HOFV
Hall of Fame Resort & Entertainment CO
NASDAQ
SCHEDULE 13D/A: Hall of Fame Resort & Entertainment Co to Go Private in $0.90 Per Share Cash Merger
Sentiment:
Merger Announcement
12 May 2025 11:32 PM
Hall of Fame Resort & Entertainment Co has entered into a definitive merger agreement to be acquired by HOFV Holdings, LLC, a subsidiary of major shareholder CH Capital Lending, LLC, for $0.90 per share in cash, leading to its delisting from Nasdaq.
Capital raise
The Buyer Parties' obligation to consummate the Merger is conditioned on receiving 'Parent Acquisition Financing' in an aggregate amount of not less than $20 million.
The Buyer Parties' obligation to consummate the Merger is additionally conditioned on receiving 'additional project level financing' in an aggregate amount not less than $125 million.
Summary
- Hall of Fame Resort & Entertainment Co (the "Issuer") has entered into an Agreement and Plan of Merger with HOFV Holdings, LLC ("Parent") and Omaha Merger Sub, Inc. ("Merger Sub"), with CH Capital Lending, LLC ("CHCL") acting as guarantor.
- The merger consideration for each outstanding share of Company Common Stock will be $0.90 in cash, without interest and subject to applicable withholding.
- Shares of Company Common Stock held in treasury, by Buyer Parties, or their affiliates will be cancelled without consideration.
- All outstanding 7.00% Series A Cumulative Redeemable Preferred Stock and 7.00% Series C Convertible Preferred Stock will be automatically cancelled without any conversion or consideration.
- Company Restricted Stock Unit Awards (RSUs) will be cancelled and converted into a cash payment equal to the number of RSUs multiplied by the $0.90 Merger Consideration.
- Public Warrants (Series A and B) and Private/Series X Warrants (not owned by Buyer affiliates) will become exercisable for the Merger Consideration; Series A Warrants expire on July 1, 2025, and Series B Warrants offer a Black Scholes Value purchase option.
- Warrants owned by affiliates of the Buyer Parties will be cancelled and extinguished without consideration.
- The merger is subject to customary closing conditions, including stockholder approval, financing of at least $20 million for Parent Acquisition Financing and $125 million for additional project level financing, and consummation of a Lease Restructuring.
- The Issuer's Board of Directors approved the merger based on the unanimous recommendation of a special committee of independent directors.
- Upon consummation, the Company Common Stock and Series A Warrants will be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934.
- Stuart Lichter, a key reporting person, beneficially owns 14,152,264 shares, representing 73.1% of the class, through direct and indirect holdings in various entities including CH Capital Lending, LLC.
Sentiment
Score: 4
Explanation: The sentiment is moderately negative. While the merger provides certainty and liquidity for common shareholders at a fixed price, the low cash consideration and the complete cancellation of preferred stock without consideration are significant negatives. The transaction appears to be a distressed take-private by a major lender/shareholder, which often implies underlying financial challenges.
Positives
- The merger provides a definitive cash exit for common stockholders at $0.90 per share, offering liquidity and certainty amidst potential ongoing operational challenges.
- The transaction is supported by a voting agreement from significant stockholders, increasing the likelihood of Requisite Stockholder Approval.
Negatives
- The 7.00% Series A Cumulative Redeemable Preferred Stock and 7.00% Series C Convertible Preferred Stock will be cancelled without any consideration, resulting in a complete loss for holders of these securities.
- The cash consideration of $0.90 per share for common stock may be perceived as low by some investors, especially given the company's prior trading history or potential future value.
- The delisting from Nasdaq will remove the company's public trading access, limiting future investment opportunities for current shareholders.
Risks
- The merger is contingent on obtaining Requisite Stockholder Approval, which, while supported by a voting agreement, is not guaranteed.
- The Buyer Parties' obligation to consummate the merger is conditioned on securing Parent Acquisition Financing of not less than $20 million and additional project level financing of not less than $125 million.
- Consummation of a Lease Restructuring is a condition precedent to the merger, and failure to achieve it could prevent closing.
- The merger could be terminated if a material adverse effect on the Issuer occurs after the agreement date.
- The agreement includes various termination rights for both parties, including failure to close by October 31, 2025, or if certain conditions related to financing or breaches of covenants are not met.
