{"url_path":"/sec/slmt/10-k/2026/item-5","section_key":"item-5","section_title":"Item 5 Operating and Financial Review and Prospects","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1939965/0001213900-26-057974-index.html","accession_number":"0001213900-26-057974","cik":"0001939965","ticker":"SLMT","issuer_name":"Brera Holdings PLC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1939965/0001213900-26-057974-index.html","primary_entity_key":"0001939965","primary_entity_name":"Brera Holdings PLC"},"word_count":5492,"has_tables":true,"body_markdown":"Item\n5. Operating and Financial Review and Prospects\n\n* *\n\n*You should read the following discussion and\nanalysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related\nnotes included elsewhere in this Annual Report. This discussion may contain forward-looking statements. Our actual results may differ\nmaterially from those anticipated in these forward-looking statements because of various factors, including those set forth under “Item\n3. Key Information—D. Risk Factors” or in other parts of this Annual Report. See also “Forward-Looking Statements”\nabove.*\n\n \n\n**5.A. Operating Results**\n\n \n\nThe following Management’s Discussion and\nAnalysis of Financial Condition and Results of Operations (“MD&A”) of Brera Holdings summarizes the significant factors\naffecting the Company’s operating results, financial condition, liquidity and cash flows as of and for the years ended December\n31, 2025 and 2024. Certain information called for by this Item 5, including a discussion of the year ended December 31, 2024 compared\nto the year ended December 31, 2023 has been reported previously in Amendment No. 1 to our Annual Report on [Form\n20-F/A](http://www.sec.gov/ix?doc=/Archives/edgar/data/1939965/000121390025048029/ea0242667-20fa1_brerahold.htm#a_001) for the year ended December 31, 2024, under the section entitled “Item 5. Operating and Financial Review and\nProspects—A. Operating Results—Results of Operations—Comparison of Years Ended December 31, 2024 and 2023.” This\nMD&A should be read in conjunction with the Company’s consolidated financial statements and the related notes thereto for the\nyear ended December 31, 2025 (the “2025 Financials”). Amounts are expressed in euros unless otherwise stated. This MD&A\ncontains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently\navailable to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements\nas a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other\nparts of this Annual Report. See also “Forward-Looking Statements” above.\n\n \n\nThe 2025 Financials and the financial information\ncontained in this MD&A are prepared pursuant to International Financial Reporting Standards (“IFRS”) and in accordance\nwith the standards of the United States Public Company Accounting Oversight Board. As permitted by the rules of the U.S. Securities and\nExchange Commission for foreign private issuers, we do not reconcile our financial statements to United States generally accepted accounting\nprinciples.\n\n \n\nThis MD&A reports the Company’s activities\nthrough December 31, 2025, unless otherwise indicated. All figures are expressed in thousands of euros, unless otherwise noted.\n\n \n\n57\n\n \n\n \n\n**Company Overview**\n\n \n\nWe are a NASDAQ-listed company incorporated in\nthe Republic of Ireland. Prior to the execution of our private placement offerings in September 2025 (the “PIPE transaction”),\nthe Company’s primary business strategy was to operate global network of professional sports business, which included a portfolio\nof men’s and women’s sports clubs primarily located in Europe. Following the closing of the PIPE transaction, the Company\nannounced a new business strategy designed to acquire and stake SOL, the native cryptocurrency of the Solana blockchain, and drive shareholder\nvalue through the accumulation SOL and through the development of new revenue opportunities tied to various innovative Solana infrastructure\nprojects.\n\n \n\nWe are in the process of evaluating the performance\nof our sports business portfolio which includes global portfolio of men’s and women’s sports clubs, to determine the future\nstrategy for this business segment and the plans to wind down some parts of this business.\n\n* *\n\n**Recent Developments - Corporate Updates**\n\n \n\nDigital Asset Treasury\n\n \n\nOur primary digital asset strategic objective\nis to accumulate SOL treasury capital and generate attractive risk-adjusted returns for our investors through a range of SOL-based digital\nasset strategies. We aim to provide public market investors with direct exposure to SOL and to participate in the growth and development\nof the broader Solana ecosystem through a disciplined treasury approach. We believe that strategic digital asset reserves such as SOL\nmay serve as a foundation for future applications in global payments, capital markets and other real life use cases built on decentralized\nSOL infrastructure. We view the Solana network as a highly scalable and performant blockchain platform that is consistent with our long-term\nobjective of supporting the emerging technologies through our business. Our participation in the Solana ecosystem is intended to provide\nliquidity to the ecosystem and its participants and support new strategic initiatives.