Hall of Fame Resort & Entertainment Company

Good morning, and welcome to the Hall of Fame Resort and Entertainment Company's third quarter 2021 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. I will now turn the conference over to Anne Grafis, Executive Vice President of Public Affairs.

Good morning, and thank you for joining us for our third quarter 2021 earnings conference call. Our latest press release, supplemental slides, and 10Q were posted yesterday evening after market hours. These documents can be found in the investor relations section of our website at hosreco.com. After this brief introduction, Michael Crawford, our president and CEO, will give an overview of the quarter's results and an update on our fiscal year priorities. Jason Crum, our CFO, will then provide analysis of the quarter's financial results an update on our fiscal 2021 and fiscal 2022 financial outlooks. During today's 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 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 directly. It's now my pleasure to turn the call over to Michael Crawford.

Thank you, Anne. Good morning, everybody. I think it's only fitting that we start this call by recognizing that it's Veterans Day today. My father, my grandfathers all served in the military. And while we get wrapped up in our day-to-day grind, for me, it's very personal to recognize the individuals that have served and are still serving to keep the freedoms that we cherish so much. We wouldn't be here today doing the things we're doing creating this company, creating great experiences, and having opportunities to talk about them like we're getting ready to do without the service of these men and women. So I just want to say a very heartfelt thank you on this Veterans Day. There's been a lot going on in this past quarter. Probably the biggest thing to talk about is the successful enshrinement events, concerts, all of the happenings around that weekend. the great NFL football game that kicked off the preseason between the Cowboys and the Steelers, the viewership for all of those events were at all-time highs for the last several years. I mean, we had well over 100,000 people on campus, and it really does get me excited that as we continue to add more of those types of events, that the synergies between our business units, media, gaming, sports, and onsite asset creation are really going to drive great value for our shareholders. We also have had a lot of progress on construction. And for those of you who have continued to monitor on our website, our construction cam, I hope you've seen the progress that I'm talking about and we'll talk about in just a moment. Before I get into the business of Q3, I do believe that there are three things that I really wanted to talk a little bit more deeply about, things that we've heard from analysts and from our investors that are incredibly important to you as it relates to our company. And the first one probably is not going to be a surprise. Where do we stand with construction financing? Well, We've done many things. Um, and as you've seen recently, we announced signing a term sheet with Erie bank, uh, for the constellation center for excellence. That was an important domino, um, because it allows others to fall and it unlocks a lot of public and private financing that we also have term sheets around. And so the magnitude of that is exponentially growing our capabilities and our cap stack to the tune of millions of dollars. We've been active in terms of conversations with other lenders. When we have continued to build assets and had the opportunity to talk through the business thesis to these investors, or sorry, these lenders, they get very excited. And always our eye on lowering the cost of debt, maximizing the potential of our cap stack, and really leveraging this concept that I keep referring to as just-in-time financing. The world is in a incredibly difficult place, and I think it's important that we acknowledge that. The supply chain issue is real for us, just as it's real for many other companies around the world. You see efforts through infrastructure planning to try to improve supply chain. We have been victimized by that even in Q3, and just a few small examples, but the steel for our fan engagement zone, the retail promenade that we've talked about, was due to arrive to us in May of this year. We received it in September. The mesh video wall that is on the side of Constellation Center for Excellence that faces Tom Benson Hall of Fame Stadium, if you tuned in to any of the events over enshrinement weekend, you saw a quarter of that wall up and operating. The rest of it hung up in the supply chain, on trucks, on trains, still trying to get to us. So we have been overcoming the supply chain challenges just as we've been overcoming some of the challenges with hiring and other supplies and equipment that we need to effectively develop. The good news, again, is our team has been very nimble. We have been actively planning for those types of challenges, and I think we've done a good job of overcoming them. And I'll talk about another example of that in just a moment. As it relates to other financing vehicles, I'm sure you would have seen our filing for an at-the-market offering. I talked about earlier in the year not having to need to raise additional equity. This ATM, as it's referred to, simply allows us greater flexibility as a company. Most companies file for this type of flexibility. And at the end of the day, it also allows us to take advantage of timing and pricing so that if we want to raise additional equity, we have that ability to do so. I think as Jason talks about how we've progressed along that front, you'll quickly realize our goal is to be very pragmatic. We haven't gone deep on that vehicle yet, and we will be very pragmatic going forward in terms of how we use that. The material costs for construction are continuing to rise. And so we're monitoring that very closely. We've done construction studies and surveys, uh, things that we can impact in terms of design and redesign we are doing. And as an example of that, our center for performance, which by the way, right now has already broken ground. And we're incredibly excited to start the foundations of that in Q4. and hopefully have that facility up and running prior to enshrinement of 22 we redesigned that entire facility why was that important number one it allowed us to make a really unique and different architectural statement at the campus in campton which we're excited about and we'll start to show images of that in the very near term but it's a dome and you know gives us year-round capacity for sporting events and non-sporting events that allows us to draw attendance to the destination 365 days out of the year. But why that was important was while the cost of steel and lumber and everything else continues to escalate, the redesign of that facility allowed us to offset a significant portion of those incremental costs for other buildings, like our football-themed water park, like our on-site tapestry hotel. So we have tried to be very smart about minimizing the impact of costs and supply chain management. And I think our team has done a great job and I want to congratulate them for that. The last thing I'd say on construction financing and just the experience I've had in this over the years is even if you were able to take on all of the debt that you wanted to right now, it wouldn't be the smartest decision to make. You'd be paying interest and fees on that debt. And as I talked about the supply chain, you would have a hard time spending that money all at the same time. And so this just in time financing concept allows us to be smart about taking that when we need it to continue with construction on time so that we can start to drive revenue out of those assets and the synergies out of those assets that we've talked about. So really good progress on construction financing, and I'm optimistic that that in Q4 and Q1 of next year, we'll have other financing vehicles that we can talk about that allows us to continue with construction as we've planned. The second point that I wanted to address is one that I know is continuing to sort of rumble around out in the stratosphere here, which is the topic of sports betting. As you know, Ohio is not legalized for sports betting today. I'm sure many of you have tracked this There is legislation that has been working its way around the Statehouse in Columbus, and we stay very closely connected to that. I've said that before. We have consultants that advise us on this. We ensure that we are positioned well for the