MEMORANDUM FOR POTENTIAL EQUITY INVESTMENT September 2023 THIS MEMORANDUM IS SUBMITTED TO YOU ON A CONFIDENTIAL BASIS SOLELY IN CONNECTION WITH YOUR CONSIDERATION OF AN INVESTMENT IN LOS ANGELES PICKLEBALL INC., A CALIFORNIA CORPORATION. THE PROJECT SPONSOR, LOS ANGELES PICKLEBALL INC. INCLUDING ITS AFFILIATES, SUBSIDIARIES, MEMBERS, MANAGERS, PARTNERS, AGENTS, AND CONSULTANTS, (“SPONSOR”) BELIEVES THE INFORMATION CONTAINED HEREIN TO BE ACCURATE AND DERIVED SOURCES DEEMED RELIABLE HOWEVER, IN NO WAY GUARANTEES THE PROJECTIONS CONTAINED HEREIN. DUE TO THE CONFIDENTIAL NATURE OF THIS MEMORANDUM. ITS USE FOR ANY OTHER PURPOSE MIGHT INVOLVE SERIOUS LEGAL CONSEQUENCES. CONSEQUENTLY, THIS MEMORANDUM MAY NOT BE REPRODUCED IN WHOLE OR IN PART, AND MAY NOT BE DELIVERED, SHARED, OR TRANSFERRED TO ANY PERSON IN ANY MEDIUM, PRINT OR ELECTRONIC, WITHOUT THE PRIOR WRITTEN CONSENT OF LOS ANGELES PICKLEBALL INC. AN INVESTMENT IN LOS ANGELES PICKLEBALL INC. WILL BE SPECULATIVE AND WILL INVOLVE A HIGH DEGREE OF RISK. SUCH RISKS INCLUDE, BUT ARE NOT LIMITED TO, INVESTMENT IN A NEW START-UP VENTURE WITH SIGNIFICANT CAPITAL NEEDS AND EXPENSES, THE ILLIQUIDITY OF THE INVESTMENT, RESTRICTIONS ON TRANSFERABILITY, THE NEED FOR ADDITIONAL CAPITAL, AND OTHER POTENTIAL RISKS WHICH CANNOT BE DETERMINED IN ADVANCE. PROSPECTIVE INVESTORS ARE ENCOURGED TO DO THEIR OWN DUE DILIGENCE AND CONSULT WITH THEIR ATTORNEY, CPA, OR PROFESSIONAL FINANCIAL ADVISOR REGARDING THE SUITABILITY OF THE INVESTMENT FOR YOU.
TABLE OF CONTENTS Section 1: Los Angeles Pickleball Inc. Brand Deck Section 2: Project Description & Investor Term Sheet Proposal Section 3: Project Financial Projections Section 4: Future Location Package (Site) - LA Pickleball Silicon Beach Section 5: Site Letter of Intent Lease Terms Section 6: Site Property Profiles Section 7: LA City Zoning Determination & Zoning Code Section 8: Santa Monica Pickleball Ctr. Media Deck Exhibit A: Los Angeles Pickleball Inc. CA Secretary of State Statement of Information
LOS ANGELES PICKLEBALL: SILICON BEACHTHE CITY'S PREMIERE PICKLEBALL DESTINATION
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THE PRTHE LACK 40 minute waits during Open Play. $50,000+ initiation fees for private clubs. 90 minute drives to local tournaments. THE RELA has 0.8 pub100,000 Zero dedicatethe WeProperly ZonLA Areas is Dif
ROBLEM EALITY blic courts per people. ed courts on st Side. THE SOLUTION As the team behind Santa Monica Pickleball Center, we have a proven track record with profitable and scalable pickleball. ned Land in fficult to Find
✶ SOLULA PICKLEBRINGING PICPEO
UTION ✶ EBALL IS CKLE TO THE PLE.
ADVANCING THE GAME There is no middle ground for the pickleball masses on the Westside. Welcome to the next chapter of pickleball. We are the only team uniquely equipped with expertise, a proven track record, strategy and the partnerships to grow a profitable pickleball in one of the most expensive and difficult markets in the country.