- The Issuer may terminate the agreement if its cash or key employee resources are not reasonably sufficient to continue operations through the closing date, and the Board determines winding down is consistent with fiduciary duties.
Future Outlook
The future outlook for Hall of Fame Resort & Entertainment Co is a transition to private ownership, with its common stock and Series A Warrants expected to be delisted from the Nasdaq Capital Market and deregistered under the Securities Exchange Act of 1934 upon the consummation of the merger. The transaction is anticipated to close by October 31, 2025, subject to various closing conditions including financing and stockholder approval.
Management Comments
- The Issuer's Board of Directors approved the Merger Agreement and the other transactions contemplated thereby based upon the unanimous recommendation of a special committee consisting only of independent and disinterested directors.
- Subject to the terms of the Merger Agreement, the Issuer Board resolved to recommend that the Issuer's stockholders vote in favor of adoption of the Merger Agreement and approval of the Merger.
Industry Context
This take-private transaction for Hall of Fame Resort & Entertainment Co, a company focused on sports and entertainment, reflects a trend where companies with significant debt or complex capital structures may opt for private ownership to facilitate restructuring, secure necessary financing, and pursue long-term strategic goals away from public market scrutiny. The involvement of a major lender (CH Capital Lending, LLC) as the acquirer suggests a potential debt-for-equity conversion or a strategic move to consolidate control and stabilize the company's financial position within the specialized entertainment and resort industry.
Comparison to Industry Standards
- N
- A
Stakeholder Impact
- **Shareholders (Common Stock):** Will receive $0.90 cash per share, providing liquidity and certainty but potentially at a lower valuation than some might expect.
- **Shareholders (Preferred Stock):** Will have their Series A and Series C Preferred Stock cancelled without any consideration, resulting in a complete loss of their investment.
- **Warrant Holders:** Public warrant holders will have their warrants become exercisable for the merger consideration, with specific terms for Series A and B warrants. Private/Series X warrant holders (not affiliated with Buyer) will also have their warrants become exercisable for the merger consideration. Warrants held by Buyer affiliates will be cancelled without consideration.
- **Employees/Management:** Directors and officers of the Issuer and its subsidiaries are expected to resign at the effective time of the merger, indicating potential management changes.
- **Creditors:** The transaction involves significant financing conditions ($20M Parent Acquisition Financing, $125M additional project financing) and the conversion/cancellation of various debt instruments held by related parties, which will impact the company's capital structure and creditor relationships.
Next Steps
- The Issuer's stockholders must vote in favor of the adoption of the Merger Agreement and approval of the Merger (Requisite Stockholder Approval).
- The Buyer Parties must secure Parent Acquisition Financing of at least $20 million.
- The Buyer Parties must secure additional project level financing of at least $125 million.
- The Lease Restructuring must be consummated.
- Various third-party consents and resignation letters from Issuer directors/officers must be obtained.
- The merger is expected to be consummated by October 31, 2025.
- Upon consummation, the Company Common Stock and Series A Warrants will be delisted from Nasdaq and deregistered.
Related Party Transactions
- The merger involves CH Capital Lending, LLC ("CHCL") as the guarantor of Parent's obligations and Parent's wholly owned subsidiary, indicating a transaction with a significant existing shareholder and lender.
- Stuart Lichter, a key reporting person, has significant indirect beneficial ownership across multiple entities involved in the transaction, including CH Capital Lending, LLC, IRG, LLC, Midwest Lender Fund, LLC, and American Capital Center, LLC, highlighting a highly concentrated ownership and control structure in the acquiring party.
- The conditions to the merger include the requirement for Parent to receive executed termination agreements for certain scheduled related-party contracts, indicating existing dealings that will be unwound as part of the transaction.
Key Dates
- 2020-07-14: Initial statement on Schedule 13D filed by the Reporting Persons.
- 2021-01-05: Amendment No. 1 to the Original Schedule 13D filed.
- 2022-09-16: Amendment No. 2 to the Original Schedule 13D filed.
- 2023-03-17: Date of Third Amendment to Second Amended and Restated Secured Cognovit Promissory Note (2020 Term Loan Note).
- 2023-12-08: Date of First Amended and Restated Promissory Note (2022 Term Loan Note).