types of licenses that have been talked about in the bill that is being passed around between the Senate and the House. The two biggest components for us that are very exciting and that will allow us to drive, we believe, significant fan engagement experience and also revenue to our company are, number one, having an on-site presence, meaning an on-site sports betting, sports bar facility that will really enhance and engage guests and fans coming to the destination in Canton, Ohio. Number two, allowing ourselves to have a mobile license that will extend both the opportunity for our fans and our brand to engage with sports betting while they're not on campus in Canton. And so both of those are things that we have been building plans around. There is nothing to announce. I will continue to say we stay informed. We talk to sports betting companies. There is active interest in us as a company and a brand in terms of a partnership. But as we have updates, we will make sure that we make those public. And we do believe that it will enhance the experience and drive revenue for our shareholders. The last topic before I go into Q3 is the change in leadership at the Hall of Fame, Professional Football Hall of Fame. We've been asked multiple times, how does that impact our company as the publicly traded company? And here's the answer that I give. I think it impacts us in a very positive way. The new leadership, Jim Porter, as president of the Hall of Fame, I've known Jim for many years. I consider Jim a friend. Jim is a person of integrity, and we're already having incredibly productive conversations around extending our partnership as we've talked about in the past. This enables us to create integrated experiences with the Pro Football Hall of Fame, This allows us to also access, you know, the types of materials, intellectual property that we continue to need to drive business within our gaming division, our media division, and of course, at our theme destination resort in Canton, Ohio. We are two separate legal entities. And so the Pro Football Hall of Fame does have representation on the board of the Hall of Fame Resort and Entertainment Company. They are a significant shareholder of the company. And so in their interest lies our interest. We are completely aligned with how we continue to grow as a company. They're there to support us, and we're there to support them. And so that leadership change I took very positively, and we're incredibly excited about what the future represents. So I want to make sure everybody understands that that impact net-net is a positive for us going forward. When we started this year, we stated some very clear goals. construction financing and maintaining our construction schedule, getting into the media space in a significant way, launching our gaming division and making sure that we were able to stand up a one-of-a-kind unique gaming experience, and ensuring our integrated business model, which we have already started to show having success is something that we will be able to build upon and drive great value around for our shareholders. To that end, when I talk about our gaming division, we're really starting to ramp up our efforts there. You'll recall that this past quarter we signed a deal with Esports Entertainment Group, and Grant Johnson is a good friend, the CEO of that company. I think very highly of them and their capabilities there. So esports will become a big component of what we do into 22. Sports betting we've talked about in our fantasy league, I'll talk about in a moment. I feel like we need to have now the right leader in place to lead that division for us. So we have started and are continuing to conduct a search, and I'm hopeful that we will find the right person that will really wake up every day thinking about new business development, synergy opportunities, and how to continue to leverage esports. gaming as a potential growth for our business, but also a really good way to engage our fans and guests, both onsite and offsite. And then lastly, we want to make sure that as we continue to create the different business verticals, that synergy, as I talked about, remains at the heart of everything we do. And so I'll give you some examples of that. I think Q3 for us really started to frame in our minds how powerful this synergistic model can be between the business units. We've achieved a lot of that already, which has driven great results from a fan perspective, a guest perspective, and also a revenue perspective and allows us to continue to grow revenue quarter over quarter and now year over year. Before I get into the specific business verticals for Q3, You know, again, an example of that synergy that I just referenced. We started the second season of our NFL Alumni Academy. This is a developmental academy for kids that just didn't make the last cut of an NFL franchise team. Exciting for me to continue to help them realize their dreams. Our motto, honor the past, inspire the future, certainly inspiring these kids, training these kids, giving them the development that they need to realize their dreams to get into the NFL. But more importantly for us as a company, those kids stay in our onsite or our offsite hotel, our Doubletree Hotel downtown. So it drives synergy from a revenue perspective there. It allowed us to sign a partnership with Whistle Studios to produce an original docu-series around the growth and the development, the stories of these kids, these coaches, as they're being called up to the NFL. And it allows us to have a greater connectivity to the NFL itself. We've had several players called up already this season. And, in fact, excitingly enough, two weeks ago, one of our academy individuals was starting for the New Orleans Saints on a Monday night football game. And we've had others this year as well and last year. So that's just a great example of the synergy that we can take advantage of and create uplift from a revenue perspective. and from all of our business verticals. Let me talk about destination-based assets. As you know, we've had our Hilton Doubletree Hotel in downtown Canton for one year now. In fact, just this week, we celebrated the one-year anniversary. One year of a very difficult environment during COVID, and yet, month over month, occupancy, rev par, have continued to grow. And this is the premier asset, I believe, within our county that really is now starting to gain recognition, not only from a can we fill it with our own events, like our youth sporting events, concerts, enshrinement, et cetera, but now business travel is starting to uptick as well, and we're starting to take advantage of that. This business is very tricky right now, and as you see other industry leaders starting to report, weekend business, leisure travel is coming back strong, business travel is coming back slowly. hard to predict right now the impact of COVID and how long COVID has continued to hang on, what that's done to the mental aspect of travel. But here's the thing that is very gratifying for us. The team there has done a great job. They have an entrepreneurial mindset. They're selling every day and they're taking advantage of other opportunities to really grow that business. And you can imagine as we start the development of our onsite tapestry hotel, which, by the way, I was just out in Las Vegas and finalizing the design of, which is going to be a fantastic new asset for us, we can take even more advantage of on-site activities and leverage them into our own hotel, creating uplift from a revenue perspective there as well. We finished our Constellation Center for Excellence. We received our Certificate of Occupancy. We are going to start moving tenants into that facility starting in Q4. We are going to start programming into that facility in uh over the next month or so um this is a facility that has a great ted talk slash what in football terms we would refer to as a chalk talk room the technology capabilities inside of that room allow us to host smaller intimate events but to grow those even bigger and have the connectivity between that room and our two jumbotrons in the tom benson hall of fame stadium so that we could do things like movie premieres or big events where you want to address larger crowds. And so I'm very excited about what that building represents for us as the asset that we've just completed. The Tom Benson Hall of Fame Stadium, I think you know we've completed now the West End Zone Jumbotron there. Again, a really fun and engaging environment we've created with our East End Zone fan area. And the jumbotron we placed there. We are well underway with our fan engagement zone. This