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 second quarter fiscal 2021 results for the period
ended June 30, 2021.
“There have been many key events achieved during the second
quarter and continuing into the third quarter, highlighting the
strength of the ecosystem that we are creating,” stated Michael
Crawford, President and CEO of HOFV. “The foundation that has been
laid has created momentum across all business verticals. The last
months have been exciting and show the strength of the team to
achieve all these accomplishments. We, together with the Pro
Football Hall of Fame, hosted Enshrinement Week last week with
thousands of people coming to the Hall of Fame Village powered by
Johnson Controls to celebrate two Enshrinements (2020 and 2021),
the NFL Hall of Fame Game, and concert. Within our Hall of Fame
Village Media subsidiary, we co-produced World Chase Tag (“WCT”)
2021 Championships and launched a set of NFTs for six football
legends. Finally, within our gaming vertical, our Hall of Fantasy
league announced the front offices for each of the teams and
launched an app.”
Key Financial Highlights
- Second quarter revenue was $2.4 million, an increase of 39%
compared to the same period of the prior year, primarily driven by
hotel revenue. Event and rental revenue also contributed to
revenue.
- Second quarter net income was $15.5 million. This was primarily
due to income of $26.3 million related to a change in fair value of
warrant liability .
- Second quarter adjusted EBITDA was a loss of $5.6 million,
compared to $1.3M in the same period of the prior year, resulting
from increased investments in operations. See page 6 for
reconciliation of net income attributable to Hall of Fame Resort
& Entertainment Company stockholders to adjusted EBITDA.
- The Company finished its second quarter with a cash balance,
including restricted cash, of $73.7 million, compared to $68.5
million as of March 31, 2021. The increased cash balance was driven
by proceeds from the Series B preferred shares and warrants issued
during the quarter.
Second Quarter Business Highlights
- Recognized with 2020 Hilton Legacy Award for our conversion and
launch of the DoubleTree by Hilton Canton Downtown Hotel.
- Announced Hall of Fame Running Back Terrell Davis as the
commissioner of the Hall of Fantasy League for the inaugural
2021-2022 season.
- Completed $15.2M raise of Series B preferred stock and warrants
in June to further strengthen the Company’s balance sheet.
- Announced collaboration with Tupelo Honey, WCT, and ESPN to
produce World Chase Tag 2021 Championships. The Company hosted the
competition with the event being televised on ESPN.
Subsequent To Quarter End Highlights
- Announced partnership with Esports Entertainment Group to
become the official esports provider and will operate a Helix
eSports entertainment center that is scheduled to open in
2022.
- Partnered with Venuetize to develop a mobile app to provide
guests with information and more convenient visits to the Hall of
Fame Village powered by Johnson Controls.
- Announced front office staff for the Hall of Fantasy League’s
inaugural 2021-2022 season with former NFL players and top fantasy
experts leading the franchises.
- Signed a multi-year sponsorship agreement with Hendrickson, a
leading global manufacturer and supplier of commercial
transportation products.
- Launched “Playbooks”, a collectible series of NFTs highlighting
memorable plays of six pro football legends.
Conference Call
The Company will host a conference call and webcast Friday,
August 13, 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 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,
including refinancing its existing term loan and obtaining
financing to construct planned facilities; 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 June 30,
For the Six Months Ended June
30,
2021
2020
2021
2020
Revenues Sponsorships,
net of activation costs
$
1,508,402
$
1,660,928
$
2,983,838
$
3,321,856
Rents and cost recoveries
55,078
42,657
96,961
317,437
Event revenues
5,057
-
6,719
27,833
Hotel revenues
795,222
-
1,191,560
-
Total revenues
$
2,363,759
$
1,703,585
$
4,279,078
$
3,667,126
Operating expenses
Property operating expenses
6,219,781
2,428,283
12,228,780
9,112,269
Hotel operating expenses
1,596,989
-
2,363,154
-
Commission expense
260,583
607,126
427,250
1,057,980
Depreciation expense
2,972,130
2,723,303
5,893,067
5,445,423
Total operating expenses
$
11,049,483
$
5,758,712
$
20,912,251
$
15,615,672
Loss from operations
(8,685,724
)
(4,055,127
)
(16,633,173
)
(11,948,546
)
Other expense Interest
expense
(1,004,419
)
(2,199,785
)
(1,959,727
)
(4,209,795
)
Amortization of discount on note payable
(1,164,613
)
(3,443,333
)
(2,398,727
)
(6,677,746
)
Change in fair value of warrant liability
26,315,888
-
(90,035,112
)
-
Gain on extinguishment of debt
-
-
390,400
-
Total other income (expense)
$
24,146,856
$
(5,643,118
)
$
(94,003,166
)
$
(10,887,541
)
Net income (loss)
$
15,461,132
$