- 2024-05-02: Amendment No. 3 to the Original Schedule 13D filed.
- 2024-10-01: Amendment No. 4 to the Original Schedule 13D filed.
- 2025-03-21: Date as of which 6,698,645 shares of Common Stock were issued and outstanding, as reported in the Issuer's Form 10-K.
- 2025-03-26: Amendment No. 5 to the Original Schedule 13D filed; also date of Issuer's Annual Report on Form 10-K filing.
- 2025-03-31: Date for principal amount calculations of various convertible notes and loans (Convertible Note, 2020 Term Loan Note, 2022 Term Loan Note, Bridge Loan, Hotel II Note, Split Note).
- 2025-05-07: Date of event requiring filing of this statement; Agreement and Plan of Merger and Voting Agreement entered into.
- 2025-05-08: Date of Issuer's Form 8-K filing incorporating Merger Agreement and Voting Agreement.
- 2025-05-12: Date of signing of this Amendment No. 6.
- 2025-07-01: Expiration date for Series A Warrants.
- 2025-10-31: Outside date for consummation of the Merger, after which the Merger Agreement may be terminated.
Keywords
Merger Agreement, Take-private, Hall of Fame Resort & Entertainment Co, HOFV Holdings, CH Capital Lending, Common Stock, Preferred Stock, Warrants, Delisting, SEC Filing, Schedule 13D, Corporate Action, Shareholder Vote, Financing Conditions
HOFV
Hall of Fame Resort & Entertainment CO
NASDAQ
Sector: Communication Services
Filings with Classifications
Capital raise
25 June 2025 4:05 PM
Delisting Notice and Debt Amendment
- The company increased its 'Facility Amount' under the Note and Security Agreement by $2,000,000, from $12,000,000 to $14,000,000.
- This additional funding is provided by CH Capital Lending, LLC, an affiliate of a company director, Stuart Lichter.
Delay expected
25 June 2025 4:05 PM
Delisting Notice and Debt Amendment
- The company failed to hold its annual meeting of shareholders on or prior to June 30, 2025, which is a requirement by Nasdaq Listing Rule 5620(a).
Worse than expected
25 June 2025 4:05 PM
Delisting Notice and Debt Amendment
- The company is facing imminent delisting from Nasdaq, a significant negative event for a publicly traded company.
- The delisting is due to a failure to meet a fundamental corporate governance requirement (holding an annual shareholder meeting).
- While new funding was secured, it is from a related party, which can be viewed less favorably than arms-length financing, especially in the context of delisting.
Capital raise
29 May 2025 8:05 PM
Current Report
- The company increased its existing credit facility by $2,000,000, raising the total available amount to $12,000,000.
- This capital is provided by CH Capital Lending, LLC, an affiliate of a company director, Stuart Lichter.
- The funds are designated for general corporate purposes.
Delay expected
19 May 2025 4:05 PM
8-K Filing
- The maturity date was extended from March 31, 2025, to September 30, 2025, indicating a delay in the company's ability to meet its original repayment schedule.
Capital raise
13 May 2025 4:06 PM
Quarterly Report
- The company states that it will need to raise additional financing to accomplish its development plan and fund its working capital.
- The company is seeking to obtain additional funding through debt, construction lending, and equity financing.
- There are no assurances that the company will be able to raise capital on terms acceptable to the company or at all.
Worse than expected
13 May 2025 4:06 PM
Quarterly Report
- The company's net loss increased slightly compared to the same period last year.
- Total revenue decreased significantly due to lower sponsorship and event revenues.
- Management expresses substantial doubt about the company's ability to continue as a going concern.
Capital raise
12 May 2025 11:32 PM
Merger Announcement
- The Buyer Parties' obligation to consummate the Merger is conditioned on receiving 'Parent Acquisition Financing' in an aggregate amount of not less than $20 million.
- The Buyer Parties' obligation to consummate the Merger is additionally conditioned on receiving 'additional project level financing' in an aggregate amount not less than $125 million.
Worse than expected
8 May 2025 9:23 PM
Merger Announcement
- The acquisition price of $0.90 per share is significantly lower than the company's previous trading price, indicating a less favorable outcome for shareholders compared to previous expectations.
Capital raise
8 May 2025 9:23 PM
Merger Announcement
- The merger is contingent on the Investor obtaining $20 million in financing.