is the retail promenade. Hopefully you've seen some of that on our webcams, our construction cam, and some of the updates that we've put out. An amazing new area that will be open by mid-July next year. In time for enshrinement, you've hopefully also seen some of the fantastic concepts that we've signed deals with there. not only hosting an esports Helix Complex, a Shula's one-of-a-kind restaurant there, the opportunity to have, you know, Topgolf, Brew Kettle, a lot of concepts that are going to really engage our fans from an entertainment perspective, but from a food and beverage perspective as well. That should be enclosed. Those facilities should be enclosed by the end of this year with work then progressing through the winter on the interiors of to then open, as I said, mid next year. The other thing I get very excited about, which we haven't talked a lot about, is the expansion of our Hall of Fame Village Sports Complex. Again, we host hundreds of thousands of both adult and youth sporting events at this complex every year. The expansion does two things. Number one, it adds additional amenities, ticket sales amenities, concession amenities, coach and athlete amenities that allow us to expand the offering there and really engage in a world-class way with those coming. That also drives revenue for us. The second way that, of course, we're excited about is the opportunity to expand capacity. We have had significant demand and, in fact, demand that we've had to share with surrounding area fields and facilities, which is not a bad thing. but that we haven't been able to capture on site. Adding additional fields allows us already, and we're booking bigger events next year, more people on campus, more people staying in our hotels, more people eating in our restaurants and having fun in our entertainment venues, significant uplift in revenue opportunity there as well. I talked about Tom Benson Hall of Fame Stadium. From an events point of view, we're hosting the Ohio State Football Championships this We have the division three college football championship we're hosting there. You would have seen the announcement of ASM global. This is a very important step for us. ASM is one of the best event booking companies from my perspective in the United States. And so we have a big event agenda for 22 and beyond, and we're excited to get them going and they are all already going for us to really, get those events, festivals, concerts, other things lined up. Moving on to media, media has had a lot of progress in Q3. Some of the existing projects that I've already spoken about, our NFL Alumni Academy is in production with Whistle Studios. We're looking forward to both short-form and long-form content being distributed. We've had several players called up. These are real life stories that I think our fans are going to be excited to watch. And we couldn't be more pleased with the progress that the Alumni Academy has allowed for onsite engagement, hotel stays, studio and media events. And so that is well under production. Inspired was another project that we spoke briefly about before, but NFL athletes doing great things in their community. And again, we'll be in production later this year with a goal of finalizing and distributing to be on air in 2022. I think this really encapsulates the kinds of projects from a media perspective that we want to do heartfelt stories that inspire others to do great things, leveraging our access to intellectual property and athletes that other companies don't have access to. And so a project that we're looking forward to in 22 coming forward, um, inspiring people, and also again, driving that revenue and potential synergy with our other business units. I've talked to the perfect 10 project in the past. I was fortunate enough to be a part of watching the production of this happening over the last couple of months. Uh, we looked in production, uh, towards the end of this year. and develop this documentary for distribution in 22. So a lot of exciting things in 22 from a media perspective, along with NFTs, the non-fungible tokens. We believe that this medium will continue to grow. We were early to the party. We have had success there. Athletes continue to sign with us. We haven't announced new athletes. We have sort of reframed our strategy in terms of distribution. We talked about that in Q3. We've sold several thousands of these now. The ability to drive unique type of product through the digital space, the digital collectible space, is something that as a company we feel very strongly about, and giving access to our fans and our guests to that product is something that we think will continue to not only drive revenue for us as a company, but synergy in terms of marketing and positioning other products. And so as an example of that, the perfect 10, the 10 gentlemen that won a Heisman trophy and also been inducted into the pro football hall of fame, we've put out several NFTs that have highlighted great moments in their careers. And these are the best to have ever played and in a very unique club. And so we're excited about adding more talent and more content to to that as well. The other thing we were successful in doing in the NFT space is really helping launch our Hall of Fantasy League in our gaming space with an original NFT for that game, the league as it started. And so more revenue from that perspective, but more marketing for the league itself. Moving into gaming, I think you would have seen the Hall of Fantasy League has launched. You know, two mobile apps, certainly our website, our relationship with State Kings, our online merchandise store, all very active. And probably as important, the business thesis of a community-based fantasy league that had franchises that were being run by professional fantasy football players, ex-professional football players themselves, a Hall of Fame commissioner organization. And so the ecosystem that we've created there, I'm very proud of, and the social dynamic and interaction between the fans and the front offices on our Discord just continues to escalate. The other thing that we've done is allowed for what we call side action. You know, weekly gaming that allows our stakers to participate and win cash in predicting outcomes of certain aspects of the games. So again, activating that was really important from a media perspective. We do a weekly show on Twitch hosted by Jeff Eisenban. We have lots of guests that come on there and talk about the fantasy space, talk about the league. And again, I referenced that NFT opportunity there as well. And I wouldn't be surprised if we'll continue to look for opportunities from an NFT perspective in our league. It again showcases all the different ways that we can synergize and drive revenue And you can imagine, at least from my perspective, this is a league where we have teams playing each other virtually on a weekly basis. And we all know that the prop betting or the micro betting, when teams play each other, it also allows for potential betting to occur. So that's another area of opportunity that we'll be focusing on as it relates to our league next year. Sports betting, I've already spoken about that. But, you know, there is potential for e-gaming from a betting perspective as well. And we're waiting to see how the legislation in Ohio evolves. Traditional sports betting, of course, but sports betting as e-gaming really takes off is something that could be interesting for us as a new way to engage those fans that are there watching the e-gaming tournaments or virtually engaging with those tournaments and placing bets on their favorite athletes or teams. Lastly, partnerships and sponsorships. Hopefully you would have also seen that we've continued to drive new partnerships. It's great to see big brands that really want to be and are excited to be associated with our company. Brands like Comscope, brands like Kilshore Clark, Hendrickson, a deal that I talked about earlier with ASM that will really power our booking engine for new events. These are all the types of partnerships that as a company that will enable us to grow much more quickly, enable us to grow revenue, events, and significant contribution to construction as well over time. So, again, I think from my seat, Q3 was a very successful integration, demonstration of synergy and standing up all the verticals, delivering upon what we committed to do this year in terms of the objectives that we laid out. Let me now turn it over to Jason Crom, and Jason can take us through our financial results, and then I'll come back and have some closing statements and then take Q&A from there. Jason.

