Brera Holdings PLC

Brera Holdings PLC (NASDAQ: BREA) is an Ireland-based holding company. The Company is focused on expanding social impact football (American soccer) by developing a global portfolio of emerging football clubs with increased opportunities to earn tournament prizes, gain sponsorships, and provide other professional football and related consulting services. The Company operates through three segments: FKAP, UYBA, and Brera Milano.

Recent Business and Financial Updates

• Overview of Brera Holdings’ Financial Performance for the Six Months Ended June 30, 2024: Brera Holdings PLC (BREA), a company focused on acquiring and managing sports teams, reported a significant revenue increase for the six months ended June 30, 2024, totaling EUR 1,612,071, a 1,940% rise from EUR 79,031 in the same period of 2023. This growth was driven by diverse revenue streams including sponsorships (EUR 900,220), player transfers (EUR 249,963), subsidies, grants, and donations (EUR 178,472), short-term leases for non-volley events (EUR 46,105), and ticketing (EUR 39,448), with contributions from independent third parties (EUR 1,402,625) and related parties (EUR 209,446). The acquisitions of Fudbalski Klub Akademija Pandev (FKAP) in April 2023 and UYBA Volley S.s.d.a.r.l. (UYBA) in August 2023 significantly boosted this performance, as FKAP contributed only two months of revenue in 2023, while UYBA added to the 2024 figures.
• Strategic Acquisitions and Expansion of the Global Sports Group: Brera Holdings advanced its strategy to develop a “Global Sports Group” portfolio through strategic acquisitions, including a 90% stake in FKAP in April 2023 for EUR 742,000, rebranded as Brera Strumica FC, and a 51% majority ownership in UYBA, an Italian Serie A1 women’s volleyball team, in July 2023 for EUR 840,000. In September 2023, the company assumed control of Bayanzurkh Sporting Ilch FC in the Mongolian National Premier League, rebranded as Brera Ilch FC by March 2024, aligning with its focus on undervalued sports clubs in emerging markets. The company also reopened Brera FC in Milan in the summer of 2024, resuming operations in an amateur league at the Arena Civica, emphasizing its social impact mission alongside competitive goals.
• Revenue Composition and Customer Concentration: For the six months ended June 30, 2024, Brera Holdings generated revenue primarily from advertising, sponsorships, subsidies, grants, donations, ticketing, and player transfer fees, supplemented by training fees, youth leagues, facility rentals, media rights, and marketing contracts, contrasting with 2023’s focus on consulting contracts. Two customers accounted for 23% of total revenue in 2024, with trade receivables from these customers at EUR 0 as of June 30, 2024, while in 2023, one customer represented 60% of revenue, indicating a shift in customer dependency. The significant revenue growth reflects the expanded operations following the FKAP and UYBA acquisitions, which broadened the company’s revenue base.
• Financial Position and Cost Analysis: The cost of revenue for the six months ended June 30, 2024, rose sharply to EUR 87,460, a 4,204% increase from EUR 2,032 in 2023, driven by the full six-month operational impact of managing multiple sports teams post-acquisitions, compared to FKAP’s limited two-month contribution in 2023. General and administrative expenses also increased by 191% to EUR 4,747,436 from EUR 1,631,787, attributed to higher audit fees, depreciation, employee benefits, legal and professional fees, player management, and rent expenses, with non-cash expenses rising to EUR 1,309,976 from EUR 674,102. This cost escalation, largely due to the growth from acquisitions, contributed to an operating loss of EUR 3,222,826 in 2024, up from EUR 1,554,788 in 2023.
• Income, Expenses, and Net Loss: Other income for the six months ended June 30, 2024, increased to EUR 92,174 from EUR 2,173 in 2023, primarily due to interest income and accounting adjustments, while finance costs surged to EUR 36,349 from EUR 140, reflecting higher interest on lease liabilities and long-term debt. The loss before income taxes grew by 110% to EUR 3,188,001 from EUR 1,521,681, driven by increased operating expenses and finance costs, though the provision for income taxes decreased to EUR 0 from EUR 3,351 due to the loss position. Consequently, the net loss for the period rose 109% to EUR 3,188,001 from EUR 1,525,032, reflecting the financial impact of Brera’s expansion strategy through acquisitions.
• Liquidity and Capital Resources: As of June 30, 2024, Brera Holdings held cash and cash equivalents of EUR 425,959 (approximately USD 456,010), which decreased to EUR 87,245 by November 30, 2024, with operations historically funded through revenue, loans, pre-IPO share issuances, and the January 2023 Nasdaq IPO, which raised net proceeds of approximately USD 6,900,000. The company maintained uninsured cash deposits of USD 170,934 in Wise Europe SA, deemed low-risk due to regulatory safeguards by the National Bank of Belgium and a lack of prior losses, though future capital needs may require additional equity or debt financing, potentially diluting shareholders or restricting operations. The board is monitoring global economic volatility, including the impacts of the Russia-Ukraine conflict and rising inflation, to ensure business continuity, supported by a commitment from Executive Chairman Daniel Joseph McClory to provide funding as needed.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 49.69, near mid-levels, with expectations of a consolidation or an upward reversal if the important resistance levels of USD 0.70-USD 0.75 is broken on the upside. Additionally, the stock's current positioning is below both 50-Day SMA and 200-Day SMA, which can act as a short to medium term resistance levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Brera Holdings PLC (NASDAQ: BREA) at the current price at USD 0.67, as of March 19, 2025, at 08:20 am PDT. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is March 19, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.