Q2 2022 Hall of Fame Resort & Entertainment Co Earnings Call

[music].

Good morning, and welcome to the Hall of Fame Resort Entertainment Company's second quarter 2022 earnings Conference call. This conference call is being recorded and all participants are in a listen only mode. We will open the conference up for questions and answers. Following the prepared remarks. It is now my pleasure to turn the conference over to Anne graphic.

Executive Vice President Public Affairs, you may begin.

Good morning, and thank you all for joining us for our second quarter 2022 earnings Conference call. Our latest press release supplemental slides and Form 10-Q were posted yesterday evening. After market hours. These documents can be found in the Investor Relations section of our website at H O F. R E C O dot.

Com.

After my brief introduction, Michael Crawford, our President and CEO will give an overview of the quarter's results and an update of our fiscal year priorities Benjamin Lee Our Chief Financial Officer will then provide analysis of the quarter's financial results and update on our fiscal 'twenty two financial outlook during todays call. We will make forward looking statements that reflect.

The company's current expectations about future plans and performance. These statements rely on assumptions and estimates and actual results may differ materially due to risks and uncertainties I encourage you to read the full disclosure concerning forward looking statements in the earnings press release.

Additionally, please note that the company uses non-GAAP results to evaluate performance internally as detailed in the press release, we have posted a supplementary slide deck summarizing the quarterly results. These slides can be accessed on our website and will be archived there along with a replay of this call. If you have any additional questions. After today's call. Please contact me <unk>.

<unk> is now my pleasure to turn the call over to Michael Crawford Michael.

Good morning, Thanks, Dan good to be with everyone. On this on this great day for.

For the earnings call.

A lot going on over this last quarter and certainly over this last couple of weeks I think and I hope you would've seen.

Hall of Fame village coming to life.

As we hosted <unk>.

Michigan events nationally televised I think we showed up very well so I'm incredibly proud of the team and all the accomplishments that we've had over the Q2 period of time, but specifically over these last couple of weeks as well.

Thank you probably would have seen.

Orange training of our new class of 2022 Hall of Famers, which was fantastic.

We kicked off the NFL preseason with the Jags and the Raiders great game, even though it was weather delayed I think it came out and showed strong and it really showed the popularity of professional football with the whole team game kicking off the pre season for the NFL.

We had our concert for legend with journey and I can tell you standing in the front row. It was an absolutely mind blowing concert.

Guys or just the greatest hit band it wildly crowd.

And then on Sunday Night, we closed the act with Dave Chappelle and he was just an overtopped a list your comedian and I think everybody enjoyed that as well.

Typically as I do I'd like to start off just talking about a few macro trends that we're watching and things that are impacting our ability to drive business in some cases and in some cases things that we've overcome and really made great strides against in spite of those issues.

First I think it's worth mentioning.

We continue to watch a lot of things.

I've said before that's an old Disney Guy the parade of horrible just continues to to go by but one thing our shareholders should know by now and I Hope you should take comfort in is this team really just doesn't give up it.

It continues to execute in spite of very very difficult environments, inwall inflation seems to be easing in some categories, certainly product availability and supply chain constraints remain remained very real for us.

In addition over the last quarter.

Stock market volatility federal reserve, raising interest rates inflationary pressures and I know it.

<unk> Crazy to say.

Inflationary pressures when at the same time, we're not talking about recessionary types of conditions, but that's the that's the kind of upside down world that we're living in GDP.

GDP releases show that we are probably in a recession, but as I said, we're not overly concerned with it you know we're focused on our future growth and it's just one more thing that the company and its leadership team and its board has to overcome I mean, we've been dealing with the world health pandemic that still continues on.

Some level.

New introduction of health concerns with Monkey pox.

Supply chain issues labor constraints.

And when you when you take all of that into consideration and you think about the strides forward that this team has made it gives me great comfort that in a more normalized or whatever that new state of normal looks like and more normalized world that our team can really overcome anything that's put in front of it.

Each of fighters, but just don't give up.

A couple of key things, though to remind people of consumers consumer spending remains very strong and elevated frankly and unemployment remains low.

And even in a recessionary environment people forgo a lot of things that are those higher priced items. They may not buy a new refrigerator. They may not buy a new car, but gosh, they've liked going and having experiences and we're seeing we're seeing dining.

We're seeing travel hotel stays sporting events attendants. We're seeing these things returned to 2019 levels and it's very encouraging for us, especially as a company that in the.

Early days as a regional drive destination. So as we know you may not want to get on a long flight, but you may be willing to drive you know four or five hours to get to a really compelling destination for an event for a sporting event or just to have a great time and very immersive environment.

And this is all being confirmed by other recent companies reporting I think hotels are showing revpar growth back to the 2019 levels as I said.

The length of stay is growing as well leisure travel remains elevated business travel is now coming back which is exciting for us as well.

And again entertainment and theme park attendance going going very high to those 2019 levels and just as important to the attendance levels spending is up.

So you know I always say and I've said this before on these calls, but one thing that I know is people are resilient and you just never can bet against the consumer if they want something and they find you are creating a new and exciting experience, whether it's a media show that youre streaming gaming opportunity or physical destiny.

<unk> never bet against the consumer they are there they show up and they spend money.

As I move into you know some of the some of the more relevant updates.

Did you want to talk about over the last quarter, there seemed to be a lot of discussion around broader company news broader company updates.

I felt like I needed to address those and provide a few points of clarification around how I see things currently and how I see them moving forward. So let's start with the <unk>.

Comment that I get a lot how could the management and board of directors not be buying stock at the current prices that the stock is trading at and by the way the stock is trending up over the last month, which we're encouraged to see and.

