CANTON,
Ohio, March 20, 2024 /PRNewswire/ -- Hall of
Fame Resort & Entertainment Company (NASDAQ: HOFV, HOFVW) (the
"Company"), the only resort, entertainment and media company
centered around the power of professional football, announced its
fourth quarter and full-year fiscal 2023 results for the period
ended December 31, 2023.
"The performance of the fourth quarter highlights the
significant progress that we have made over the course of the last
year," stated Michael Crawford, HOFV
President & CEO. "We remained focused on operational execution
within all our business verticals, which led to record fourth
quarter revenue. As an early-stage Company, it is mission
critical that we continue to make the necessary strategic
investments to enhance business growth, increase operational
efficiency, and elevate our Media and Gaming product and brands
within the sports and entertainment industry. In addition, our
synergistic business model helps create integrated guest
experiences and growth throughout our organization. As we
enter 2024, I am very excited with the plan we have to grow our
operational capabilities by adding a roster of diverse events,
strategic partnerships, and new experiences that will bring
millions of guests to our campus. Finally, we are committed
to telling great stories with multiple new Hall of Fame Village
Media projects being shopped for production and distribution."
Crawford went on to share, "Our priorities remain creating
one-of-a-kind content and experiences for our guests to enjoy,
completing the Phase II development of Hall of Fame Village, and
continue our work on a balance sheet structure that creates
shareholder value and supports the company's long-term success."
Key Financial Highlights
- Fourth quarter revenue was $6.1
million, an increase of 101% compared to the same period in
the prior year, primarily driven by continued operationalization of
Hall of Fame Village through event and rental revenue. For the full
year, revenue was $24.1 million, an
increase of 51% compared to the prior year. Full year results were
driven by event and rental revenue at Hall of Fame Village and
hotel revenue at the Doubletree by Hilton Downtown Canton.
- Fourth quarter net loss attributable to shareholders was
$20.2 million, compared to a net loss
of $18.5 million in the same period
in the prior year. The change was primarily driven by impairment
expense related to the agreement of the ForeverLawn Sports Complex
sale and was partially offset by an increase in other income
resulting from an award by an arbitration panel and an increase in
total revenue. For the full year, net loss was $69.7 million compared to a net loss of
$46.9 million, primarily driven by
increased net interest expense and operating expenses.
- Fourth quarter adjusted EBITDA was a loss of $1.9 million, compared to a loss of $5.5 million in the same period in the prior
year. For the full year, adjusted EBITDA was a loss of $25.5 million compared to a loss of $26.0 million in the prior year as increased
operating expense was mostly offset by revenue. See page 6 for a
reconciliation of net loss to EBITDA and adjusted EBITDA.
- The Company finished its fiscal quarter with a cash balance of
$11.8 million, including $8.6 million in restricted cash, compared to
$11.8 million, including $7.5 million in restricted cash, as of
September 30, 2023.
Key Business Highlights
- Hall of Fame Village hosted many large events at Hall of Fame
Village including Emmy and Grammy nominated comedian, Bill Burr, all seven divisions of the OHSAA
Football Championships, and Winter
Blitz. In addition to these large events, additional revenue
was generated from campus programming and tenant and event rentals
associated with our synergistic revenue model.
- The Company announced the strategic partnership with
Josh Harris and David Blitzer to elevate and expand youth sports
programming at the Hall of Fame Village. The partnership will
amplify youth sports programming and create world-class experiences
for participants at the ForeverLawn Sports Complex and will extend
to youth sports programming at the Hall of Fame Village's Center
for Performance.
- The Company partnered with several new prominent companies
including Coca-Cola Consolidated, the Ohio Lottery!, and
Enviroscapes.
- The Company completed a $2.8
million public offering of common stock and warrants to
increase institutional ownership and improve stock trading
volumes.
Conference Call
The Company will host a conference
call and webcast Thursday, March 21,
2023, beginning at 8:30 a.m.