Great. Thanks, Mike, and good morning, everyone. As Ann mentioned earlier, we filed our third quarter fiscal 2021 Form 10Q post-market yesterday. That document can be found on the SEC website as well as our investor relations site. Third quarter total revenue was $3.5 million. which represents an increase of 108% from the prior year and 47% sequentially from the second quarter. Revenue growth was primarily driven by the Doubletree Hotel, with event revenue at the Hall of Fame Village Sports Complex and Tom Benson Hall of Fame Stadium also positively and synergistically contributing to our results. Sponsorship revenue was in line with the prior year and continues to be largely derived from our long-term contracts. Third quarter adjusted EBITDA was minus $7.3 million driven by property operating and hotel operating expenses as we continue to invest across all three of our business verticals. We remain diligent in balancing operating expenses with driving growth. Net income was a positive $8.1 million driven by the accounting treatment of warrant liabilities. Due to the SEC statement from the second quarter of 2021, will show decreased liabilities and expense if the company's stock price declines. While the line items on the 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. Now let's move over to the balance sheet. We finished the quarter with a cash balance of about $28 million compared to about $74 million at the end of the second quarter. Both of these values are inclusive over our restricted cash balances. That $46 million decrease in our cash balance was primarily driven by three items. First, operating activities accounted for about $10 million. Second, construction spending on campus during the third quarter represented about $15 million. And third, we also had the repayment of about $20 million or half the balance of the Aquarian loan. Our net debt balance at Q3 was $84 million, as represented in notes payable, compared to $104 million at the end of the second quarter. The driver of that reduction is the change in the inquiry and loan. I would also like to give a bit more detail on the construction financing. As Mike stated during his earlier remarks, we announced the Erie Bank term sheet for the Constellation Center for Excellence. This financing unlocks other public and private financing options available to us that are dependent on a senior loan. We expect to finalize the loan within the next few weeks, and with that, expect to recover some of the equity that we used during the construction of the building. We continue to strategically align construction spend with our achievement of financing. This is especially important given the global supply chain constraints, construction completion timelines, and volatility within the commodity markets. The expected phase two total construction spend has not materially changed. And we're working to make sure we have the right financing with the ideal structure for our company and our shareholders. We continue to have frequent conversations with multiple lenders to round out the rest of the phase two capital stack. This is best equated to a jigsaw puzzle. While we continue to make progress, we are not yet completed. Our team is committed to obtaining the best overall financing options for the company and our shareholders over the near, medium, and long term. As a relatively younger, high-growth company, we do not want to be encumbered with high-cost loans that limit our ability to invest for future growth. Along those lines, as Mike mentioned earlier, we filed an ATM, or at-the-market, offering on October 1st for up to $50 million as an opportunistic option that many companies use. We have tested the waters on this in October As we disclosed in our 10Q, we've so far raised about a half a million dollars. We'll continue to provide updates as financing gets finalized. While there's only a month and a half remaining in this fiscal year, we wanted to provide more detailed guidance for 2021 and an outlook for fiscal 2022. In terms of the overall fiscal 2021 financials, we anticipate revenue to be in millions in the low teens. and an adjusted EBITDA in the minus mid-$20 million. We expect similar capital expenditures in the fourth quarter to what we saw in the third quarter. Based on our budget process for next year, current revenue expectations for 2022 are in the mid-$30 million range, with adjusted EBITDA expected to be in the negative mid-teens, again in millions. This accounts for continued investment across all of our verticals as we add capabilities and expect to open some of our Phase 2 assets here on campus around the middle of 2022. I want to continue to reiterate that our longer-term goalposts have not moved, and by the time construction on Phase 2 is fully complete and operational, we continue to target $150 million of annual run rate revenue and approximately $50 million of annual run rate adjusted EBITDA across our key pillars. Those key pillars, again, are destination-based assets, our media platforms, and our gaming vertical. The revenue and EBITDA generation is expected to be diversified across multiple streams, with each one driving synergies to support the ecosystem that we're building. As Mike alluded to earlier, we'll drive the traffic and attendance needed to capitalize on and achieve these financial targets. Additionally, we view e-gaming and sports betting as potential upside to our targets and guidance for 2022, and at the very least, risk mitigation to any unexpected headwinds we might face into. The team continues to execute on the financial priorities that have been communicated. We also remain committed to maintaining a balance sheet, providing financial flexibility throughout the growth phase to deliver long-term value to all of our shareholders. With that, let me turn it back to Mike, who will provide some closing comments.

