CANTON,
Ohio, Aug. 12, 2024 /PRNewswire/ -- Hall of Fame
Resort & Entertainment Company (NASDAQ: HOFV, HOFVW) (the
"Company"), the only resort, entertainment and media company
centered around the power of professional football, announced its
second quarter 2024 results for the period ended June 30, 2024.
"Over the past quarter we have successfully demonstrated our
ability to make marked improvements in overall operational
efficiency and evolve our "Eat, Stay, and Play" strategy," shared
Hall of Fame Resort & Entertainment Company President and CEO
Michael Crawford. "The Company is
still in its early stages, building new and exciting assets,
creating compelling and engaging media and taking gaming to the
next level. We are focused on working to complete the capital
stacks of our Gameday Bay Waterpark and Tapestry Hotel, continuing
to grow the type of media and gaming content that we are producing
and distributing, as well as delivering one-of-a-kind experiences
that you would expect from a sports and entertainment company, as
we continue to execute upon our strategy and work towards achieving
our long-term financial goals."
Key Financial Highlights
- Second quarter revenue was $4.7
million, a decrease of 23% compared to the same period in
the prior year, primarily driven by the mix of events within Hall
of Fame Village.
- Second quarter net loss attributable to shareholders was
$15.8 million, compared to a net loss
of $13.6 million in the same period
in the prior year. The change was primarily driven by increases in
net interest and depreciation expenses, partially offset by lower
operating expenses.
- Second quarter adjusted EBITDA was a loss of $4.2 million, compared to a loss of $6.2 million in the same period in the prior
year. The change was driven by lower operating expenses from
event-related expenses and compensation-related expenses. See page
6 for a reconciliation of net loss to EBITDA and adjusted
EBITDA.
- The Company finished its fiscal quarter with a cash balance of
$6.4 million, including $5.0 million in restricted cash, compared to
$6.9 million, including $4.2 million in restricted cash, as of
March 31, 2024.
- The Company restructured $21.0
million of debt with City of
Canton, Stark County Port Authority, and Stark Community
Foundation by extending maturity dates and payment terms for five
different loans. In addition, the Company completed $1.5 million in additional financing with the
Stark Community Foundation.
- The Company secured $9.9 million
in financing from Constellation, a leading supplier of energy
products and services and the official energy provider of the Hall
of Fame Village, to implement energy efficiency measures and to
support the construction and development of the Gameday Bay
Waterpark. Constellation has employed its Efficiency Made
Easy® program over the course of the development on two
other occasions allowing for infrastructure development that is
designed to reduce energy consumption, creating a more sustainable
footprint to advance energy efficiency throughout the resort.
- The Company was awarded a $9.8
million grant from the State of
Ohio's One Time Strategic Community Investments in support
of the development of the Hall of Fame Village. In addition, the
Company received a $500 thousand
grant from the Stark Community Foundation.
Key Business Highlights
- Gold Summit Gaming announced its Gridiron Gateway Gaming
tournament. The event held in July showcased many of the top 100
ranked players in Super Smash Bros. Melee and Ultimate from across
the United States. Notable
highlights included Cody Schwab, the
world's #1 Melee player representing Nouns Esports, who triumphed
in the Melee Singles event, and Stephen
Schmidt of Cincinnati Fear, who emerged victorious in the
Ultimate Singles event. Former NFL running back Le'Veon Bell also
participated in the Ultimate Singles competition.
- Hall of Fame Village hosted Bert
Kreischer's Fully Loaded Comedy Festival in June at Tom
Benson Hall of Fame Stadium. The festival highlighted multiple
nationally known comedians and continues the award-winning comedic
talent performing at Tome Benson Hall of Fame Stadium during the
last three years.
- The Company renewed and expanded existing partnerships with
Visit Canton and Blue Technologies, while also creating a
partnership with Aultcare.
- Hall of Fame Village held its first Carnival in May, weekly car
shows highlighted by Cruisin' & Groovin', and movie
nights bringing numerous visitors to campus to experience different
entertainment options.