ET, to provide commentary on the business. Investors and all
other interested parties can access the live webcast and replay at
the Company's website: https://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 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 "plan," "opportunity,"
"future," "will," "goal," "enable," "pipeline," "transition," "move
forward," "towards," "build out," "coming" 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, which
could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements. Important
factors that may affect actual results or outcomes include, among
others, the Company's ability to manage growth; the Company's
ability to execute its business plan and meet its projections,
including obtaining financing to construct planned facilities and
for working capital; 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; increased inflation; the
inability to maintain the listing of the Company's shares on
Nasdaq; and 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
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
For the Years Ended
December 31,
|
|
2023
|
|
2022
|
|
|
|
|
|
Revenues
|
|
|
|
|
Sponsorships, net of
activation costs
|
$
2,819,041
|
|
$
2,697,487
|
|
Event, rents,
restaurant, and other revenues
|
13,855,169
|
|
7,116,594
|
|
Hotel
revenues
|
7,455,463
|
|
6,165,291
|
|
Total
revenues
|
24,129,673
|
|
15,979,372
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Operating
expenses
|
43,171,407
|
|
35,982,464
|
|
Hotel operating
expenses
|
6,491,625
|
|
5,949,839
|
|
Impairment
expense
|
8,845,000
|
|
-
|
|
Depreciation
expense
|
15,069,782
|
|
12,037,374
|
|
Total operating
expenses
|
73,577,814
|
|
53,969,677
|
|
|
|
|
|
Loss from
operations
|
(49,448,141)
|
|
(37,990,305)
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
Interest expense,
net
|
(18,763,838)
|
|
(5,377,146)
|
|
Amortization of
discount on note payable
|
(3,589,858)
|
|
(6,250,721)
|
|
Other income
|
4,265,937
|
|
604,912
|
|
Change in fair value of
warrant liability
|
686,000
|
|
9,422,000
|
|
Change in fair value of
interest rate swap
|
163,850
|
|
(200,000)
|
|
Change in fair value of
investments available for sale
|
(2,067,754)
|
|
-
|
|
Loss on extinguishment
of debt
|
-
|
|
(6,377,051)
|
|
Total other
expense
|
(19,305,663)
|
|
(8,178,006)
|
|
|
|
|
|
Net
loss
|
$
(68,753,804)
|
|
$
(46,168,311)
|
|
|
|
|
|
Preferred stock
dividends
|
(1,064,000)
|
|
(1,064,000)
|
|
Loss attributable to
non-controlling interest
|
72,265
|
|
285,807
|
|
|
|
|
|
Net loss
attributable to HOFRE stockholders
|
$
(69,745,539)
|
|
$
(46,946,504)
|
|
|
|
|
|
Net loss per share,
basic and diluted
|
$
(11.97)
|
|
$
(9.01)
|
|
|
|
|
|
Weighted average shares
outstanding, basic and diluted
|
5,826,504
|
|
5,208,054
|
|
HALL OF FAME RESORT
& ENTERTAINMENT COMPANY AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
For the Years Ended
December 31,
|
|
|
2023
|
|
2022
|
|
Cash Flows From
Operating Activities
|
|
|
|
|
|
Net loss
|
|
$
(68,753,804)
|
|
$
(46,168,311)
|
|
Adjustments to
reconcile net loss to cash flows used in operating
activities
|
|
|
|
|
|
Depreciation
expense
|
|
15,069,782
|
|
12,037,374
|
|
Amortization of note
discount and deferred financing costs
|
|
3,577,034
|
|
6,250,721
|
|
Amortization of
financing liability
|
|
6,914,176
|
|
1,156,362
|
|
Bad debt
expense
|
|
244,143
|
|
807,877
|
|
Recognition of film
costs
|
|
160,000
|
|
-
|
|
Impairment of sports
fields and film costs
|
|
8,845,000
|
|
-
|
|
Interest income on
investments held to maturity
|
|
(563,652)
|
|
(72,917)
|
|
Interest paid in
