rates. The Company’s board of directors is monitoring the impact of these events and working with their advisers to ensure the continued smooth running of the business.
In preparing the consolidated financial statements,
the management of the Company have given careful consideration to the future liquidity of the Company. During the year ended December
31, 2024, the Company incurred a net loss of EUR
As discussed in Note 4, on December 9, 2024, the
Company announced that it had agreed to acquire a majority ownership interest in Juve Stabia through a payment of cash and the issuance
of Class B Ordinary Shares. In December 2024, the Company completed two closings of a private placement offering under which we sold
In accordance with International Accounting Standards (“IAS”) 1 Presentation of Financial Statement, management is required to perform a two-step analysis over the Company’s ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the period-end date. If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt. Management has evaluated the adverse conditions noted above and even though the adverse conditions were expected due primarily to the fact that the Company is in early stages of growth and transformation, the conditions have raised substantial doubt about the entity’s ability to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through public offerings, private equity offerings, debt financing, and government or other third-party funding. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.
The inability to obtain future additional funding could impact the Company’s financial condition and ability to pursue its business strategies, including being required to delay, reduce or eliminate some of its business development projects, or being unable to continue operations or continue as a going concern. The dependency on raising additional capital indicates that a material uncertainty exists that may cast significant doubt (or substantial doubt as contemplated by PCAOB standards) on the Company’s ability to continue as a going concern and therefore the Company may be unable to realize the assets and discharge the liabilities in the normal course of business.
F-12
Management has evaluated the adverse conditions noted above and concluded there is substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business and do not include any adjustments that would result if the Company were unable to continue as a going concern.
Historical Cost Convention
The consolidated financial statements have been prepared in accordance with the historical cost basis, except as disclosed in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Judgements and Estimates
The preparation of these consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The financial statements include estimates which by their nature are uncertain. The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions, and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
| - | Measurement of the provision for doubtful accounts, for the significant assumptions used by management in estimating the expected credit loss (“ECL”) (weighted-average loss rate or default rate, current and future financial situation of debtors for individual receivables that management is aware will be difficult to collect, future general economic conditions), and for the fair value measurements of options and warrants. |
| - | Estimated useful lives, depreciation method and impairment assessment of the property, plant and equipment and rights-of-use assets and for measuring impairment of intangibles. |
| - | Assessment of the lease term of lease liabilities depending on whether the Company is reasonably certain to exercise the extension options. |
Business Combinations
The Company accounts for business combinations using the guidance in IFRS 3, Business Combinations. The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
| ● | fair values of the assets transferred. |
| ● | liabilities incurred to the former owners of the acquired business. |
| ● | equity interests issued by the Company. |
| ● | fair value of any asset or liability resulting from a contingent consideration arrangement, and |
| ● | fair value of any pre-existing equity interest in the subsidiary. |
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Company recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are costs the Company incurs to affect a business combination. The Company accounts for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received.
The excess of (a) the consideration transferred, (b) the amount of any non-controlling interest in the acquired entity, and (c) the acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill.
F-13
If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently re-measured to fair value, with changes in fair value recognized in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognized in profit or loss.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand,
deposits held at call with financial institutions and all short-term investments readily convertible to cash, without notice or penalty,
with an initial maturity of 90 days or less to be cash equivalents. Our Company had cash equivalents of EUR
Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of our Company. Unobservable inputs are inputs that reflect our Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The fair value hierarchy consists of the following three levels of inputs that may be used to measure fair value:
| Level 1 | — | Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| Level 2 | — | Inputs other than quoted prices included in Level 1 that are observable in the marketplace either directly (i.e., as prices) or indirectly (i.e., derived from prices). | |
| Level 3 | — | Unobservable inputs which are supported by little or no market activity. |
For assets and liabilities, such as cash, accounts receivable, trade and other receivables, deposits and prepayments, loans receivable, trade and other payables, deferred revenue, lease liabilities, lease liabilities, loans payable, and income tax payable maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Fair value hierarchy of assets and liabilities that are recognized and measured at fair value in the financial statements as of December 31, 2024 and 2023 are as follows (level 3 inputs are not applicable):
| Fair Value Measurement Using | ||||
| Level 2 | ||||
| EUR | ||||
| December 31, 2024 | ||||
| Non-current liabilities | ||||
| Trade and other payables | ||||
| Lease liabilities | ||||
| Loan payable | ||||
| Contingent consideration | ||||
| December 31, 2023 | ||||
| Non-current assets | ||||
| Financial assets at fair value through profit and loss | ||||
| Non-current liabilities | ||||
| Trade and other payables | ||||
| Lease liabilities | ||||
| Loan payable | ||||
| Contingent consideration | ||||
F-14
Financial Risk Factors
Our Company is exposed in varying degrees to a variety of financial instrument-related risks. The main types of risks are credit risk, liquidity risk and market risk. These risks arise from the normal course of operations and all transactions are undertaken as a going concern. The type of risk exposure and the way in which such exposure is managed is as follows:
Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company’s credit risk is primarily attributable to its cash and cash equivalents and trade receivables and other receivables.
As of December 31, 2024, one customer accounted
for more than 10% of the Company’s trade and other receivables and as of December 31, 2023, one customer accounted for
Cash and cash equivalents are placed with credit-worthy financial institutions with high credit ratings assigned by international credit-rating agencies and therefore credit risk is limited. The Company has adopted procedures for extending credit terms to customers and monitoring its credit risk. Credit evaluations are performed on customers requiring credit over a certain amount. Before accepting any new customer, the Company carries out research on the credit risk of the new customer and assesses the potential customer’s credit quality and defines credit limits by customer. Limits attributed to customers are reviewed when necessary.
Financial instruments, which potentially subject
the Company to concentration of credit risk, consist primarily of cash deposits and accounts receivable. The Company minimizes the concentration
of credit risk associated with its cash by maintaining its cash with high-quality insured financial institutions. For the cash deposit
in the traditional banks in Italy, cash balances in excess of the amount covered by the statutory Deposit Guarantee Scheme in Italy (i.e.,
EUR
As of December 31, 2024 and 2023, we had cash
deposits in a non-traditional bank, Wise Europe SA, amounting to EUR
The Company’s current credit risk grading framework comprises the following categories:
| Category | Description | Basis of recognizing estimated credit loss (“ECL”) | ||
F-15
| Financial assets at amortized cost | 12-month or lifetime ECL | Gross carrying amount EUR |
Loss allowance EUR |
Net carrying amount EUR |
||||||||||
| 2024 | ||||||||||||||
| Trade receivables | Lifetime ECL – Not credit-impaired | |||||||||||||
| Other receivables | 12-month ECL | |||||||||||||
| 2023 | ||||||||||||||
| Trade receivables | Lifetime ECL – Not credit-impaired | |||||||||||||
| Other receivables | 12-month ECL | |||||||||||||
Liquidity Risk
Liquidity risk is the risk that we will not be able to meet our financial obligations as they fall due. Our approach to managing liquidity risk to is ensure, as far as possible, that we will always have sufficient funds to meet liabilities when due. We also manage liquidity risk by continuously monitoring actual and budgeted expenses.
In the management of the liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance its operations and mitigate the effects of fluctuations in cash flows. The management monitors the utilization of bank borrowings and ensures compliance with loan covenants.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect our income or the value of our holdings of financial instruments. We have limited exposure to any market risk.
Interest Rate Risk
We are exposed to market risks in the ordinary course of our business. Interest rate risk arises from the potential changes in interest rates that may have an adverse effect on the Company in the current reporting period and future years. Our primary interest rate relates to interest-bearing long-term borrowings. At this time, the Company only has fixed rate loans so any interest rate change would have no effect. The effect of rising interest rates on our financial condition is expected to be negligible given that we do not have material debt or accounts receivable.
The Company’s primary interest rate relates to interest-bearing long-term borrowings. The interest rate and terms of repayment of bank loans are disclosed in Note 11 of these consolidated financial statements.
Foreign Currency Exchange Risk
The majority of our cash flows, financial assets and liabilities are denominated in U.S. dollars, euros, and denars, which are the functional currencies for the Company, Brera Milano/UYBA, and FKAP, respectively. The reporting currency of the consolidated financial statements is euros. We are exposed to financial risk related to the fluctuation of foreign exchange rates and the degree of volatility of those rates. Currency risk is limited to the proportion of our business transactions denominated in currencies other than the euro, primarily for capital expenditures, potential future debt, if any, and various operating expenses such as salaries and professional fees. We do not currently use derivative financial instruments to reduce our foreign exchange exposure and management does not believe our current exposure to currency risk to be significant.
Deferred Offering Costs
Deferred offering cost means any fees, commissions, costs, expenses, concessions and other amounts payable to any party, including, without limitation, brokers, underwriters, advisors (accounting, financial, legal and otherwise) and any consultants, in connection with the Company’s initial public offering of Class B Ordinary Shares (“Offering Shares”). The Offering Shares commenced trading on the Nasdaq Capital Market under the symbol “BREA”. The closing of the IPO took place on January 31, 2023. Upon completion of the IPO, these deferred offering costs were reclassified from current assets to stockholders’ equity and recorded against the net proceeds from the offering.