And I can tell you if you look at the history.

That question.

Myself personally I have bought hundreds of thousands of shares as has my management team as has our board of directors, maybe not all at the same levels.

Confidence in this company is incredibly high.

But we've had a policy.

Are the deals predominantly with stocks are granted to our management team or our board of directors as a form of compensation. There is always tax obligation that is associated with those grants and so what our policy has been not an individual choice, but a company choice we have sold.

Stock to cover the tax liability on behalf of those individuals'.

So what you know what does that mean to you.

It means is it prohibits.

It's from trading in those open trading windows for a period of six months. After those taxes have been covered by the sale of those shares on behalf of individuals. So we took a hard look at that and we've now changed that policy to withhold shares to cover the tax liability.

Freeing up senior executives or the management team and the board to freely trade now when the Windows are open and I think what youre going to see and hopefully what you have seen is there is such a deep belief in this company's long term and near term success, but everyone across the board will continue.

New to invest where they where they find appropriate and were personally reasonable for them to do so in the success of our company and I'll come back and talk about that one in just a moment.

A couple of other things dilution.

You know that we've had an ATM or at the market offering out for quite some time, we paused that we decided that the stock prices, we're going to Oh, we didn't want further dilution and so we changed directions and brought in a bridge loan until weird.

Until we can close on some of the more meaningful public and private debt financing that we have now started to close upon and then actually we started to repay that bridge loan as well one of our senior.

Shareholders and investors in our company kind enough to provide that bridge loan and so you know what.

What you should take comfort in there is we have a management team that's focused on creating value and not diluting, where we where we don't have to and so that ATM. The sale has been on pause for quite some time.

One of the things that I also get asked a lot about recently being in compliance or I should say being deficient in terms of being in compliance as it relates to the NASDAQ rules being traded on the NASDAQ Index I'll, just remind everybody. We went and received the deficiency notice out of compliance.

24 of 2022 and that was because the stock had traded our stock had traded below a dollar for 30 consecutive trading days.

Now when we have looked at this there are obviously opportunities to correct that and our management team. Our board of directors have had I can't tell you countless meetings talking about how do we approach. This in the best interest of all of its shareholders and in the best interest of the <unk>.

As you know there.

Sure opportunities to do this first of all.

The obvious one the company trades above a dollar for 10 consecutive trading days, we started down that path a few weeks ago. We missed on a day we're back above a dollar we were before I started this call.

That's a game of chance and one that you know is what I think we're trending in the right direction.

Thank our shareholders and investors are seeing us execute opened new assets sell media create gaming environments and so I think they are encouraged by and we're seeing a.

Nice uptick and we're moving in a direction where that.

Immediate remediation opportunity really is one that could present itself.

The second is you know that we have 180 days to become compliant we can ask for 180 days. Additionally to correct or cure that deficiency notice and so that is an opportunity for us to continue to look and monitor how the stock trades and asked for additional time as we continue to <unk>.

<unk> business strategy.

The third is a reverse stock split and let.

Let me just take a moment to explain how a reverse stock split works the value of stock that you carry today would be the exact same value you would carry in the future if a reserves reverse stock split were to occur.

Thing that happens is it takes back a number of shares and re values those shares at a higher level and so there is a formula that we would potentially use to take back a number of shares reversing the number of shares that are out there in terms of availability, which.

Then increases the value of the shares that you hold so if you had $100 worth of value.

10 shares.

We took back in we divided that by five are the trading value of those two shares you had remaining would still equal a $100 a lot of people view that as a negative.

And having a negative impact on the company I can tell you that versus the fourth option to remediate. This deficiency notice which is to be removed from the primary exchange exchange into a lower tiered exchange really is one that we would not recommend and one that we.

Do not see as a viable option at this point our goal and our obligation to our shareholders is to give them a trading environment that is easy.

Easily accessible that has liquidity, that's being traded and to be removed from the NASDAQ into a pink sheet environment would complicate that and make it much much more difficult.

Again, we're looking at all of our options we're studying those.

We're measuring them against a very volatile stock market. Our board of directors is actively involved management continues to steep seek out expert opinion.

I have conversations with several wall Street investment banks were looking at academic research were looking at trending from years past. We're looking at companies that have done a reverse stock splits to see how that is worked out.

And we're having multiple conversations and watching daily trading activity something that.

Frankly, I'm not used to doing because my focus has been on running the business as has the team to execute our strategy and really creates shareholder value, but I want to reiterate one key fact here this is not us.

This is not management board in one bucket and our shareholders and another we're all in this together and it is personal for us and myself just as it is for you and people have asked me a lot. If that's really the case and my answer is 100% yes.

And why I answer that way as over the last few years and you can go back and check the filings I personally have purchased hundreds of thousands of shares of our stock at all pricing levels not at 50, some had been at $4 some had been at $3 and below.

And yes, that's myself, taking my personal money and investing in this company because I see where it is and I see where it is going to go and I understand the value that we're creating the same holds true for the management team and the same holds true for our board of directors, yes.

We are granted shares as well and I think that sometimes where that confusion comes into play we get granted shares of stock for one primary reason.

<unk> shareholders should feel like the company management is aligned with them and if we get shares of stock granted to us as part of our compensation package versus just getting cash we should be making decisions that create value for everyone.

The shares that are granted to us, but what I just spoke about that sell to cover policy is shifting to a a.

Hey, withhold to cover the tax obligation.

It's something that people should not look at it and get confused by it and say well they don't care because those are just free shares and they're given to them no no I'm going to remind everyone our company or our management team is actually foregoing cash.