Conference Call
The Company will host a conference
call and webcast Tuesday, August 13,
2024, beginning at 8:30 a.m.
ET, to provide commentary on the business. Investors and all
other interested parties can access the live webcast and replay at
the Company's website: https://ir.hofreco.com.
About Hall of Fame Resort & Entertainment
Company
Hall of Fame Resort & Entertainment
Company (NASDAQ: HOFV, HOFVW) is a resort and entertainment company
leveraging the power and popularity of professional football and
its legendary players in partnership with the Pro Football Hall of
Fame. Headquartered in Canton,
Ohio, the Hall of Fame Resort & Entertainment Company is
the owner of the Hall of Fame Village a multi-use sports,
entertainment and media destination centered around the Pro
Football Hall of Fame's campus. Additional information on the
Company can be found at www.HOFREco.com
Forward-Looking Statements
Certain statements made
herein are "forward-looking statements" within the meaning of the
"safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be identified by
the use of words and phrases such as "plan," "opportunity,"
"future," "will," "goal," "enable," "pipeline," "transition," "move
forward," "towards," "build out," "coming" , "commitment" and "look
forward" and other similar expressions that predict or indicate
future events or trends or that are not statements of historical
matters. These forward-looking statements are not guarantees of
future performance, conditions, or results, and involve a number of
known and unknown risks, uncertainties, assumptions, and other
important factors, many of which are outside the Company's control,
which could cause actual results or outcomes to differ materially
from those discussed in the forward-looking statements. Important
factors that may affect actual results or outcomes include, among
others, the Company's ability to manage growth; the Company's
ability to execute its business plan and meet its projections,
including obtaining financing to construct planned facilities and
for working capital; litigation involving the Company; changes in
applicable laws or regulations; general economic and market
conditions impacting demand for the Company's products and
services, and in particular economic and market conditions in the
resort and entertainment industry; increased inflation; the
inability to maintain the listing of the Company's shares on
Nasdaq; and those risks and uncertainties discussed from time to
time in our reports and other public filings with the SEC. The
Company does not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
|
HALL OF FAME RESORT
& ENTERTAINMENT COMPANY AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30,
|
|
For the Six Months
Ended June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Sponsorships, net of
activation costs
|
$
626,831
|
|
$
691,236
|
|
$
1,486,562
|
|
$
1,364,711
|
|
Event, rents,
restaurant, and other revenues
|
2,191,900
|
|
3,410,010
|
|
4,246,777
|
|
4,318,322
|
|
Hotel
revenues
|
1,880,938
|
|
2,026,031
|
|
3,157,645
|
|
3,564,677
|
|
Total
revenues
|
4,699,669
|
|
6,127,277
|
|
8,890,984
|
|
9,247,710
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Operating
expenses
|
7,199,196
|
|
10,693,853
|
|
13,349,560
|
|
23,222,569
|
|
Hotel operating
expenses
|
1,708,961
|
|
1,587,620
|
|
2,683,393
|
|
3,046,823
|
|
Impairment
expense
|
-
|
|
-
|
|
-
|
|
1,145,000
|
|
Depreciation
expense
|
4,181,191
|
|
3,373,076
|
|
8,339,941
|
|
5,926,436
|
|
Total operating
expenses
|
13,089,348
|
|
15,654,549
|
|
24,372,894
|
|
33,340,828
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(8,389,679)
|
|
(9,527,272)
|
|
(15,481,910)
|
|
(24,093,118)
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(6,475,614)