F-16
Property, Plant and Equipment
Property, plant and equipment are tangible assets that are held for use in the production or supply of goods or services, or for administrative purposes. Property, plant and equipment are stated in the consolidated statements of financial position at original cost less subsequent accumulated depreciation and subsequent accumulated impairment losses, if any.
Costs include any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and, for qualifying assets, borrowing costs capitalized in accordance with the Company’s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation is recognized to allocate the cost of assets less their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.
Depreciation is charged to allocate the cost of assets, over their estimated useful lives, using the straight-line method, on the following bases:
| Years | ||||
| Leasehold improvements | ||||
| Furniture and fixtures | ||||
| Office equipment and software | ||||
| Motor vehicles | ||||
| Building | ||||
| Other | ||||
Impairment on Property, Plant and Equipment and Right-of-Use Assets
At the end of the reporting period, the Company reviews the carrying amounts of its property, plant and equipment and right-of-use assets to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the relevant asset is estimated in order to determine the extent of the impairment loss (if any).
The recoverable amount of property, plant and equipment and right-of-use assets are estimated individually. When it is not possible to estimate the recoverable amount individually, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
In testing a cash-generating unit for impairment, corporate assets are allocated to the relevant cash-generating unit when a reasonable and consistent basis of allocation can be established, or otherwise they are allocated to the smallest group of cash generating units for which a reasonable and consistent allocation basis can be established. The recoverable amount is determined for the cash-generating unit or group of cash-generating units to which the corporate asset belongs and is compared with the carrying amount of the relevant cash-generating unit or group of cash-generating units.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset (or a cash-generating unit) for which the estimates of future cash flows have not been adjusted.
F-17
If the recoverable amount of an asset (or a cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or a cash-generating unit) is reduced to its recoverable amount. For corporate assets or portion of corporate assets which cannot be allocated on a reasonable and consistent basis to a cash-generating unit, the Company compares the carrying amount of a group of cash-generating units, including the carrying amounts of the corporate assets or portion of corporate assets allocated to that group of cash-generating units, with the recoverable amount of the group of cash-generating units. In allocating the impairment loss, the impairment loss is allocated first to reduce the carrying amount of any goodwill (if applicable) and then to the other assets on a pro-rata basis based on the carrying amount of each asset in the unit or the group of cash-generating units. The carrying amount of an asset is not reduced below the highest of its fair value less costs of disposal (if measurable), its value in use (if determinable) and zero. The amount of the impairment loss that would otherwise have been allocated to the asset is allocated pro rata to the other assets of the unit or the group of cash-generating units. An impairment loss is recognized immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit or a group of cash-generating units) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or a cash-generating unit or a group of cash-generating units) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. No impairment losses were recognized on property, plant and equipment or right-of-use assets during the fiscal years 2024 and 2023.
Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) resulting from a past event, it is probable that the Company will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.
Provisions for legal claims, service warranties and one-time termination benefits for certain employees are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
Share-Based Compensation
The Company grants share options and awards to the Company’s directors, officers, employees, and consultants. In accordance with IFRS 2 Share Based Payments, the fair value of each option or award is calculated on the grant date. The fair value of share options is measured using the Black-Scholes pricing model whereas the fair value of share awards is determined based on the most recent trading price of the relevant shares and the resulting cost of share options or awards granted is either capitalized to the consolidated statement of financial position or charged to the consolidated statement of profit or loss over the vesting period. Where share options or awards are subject to vesting, each vesting tranche is considered a separate award with its own vesting period and grant date fair value. Compensation expense is recognized over the tranche’s vesting period by either capitalization to the consolidated statement of financial position or a charge to the consolidated statement of profit or loss with a corresponding increase to reserves based on the number of options expected to vest. Consideration paid for the shares on the exercise of share options is credited to capital shares. When vested options are forfeited or are not exercised at the expiration date, the amount previously recognized in share-based compensation is transferred to deficit. The number of options expected to vest is reviewed at least annually, with any impact being recognized immediately.
Financial Instruments
Financial assets and financial liabilities are recognized when a Company entity becomes a party to the contractual provisions of the instrument. Purchases or sales are transactions that require delivery of assets within the time frame established by regulation or convention in the marketplace. Purchases or sales of financial assets are recognized and derecognized on a trade date/settlement date basis.
Financial assets and financial liabilities are initially measured at fair value except for trade receivables arising from contracts with customers which are initially measured in accordance with IFRS 15. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets or financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
F-18
The effective interest method is a method of calculating the amortized cost of a financial asset or financial liability and of allocating interest income and interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts and payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Financial Assets
Classification and subsequent measurement of financial assets
Financial assets that meet the following conditions are subsequently measured at amortized cost:
| ● | the financial asset is held within a business model whose objective is to collect contractual cash flows; and |
| ● | the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
(i) Amortized cost and interest income
Interest income is recognized using the effective interest method for financial assets measured subsequently at amortized cost, and debt instruments or receivables subsequently measured at fair value through comprehensive income. Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset.
Impairment of financial assets subject to impairment assessment under IFRS 9.
The Company performs impairment assessment under ECL model on financial assets (including trade and other receivables and loan receivables) which are subject to impairment assessment under IFRS 9. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition.
Lifetime ECL represents the ECL that will result from all possible default events over the expected life of the relevant instrument. In contrast, 12-month ECL (“12m ECL”) represents the portion of lifetime ECL that is expected to result from default events that are possible within 12 months after the reporting date. Assessments are done based on the Company’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current conditions at the reporting date as well as the forecast of future conditions.
The Company always recognizes lifetime ECL for trade receivables. For all other instruments, the Company measures the loss allowance equal to 12m ECL, unless there has been a significant increase in credit risk since initial recognition, in which case the Company recognizes lifetime ECL. The assessment of whether lifetime ECL should be recognized is based on significant increases in the likelihood or risk of a default occurring since initial recognition.
(ii) Significant increase in credit risk
In assessing whether the credit risk has increased significantly since initial recognition, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort.
In particular, the following information is considered when assessing whether credit risk has increased significantly:
| ● | an actual or expected significant deterioration in the financial instrument’s external (if available) or internal credit rating; |
| ● | significant deterioration in external market indicators of credit risk, e.g. a significant increase in the credit spread, the credit default swap prices for the debtor; |
| ● | existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the debtor’s ability to meet its debt obligations; |
| ● | an actual or expected significant deterioration in the operating results of the debtor; |
| ● | an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor that results in a significant decrease in the debtor’s ability to meet its debt obligations. |
F-19
Irrespective of the outcome of the above assessment, the Company presumes that the credit risk has increased significantly since initial recognition when contractual payments are more than 120 days past due, unless the Company has reasonable and supportable information that demonstrates otherwise.
Despite the foregoing, the Company assumes that the credit risk on a debt instrument has not increased significantly since initial recognition if the debt instrument is determined to have low credit risk at the reporting date. A debt instrument is determined to have low credit risk if (i) it has a low risk of default, (ii) the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and (iii) adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.
The Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
In order to minimize the credit risk, the management of the Company has created a team responsible for the determination of credit limits and credit approvals for customers.
(iii) Definition of default
The Company considers for internal credit risk management purposes, based on historical experience, that an event of default to have occurred when there is information obtained from internal or external sources that indicates the debtor is unlikely to pay its creditors, including the Company.
(iv) Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. These events include evidence that there is significant financial difficulty of the debtors or it is becoming probable that the debtor will enter bankruptcy.
(v) Write-off policy
The Company writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, e.g., when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the Company’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognized in profit or loss.
(vi) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e., the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate.
If the Company has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Company measures the loss allowance at an amount equal to 12-month ECL at the current reporting date.
The Company recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.
F-20
Derecognition of Financial Assets
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and a collateralized borrowing for the proceeds received.
On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received is recognized in profit or loss.
Financial Liabilities and Equity
Classification as Debt or Equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Sale of shares are recorded at the proceeds received, net of direct issue costs while issuances of stock award, options and warrants are recorded at the fair market values on the dates of issuance or grant.
Financial Liabilities
Financial liabilities including trade and other payables, loans from shareholders and borrowings are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest method, with interest expense recognized on an effective yield basis, except for short-term payables when the recognition of interest would be immaterial.
Interest-bearing loans are initially recognized at fair value, and are subsequently measured at amortized cost, using the effective interest method.
Derecognition of Financial Liabilities
The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.
Revenue from Contracts with Customers
Revenue is measured based on the consideration specified in a contract with a customer and recognized as and when control of a service is transferred to a customer.
A performance obligation represents a good or service (or a bundle of goods or services) that is distinct or a series of distinct goods or services that are substantially the same.
Control is transferred over time and revenue is recognized over time by reference to the progress towards complete satisfaction of the relevant performance obligation if one of the following criteria is met:
| ● | the customer simultaneously receives and consumes the benefits provided by the Company’s performance as the Company performs; |
| ● | the Company’s performance creates or enhances an asset that the customer controls as the Company performs; or |
| ● | the Company’s performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date. |
Otherwise, revenue is recognized at a point in time when the customer obtains control of the distinct good or service.