\n\n \n\nStrategic Advisor Agreement\n\n \n\nIn September 2025, we entered into a strategic\nadvisor agreement (the “Strategic Advisor Agreement”) with several individuals (“Strategic Advisors”) pursuant\nto which the Strategic Advisors provide strategic advisory services to the Company as well as guidance relating to the Company’s\nbusiness, operations, growth initiatives and industry and market trends in the digital assets sector and the United Arab Emirates market\nfor an initial term of 10 years. The Company and any of the Strategic Advisors may terminate this agreement upon written notice. The\nStrategic Advisors are entitled to receive equity warrants for the services that they provide in connection with the PIPE transaction\nand continue to provide to the Company.\n\n \n\nIn consideration for their advisory services,\nthe Strategic Advisors are entitled to the following compensation under the Strategic Advisor Agreement:\n\n \n\n●*Cash compensation*:\n1% per annum of the Company’s SOL Assets Under Management (“SOL AUM”) up\nto $1,000,000,000, and 0.5% per annum of SOL AUM exceeding that amount, calculated as of\neach anniversary of the Agreement’s effective date.\n\n \n\n●*Pre-funded\nwarrants*: Warrants to purchase Class B Ordinary Shares equal to 10% of the total Class\nB Ordinary Shares and pre-funded warrants issued under the Securities Purchase Agreements.\n\n \n\n●*Common Warrants\n1*: Warrants to purchase Class B Ordinary Shares equal to 50% of the aggregate number\nof shares underlying the Strategic Advisor Pre-Funded Warrants.\n\n \n\n●*Common Warrants\n2*: Warrants to purchase Class B Ordinary Shares equal to 9% of the total Class B Ordinary\nShares and pre-funded warrants issued under the Securities Purchase Agreements.\n\n \n\nSee “Note\n16 – Related Party Transactions” to the consolidated financial statements included elsewhere in this Annual Report for additional\ninformation in connection with the Strategic Advisor Agreement.\n\n \n\nLeadership Transition\n\n \n\nOn September 23, 2025, Mr. Marco Santori was\nappointed Chief Executive Officer replacing Fabio Scacciavillani, who resigned from the Company’s Board of Directors and as Chief\nExecutive Officer effective September 23, 2025. Mr. Scacciavillani continued to serve as the Company’s Chief Financial Officer\nuntil his subsequent resignation effective December 31, 2025. Mr. Santori served as Chief Executive Officer of the Company and as a member\nof its board of directors until April 2026, after which Guy Hirsch was appointed Interim Chief Operating Officer, which appointment expired\non May 1, 2026. Effective as of May 1, 2026, Ron Sade was appointed Chief Executive Officer.\n\n \n\n58\n\n \n\n \n\nOn September 23, 2025, certain directors from\nthe Company’s Board of Directors resigned, and the new Board of Directors were appointed. This was part of a series of the changes\nto the Company’s leadership and overall strategy designed to accelerate the growth of the Company’s digital assets and infrastructure\nbusiness and strengthen corporate governance. The new Board members bring expertise in digital assets industry and global relationships,\nespecially in the Gulf region, and are expected to enhance strategic planning, expand market reach, and reinforce the Company’s\nposition as a key participant in the Solana ecosystem. The Company welcomed Dr. Arthur Laffer, Viktor Fischer, Keren Maimon, Ron Sade,\nAlyazi Saeed Almheiri and Tariq Salem Alsaman Alnuaimi, as new directors. Alberto Libanori continued to serve as the Company’s\ndirector until December 2025, and Daniel McClory continued to serve as the Chairman of the Board until January 2026. In December 2025,\nthe Company welcomed Erez Simha as a director and as a Chairman of the Company’s Audit Committee. Subsequently, in April 2026,\nDr. Arthur Laffer and Viktor Fischer resigned from the Board of Directors. On April 24, 2026, Marco Santori was terminated as the Chief\nExecutive Officer and director of the Company. On April 29, 2026, Ron Sade was appointed as the Company’s Chief Executive Officer,\neffective as of May 1, 2026.