Thank you, Jason. Well done. I guess I would end with this. There are a lot of headwinds. A lot of companies are facing them. COVID is still very uncertain and present. It impacted us this year in a fairly significant way. Supply chain, cost of goods, all are real obstacles that we're going to face. There is political risk that we're going to face. And yet, if you look at the accomplishments in Q3 and what I see coming in Q4 and beyond, you have a team that has a mentality of we will overcome these, and we have. We have overcome supply chain constraints and costs associated with that. We have overcome the ability to host big events due to COVID, sometimes having to be very much more cautious. But overall, we continue to have events and grow revenue. as you've seen in our updates. Our goals of low-cost debt enhancing our capital, our cap stack, are very important. We want to make sure that we're taking full advantage of public and private financing, and I think you'll see that in the coming months. This concept of just-in-time financing without interrupting construction, very important for us, and taking the pragmatic approach I referenced in terms of when to take in cash and how to take in cash to ensure that our growth is continuing, not only from a construction point of view, which is amazing if you're on campus in Canton, almost every single aspect of the campus is under construction, but also creating new media, new gaming, and the content that will flow through all of those, which will allow us to continue to grow our businesses across all three verticals. We have an incredible team. We have a great board that is focused on success. You know, the experiences we've launched already are really exciting. For those of you who are in our fantasy league, you got five teams that are six and three going into week 10. And we're looking forward to how this season ends and building upon that. We always talk about building a dynasty. We're adding talent that will make a difference for us today and in the future. And as we talk about, you know, investment, we're talking about cost as well. Cost is investment for us. loss is investment for us. It's not loss from operations, it's investment. And so the first downs that we make leading to touchdowns are all predicated upon great human resources. And I do believe that we've added a lot of talent. We're adding more. We've had some significant hires on our media division, allowing us to create new content and do new business development deals that we'll start to be able to reference in the months to come. We're focused just as much on the near term as we are in the long term. And I think you'll start to see this through the announcements that we make, the partnerships that we build, and the revenue growth that we'll be able to demonstrate. I'll close by saying thank you to all of our shareholders, our investors, our board, and especially our team. None of this would be possible without all of you. Thank you for that belief. And hopefully, as I said many months ago, our commitment is to do what we say we're going to do. And I think we've done that. So I'll stop there, turn it back over to Ann, and open it up for questions.