|
|
(4,404,146)
|
|
(12,997,148)
|
|
(8,036,783)
|
|
Amortization of
discount on note payable
|
(1,054,650)
|
|
(882,240)
|
|
(2,009,972)
|
|
(1,738,131)
|
|
Change in fair value of
warrant liability
|
(1,000)
|
|
(223,000)
|
|
48,000
|
|
(461,000)
|
|
Change in fair value of
interest rate swap
|
-
|
|
60,000
|
|
-
|
|
(40,000)
|
|
Change in fair value of
securities available for sale
|
-
|
|
1,683,246
|
|
-
|
|
1,683,246
|
|
Gain (loss) on sale of
asset
|
1,502
|
|
-
|
|
(138,539)
|
|
-
|
|
Loss on extinguishment
of debt
|
(3,763)
|
|
-
|
|
(3,763)
|
|
-
|
|
Other income
|
500,000
|
|
-
|
|
500,000
|
|
-
|
|
Loss from equity method
investments
|
(65,778)
|
|
-
|
|
(35,826)
|
|
-
|
|
Total other
expense
|
(7,099,303)
|
|
(3,766,140)
|
|
(14,637,248)
|
|
(8,592,668)
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
(15,488,982)
|
|
$
(13,293,412)
|
|
$
(30,119,158)
|
|
$
(32,685,786)
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends
|
(266,000)
|
|
(266,000)
|
|
(532,000)
|
|
(532,000)
|
|
Loss attributable to
non-controlling interest
|
-
|
|
5,795
|
|
8,588
|
|
54,372
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to HOFRE stockholders
|
$
(15,754,982)
|
|
$
(13,553,617)
|
|
$
(30,642,570)
|
|
$
(33,163,414)
|
|
|
|
|
|
|
|
|
|
Net loss per share,
basic and diluted
|
$
(2.41)
|
|
$
(2.39)
|
|
$
(4.71)
|
|
$
(5.88)
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding, basic and diluted
|
6,527,988
|
|
5,660,385
|
|
6,507,016
|
|
5,644,822
|
|
HALL OF FAME RESORT
& ENTERTAINMENT COMPANY AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(unaudited)
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30,
|
|
|
2024
|
|
2023
|
|
Cash Flows From
Operating Activities
|
|
|
|
|
|
Net loss
|
|
$
(30,119,158)
|
|
$
(32,685,786)
|
|
Adjustments to
reconcile net loss to cash flows used in operating
activities
|
|
|
|
|
|
Depreciation
expense
|
|
8,339,941
|
|
5,926,436
|
|
Amortization of note
discount and deferred financing costs
|
|
2,009,972
|
|
1,738,131
|
|
Amortization of
financing liability
|
|
3,689,840
|
|
3,399,422
|
|
Impairment of film
costs
|
|
-
|
|
1,145,000
|
|
Interest income on
investments held to maturity
|
|
-
|
|
(508,610)
|
|
Loss from equity method
investments
|
|
35,826
|
|
-
|
|
Interest paid in
kind
|
|
6,245,901
|
|
2,282,040
|
|
Loss on sale of
asset
|
|
138,539
|
|
-
|
|
Loss on extinguishment
of debt
|
|
3,763
|
|
-
|
|
Change in fair value of
interest rate swap
|
|
-
|
|
40,000
|
|
Change in fair value of
warrant liability
|
|
(48,000)
|
|
461,000
|
|
Change in fair value of
securities available for sale
|
|
-
|
|
(1,683,246)
|
|
Stock-based
compensation expense
|
|
302,463
|
|
1,737,051
|
|
Non-cash operating
lease expense
|
|
248,841
|
|
177,775
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
(177,685)
|
|
(829,818)
|
|
Prepaid expenses and
other assets
|
|
(2,144,476)
|
|
(1,143,033)
|
|
Accounts payable and
accrued expenses
|
|
1,797,937
|
|
(1,743,958)
|
|
Operating
leases
|
|
(153,214)
|
|
(78,508)
|
|
Due to
affiliate
|
|
1,569,068
|
|
(456,167)
|
|
Other
liabilities
|
|
2,950,265
|
|
2,539,138
|
|
Net
cash used in operating activities
|
|
(5,310,177)
|
|
(19,683,133)
|
|
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
|
Investments in
securities held to maturity
|
|
-
|
|
(64,606,946)
|
|
Proceeds from
securities held to maturity
|
|
-
|
|
69,815,000
|
|
Proceeds from sale of
assets
|
|
8,128,136
|
|
-
|
|
Additions to project
development costs and property and equipment
|
|
(11,905,537)
|
|
(19,676,877)
|
|
Net cash used in
investing activities
|
|
(3,777,401)
|
|
(14,468,823)
|
|
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
|
Proceeds from notes
payable
|
|
12,298,391
|
|
22,270,339
|
|
Repayments of notes
payable
