10-K: Hall of Fame Resort & Entertainment Company Details Registered Securities and Provides Annual Report

Hall of Fame Resort & Entertainment Company outlines its registered securities as of December 31, 2023, and provides its annual report for the fiscal year ended December 31, 2023.

Summary

• Hall of Fame Resort & Entertainment Company (HOFV) had two classes of securities registered under the Securities Exchange Act of 1934 as of December 31, 2023: Common Stock and Series A Warrants.
• The company's authorized capital stock consists of 300,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock.
• As of December 31, 2023, there were 6,437,020 shares of Common Stock, 6,800 shares of Series A Preferred Stock, 200 shares of Series B Preferred Stock, and 15,000 shares of Series C Preferred Stock issued and outstanding.
• Holders of Common Stock have exclusive voting rights, with each share having one vote.
• Holders of Common Stock are entitled to receive dividends and distributions as declared by the board of directors.
• In the event of liquidation, holders of Common Stock will receive their ratable share of remaining assets.
• Series A Preferred Stock holders are entitled to a cumulative dividend at a rate of 7.0% per annum, payable quarterly.
• Series A Preferred Stock has a liquidation preference of $1,000 per share plus accrued and unpaid dividends.
• The Company must redeem Series A Preferred Stock 60 months after issuance, with possible extensions up to 84 months.
• Series B Preferred Stock holders are entitled to a cumulative dividend at a rate of 7.0% per annum, with 4.00% payable in cash and 3.00% payable in cash or Common Stock at the holder's election.
• Series B Preferred Stock has a liquidation preference of $1,000 per share plus accrued and unpaid dividends.
• Series B Preferred Stock will automatically convert to Common Stock on the third anniversary of issuance at a conversion price of $67.35, subject to adjustments.
• Series C Preferred Stock holders are entitled to a cumulative dividend at a rate of 7.0% per annum, with 4.00% payable in cash and 3.00% payable in cash or Common Stock at the holder's election.
• Series C Preferred Stock has a liquidation preference of $1,000 per share plus accrued and unpaid dividends.
• Series C Preferred Stock is convertible into Common Stock at a conversion price of $33.01, subject to adjustments.
• Series A Warrants entitle holders to purchase 0.064578 shares of Common Stock at $253.11 per share, expiring five years after the Business Combination.
• The Company is obligated to register the Common Stock underlying the Series A Warrants.
• The Company may redeem Series A Warrants at $0.01 per warrant if the Common Stock price equals or exceeds $18.00 per share for 20 trading days within a 30-trading day period.
• Series B Warrants entitle holders to purchase 0.045435 shares of Common Stock at $30.81 per share, expiring five years from issuance.
• Series C Warrants entitle holders to purchase 0.045418 shares of Common Stock at $12.77 per share, expiring on March 1, 2029.
• Series D Warrants (Series D No. W-1) entitle holders to purchase 0.045418 shares of Common Stock at $12.77 per share, expiring on March 1, 2029.
• Series D Warrants (Series D No. W-2) entitle holders to purchase 0.045410 shares of Common Stock at $151.86 per share, expiring on June 4, 2024.
• Series E Warrants entitle holders to purchase 0.045418 shares of Common Stock at $12.77 per share, expiring on March 1, 2029.
• Series F Warrants entitle holders to purchase 0.045418 shares of Common Stock at $12.77 per share, expiring on March 1, 2029.
• Series G Warrants entitle holders to purchase 0.045418 shares of Common Stock at $12.77 per share, expiring on June 8, 2027.
• Series H Warrants entitle holders to purchase one share of Common Stock at $2.81 per share, expiring on February 23, 2027.
• As of March 21, 2024, the closing price of the Common Stock was $3.73 and the Series A Warrants was $0.0083.
• The company had 103 holders of record of Common Stock, 2 holders of Series A Preferred Stock, 1 holder of Series B Preferred Stock, 1 holder of Series C Preferred Stock, 1 holder of Series A Warrants, 1 holder of Series B Warrants, 1 holder of Series C Warrants, 1 holder of Series D Warrants (Series D No. W-1), 1 holder of Series D Warrants (Series D No. W-2), 2 holders of Series E Warrants, 1 holder of Series F Warrants, 1 holder of Series G Warrants, and 1 holder of Series H Warrants.
• The company's board of directors is divided into three classes with staggered three-year terms.
• Special meetings of stockholders may be called by a majority vote of the board, the Chair, the CEO, or stockholders holding at least a majority of the Common Stock.
• The company is subject to Section 203 of the Delaware General Corporation Law, regulating corporate takeovers.
• The sole and exclusive forum for certain stockholder litigation matters is the Court of Chancery of the State of Delaware.
• The transfer agent and registrar for the Common Stock and Series A Warrants is Continental Stock Transfer & Trust Company.
• The company's Common Stock and Series A Warrants are listed on Nasdaq under the symbols HOFV and HOFVW, respectively.
• The company's annual report on Form 10-K for the fiscal year ended December 31, 2023, includes a discussion and analysis of financial condition and results of operations, financial statements, and other required disclosures.