You are buying stock, meaning I've taken part of my bonus or I've taken part of my my annual compensation and I've said I don't want the cash I believe so deeply in the company I would rather take it in stock I've done that multiple times as has our board of directors and again I think there is confusion.

Cause when those filings occur people say, Oh, well, that's just stock being given to them no. That's real cash out of their pockets into this company and they do that because they want to make sure that people understand that they believe this company and the strategies that we have and the management team, we have and the support from our board.

<unk> will create long term value for all of US we're all in this together.

I'd also just like to say that you know over the last several months theres been a lot of criticism as to why you know why wouldn't management be buying at these lower levels and we listen to that but again I just want to reiterate there have actually been a desire to do that but we've been pretty.

Liberty to do that by trading rules, you know the windows have been closed.

Sell to cover policy is prohibited us from doing that and so we're hoping that as we move forward we have the chance to invest in our company just like you have invested in our company as well.

The last thing I want to reiterate here and its one I think that was confused by that sell to cover policy is no one and I'm going to repeat this no one in our company management team Board of Directors has sold a single share of their stock.

This the sales that Youre seeing work conducted on behalf of the individual by the company to cover the tax obligation. It's important that you know that this management team. This board of directors has complete confidence in the company in the near mid and long term goals that we have set out.

For ourselves the way, we're executing in accomplishing those goals and creating long term value is the most important thing in every decision that we make for you as our shareholders.

So I just I wanted to be very clear on that so that people were not confused.

And I'm happy to take questions at the end.

Let's start with a couple of other key updates here construction.

Hopefully you saw over multiple nationally televised hours of events that we posted in the last few months at our stadium, Tom Benson whole theme stadium and at the village U S. F. L playoffs, and championships and trying with the NFL game et cetera that are campus has really grown and grown.

In a big way.

But we are having to be very purposeful and very plan full in doing.

If you would've asked a lot of the skeptics out there. They would have said no way the progress that we have been made would have been possible, but we did it.

From one year.

Saying that I'm using now we've gone from dirt to destination.

We have literally taken dirt fields and now created a destination you see a giant indoor dome called center for performance you see a phenomenal outdoor activation area called play action plan you see the fan engagement zone, and I'm going to talk in a moment about tenant in and how thats progressing and the timing.

The opening of those tenants.

No one should interpret what has been done in a year has been is being easy.

And we have been and I have been very thankful for the.

Ingenuity Stick-to-it-ive Miss of our team. Our team has worked seven days, a week and tirelessly to get the destination to where it is today and we continue to have plans to advance our how we will do things in a very measured way inflation is real.

And so we're looking at how fast we move forward with the hotel Waterpark given significant price increases in commodities and materials prices in some cases and categories have been up 20% to 30% now no. One should walk away from this call, saying, Oh that means theyre going to delay or a push.

Back in a significant way the opening of the hotel and the Waterpark not the case, we're looking at when we buy certain packages of materials to ensure that we're maximizing the dollars we're going to spend and just as we did with the center for performance, you'll remember that that was an original.

Brick and mortar building in and we re imagine what that facility.

Facility could be and what it could look like and how it could create an architectural statement for the village and for the city and for the County, and frankly for the region. In this wonderful new dome complex that is by the way one of the largest in the country fabric domes that hosted already multiple events over and try them that weekend. Another big event. This.

Weekend, and then we're gonna start really rolling into the season of where an indoor facility becomes highly advantageous for a company that faces winters and rain and a lot of bad weather, but but my point here is we're now looking at some of the design work and the hotel Waterpark looking at how we value.

And here without compromising the experience we are reexamining every detail some things arent.

Arent necessary, some things can be changed or different materials. We have a team that has done that and has proven that we can save.

Money and we can create just as compelling and experience and I want to thank people like Carol Smith and her team.

For doing just that type of work and all of our contractors that worked so tirelessly to get the village to where it is today.

As a destination.

The Hall of Fame village had a phenomenal week as I said within trend, we welcomed tens of thousands of people to campus everyone was blown away everyone got to see incredibly compelling content.

I would tell you that the question I kept getting asked over and over how did you do this how did you do this in a.

A year you know we were here three months ago and it didn't look like any way that this was going to happen.

We had record setting attendance for noninterest events, if you tuned in on Fox and watch the U S. F. L playoffs and championships there were thousands of people in our stance.

And even though you know the gas prices are high and inflation is still there people comp people buy tickets people eat concessions people stay in hotels, we have been full.

On campus for events over the last couple of months and we're building the slate of events, even larger we announced the O Jayson Gladys Knight to hall of Fame bands coming too.

Canton, Ohio, where the O. J started you know they're banned in where they're trying to finish their last tour.

And most importantly, we're able to cater and created an experience that was very compelling for those large sized crowds proof cases, showing that as we grow we have the ability to offer world class service and immerse guests in.

In an environment that is amazing just like it showed up for Enshrinement week and beyond and before.

Tom Benson Hall of Fame Stadium, I want to talk about how we continue to monetize and grow the number of events that were hosting that.

We do a lot of things in this statement.

Some events, we own and we own every aspect of it from the planning to the selling.

Two the hosting and the servicing some events, we rent the stadium to vendors and we monetize through that kind of rent, but then we take percentages of ticket and concession and maybe even merchandise all of these types of events are by the way filling up our own hotel downtown Ah, It's a double tree. So there are more.

Multiple ways, which we're monetizing this and mitigating risk you know some events we want to take on some events are better served if other groups are running them in our stadium Usfl Championships was a good example of that where you had fox in the U S. F O coming in paying us for the stadium, giving us an opportunity.