\n\n \n\n**Principal Factors Affecting Our Financial\nPerformance**\n\n** **\n\nOur operating results are primarily affected\nby the following factors:\n\n \n\n●our\nability to acquire, deploy, and effectively manage digital assets, including SOL, within\nour treasury strategy;\n\n \n\n●our\nability to manage risks related to custody, cybersecurity, and third-party service providers;\n\n \n\n●the\nmarket price, volatility, and liquidity of SOL and any other digital assets held in our treasury;\n\n \n\n●our\nability to generate yield on digital assets through staking and other treasury activities;\n\n \n\n●our\nability to access liquidity or monetize digital asset holdings when needed;\n\n \n\n●regulatory\ndevelopments affecting digital assets, staking, and related financial activities;\n\n \n\n●general\nmarket conditions in the digital asset industry, including investor sentiment and capital\nflows;\n\n \n\n●competition\nfrom other digital asset treasury companies, funds, and investment vehicles;\n\n \n\n●our\nability to manage and unwind certain legacy sports operations; and\n\n \n\n●broader\nmacroeconomic conditions, including interest rates, inflation, and global financial market\nstability.\n\n \n\n**Emerging Growth Company**\n\n** **\n\nUpon completion of the IPO transaction in 2023\nand following the filing our 2024 annual report, we qualified and continue to qualify as an “emerging growth company” under\nthe JOBS Act and relied on reduced disclosure requirements, including delayed adoption of new accounting standards. As a result, our\nfinancial statements may not be comparable to those of other public companies. We will retain this status until the earliest of: (i)\nreaching $1.235 billion in annual revenue, (ii) the fifth anniversary of the IPO, (iii) issuing over $1.0 billion in non-convertible\ndebt within three years, or (iv) becoming a large accelerated filer. At that time, these exemptions will no longer apply.\n\n \n\n59\n\n \n\n \n\n**Results of Operations**\n\n** **\n\nThe following sets forth a summary of the Company’s\nconsolidated results of operations for the years ended December 31, 2025, and December 31, 2024. The discussion of the Company’s\nresults of operations for the year ended December 31, 2023, is presented in our Annual Report on Form 20-F for the year ended December\n31, 2024, filed with the SEC on May 15, 2025, and is incorporated herein by reference.\n\n \n\nThe information should be read together with\nour consolidated financial statements and related notes included elsewhere in this Annual Report. Our historical results presented below\nare not necessarily indicative of the results that may be expected for any future period.\n\n \n\n**Comparison of Years Ended December 31,\n2025 and 2024**\n\n** **\n\nThe following table sets forth key components\nof our results of operations during the years ended December 31, 2025 and 2024.\n\n \n\n  \nYears Ended December 31, \n\n  \n2025  \n2024 \n\n  \n   \n% of  \n   \n% of \n\n  \n€  \nRevenue  \n€  \nRevenue \n\nContinuing Operations \n   \n   \n   \n  \n\nRevenue \n 4,484  \n 100% \n 1,193  \n 100%\n\nOperating expenses \n    \n    \n    \n   \n\nEquity based compensation \n 269,125  \n 6,003% \n 961  \n 81%\n\nGeneral and administrative \n 37,871  \n 845% \n 4,473  \n 375%\n\nImpairment of non-financial assets \n 81,999  \n 1,829% \n -  \n -%\n\nTotal operating expenses \n 388,995  \n 8,676% \n 5,434  \n 456%\n\n  \n    \n    \n    \n   \n\nOperating loss from continuing operations \n (384,511) \n (8,576)% \n (4,241) \n (356)%\n\n  \n    \n    \n    \n   \n\nOther income (expense): \n    \n    \n    \n   \n\nInterest income (expense) \n (229) \n (5)% \n (8) \n (1)%\n\nOther income \n 6,297  \n 140% \n 412  \n 35%\n\nTotal other income \n 6,068  \n 135% \n 404  \n 34%\n\n  \n    \n    \n    \n   \n\nLoss before income taxes from continuing operations \n (378,443) \n (8,441)% \n (3,837) \n (322)%\n\nIncome tax benefit (provision) \n 1,109  \n (25)% \n -  \n -%\n\nNet loss from continuing operations \n (377,334) \n (8,465)% \n (3,837) \n (322)%\n\n  \n    \n    \n    \n   \n\nLoss from discontinued operations, net of tax \n (711) \n (16)% \n (1,212) \n (102)%\n\n  \n    \n    \n    \n   \n\nNet loss \n (378,045) \n (8,481)% \n (5,049) \n (423)%\n\n \n\n60\n\n \n\n \n\n**Revenue**\n\n \n\nIn 2025, we transitioned our business model into\ndigital assets treasury business, while continuing managing our legacy sports portfolio. On December 1, 2025, we assumed 100% equity\ninterest in Juve Stabia, 48% of which was assigned to us by the judicial administrators in Napoli, Italy, and recorded a full consolidation\nof Juve Stabia’ club activities as of December 31, 2025. The principal activities of our Company for the year ended December 31,\n2025, were staking revenues from our digital asset treasury business and advertising, sponsorships and other sport club operations. The\nprincipal activities of our Company for the year ended December 31, 2024 were advertising, sponsorships and other sport club operations.