SANTA MONICA PIA PROVEN1,94 CURRENT REVENUE PROFILE SANTA MONICA PICKLEBALL CENTER $9$8$2$1$7
CKLEBALL CENTER: N SUCCESS 900 SQ FEET PRO SHOP COURTS 90K/MO AVERAGE RETAIL SALES REVENUE 80K/MO AVERAGE EVENTS REVENUE 2MM ANNUAL REVENUE 1.2 ANNUAL COSTS 750K ANNUAL PROFIT
LA PICKLEBALL: SILICON BE
EACH INDOOR COURTS OUTDOOR COURTS PRO SHOP LOUNGE AREA DEDICATED PARKING
Y1 Y2 Y3 $624,000 $1,417,000 $1,862,000 $1,000,000 $1,030,000 $1,061,000 $1,940,000 $1,998,000 $2,058,000Membership Retail Events Using conservative estimates modeled after current Santa Monica Pickleball CenFull financial models available upon request. LA PICKLEBALL: SILICON
nter retail and programming. BEACH REVENUE MODEL 3X COURTS $83K/MO AVERAGE RETAIL SALES $52K/MO MEMBERSHIP REVENUE $2.5MM ANNUAL REVENUE YEAR ONE $161K/MO EVENTS REVENUE
Q3 2010 Santa Monica Tennis Center Founded 1 2 TIMELINE How Santa Monica Pickleball Center becomes LA's Pickleball Empire Q3 2021 $250K Invested to create Santa Monica Pickleball Center Q4 2022 3 Month over month pickleball revenues quickly outpace tennis by 25-50%+ QTennis Courtsfirst dedin Sa
4 Q2 2023 moved off-site, s resurfaced for icated PB courts anta Monica 5 Q3 2023 Secure funding and begin build on LA PB: Silicon Beach facility Q4 2024 6 Open LA PB: Silicon Beach 7 LA PB: Silicon Beach Location reaches profitability Q2 2026
MEMBERSHIPS Monthly Membership Models with Initiation Fees THE REVENUOnline and BrickRETWith an attainable membership model coupledLA Pickleball is a$249/MO 400 MEMBERS 8% INCREASE IN PRICES YOY 40-55% PRO25% CURRENT M-0-
UE STREAMS k & Mortar Retail TAIL Corporate Events & Tournaments EVENTS d with tournament and private event income streams, a guaranteed success. OFIT MARGIN M RETAIL INCREASES 80% MARGINS 10 TOURNAMENTS/YR 3 EVENTS/WEEK
✶ THE $1M IN FPROFITABILITIN Y
ASK ✶ FUNDING TY REACHED Y2
THE TJon Neeter Owner General Manager With decades of coaching high level tennis players including the Duke Men's D1 team, Jon took that experience and opened the first dedicated pickleball facility in Los Angeles, the Santa Monica PIckleball Center. Jon has 15+ years of experience of owning a tennis and fitness center on the West Side of LA. aj
TEAM Julio Rivera Co-Owner Director of Pickleball Julio Rivera became the Director of Pickleball at the Center in 2022. After decades of success as a tennis coach., Julio quickly made the ump to a top ranked player on the APP Senior Pro Tour. Julio is currently the Head Coach of the Orlando Squeeze Major League Pickleball team and is considered one of the top PB coaches.