(9,698,245
)
$
(110,636,339
)
$
(22,836,087
)
Series B preferred stock dividends
$
(130,000
)
-
$
(130,000
)
-
Non-controlling interest
209,921
-
160,210
-
Net loss attributable to HOFRE
stockholders
$
15,541,053
$
(9,698,245
)
$
(110,606,129
)
$
(22,836,087
)
Net loss per share - basic
$
0.16
$
(1.78
)
$
(1.30
)
$
(4.20
)
Weighted average shares outstanding, basic
94,397,222
5,436,000
84,978,294
5,436,000
Net loss per share - diluted
$
-
$
(1.78
)
$
(1.30
)
$
(4.20
)
Weighted average shares outstanding, diluted
107,353,272
5,436,000
84,978,294
5,436,000
HALL OF FAME RESORT & ENTERTAINMENT
COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS As of: June 30, 2021 December 31, 2020
(unaudited)
Assets Cash
$
61,908,208
$
7,145,661
Restricted cash
11,759,884
32,907,800
Accounts receivable, net
869,421
1,545,089
Prepaid expenses and other assets
8,954,346
6,920,851
Property and equipment, net
150,151,539
154,355,763
Project development costs
126,595,920
107,969,139
Total assets
$
360,239,318
$
310,844,303
Liabilities and stockholders' equity
Liabilities Notes payable, net
$
103,534,759
$
98,899,367
Accounts payable and accrued expenses
12,825,686
20,538,190
Due to affiliate
1,901,992
1,723,556
Warrant liability
55,805,000
19,112,000
Other liabilities
5,213,829
5,489,469
Total liabilities
179,281,266
145,762,582
Commitments and contingencies Stockholders'
equity Undesignated preferred stock, $0.0001 par value;
4,932,200 sharesauthorized; no shares issued or outstanding at June
30, 2021 andDecember 31, 2020
-
-
Series B convertible preferred stock, $0.0001 par value; 15,200
sharesdesignated; 15,200 and 0 shares issued and oustanding at June
30, 2021and December 31, 2020, respectively
2
-
Common stock, $0.0001 par value; 300,000,000 shares authorized;
94,872,068 and 64,091,266 shares issued and outstanding at June
30,2021 and December 31, 2020, respectively
9,488
6,410
Additional paid-in capital
298,752,278
172,112,688
Accumulated deficit
(117,447,000
)
(6,840,871
)
Total equity attributable to HOFRE
181,314,768
165,278,227
Non-controlling interest
(356,716
)
(196,506
)
Total equity
180,958,052
165,081,721
Total liabilities and stockholders' equity
$
360,239,318
$
310,844,303
HALL OF FAME RESORT & ENTERTAINMENT COMPANY AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited) For the Six Months Ended June
30,
2021
2020
Cash Flows From Operating Activities Net loss
$
(110,636,339
)
$
(22,836,087
)
Adjustments to reconcile net loss to cash flows used in
operating activities Depreciation expense
5,893,067
5,445,423
Amortization of note discounts
2,398,727
6,677,746
Interest paid in kind
952,012
2,199,714
Gain on forgiveness of debt
(390,400
)
-
Change in fair value of warrant liability
90,035,112
-
Stock-based compensation expense
3,006,692
-
Changes in operating assets and liabilities: Accounts
receivable
675,668
(346,185
)
Prepaid expenses and other assets
(2,033,495
)
(3,550,720
)
Accounts payable and accrued expenses
(2,060,008
)
2,121,854
Due to affiliates
178,436
(3,619,101
)
Other liabilities
(275,640
)
3,441,126
Net cash used in operating activities
(12,256,168
)
(10,466,230
)
Cash Flows From Investing Activities Additions to
project development costs and property and equipment
(26,098,120
)
(14,688,633
)
Purchase of leasehold improvements
-
(156,390
)
Net cash used in investing activities
(26,098,120
)
(14,845,023
)
Cash Flows From Financing Activities Proceeds from
notes payable
6,000,000
36,014,210
Repayments of notes payable
(4,309,947
)
(5,572,102
)
Payment of financing costs
(15,000
)
(135,268
)
Proceeds from sale of Series B preferred stock and warrants
15,200,000
-
Proceeds from equity raises, net of offering costs
31,746,996
-
Proceeds from exercise of warrants
23,346,870
-
Net cash provided by financing activities
71,968,919
30,306,840
Net increase in cash and restricted cash
33,614,631
4,995,587
Cash and restricted cash, beginning of year
40,053,461
8,614,592
Cash and restricted cash, end of year
$
73,668,092
$
13,610,179
Cash
$
61,908,208
$
2,149,500
Restricted Cash
11,759,884
11,460,679
Total cash and restricted cash
$
73,668,092
$
13,610,179
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 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 June 30,
2021
2020
Adjusted EBITDA Reconciliation Net income (loss)
attributable to HOFRE stockholders
$
15,541,053
$
(9,698,245
)
(Benefit from) provision for income taxes
-
-
Interest expense
1,004,419
2,199,785
Depreciation expense
2,972,130
2,723,303
Amortization of note discounts
1,164,613
3,443,333
EBITDA
20,682,215
(1,331,824
)
Change in fair value of warrant liability
(26,315,888
)
-
Adjusted EBITDA
$
(5,633,673
)
$
(1,331,824
)
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version on businesswire.com: https://www.businesswire.com/news/home/20210812005869/en/
Media/Investor Contacts: Media Inquiries:
public.relations@hofreco.com Investor Inquiries:
investor.relations@hofreco.com
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