F-21.
A contract asset represents the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer that is not yet unconditional. It is assessed for impairment in accordance with IFRS 9. In contrast, a receivable represents the Company’s unconditional right to consideration, i.e., only the passage of time is required before payment of that consideration is due.
A contract liability represents the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer.
A contract asset and a contract liability relating to the same contract are accounted for and presented on a net basis.
Revenues are recognized upon the application of the following steps:
| 1. | Identification of the contract or contracts with a customer; |
| 2. | Identification of the performance obligations in the contract; |
| 3. | Determination of the transaction price; |
| 4. | Allocation of the transaction price to the performance obligations in the contract; and |
| 5. | Recognition of revenue when, or as, the performance obligation is satisfied. |
The Company enters into services agreements and statements of work which set out the details of the work streams for each project to be provided to the customers. The work streams are generally capable of being distinct and accounted for as separate performance obligations.
Revenue recognized from contracts with customers is disaggregated into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
| ● | In 2023, the Company transitioned its business model to acquiring and operating professional sports teams worldwide. The principal activities of the Company for the year ended December 31, 2023 were advertising and sponsorships associated with the operation of its international sports teams. This business model continued into the year ended December 31, 2024. Under the current business model, commercial revenue (whether settled in cash or value in kind) mainly comprises the exploitation of the Brera brand through sponsorships, advertising and other commercial agreements. |
Our revenue has been disaggregated into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The categories of the majority or our revenue during the years ended December 31, 2024 and 2023 are as follows:
| ● | Advertising and Sponsorships – we entered into advertising and sponsorship agreements which typically are for |
| ● | Ticketing – we sold tickets to our sporting events both for an entire season and on a single ticket basis. For any tickets, we recognized revenue at the time the ticket is sold. |
| ● | Youth League – we operated volleyball schools for younger ages. We recognize revenue over the school term. |
| ● | Store – we sold merchandise at events. We recognize revenue at point of sale. |
| ● | Player Transfers – we occasionally entered into transfer agreements, commercial partner agreements and other contracts. A transfer is a business transaction between two clubs which sees a player move from one club to the other. If a player is under contract, the club wishing to secure his or her services are usually expected to pay compensation - otherwise known as a transfer fee. |
The Company has elected to apply the practical expedient provided in IFRS 15, to recognize revenue in the amount to which it has the right to invoice and has not disclosed the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period.
F-22
Interest Income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.
Leases
A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company accounts for leases under the guidance of IFRS 16. For leases entered into or modified on or after the date of initial application of IFRS 16 or arising from business combinations, the Company assesses whether a contract is or contains a lease based on the definition under IFRS 16 at inception, modification date or acquisition date, as appropriate. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed.
Short-Term Leases and Leases of Low-Value Assets
The Company applies the short-term lease recognition exemption to leases of motor vehicles that have a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the recognition exemption for lease of low-value assets. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis or another systematic basis over the lease term.
Lease Liabilities
At the commencement date of a lease, the Company recognizes and measures the lease liability at the present value of lease payments that are unpaid at that date. In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable.
The lease payments include:
| ● | fixed payments (including in-substance fixed payments) less any lease incentives receivable; |
| ● | variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; |
| ● | amounts expected to be payable by the Company under residual value guarantees; |
| ● | the exercise price of a purchase option if the Company is reasonably certain to exercise the option; and |
| ● | payments of penalties for terminating a lease, if the lease term reflects the Company exercising an option to terminate the lease. |
After the commencement date, lease liabilities are adjusted by interest accretion and lease payments.
The Company remeasures lease liabilities (and makes a corresponding adjustment to the related right-of-use assets) whenever:
| ● | the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the related lease liability is remeasured by discounting the revised lease payments using a revised discount rate at the date of reassessment. |
| ● | the lease payments change due to changes in market rental rates following a market rent review/expected payment under a guaranteed residual value, in which cases the related lease liability is remeasured by discounting the revised lease payments using the initial discount rate. |
The Company presents lease liabilities as a separate line item on the consolidated statements of financial position.
F-23
Right-of-Use Assets
The cost of right-of-use asset includes:
| ● | the amount of the initial measurement of the lease liability; |
| ● | any lease payments made at or before the commencement date, less any lease incentives received; |
| ● | any initial direct costs incurred by the Company; and |
| ● | an estimate of costs to be incurred by the Company in dismantling and removing the underlying assets, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. |
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.
Right-of-use assets in which the Company is reasonably certain to obtain ownership of the underlying leased assets at the end of the lease term are depreciated from commencement date to the end of the useful life. Otherwise, right-of-use assets are amortized on a straight-line basis over the shorter of its estimated useful life and the lease term.
The Company presents right-of-use assets as a separate line item on the consolidated statements of financial position.
Inventories
Inventories are valued at the lower of cost and net realizable value. Cost comprises purchase cost of goods, direct labor. Costs of purchases inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. Inventories are accounted for on a first-in-first-out (FIFO) basis.
Refundable Rental Deposits
Refundable rental deposits paid are accounted under IFRS 9 and initially measured at fair value. Adjustments to fair value at initial recognition are considered as additional lease payments and included in the cost of right-of-use assets.
Borrowing Costs
All borrowing costs are recognized in profit or loss in the period in which they are incurred.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit/(loss) before tax because of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.
F-24
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied to the same taxable entity by the same taxation authority.
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
Trade Receivables
Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components when they are recognized at fair value. They are subsequently measured at amortized cost using the effective interest method, less loss allowance. For trade receivables, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables. See Note 11 for further information about the Company’s accounting for trade receivables.
Trade And Other Payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial period which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.
Intangible Assets
Goodwill
Goodwill is monitored by management at the level of each operating segment. The fair values of net tangible assets and intangible assets acquired are based upon preliminary valuations and the Company’s estimates and assumptions are subject to change within the measurement period (potentially up to one year from the acquisition date). Goodwill is measured as described in the Business Combinations section above. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Intangible Assets
Player contracts, broadcasting rights, brands,
and customer relationships were acquired as part of a business combination.
| Player contracts | ||
| Brands | ||
| Broadcasting rights | ||
| Season ticket holders | ||
| Stadium lease | ||
| Customer relationships |
F-25
Impairment of Assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period. The Company performed its annual impairment assessment and determined that no impairment losses were required to be recognized for the fiscal years 2024 and 2023.
Government Grants
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received, and the Company will comply with all attached conditions.
Investments And Other Financial Assets
Classification
The Company classifies its financial assets in the following measurement categories:
| ● | those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss), and |
| ● | those to be measured at amortized cost. |
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. The Company reclassifies debt investments when and only when its business model for managing those assets changes.
Recognition and Derecognition
Purchases and sales of financial assets are recognized on trade date, being the date on which the Company commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
Debt Instruments
The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. There are three measurement categories into which the Company classifies its debt instruments:
Amortized cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss.
F-26
Equity Investments
The Company measures all equity investments at fair value. Where the Company’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Company’s right to receive payments is established.
Changes in the fair value of financial assets at fair value through profit or loss are recognized in other gains/(losses) in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at fair value through other comprehensive income are not reported separately from other changes in fair value.
Impairment
The Company assesses on a forward-looking basis the expected credit losses associated with its financial instruments carried at amortized cost and fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
Loans
Loans are initially recognized at fair value, net of transaction costs incurred. Loans are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the loans using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.
Loans are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss as other income or finance costs.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognized in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. Loans are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
Note 3 — Acquisitions
FKAP
As stated in Note 1, in April 2023, the Company
acquired
F-27
Details of the purchase consideration, the net assets acquired, and goodwill are as follows:
| December 31, 2023 | ||||
| EUR | ||||
| Cash purchase | ||||
| Contingent consideration | ||||
| Total purchase consideration | ||||
As of December 31, 2024 and 2023, the fair value
of the contingent consideration was EUR
IFRS 3 Purchase Price Allocation of FKAP
| Final Fair Value December 31, 2023 | ||||
| EUR | ||||
| Net Tangible Assets | ||||
| Net working capital | ( | ) | ||
| Fixed assets | ||||
| Amounts due to related parties | ( | ) | ||
| Total tangible asset allocation | ( | ) | ||
| Identifiable Intangible Assets | ||||
| Broadcasting rights | ||||
| Brand | ||||
| Player contracts | ||||
| Total identifiable intangible assets | ||||
| Implied goodwill | ||||
| Business Enterprise Value (BEV) | ||||
| Less: Non-controlling interest | ( | ) | ||
| Total Purchase Price (Equity Basis) | ||||
The goodwill is attributable to the workforce and the high profitability of the acquired business. It will not be deductible for tax purposes.
Accounting Policy Choice for Non-Controlling Interests
The Company recognizes non-controlling interests in an acquired entity either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition-by-acquisition basis. For the non-controlling interests in FKAP, the Company elected to recognize the non-controlling interests at its proportionate share of the acquired net identifiable assets. See Note 2 Business Combinations for the Company’s accounting policies for business combinations.