Sentiment

Score: 6

Explanation: The document is factual and descriptive, providing necessary details about the company's securities. There is no clear positive or negative sentiment, but the complexity of the capital structure and the presence of anti-takeover provisions could be seen as slightly negative from an investor's perspective.

Positives

• The company has a diversified capital structure with common and preferred stock, as well as warrants.
• The company has the ability to redeem Series A Warrants if the stock price reaches a certain level.
• The company has a staggered board of directors, which can provide stability.
• The company has a clear process for calling special meetings of stockholders.
• The company has a process for stockholders to bring business before a special meeting of stockholders.
• The company has a process for stockholders to make nominations for directors at the annual meeting of stockholders.
• The company has a transfer agent and registrar for its securities.

Negatives

• The company is subject to Delaware's anti-takeover statute, which could make it more difficult to acquire the company.
• The company's exclusive forum for stockholder litigation is the Delaware Court of Chancery, which could make it more difficult for stockholders to bring lawsuits against the company.
• The company's Series A Warrants have a high exercise price of $253.11 per share.
• The company's Series B Warrants have a high exercise price of $30.81 per share.
• The company's Series D Warrants (Series D No. W-2) have a high exercise price of $151.86 per share.

Risks

• The company's ability to deliver shares upon exercise of warrants is contingent on an effective registration statement.
• The company may redeem Series A Warrants even if it cannot register the underlying securities for sale under all applicable state securities laws.
• The company's management has the option to require cashless exercise of Series A Warrants, which could reduce the number of shares issued and lessen the dilutive effect of a warrant redemption.
• The company's Series B Warrants do not have a public trading market and are not intended to be listed on any exchange.
• The company's Series C Warrants do not have a public trading market and are not intended to be listed on any exchange.
• The company's Series D Warrants (Series D No. W-1) do not have a public trading market and are not intended to be listed on any exchange.
• The company's Series D Warrants (Series D No. W-2) do not have a public trading market and are not intended to be listed on any exchange.
• The company's Series E Warrants do not have a public trading market and are not intended to be listed on any exchange.
• The company's Series F Warrants do not have a public trading market and are not intended to be listed on any exchange.
• The company's Series G Warrants do not have a public trading market and are not intended to be listed on any exchange.
• The company's Series H Warrants do not have a public trading market and are not intended to be listed on any exchange.
• The company's exclusive forum provision may discourage lawsuits against its directors and officers.

Future Outlook

The company plans to use its authorized but unissued Common Stock and Preferred Stock for future issuances, including offerings to raise additional capital, acquisitions, and employee benefit plans.

Industry Context

This document provides a detailed overview of the company's capital structure and securities, which is essential for investors to understand the company's financial position and potential risks. The information is relevant to the broader market as it provides insight into the company's financing and governance structure.

Comparison to Industry Standards

• The use of multiple classes of preferred stock and warrants is common among growth-oriented companies, particularly those in the entertainment and resort industries.
• The staggered board structure is a common corporate governance practice, but it can be viewed as a potential anti-takeover measure.
• The exclusive forum provision is becoming increasingly common among Delaware corporations to manage litigation costs and ensure consistency in the application of Delaware law.
• The specific terms of the warrants, such as exercise prices and expiration dates, are unique to the company and reflect its specific financing needs and agreements.
• The company's capital structure is complex, with multiple classes of securities and warrants, which is not uncommon for companies that have undergone mergers or acquisitions or have raised capital through various means.

Corporate Governance

Stakeholder Impact

• Shareholders: The document provides detailed information about the company's securities, which is important for shareholders to understand their rights and potential risks.
• Employees: The document does not directly impact employees, but it provides information about the company's financial structure.
• Customers: The document does not directly impact customers, but it provides information about the company's financial stability.
• Suppliers: The document does not directly impact suppliers, but it provides information about the company's financial structure.
• Creditors: The document provides information about the company's debt and equity structure, which is relevant to creditors.

Next Steps

• The company will continue to use its authorized but unissued Common Stock and Preferred Stock for future issuances.
• The company will continue to operate under the terms of its existing securities.

Key Dates

Keywords

Common Stock, Preferred Stock, Warrants, Securities, Dividends, Voting Rights, Liquidation Rights, Redemption, Conversion, Exercise Price, Nasdaq, Delaware Law, Corporate Governance