THANK YOU LOS ANGELES PICKLEBALL
LAPB Inc. Potential-Equity-Investment-Term Sheet.3.docx Page 1 of 6 TERM SHEET FOR POTENTIAL EQUITY INVESTMENT IN LOS ANGELES PICKLEBALL, INC September 2023 This term sheet (“Term Sheet”) summarizes the principal terms with respect to a potential private placement of equity securities into Los Angeles Pickleball, Inc. (“Company”) by (“Investor”) and related strategic alliance. This Term Sheet is intended solely as a basis for further discussion and is not intended to be and does not constitute a legally binding obligation on the Company. No legally binding obligations will be created, implied, or inferred until a document in final form entitled Stock Purchase Agreement (SPA) is executed and delivered by all parties. Without limiting the generality of the foregoing, it is the parties intent that, until that event, no agreement shall exist among them and there shall be no obligations whatsoever based on such things as parol evidence, extended negotiations, “handshakes,” oral understandings, or courses of conduct (including reliance and changes of position). This term sheet is divided into 2 sections: • Part A contains background; • Part B sets out key investment terms intended to be incorporated in a detailed SPA to be entered into between the Company and Investor (but which is not binding until a SPA is signed); and PART A – BACKGROUND The Project: The Company intends to expand and relocate its current operations at the Santa Monica Pickleball Center in Santa Monica, CA to a much larger, market dominant facility location, by constructing and operating a world class Pickleball performance, training, and competition center including pro shop and lounge at 4086-4090 Del Rey Ave. in Los Angeles suburb of Marina Del Rey, CA (Site) providing approximately 6+ indoor and up to 6 or more outdoor Pickleball courts plus guest parking on site, (Project). The site is approximately 61,676 sq. ft. of land containing an existing highly improved building of approx. 12,490 sq. ft. centrally located among the adjoining communities of Venice, Marina Del Rey, Santa Monica, Culver City, South Beach communities including El Segundo and Manhattan Beach, and West Los Angeles accessible from Lincoln Blvd., Interstate 405 and State Hwy 90. A description of the facility with pictures is included in this package, the Founders are currently in negotiations with the landlord to secure the Site. Because of the high barriers to entry and scarcity of large areas of available space in the densely populated Westside of Los Angeles, locations appropriately zoned permitting sport operations are rare, especially near beach communities. The Founders, with the support of City Council District 11, were able to secure in writing from city planning, zoning, and building departments, that Pickleball is a permitted use at the Site. Of note, besides the Sites obvious physical attributes, the Founders selected this location because its in the heart of where the highest customer concentrations of racquet sport, and particularly pickleball players, are located providing a sustainable customer base. Because of its size, SMPB reputation, and location, the Founders believe its regional market share will result in little or no opportunity for competition to its business on the Westside of Los Angeles.
LAPB Inc. Potential-Equity-Investment-Term Sheet.3.docx Page 2 of 6 Proof Of Concept: In 2021 and 2022 the Sports and Fitness Industry Association (SFIA) officially reported that Pickleball had become the fastest growing sport in the United States two years in a row. Over those years the number of players increased almost 40% to 4.8 million players. NBA player LeBron James, retired NFL quarterback Drew Brees and Tom Brady, entrepreneur Gary Vaynerchuk and other celebrities and athletes have all made investments in professional pickleball teams, spreading exposure of the sport. Being long time racquet sport professionals, the Company founders were early adopters of the growing pickleball trend and launched in Q3 2021 Santa Monica Pickleball Center (SMPC) in Santa Monica, CA. SMPC initially became a proud addition to one of the most recognized tennis operations in Southern California, The Santa Monica Tennis Center. By Q4 2022, Month over month pickleball revenues quickly outpaced tennis by 25-50%+. SMPC has already become the premiere location for the sport in Los Angeles County. Over a quarter million dollars was invested in SMPC with the addition of 4 new lighted outdoor pickleball courts with top-of-the-line C&D nets and 1,900 sq. ft. of retail space offering the largest and most-varied inventory of pickleball equipment in all of Los Angeles. SMPC has also been frequently booked for private events, reality TV shows, and commercials. A press packet is included in this package. With only 4 courts, SMPC and its Founders have already demonstrated a proven track record with a profitable and scalable pickleball facility whose metrics are: • $90,000/mo. Average Retail Sales • $80,000/mo. Average Events Revenue • $2,000,000 Annual Revenue • $750,000 Annual Profit Based upon the success of SMPC and the exploding interest in the sport, a preliminary feasibility study and business plan for the Project has been completed by the Founders indicating its financial viability and is included in this package. The Founders now wishes to engage with potential equity partners to advance the Project. Company: The Project will be undertaken by, owned, and operated by a special purpose entity, Los Angeles Pickleball, Inc., a California Corporation. The Company’s founders are Jon Neeter and Julio Rivera (Founders). Establishment Cost and Timeframe: The preliminary estimate of the total costs to complete the Project (inclusive of contingencies and pre-opening expenses) is approximately One Million Dollars ($1,000,000), the court construction, facility, remodeling and fixturization period to opening is conservatively estimated at 9-12 months and further depicted on the Timeline on page 8 in the attached Brand Deck.