F-28
UYBA
As stated in Note 1, in July 2023, we acquired
IFRS 3 Purchase Price Allocation of UYBA
| Fair Value July 31, 2023 | ||||
| EUR | ||||
| Net Tangible Assets | ||||
| Current assets | ||||
| Current liabilities minus short term debt | ||||
| Net working capital | ( | ) | ||
| Fixed assets | (*) | |||
| Financial assets | ||||
| Other liabilities | ( | ) | ||
| Total tangible asset allocation | ( | ) | ||
| Identifiable Intangible Assets | ||||
| Advertising relationships | ||||
| Season ticketholder relationships | ||||
| Stadium lease | ||||
| Brand | (*) | |||
| Player contracts | ||||
| Total identifiable intangible assets | ||||
| Assembled workforce | ||||
| Implied goodwill (excl. assembled workforce) | ||||
| Total economic goodwill | ||||
| Business Enterprise Value (BEV) | ||||
| Deduct: Debt | ( | ) | ||
| Total Purchase Consideration (Equity Basis) | ||||
| Less: Non-controlling interest | ( | ) | ||
| Total Purchase Price | ||||
The goodwill is attributable to the workforce and the high profitability of the acquired business. It will not be deductible for tax purposes.
| (*) |
F-29
Accounting Policy Choice for Non-Controlling Interests
The Company recognizes non-controlling interests in an acquired entity either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition-by-acquisition basis. For the non-controlling interests in UYBA, the Company elected to recognize the non-controlling interests at its proportionate share of the acquired net identifiable assets. See Note 2 Business Combinations for the Company’s accounting policies for business combinations. The fair values of net tangible assets and intangible assets acquired are based upon preliminary valuations and the Company’s estimates and assumptions are subject to change within the measurement period (potentially up to one year from the acquisition date).
Note 4 – Investment in Juve Stabia
On December 9, 2024, the Company announced that
it had agreed to acquire a majority ownership interest in Juve Stabia, through share capital and reserve increases in the Club. Our investment
will consist of both payments of cash and issuances of our Nasdaq-listed shares in a multi-step process that will ultimately give the
Company a total of approximately
The Company has also agreed on certain earn out consideration to be paid to XX Settembre on a contingent basis. Upon and subject to completion of the final closing, in addition to the purchase price, the Company shall pay to the XX Settembre an amount of:
| ● | EUR |
| ● | EUR |
The Earn-Outs are only a possible and subordinate consideration and, therefore, the Company will be required to pay each Earn-Out only if the corresponding indicated condition occurs.
We determined that this transaction is a business
combination achieved in stages, or a step acquisition as discussed in paragraph 41 of IFRS 3. In a step acquisition, IFRS 3 defines the
acquisition date as the date the acquirer obtains control of the acquiree. In a combination effected by a sale and purchase agreement,
this is generally the specified closing or completion date. While IFRS also defines control as having a majority of board seats or decision-making
authority, our Company has no board seats and no decision-making authority for Juve Stabia at December 31, 2024 and will not have such
a majority of board seats or authority until the final closing. Therefore, for the Juve Stabia acquisition, the date of the final closing
is date that final consideration will be paid and control of approximately
As of December 31, 2024, Brera’s ownership
in Juve Stabia was approximately
As of December 31, 2024, we have recorded an investment
of €
F-30
Note 5 – Financial Instruments
The following table sets out the financial instruments as at the end of the reporting period:
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Financial assets | ||||||||
| Cash | ||||||||
| Trade and other receivables – outside parties | ||||||||
| Trade and other receivables – related parties | ||||||||
| Total | ||||||||
| Financial liabilities | ||||||||
| Trade and other payables – outside parties | ||||||||
| Trade and other payables – related parties | ||||||||
| Deferred revenue | ||||||||
| Loan payable – outside parties | ||||||||
| Loan payable – related party | ||||||||
| Lease liabilities | ||||||||
Note 6 – Property, Plant and Equipment
December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Office equipment | ||||||||
| Furniture and fixtures | ||||||||
| Motor vehicles | ||||||||
| Leasehold improvements | ||||||||
| Subtotal | ||||||||
| Less accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Net | ||||||||
Depreciation expense for the years ended December
31, 2024 and 2023 amounted to EUR
Note 7 – Right-of-Use Assets
December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Arena | ||||||||
| Flats and houses | ||||||||
| Subtotal | ||||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| Net | ||||||||
F-31
Amount recognized in profit and loss
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Amortization of right-of-use assets | ||||||||
| Interest expense on lease liabilities | ||||||||
| Expenses relating to lease of short-term leases | ||||||||
The Company applies the short-term lease recognition exemption to leases of motor vehicles that have a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the recognition exemption for lease of low-value assets. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis or another systematic basis over the lease term.
Note 8 – Intangible Assets
December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Customer relationships | ||||||||
| Broadcasting rights/sports titles/stadium lease | ||||||||
| Brand | ||||||||
| Player contracts | ||||||||
| Other | ||||||||
| Goodwill | ||||||||
| Subtotal | ||||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| Net | ||||||||
The cost of and amortization methods and periods used by the Company for goodwill, customer relationships, broadcasting rights and other intangible assets are disclosed in Note 2 under Intangible Assets. The Company performed its annual impairment assessment and determined that impairment losses were required to be recognized for the fiscal years 2024 and 2023.
The asset’s useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Note 9 – Financial Assets at Fair Value through Profit or Loss
Financial assets mandatorily measured at fair value through profit or loss include the following:
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Current assets | ||||||||
| U.S. listed equity securities | ||||||||
| Treasury bond | ||||||||
F-32
During the periods presented below, the following gains (losses) were recognized in profit or loss:
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Fair value gains (losses) on equity investments recognized in other income (expense) | ||||||||
Note 10 – Loan Receivable
During the year, the Company issued short-term loans primarily for operational purposes. The nature and terms of these loans are outlined below:
Business Purpose: The loans were extended to employees, consultants, and affiliated entities to support short-term operational needs, including funding payroll, fee advances, and other working capital requirements. All operational loans were issued in the ordinary course of business to maintain uninterrupted operations.
Terms: The loans were unsecured, short-term, non-interest-bearing, and repayable on demand.
All loans were fully settled by December 31, 2024, with the exception of those issued to Brera Ilch NGO and Sport For Life, which remained outstanding as of the reporting date.
The loan receivable amounts consist of the following:
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Current assets | ||||||||
| Short term loan receivable – related parties | ||||||||
Note 11 – Trade and Other Receivables
Trade and other receivables consist of the following:
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Trade receivables – outside parties | ||||||||
| Trade receivables – related parties | ||||||||
The credit period on rendering of service to outside parties is based on ordinary course of business practices. Trade receivables are mainly made up of advertising, sponsorships, and naming rights.
Any loss allowance for trade receivables has been measured at an amount equal to the lifetime ECL. The ECL on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors, and where relevant general economic conditions of the industry in which the debtors operate. As of the end of each reporting period presented above, management considers the ECL for trade and other receivables to be insignificant.
Note 12 – Deposits and Prepayments
Deposits and prepayments consist of the following:
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Deposits – outside parties | ||||||||
| Prepayments – outside parties | ||||||||
Prepayments consist mainly of yearly registration fees to professional leagues and legal and professional deposits.
F-33
Note 13 –Trade and Other Payables
Trade and other payables consist of the following:
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Current: | ||||||||
| Trade and other payables – non-related parties | ||||||||
| Trade and other payables – related parties | ||||||||
| Subtotal | ||||||||
| Non-current: | ||||||||
| Trade and other payables – non-related parties | - | |||||||
| Trade and other payables – related parties | - | |||||||
| Subtotal | ||||||||
| Total | ||||||||
Trade payables mainly represent amounts due to vendors, including independent third party and related parties, who delivered the consultancy services. Other payables mainly represent accruals, VAT and other taxes payable.