To also have percentages of the concessions and the ticket fees and so on but you know being here for two weeks that was a lot of business for our company and a lot of revenue that was generated off of that women's football Alliance Championships. A three day Fatherhood Festival. These are all things that you know you're now starting to see.

Year over year growth in not only the event slate, but how these events performed.

And again, I'll reemphasize being on national televised tell.

Television for these types of events is incredibly meaningful for us it's important to drive things like sponsorship dollars, it's important to leverage national TV without having to pay for it for marketing hub, the destination and marketing of all of the other types of things that we're doing as a company it's <unk>.

Advertising that you just simply cannot pay for and so this physical location this large destination.

Stadium gives us that and we're looking forward to continuing that model as we start to host major events and the other assets that we have built and will continue to build sooner for performance is up as I promised to up and running.

Three days of events over and shrine that renting out that facility.

I'm, making a lot of money and generating revenue in its very first couple of days of existence.

It gives us it gives us the opportunity for that year round capacity, which we are so desperately needed.

We've started to successfully move business from other sports domes into our CFP Sporting leagues, we're now looking and hiring people to sell conventions and other large scale meetings and so this facility shows up really well and it's one of the accounting for this region and people are incredibly excited for it.

I talked about the double tree 80 hours are up year over year occupancy is up year over year. The hotel remains in the top 5% of.

Customer service within all Doubletree hotels.

That's an important statement, what we build has to be quality the assets have to be compelling. It's people that make the experience and so I get more excited when I see the 5% in the top 5% of customer service than I do with the occupancy and the ADR because if you're in the top 5% of service.

Those things take care of themselves. We are now proving out our synergy model here, which is why we're looking forward to our second onsite hotel every event. We have every meeting we have we're an official hotel for the Hall of Fame now the hall of Famers stayed at this hotel over the last week they had an.

Full time, the assets showed up well.

We hosted multiple private parties for the hall of Fame at the Doubletree multiple different ways to generate revenue in the synergy model that I've spoken about is incredible and being the official hotel for the pro Football Hall of Fame. They host events year round and it's just I'm thankful to Jim Porter and his team for the confidence they have.

Shown in us and having the ability to generate great experiences out of our hotel.

Let me shift to media.

The media vertical while its still its early stages has had several key wins.

We've hosted live events, we've had we've added branded content and we are a really cool emerging media company.

And adding partners that I think are going to be meaningful for us like J, Paul you know and the deal that we just did.

With.

<unk> to really produce interesting one of a kind content in our media group and I'll talk about a.

Better in just a moment for R.

Our our gaming division.

But you will have seen.

Many many shows now in development. Many shows are being produced and in many shows are now being put through distribution the perfect 10.

We have secured distribution and I think you're going to be very pleased with the results of that distribution and I'll leave it at that there's more to come the inspired pilot that we ran number one broadcast within the age group of 25 to 54 over that time period. It aired across 63 different market.

In the U S and we're now out looking to sell that in a much bigger way I talked about football having podcast. This is going to be an incredible way to enhance your knowledge of football and three grade host.

Football Heaven will have we've already secured and started filming with 18 phenomenal guests guests.

Guests that are going to blow you away, we've secured a new sponsor, which we will talk about in the future and.

And we've also continued to deepen how we view media we've sold multiple new shows that we haven't announced we'll be doing that in the future.

Were securing talent like Keegan, Michael key for Enshrinement, Our group is really expanding its capabilities and I'm proud of them and what they've done and then F. Ts we signed multiple partnership deals on the entities, including with the Pro Football Hall of Fame in a company called I got it but we've also hired our own NFC.

He developer and strategist I really continue to believe that digital collectibles done right with enhancements around them things that will really make them compelling entitlements that come with them will be a way in which fans engage.

In that type of media in the future and we want to be on the forefront of that.

Hired Rob Bourne at really high profile gaming executive in our gaming Division is really starting to take off.

Rob has started to execute I've appreciated his passion and his determination. He talks to me on a daily basis, we will not fail here as his words you will have seen that we were preparing to launch and continue to now talk about season, two of our hall of Fantasy League.

But you'll also have seen the adjustments we've made to make this an even more compelling and dynamic product.

We added three new teams D Denver mile highs, the Green Bay Winter Warriors.

New Jersey Boardwalk or is again fund whimsical the logos the names the markets. We've studied all of that whereas fantasy very popular.

Where can we give those guests an opportunity to engage with our product we're excited.

About that we did eliminate one team the Texas <unk>.

So I had to do that but maybe in the future you never know.

We have added more ways in which you can engage with this week last year, we realized that backing are sneaking a team. After the season started it was very limiting for our fans and guests to become a part of the league and enjoy everything we're doing we've added a free to play option their weekly.

Opportunities to engage and win prizes.

One thing that I'm excited about.

Fantasy is based on information and I have a lot of friends that do fantasy.

Aggregating several sources of information into one service, where you can pay a small fee and have access to the service will make you a better fantasy player. It will enable you to have access to information that you, so desperately need and making selections to your teams trades.

Drafts et cetera.

We have a better merchandise online store better quality merchandise, we have a better and more easily accessible.

<unk> and multiple apps that you can engage with and enjoy the game and we added them in Smith as our commissioner and what Youre going to find this year is the promise of and the execution of more interaction with our Gms and our commission or these are all passionate folks Rob has laid out a plan.

I think it's going to be.

Very compelling for them and very exciting for you. This is a one of a kind week. This is a national fantasy football League, but is now adding multiple ways for you to engage so go out their download the app get going you're going to have the time of your life and then watch our live draft. This Sunday.