kind
|
|
6,671,400
|
|
3,969,093
|
|
Loss on extinguishment
of debt
|
|
-
|
|
6,377,051
|
|
Gain on sale of
asset
|
|
(148,796)
|
|
-
|
|
Gain on outcome of
arbitration
|
|
(4,117,141)
|
|
-
|
|
Change in fair value of
warrant liability
|
|
(686,000)
|
|
(9,422,000)
|
|
Change in fair value of
interest rate swap
|
|
(163,850)
|
|
200,000
|
|
Change in fair value of
investments available for sale
|
|
2,067,754
|
|
(67,754)
|
|
Stock-based
compensation expense
|
|
2,756,849
|
|
3,925,303
|
|
Non-cash operating
lease expense
|
|
520,831
|
|
179,898
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
(798,752)
|
|
(251,795)
|
|
Prepaid expenses and
other assets
|
|
(357,126)
|
|
289,396
|
|
Accounts payable and
accrued expenses
|
|
2,026,036
|
|
9,924,830
|
|
Operating
leases
|
|
(319,056)
|
|
17,753
|
|
Due to
affiliates
|
|
438,389
|
|
3,015,292
|
|
Other
liabilities
|
|
(383,655)
|
|
2,939,079
|
|
Net
cash used in operating activities
|
|
(27,000,438)
|
|
(4,892,748)
|
|
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
|
Additions to project
development costs and property and equipment
|
|
(45,590,651)
|
|
(95,167,689)
|
|
Proceeds from
securities held to maturity
|
|
89,470,392
|
|
-
|
|
Proceeds from sale of
property and equipment
|
|
241,691
|
|
-
|
|
Investment in
securities held to maturity
|
|
(71,947,597)
|
|
(16,960,598)
|
|
Net cash used in
investing activities
|
|
(27,826,165)
|
|
(112,128,287)
|
|
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
|
Proceeds from notes
payable
|
|
43,075,339
|
|
79,196,400
|
|
Payment for fractional
shares
|
|
-
|
|
(118,344)
|
|
Repayments of notes
payable
|
|
(5,757,301)
|
|
(19,256,319)
|
|
Payment of financing
costs
|
|
(2,226,310)
|
|
(11,559,606)
|
|
Payment for repurchase
of interest rate swap
|
|
(36,150)
|
|
-
|
|
Payment of Series B
dividends
|
|
(450,000)
|
|
(750,000)
|
|
Proceeds from sale of
common stock under ATM
|
|
39,261
|
|
20,777,893
|
|
Proceeds from failed
sale leaseback
|
|
-
|
|
65,588,519
|
|
Proceeds from common
stock offering
|
|
2,500,996
|
|
-
|
|
Payment on financing
liability
|
|
(4,019,531)
|
|
(729,166)
|
|
Net cash provided by
financing activities
|
|
33,126,304
|
|
133,149,377
|
|
|
|
|
|
|
Net (decrease)
increase in cash and restricted cash
|
|
(21,700,299)
|
|
16,128,342
|
|
|
|
|
|
|
Cash and restricted
cash, beginning of year
|
|
33,516,382
|
|
17,388,040
|
|
|
|
|
|
|
Cash and restricted
cash, end of year
|
|
$
11,816,083
|
|
$
33,516,382
|
|
|
|
|
|
|
Cash
|
|
$
3,243,353
|
|
$
26,016,547
|
|
Restricted
Cash
|
|
8,572,730
|
|
7,499,835
|
|
Total cash and
restricted cash
|
|
$
11,816,083
|
|
$
33,516,382
|
|
HALL OF FAME RESORT
& ENTERTAINMENT COMPANY AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
As of December
31,
|
|
2023
|
|
2022
|
|
|
|
|
|
Assets
|
|
|
|
|
Cash
|
$
3,243,353
|
|
$
26,016,547
|
|
Restricted
cash
|
8,572,730
|
|
7,499,835
|
|
Investments held to
maturity
|
-
|
|
17,033,515
|
|
Investments available
for sale
|
2,000,000
|
|
4,067,754
|
|
Accounts receivable,
net
|
1,108,460
|
|
1,811,143
|
|
Prepaid expenses and
other assets
|
3,514,135
|
|
3,340,342
|
|
Property and equipment,
net
|
344,378,835
|
|
248,826,853
|
|
Property and equipment
held for sale
|
12,325,227
|
|
-
|
|
Right-of-use lease
assets
|
7,387,693
|
|
7,562,048
|
|
Project development
costs
|
59,366,200
|
|
140,138,924
|
|
Total
assets
|
$
441,896,633
|
|
$
456,296,961
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Liabilities
|
|
|
|
|
Notes payable,
net
|
$
219,532,941
|
|
$
171,315,860
|
|
Accounts payable and
accrued expenses
|
21,825,540