Note 14 – Loans Payable
Loans Payable to Non-Related Party
Loans payable to non-related parties consist of the following:
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Unsecured – at amortized cost: | ||||||||
| Unsecured – at amortized cost: (2022: interest rate: | ||||||||
| Analyzed between: | ||||||||
| Current portion – due within 1 year | ||||||||
| Non-current portion – due within 2 to 5 years | ||||||||
The loans were drawn in 2021 and 2023 from an
independent third party. The weighted average annualized interest rate is
Loans Payable to Related Parties
Director Loans
In April 2023, we received an interest-free loan
from Goran Pandev, one of our directors, in the amount of EUR
During the period August 29, 2024 to November
29, 2024, Daniel Jospeh McClory, the Company’s Executive Chairman, made short-term interest-free loans to the Company of EUR
Note 15 – Lease Liabilities and Commitment
The Company entered into lease agreements for
the arena and athlete housing with expiration dates ranging from 2024 to 2039. The lease terms were between
F-34
A maturity analysis of lease liabilities based on undiscounted gross cash flow is shown in the table below:
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Less than 1 year | ||||||||
| 1 to 5 years | ||||||||
| 5 to 10 years | ||||||||
| 10 to 15 years | ||||||||
| More than 15 years | ||||||||
| Total undiscounted cash flow | ||||||||
| Less: interest to be paid | ( | ) | ( | ) | ||||
| Total lease liabilities | ||||||||
| Non-current lease liabilities | ||||||||
| Current lease liabilities | ||||||||
| Total lease liabilities | ||||||||
Note 16 –
The provision for income taxes differs from the amount that would have resulted in applying the combined federal statutory tax rate as follows:
| December 31, | December 31, | December 31, | ||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Net loss before taxes for the period | € | € | € | |||||||||
| Permanent differences | ||||||||||||
| Expected in tax recovery at | € | € | ( | ) | € | |||||||
| Difference in tax rates, foreign exchange, and other | ||||||||||||
| Change in deferred tax assets not recognized | ||||||||||||
| Income tax recovery | € | € | ( | ) | € | |||||||
| Statutory income tax rate | % | |||
| Italy | % | |||
| Macedonia | % | |||
| Ireland | % | |||
Temporary differences that give rise to the following deferred tax assets and liabilities at are:
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Deferred tax assets/(liabilities) | € | € | ( | ) | ||||
| Net operating loss carryforwards | € | € | ||||||
| Deferred tax assets not recognized | ( | ) | ||||||
| Net deferred tax asset/(liabilities) | € | € | ( | ) | ||||
As of December 31, 2024 and 2023, the Company has approximately
EUR
Note 17 – Deferred Revenue
Deferred revenue, also known as unearned revenue, represents amounts received or invoiced in advance of delivering goods or rendering services. These amounts are recognized as revenue when the performance obligations under the contracts are fulfilled. The Company accounts for deferred revenue in accordance with IFRS –15 - Revenue from Contracts with Customers.
The following is a summary of the sources of deferred revenue:
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Brera Milano | ||||||||
| UYBA | ||||||||
| FKAP | ||||||||
| Total | ||||||||
F-35
Note 18 – Share Capital and Other Reserves
The authorized share capital of the Company consists
of
Shares Issued for Cash
During the year ended December 31, 2023, our Company
sold
In January 2023, our Company conducted an initial
public offering (the “Offering”) of
The Offering Shares commenced trading on the Nasdaq
Capital Market under the symbol “BREA.” The closing of the Offering took place on January 31, 2023. After deducting underwriting
discounts and commissions and non-accountable expense allowance, the Company received net proceeds of approximately US$
The Company also issued the Representative a warrant
to purchase up to
The Offering Shares were offered and sold and the Representative’s Warrant was issued pursuant to the Company’s Registration Statement on Form F-1 (File No. 333-268187), as amended (the “Registration Statement”), initially filed with the Commission on November 4, 2022, and declared effective by the Commission on January 26, 2023, and the final prospectus filed with the Commission on January 30, 2023 pursuant to Rule 424(b)(4) of the Securities Act. The Offering Shares, Representative’s Warrant and the Class B Ordinary Shares underlying the Representative’s Warrant were registered as a part of the Registration Statement. The Company intends to use the net proceeds from the Offering to purchase acquisition or management rights of football clubs; continued investment in social impact football; sales and marketing; and working capital and general corporate purposes.
The Underwriting Agreement contained customary representations, warranties and covenants by the Company, customary conditions to closing, indemnification obligations of the Company and the underwriters, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.
The Company’s officers, directors, and Class A Ordinary Shares shareholders, have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any ordinary shares or other securities convertible into or exercisable or exchangeable for ordinary shares for a period of 12 months without the prior written consent of the Representative.
In December 2024, the Company completed two closings
of a private placement offering of its securities selling
F-36
Shares Issued for Services
During the year ended December 31, 2024, we granted
share awards totaling
During the year ended December 31, 2023, we granted
share awards totaling
We valued the share awards based on the fair market
value of our shares on the dates of grant. During the years ended December 31, 2024 and 2023, we recorded general and administrative expenses
of EUR
Share Options
On February 2, 2023, we granted options to purchase
The fair value of each share option was estimated
on the date of grant using the Black-Scholes option pricing model, resulting in a valuation for all five options totaling EUR
| Expected term in years | ||
| Risk-free interest rate | ||
| Annual expected volatility | ||
| Dividend yield |
Risk-free interest rate: We use the risk-free interest rate of a U.S. Treasury Bill with a similar term on the date of the option grant.
Volatility: We estimate the expected volatility of the share price based on the corresponding volatility of our historical share price.
Dividend yield: We use a
Remaining term: The remaining term is based on the remaining contractual term of the warrant.
Activity related to the share options is as follows:
| Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life in Years | Aggregate Intrinsic Value | |||||||||||||
| Outstanding, December 31, 2022 | US$ | - | ||||||||||||||
| Activity during the year ended December 31, 2023: | ||||||||||||||||
| Options granted | US$ | | ||||||||||||||
| Options forfeited | ( | ) | US$ | |||||||||||||
| Outstanding, December 31, 2023 | US$ | | ||||||||||||||
| Outstanding, December 31, 2024 (no activity) | US$ | |||||||||||||||
| Exercisable, December 31, 2024 | US$ | | US$ | | ||||||||||||
F-37
Conversion of Shares
During the year ended December 31, 2024, holders
of
Warrants
During the year ended December 31, 2023, we issued
a
In December 2024, we issued
During the years ended December 31, 2024 and 2023, the assumptions used in determining the fair value of the warrant issued to Revere were as follows:
| December 31, 2024 | December 31, 2023 | |||
| Expected term in years | ||||
| Risk-free interest rate | ||||
| Annual expected volatility | | | ||
| Dividend yield |
During the year ended December 31, 2024, the assumptions used in determining the fair value of the warrants issued to Boustead were as follows:
| December 31, 2024 | |
| Expected term in years | |
| Risk-free interest rate | |
| Annual expected volatility | |
| Dividend yield |
Expected term in years: The term is based on the remaining contractual term of the warrant.
Risk-free interest rate: We use the risk-free interest rate of a U.S. Treasury Bill with a similar term on the date of the warrant valuation grant.
Volatility: We estimate the expected volatility of the share price based on the corresponding volatility of our historical share price.
Dividend yield: We use a
F-38
Activity related to the warrants is as follows:
| Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life in Years | Aggregate Intrinsic Value | |||||||||||||
| Outstanding, December 31, 2022 | US$ | | ||||||||||||||
| Granted during year ended December 31, 2023 | US$ | |||||||||||||||
| Outstanding, December 31, 2023 | US$ | | ||||||||||||||
| Granted during year ended December 31, 2024 | US$ | | ||||||||||||||
| Outstanding, December 31, 2024 (no activity) | US$ | | ||||||||||||||
| Exercisable December 31, 2024 | US$ | | US$ | | ||||||||||||
Equity Incentive Plan
Effective October 26, 2022, our board of directors
adopted the Brera Holdings PLC 2022 Equity Incentive Plan (the “Plan”) authorizing a total of
As of December 31, 2024, there are
Note 19 – Revenue
| Revenue – non-related parties | Year Ended December 31, 2024 | Year Ended December 31, 2023 | Year Ended December 31, 2022 | |||||||||
| EUR | EUR | EUR | ||||||||||
| Revenue recognized at time of transaction | ||||||||||||
| Player transfers | ||||||||||||
| Ticketing | ||||||||||||
| Store | ||||||||||||
| Subsidies, grants and donations | ||||||||||||
| Short-term leases for non-volley events | ||||||||||||
| Revenue recognized over time | ||||||||||||
| Sponsorships | ||||||||||||
| Youth league | ||||||||||||
| Others | ||||||||||||
| Consulting revenue | ||||||||||||
| Total revenue – non-related parties | ||||||||||||
| Revenue – related parties | Year Ended December 31, 2024 | Year Ended December 31, 2023 | Year Ended December 31, 2022 | |||||||||
| EUR | EUR | EUR | ||||||||||
| Revenue recognized at time of transaction | ||||||||||||
| Player transfers | ||||||||||||
| Ticketing | ||||||||||||
| Store | ||||||||||||
| Subsidies, grants and donations | ||||||||||||
| Short-term leases for non-volley events | ||||||||||||
| Revenue recognized over time | ||||||||||||
| Sponsorships | ||||||||||||
| Youth league | ||||||||||||
| Others | ||||||||||||
| Consulting revenue | ||||||||||||
| Total revenue – related parties | ||||||||||||
For the year ended December 31, 2024, all revenue was generated
from sales transactions with independent third parties totaling EUR
F-39
For the year ended December 31, 2024, the Company mainly generated
revenues from advertising and sponsorships, ticketing revenues and player transfer fees. They also generated revenues from training fees
and youth leagues. Other revenues are mainly comprised of facility space rented out for other events, media rights, parking and marketing
contracts. For the years ended December 31, 2023 and 2022, and EUR
No customer accounted for over 10% of the Company’s
total revenue for the years ended December 31, 2024 and 2023. Three customers, each accounted for over 10% of the Company’s total
revenue, representing
As of and for the year ended December 31, 2024, the Company’s top customers and associated trade receivables were as follows:
| Customer – non-related parties | Revenue | Associated Trade Receivables | ||||||
| EUR | EUR | |||||||
| LLC FC Polissia | ||||||||
| Influencer Football League LLC | ||||||||
| Macron | ||||||||
| Katamon Fans Club Israel | ||||||||
| BURSON COHN e WOLFE SRL | ||||||||
| Total | ||||||||
| Customer – related parties | ||||||||
| E-Work | ||||||||
| Laica | ||||||||
| Edimen | ||||||||
| Studio Pirola Associati | ||||||||
| Total | ||||||||
Revenue by Geographic Region
| Region | Revenue 2024 | Revenue 2023 | Revenue 2022 | |||||||||
| EUR | EUR | EUR | ||||||||||
| Italy | ||||||||||||
| North Macedonia | ||||||||||||
| Ireland | ||||||||||||
| Total | ||||||||||||
Note 20 – Cost of Revenue
The cost of revenue primarily consists of expenses
for consultants directly involved in the delivery of services to customers. During the years ended December 31, 2024, 2023 and 2022, cost
of revenue from non-related parties totaled EUR
In the years ended December 31, 2024 and 2023,
one supplier, and in the year ended December 31, 2022, four suppliers, each accounted for over 10% of the Company’s total cost of
revenue, representing
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Note 21 – Segment Reporting
Basis of Segmentation
The Company’s Chief Operating Decision Maker
(“CODM”), identified as the Chief Executive Officer, regularly reviews financial and operational information by business line
to assess performance and allocate resources. Based on the current internal reporting structure and in accordance with the aggregation
criteria outlined in IFRS 8.12, the Company monitors its results across
Below are the details of each segment and their respective revenue streams:
Segment 1: Sponsorships
This segment includes revenue generated from sponsorship agreements, primarily derived from providing exposure to the sponsor’s brand through promotional activities, event placements, free tickets, and participation rights in sponsored events.
