SCHEDULE 13D/A: Major Shareholder Stuart Lichter and Affiliates Consolidate Control of Hall of Fame Resort & Entertainment Co Through Debt Restructuring

An amendment to a Schedule 13D filing reveals that Stuart Lichter and affiliated entities have significantly increased their beneficial ownership in Hall of Fame Resort & Entertainment Co, primarily through the acquisition and conversion rights of various promissory notes and warrants.

Summary

• This document is Amendment No. 5 to the Schedule 13D filing for Hall of Fame Resort & Entertainment Co (the "Issuer"), updating beneficial ownership information.
• Stuart Lichter, a key reporting person, is reported as beneficially owning 13,735,624 shares, representing 72.5% of the Issuer's common stock.
• CH Capital Lending, LLC, an affiliate of Mr. Lichter, beneficially owns 11,998,475 shares, or 66.9% of the common stock, largely due to conversion rights from various notes and warrants.
• On January 15, 2025, IRG Master Holdings, LLC, another affiliate of Mr. Lichter, satisfied obligations under a Guaranty Agreement related to two promissory notes (the "Hotel II Note" and the "Split Note") that were originally issued by the Issuer and its subsidiaries to JKP Financial, LLC.
• Following this satisfaction, CH Capital Lending, LLC became the beneficial owner of the Hotel II Note (original amount $9,097,203.95) and the Split Note (original principal amount $4,273,543.46), including their collateral.
• The beneficial ownership percentages for each reporting person are calculated based on 6,698,645 shares of Common Stock issued and outstanding as of March 21, 2025, plus the shares of Common Stock issuable upon the exercise of warrants and conversion of debt held by that specific reporting person within 60 days.

Sentiment

Score: 5

Explanation: The document is a factual disclosure of changes in beneficial ownership and debt restructuring. It is neutral in tone, detailing a consolidation of control by a major shareholder and his affiliates. While it highlights potential future dilution, it doesn't present inherently positive or negative operational news.

Positives

• The consolidation of debt under a single, significant beneficial owner (CH Capital Lending, LLC, an affiliate of Stuart Lichter) may streamline financial management and decision-making for the Issuer's debt obligations.
• The satisfaction of JKP Financial, LLC's obligations by an affiliate of Mr. Lichter resolves specific debt obligations for the Issuer and its subsidiaries, transferring them to a related party.

Negatives

• The high percentage of beneficial ownership (72.5% for Stuart Lichter, 66.9% for CH Capital Lending, LLC) indicates a highly concentrated ownership structure, which could limit liquidity for other shareholders and potentially reduce independent oversight.
• A significant portion of the reported beneficial ownership is derived from convertible notes and warrants, suggesting potential for substantial future dilution for existing shareholders if these instruments are converted.

Risks

• Dilution Risk: A large portion of the reported beneficial ownership stems from convertible notes and warrants (e.g., Convertible Note, Series C Preferred Stock, 2020 Term Loan Note, 2022 Term Loan Note, Bridge Loan, Hotel II Note, Split Note, Series A, B, C, D, E, G warrants). The conversion or exercise of these instruments could significantly dilute the ownership percentage of other shareholders.
• Concentrated Ownership Risk: Stuart Lichter and his affiliated entities hold a dominant beneficial ownership stake (72.5%), which could allow them to exert significant control over corporate decisions, potentially to the detriment of minority shareholders.
• Debt Burden: The company continues to carry substantial debt in the form of various promissory notes, which, while now held by an affiliate, still represent financial obligations for the Issuer.

Future Outlook

This Schedule 13D amendment primarily details changes in beneficial ownership and debt restructuring, and does not provide specific forward-looking statements or guidance regarding the Issuer's future operations or financial performance beyond the potential conversion of existing debt and warrants into common stock.

Industry Context

This filing is specific to the ownership structure of Hall of Fame Resort & Entertainment Co and does not provide broader industry context or trends. The company operates in the sports and entertainment resort sector, and changes in its ownership structure could influence its strategic direction and capital allocation within that industry.

Related Party Transactions

• IRG Master Holdings, LLC (an affiliate of Mr. Lichter) entered into a Guaranty Agreement with JKP Financial, LLC.
• On January 15, 2025, IRG Master Holdings, LLC satisfied obligations under this Guaranty, leading to CH Capital Lending, LLC (also an affiliate of Mr. Lichter) becoming the beneficial owner of the Hotel II Note and the Split Note.
• The various notes and warrants held by CH Capital Lending, LLC, IRG, LLC, and Midwest Lender Fund, LLC are held by entities affiliated with Stuart Lichter, indicating ongoing related-party financial arrangements.

Stakeholder Impact

• Shareholders: Existing shareholders face potential dilution from the conversion of a significant number of convertible notes and warrants held by Stuart Lichter and his affiliated entities. The highly concentrated ownership structure may also reduce the influence of minority shareholders.
• Creditors: The transfer of the Hotel II Note and Split Note to CH Capital Lending, LLC (an affiliate of a major shareholder) changes the creditor for these specific debts, potentially simplifying debt management for the Issuer but also consolidating control over its debt structure.

Next Steps

• Various warrants and convertible notes held by the reporting persons are exercisable or convertible within 60 days, implying potential future conversions into common stock.

Key Dates

Keywords

Hall of Fame Resort & Entertainment Co, Hofrec, Schedule 13D, Beneficial Ownership, Stuart Lichter, CH Capital Lending, Convertible Notes, Warrants, Debt Restructuring, Corporate Control, SEC Filing, Shareholder Disclosure, Dilution, Promissory Note, Corporate Governance