We will be doing this on Sirius XM radio Fantasy Sports Channel 87 starts at four o'clock, we will be having some surprise guests I'm one of them. That's not the reason why your tuna and you tune in for people, who know what they're talking about and you get really excited about what this league is going to represent for us and the mulch.

People ways in which we intend to monetize and grow revenue through this league and its unique offering.

Also in our gaming Division.

Thing that's probably been closely followed most closely followed the sports betting yeah, and what I Hope you will have seen as both of our applications retail betting and mobile betting had been submitted to the Ohio Casino Control Commission. We have stayed in very close contact and communication with them.

We've hired outside consulting experts that really give us.

The right advice on the best chance as we're going through the application process, which is a cumbersome, but you know one that ensures that Ohio has the right companies.

In control or in the seat of sports betting on behalf of of the state and I think Ohio has done it right and we're proud to say that we are anxiously awaiting.

Our approvals, but as we are awaiting we're watching things like in July .

Tayo setting records for gaming for the casinos in the <unk> $210 million.

Unbelievable, how people are enhancing and engaging with sports now through better and we're wanting to bring new and different opportunities for our guests to do that restroom interactive.

<unk> is a high quality I know Richard Swartz. He is committed to he is the CEO . He is a high quality individual committed to delivering experiences immersive experience in C&I. The moment, we spoke I knew we were aligned and I know, we can create something fantastic together at the village and then you will have seen.

Our new mobile betting partner.

Better.

Joey and a guy by the name of J, Paul you might have heard of them.

Millions of followers around the world.

This is a guy and two gentlemen that I had the chance to interact with they get it they get where the future is going they get where are the future consumers and sports betters would like to engage our micro betting is fun, it's allowing our fans to enhance the way there and you also gave you all.

Sports not just football they are forward looking and we see a ton of synergies between our company and there is by the way Jacobs starting a new media show. He has been a social media influencer for a long time, it's the synergy that was so exciting to me and our team we think we can create.

Great revenue opportunities and great experiences for our guests in at least two of our business verticals.

In terms of gaming and media and who knows maybe some onsite presence at the village stay tuned.

Let me turn it to partnerships and sponsorships I've talked about strategically maximizing sponsor dollars yeah.

You know so you were growing our events like you now see the assets are growing media is growing.

Gaming is growing and so it allows us to through our partnership with Allied sports through our team on the ground by the way I think we've hired one of the best in the business as our executive Vice President of sales and marketing Big Greg of it. He is putting together a team and we already have a great team in place and he's.

Really laser focused now on monetizing the great progress the company has made.

You're selling partnerships across all our business verticals and with that progress specifically opening assets at the village.

And seeing real construction and events happening on site and media content being distributed we feel like that we can leverage that and maximize the dollars by category that we're seeing in from sponsorship point of view.

And so we're excited about where this is going to go now let me address one thing.

From a sponsorship point of view, but I know many of you want to know more about and that's our relationship with Johnson controls and the sponsorship there as we've talked about we are in dispute with Johnson controls predominantly over the services agreement we had in place, but also timing of.

Building assets in obtaining construction lending.

We believe they are in breach of their obligation to us and they have said that about us as well to them.

Here's where it stands.

It's been slow to get the Johnson controls team and our team to move forward, but we are moving forward.

We have mediation plan in the very near term this is non binding.

And if that mediation is unsuccessful, we will then and fully intend to pursue the next step and binding arbitration in the state of Ohio.

We cannot.

Simply accept that this relationship.

As in breach we are not in breach we do not feel we are in breach and so we have an obligation to you as shareholders to continue to pursue this to rectify the situation. However in the meantime, we're also in parallel.

Working with Johnson controls to better define the products and services.

They offer and how it fits into what we are building and the operation that were running.

Some of which those types of things. We're now seeing we can provide and can source in a more cost effective manner with the same quality level of course, but through different service providers and so I can assure you that the process. The dispute resolution process is underway.

We will pursue it.

And we will have a resolution.

So that's the update that I would have for there and I'm going to stop for a moment now and turn it over to Ben Li to give us a financial overview of the company and then I'll come back and talk about some of the other things that we're progressing and some updates that you can look forward to in the future So Ben over to you.

Thanks, Mike and good morning, everyone moving into results and.

As Dan mentioned earlier, we filed our second quarter 2022 Form 10-Q post market yesterday that document is available on the SEC website as well as our Investor Relations site.

Second quarter total revenue was $2 7 million, which represents an increase of 14% from the same period in the prior year and an increase of 27% on a linked quarter.

Revenue growth was primarily driven by higher event revenue that Tom Benson Holidaying Stadium and significant increases in operating revenue at our Doubletree Hotel.

While sponsorship revenue was down from the prior year due to the previously disclosed dispute with Johnson controls as Mike just discussed.

Revenue growth and diversification have improved and we continued to add new partners, including Molson Coors and sugar down as previously announced.

Second quarter, adjusted EBITDA was minus $6 $1 million.

The company posted a net loss of $9 2 million, partially offset by the change in the fair value of our warrant liabilities, which increased by $2 4 million.

Under U S. GAAP the fair value of these liabilities on a decline in income will improve if the companys stock price declines.

We had experienced the opposite effects when our stock price is higher.

While this line in our financial statements will vary based on the company's stock price. It does not impact our cash flow from operations cash and cash equivalents or liquidity for all prior and future periods.

Moving to the balance sheet, we finished the quarter with a cash balance of approximately $18 million compared to approximately $13 million at the end of the first quarter.

Both values are inclusive of our restricted cash balances.

The company's primary usage of cash continues to be driven by construction expenditures, but approximately $20 million spent during the second quarter.

This cash usage was offset by proceeds obtained from various financing instruments. During the quarter. In addition to cash flow from operations and the sale of common stock under the ATM.

