Hall of Fame Resort & Entertainment Company (NASDAQ: HOFV,
HOFVW), the only resort, entertainment and media company centered
around the power of professional football, announced its first
quarter fiscal 2021 results for the period ended March 31,
2021.
“We are pleased with all of the progress made during the first
quarter. The team continues to execute at a high level, moving the
ball down the field,” shared President and CEO Michael Crawford.
“We announced several new media partnerships to create two
documentaries: “INSPIRE: Heroes of Change”, in partnership with
Tupelo Honey and “The Perfect Ten”, the story of the 10 athletes
who are the only players to win both the Heisman trophy and be
enshrined into the Pro Football Hall of Fame (also known as “H2H”)
in partnership with Elite Team Holdings, LLC. Also, this quarter,
the Company partnered with leading marketing and PR agency Dolphin
Entertainment to enter into the exciting world of non-fungible
tokens (“NFTs”). Our first NFTs will showcase several of the
amazing H2H Legends in a way that we believe has not been developed
to date. These NFTs demonstrate our ability to provide a new medium
of engagement with football fans through our direct access to
one-of-a-kind content.” Crawford continued, “We were also able to
move forward on the construction front within Hall of Fame Village
powered by Johnson Controls. We have developed the east endzone of
Tom Benson Hall of Fame Stadium which will now house a state of the
art “fan-zone”, providing tremendous engagement and entertainment
opportunities, complete with a jumbotron scoreboard as well as have
made remarkable progress within the Constellation Center of
Excellence. Lastly, we were excited to launch the Hall of Fantasy
League (“HOFL”), our “first of its kind” fantasy football league.
The HOFL allows fans to participate in new and unique ways within
the world of fantasy football. Over the last quarter we made
“staking” available through our relationship with StakeKings as
well as the opportunity to purchase team logo merchandise online.
We look forward to the first HOFL season which will run parallel to
that of the NFL.”
Key Financial Highlights
- First quarter revenue was $1.9 million, which is comparable to
the prior year, as hotel revenue mostly offset lower rent and
events revenues.
- First quarter net loss of $126.1 million. This was primarily
due to $116.4 million expense related to a change in fair value of
warrant liability, a result of the April 12, 2021 Securities and
Exchange Commission staff statement affecting the accounting
treatment for certain warrants.
- First quarter adjusted EBITDA was a loss of $5.1 million, which
is comparable to the prior year. See page 6 for reconciliation of
net loss attributable to Hall of Fame Resort & Entertainment
Company stockholders to adjusted EBITDA.
- The Company had a cash balance, including restricted cash, of
$68.6 million as of March 31, 2021, compared to $40.1 million as of
December 31, 2020. The increased cash balance was driven by
proceeds from an equity raise and exercise of warrants in the first
quarter.
First Quarter Business Highlights
- Formed a media partnership with Tupelo Honey, one of the
nation’s largest independent production companies, to work on
producing INSPIRED: Heroes of Change, an unscripted series
featuring professional football figures who are using their
platforms to improve their communities.
- Announced the development of the H2H documentary with Elite
Team Holdings, LLC that will be produced in partnership with NFL
Films. The documentary will highlight the careers of the ten men
that have won the Heisman Trophy and also have been enshrined into
the Pro Football Hall of Fame.
- Announced that the Highway 77 Music Festival will take place at
the Hall of Fame Village powered by Johnson Controls, on Sunday,
September 12, 2021.
- Signed a multi-year partnership with the Women’s Football
Alliance to host its four division championships at the Tom Benson
Hall of Fame Stadium beginning this year.
- Closed on the sale of 14.1 million shares of common stock in an
underwritten public offering, which includes the full exercise of
the underwriters’ over-allotment option, for gross proceeds of
approximately $34.5 million.
- Signed a partnership with Dolphin Entertainment to create NFTs
with the first tokens connected to the H2H platform.
- Launched HOFL with the unveiling of 10 cities, team names and
logos.
- Launched “staking” of the 10 HOFL teams as well as the ability
to purchase team logo merchandise online.
Subsequent To Quarter End Highlights
- Announced multi-year partnership deal with American Standard
and extended an agreement with PepsiCo Beverages North
America.
- Announced the launch of the first NFTs for the H2H Legend
Series on May 17th, beginning with Heisman Trophy winner and Pro
Football Hall of Fame enshrinee Tim Brown.