LAPB Inc. Potential-Equity-Investment-Term Sheet.3.docx Page 3 of 6 PART B - KEY INVESTMENT TERMS The Company and the Investor are discussing a private placement of shares of Preferred Stock on the following terms: Amount of Initial Investment: $1,000,000 (“Initial Investment”) to be funded in full into an account (“Disbursement Account”) held by Company or a reputable Escrow Company (“Trustee”) of the parties mutual choosing to hold, manage, and distribute the Investment Amount (or portion(s) thereof) pursuant to the terms and conditions as contained in the Stock Purchase Agreement as further summarized below. Type of Security: Shares of the Company’s Preferred Stock (“Preferred”). Use of Proceeds: The Company shall use the proceeds from this Investment for working capital purposes for initial setup costs inclusive of soft costs (design/permitting), hard costs (construction of pickleball courts & Club), initial leasehold security deposit, carry costs during development, and startup expense for a new Pickleball and racquet sports facility with retail pro shop at in the Marina Del Rey area of Los Angeles at 4086-4090 Del Rey Ave., Los Angeles, CA 90292. Milestones: The Investor will be able to track the progress of their investment by correlating the following milestones of the Company Project to the potential appreciate of the invested capital. All times below are believed to be reasonably accurate but are approximate and subject to adjustment: 1) Delivery of the initial Executed Letter of Intent for or Executed Leasehold for 4086-4090 Del Rey Ave., Los Angeles, CA: by October 31, 2023. 2) Delivery of the Budget for Work of Facility Improvements: by January 31 - February 15, 2024. 3) Schedule and Progress Reports from Company management of Facility construction: from March 1, 2024, 2023 to October 31, 2024. Disbursements of Initial Investment: Investor will contribute the Initial Investment to the Company by depositing in a lump sum the full amount of into the Disbursement Account. Disbursements of the Investment Amount from the Disbursement Account shall be made in tranches or installments relative to time frames in connection with the accomplishment of certain procedures and performance activities or demands outlined in the Facility Development Budget and Schedule for items including but not limited to: (i) Facility Lease i.e. security deposit related to the lease execution, (ii) required Facility construction progress payments to contractors for Facility construction, (iii) vendors for retail inventory, and (iv) staffing; and (v) other permitted expenses necessary for the development and opening of the Facility to the members and general public as further detailed in the Stock Purchase Agreement. Payments to Company from the Disbursement Account shall be made within five (5) calendar days after receipt of Company invoice and accompanying supporting materials, unless the Company or Trustee receives written objection from Investor. Investor shall have three (3) calendar days from the receipt of each invoice setting forth with specificity the nature of the objection. Objections to payment of invoices
LAPB Inc. Potential-Equity-Investment-Term Sheet.3.docx Page 4 of 6 shall be based on only one or more of the following reasons: (i) Company and/or its Contractor has failed to complete the activity in question, (ii) Vendor/Contractor has not provided Company and Trustee legible copies of the required evidence of activity accomplishment, invoice and if construction contractor, corresponding Lien Release, (iii) Company has failed to make previous payments to its Facility Contractors and/or subcontractors, (iv) A claim against Company has been filed by a third party, or Company is otherwise failing to comply with a material provision of the Stock Purchase Agreement. Return of Investor Capital & Cash Flow Participation: The Company intends to provide a significant return on investment based on the timeliness of funding and the current market opportunities the Company anticipates. Based upon the net cash flow projections accompanying this Term Sheet, the basic terms are as