INVEST
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If you invest, you're betting Oakland Roots and Soul Sports Club will be worth more than $93M in the future.
We have financial statements ending December 31, 2023. Our cash in hand is $738,994, as of August 2024. Over the three months prior, revenues averaged $512,066/month, cost of goods sold has averaged $16,000/month, and operational expenses have averaged $1,071,227/month.
Management’s Discussion and Analysis of Financial Condition and Results of OperationsYou should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.OverviewOakland First, Always.We started Oakland Roots & Soul Sports Club to show that it's possible to build a successful, professional sports team around a higher purpose; to harness the magic of Oakland and the power of sports as a force for social good.We plan to have completed real estate projects including a training facility, a 10,000+ seat stadium for the Roots and Soul to play, and made progress on workforce housing for our players and the community. We plan to have Oakland Soul be part of the fully-professional USL SuperLeague. Maybe even win a championship or two!MilestonesOakland Pro Soccer LLC was incorporated in the State of California in July 2018.Since then, we have:
Historical Results of Operations
Related Party TransactionRefer to Question 26 of this Form C for disclosure of all related party transactions.Oakland Soccer Opportunity Fund LLC ("OSOF") is the entity into which accredited investors put their capital (it’s an opportunity zone fund). OSOF's purpose is to buy units in Oakland Pro Soccer LLC ("OPS"). OSOF has traditionally been the entity which has raised funds since we stood it up in 2019 to tap into the opportunity zone fund legislation as the original founding members of OPS did not contemplate the idea. OPS is the main operating entity and is the entity that is raising funds in this Wefunder offering.Liquidity & Capital ResourcesTo-date, the company has been financed with $697,735 in debt, $39,879,173 in equity, and $12,850,000 in convertibles.After the conclusion of this Offering, should we hit our minimum funding target, we will need to raise additional capital immediately to extend our runway.We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 3 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.Runway & Short/Mid Term ExpensesOakland Pro Soccer LLC cash in hand is $744,392, as of July 2024. Over the last three months, revenues have averaged $512,066/month, cost of goods sold has averaged $16,000/month, and operational expenses have averaged $1,071,227/month, for an average burn rate of $575,161 per month. Our intent is to be profitable in 120 months.Since the date our financials cover, we raised capital from existing investors and additional capital at a higher valuation and same per unit price as last year. We also received additional loans from existing investors.The Company will have conducted a “stock split” by the time of this community invest round to bring the per unit price down from $10,296 to $100 to make the community investment round easier to manage.We have been working with the City of Alameda, Alameda County, and Prologis on a transaction where Prologis would acquire the practice facility acquisition and Prologis would lease the facility to the Roots and Soul. That negotiation continues and if it concludes, which is expected, the lease would be a long-term lease at a higher rate than the organization is paying now.We submitted a proposal to lease the Malibu site for an interim stadium and are negotiating with the City, County, and JPA. Entered into a cooperation agreement with AASEG related to that site as well. The documents needed for planning approval for the Malibu site have been submitted and a planning meeting is scheduled for July 10, 2024.The Company is negotiating with the JPA to lease the Coliseum for 2025. We expect that negotiations will be completed this summer which will allow for the field at the Coliseum to be changed from baseball to soccer and give the Roots and the Soul the ability to play matches in 2025 in the Coliseum.The USL SuperLeague received D1 sanctioning, will begin play in August 2024.Revenues should continue on a steady state through the summer, with the main drivers being single game ticket sales. Historically, ticket sales have picked up as the playoffs approach in the fall so we’d expect the same increase this fall. New sponsors may also sign agreements for the second half of the season but most revenue has been locked in through existing relationships. Expenses should also continue on the current trajectory with some increase as we continue to spend on stadium and practice facility planning. We are estimating ~$900k - $1 million of additional revenue through the end of 2024, and an additional ~$6 million in costs through the end of 2024.The Oakland Roots and Soul are not profitable. There will be significant future capital needs (millions of dollars a year) to fund the team’s operations although the intent is to shrink them and get the operating entity to cash flow positive. The critical change to reducing losses and the related cash requirements is moving to a larger scale stadium. To break even, the business model for the team requires revenues to grow in order to cover the fixed costs - compensation (salary, benefits, insurance, housing) for players, staff, and coaches is the primary cost along with league fees, facility and game day fees, and travel. We need to grow revenue - the primary sources are tickets, sponsorships, merchandise, food and beverage, and eventually player transfer fees. Tickets and sponsorships are directly related to the size of the stadium in which we play and we are limited by the size of the current location to ~5,000 people. We intend to put real estate investments into a related but separate entity to fund the acquisition and creation of a stadium.The Oakland Roots and Soul are generating revenue which helps offset some but not all of our operating expenses. We also have been raising funds from accredited investors since the organization’s founding in 2018 and will continue to do so. All projections in the above narrative are forward-looking and not guaranteed.
External environment
Unfavorable weather, forest fires and the associated smoke, earthquakes and other natural disasters could impact the Company’s success because we play games in venues where people need to gather to generate revenue and those events could lead to the postponement or cancellation of games.
Completing real estate projects critical to the Company’s future success will require cooperation from a number of stakeholders, including city, county, and state politicians, community groups, financial backers, educational institutions, unions, and others. The number of different viewpoints and potential objectives could lead to failure of anticipated projects.
The ongoing COVID-19 pandemic and future public health issues poses significant risks to competitive athletics, including the risk of actions that may be taken by government authorities to contain the outbreak, including the imposition of limitations on fan attendance and potential shutdowns and the lost revenues associated therewith. The impact on the Company’s fans, sponsors and suppliers, other impacts to the business, and our ability to sufficiently manage and mitigate the strategic and operational impact of such events cannot be predicted and could have a negative impact on the Company.
Legal / Regulatory Risks
There are a significant number of local, state, and federal laws and regulations that apply to our business. We are a small team that relies mainly on software and advisors to stay in compliance with those laws and regulations. Non-compliance with laws, regulations, or changes in government policies can lead to penalties, lawsuits, or business interruptions.
Intellectual Property
The Company’s success depends on the ability to obtain, maintain, defend and enforce intellectual property rights. The Company’s ability to compete against other businesses selling similar products depends on its ability to secure and enforce intellectual property rights, including trademark and trade secret rights. However, there is no guarantee that any trademark applications that the Company have filed (or the Company may in the future file) will be approved, and any trademark registrations that have issued (or may in the future issue) could be held invalid due to the Company’s conduct or challenges by third parties. The Company could lose its trade secret rights if the Company fails to properly protect confidential information. Even to the extent that the Company’s intellectual property rights are valid, enforcing those rights could involve costly legal processes that the Company may not be able to bring to a successful conclusion.
Brand / Reputational Risk
The company’s brand and image are integral to its success. There is the potential for a mistake to create negative publicity, customer dissatisfaction, or social media backlash that could damage the Company's reputation and impact its relationships with the community, fans, players, political figures, and financial results.
Steven Aldrich is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.
The Securities and Exchange Commission hosts the official Form C on their EDGAR web site.