\nRevenue for the years ended December 31, 2025 and 2024 was €4,484 and €1,193, respectively, representing an increase of €3,291\nor 276%. The increase was primarily attributed to an increase in the revenues from our legacy sports business operations. As discussed\nabove, the Company obtained full ownership of Juve Stabia’s sports club on December 1, 2025. The Company has included the club’s\nresults of operations in the consolidated financial statements for the period from June 20, 2025, the date Juve Stabia became a consolidated\nentity, through December 31, 2025, which included approximately €2.6 million of total revenues for the year ended December 31, 2025.\nIn the comparative period ended December 31, 2024, the Company did not hold a controlling interest in Juve Stabia and, accordingly, its\nresults were not consolidated. Included in the total were new revenues generated from our digital assets business, which primarily consisted\nof €1,535 of staking revenue received from October 2025 to December 2025.\n\n \n\n**Segment Reporting**\n\n \n\nBasis of Segmentation\n\n \n\nFollowing the closing of the PIPE transaction\nin September 2025 and the adoption of the Company’s new business strategy, the Company reconsidered its the segment assessment\nthat was used in the financial years ended 2024 and 2023. Post the PIPE transaction, the Company evaluates periodic operating and financial\nperformance at the portfolio level rather than at the individual business unit level. The Company has therefore identified the following\nreportable segments:\n\n \n\n●\n*Legacy\nSports Portfolio*, primarily comprising its sport clubs and related administrative entities\nsuch as North Macedonia FKAP, and Brera Milano; The Legacy Sports Portfolio generates revenue\nfrom competition prizes, sponsorship arrangements, player transfers, and sports-related advisory\nand consulting services. The segment’s expenses primarily include costs directly associated\nwith revenue-generating activities, as well as merchandise operations and advertising and\nmarketing initiatives; and\n\n \n\n●*Digital\nAsset Treasury Portfoli*o, primarily generates revenue from digital assets business, including\nSOL staking and other activities as the Company pivots its operations in that area. The Company’s\nexpenses in that segment primarily consist of costs related to the acquisition of SOLs, impairment\ncharges on SOL-based digital assets, compensation expenses, including directors’, consultants’\nand strategic advisors’ fees.\n\n \n\n61\n\n \n\n \n\nOur management reporting framework, including\nthe assumptions and methodologies applied, is regularly reviewed to ensure their continued validity and relevance. The capital attribution\nmethodologies rely on several key assumptions, which are periodically reassessed and updated as needed.\n\n \n\nFor the year ended December 31, 2025 and 2024\nthe Company’s revenue, expenses, net segment profit or loss came from the following segments:\n\n \n\n  \nDecember 31, 2025  \nDecember 31, 2024* \n\nSegment Revenue \nDigital\nAssets\nTreasury  \nLegacy\nSport\nPortfolio  \nConsolidated  \nDigital\nAssets\nTreasury  \nLegacy\nSport\nPortfolio  \nConsolidated \n\nRevenues \n€1,535  \n€2,949  \n€4,484  \n€          -  \n€1,193  \n€1,193 \n\nEquity based compensation \n 266,967  \n 2,158  \n 269,125  \n -  \n 961  \n 961 \n\nGeneral and administrative \n 19,939  \n 17,932  \n 37,871  \n -  \n 4,473  \n 4,473 \n\nImpairment of non-financial assets \n 66,052  \n 15,947  \n 81,999  \n -  \n -  \n - \n\nOperating\nloss \n€(351,423) \n€(33,088) \n€(384,511) \n€-  \n€(4,241) \n€(4,241)\n\nInterest income (expense \n -  \n (229) \n (229) \n -  \n (8) \n (8)\n\nOther income (expense) \n (938) \n 7,235  \n 6,297  \n -  \n 412  \n 412 \n\nNet loss \n€(352,361) \n€(26,082) \n€(378,443) \n€-  \n€(3,837) \n€(3,837)\n\n \n\n*Segment disclosures for\nthe year ended December 31, 2024 have been restated as a result of the change of the Company’s\nsegment structure during 2025.\n\n \n\n**Equity based compensation**\n\n** **\n\nEquity-based compensation for the year ended December 31, 2025, amounted\nto €269,125 compared with €961 for the prior year, or an increase of €268,164, or 27,902%. This significant increase primarily\nreflects the additional compensation expenses recorded from the equity warrants issued with respect to a new advisory agreement entered\nwith the Strategic Advisors to support the Company’s funding provided by the PIPE investors and led by the Strategic Advisors as\nwell as ongoing strategic initiatives of the Company. After the PIPE transaction, all Strategic Advisors joined the Board of Directors\nof the Company (Mr. Guy Hisch joined the Board of Directors on May 8, 2026). A detailed breakdown of these expenses by the nature of expense\nis further detailed in Note 5 — Equity-based compensation, as well as Note 14, Share-based compensation and Note 16, Transactions\nwith Related Parties, to the consolidated financial statements.