follows: Net cash proceeds to the parties shall be payable as follows in order of priority - • 100% of distributable profit will be paid to Company for Recoverable Operating Losses; then • 80%/20% split of distributable profit (80% Investor/20% Company) payable quarterly to capital contributors including Investor, until 115% of their respective initial capital investment is realized (“1st Return”); then • 80%/20% split of distributable profit (80% Investor/20% Company) payable quarterly pro rata in favor of Investor and Company until another 10% of Investor initial capital investment is realized (“2nd Return”); then • 95%/5% split of distributable profit (95% Company/5% Investor) payable quarterly pro rata, parri passou, until the expiration of the fifth (5th) calendar year following opening date of the Project (“3rd Return”) after which expiration date distributable profit to Investor shall cease. • Included as a line item operating expense from the outset and in perpetuity: • 5% management fee to Company management for day to day operations and oversight; and • $100,000 annual salary to GM of the Company (so long as he/they is actively engaged at the Company), annual increases not to exceed 3%. • Stock Purchase Agreement to contain buy-sell, drag along and tag along provisions to be finalized as part of final documents. Branding/Management: Company Management and its officers will be solely responsible for management of all aspects of the business. • Company Management and its officers will be solely responsible for management and day to day operations, reporting, accounting, and all aspects of Company’s business subject to certain consent rights of Investor contained in the final Stock Purchase Agreement. • Company Management and its officers will have total design and messaging control over the Facility however, Investor shall not be liable for financial expenses related to Company’s work of construction, remodeling, and rebranding. • Notwithstanding the above Company Management responsibilities, in exchange for Investors participation in distributable profit in perpetuity, Investor shall act as
LAPB Inc. Potential-Equity-Investment-Term Sheet.3.docx Page 5 of 6 guarantor under the real property lease for the Facility, if required, for the first five (5) years only. (to be negotiated in the Stock Purchase Agreement.) Voting Rights: On all matters submitted for stockholder approval, the Company shall not, without the prior consent of the holders of at least a majority of the then issued and outstanding Preferred Stock, voting as a separate class: a) issue or create any series or class of securities with rights superior to or on a parity with the a Preferred Stock or increase the rights or preferences of any series or class having rights or preferences that are junior to the Preferred Stock so as to make the rights or preferences of such series or class equal or senior to the Preferred Stock. b) effect any exchange or reclassification of any stock affecting the Preferred Stock or any recapitalization involving the Company and its subsidiaries taken as a whole. c) enter into any transaction with management or any member of the board of directors, except for employment contracts approved by the Board of Directors and transactions entered at arms-length terms which are no less favorable to the Company than could be obtained from unrelated third parties. d) effect any amendment of the Company's Certificate of Incorporation or Bylaws which would materially adversely affect the rights of the Preferred Stock. e) Except for the real property lease in connection with the Facility, incur or guarantee debt in excess of $100,000. f) voluntarily dissolve or liquidate. g) effect any merger or consolidation of the Company with or into another corporation or other entity (except one in the holders of the capital stock of the Company immediately prior to such a merger or consolidation continue to hold at least a majority of the capital stock of the surviving entity after the merger or consolidation) or sell, lease, or otherwise dispose of all or substantially all or a significant