|
|
(11,407,206)
|
|
(783,191)
|
|
Payment of financing
costs
|
|
-
|
|
(1,552,342)
|
|
Payment on financing
liability
|
|
(747,396)
|
|
(2,187,500)
|
|
Proceeds from financing
liabilities
|
|
3,500,000
|
|
-
|
|
Payment of Series B
dividends
|
|
-
|
|
(300,000)
|
|
Proceeds from sale of
common stock under ATM
|
|
71,071
|
|
39,261
|
|
Net cash provided by
financing activities
|
|
3,714,860
|
|
17,486,567
|
|
|
|
|
|
|
Net decrease in cash
and restricted cash
|
|
(5,372,718)
|
|
(16,665,389)
|
|
|
|
|
|
|
Cash and restricted
cash, beginning of year
|
|
11,816,083
|
|
33,516,382
|
|
|
|
|
|
|
Cash and restricted
cash, end of period
|
|
$
6,443,365
|
|
$
16,850,993
|
|
|
|
|
|
|
Cash
|
|
$
1,455,207
|
|
$
9,307,494
|
|
Restricted
Cash
|
|
4,988,158
|
|
7,543,499
|
|
Total cash and
restricted cash
|
|
$
6,443,365
|
|
$
16,850,993
|
|
HALL OF FAME RESORT
& ENTERTAINMENT COMPANY AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
As of
|
|
June 30,
2024
|
|
December 31,
2023
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
Cash
|
$
1,455,207
|
|
$
3,243,353
|
|
Restricted
cash
|
4,988,158
|
|
8,572,730
|
|
Equity method
investments
|
2,410,619
|
|
-
|
|
Investments available
for sale
|
2,000,000
|
|
2,000,000
|
|
Accounts receivable,
net
|
1,131,364
|
|
1,108,460
|
|
Prepaid expenses and
other assets
|
7,146,820
|
|
3,514,135
|
|
Property and equipment,
net
|
339,210,450
|
|
344,378,835
|
|
Property and equipment
held for sale
|
-
|
|
12,325,227
|
|
Right-of-use lease
assets
|
7,231,656
|
|
7,387,693
|
|
Project development
costs
|
71,367,323
|
|
59,366,200
|
|
Total
assets
|
$
436,941,597
|
|
$
441,896,633
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Liabilities
|
|
|
|
|
Notes payable,
net
|
$
229,184,587
|
|
$
219,532,941
|
|
Accounts payable and
accrued expenses
|
26,670,454
|
|
21,825,540
|
|
Due to
affiliate
|
2,862,942
|
|
1,293,874
|
|
Warrant
liability
|
177,000
|
|
225,000
|
|
Financing
liability
|
67,758,996
|
|
62,982,552
|
|
Operating lease
liability
|
3,326,074
|
|
3,440,630
|
|
Other
liabilities
|
8,793,397
|
|
5,858,682
|
|
Total
liabilities
|
338,773,450
|
|
315,159,219
|
|
|
|
|
|
Commitments and
contingencies (Note 6, 7, and 8)
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Undesignated preferred
stock, $0.0001 par value; 4,917,000 shares authorized; no shares
issued or outstanding at
June 30, 2024 and December 31, 2023
|
-
|
|
-
|
|
|
Series B convertible
preferred stock, $0.0001 par value; 15,200 shares designated; 0 and
200 shares issued and
outstanding at June 30, 2024 and December 31,
2023; liquidation preference of $0 as of June 30, 2024
|
-
|
|
-
|
|
|
Series C convertible
preferred stock, $0.0001 par value; 15,000 shares designated;
15,000 shares issued and
outstanding at June 30, 2024 and December
31, 2023; liquidation preference of $16,682,500 as of June 30,
2024
|
2
|
|
2
|
|
|
Common stock, $0.0001
par value; 300,000,000 shares authorized; 6,548,719 and 6,437,020
shares issued and
outstanding at June 30, 2024 and December 31,
2023, respectively
|
655
|
|
643
|
|
Additional paid-in
capital
|
346,417,368
|
|
344,335,489
|
|
Accumulated
deficit
|
(247,286,452)
|
|
(216,643,882)
|
|
Total equity
attributable to HOFRE
|
99,131,573
|
|
127,692,252
|
|
Non-controlling
interest
|
(963,426)
|
|
(954,838)
|
|
Total
equity
|
98,168,147
|
|
126,737,414
|
|
Total liabilities
and stockholders' equity
|
$
436,941,597
|
|
$
441,896,633
|
Non-GAAP Financial Measures
The Company reports its
financial results in accordance with accounting principles
generally accepted in the United
States ("GAAP") and corresponding metrics as non-GAAP
financial measures. The press release includes references to the
following non-GAAP financial measures: EBITDA and adjusted EBITDA.