Conference Call
The Company will host a conference call and webcast Monday, May
17, 2021, beginning at 8:30 a.m. ET, to provide commentary on the
business. Speaking on the call will be Michael Crawford, President
and Chief Executive Officer, and Jason Krom, Chief Financial
Officer.
Investors and all other interested parties can access the live
webcast and replay at the Company’s website: ir.hofreco.com.
About Hall of Fame Resort & Entertainment Company
Hall of Fame Resort & Entertainment Company (NASDAQ: HOFV,
HOFVW) is a resort and entertainment company leveraging the power
and popularity of professional football and its legendary players
in partnership with the Pro Football Hall of Fame. Headquartered in
Canton, Ohio, the Hall of Fame Resort & Entertainment Company
is the owner of the Hall of Fame Village powered by Johnson
Controls, a multi-use sports, entertainment and media destination
centered around the Pro Football Hall of Fame’s campus. Additional
information on the Company can be found at www.HOFREco.com.
Forward-Looking Statements
Certain statements made herein are “forward-looking statements”
within the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words and phrases such
as “opportunity,” “future,” “will,” “goal,” and “look forward” and
other similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. These
forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the Company’s control, that
could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements. Important
factors, among others, that may affect actual results or outcomes
include the inability to recognize the anticipated benefits of the
business combination; costs related to the business combination;
the inability to obtain or maintain the listing of the Company’s
shares on Nasdaq; the Company’s ability to manage growth; the
Company’s ability to execute its business plan and meet its
projections; potential litigation involving the Company; changes in
applicable laws or regulations; general economic and market
conditions impacting demand for the Company’s products and
services, and in particular economic and market conditions in the
resort and entertainment industry; the potential adverse effects of
the ongoing global coronavirus (COVID-19) pandemic on capital
markets, general economic conditions, unemployment and the
Company’s liquidity, operations and personnel, as well as those
risks and uncertainties discussed from time to time in our reports
and other public filings with the SEC. The Company does not
undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
HALL OF FAME RESORT & ENTERTAINMENT COMPANY AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited)
For the Three Months Ended March
31,
2021
2020
Revenues Sponsorships, net of
activation costs
$
1,475,436
$
1,660,928
Rents and cost recoveries
41,883
274,780
Event revenues
1,662
27,833
Hotel revenues
396,338
-
Total revenues
$
1,915,319
$
1,963,541
Operating expenses Property operating
expenses
6,008,999
6,683,986
Hotel operating expenses
766,165
-
Commission expense
166,667
450,854
Depreciation expense
2,920,937
2,722,120
Total operating expenses
$
9,862,768
$
9,856,960
Loss from operations
(7,947,449
)
(7,893,419
)
Other expense Interest expense
(955,308
)
(2,010,010
)
Amortization of discount on note payable
(1,234,114
)
(3,234,413
)
Change in fair value of warrant liability
(116,351,000
)
-
Gain on forgiveness of debt
390,400
-
Total other expense
$
(118,150,022
)
$
(5,244,423
)
Net loss
$
(126,097,471
)
$
(13,137,842
)
Non-controlling interest
(49,711
)
-
Net loss attributable to HOFRE stockholders
$
(126,147,182
)
$
(13,137,842
)
Net loss per share - basic and diluted
$
(1.67
)
$
(2.42
)
Weighted average shares outstanding, basic and
diluted
75,350,163
5,436,000
HALL OF FAME RESORT & ENTERTAINMENT COMPANY
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
As of:
March 31, 2021
December 31, 2020
(unaudited)
Assets Cash
$
50,320,435
$
7,145,661
Restricted cash
18,228,113
32,907,800
Accounts receivable, net
956,778
1,545,089
Prepaid expenses and other assets
11,874,628
6,920,851
Property and equipment, net
153,447,521
154,355,763
Project development costs
116,017,357
107,969,139
Total assets
$
350,844,832
$
310,844,303
Liabilities and stockholders' equity
Liabilities Notes payable, net
$
102,431,787
$
98,899,367
Accounts payable and accrued expenses
11,387,699
20,538,190
Due to affiliate
1,922,868
1,723,556
Warrant liability
84,298,000
19,112,000
Other liabilities
5,114,112
5,489,469
Total liabilities
205,154,466
145,762,582
Commitments and contingencies (Note 7 and 8)