portion of the assets of the Company. h) Change the size of the Board of Directors or change any procedure of the Company relating to the designation, nomination, or election of the Board of Directors. i) Amend, alter, or repeal the preferences, special rights, or other powers of the Preferred Stock so as to adversely affect the Preferred Stock. Board of Directors: The Board of Directors of the Company shall remain as is and the founders of the Company shall have the right to designate new directors. Affirmative Covenants: While any Preferred Stock is outstanding, the company will: a) maintain adequate property and business insurance. b) comply with all laws, rules, and regulations. c) preserve, protect, and maintain its corporate existence; its rights, franchises, and privileges; and all properties necessary or useful to the proper conduct of its business. d) Cause, to the extent reasonably possible, all key employees to execute and deliver noncompetition, non solicitation, nonhire, nondisclosure, and assignment
LAPB Inc. Potential-Equity-Investment-Term Sheet.3.docx Page 6 of 6 of inventions agreements for a term of their employment with the Company plus one year in a form reasonably acceptable to the Board of Directors. e) not enter into related party transactions without the consent of a majority of disinterested directors. f) reimburse all reasonable out-of-pocket travel-related expenses of the Preferred Stock directors. Financial Statements and Reporting: The Company will provide all information and materials, including, without limitation, all internal management documents, reports of operations, reports of adverse developments, copies of any management letters, communications with shareholders or directors, and press releases and registration statements, as well as access to all senior managers as requested by holders of Preferred Stock. In addition, the Company will provide the holders of Preferred Stock with unaudited quarterly and audited yearly financial statements, as well as an annual budget. Redemption: Commencing with the date that is five years following the Project opening date and on each one-year anniversary of such date thereafter, holders of at least a majority of the then issued and outstanding shares of Preferred Stock shall have the right and option to purchase Investors shares at a price equal to One Hundred Dollars and No/100 ($100.00) plus any declared but unpaid dividends. Right of First Refusal and Cosale: In the event that any of the Founders and existing executive management propose to sell their stock to third parties, the Investor shall have the first right to purchase the securities on substantially the same terms as the proposed sale; any other than Preferred Stockholders shall next have said right according to respective percentage ownership of Preferred Stock or to sell proportionate percentage pursuant to cosale rights (to be further defined in the Stock Purchase Agreement.) Other Provisions: The purchase agreement shall include standard and customary representations and warranties of the Company, and the other agreements prepared to implement this financing shall contain other standard and customary provisions. Definitive agreements will be drafted by counsel to the Company. This term sheet is intended by the parties to be nonbinding. Conditions to Closing: Closing shall be subject to the standard and customary conditions, including the completion of due diligence, executed lease with the Site Landlord, and a mutually executed Stock Purchase Agreement. Company Investor Los Angeles Pickleball, Inc. By: By:
LA Pickleball Inc. - Investor Cash Flow Projections Figures in $000s Cash Flow Splits Investor Company Split #1 (Until 115% of Investor Capital Contribution is Returned) 80% 20% Split #2 (Until Investor Receives Additional 10% of Capital Contribution) 80% 20% Split #3 (Thereafter, through End of Year 5) 5% 95% Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 LA Pickleball Inc. Cash Flow Summary Initial Development Costs ($1,000) - - - - - EBITDA - 698 1,520 1,994 2,210 2,274 Maintenance Capex - (40) (41) (43) (44) (46) Unlevered Cash Flows ($1,000) $658 $1,478 $1,951 $2,166 $2,228 Split #1 Split #1 - Cash Flows to Investor $526 $624 $0 $0 $0 Split #1 - Cash Flows to Company $132 $156 $0 $0 $0 Total Split 1 Cash Flows $658 $780 $0 $0 $0 Remaining Cash Flow After Split 1 - $699 $1,951 $2,166 $2,228 Split #2 Split #2 - Cash Flows to Investor $0 $100 $0 $0 $0 Split #2 - Cash Flows to Company $0 $25 $0 $0 $0 Total Split 2 Cash Flows $0 $125 $0 $0 $0 Remaining Cash Flow After Split 2 - $574 $1,951 $2,166 $2,228 Split #3 Split #3 - Cash Flows to Investor $0 $29 $98 $108 $111 Split #3 - Cash Flows to Company $0 $545 $1,854 $2,058 $2,117 Total Split 3 Cash Flows $0 $574 $1,951 $2,166 $2,228 Remaining Cash Flow After Split 3 - - - - - Investor Cash Flows Initial Capital Contribution ($1,000) $0 $0 $0 $0 $0 Investor Cash Flows - Split 1 $526 $624 $0 $0 $0 Investor Cash Flows - Split 2 $0 $100 $0 $0 $0 Investor Cash Flows - Split 3 $0 $29 $98 $108 $111 Total Investor Cash Flows ($1,000) $526 $752 $98 $108 $111 Investor Cash Flows Initial Investment (Month 0) ($1,000) Repayment of 115% of Investor Capital Contribution (Months 1-18) 1,150 Payment of Additional 10% of Investor Capital Contribution (Months 19-21) 100 5% of Cash Flows Thereafter Through Year 5 (Months 22-60) 346 Total Investor Profit $596 Investor Profit $596 Investor IRR 27.3% Investor MOIC (Multiple on Invested Capital) 1.60x
MDR Pickleball - Financial Projections Figures in $000s, except for members and per person fee amounts Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Member Count 400 500 600 600 600 600 Fee Detail Recurring Membership Fee (Per Member Per Month) $240 $260 $280 $288 $297 $344 Revenues (in $000s) Recurring Membership Fees 624 1,417 1,862 2,076 2,139 2,479 Retail Revenues 1,000 1,030 1,061 1,093 1,126 1,305 Ancillary Revenues (1) 1,730 1,782 1,835 1,890 1,947 2,257 Total Revenues $3,354 $4,229 $4,758 $5,060 $5,211 $6,041 % Membership Fees 19% 34% 39% 41% 41% 41% % Retail + Ancillary Revenues 81% 66% 61% 59% 59% 59% Expenses (in $000s) Rent ($960) ($960) ($960) ($989) ($1,018) ($1,181) Payroll (350) (362) (375) (388) (402) (477) Overhead (Marketing, G&A, Insurance) (100) (104) (107) (111) (115) (136) Retail COGS (10% Retail Profit Margin) (900) (927) (955) (983) (1,013) (1,174) Ancillary Expenses (80% Profit Margin) (346) (356) (367) (378) (389) (451) Total Expenses ($2,656) ($2,709) ($2,764) ($2,849) ($2,937) ($3,420) EBITDA (in $000s) $698 $1,520 $1,994 $2,210 $2,274 $2,622 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Cash Flow Summary (in $000s) Initial Development Costs (2) ($1,000) - - - - - - EBITDA - 698 1,520 1,994 2,210 2,274 2,622 Maintenance Capex - (40) (41) (43) (44) (46) (55) Unlevered Cash Flows ($1,000) $658 $1,478 $1,951 $2,166 $2,228 $2,567 Cumulative Profit / (Loss) ($1,000) ($342) $1,136 $3,088 $5,254 $7,482 $19,621 Breakeven N N Y Y Y Y Y (1) Represent revenues and expenses, respectively, associated with tournaments, corporate events, and guest fees (all of which are high flow-through; 80% assumed margin) (2) Represents initial setup costs inclusive of soft costs (design/permitting), hard costs (construction of pickleball courts & club), and carry costs (e.g. rent due prior to opening of club)
MDR Pickleball - Financial Projections Figures in $000s, except for members and per person fee amounts Year 0 Year 1 Year 2 YeMembership Projections Beginning of Period - 400 5New Members 400 100 1Lost Members (5% Churn from Y4 Onwards) - - End of Period 400 500 6Fee Detail Recurring Membership Fee (Per Member Per Month) $240 $260 $2% Growth - Monthly Fees 8% Revenues (in $000s) Recurring Membership Fees 624 1,417 1,8Retail Revenues 1,000 1,030 1,0Ancillary Revenues (1) 1,730 1,782 1,8Total Revenues $3,354 $4,229 $4,7% Growth 26% 1Expenses (in $000s) Rent (2) ($960) ($960) ($9Staff & GM Salary (350) (362) (3Maintenance Expenses - - Overhead (Marketing, G&A, Insurance) (100) (104) (1Retail COGS (10% Retail Profit Margin) (900) (927) (9Ancillary Expenses (80% Profit Margin) (1) (346) (356) (3Total Expenses ($2,656) ($2,709) ($2,7% Growth 2% % Other Income Margin 80% 80% 8EBITDA (in $000s) $698 $1,520 $1,9% Growth 118% 3% Margin 21% 36% 4(1) Represent revenues and expenses, respectively, realized for tournaments, corporate events,(2) Represents full-service gross rent (inclusive of operating expenses such as real estate taxes,Year 0 Year 1 Year 2 YeCash Flow Summary (in $000s) Initial Development Costs (3) ($1,000) - - EBITDA - 698 1,520 1,9Maintenance Capex - (40) (41) Unlevered Cash Flows ($1,000) $658 $1,478 $1,9Cumulative Profit / (Loss) ($1,000) ($342) $1,136 $3,0Breakeven? N N Y Y (3) Represents initial setup costs inclusive of soft costs (design/permitting), hard costs (construc
