Hall of Fame Resort & Entertainment Company

Good morning and welcome to the Hall of Fame Resort and 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 Grafis, 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 hofreco.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 an update on our fiscal 22 financial outlook. 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 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 the replay of this call. If you have any additional questions after today's call, please contact me directly. It is now my pleasure to turn the call over to Michael Crawford. Michael?

Good morning. Thanks, Anne. Good to be with everyone on this great day 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 have seen the Hall of Fame Village coming to life. And, you know, as we hosted significant 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. I think you probably would have seen our enshrining of our new class of 2022 hall of famers, which was fantastic. Uh, we kicked off the NFL preseason with the Jags and the Raiders, a 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 hall of fame game, kicking off the preseason for the NFL. Of course, we had our concert for legends with journey. And I can tell you standing in the front row, it was an absolutely mind blowing concert and, These guys are just the greatest hit band that wowed the crowd. And then on Sunday night, we closed the act with Dave Chappelle, and he was just an overtop A-lister comedian, and I think everybody enjoyed that as well. Typically, as I do, I 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. Um, first I think it's worth mentioning, um, that, you know, we continue to watch a lot of things, you know, that I've said before, as an old Disney guy, the parade of horribles just continues to, to go by. But one thing our shareholders should know by now, and I, and I hope you should take comfort in is this team really just doesn't give up. Uh, it continues to execute in spite of very, very difficult environments. Uh, and while inflation seems to be easing in some categories, certainly product availability and supply chain constraints remain very real for us. In addition, over the last quarter, you know, stock market volatility, Federal Reserve raising interest rates, inflationary pressures. And I know it sounds crazy to say, you know, inflationary pressures, when at the same time we're now talking about recessionary types of conditions. But that's the kind of upside-down world that we're living in. GDP releases show that we are probably in a recession. But as I said, we're not overly concerned with this. 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 a world health pandemic that still continues on some level, new introduction of health concerns with monkeypox, supply chain issues, labor constraints. And 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, you know, in a more normalized, 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. A bunch of fighters that just don't give up. A couple of key things, though, to remind people of. Consumer spending remains very strong and elevated, frankly. And unemployment remains low. And even in a recessionary environment, people forego 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 like going and having experiences, and we're seeing that. We're seeing dining. We're seeing travel. You know, hotel stays, sporting events, attendance. We're seeing these things return to 2019 levels. And it's very encouraging for us, especially as a company that, you know, in the early days is 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 in a very immersive environment. And this is all being confirmed by other recent companies' reportings. 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 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, the 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're creating a new and exciting experience, whether it's a media show that you're streaming, a gaming opportunity or a physical destination, Never bet against the consumer. They are there. They show up and they spend money. As I move into some of the more relevant updates, I did want to talk about over the last quarter, there seemed to be a lot of discussion around broader company news, broader company updates. And 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, you know, the 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 I can tell you, if you look at the history of 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, but the confidence in this company is incredibly high. But we've had a policy that deals predominantly with, as 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? Well, what it means is it prohibits us 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 the individual. 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 you're 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 that everyone across the board will continue to invest where they find appropriate and where 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 were going too low. We didn't want further dilution. And so we changed directions and brought in a bridge loan until we could 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 you should take comfort in there is we have a management team that's focused on creating value and not diluting 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 NASDAQ rules being traded on the NASDAQ index. I'll just remind everybody, we went and received the deficiency notice out of compliance May 24th, 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 company. As you know, there are four 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. So that's a game of chance. And one that, you know, is what I think we're trending in the right direction. I think our shareholders and investors are seeing us execute open new assets, sell media, create gaming environments. And so I think they're encouraged by and we're seeing a nice uptick and we're moving in a direction where that media 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 ask for additional time as we continue to execute our business strategy. The third is a reverse stock split. And 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 reverse stock split were to occur. The thing that happens is it takes back a number of shares and revalues 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 at 10 shares and we took back and we divided that by five, the trading value of those two shares you had remaining would still equal $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 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. So again, we are 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 seek out expert opinion and and have conversations with several Wall Street investment banks. We're looking at academic research. We're looking at trending from years past. We're looking at companies that have done reverse stock splits to see how that has 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 create shareholder value. But I want to reiterate one key fact here. This is not us and you. This is not management board in one bucket and our shareholders in another. We are 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 is 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 cents. Some have been at $4. Some have 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's sometimes where that confusion comes into play. We get granted shares of stock for one primary reason. The 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. And so the shares that are granted to us, what I just spoke about that sell to cover policy shifting to a withhold to cover the tax obligation is something that people should not look at and get confused by 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, our management team has actually foregoed cash in lieu of buying stock, meaning I've taken part of my bonus or I've taken part of 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 because 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 will create long-term value for all of us. We're all in this together. Um, I I'd also just like to say that, you know, over the last several months, um, there's been a lot of criticism as to why, you know, why wouldn't management be buying at these lower levels? And we listened to that, but again, I just want to reiterate. There have actually been a desire