HOFV
Hall of Fame Resort & Entertainment CO
NASDAQ
8-K: Hall of Fame Resort & Entertainment Company Amends Loan Agreement, Secures Additional Funding
Sentiment:
Loan Agreement Amendment
18 January 2024 5:12 PM
Hall of Fame Resort & Entertainment Company executed multiple amendments to its term loan agreement, including the release of HOF Village Youth Fields from debt obligations and securing an additional $2.2 million in funding.
Worse than expected
The company's debt has increased significantly to $12,751,934.09, indicating a worsening financial position despite the asset sale.
Summary
- Hall of Fame Resort & Entertainment Company, along with HOF Village Newco, entered into Amendment Number 10 to their term loan agreement on January 11, 2024.
- This amendment facilitated the release of HOF Village Youth Fields from certain debt instruments and related collateral obligations.
- The outstanding principal balance of the loan was $14,268,942.40 as of December 29, 2023, which was reduced by proceeds from the Sandlot Transaction and then increased by a $4,400,000 advance.
- The Sandlot Transaction involved the sale of the ForeverLawn Sports Complex business for $10 million, with $1.5 million held back for potential indemnification claims.
- The company received $8,126,633.95 from the Sandlot Transaction, which was used to reduce the loan principal.
- A new loan amount of $10,542,308.45 was established after adding the $4,400,000 advance.
- On January 17, 2024, Amendment Number 11 to the term loan agreement was executed, providing an additional $2,200,000 advance, increasing the total loan amount to $12,751,934.09.
- The amendments also included changes to security agreements and mortgages to reflect the release of HOF Village Youth Fields and the new loan amounts.
Sentiment
Score: 4
Explanation: The sentiment is moderately negative due to the increase in debt despite the asset sale. While the company has secured additional funding, the reliance on lender discretion and the holdback amount create uncertainty. The complexity of the transactions also adds to the negative sentiment.
Positives
- The release of HOF Village Youth Fields from debt obligations simplifies the company's financial structure.
- The company successfully completed the sale of the ForeverLawn Sports Complex business, generating significant proceeds.
- The company secured an additional $6.6 million in funding through loan advances.
- The amendments clarify the loan terms and provide a clear path for future advances.
Negatives
- The company's debt obligations have increased to $12,751,934.09 after the additional advances.
- A portion of the sale proceeds ($1.5 million) is held back for potential indemnification claims, which could impact cash flow.
- The company is reliant on the lender's discretion for future advances from the Sandlot Proceeds Account.
Risks
- The company's ability to repay the increased debt obligations is dependent on future financial performance.
- The holdback amount from the Sandlot Transaction could be used to cover indemnification claims, reducing available cash.
- Future advances from the Sandlot Proceeds Account are subject to the lender's discretion, creating uncertainty.
- The company's financial health is closely tied to the success of the Hall of Fame Village development.
Future Outlook
The company may request additional advances from the Sandlot Proceeds Account, subject to the lender's discretion.
Management Comments
- The documents include signatures from Michael Crawford, President and Chief Executive Officer of Hall of Fame Resort & Entertainment Company.
- The documents include signatures from John A. Mase, Chief Executive Officer of CH Capital Lending, LLC.
Industry Context
This announcement reflects ongoing financial maneuvering within the sports and entertainment industry, where companies often use complex financing structures to fund development and operations. The sale of the sports complex and subsequent loan amendments are part of a broader strategy to manage debt and allocate capital.
Comparison to Industry Standards
- The use of term loan agreements and amendments is a common practice in the real estate and entertainment industries, particularly for companies undergoing significant development projects.
- The sale of a non-core asset like the sports complex to reduce debt is a typical strategy for companies looking to improve their financial position.
- The loan terms and interest rates are not disclosed, making it difficult to compare to industry benchmarks without further information.
- Companies like Cedar Fair and Six Flags also use debt financing for capital projects, but their specific terms and conditions vary based on their financial health and project scope.
Stakeholder Impact
- Shareholders may be concerned about the increased debt and the company's reliance on lender discretion.
- Employees may be impacted by any changes in the company's financial stability.
- Customers may not be directly impacted by these financial transactions.
- Suppliers and creditors may be affected by the company's ability to meet its financial obligations.
Next Steps
- The company may request additional advances from the Sandlot Proceeds Account.
- The company will need to manage its debt obligations and ensure timely payments.
- The company will need to monitor the holdback amount and address any potential indemnification claims.
Related Party Transactions
- CH Capital Lending, LLC, the lender, is an affiliate of director Stuart Lichter.
Key Dates
- 2020-12-01: Original Term Loan Agreement date.
- 2021-01-28: Amendment Number 1 to Term Loan Agreement.
- 2021-02-15: Amendment Number 2 to Term Loan Agreement.
- 2021-08-30: Amendment Number 3 and 4 to Term Loan Agreement.
- 2021-12-15: Amendment Number 5 to Term Loan Agreement.
- 2022-03-01: Assignment of Loan and Loan Documents to CH Capital Lending, LLC and Amendment Number 6 to Term Loan Agreement.
- 2022-07-31: Amendment Number 7 to Term Loan Agreement.
- 2022-11-07: Amendment Number 8 to Term Loan Agreement.
- 2023-10-06: Modification Agreement effective date.
- 2023-12-08: Amendment Number 9 to Term Loan Agreement.
- 2023-12-22: Date of the Membership Interest Purchase Agreement.
- 2023-12-29: Date used to calculate the outstanding principal balance of the loan.
- 2024-01-11: Effective date of Amendment Number 10 to Term Loan Agreement, Second Amendment to Second Amended and Restated Secured Cognovit Promissory Note, Sixth Amendment to and Spreader of Pledge and Security Agreement, Fourth Amendment to and Spreader of Open-End Fee and Leasehold Mortgage, Partial Release of Mortgage, Omnibus Release of Youth Fields Borrower from Certain Debt Instruments, and closing date of the Sandlot Transaction.
- 2024-01-17: Effective date of Amendment Number 11 to Term Loan Agreement and Third Amendment to Second Amended and Restated Secured Cognovit Promissory Note.
- 2024-01-18: Date of the 8-K filing.
Keywords
Term Loan Agreement, Loan Amendment, Debt Financing, Sandlot Transaction, HOF Village Youth Fields, Asset Sale, Mortgage, CH Capital Lending, Hall of Fame Resort & Entertainment Company, Loan Proceeds
HOFV
Hall of Fame Resort & Entertainment CO
NASDAQ
Sector: Communication Services
Filings with Classifications
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).
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.
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.
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.
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.
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.
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
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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
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.