ear 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 500 600 600 600 600 600 600 600 100 30 30 30 30 30 30 30 - (30) (30) (30) (30) (30) (30) (30) 600 600 600 600 600 600 600 600 280 $288 $297 $306 $315 $325 $334 $344 8% 3% 3% 3% 3% 3% 3% 3% 862 2,076 2,139 2,203 2,269 2,337 2,407 2,479 061 1,093 1,126 1,159 1,194 1,230 1,267 1,305 835 1,890 1,947 2,006 2,066 2,128 2,192 2,257 758 $5,060 $5,211 $5,368 $5,529 $5,695 $5,865 $6,041 3% 6% 3% 3% 3% 3% 3% 3% 960) ($989) ($1,018) ($1,049) ($1,080) ($1,113) ($1,146) ($1,181) 375) (388) (402) (416) (430) (445) (461) (477) - - - - - - - - 107) (111) (115) (119) (123) (127) (132) (136) 955) (983) (1,013) (1,043) (1,075) (1,107) (1,140) (1,174) 367) (378) (389) (401) (413) (426) (438) (451) 764) ($2,849) ($2,937) ($3,028) ($3,121) ($3,218) ($3,317) ($3,420) 2% 3% 3% 3% 3% 3% 3% 3% 80% 80% 80% 80% 80% 80% 80% 80% 994 $2,210 $2,274 $2,340 $2,407 $2,477 $2,548 $2,622 31% 11% 3% 3% 3% 3% 3% 3% 42% 44% 44% 44% 44% 43% 43% 43% and guest fees (all of which are high flow-through; 80% assumed margin) , property insurance, janitorial, utilities, etc.) ear 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 - - - - - - - - 994 2,210 2,274 2,340 2,407 2,477 2,548 2,622 (43) (44) (46) (48) (49) (51) (53) (55) 951 $2,166 $2,228 $2,292 $2,358 $2,426 $2,496 $2,567 088 $5,254 $7,482 $9,774 $12,133 $14,559 $17,054 $19,621 Y Y Y Y Y Y Y ction of pickleball courts & club), and carrying costs (e.g. rent due prior to opening of club)
MDR Pickleball Financial Projections Ancillary Revenue Breakdown Tournaments # of Entries Per Tournament 400 Cost Per Entrant $200 Revenue Per Tournament $80,000 # of Tournaments Per Year 12 Tournament Revenue Per Year $960,000 Corporate Events Cost Per Event $3,000 # of Events Per Week 4 Corporate Revenue Per Week $12,000 # of Weeks with Events 50 Corporate Revenue Per Year $600,000 Guest Revenues Guest Revenue Per Day $500 # of Working Days / Year 340 Guest Revenue Per Year $170,000 Total - Ancillary Revenue Tournament Revenue Per Year $960,000 Corporate Revenue Per Year $600,000 Guest Revenue Per Year $170,000 Total Ancillary Revenue Per Year $1,730,000
MARINA DEL REY, CA 90292 DEL REY AVE STAND ALONE CREATIVE OFFICE BUILDINGS AVAILABLE IMMEDIATELY 4086
$5.00/SF, NNN 12,490 SF 200+ PARKING SPACES @ $200 PER SPACE PER MONTH MARINA DEL REY, CA 90292 DEL REY AVE STAND ALONE CREATIVE OFFICE BUILDINGS AVAILABLE IMMEDIATELY 4086 LOCATED ONE BLOCK OFF LINCOLN AND WASHINGTON BOULEVARDS, THIS INDUSTRIAL CONVERSION TO A STANDALONE CREATIVE OFFICE SPACE OFFERS A CREATIVE TENANT THE ABILITY TO OFFICE MINUTES AWAY FROM THE MARINA MARKETPLACE OFF GLENCOE & MAXELLA, WATERSIDE MDR ALONG THE MARINA, AND ABBOTT KINNEY - ONE OF THE MOST FAMOUS RETAIL STREETS IN THE COUNTRY. WITH OVER 16 PARKING SPACES PER 1,000 SF (200+ TOTAL), A USER CAN MAXIMIZE THE SPACE TO ITS HIGHEST AND BEST USE BY UTILIZING THE OUTDOOR SPACES FOR AN INDOOR-OUTDOOR RETURN TO WORK. INTERIORS ARE FULLY BUILT OUT AND HAVE BEEN OCCUPIED BY A LOCAL TECHNOLOGY AND MEDIA & ENTERTAINMENT COMPANIES FOR YEARS.
STYLISTIC AND AV CONNECTED BREAKOUT CONFERENCE ROOMS AND OFFICES UNIQUE BULLPEN WITH HIGH EXPOSED CEILINGS POLISHED CONCRETE FLOORS AND CREATIVE FINISHES THROUGHOUT PROPERTY FEATURES:
TWO DIFFERENT BUILDINGS ENABLES FLEXIBILITY FOR A USER PACKING/SHIPPING ROOM WITH ROLL-UP DOOR TO OUTSIDE DECK AREA SIGNIFICANT AMOUNT OF PRIVATE ENCLOSED SPACES SURROUNDING LARGE OPEN BULLPEN AREA WITH ELEVATED CEILING HEIGHTS
LINCOLN BOULEVARD DEL REY AVENUE
WASHINGTON BOULEVARD
FLOOR PLANS