Our net debt balance increased to $123 million compared to $104 million at the end of the first quarter.

The increase in notes payable is primarily due to increased principal amounts related to a $10 $5 million bridge loan from th capital of $4 million loan from Midwest lender and a $2 $5 million loan from start community Foundation.

The bridge loan and allowed the company to pause the at the money equity offering for much of the current quarter and shows the company's largest shareholder th capital continues to invest in the company.

In addition, the financial support provided by the local community Foundation.

Next our common goal of driving significant economic impact into the local community.

These dollars will be used to fund destination infrastructure and site work both areas of traditional lenders do not typically provide financing for it.

I'd also like to give a bit more detail on financing as we've continued to make significant progress this quarter and.

In early July the company closed on $33 $4 million in pace financing supported by our Premier asset Tom Benson Holophane Stadium.

We've been laser focused on building a capital structure that allows the company to reach its long term financial goals.

So far we've invested nearly $90 million of company equity into building phase III assets and since December 31 21.

We've raised approximately $55 million and additional debt financing to round out the capital stack.

But even more importantly, and this is critical we've extended debt maturities by five years to a weighted average maturity of 10 eight years and through our pragmatic approach. We have maintained our weighted average interest rate of only seven 4%, even as credit markets have tightened as evidenced by the rising interest rate environment.

As it relates to guidance, we are revising our fiscal 2022 guidance with expected full year revenue in the low $20 million range and an adjusted EBITDA loss of approximately $20 million.

This reduction in full year guidance is primarily the result of a lower than expected sponsorship revenue as Mike discussed and timing delays in expected media and lease revenue.

While lower than our previously stated guidance, we still expect significant revenue growth in the second half of 2022.

Continuing on our upward trajectory as we add resources and work to operationalize our phase two assets.

We remain diligent and balancing operating expenses, while investing in the future across all three of our business verticals.

Throughout the remainder of the year, we expect to maintain our current construction spend run rate in the mid teens millions of dollars per quarter.

Longer term, we continue to target $150 million of annual run rate revenue and approximately $50 million of annual run rate adjusted EBITDA across the key pillars.

Pillars again, our destination based assets, our media platforms and our gaming vertical.

Revenue and EBITDA generation will be diversified across multiple screens with each one driving synergies to support the exciting ecosystem, we're working so hard to build.

In closing the team continues to execute on our financial priorities that we've communicated we also remain extremely committed to maintaining a balance sheet that provides financial flexibility through our growth phase to deliver long term shareholder value.

Finally, and as you've come to expect we will continue to provide transparent and timely updates to our shareholders as we move ahead.

Now I'll turn it back to Mike who will provide some closing comments Mike.

Thank you Ben and thanks for the great job.

You're doing a <unk>.

Ben has really supported and help lead so many efforts to conclusion, so I'm grateful for him and his partnership.

One thing I, just want to address a little bit off script, you heard Ben talk about some of the loans that we have been bringing in.

And there's been lots of discussion about well it feels like.

The Hall of Fame resort and Entertainment company is just adding debt.

Let me remind everyone its been well over a year ago, where I talked about the need to develop a very balanced capital stack because we built assets as we invested in media as we invested in our gaming Division.

This may or may not be something that people will recall, we have invested over $100 million of equity in building all of those things that's not that that's equity okay.

You have to invest equity in order to get access to the right type of debt to round out your capital stack, we have been incredibly creative around things like pace lending that is longer term that 25 years.

Lower interest rate debt to ensure the long term success of this company. So before anyone walks away from this call thinking all they're doing is just adding more debt, which is going to put at risk. The company's success I'd just like to remind you. This is going according to plan in the capital stack for each asset.

Each media asset for each gaming asset requires an investment of equity first.

And then you start layering in these other vehicles I'd also tell you that the approval of loans from the city from the community.

And from the County in General really show the confidence that are surrounding area community has in us and the belief that they have to help support this in order to have the economic impact that we're projecting and are already having on the community in the REIT.

And so just a couple of things to keep in mind when people start talking about debt is bad debt is good and that is necessary. It's the right types of debt that we've been focused on just in time to ensure we're not overpaying for debt or paying interest too soon.

We entered this year with a lot of goals some of which were very basic maintaining our construction schedule I think we've done a good job of that building our media pipeline, you're seeing that right now.

<unk>, our gaming vertical and improving our hall of Fantasy League experience sports betting applications in <unk>.

Gaming focus with Rob being hired Hauler Fantasy League I'm incredibly excited about this experience, we really listened and evolved it this year and we're getting ready to launch it and it's going to be successful.

One of the things, though that it was important to me and I know to you. We are really in the early stages of monetizing assets and creating new content.

How do we drive revenue.

Shifting from this building and construction mindset.

This monetization of.

The assets in <unk>.

And the content that we're creating.

We are.

Then that we're laser focused on generating revenue.

Would it not been for the Johnson controls a.

Non recognition of the revenue this past quarter.

We would have well exceeded and we did exceed already which means we're replacing that revenue coming in from that one sponsor again sponsor not lender not investor.

Not shareholder, but a sponsor we replace that revenue and we've grown it and so that should give everyone confidence that we are really focused on continuing to monetize and grow our assets.

We are completing.

And aligning the financial needs in the structuring of financing in a way that supports the long term needs of our company and we're doing it without putting at risk anything that's already been done and invested and so it's going a little slower the markets are a little more volatile we're having meetings.

With key banks now, we're hoping to be able to announce in the near future closing of more debt the right type of debt and so it's a really important note to make to all of US that this is moving according to plan, but it's being balanced against the equity we've already invested.