\n\n \n\n**General and Administrative Expenses**\n\n** **\n\nGeneral and administrative expenses consisted\nof professional and consultancy fees, director remuneration, payments made to employees and consultants and legacy sports operating expenses\nsuch as players compensation, benefits and travel expenses, players management expenses, sports training facilities rental, and other\nsports related expenses. General and administrative expenses for the years ended December 31, 2025 and 2024 amount to €37,871 and\n€4,473, respectively, an increase of €33,398 or 747%.\n\n \n\nThe increase in these expenses is attributed to implementation of the\nCompany’s strategic initiatives, including additional equity registration statement (the ATM transaction described earlier) and\nanticipated acquisition transactions, which were subsequently reconsidered, as well as due to an increase in certain sports business activities.\nLegal, consulting, and advisory expenses amounted to €3,823 for the year ended December 31, 2025 as compared to €883, for the\nyear ended December 31, 2024. An increase in these expenses of €2,940, or 333%, was primarily related to the Company’s strategic\ninitiative as discussed earlier. In addition, increase in the general and administrative expenses for the year ended December 31, 2025\nwas due to a higher provision for bad debts and other financial asset impairment amounting to €15,966 which includes an impairment\nprovision of €14,426 related to a prepayment made for the digital assets purchase transaction, which settled after December 31, 2025\nas well as an impairment provision on Juve Stabia’s acquired receivables and other assets amounting to €938. No impairment\nfor these or similar assets was recorded in the year ended December 31, 2024.\n\n** **\n\n62\n\n \n\n** **\n\nAn increase in certain sports business activities\nwas primarily attributable to the Company obtaining a controlling interest in one of its sports clubs, Juve Stabia, on June 20, 2025,\nat which point consolidation commenced. The Company subsequently assumed the remaining ownership interest on December 1, 2025, resulting\nin full ownership as of December 31, 2025. Accordingly, in the year ended December 31, 2025, Company reported the club’s period\nresults from June 20, 2025 through December 31, 2025 of operations, including €11,594 of general and administrative expenses, versus\nnil in Juve Stabia’s general and administrative expenses reported in the year ended December 31, 2024, during which the Company\ndid not own the controlling interest in Juve Stabia.\n\n \n\nA detailed breakdown of these expenses by the\nnature of expenses is further detailed in Note 6 — General and Administrative expenses, to the consolidated financial statements.\n\n \n\n**Impairment of non-financial assets**\n\n* *\n\nTotal impairment provision expenses recognized for non-financial assets\nfor the year ended December 31, 2025, amounted to €81,999. No impairment expense was recognized during the year ended December 31,\n2024. The detailed composition of these charges and the description of the measurement methods are summarized in Note 7 - Impairment of\nNon-Financial Assets, to the consolidated financial statements. The increase in the impairment provision expenses primarily reflects the\nnon-recurring non-cash charge for goodwill write off in the Company’s sports business segment and the reduction in carrying values\nof certain intangible and other assets related to sports business segment following the updated recoverability analyses made by the management.\n\n** **\n\n**Operating Loss**\n\n** **\n\nOperating loss for the years ended December 31,\n2025 and 2024 was €384,511 and €4,241, respectively, an increase of €380,269, or 8,966%. The increase in operating loss\nresults from the factors described under the revenue, operating expenses sections above.\n\n \n\n**Other income (expenses)**\n\n** **\n\nOther income (expense), net, for the year ended\nDecember 31, 2025 was €6,297, primarily attributable to donations and sponsorship payments in the legacy sports business, capital\ngains on disposal of intangible assets related to the players registration; multi-year broadcasting rights, and remeasurement gains recognized\nupon Juve Stabia’s step acquisition. The increase in the year ended December 31, 2025 as compared to €412 for the year ended\nDecember 31, 2024 is primarily due to the absence of Juve Stabia’s results in the prior year, as the Company did not have a controlling\ninterest in Juve Stabia during 2024.