|
|
17,575,683
|
|
Due to
affiliate
|
1,293,874
|
|
855,485
|
|
Warrant
liability
|
225,000
|
|
911,000
|
|
Financing
liability
|
62,982,552
|
|
60,087,907
|
|
Derivative liability -
interest rate swap
|
-
|
|
200,000
|
|
Operating lease
liability
|
3,440,630
|
|
3,413,210
|
|
Other
liabilities
|
5,858,682
|
|
10,679,704
|
|
Total
liabilities
|
315,159,219
|
|
265,038,849
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Undesignated preferred
stock, $0.0001 par value; 4,917,000 shares
|
|
|
|
|
authorized; no shares
issued or outstanding at December 31, 2023 and 2022
|
-
|
|
-
|
|
Series B convertible
preferred stock, $0.0001 par value; 15,200 shares
|
|
|
|
|
designated; 200 shares
issued and outstanding at December 31, 2023 and 2022;
liquidation preference of $222,011 as of December 31,
2023
|
-
|
|
-
|
|
Series C convertible
preferred stock, $0.0001 par value; 15,000
|
|
|
|
|
shares designated;
15,000 shares issued and outstanding at December 31, 2023 and
2022; liquidation preference of $15,707,500 as of December 31,
2023
|
2
|
|
2
|
|
Common stock, $0.0001
par value; 300,000,000 shares authorized;
|
|
|
|
|
6,437,020 and 5,604,869
shares issued and outstanding at December 31, 2023 and
2022, respectively
|
643
|
|
560
|
|
Additional paid-in
capital
|
344,335,489
|
|
339,038,466
|
|
Accumulated
deficit
|
(216,643,882)
|
|
(146,898,343)
|
|
Total equity
attributable to HOFRE
|
127,692,252
|
|
192,140,685
|
|
Non-controlling
interest
|
(954,838)
|
|
(882,573)
|
|
Total
equity
|
126,737,414
|
|
191,258,112
|
|
Total liabilities
and stockholders' equity
|
$
441,896,633
|
|
$
456,296,961
|
Non-GAAP Financial Measures
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States ("GAAP") and corresponding
metrics as non-GAAP financial measures. The press release 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 improved 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 the Company's results prepared in
accordance with GAAP. In addition, the non-GAAP measures the
Company 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 December 31,
|
|
For the Twelve Months
Ended December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
Net loss attributable
to HOFRE stockholders
|
$
(20,163,050)
|
|
$
(18,507,694)
|
|
$
(69,745,539)
|
|
$
(46,946,504)
|
|
(Benefit from)
provision for income taxes
|
-
|
|
-
|
|
-
|
|
-
|
|
Interest expense,
net
|
4,700,254
|
|
1,571,836
|
|
18,763,838
|
|
5,377,146
|
|
Depreciation
expense
|
4,583,447
|
|
2,616,789
|
|
15,069,782
|
|
12,037,374
|
|
Amortization of
discount on note payable
|
432,043
|
|
2,639,983
|
|
3,589,858
|
|
6,250,721
|
|
EBITDA
|
(10,447,306)
|
|
(11,679,086)
|
|
(32,322,061)
|
|
(23,281,263)
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment
of debt
|
-
|
|
6,228,579
|
|
-
|
|
6,377,051
|
|
Impairment
expense
|
8,845,000
|
|
-
|
|
8,845,000
|
|
-
|
|
Other income
|
(4,117,141)
|
|
(67,754)
|
|
(4,265,937)
|
|
(604,912)
|
|
Change in fair value of
warrant liability
|
(179,000)
|
|
(411,000)
|
|
(686,000)
|
|
(9,422,000)
|
|
Change in fair value of
interest rate swap
|
-
|
|
72,000
|
|
(163,850)
|
|
200,000
|
|
Change in fair value of
securities available for sale
|
3,751,000
|
|
-
|
|
2,067,754
|
|
-
|
|
Preferred stock
dividends
|
266,000
|
|
266,000
|
|
1,064,000
|
|
1,064,000
|
|
Loss attributable to
non-controlling interest
|
(6,616)
|
|
51,359
|
|
(72,265)
|
|
(285,807)
|
|
Adjusted
EBITDA
|
$
(1,888,063)
|
|
$
(5,539,902)
|
|
$
(25,533,359)
|
|
$
(25,952,931)
|
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SOURCE Hall of Fame Resort & Entertainment Company