Segment 2: Ticketing, short-leases, store and youth league
This segment includes the following revenue streams:
| ● | Sales of event tickets: Revenue from the sale of event tickets. |
| ● | Renting the arena for non-volleyball events hosted by UYBA: Revenue from renting the arena for non-volleyball events hosted by UYBA. |
| ● | Merchandise Sales: Revenue generated from the sale of branded merchandise. |
| ● | Youth Training Programs: Revenue from youth training programs conducted during the sports season, typically spanning from September to October. |
Segment 3: Player Transfers
This segment accounts for revenue generated from transferring players to other clubs.
Segment 4: Other Revenue
This segment encompasses various other revenue streams, including consulting services, one-off events, and similar activities.
Segment-Specific Policies
Segment 1: Sponsorships
Revenue Stream: Sponsorship agreements.
Recognition: Revenue is recognized over time as performance obligations are satisfied. This includes exposure of sponsor brands through jerseys, event placements, promotional spots, and other agreed deliverables.
Performance Obligations: A single performance obligation is identified as the services are interdependent and delivered as a cohesive package throughout the contractual period.
Measurement: Progress is measured based on milestones such as matches played or events conducted, which directly link to the sponsor’s benefits.
Segment 2: Ticketing and Related Activities
Revenue Streams: Event ticket sales, renting the arena for non-volleyball events, merchandise sales (store) and youth training programs.
F-41
Recognition:
Ticket Sales: Revenue recognized at a point in time when the event occurs.
Arena Rentals: Revenue recognized over the rental period.
Merchandise Sales: Recognized at the point of sale when control transfers to the customer.
Youth Training: Recognized over the training program period.
Measurement: Transaction price is allocated based on observable stand-alone selling prices.
Segment 3: Player Transfers
Revenue Stream: Revenue from transferring players to other clubs.
Recognition: Revenue recognized at the point in time when control of the player’s registration rights is transferred.
Measurement: Based on the agreed transaction price in the transfer agreement.
Segment 4: Others
Revenue Streams: Consulting services, one-off events, and miscellaneous activities.
Recognition: Revenue is recognized either at a point in time or over time depending on the nature of the services provided.
Performance Obligations: These are identified based on the distinct services provided under each contract.
Our management reporting framework, including the assumptions and methodologies applied, is regularly reviewed to ensure their continued validity and relevance. The capital attribution methodologies rely on several key assumptions, which are periodically reassessed and updated as needed.
For the years ended December 31, 2024, 2023 and 2022, the Company’s revenue, expenses, net segment profit or loss, and assets and liabilities came from the following segments:
Year Ended December 31, 2024 (Net Segment Profit or Loss) – in EUR
| Segments | Total Revenue | Total Expenses | Operating Profit/(Loss) | Other Income | Provision for Income Taxes | Segment Profit/(Loss) | ||||||||||||||||||
| Sponsorships | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Ticketing, short-leases, store and youth league | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Player transfers | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Others | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Year Ended December 31, 2023 (Net Segment Profit or Loss) – in EUR
| Segments | Total Revenue | Total Expenses | Operating Profit/(Loss) | Other Income (Expenses) | Provision for Income Taxes | Segment Profit/(Loss) | ||||||||||||||||||
| Sponsorships | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Ticketing, short-leases, store and youth league | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Player transfers | ( | ) | ) | ( | ) | ( | ) | |||||||||||||||||
| Others | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
F-42
Year Ended December 31, 2022 (Net Segment Profit or Loss) – in EUR
| Segments | Total Revenue | Total Expenses | Operating Profit/(Loss) | Other Income (Expenses) | Segment Profit/(Loss) | |||||||||||||||
| Sponsorships | ||||||||||||||||||||
| Ticketing, short-leases, store and youth league | ||||||||||||||||||||
| Player transfers | ||||||||||||||||||||
| Others | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Segment Asset and Liabilities as of December 31, 2024 – in EUR
| Segment | Segment Assets | Segment Liabilities | ||||||
| Sponsorships | ( | ) | ||||||
| Ticketing, short-leases, store and youth league | ( | ) | ||||||
| Player transfers | ( | ) | ||||||
| Others | ( | ) | ||||||
| ( | ) | |||||||
Segment Asset and Liabilities as of December 31, 2023 – in EUR
| Segment | Segment Assets | Segment Liabilities | ||||||
| Sponsorships | ( | ) | ||||||
| Ticketing, short-leases, store and youth league | ( | ) | ||||||
| Player transfers | ( | ) | ||||||
| Others | ( | ) | ||||||
| ( | ) | |||||||
Segment Asset and Liabilities as of December 31, 2022 – in EUR
| Segment | Segment Assets | Segment Liabilities | ||||||
| Sponsorships | ||||||||
| Ticketing, short-leases, store and youth league | ||||||||
| Player transfers | ||||||||
| Others | ( | ) | ||||||
| ( | ) | |||||||
F-43
Note 22 – General and Administrative Expenses
General and administrative expenses consist of the following categories:
| December 31, 2024 | December 31, 2023 | December 31, 2022 | ||||||||||
| EUR | EUR | EUR | ||||||||||
| NON-RELATED PARTIES | ||||||||||||
| Advertising and marketing expenses | ||||||||||||
| Audit fees | ||||||||||||
| Bad debt expenses | ||||||||||||
| Bank and other charges | ||||||||||||
| Cleaning expenses | ||||||||||||
| Expenses on short term leases | ||||||||||||
| Depreciation and amortization expense | ||||||||||||
| Directors’ fees | ( | ) | ||||||||||
| Employee benefits expense | ||||||||||||
| Finance costs | ||||||||||||
| Expense related to contingent consideration | ||||||||||||
| Foreign exchange losses (or gains) | ||||||||||||
| Freight and transportation costs | ||||||||||||
| Insurance expenses | ||||||||||||
| Legal and professional fees | ||||||||||||
| Listing fee | ||||||||||||
| Medical and health services and materials | ||||||||||||
| Office expenses | ||||||||||||
| Office supplies and administrative expenses | ||||||||||||
| Other administrative expenses | ||||||||||||
| Player management expenses | ||||||||||||
| Player registration and deletion | ||||||||||||
| Provision for income taxes | ||||||||||||
| Repairs and maintenance expenses | ||||||||||||
| Share based expenses | ||||||||||||
| Subscriptions | ||||||||||||
| Stamp duties and other taxes | ||||||||||||
| Training and development expenses | ||||||||||||
| Travel and entertainment expenses | ||||||||||||
| Utilities and rent | ||||||||||||
| Warrant expense | ||||||||||||
| RELATED PARTIES | ||||||||||||
| Advertising and marketing expenses | ||||||||||||
| Bad debt expenses | ||||||||||||
| Directors’ fees | ||||||||||||
| Employee benefits expense | ||||||||||||
| Legal and professional fees | ||||||||||||
| Office supplies and administrative expenses | ||||||||||||
| Sponsorship | ||||||||||||
| Share based expenses | ||||||||||||
| Travel and entertainment expenses | ||||||||||||
| Utilities and rent | ||||||||||||
F-44
Note 23 – Other Income
Other income for the years ended December 31,
2024, 2023 and 2022 is EUR
Note 24 – Provision for Income Taxes
Ireland
Brera Holdings PLC is a holding company registered
in Ireland. The Company was incorporated in Ireland on June 30, 2022, no provision for income taxes in Ireland has been made as Brera
Holdings PLC did not generate any Ireland taxable income for the years ended December 31, 2024, 2023 or 2022. The corporate tax rate for
trading income in Ireland is
Italy
The Company conducts a majority of its business in Italy and is subject to tax in this jurisdiction. During the years ended December 31, 2024, 2023 and 2022, all taxable income (loss) of the Company is generated in Italy. As a result of its business activities, the Company files tax returns that are subject to examination by the Italian Revenue Agency.
