HOFV
Hall of Fame Resort & Entertainment CO
NASDAQ
10-K: Hall of Fame Resort & Entertainment Details Financials, Risks in Annual Report
Sentiment:
Annual Report
26 March 2025 5:00 PM
Hall of Fame Resort & Entertainment Company's annual report reveals ongoing financial challenges and strategic shifts, including the termination of a key lease and a potential take-private proposal.
Worse than expected
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
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
The Company postponed its 2024 Annual Meeting of Stockholders.
Summary
- Hall of Fame Resort & Entertainment Company (HOFV) filed its annual report on Form 10-K for the fiscal year ended December 31, 2024.
- The company is focused on leveraging professional football through its Hall of Fame Village and related ventures.
- HOFV's strategic plan involves three phases: Phase I is operational, Phase II is underway, and Phase III is in planning.
- Phase I includes the Tom Benson Hall of Fame Stadium, the ForeverLawn Sports Complex (ownership reduced to 20%), and Hall of Fame Village Media.
- Phase II includes the Constellation Center for Excellence, the Center for Performance, Play Action Plaza, the Fan Engagement Zone, and two hotels.
- Phase III expansion plans may include residential space, additional attractions, and more.
- The company has significant debt outstanding, totaling approximately $251.2 million as of December 31, 2024.
- HOFV has incurred recurring losses and has an accumulated deficit of $273.6 million as of December 31, 2024.
- The company's cash position is deficient, and it requires additional capital to fund operations and debt service.
- A non-binding proposal to take the company private has been received from IRG Canton Village Member, LLC.
- The company terminated the waterpark ground lease, surrendering the premises and improvements.
- The company received a $9.8 million grant from the State of Ohio.
- Michael Crawford intends to resign as President, Chief Executive Officer, and Chairman of the Board of Directors.
- The closing price of the Common Stock and Series A Warrants on March 21, 2025, was $0.88 and $0.0026, respectively.
Sentiment
Score: 3
Explanation: The document presents a concerning financial situation with recurring losses, significant debt, and a potential delisting from Nasdaq. While there are some positive developments, the overall outlook is negative.
Positives
- The company received a $9.8 million grant from the State of Ohio.
- The company is exploring additional growth verticals as part of Phase II.
- The company has been successful in attracting a strong sponsorship base and will continue to seek significant partnerships with leading companies and brands across a range of untapped categories.
Negatives
- The company has significant debt outstanding, totaling approximately $251.2 million as of December 31, 2024.
- HOFV has incurred recurring losses and has an accumulated deficit of $273.6 million as of December 31, 2024.
- The company's cash position is deficient, and it requires additional capital to fund operations and debt service.
- The company terminated the waterpark ground lease, surrendering the premises and improvements.
- The company has identified material weaknesses in its internal control over financial reporting.
- The company's cash flow from operations and financing arrangements have been insufficient to allow it to pay all vendors on a timely basis.
Risks
- The company's recurring losses from operations, significant debt, and deficient cash position raise substantial doubt about its ability to continue as a going concern.
- The termination of the waterpark ground lease and surrender of the premises would be expected to have a material adverse effect on the company's liquidity, financial condition, and results of operations.
- There is no assurance that the non-binding proposal from IRG Canton Village Member, LLC to take the company private will result in a definitive transaction.
- The company's operations are impacted by its ability to attract and retain management and other key employees, and the unexpected loss of one or more such employees could harm its business.
- Changes in consumer tastes and preferences for sports and entertainment products could reduce demand for the company's offerings.
- The company could be adversely affected by declines in discretionary consumer spending, consumer confidence, and general and regional economic conditions.
- Cyber security risks and the failure to maintain the integrity of internal or guest data could result in damages to the company's reputation, the disruption of operations, and/or subject it to costs, fines, or lawsuits.
- The company's business may be adversely affected by defaults or bankruptcy of its tenants and partners.
- The company's sports betting and eSports operations are subject to a variety of laws, and any change in existing regulations could adversely impact its ability to operate its business.
- If the company fails to comply with the continued listing standards of Nasdaq, its common stock may be delisted.
- The trading price of the company's securities has been, and likely will continue to be, volatile.
Future Outlook
The company anticipates continued growth with the development of Phase III, which may include residential space, additional attractions, and more. The company is currently planning the future assets to be constructed in Phase III and expects to begin construction sometime after the completion of Phase II.
Industry Context
The company operates in the competitive sports and entertainment industry, facing competition from other facilities, media producers, hotels, and gaming providers. The success of the company depends on its ability to adapt to changing consumer preferences and maintain strong relationships with branded partners.
Comparison to Industry Standards
- It is difficult to compare HOFV to industry standards as it is a unique business model.
- The company's reliance on debt financing and recurring losses are concerning when compared to more established entertainment and resort companies.
- The company's ability to generate revenue from its assets will be critical to its long-term success.
Stakeholder Impact
- Shareholders face the risk of dilution and potential loss of investment due to the company's financial challenges and potential delisting.
- Employees face uncertainty due to the company's financial instability and management changes.
- Customers may be impacted by potential changes in the company's operations and offerings.
- Creditors face increased risk of default due to the company's high debt levels and financial difficulties.
Next Steps
- The company needs to secure additional financing to continue operations and development.
- The company needs to address the material weaknesses in its internal control over financial reporting.