- The merger is also conditioned on securing $125 million in additional project-level financing.
Capital raise
8 May 2025 5:21 PM
Merger Announcement
- The transaction is contingent on the Investor obtaining $20 million in financing.
- The transaction is also conditioned on prior or concurrent consummation of additional project level financing in an aggregate amount not less than $125 million.
Worse than expected
8 May 2025 5:21 PM
Merger Announcement
- The company is being acquired for $0.90 per share, which may be considered worse than expected for investors who anticipated higher returns or continued growth as a public entity.
Worse than expected
16 April 2025 4:05 PM
8-K Filing
- The company received a deficiency letter from Nasdaq due to its stock price falling below the minimum bid price requirement, indicating a negative development.
Delay expected
4 April 2025 8:05 PM
Current Report (8-K)
- The maturity dates of debt instruments and convertible notes have been delayed.
Delay expected
3 April 2025 11:43 AM
SEC Form 4
- The maturity dates of several convertible debt instruments were extended from March 31, 2025, to either September 30, 2025, or December 31, 2025.
Worse than expected
26 March 2025 5:00 PM
Annual Report
- The company's revenue decreased from 2023 to 2024.
- The company's net loss decreased from 2023 to 2024.
- The company's cash position is deficient and it requires additional capital to fund operations and debt service.
Capital raise
26 March 2025 5:00 PM
Annual Report
- The company's cash position is deficient, and it requires additional capital to fund operations and debt service.
- The company is seeking to obtain additional funding through debt, construction lending, and equity financing.
Delay expected
26 March 2025 5:00 PM
Annual Report
- The Company postponed its 2024 Annual Meeting of Stockholders.
Delay expected
16 January 2025 5:13 PM
8-K Filing
- The company failed to hold its annual meeting within 12 months of its fiscal year end, resulting in a delay and a delisting notice from Nasdaq.
Worse than expected
16 January 2025 5:13 PM
8-K Filing
- The company received a delisting notice from Nasdaq for failing to hold its annual meeting within the required timeframe, which is a negative development.
Worse than expected
20 November 2024 4:05 PM
Current Report
- The high interest rate of 12%, potentially rising to 17%, suggests the company is in a weaker financial position and had to accept unfavorable terms.
- The extensive security interest granted to the lender indicates a lack of financial flexibility and a higher risk profile.
Worse than expected
13 November 2024 5:18 PM
Quarterly Report
- The company's net loss of $34.5 million for the nine months ended September 30, 2024, is worse than expected.
- The company's default on the waterpark ground lease and the risk of default on other loan agreements are worse than expected.
- The company's precarious cash position and the substantial doubt about its ability to continue as a going concern are worse than expected.
Delay expected
13 November 2024 5:18 PM
Quarterly Report
- The company's waterpark project has been delayed due to the termination of the ground lease.
Capital raise
13 November 2024 5:18 PM
Quarterly Report
- The company is seeking additional funding through debt, construction lending, and equity financing.
- The company's ability to raise capital on acceptable terms or at all is uncertain.
Worse than expected
31 October 2024 4:05 PM
Current Report
- The termination of the waterpark ground lease due to a payment default is a significantly worse outcome than expected.
- The company's inability to meet its financial obligations and the potential loss of key assets are also worse than expected.
Capital raise
31 October 2024 4:05 PM
Current Report
- The company is in discussions with IRG Canton Village Member, LLC regarding a non-binding proposal to take the company private, which could involve a capital raise or restructuring.
- The company's current financial situation suggests that a capital raise or restructuring is likely necessary to address its liquidity issues.
Delay expected
23 October 2024 4:05 PM
Current Report
- The 2024 Annual Meeting of Stockholders has been postponed from its original date of November 21, 2024.
Better than expected
17 September 2024 4:05 PM
Material Definitive Agreement
- The removal of the annual license fee and the waiver of the $600,000 payment for 2024 are better than the previous agreement.
Delay expected
19 August 2024 5:04 PM
Shareholder Letter
- The funding process for the Gameday Bay Waterpark and Hilton Tapestry Hotel has taken longer than originally anticipated due to a restrictive lending environment and multiple stakeholders.
Worse than expected
19 August 2024 5:04 PM
Shareholder Letter
- Second quarter revenue was below the prior year, indicating worse than expected performance.
