UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 29, 2022
HALL OF FAME RESORT & ENTERTAINMENT COMPANY
(Exact name of registrant as specified in its charter)
| Delaware | 001-38363 | 84-3235695 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
2626 Fulton Drive NW
Canton, OH 44718
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (330) 458-9176
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Capital Market | ||||
| Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On June 29, 2022, HOF Village Stadium, LLC (the “Lessee”), a wholly-owned subsidiary of Hall of Fame Resort & Entertainment Company (the “Company”) that leases the Tom Benson Hall of Fame Stadium (“Stadium”) from Stark County Port Authority, entered into an Energy Project Cooperative Agreement (the “EPC Agreement”) with Canton Regional Energy Special Improvement District, Inc. (the “ESID”), SPH Canton St, LLC, an affiliate of Stonehill Strategic Capital, LLC (“Investor”), and City of Canton, Ohio.
Under the EPC Agreement, the Investor provided $33,387,844 (the “Project Advance”) property assessed clean energy (“PACE”) financing to finance the costs of the special energy improvement projects at the Stadium described in the Canton Regional Energy Special Improvement District Project Plan that have been completed (as supplemented, the “Plan”). Of the Project Advance, $29,565,729 was disbursed to Lessee, $3,221,927 was retained by Investor as capitalized interest, and $600,187 was used to pay closing costs. Pursuant to the EPC Agreement, the Lessee agreed to make special assessment payments in an aggregate amount that will provide revenues sufficient to repay the Project Advance plus interest and certain costs (the “Special Assessments”). The Special Assessments have been levied in the amounts necessary to amortize the Project Advance, together with interest at the annual rate of 6.0% and a $6,542 semi-annual administrative fee to the ESID over 50 semi-annual payments of $1,314,913 to be collected beginning approximately on January 31, 2024, and continuing through approximately July 31, 2048
In connection with entering into the EPC Agreement, the Company obtained the consent and agreement of Cuyahoga River Capital LLC (“CRC”), pursuant to an agreement, dated June 27, 2022 (the “Consent Agreement”). CRC holds 100% of the interest in the Development Finance Authority of Summit County Tax-Exempt Development Revenue Bonds, Series 2018 (Hall of Fame Village - Stadium and Youth Fields TIF Project), issued in the original principal amount of $10,030,000 the “Series 2018 Bonds”). Pursuant to the Consent Agreement, upon the closing of the EPC Agreement the Company deposited $9,895,197 into a bank account at The Huntington National Bank (“Huntington”) subject to a deposit account control agreement (the “DACA”) executed by Huntington and CRC as secured party (the “Pledged Account”). Under the Consent Agreement, in the event the Series 2018 Bonds are outstanding on December 29, 2022, the Company will repurchase the Series 2018 Bonds. The Company granted CRC a lien on the Pledged Account to secure the Company’s obligations under the Consent Agreement. In the event the Series 2018 Bonds are redeemed and/or defeased prior to December 29, 2022, upon such redemption or defeasance the Consent Agreement shall automatically terminate, and CRC shall instruct Huntington to release the DACA
A copy of the press release announcing the $33,387,844 PACE financing is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Document | |
| 99.1 | Press Release dated July 6, 2022 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HALL OF FAME RESORT & ENTERTAINMENT COMPANY | |||
| By: | /s/ Michael Crawford | ||
| Name: | Michael Crawford | ||
| Title: | President and Chief Executive Officer | ||
| Dated: July 6, 2022 | |||
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Exhibit 99.1
Hall of Fame Resort and Entertainment Company Secures $33.4 Million PACE Loan
Company Release - 7/6/2022 8:00 AM ET
Proceeds to be used to continue investing in the growth of the Hall of Fame Village
CANTON, Ohio--(BUSINESS WIRE)-- Hall of Fame Resort & Entertainment Company (“HOFV” or the “Company”) (NASDAQ: HOFV, HOFVW), the only resort, entertainment and media company centered around the power of professional football, today announced it secured approximately $33.4 million in Property Assessed Clean Energy (“PACE”) financing from Stonehill Strategic Capital, LLC. The financing was approved by the Canton City Council in coordination with the Canton Regional Energy Special Improvement District.
The PACE model is an innovative mechanism for financing energy efficiency and renewable energy improvements on private property. The PACE financing, coupled with the previously secured $5 million in financing from Stark Community Foundation, Inc., provides HOFV with additional capital for the continued construction of Phase II of the Hall of Fame Village and generates revenue for its business by opening several one-of-a-kind, sports-themed assets at the campus.
“Securing this PACE financing is an important step in the continued growth of our business, providing us with additional capital to continue moving full steam ahead on our plans for the Hall of Fame Village,” stated Michael Crawford, President and CEO of HOFV. “Despite the significant market challenges, we haven’t slowed down or stopped moving forward with our strategic plan, and I’m very proud of all that we’ve achieved so far. There is so much more success in sight, especially as we get set to unveil the Center for Performance, Fan Engagement Zone, Play Action Plaza and our expanded Forever Lawn Youth Sports Complex over the coming weeks.
“I’m thankful for our shareholders who have supported us along the way and to the greater community of Canton for being a loyal partner from the inception of the Hall of Fame Village development, and at each step thereafter. It’s a very exciting time for our Company and I am energized by the significant potential of our business as these new assets open and we break ground in the very near term on the waterpark and on-site hotel, launch season two of the Hall of Fantasy League, release exclusive content produced by Hall of Fame Village Media and progress in our efforts to secure gaming licenses from the State of Ohio.”
The Company has also leveraged PACE financing for the Center for Performance, a 100,000-square-foot exhibition hall and athletic performance space. The Center for Performance will provide year-round capacity for both sport and non-sport events serving guests from around the country. The facility will house Ohio-based sports leagues as well as world-class training facilities, turf practice fields and two basketball courts that can also be used for volleyball.
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 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, the inability to maintain the listing of the Company’s shares on Nasdaq, 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.
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Media/Investor Contacts:
For Hall of Fame Resort & Entertainment
Company
Media Inquiries: public.relations@hofreco.com
Investor Inquiries: investor.relations@hofreco.com