Italian companies are subject to two enacted income taxes at the following rates:
| 2024 | 2023 | 2022 | ||||||||||
| IRES (state tax) | % | % | % | |||||||||
| IRAP (regional tax) | % | % | % | |||||||||
IRES is a state tax and is calculated on the taxable income determined on the income before taxes modified to reflect all temporary and permanent differences regulated by the tax law.
IRAP is a regional tax and each Italian region
has the power to increase the current rate of
For the years ended December 31, 2024, 2023 and 2022, the Company’s income tax expenses are as follows:
| 2024 | 2023 | 2022 | ||||||||||
| EUR | EUR | EUR | ||||||||||
| Current tax expenses | ( | ) | ||||||||||
| ( | ) | |||||||||||
A reconciliation of income taxes at statutory rates with the reported taxes is as follows:
| 2024 | 2023 | 2022 | ||||||||||
| EUR | EUR | EUR | ||||||||||
| (Loss) profit before tax for the year | ( | ) | ( | ) | ( | ) | ||||||
| Expected income tax recovery – IRES | ( | ) | ( | ) | ||||||||
| Expected income tax recovery – IRAP | ( | ) | ||||||||||
| Expected income tax recovery – Ireland | ( | ) | ||||||||||
| Tax loss not recognized | ( | ) | ||||||||||
| Current tax expenses | ( | ) | ||||||||||
F-45
North Macedonia
North Macedonian companies are subject to corporate
tax on their worldwide income. North Macedonian companies are companies incorporated in North Macedonia. Foreign companies are taxed in
North Macedonia on their profits generated from activities conducted through a permanent establishment in the country and on income from
North Macedonian sources. The corporate tax rate for trading income in North Macedonian is
Note 25 – Basic and Diluted Loss Per Share
The Company computes net loss per share of Class A Ordinary Shares and Class B Ordinary Shares using the two-class method. Basic net loss per share is computed using the weighted-average number of ordinary shares outstanding during the period. Diluted net loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding during the year to assume conversion of all potentially dilutive securities to ordinary shares. Because the Company has reported a net loss for each of the years ended December 31, 2024, 2023 and 2022, diluted net loss per ordinary share is the same as basic net loss per common share for such periods as the inclusion of any dilutive ordinary shares during these periods would result in the net loss per ordinary share calculation to be anti-dilutive.
The following table sets forth the computation of basic and diluted net loss per share for the years ended December 31, 2024, 2023 and 2022, which includes both Class A Ordinary Shares and Class B Ordinary Shares:
| December 31, 2024 | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
| Amounts in EUR except for shares | Class A Ordinary Shares | Class B Ordinary Shares | Class A Ordinary Shares | Class B Ordinary Shares | Class A Ordinary Shares | Class B Ordinary Shares | ||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||
| Total net loss attributable to Parent | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Allocation of net loss between Class A and Class B Ordinary Shares | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Denominator: | ||||||||||||||||||||||||
| Weighted average shares | ||||||||||||||||||||||||
| Basic and diluted net loss per share | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Note 26 – Related Parties
Amounts of trade and other receivables and trade and other payables due to or from related parties as of December 31, 2024 and 2023 are shown in the table below. Loans payable to related parties are disclosed elsewhere in these consolidated financial statements.
F-46
December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Trade and other receivables – related parties | ||||||||
| Edimen Srl (Owned by Gianluigi Vigano, ex-CEO of UYBA and Milano) | ||||||||
| Sutter Securities (Daniel Joseph McClory, Executive Chairman of Brera Holdings, CEO of parent of Sutter Securities) | ||||||||
| LAICA SPA (Minority shareholder of UYBA) | ||||||||
| E-WORK SPA (Minority shareholder of UYBA) | ||||||||
| Leonardo Aleotti (Director of SSD) | ||||||||
| Total | ||||||||
| Loan receivables – related parties | ||||||||
| Sport for Life (Owned by Sasho Pandev, brother of Goran Pandev, a director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||||
| Brera Ilch Ngo | ||||||||
| Total | ||||||||
| Trade and other payables – related parties | ||||||||
| Edimen Srl (Owned by Gianluigi Vigano, ex-CEO of UYBA and Milano) | ||||||||
| Pandev Sports (Owned by Goran Pandev, a director and minority shareholder for Brera Holdings and minority FKAP shareholder) | ||||||||
| Linking Srl (Owned by Gianluigi Vigano, ex-CEO of UYBA and Milano) | ||||||||
| E-Work Holding Srl (UYBA’s shareholder) | ||||||||
| Minerva Valuations (Owned by Abhi Mathews, a director and minority shareholder of Brera Holdings) | ||||||||
| Pietro Bersani (Director and minority shareholder of Brera Holdings) | ||||||||
| Alberto Libanori (Director and minority shareholder of Brera Holdings) | ||||||||
| Christopher Gardner (Director and minority shareholder of Brera Holdings) | ||||||||
| Goran Pandev (Director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||||
| Sashko Pandev (Brother of Goran Pandev, a director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||||
| SPORTS CENTER PANDEV (Owned by Goran Pandev, a director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||||
| 40&FAC CONSULTING SRLS (Minority shareholder of UYBA) | ||||||||
| E-WORK SPA (F) (Minority shareholder of UYBA) | ||||||||
| STUDIO PIROLA ASSOCIATI SRL (F) (Owned by Guiseppe Pirola, director and minority shareholder of Brera Holdings and President and minority shareholder of UYBA) | ||||||||
| CIRCUITO LOMBARDIA SRL (Owned by Gianluigi Vigano, ex-CEO of UYBA and Milano) | ||||||||
| Studio Facchinetti (Owned by Facchinetti Simone, a director and minority shareholder of UYBA) | ||||||||
| DCS & PARTNER (Related to Francesca Duva, ex-CEO of Milano) | ||||||||
| Total | ||||||||
| Director loan – related party | ||||||||
| Goran Pandev (Director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||||
| Aleksandra Terziski (Director of ZFK) | - | |||||||
| Total | ||||||||
Shareholding
On February 29, 2024, BREA Holdings, LLC, a company owned
by Daniel Joseph McClory, Executive Chairman of Brera Holdings, purchased a total of
Name of Seller - Alessandro Aleotti
Amount and Type of Securities:
Name of Seller: Niteroi SpA (Adrio Maria de Carolis)
Amount and Type of Securities:
F-47
Grant McClory, the son of Daniel Joseph McClory, Executive
Chairman of Brera Holdings, purchased Series A Preferred Shares of the Company on December 23, 2024, for a total consideration of €
As of December 31, 2024 and 2023, balances due from and due to related parties primarily represent net monetary advancements to or from the related parties for our Company’s normal course of business.