These are important financial measures used in the management of
the business, including decisions concerning the allocation of
resources and assessment of performance. Management believes that
reporting these non-GAAP financial measures is useful to investors
as these measures are representative of the company's performance
and provide improved comparability of results. See the table below
for the definitions of the non-GAAP financial measures referred to
above and corresponding reconciliations of these non-GAAP financial
measures to the most comparable GAAP financial measures. Non-GAAP
financial measures should be viewed as additions to, and not as
alternatives for the Company's results prepared in accordance with
GAAP. In addition, the non-GAAP measures the Company uses may
differ from non-GAAP measures used by other companies, and other
companies may not define the non-GAAP measures the company uses in
the same way.
|
For the Three Months
Ended June 30,
|
|
For the Six Months
Ended June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Adjusted EBITDA
Reconciliation
|
|
|
|
|
|
|
|
|
Net loss attributable
to HOFRE stockholders
|
$
(15,754,982)
|
|
$
(13,553,617)
|
|
$
(30,642,570)
|
|
$
(33,163,414)
|
|
(Benefit from)
provision for income taxes
|
-
|
|
-
|
|
-
|
|
-
|
|
Interest expense,
net
|
6,475,614
|
|
4,404,146
|
|
12,997,148
|
|
8,036,783
|
|
Depreciation
expense
|
4,181,191
|
|
3,373,076
|
|
8,339,941
|
|
5,926,436
|
|
Amortization of
discount on note payable
|
1,054,650
|
|
882,240
|
|
2,009,972
|
|
1,738,131
|
|
EBITDA
|
(4,043,527)
|
|
(4,894,155)
|
|
(7,295,509)
|
|
(17,462,064)
|
|
|
|
|
|
|
|
|
|
Impairment
expense
|
-
|
|
-
|
|
-
|
|
1,145,000
|
|
Change in fair value of
warrant liability
|
1,000
|
|
223,000
|
|
(48,000)
|
|
461,000
|
|
Change in fair value of
interest rate swap
|
-
|
|
(60,000)
|
|
-
|
|
40,000
|
|
Change in fair value of
securities available for sale
|
-
|
|
(1,683,246)
|
|
-
|
|
-
|
|
Loss on sale of
asset
|
(1,502)
|
|
|
|
138,539
|
|
|
|
Loss on extinguishment
of debt
|
3,763
|
|
-
|
|
3,763
|
|
-
|
|
Other income
|
(500,000)
|
|
-
|
|
(500,000)
|
|
(1,683,246)
|
|
Loss from equity method
investment
|
65,778
|
|
|
|
35,826
|
|
|
|
Preferred stock
dividends
|
266,000
|
|
266,000
|
|
532,000
|
|
532,000
|
|
Loss attributable to
non-controlling interest
|
-
|
|
(5,795)
|
|
(8,588)
|
|
(54,372)
|
|
Adjusted
EBITDA
|
$
(4,208,488)
|
|
$
(6,154,196)
|
|
$
(7,141,969)
|
|
$
(17,021,682)
|
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SOURCE Hall of Fame Resort & Entertainment Company