One of the things that I had the privilege of doing over in <unk> weekend was meeting with the.

The Hall of Fame Board, Roger Goodell, Jerry Jones, and the meeting several owners where in that meeting.

And I presented to them our strategy our plan and our progress.

All of them commented about the progress that has been made is incredibly exciting.

Needed and one that we very much look forward to seeing the success in the long term.

Commissioner Goodell commented about revenue.

<unk> talked about how he was pleased with how everything has been moving forward and so we stay in close contact with key individuals from the NFL from the pro Football Hall of Fame to ensure that we can continue to grow business with them and align and partner with them and synergize with them in as many ways as possible.

We're executing across adding new sponsorships youre seeing that the number of events are growing the number of nationally televised events continue to grow that free advertising that exposure for our company and for our campus.

And then lifting up the.

The play action Plaza area, we have one of our ride attraction is up and running the forward pass.

We have others that we have planned and I'll talk about the timing of those in just a few moments the fan engagement zone.

Core and shell for for that retail area is.

Is complete or will be complete in the very near term and tenants are already starting in some cases their fit out I'll talk about the timing of that right now.

And just as important achieving our financial objectives.

While we were reducing our our 2022 guidance, we're not adjusting our long term model and a lot of this I'll just remind you is timing.

<unk>.

Supply chain issues timing of financing timing of construction, but I have complete confidence that youre going to see quarter over quarter year over growth year over year growth for multiple years to come.

The village itself major sporting events.

We component, we cut ribbon on our sports complex.

Adding three new fields, a lot of amenities enhancing and expanding that experience was key to us and now we're bringing an even larger groups even bigger camps. This as a driver in attendance driver for all of our other assets for people to come have dinner.

EMEA will play games enjoy a ride so we really think that this over Q3 and Q4 is going to continue to grow for us.

Along with attendance growth and things like tenant leases right attractions event revenue those are all ways in which this destination is coming to life sale of media content is really important the breath of media, we signed multiple new partnership deals that we Havent announced.

We've sold content for distribution and we have multiple new shows in development. So that is a.

A very very good progress in terms of media I spoke about gaming, we're really hopeful that in the near term or over the next quarter or two we will get a response from the Ohio Casino Control Commission.

Mobile will be ready to launch.

As quickly as the legalized licensing.

The legalized sports betting is in place, they're saying Jan one of 23 and I'll talk about our retail location here now.

Let me go through that.

The tentative process because this is a big driver of revenue for us and I've had a lot of questions you've built boxes, but we don't see a lot of things open things will be opening okay. Shoeless will open in Q4 of this year Bruce Chadel top golf Q4 of this year build a bear will open in Q3 of this year visit Canton will open.

In Q3 of this year visit canton being on site with strategic for US having the visitor Bureau, they're seeing all the great things, we're doing brain storming with us becoming almost a guest service amenity for us really leveraging their contacts and the work they're doing to bring in visitation tourism into the city into the.

County is important and we wanted to physical location for them on site.

<unk> cookies, Isaac Bruce you know another hall of Famer Q4 of this year the sports book because of the food operations. The sport book integration, we're looking at Q2 of 'twenty three.

But with a lot of education, and a lot of customer acquisition well before that so that when we're open we're running and we're ready to go.

Our center for excellence, we have tenant it out the third floor of that building.

Those tenants are expecting to be up and operational are paying rent to us in Q4 of this year. Starbucks is now open on the first floor, we have very good line of sight.

On another first for a tenant a tenant that will be a.

And interesting and compelling experience and I'll just leave it at that and we hope to announce something there very soon.

And then play action Plaza, the Red Zone, our Ferris wheel finally will be moving construction on that we didn't want to start before and try them and have too much disruption, but we look forward to opening that in Q4 of this year and most importantly, enhancing with a lot of programming and our fan engagement zone and play action Plaza.

Ways in which our guests can come out and enjoy the destination without some of these retail boxes being opened just yet.

Our relationship with the Pro Football Hall of Fame continues to grow and strengthen.

As we noted before we took over the concert for legends journey. This year, but we are really focused on packaging and working with the hall of fame to create a bigger experience for our guests to enjoy stadium tours combine attraction inside the stadium again multiple things for our guests to do when they come.

On site now this is not just a couple of hour visit this can be an all day thing maybe a day and a half thing as we at our hotel and our Waterpark and break break ground and construction on them.

Summer, we're hopeful that by the end of next year in early 'twenty for those two assets will be up and running.

I'll just end by saying.

What you are hopefully seeing.

He has a team that has created.

Has created and is committed to creating an exceptional experience across every single platform and every business vertical that we have I could not be more proud of what they are doing I know I said that but it's just true and our goal of honoring the past and inspiring the future is alive and well.

Along with driving synergies throughout all of our company when one business verticals is creating opportunity we look at it across the other two as well.

Sports betting we think is a game changer for us and our partnerships with rush and better we could not have imagined to.

Partner is more aligned with what we're doing in creating synergy for us at our destination through gaming and in our media.

And I'll just the last thing I'll say and I've said this in some of my posts.

And explain why you know you just have to trust. The process here. We are a company that is committed to excellence, where a company committed to long term and midterm value.

This is never going to change.

We'd like to do things quicker, we want to do things great and the process allows us to do that I couldnt be more proud of the team I. Thank all of you as shareholders and investors hopefully we've answered a lot of questions. I know this was a bit longer call I felt it was important for you to hear directly from me on some of these broader key.

Issues and just the progress, we're making and it's exciting for me every single day, it changes and evolves and now I'll stop and turn.

Turn it back over to N and open this up for questions. Thank you.