Thank you.

At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key.

One moment, please, while we poll for questions. Our first question comes from the line of Jack Vanderaard with Maxim Group.

Please proceed with your question.

Great. Good morning, guys. Thanks for taking my questions. Appreciate the quarterly update. Michael, I I want to explore the gaming front comments you made in your prepared remarks. It's good to hear you're actively searching to onboard an industry leader to kind of spearhead that division. Now, a recent topic that's been receiving a lot of buzz in the news lately has been the topic of the metaverse. And just, you know, tying in how the metaverse and gaming NFTs are also kind of being intertwined, it's very early on, but just seems like a unique opportunity for for hall of fame with the, with the assets that you guys own and the NFTs and the players. Is there any, do you have any initial thoughts on maybe how hall of fame could be involved in the, in the space?

Yeah. You know, from a, a gaming point of view, this concept of virtual environments, personal sort of experiences and, you know, augmented reality are all things that we have had many discussions with partners that are in the space. It's interesting, you know, as you can imagine, our Hall of Famers are also being asked about how they could help support creating these types of environments for fans and guests to access, right? I do think that we are aware of what they represent. It's early days. In some cases, it makes sense for us, like NFTs, to be a first mover. I think there's ways for us, Jack, to align experiences with the intellectual property and our Hall of Famers and others that are engaged with the sport of professional football to create those environments that become more real-time, and personalized for our fans to enjoy. And there's several, you know, sort of platforms out there that I've had discussions with and that have been brought to our attention that are trying to crack the code on how to do those very things. So it's a very circular answer I'm giving you. I understand it's early days, but I do think there's ways for us to connect what we do and how we do it with that type of metaverse experience.

