Le Lézard
Classified in: Tourism and vacations, Business, Sports and recreation
Subject: ERN

Hall of Fame Resort & Entertainment Company Announces Fourth Quarter and Full Year 2023 Results


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

Key Business Highlights

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)

 

SOURCE Hall of Fame Resort & Entertainment Company


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