Okay.

Thank you Mike do we have any questions from anyone on the call.

At this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two to remove your question from the queue. The participants using speaker equipment and may be necessary. So you pick up your handset before pressing the star.

One moment, while we pull for questions.

Our first question comes from the line of Jackman day or day with Maxim Group. You May proceed with your question.

Great. Good morning, guys I appreciate all the added color.

Michael I'll start with your question.

Did you hear the billings continued to advance.

You noted the record of 10 minutes.

How do you see.

This level, maybe even look into the summer of next year.

And maybe.

Maybe play a role in that and is there any other color.

Okay.

Yeah. Thanks, Jack I would say that if you look at from last year to this year the growth in our events has been exponential.

And we now have a destination that is people claim for <unk> people came for women's football Championships and that's been certainly a trend that you see that the the excitement and the juices flowing.

With ideas I can't tell you the number of conversations with talent booking agents with with sporting event.

Operators that we're while we have to be here soon.

<unk>, what you've created skiing, how easy it is and the amenities that you have to offer so I'm very excited about next year. We're in the process of booking right now.

As you know Colin gets booked a year or even sometimes multiple years out we're still suffering a little bit with COVID-19 in terms of hangover with concerts and events that had to be canceled for a couple of years. So they are still trying to course correct those but I think the event slate for next year is going to be very strong.

If this year was an indicator and the growth that we saw I expect that same kind of growth out of our team in and out of our partners. We have others that are helping agents that are helping book talent for us now and as we open more assets. It just becomes such a compelling destination I think the the comment around.

The quality of experience with these artists and that these athletes are having.

Is really unparalleled and I'm proud of that and what we're creating and so it should be.

Exciting for our guests and for our fans next year, even more so than this year I think you asked a question about <unk>, we really want to grow in ftes from just being collectible to being usable.

And you're seeing this across sports in general you know tickets, becoming enough qis two events, but I think entitlements, we have an opportunity to create and ftes that will give one of a kind experiences not only one of a kind collectible pieces digital pieces, but one of a kind experiences that.

Our attached to those and so while I won't talk a lot about that on this call I do think there is going to be opportunity for their for us there.

That's great and then maybe a question for Ben.

The outlook will target might be.

My line was a.

A little bit.

Got it.

Scott since then.

I did hear your long term guidance remains intact.

Horton.

As a reminder, the point.

Yeah sure thing glad to revisit that so as it relates to guidance for 'twenty two.

We're expecting full year revenue in the low $20 million range and adjusted EBITDA loss of approximately $20 million.

Again, we talked about we reduce that primarily due to timing changes for sponsorship I'm, sorry for media and lease revenue.

We're still on that upward trajectory seen quarter over quarter growth that we expect a pretty strong second half year as you can imagine.

In terms of construction spend we expect to maintain right where he has been in the past couple of quarters.

The run rate of around the mid teens of millions of dollars for the next couple of quarters.

Okay, Great that's really helpful.

And then Michael just one more.

The second season of the Hall of Fame.

Yes.

The near term event.

<unk> got launched.

Maybe I hurried up slightly.

Monetization schemes are planned.

Just talk to that a bit further.

Yeah, I think look we realized that we had a brand new model.

Our franchise model that was unfamiliar to the fantasy world.

It was I think it was very popular I think those that play it had a great time, and we learned a whole bunch.

Engagement is important these fantasy expert Gms the commissioner.

Being meaningfully engaged with our participants really changes.

The game for them right they get to hear from people who are living in this world and celebrities.

In the space and then also one of the best ever take the ball from from the quarterback and gained meaningful yards and make an impact on the game and Emmitt Smith and you're already seeing more engagement than last year I think Rob has done a good job at really laying out a plan of execution and engagement that will be important.

For our guests and our fans to enjoy.

But we wanted to be able to have people come in and out of the season last year you were in your back to the team and that was sort of how the league work Nishu. This year you can still do that.

You can still come in selected team you could build your own team.

Can play on a weekly basis and have chances to win.

Prices on a weekly basis, but the one thing that was really interesting to me is the access to information and our ability to aggregate from multiple sources multiple feeds if you will.

Fantasy feeds into one and give easy access to information on a subscription based model I think is a really important game changer for those that want to play fantasy. So you can come in if you're a novice and say hey, I just wanted to follow a team.

Thats in place and that G. M. I really believe will create a great team and potentially win the league like the Atlanta Hot Wings did last year Atlanta as coming back this year.

I want to create my own team of compete against those teams.

I want to have access to information.

I want to have it in a way in which I can engage with the folks that are running this week and subject matter experts that can really help me we know that fantasy players typically play in multiple inks, but we want to be able to have them in ours and provide the right level of experience. So I think this is a very very <unk>.

Crescive model.

We'll look to enhance with.

Podcast will look to enhance with.

Sponsorships, so that the opportunity to monetize this week for US I think comes in four or five different ways, but again, if you create great experiences people will find them and we're going to do a lot more marketing around them. This year, so that people understand.

How great this can be and how how fun it can be and as they engage with it I think they're going to find it to be both of those things.

Great really appreciate all the color.

Hello.

Absolutely Thanks Jack.

Ladies and gentlemen, we have reached the end of today's question and answer session I would like to turn the call back over to Andy <unk> for closing remarks.

Thank you.

Closing I just want to say on behalf of the entire team at the hall of Famers are an entertainment company extending just a very sincere. Thank you to our shareholders our investors and our partners.

Really appreciate your continued support and belief in our game plan. So thank you for being with US today I Hope you have a wonderful Friday and a great weekend ahead.

This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation go the rest of them.

[music].