Stockholders' equity
Undesignated preferred stock, $0.0001 par value; 4,947,200 shares
authorized; no shares issued or outstanding at March 31, 2021 and
December 31, 2020
-
-
Common stock, $0.0001 par value; 300,000,000 shares authorized;
94,178,308 and 64,091,266 shares issued and outstanding at March
31, 2021 and December 31, 2020, respectively
9,419
6,410
Additional paid-in capital
278,815,795
172,112,688
Accumulated deficit
(132,988,053
)
(6,840,871
)
Total equity attributable to HOFRE
145,837,161
165,278,227
Non-controlling interest
(146,795
)
(196,506
)
Total equity
145,690,366
165,081,721
Total liabilities and stockholders' equity
$
350,844,832
$
310,844,303
HALL OF FAME RESORT & ENTERTAINMENT COMPANY AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited)
For the Three Months Ended March
31,
2021
2020
Cash Flows From Operating Activities Net loss
$
(126,097,471
)
$
(13,137,842
)
Adjustments to reconcile net loss to cash flows used in
operating activities Depreciation expense
2,920,937
2,722,120
Amortization of note discounts
1,234,114
3,234,413
Prepaid rent
-
(1,463,093
)
Interest paid in kind
550,949
552,903
Gain on forgiveness of debt
(390,400
)
-
Change in fair value of warrant liability
116,351,000
-
Stock-based compensation expense
1,386,543
-
Changes in operating assets and liabilities: Accounts
receivable
588,311
239,783
Prepaid expenses and other assets
(4,953,777
)
(4,670
)
Accounts payable and accrued expenses
(2,554,866
)
(275,749
)
Due to affiliates
199,312
2,294,821
Other liabilities
(375,357
)
1,367,740
Net cash used in operating activities
(11,140,705
)
(4,469,574
)
Cash Flows From Investing Activities Additions to
project development costs and property equipment
(16,826,627
)
(7,164,875
)
Net cash used in investing activities
(16,826,627
)
(7,164,875
)
Cash Flows From Financing Activities Proceeds from
notes payable
5,100,000
19,109,624
Repayments of notes payable
(2,777,154
)
(1,825,630
)
Payment of financing costs
(15,000
)
(134,243
)
Proceeds from equity raises
31,746,996
-
Amounts due from exercise of warrants from transfer agent
3,450,015
-
Proceeds from exercise of warrants
18,957,562
-
Net cash provided by financing activities
56,462,419
17,149,751
Net increase in cash and restricted cash
28,495,087
5,515,302
Cash and restricted cash, beginning of year
40,053,461
8,614,592
Cash and restricted cash, end of year
$
68,548,548
$
14,129,894
Cash
$
50,320,435
$
911,015
Restricted Cash
18,228,113
13,218,879
Total cash and restricted cash
$
68,548,548
$
14,129,894
Non-GAAP Financial Measures
The Company reports its financial results in accordance with
accounting principals generally accepted in the United States
(“GAAP”) and corresponding metrics as non-GAAP financial measures.
The presentation includes references to the following non-GAAP
financial measures: EBITDA and adjusted EBITDA. These are important
financial measures used in the management of the business,
including decisions concerning the allocation of resources and
assessment of performance. Management believes that reporting these
non-GAAP financial measures is useful to investors as these
measures are representative of the company’s performance and
provide improve comparability of results. See the table below for
the definitions of the non-GAAP financial measures referred to
above and corresponding reconciliations of these non-GAAP financial
measures to the most comparable GAAP financial measures. Non-GAAP
financial measures should be viewed as additions to, and not as
alternatives for HOFV’s results prepared in accordance with GAAP.
In additional, the non-GAAP measures HOFV uses may differ from
non-GAAP measures used by other companies, and other companies may
not define the non-GAAP measures the company uses in the same
way.
For the Three Months Ended March
31,
2021
2020
Adjusted EBITDA Reconcilliation Net loss attributable
to HOFRE stockholders
$
(126,147,182
)
$
(13,137,842
)
(Benefit from) provision for income taxes
-
-
Interest expense
955,308
2,010,010
Depreciation expense
2,920,937
2,722,120
Amortization of note discounts
1,234,114
3,234,413
EBITDA
(121,036,823
)
(5,171,299
)
Gain on forgiveness of debt
(390,400
)
-
Change in fair value of warrant liability
116,351,000
-
Adjusted EBITDA
$
(5,076,223
)
$
(5,171,299
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210514005549/en/
Media/Investor Contacts: For Hall of Fame Resort &
Entertainment Company Media Inquiries: public.relations@hofreco.com
Investor Inquiries: investor.relations@hofreco.com
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