- The company needs to regain compliance with Nasdaq listing rules.
- The company needs to evaluate and respond to the non-binding proposal to take the company private.
- The Board has begun the process of recruiting and evaluating candidates to succeed Mr. Crawford.
Related Party Transactions
- The company has engaged in numerous related party transactions with IRG and its affiliates, including loans, management agreements, and the proposed take-private transaction.
- The company has entered into multiple agreements with PFHOF, including a Global License Agreement and a Retail Merchandise Agreement.
Key Dates
- December 16, 2015: HOF Village was formed as a limited liability company.
- September 16, 2019: Date of the original Merger Agreement.
- July 1, 2020: Date of consummation of the Business Combination.
- August 29, 2019: Hall of Fame Resort & Entertainment Company was incorporated in Delaware.
- November 2020: Public offering of Series B Warrants.
- November 2020: Opening of the DoubleTree by Hilton hotel in downtown Canton.
- December 2020: Private placement of Series C Warrants.
- October 2021: Opening of the Constellation Center for Excellence.
- June 2021: Private placement of Series D Warrants.
- March 1, 2022: Series C, D, E and F Warrants amended and restated.
- March 28, 2022: Company filed a Certificate of Designations to establish the preferences, limitations and relative rights of the Series C Preferred Stock.
- August 2022: Opening of the Center for Performance and completion of Play Action Plaza.
- September 29, 2022: Stockholders approved an amendment to the Certificate of Incorporation to effect a reverse stock split.
- November 2022: Opening of the Center for Performance.
- November 2022: Completion of the core and shell of Retail II.
- December 27, 2022: Effective time of the Reverse Stock Split.
- April 18, 2023: Series C, D, E and F Warrants exercisable.
- January 11, 2024: HOF Village completed the sale to Sandlot Facilities, LLC of 80% of a newly formed limited liability company named Sandlot HOFV Canton SC, LLC.
- February 23, 2024: HOF Village Waterpark, LLC entered into a first amendment to lease agreement with Oak Street.
- February 29, 2024: HOF Village Waterpark, LLC, HOF Village Newco, LLC, as guarantor and pledgor, and HOF Village Stadium, LLC, as mortgagor, entered into a second amendment to the ground lease agreement for the waterpark with Oak Street.
- May 10, 2024: The parties entered into a third amendment to the lease agreement, to remove a sentence, effective May 1, 2024, that provided there shall be no notice or cure period for deferred rent due on May 1, 2024.
- August 9, 2024: The company received a $9.8 million grant from the State of Ohio.
- August 18, 2024: The company completely took over management of the restaurant, and opened it under a new brand, Gridiron Gastropub.
- August 31, 2024: Tara Charnes resigned from the office of General Counsel and Corporate Secretary of the Company.
- September 14, 2024: The registration statement on Form S-3 expired and the Company is no longer eligible to sell shares under the ATM.
- September 27, 2024: Our Board of Directors received a preliminary, nonbinding proposal from IRG Canton Village Member related to a proposed acquisition.
- October 10, 2024: ErieBank released an additional $943,864 of the held back portion of the loan proceeds to HOFV CFE for general development.
- October 26, 2024: The company received from Oak Street a notice of lease termination due to an event of default under the Sale-Leaseback.
- December 31, 2024: The Company failed to hold an annual meeting of stockholders within 12 months after its fiscal year ended December 31, 2023, as required by Nasdaq Listing Rule 5620(a).
- January 10, 2025: The Company received a deficiency letter from Nasdaq stating that the Company failed to hold an annual meeting of stockholders within 12 months after its fiscal year ended December 31, 2023.
- January 11, 2025: IRG Master Holdings, LLC purchased from JKP Financial, LLC the Hotel II Note and the Split Note.
- January 24, 2025: The Company and its subsidiaries entered into a Second Amendment to Note and Security Agreement with CHCL.
- February 18, 2025: The Company submitted to the Staff a plan of compliance which describes the circumstances under which it became noncompliant with the Annual Meeting Requirement and the Companys plan with which it will regain compliance.
- February 21, 2025: The Company entered into a Third Amendment to Note and Security Agreement with CHCL.
- March 12, 2025: Michael Crawford informed the Board of Directors of the Company that he intends to resign as President, Chief Executive Officer, and Chairman of the Board of Directors.
- March 18, 2025: The Company entered into a Fourth Amendment to Note and Security Agreement with CHCL.
- March 21, 2025: The closing price of the Common Stock and Series A Warrants was $0.88 and $0.0026, respectively.
- June 30, 2025: The Staff has determined to grant the Company an extension until June 30, 2025 to regain compliance with the Annual Meeting Requirement by holding an annual meeting of shareholders.
Keywords
Hall of Fame Resort & Entertainment, financial results, risk factors, going concern, debt, liquidity, take private, waterpark, sports betting, warrants, preferred stock, delisting, internal control, Michael Crawford
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.
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
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.
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.
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.
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.
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.
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
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.
Delay expected
26 March 2025 5:00 PM
Annual Report
- The Company postponed its 2024 Annual Meeting of Stockholders.
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
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.
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.
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.
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.
Worse than expected
19 August 2024 5:04 PM
Shareholder Letter
- Second quarter revenue was below the prior year, indicating worse than expected performance.
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
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.
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.
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.
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.
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.
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
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.
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.