Okay, great. No, I appreciate the color there.

I'm just curious. It's such a polarizing topic. Um, and then maybe, uh, another question on the hall of fantasy league. Um, you know, can you speak again and kind of provide some more detail on the side activities or something side, uh, new, new features that you've added to the league, um, that you mentioned in your prepared remarks. Um, and then also talk about the feedback you're hearing maybe from some of the actual players, um, the participants in the league, uh, now that we're halfway through the season and how you're incorporating that feedback to maybe improve or make the league better, uh, for next year?

Well, I think the, you know, the feedback has been very positive. Those that are engaged, um, have a, a high level of appreciation around the community involvement, the ability to talk to and, and sort of learn from, uh, you know, Terrell, uh, Davis and, and the, uh, managing front offices on how to think about fantasy. Remember this was based on, you know, a concept sort of a white space that was franchises versus individuals picking their teams. And so we, we find that there are players that are playing because they want to root for a team, be a part of community and learn from those professional fantasy players, but it's also helping them sort of in their own individual leagues and You know, could we incorporate some of that kind of concept in the future? Sure. I think what we're going to take away from this season is a lot of input, a lot of lessons learned. And just like any good, you know, new movie or new film or television show, you learn and then you grow and the characters kind of evolve in season two. And that's what we've done with our NFL Alumni Academy as well. The lessons learned from year one we've really implemented in year two, and it's yielding results for us. I think the same thing here. The business model is very different. Allowing guests to stake or back teams versus create their own leagues is something that we're considering and how that works in the future. I think sports betting, as I said, comes into play here as another economic driver for the leagues. I think the biggest thing is awareness and continuing to build awareness, marketing, having the right profile of individuals associated with the league is very important. And for us as a company, learning the spaces that these types of gamers really want to be or these fantasy players really want to be involved with. But net-net, the engagement from the fans that are participating in the league has been incredibly high, And I think they've appreciated this new experience that we've created.

Excellent. Great to hear. And then maybe just one more kind of housekeeping question for Jason Crum.

Can you just please report, I'm sorry, repeat your comments on the 2021 and 2022 guidance parameters? I didn't quite catch that all the way.

Yeah, no problem, Jack. So as you think about 2021, what we're currently projecting now is revenue in low teens in terms of millions and an adjusted EBITDA in the minus mid $20 million range. And then for 2022, we're currently targeting revenue in the mid $30 million range and adjusted EBITDA in the negative mid teen range. Got it. Okay. Appreciate the update, guys.

I will hop back in the queue. Thank you. Thanks, Jack.

And we have reached the end of this portion of the Q&A session. I'll now turn the call back over to Ann for any additional questions.

Thank you. We have had a couple of questions come in, Ann, so I will recite them as they come in. All eyes are on Ohio. Currently, obviously, Mike, you touched on sports betting legislation. Are you able to share additionally timing of the opportunity for Hall of Fame Resort and Entertainment Company and how big that opportunity could potentially be for the company?

Well, you know, it's hard to predict. We stay closely connected to it. I know that the legislators want to have the right bill for Ohio pass into law, and we respect that. Our job is to just stay closely connected to that through the legislators, lobbyists, and our consultants. We've learned a lot over these past couple of months around the type of business that we want to be engaged with as it relates to sports betting. The first thing that I said earlier is an on-site experience that our guests and fans can visit and engage with is going to be really important to round out the destination. And so we're very focused on that. The second is the gaming revenue and the industry itself has turned largely mobile. And so having the ability to take our brand and extend it with a partner into a mobile environment, which will create a much greater reach for us beyond just the asset on campus, has become just as important, if not more important for us. And so what we've tried to do is develop a strategy that leverages both. The quantum of that is significant for us as a company, and we would look to try to have long-term partnerships that would really help us grow the base of sports bettors that engage in our ecosystem, either onsite or through our mobile connectivity, which would allow for the profitability to grow year over year over year. There are many, many companies in this space We have continued to engage with a lot of those companies to understand their goals. The best partnerships are ones that drive benefit for both. Again, access to celebrity in terms of professional football players that are the highest recognized in the field is something that's really unique for us. The brand of the Hall of Fame Village, the Pro Football Hall of Fame, other things very unique for us to be able to leverage as well. I would just say this. We will continue to look to partner with quality operators, sports betting operators, but also drive maximum value to the bottom line for us as a company and for our shareholders. I would estimate this in the millions over years that drives significant uplift to us as a company. And as Jason said, it does one of two things. These are not in our working numbers. Sports betting was not. This is us being nimble as a company, taking advantage of a trend and an opportunity and being smart about how we do it. It either protects us in a significant downside scenario where we're impacted by supply chain or timing of materials or cost of materials, which we're continuing to offset. or it provides uplift for us. And so, you know, time will tell as we go by, but NFTs were another one of those strategies, sports betting. Those are the kinds of things that as a company we're focused on in terms of driving value. And we're staying connected in this environment to ensure the timeliness of what we do versus the law that gets passed is important. You know, we want to be there and be prepared, ready to go. So, So we'll wait and see how this bill progresses. I'm optimistic, but it's got to be passed into law before we really have an opportunity to leverage and take advantage of it.