Worse than expected
15 August 2024 4:05 PM
Quarterly Report
- The company's revenue decreased by 23% year-over-year, indicating worse than expected performance.
- The net loss attributable to shareholders increased to $15.8 million from $13.6 million in the prior year, indicating worse than expected performance.
Worse than expected
13 August 2024 4:05 PM
Quarterly Report
- The company's revenue decreased compared to the same period last year.
- The company's net loss increased compared to the same period last year.
- The company's hotel revenues decreased compared to the same period last year.
Capital raise
13 August 2024 4:05 PM
Quarterly Report
- The company expects that it will need to raise additional financing to accomplish its development plan and fund its working capital.
- The company is seeking to obtain additional funding through debt, construction lending, and equity financing.
- The company may have to raise additional capital through the equity market, which could result in substantial dilution to existing stockholders.
Capital raise
14 May 2024 4:06 PM
Quarterly Report
- The company expects that it will need to raise additional financing to accomplish its development plan and fund its working capital.
- The company is seeking to obtain additional funding through debt, construction lending, and equity financing.
- There are no assurances that the company will be able to raise capital on terms acceptable to the Company or at all.
Delay expected
14 May 2024 4:06 PM
Quarterly Report
- The company has delayed payment of base rent for the waterpark ground lease, which could lead to a default.
Worse than expected
14 May 2024 4:06 PM
Quarterly Report
- The company's net loss of $14.6 million and the substantial doubt about its ability to continue as a going concern indicate worse than expected results.
Better than expected
14 May 2024 8:39 AM
Quarterly Report
- The company's revenue increased by 34% year-over-year.
- The net loss attributable to shareholders decreased from $19.6 million to $14.9 million.
- The adjusted EBITDA loss improved from $10.9 million to $2.9 million.
Worse than expected
29 April 2024 5:11 PM
Annual Report Amendment
- The company had to amend its annual report due to omitting required information, indicating a deficiency in internal controls or reporting processes.
Capital raise
29 April 2024 5:11 PM
Annual Report Amendment
- The company has multiple loan agreements with CH Capital Lending, LLC, and other related parties, some of which have been amended and restated.
- The company has issued Series A, B, and C Preferred Stock to related parties.
- The company has a history of using convertible notes and warrants to raise capital.
Capital raise
29 April 2024 4:57 PM
SEC Form 4 Filing
- The document details multiple transactions involving convertible notes and term loans, indicating ongoing capital raising activities.
- CH Capital Lending, LLC advanced additional funds under the 2020 Convertible Term Loan in January and February 2024.
- The company has been paying interest by increasing the principal of the Convertible Notes due 2025.
Capital raise
8 April 2024 5:25 PM
8-K Filing
- The company has the ability to sell up to $14,661,873 of common stock through the at-the-market offering.
- The company amended its equity distribution agreement to increase agent compensation, which may incentivize sales.
Capital raise
25 March 2024 4:37 PM
Annual Results
- The company's authorized but unissued Common Stock and Preferred Stock are available for future issuances without stockholder approval.
- The company could utilize these shares for future offerings to raise additional capital.
Capital raise
21 March 2024 8:20 AM
Quarterly Report
- The company completed a $2.8 million public offering of common stock and warrants to increase institutional ownership and improve stock trading volumes.
Worse than expected
21 March 2024 8:20 AM
Quarterly Report
- The company's net loss for the full year increased significantly compared to the previous year, indicating worse than expected financial performance.
Worse than expected
29 February 2024 5:24 PM
Lease Amendment
- The company has increased its debt and diluted its equity through the warrant issuance.
- The company has increased its base rent obligations.
- The company has pledged a 20% membership interest in Sandlot HOFV Canton SC, LLC, as collateral.
Capital raise
29 February 2024 5:24 PM
Lease Amendment
- The company issued a Series H Common Stock Purchase Warrant to the landlord.
- The warrant allows the landlord to purchase 890,313 shares of the company's common stock.
- The exercise of the warrant could result in a capital raise for the company, but also dilute existing shareholders.
Worse than expected
18 January 2024 5:12 PM
Loan Agreement Amendment
- The company's debt has increased significantly to $12,751,934.09, indicating a worsening financial position despite the asset sale.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.