\n\n \n\n**Income\nTax Benefit**\n\n** **\n\nProvision for income tax expenses for the year ended December 31, 2025\nresulted in a tax benefit of €1,109, compared to no provision for the year ended December 31, 2024. The increase was primarily attributable\nto local tax benefits recognized by Juve Stabia following its consolidation in 2025. In the prior year, no provision was recorded as the\nCompany and its subsidiaries generated losses resulting in no current tax liability.\n\n \n\n**Net Loss**\n\n** **\n\nNet loss for the years ended December 31, 2025 and 2024 was €378,045\nand €5,049, respectively, an increase of €375,214 or 7,432%. The increase was the result of the various factors discussed above.\n\n \n\n**5.B. Liquidity and Capital Resources**\n\n \n\nPrior to the 2025 PIPE transaction our operations\nwere primarily financed through sales of common shares in public offering transactions and loans from affiliated companies. The closing\nof a PIPE transaction in September 2025 provided the Company with $270.8 million in net proceeds, which were delivered in cash, digital\nassets and shares in a private crypto-related company. In the 2024 annual report, the Company had substantial doubt about its ability\nto continue as a going concern due to the recurring losses and negative operating cash flows. With the successful completion of the 2025\nPIPE transaction, through our improved cash position and significant holdings of liquid SOL assets as of December 31, 2025, we believe\nthat substantial doubt about our ability to continue as a going concern has been alleviated for at least the next twelve months from\nthe date of filing of this form.\n\n \n\n63\n\n \n\n \n\nAs of December 31, 2025 and 2024, we had cash\nand cash equivalents of €16,199 and €1,522, respectively. As of May 10, 2026, we had cash and cash equivalents of approximately\n€4.7 million.  To date, we have financed our operations primarily through revenue generated from operations and proceeds from\nthe PIPE transaction described above as well as other smaller share issuances executed prior to the PIPE transaction.\n\n** **\n\nAs of December 31, 2025 and 2024, we held cash\nbalances in a non traditional bank, Wise Europe SA, amounting to €9,899 and €1,454, respectively. These deposits are not insured\nby the local government. The Company performed a detailed credit risk assessment concerning the uninsured deposit made in Wise Europe\nSA and determined that the credit risk is low, based on the following factors: (i) Wise Europe SA safeguards its customers’ funds\nby holding them in a mix of cash in leading commercial banks and low risk liquid assets, as required by its regulatory obligations; (ii)\nWise Europe SA is authorized by the National Bank of Belgium (“NBB”), which ensures that the bank operates under the regulations\nand guidelines set by the NBB; and (iii) the Company has not experienced losses on these bank accounts and does not believe it is exposed\nto any significant credit risk with respect to these bank accounts.\n\n** **\n\nAs of December 31, 2025, we also held cash balances\nin a US commercial bank Axos Bank, amounting to amounting to €4,805. Up to $250,000 held on these accounts are insured by the US\nFederal Depositary Insurance Company. local government. The Company performed a detailed credit risk assessment concerning the uninsured\ndeposit made in Wise Europe SA and determined that the credit risk is low, based on the following factors: (i) Axos Bank safeguards its\ncustomers’ funds by holding them in a mix of cash in leading commercial banks and low risk liquid assets, as required by its US\nFederal regulatory obligations.\n\n \n\nAs of December 31, 2025 and May 10, 2026 we hold\ndigital assets (primarily SOL) that are subject to market volatility and may also be subject to staking, custody, lock-up, or other restrictions.\nAs a result, such holdings may not be readily available for immediate monetization, and we do not currently rely on them as a principal\nsource of liquidity or operating funds. To the extent needed, we may consider monetizing certain digital assets to provide funding for\nour operations and other liquidity requirements.\n\n \n\nThe accompanying consolidated financial statements\nhave been prepared on a going concern basis under which we are expected to be able to realize our assets and satisfy our liabilities\nin the normal course of business.\n\n \n\n**Summary of Cash Flow**\n\n* *\n\nThe following table sets forth a summary of the\nCompany’s consolidated cash flows for the years ended December 31, 2025 and 2024. The discussion of the Company’s cash flows\nfor the year ended December 31, 2023, is presented in Amendment No. 1 to our Annual Report on Form 20-F/A for the year ended December\n31, 2024, filed with the SEC on May 28, 2025, and is incorporated herein by reference. The information should be read together with our\nconsolidated financial statements and related notes included elsewhere in this Annual Report. Our historical results presented below\nare not necessarily indicative of cash flows that may be expected for any future period.