Other Related Party Transactions
During the financial year, the Company granted UYBA the concession
to operate the Palazzetto facility. As part of this agreement, UYBA is required to maintain an insurance policy for a five-year period
to cover any potential defaults in the payment of the annual municipal fee. The insurance premium amounts to €
During the year ended December 31, 2024, the Company engaged the following related parties to provide goods and services, resulting in revenue transactions:
| Related Party and Relationship | Nature of Transaction | EUR | ||||
| Edimen Srl (Owned by Gianluigi Vigano, ex-CEO of UYBA and Milano) | ||||||
| STUDIO PIROLA ASSOCIATI SRL (Owned by Guiseppe Pirola, a director and minority shareholder of Brera Holdings and President and minority shareholder of UYBA) | ||||||
| E-WORK SPA (Minority UYBA shareholder) | ||||||
| Laica Spa (Minority UYBA shareholder) | ||||||
| Total Revenue – related parties | ||||||
During the year ended December 31, 2024, the Company engaged the following related parties to provide services:
| Related Party and Relationship | Nature of Transaction | EUR | ||||
Minerva Valuations (Owned by Abhi Mathews, a director and minority shareholder of Brera Holdings) | ||||||
| Abhi Mathews (Director and minority shareholder of Brera Holdings) | ||||||
| Alberto Libanori (Director and minority shareholder of Brera Holdings) | ||||||
| Alberto Libanori (Director and minority shareholder of Brera Holdings) | ||||||
| Boustead Securities LLC (Daniel Joseph McClory, Executive Chairman of Brera Holdings, is CEO of parent of Boustead Securities LLC) | ||||||
| Christopher Gardner (Director and minority shareholder of Brera Holdings) | ||||||
| Christopher Gardner (Director and minority shareholder of Brera Holdings) | ||||||
| Federico Pisanty (Director and minority shareholder of Brera Holdings, resigned on September 30, 2024) | ||||||
| Giuseppe Pirola (Director and minority shareholder of Brera Holdings and President and minority shareholder of UYBA) | ||||||
| Goran Pandev (Director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||
| Goran Pandev (Director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||
| Pierre Galoppi (CEO, director until February 2025, and minority shareholder of Brera Holdings) | ||||||
| Pierre Galoppi (CEO, director until February 2025, and minority shareholder of Brera Holdings) | ||||||
| Pietro Bersani (Director of Brera Holdings) | ||||||
| Pietro Bersani (Director of Brera Holdings) | ||||||
Sutter Securities (Daniel Joseph McClory, Executive Chairman of Brera Holdings, is CEO of parent of Sutter Securities) | ||||||
Sutter Securities (Daniel Joseph McClory, Executive Chairman of Brera Holdings, is CEO of parent of Sutter Securities) | ||||||
| Goran Pandev (Director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||
| Goran Pandev (Director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ( | ) | ||||
| Sashko Pandev (Brother of Goran Pandev, director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||
| Sashko Pandev (Brother of Goran Pandev, director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||
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| Related Party and Relationship | Nature of Transaction | EUR | ||||
| SPORTS CENTER PANDEV (Owned by Goran Pandev, director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||
| SPORTS CENTER PANDEV (Owned by Goran Pandev, director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||
| SPORTS CENTER PANDEV (Owned by Goran Pandev, director and minority shareholder of Brera Holdings and minority FKAP shareholder) | ||||||
| Vanco Stojanov (Director for FKAP) | ||||||
| Brera Ilch Ngo (Contract to manage and rebrand the club, which includes providing financial assistance such as short-term loans and covering staff salaries) | ||||||
| Brera Tchumene FC (Contract to manage and rebrand the club, which includes covering staff salaries) | ||||||
| CIRCUITO LOMBARDIA SRL (Owned by Gianluigi Vigano, ex-CEO of UYBA and Milano, services were terminated on July 31, 2024) | ||||||
| DCS & PARTNER (Related to Francesca Duva, ex-CEO for Milano, resigned on October 2, 2024) | ||||||
| DCS & PARTNER (Related to Francesca Duva, ex-CEO for Milano, resigned on October 2, 2024) | ||||||
| DCS & PARTNER (Related to Francesca Duva, ex-CEO for Milano, resigned on October 2, 2024) | ||||||
| Federico Pisanty (Ex-director and minority of Brera Holdings) | ||||||
| Francesca Duva (Ex-CEO of Milano, resigned on October 2, 2024) | ||||||
| Gianluigi Vigano (Ex-CEO of UYBA and Milano, services were terminated on July 31, 2024) | ||||||
| Leonardo Aleotti (Director of SSD) | ||||||
| LINKING SRL(Owned by Gianluigi Vigano, ex-CEO of UYBA and Milano, services were terminated on July 31, 2024) | ||||||
| Francesco Aleotti (Brother of Leonardo Aleotti, director of SSD) | ||||||
| E-WORK SPA (Minority shareholder of UYBA and owned by Paolo Ferrario, ex-director of UYBA, resigned on October 24, 2024) | ||||||
| Facchinetti (Owned by Facchinetti Simone, director and minority shareholder of UYBA) | ||||||
| LINKING SRL (Owned by Gianluigi Vigano, ex-CEO of UYBA and Milano, services were terminated on July 31, 2024) | ||||||
| STUDIO PIROLA ASSOCIATI SRL (Owned by Guiseppe Pirola, director and minority shareholder of Brera Holdings and President and minority shareholder of UYBA) | ||||||
| Aleksandra Terziski (Director for ZFK) | ||||||
| Total general and administrative – related parties | ||||||
Note 27 – Reconciliation of Liabilities Arising from Financing Activities
| Loan payable | Loan from a shareholder | Lease liabilities | Total | |||||||||||||
| EUR | EUR | EUR | EUR | |||||||||||||
| At January 1, 2022 | ||||||||||||||||
| Financing cash flows | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| New leases entered | ||||||||||||||||
| Change on modification of lease | ( | ) | ( | ) | ||||||||||||
| Interest expenses | ||||||||||||||||
| At December 31, 2022 | ||||||||||||||||
| Financing cash flows | ||||||||||||||||
| New leases entered | ||||||||||||||||
| Change on modification of lease | ( | ) | ( | ) | ||||||||||||
| Interest expenses | ||||||||||||||||
| At December 31, 2023 | ||||||||||||||||
| Financing cash flows | ( | ) | ( | ) | ( | ) | ||||||||||
| New leases entered | ||||||||||||||||
| Change on modification of lease | ( | ) | ( | ) | ||||||||||||
| Change on modification of lease | ||||||||||||||||
| At December 31, 2024 | ||||||||||||||||
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Note 28 – Contingent Consideration
| December 31, 2024 | December 31, 2023 | |||||||
| EUR | EUR | |||||||
| Fair value of contingent consideration | ||||||||
During the year ended December 31, 2024, the fair
value of contingent consideration was reassessed based on a refinement of prior assumptions and updated contractual interpretation. The
amount recorded as of December 31, 2023 EUR
Further, the fair value of contingent consideration
was remeasured to EUR
Note 29 – Commitments and Contingencies
As of December 31, 2024, the Company is not aware of any material commitments or contingent liabilities that require disclosure under IAS 37.
Note 30 – Changes in Presentation and Additional Disclosures
During the year ended December 31, 2024, the Company made certain changes in the presentation of its consolidated financial statements to improve transparency and to provide more relevant information to users of the financial statements. These changes are considered reclassifications and do not impact previously reported net income or total equity. The key changes include:
| 1. | Gross Margin Presentation |
For the first time, the Company has presented gross profit as a separate line item in the consolidated statement of profit or loss. In prior years, only total revenue and total expenses were presented without a gross margin breakdown.
| 2. | Disaggregation of Other Income/Expenses |
The “Other income” line item has been further disaggregated to include categories such as:
| o | Income from grants and donations |
| o | Change in fair value of contingent consideration |
| o | Finance costs by related and non-related parties |
This breakdown provides more detailed insight into non-operating activities.
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| 3. | Related Party Presentation |
Certain related party accounts have been separated from non-related party accounts in both the consolidated statement of financial position and the statement of profit or loss, including:
| o | Trade and other receivables/payables |
| o | Loan receivables/payables |
| o | General and administrative expenses |
| o | Net fair value gains and losses on financial assets |
| 4. | Segment Reporting |
Segment reporting disclosures under IFRS 8 were included for the first time in the December 31, 2024 financial statements. Based on management representation, and consistent with our understanding during the 2023 audit, the Chief Operating Decision Maker (CODM) did not evaluate the Company’s performance based on segmented information during 2023. Therefore, segment disclosures were not presented in the prior year and are newly presented in the current year based on operational changes.
The segment disclosures presented for the years ended December 31, 2023 and 2022 were not audited by the predecessor auditor, the current (successor) auditor has performed procedures on the segment information.
Management believes these presentation changes enhance comparability and provide more meaningful information for investors and stakeholders. For clarity, no amounts previously reported for the year ended December 31, 2023 have been changed. Comparative figures have only been reclassified where applicable to align with the current year’s presentation format, and these changes had no impact on net loss, total assets, total liabilities, or shareholders' equity previously reported.
Note 31 – Subsequent Events
As discussed in Note 4, on December 9, 2024, the
Company announced that it had agreed to acquire a majority ownership interest in Juve Stabia, through share capital and reserve increases
in the Club. On January 10, 2025, the Company entered into a restated sale and purchase and investment agreement (the “Restated
Agreement”) with XX Settembre relating to the acquisition of Juve Stabia, which amended the sale and purchase and investment agreement
dated December 31, 2024 (the “SPI Agreement”). Pursuant to the Restated Agreement, we will acquire from XX Settembre over
four closings, on December 31, 2024, January 10, 2025, January 31, 2025, and March 31, 2025, a total of approximately
On January 15, 2025, we received formal notice from Nasdaq that Nasdaq has granted our request for a second 180-day period, through July 14, 2025, to evidence compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). We intend to monitor its stock price and to consider all available options to regain compliance with the Rule prior to July 14, 2025, including via implementation of a reverse stock split.
On February 7, 2025, February 12, 2025, February
21, 2025, March 6, 2025, March 21, 2025, March 27, 2025, and March 31, 2025, we completed additional closings of our Series A Preferred
Shares financing, raising aggregate gross proceeds of $
On February 21, 2025, Pierre Galoppi gave written notice of his resignation from our board of directors effective immediately. Mr. Galoppi will continue to serve as our Chief Executive Officer and Interim Chief Financial Officer.
On March 6, 2025, we issued
On March 31, 2025, we issued an aggregate of
On March 31, 2025, a nonbinding UYBA split project was approved, which provides for the division of the management of the sports facility and sports management. The split does not produce deferred legal effects and no retroactive accounting registration. It will take effect from June 5, 2025, which is 60 days after its registration in the Milan Chamber of Commerce register on April 3, 2025, unless the Company decides not to continue with the split.
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