Oakland Roots and Soul Sports Club

Oakland First, Always

Oakland, CA

Notable Angel Ecommerce B2C Minority Founder Entertainment

Financials

We have financial statements ending December 31, 2022. Our cash in hand is $813,717, as of July 2023. Over the three months prior, revenues averaged $703,859/month, cost of goods sold has averaged $52,823/month, and operational expenses have averaged $1,162,324/month.

At a Glance

Jan 1 – Dec 31, 2022

$3,775,068

+89%

Revenue

-$9,946,863

Net Loss

$1,281,952

-55%

Short-Term Debt

$16,341,263

Raised in 2022

$813,717

+89%

Cash on Hand

Net Margin:

-263%

Gross Margin:

87%

Return on Assets:

-134%

Earnings per Share:

-$1,280.04

Revenue per Employee:

$104,863

Cash to Assets:

10%

Revenue to Receivables:

3,015%

Debt Ratio:

144%

ORSC Financial Statements Audit Report- Final.pdf

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You 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.

Overview

Oakland Roots Sports Club is an American professional soccer team based in Oakland, California currently playing in the USL Championship.

Milestones

Oakland Pro Soccer LLC was organized in the State of California in July 2018.

Since then, we have:

- Oakland Roots & Soul Sports Club is the last, best hope for pro sports in Oakland. We have built a purpose-driven pro sports team in the United States and invested in our community.

- We are the first US pro team to be a member of the global Common Goal movement and have gained national and global recognition for our commitment to racial justice and gender equity.

- Our teams win. Oakland Roots SC, our men's team, has reached the playoffs every year of our existence. Oakland Soul SC, our women’s team, just completed a stellar debut season where we sold out every home game, beating the top-ranked USL W team on our way to the playoffs.

- We have been called the "coolest soccer team in the USA", blending purpose, art, music, sport and design into jerseys, clothing, and experiences imbued with meaning, beauty and love.

- Our gameday experience is truly unique. Combining the best of local music, art, food and culture with a diverse and passionate fanbase, our blend of top-quality sports, live music shows by Grammy-nominated artists and a commitment to showcase the best local talent is the secret behind our world-class Net Promoter scores.

- Our purpose is embedded in our commercial partnerships with companies including Anthem Blue Cross, UCSF Health, Visit Oakland, the Oakland Airport, Oaklandish, and East Bay Community Energy and non-profits like Chapter510 and the Oakland Zoo.

- Our diverse ownership group includes proud Oaklanders like NFL legend Marshawn Lynch and rap superstar G-Eazy, and we’ve featured live performances from artists like Mistah FAB, Keak da Sneak, Fantastic Negrito, Goapele and many others.

- We play in the USL, the largest professional soccer organization in North America with more than 200 member clubs. Our matches are broadcast nationally on ESPN+, complemented by away matches on local english-language station KTVU+ and spanish-language station TeleXitos.

Historical Results of Operations

Revenues & Gross Margin. For the period ended December 31, 2022, the Company had revenues of $3,775,068 compared to the year ended December 31, 2021, when the Company had revenues of $1,992,179. Our gross margin was 86.96% in fiscal year 2022, compared to 87.63% in 2021.
Assets. As of December 31, 2022, the Company had total assets of $7,436,939, including $777,596 in cash. As of December 31, 2021, the Company had $7,642,732 in total assets, including $555,587 in cash.
Net Loss. The Company has had net losses of $9,946,863 and net losses of $11,619,433 for the fiscal years ended December 31, 2022 and December 31, 2021, respectively.
Liabilities. The Company's liabilities totaled $10,678,752 for the fiscal year ended December 31, 2022 and $7,403,946 for the fiscal year ended December 31, 2021.

Related Party Transaction

Refer 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 Resources

To-date, the company has been financed with $31,869,593 in equity, $9,100,000 in convertibles, and $697,735 in PPP loans.

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 6 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 Expenses

Oakland Pro Soccer LLC cash in hand is $813,717, as of July 2023. Over the last three months, revenues have averaged $703,859/month, cost of goods sold has averaged $52,823/month, and operational expenses have averaged $1,162,324/month, for an average burn rate of $511,288 per month.

Since the date of our financials, we have raised capital from existing investors and additional capital at a higher valuation than last year from new investors. We signed an agreement to launch a women's team in the USL's professional SuperLeague once the stadium is ready. We had to leave Laney College, our previous home stadium for Oakland Roots games, and play at Cal State East Bay, improving our economics significantly by lowering our cost per game. The stadium is also not in Oakland so it has put pressure on attendance but ticketing revenues are ahead of 2022 year-to-date. The practice facility has been put up for sale with an auction date of July 10 and closing date later in the fall. We are not bidding on the facility. 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. Our women's team, the Soul, played their first games and generated ticketing and sponsor revenue and associated expenses.

Revenues should continue on a steady state through the summer, with the main drivers being single-game ticket sales. 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 pick-up related to stadium and practice facility planning.

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.

Besides Wefunder, the Oakland Roots and Soul are generating revenue which helps offset some 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.

Risks

Management / talent

Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business

The Company depends on the services of key employees, whose knowledge of Oakland, professional soccer, and the local soccer ecosystem would be difficult to replace. The Company currently does not have a firm plan fully detailing how to replace these persons in the case of death or disability. The Company’s success also depends on the Company’s ability to recruit, train, and retain qualified personnel. We are in a competitive market for talent and the loss of the services of any of the key members of senior management, other key personnel, or the Company’s inability to recruit, train, and retain senior management or key personnel may have a material adverse effect on the Company’s business, operating results, and financial condition. The business may be harmed if the Company loses the services of these people and the Company is not able to attract and retain qualified replacements.