\n\n \n\n  \nYears Ended December 31, \n\n** **** **\n**2025**** **** **\n**2024**** **\n\nStatements of Operations Data \n€  \n€ \n\nNet cash used in operating activities from continuing operations \n (9,999) \n (3,027)\n\nNet cash used in investing activities from continuing operations \n (209,081) \n (87)\n\nNet cash provided by financing activities from continuing operations \n 231,697  \n 2,817 \n\nNet increase (decrease) in cash \n 12,370  \n (633)\n\nCash, beginning of period \n 1,522  \n 2,177 \n\nCash paid for acquisitions less cash acquired \n -  \n - \n\nEffect of foreign exchange rate changes \n 2,307  \n (22)\n\nCash, end of period \n 16,199  \n 1,522 \n\n \n\nTo date the Company has financed its operations\nprimarily through revenue generated from operations, loans and sale of equity.\n\n \n\n64\n\n \n\n \n\nNet cash used in operating activities for the\nyears ended December 31, 2025 and 2024, respectively, are comprised of the following:\n\n \n\n  \nYears Ended December 31, \n\n  \n2025  \n2024  \nChange \n\n  \n   \n   \n  \n\nNet loss from continuing operations \n€(378,045) \n€(3,837) \n€(377,208)\n\nNon-cash portion of net loss \n 364,224  \n 1,001  \n 363,223 \n\nWorking capital items \n 3,111  \n (191) \n 3,302 \n\nTotal \n€(10,710) \n€(3,027) \n€(7,683)\n\n \n\nThe change in our net loss is described above\nunder Results of Operations. The change in the non cash portion of the net loss is principally due to the amounts of equity-based compensation\nof €264,617 for the year ended December 31, 2025 versus €961 for the year ended December 31, 2024, which was the result of\nshare awards issued in the year ended December 31, 2024. In addition, there was an increase in depreciation and amortization of €1,176\nfor the year ended December 31, 2025 as it included a full year of our two major subsidiaries activities versus a partial year for the\nyear ended December 31, 2024.\n\n \n\nThe increase in changes of working capital items\nbetween the year ended December 31, 2025 and 2024 of €3,302 was the result of increase in changes in accounts receivable €3,189,\nprepaid expenses and other current assets €726, accounts payable €12,612, contract liabilities and deferred revenue €1,076,\nand accrued and other current liabilities €4,679.\n\n \n\nNet cash (used in) provided by investing activities\nwas €(209,081) and (€87) for the years ended December 31, 2025 and 2024, respectively. Net cash used in investing activities\nfor the year ended December 31, 2025 was primarily for the acquisition of digital assets, which amounted to €202,469 while the net\ncash used in investing activities for the year ended December 31, 2024 was mainly for the purchase of property, plant and equipment used\nin the sports business.\n\n \n\nNet cash provided by financing activities was\n€231,697 and €2,817 for the years ended December 31, 2025 and 2024, respectively. The net cash provided by financing activities\nwas the result of the shares sold for cash as the PIPE transaction was closed in September 2025, and we sold 66.7 million of shares for\nnet proceeds of US$ 271 million, with the majority of these proceeds coming in cash. In December 2024, we sold 545,000 Series A Preferred\nShares for net proceeds of €294.\n\n \n\n**Legal Contingencies**\n\n** **\n\nWe are currently not a defendant to any material\nlegal proceedings, investigation, or claims.\n\n \n\n**Off-Balance Sheet Arrangements**\n\n** **\n\nWe have no off-balance sheet arrangements that\nhave or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues\nor expenses, results of operations, liquidity, capital expenditures or capital resources.\n\n \n\n**5.C. Research and Development, Patents and\nLicenses, etc.**\n\n \n\nSee “Item 4. Information on the Company—B.\nBusiness Overview.”\n\n \n\n**5.D. Trend Information**\n\n \n\nOther than as disclosed elsewhere in this Annual\nReport, we are not aware of any trends, uncertainties, demand, commitments or events that are reasonably likely to have a material effect\non our net revenues and income from operations, profitability, liquidity, capital resources, or would cause reported financial information\nnot to be indicative of future operation results or financial condition.\n\n \n\n**5.E. Critical Accounting Estimates**\n\n \n\nThe following discussion relates to critical\naccounting policies for our company. The preparation of financial statements in conformity with IFRS requires our management to make\nassumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments\nand contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements.\nThese accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting\npolicies are those that are most important to the portrayal of our financial condition and results of operations and require management’s\ndifficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently\nuncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance\nto financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s\ncurrent judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in\nthe preparation of our financial statements:\n\n \n\n65\n\n \n\n \n\n**Judgments, Assumptions and Estimation Uncertainties**\n\n** **\n\nInformation about judgments, assumptions and\nestimation uncertainties made in applying accounting policies that have the most significant effects on the amounts recognized in the\nconsolidated financial statements is included in the following notes to the consolidated financial statements accompanying this Annual\nReport.\n\n \n\n●*Reverse\nrecapitalization* – The 2023 acquisition of Brera Milano was accounted for as a\nreverse recapitalization, with no goodwill or other intangible assets recorded, in accordance\nwith the guidance in paragraphs B19–B27 of IFRS 3 for reverse acquisitions. Brera Milano\nwas determined to be the accounting acquirer based upon the terms of the acquisition and\nother factors including: (i) former Brera Milano shareholders owning approximately 35% of\nthe combined company (on a fully diluted basis) immediately following the closing of the\nacquisition and are the largest shareholders’ party of the Company, (ii) former Brera\nMilano shareholder, Alessandro Aleotti, being appointed as the Chief Strategy Officer and\na director of the Company, and (iii) former Brera Milano shareholder, Sergio Carlo Scalpelli,\nbeing appointed as the Chief Executive Officer and a director of the Company; (iv) shareholders\nof the Company other than the former Brera Milano shareholders continuing as passive investors;\nand (v) the combined company continuing the football related business with Brera Milano shareholders\nbeing the major subject matter experts of this industry in the Company and having the power\nto direct the development and operations of the combined company after the acquisition.\n\n \n\n●Prior to the acquisition\nof Brera Milano, the Company was a shell corporation established in 2022 with no operations\nat incorporation date. The Company has issued shares to the existing shareholders, and it\nis not qualified as a business under the definition of IFRS 3. With reference to IFRS 3 Appendix\nB, this would not constitute a business combination since there is no substantive change\nin the reporting entity or its assets and liabilities. Accordingly, the Company’s consolidated\nfinancial statements represent a continuation of the financial statement of Brera Milano\nand the assets and liabilities are presented at their historical carrying values.\n\n \n\n●*Provision\nfor doubtful accounts* – See Notes 2 and 11. Significant assumptions for measurement\nused by management in estimating the expected credit loss include weighted-average loss rate\nor default rate, current and future financial situation of debtors for individual receivables\nthat management is aware will be difficult to collect, and future general economic conditions.\n\n \n\n●*Share-based\ncompensation* – See Notes 2 and 18. Management uses significant assumptions to measure\nthe fair value of options and warrants, including the use of the Black-Scholes pricing model.\nThe Black-Scholes model has its own set of assumptions including volatility of the underlying\nshares.\n\n \n\n●*Leases*\n– See Note 2. Management makes significant assumptions regarding lease terms, exercise\noptions and present value methodologies in determining the value of its right-of-use assets.\n\n \n\n●*Intangible\nassets* – See Note 2. Management makes significant assumptions regarding lease terms,\nexercise options and present value methodologies.\n\n \n\n●*Digital\nAssets* - The Company holds cryptocurrencies that are measured at fair value. Management\napplies judgment in determining the appropriate valuation techniques and inputs used to measure\nthese assets, including the availability and reliability of quoted prices or other observable\nmarket data. Where quoted prices in active markets are not available, the Company may use\nvaluation techniques that incorporate observable and unobservable inputs, which require significant\njudgment. These judgments affect the classification of the measurements within the fair value\nhierarchy, including whether such measurements are categorized as Level 2 or Level 3. Changes\nin the valuation techniques or significant inputs used could result in material changes to\nthe amounts recognized in the consolidated financial statements."}