Great. The next question is, obviously, you've touched on lender conversations and how that's progressed related to the project. Are you able to comment on lenders' confidence level? Is it changing related to destination-based assets and how lenders are willing to fund?

Yeah, I'll take that on briefly, and then I'll ask Jason to provide an update on this because he's done an incredible job at you know, getting lenders to the table, executing term sheets, et cetera, both public and private financing as well. I would say that we have seen a more positive uptick in momentum for lending to companies like ours that create virtual environments but also physical destinations over the course of this year. It's still very difficult. COVID still looms heavily in the minds of lenders, and yet I think there's a lot of money out there to be lent, to directly quote one of the lenders that I've been speaking to or that we've spoken to. Erie coming in was a great first step for us as a commercial lender. Of course, we've had Aquarian in for a year, and that helped stabilize and help allow us to start building. As with anything else, you have proof of concept now. You have assets that have been built and opened. You have assets that are now generating revenue through sales. You have assets that are coming out of the ground. When lenders come into an environment where they see the significant amount of construction progress going on across all aspects of our destination in Canton, it's much more exciting for them and becomes easier for them to understand The model that we put forward, the revenue model, the synergy model between our business units, you know, being able to watch the NFL Alumni Academy on the field while we're having discussion, talking about a docuseries, watching Whistle Studios film them is very impactful. So I'm optimistic that that's all leading us in a near term to additional financing, smart financing opportunities. lower cost financing that will help round out our cap stack that is the setup for additional financing that comes into play from a public and private sourcing perspective. Jason, you want to add to that?

Sure. Yeah. Yeah. Thanks, Mike. I totally agree with what you said. The only things I'd really reinforce is we have these conversations with lenders and it really does help to bring them on campus, let them really see, experience what this is and what it can be. That just helps with those conversations. They're not renderings anymore. There's real tangible things happening here on campus. And then I'd reinforce probably two terms we talked about in our earlier remarks. First of which is, it is a bit of a jigsaw puzzle and it's all coming together. There's multiple pieces of the capital stack that we're working on it at any one particular time across public across private. And we want to make sure we've got that ideal capital stack for phase two for the company and for our shareholders. And then I think Mike has the perfectly coined term for this in terms of just-in-time lending. So not wanting to get out too far in front from when we need the funds. So we definitely keep the roster going, the communications going in terms of lenders and how everything's coming together.

Yeah, and the only other thing I would say is I've been really proud of the fact that Jason, his team, our outside consultant at BGL, others have really stayed focused on this. And, you know, while it sounds complicated, it's not. You know, we have the ability to identify. We know the assets. We know the cost. We've managed those costs accordingly to make them as affordable as they can be in a very difficult environment. We're demonstrating revenue growth quarter over quarter. We're showing how assets are being built, media is being created, gaming environments are being created. And so the hope and the belief is that that's really inspiring lenders, especially lenders that are focused on the growth of our community, the support in the community and the city and the county and the state from our mayor, our county commissioners, state senators, others has been just overwhelming. And so that's a very positive sign for us in terms of lending. And the other thing that I just referenced, the work we continue to do to position this company for success. You know, taking long-term debt down or near-term debt down by almost half over the course of an 18-month period of time was not insignificant. And I think our shareholders and investors should really take great comfort in the fact that you have a management team that had the ability to do that and is focused on the right profile in the capital stack to ensure our success.

Thank you, Mike. And with that, there are no other questions in the queue. So if there are any additional questions after today's call, please, as I shared earlier, reach out to me directly. We will be back with you happily. We also share again on behalf of the company our most sincere gratitude to all those who have served our great nation. We want to thank you all for your continued interest in and support of Hall of Fame Resort and Entertainment Company, and I hope you all have a great day. Thank you.

Happy Veterans Day. Thank you.

And this concludes today's conference, and you may disconnect your line at this time. Thank you for your participation.