Competition

The Company faces competition from many Bay Area teams, in soccer (e.g., SJ Earthquakes, the recently announced Bay FC women’s team, along with many other youth, amateur, and collegiate teams) and other sports, both professional and amateur. We also compete for attendance, viewership, and advertising revenue with a wide range of other entertainment and recreational activities available to potential fans. There can be no assurance that the Company will be able to compete effectively, including with companies that may have greater resources than it.

League

The Company operates mens’ and womens’ soccer franchises that compete in the United Soccer League (USL), including the USL Championship, USL L2, USLW League, and the USL SuperLeague. Those leagues compete for employees, players, and fans with a number of other soccer leagues in the US and globally. There is a risk that the leagues may not be successful and therefore the Company may be unable to continue operating.

Other Disclosures

The Board of Directors

Director	Occupation	Joined
Edreece Arghandiwal	Chief Marketing Officer @ Oakland Pro Soccer LLC	2018
Steven Aldrich	Advisor, investor @ Self-employed	2018
Barney Schauble	Advisor, investor @ Self-employed	2018
Mike Geddes	Chief Purpose Officer @ Oakland Pro Soccer LLC	2020

Officers

Officer	Title	Joined
Steven Aldrich	Chair	2018
Edreece Arghandiwal	Chief Marketing Officer	2018
Jill Fracisco	Chief of Staff	2019
Jordan Ferrell	Technical Director	2019
Mike Geddes	Chief Purpose Officer	2020
Lindsay Barenz	President	2022

Voting Power

Holder	Securities Held	Power
Barney Schauble	3,756 Includes Class A (OPS), OSOF units as if converted, and convertible debt as if fully converted	48.3%
Steven Aldrich	1,774 Includes Class A (OPS), OSOF units as if converted, and convertible debt as if fully converted	22.8%

Past Fundraises

Date	Security	Amount
	Priced Round	$0
6/2023	Priced Round	$3,703,313
6/2023	Priced Round	$593,891
12/2022	Priced Round	$2,947,200
12/2022	Convertible Note	$2,250,000
12/2022	Convertible Note	$6,950,000
3/2022	Priced Round	$4,194,063
12/2021	Priced Round	$4,612,758
2/2021	Priced Round	$3,333,333
1/2021	Loan	$412,535
11/2020	Priced Round	$2,200,000
8/2020	Priced Round	$3,093,334
6/2020	Priced Round	$3,333,333
5/2020	Loan	$285,200
12/2019	Priced Round	$3,333,333
12/2018	Priced Round	$525,035

Convertible Notes Outstanding

Issued	Amount	Valuation Cap	Maturity
12/2/22	$6,950,000	None	12/2/27
12/14/22	$2,250,000	None	12/2/27

Outstanding Debts

Issued	Lender	Outstanding	Maturity

Related Party Transactions

Name	Barney Schauble, Steven Aldrich
Amount Invested	$525,035
Transaction Type	Priced Round
Issued	12/5/18
Valuation Cap	$282,665
Relationship	Board members

Name	Oakland Soccer Opportunity Fund
Amount Invested	$2,200,000
Transaction Type	Priced Round
Issued	11/16/20
Valuation Cap	$26,069,262
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$4,612,758
Transaction Type	Priced Round
Issued	12/31/21
Valuation Cap	$35,339,261
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$4,194,063
Transaction Type	Priced Round
Issued	3/14/22
Valuation Cap	$39,952,020
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$2,947,200
Transaction Type	Priced Round
Issued	12/31/22
Valuation Cap	$59,320,286
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$6,950,000
Transaction Type	Convertible Note
Issued	12/2/22
Interest	6.55% per annum
Maturity	12/2/27
Valuation Cap	None
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$3,333,333
Transaction Type	Priced Round
Issued	6/15/20
Valuation Cap	$6,333,333
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$3,333,333
Transaction Type	Priced Round
Issued	2/2/21
Valuation Cap	$28,269,262
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$3,333,333
Transaction Type	Priced Round
Issued	12/31/19
Valuation Cap	$3,000,000
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$3,093,334
Transaction Type	Priced Round
Issued	8/24/20
Valuation Cap	$13,049,999
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$2,250,000
Transaction Type	Convertible Note
Issued	12/14/22
Interest	6.55% per annum
Maturity	12/2/27
Valuation Cap	None
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$3,703,313
Transaction Type	Priced Round
Issued	6/28/23
Valuation Cap	$62,267,486
Relationship	Parent company

Name	Oakland Soccer Opportunity Fund
Amount Invested	$593,891
Transaction Type	Priced Round
Issued	6/28/23
Valuation Cap	$70,093,458
Relationship	Parent company

Use of Funds

$51,480	70% Staff, Coach, Player and Related Costs, 23.5% Wefunder Campaign Costs, 6.5% Wefunder Fee
$4,993,560	63.5% Staff, Coach, Player and Related Costs, 11% Gameday and Facility Costs, 10% Wefunder Campaign Costs, 9% Real Estate Planning, 6.5% Wefunder Fee

Capital Structure

Class of Security	Securities (or Amount) Authorized	Securities (or Amount) Outstanding	Voting Rights
Class A Units	619	619	Yes
Class F Units	421	421	Yes
Class C Units	6,730	6,730	Yes

Form C Filing on EDGAR

The Securities and Exchange Commission hosts the official Form C on their EDGAR web site.

$3,109,605