to do that, but we've been prohibited to do that by creating rules. You know, the windows have been closed. The sell to cover policy has 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 it's 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. The sales that you're seeing were 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 and 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 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've hosted today in the last few months at our stadium, Tom Benson Hall of Fame Stadium and at the Village, USFL playoffs and championships, enshrinement, the NFL game, et cetera, that our campus is really growing and growing in a big way. But we are having to be very purposeful and very planful in doing that. If you would have 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, you know, the 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 Plaza. You see the fan engagement zone. And I'm going to talk in a moment about tenanting and how that's progressing and the timing of opening those tenants. No one should interpret what has been done in a year as being easy. And we have been and I have been very thankful for the ingenuity, the stick-to-itiveness 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 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 water park given significant price increases in commodities and materials. Prices in some cases in categories have been up 20 to 30%. Now, no one should walk away from this call saying, oh, that means they're going to delay or push back in a significant way the opening of the hotel and the water park. 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 and we reimagined what that 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 enshrinement weekend, another big event this weekend. And then we're going to 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 my point here is, we are now looking at some of the design work in the hotel water park, looking at how we value engineer without compromising the experience. We're re-examining every detail. Some things, you know, aren't necessary. Some things can be changed to 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 an experience. And I want to thank people like Carol Smith and her team for uh for doing just that type of work and all of our contractors that work so tirelessly to get the village to where it is today as a destination um you know the hall of fame village had a phenomenal week as i said with enshrinement 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 year? 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 non-enshrinement events. If you tuned in on Fox and watched the USFL playoffs and championships, there were thousands of people in our stands. And even though, you know, the gas prices are high and inflation is still there, people come, people buy tickets, people eat concessions, people stay in hotels. We have been full, you know, on campus for events over the last couple of months, and we're building the slate of events even larger. We announced the OJs and Gladys Knight, two Hall of Fame bands coming to Canton, Ohio, where the OJ started today. you know, their band and where they're trying to finish their last tour. And we, most importantly, were able to cater and create 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 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've continued to monetize and grow the number of events that we're hosting there. We do a lot of things in the stadium. Some events we own, and we own every aspect of it, from the planning to the selling to 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 at the Doubletree. So there are 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 and USFL coming in, paying us for the stadium and giving us an opportunity to also have percentages of the concessions and the, 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 perform. Um, And again, I'll reemphasize being on national 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 television without having to pay for it for marketing of the destination and marketing of all of the other types of things that we're doing as a company. It's 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. Center for Performance is up, as I promised, up and running. Three days of events over enshrinement, renting out that facility. um making a lot of money and and generating revenue in its very first couple of days of existence uh it give us it gives us the opportunity for that year-round capacity which we've so desperately needed we 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 a kind for this region, and people are incredibly excited for it. I talked about the Doubletree. ADRs 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 experiences. And so I get more excited when I see the 5% in the top 5% of customer service than I do with the occupancy in the ADRs, 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 on-site 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 incredible 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, and 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've shown in us in having the ability to generate great experiences out of our hotel. Let me shift to media. The media vertical, while it's still in its early stages, has had several key wins. We've hosted live events. We've added branded content, and we are a really cool emerging media company that and adding partners that I think are going to be meaningful for us, like Jake Paul and the deal that we just did with Better to really produce interesting, one-of-a-kind content in our media group. And I'll talk about Better in just a moment for our gaming division. But you will have seen many, many shows now in development, many shows now being produced and many shows now being put through distribution. The Perfect Ten, we have secured distribution, and I think you're going to be very pleased with the result 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 markets in the U.S., and We're now out looking to sell that in a much bigger way. I talked about Football Heaven podcast. This is going to be an incredible way to enhance your knowledge of football. And three great hosts, Football Heaven, we've already secured and started filming with 18 phenomenal guests, guests that are going to blow you away. We've secured a new sponsor. which we will talk about in the future. 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. We're 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 NFTs, you know, we signed multiple partnership deals on the NFTs, including with the Pro Football Hall of Fame and a company called I Got It. But we've also hired our own NFT developer and strategist. I really continue to believe that digital collectibles done right with, you know, 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. You know, we hired Rob Borum. a really high profile gaming executive and our gaming division is, 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 is 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 and 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, the Denver Mile Highs, the Green Bay Winter Warriors, the New Jersey Boardwalkers. Again, fun, whimsical, the logos, the names, the markets. We've studied all of that. Where is 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 Yallers. Sad to do that, but maybe in the future, you never know. We have added more ways in which you can engage with this league. Last year, we realized that backing or staking 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. There are weekly opportunities to engage and win prizes. One thing that I'm excited about, you know, 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 is and have access to this service will make you a better fantasy player. It will enable you to have access to information that you so desperately need in 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 app and multiple apps that you can engage with and enjoy the game. And we added him and Smith as our commissioner. And what you're going to find this year is the promise of, and the execution of more interaction with our GMs and our commissioner. These are all passionate folks. Rob has laid out a plan that I think is going to be very compelling for them and very exciting for you. This is a one of a kind league. This is a national fantasy football league that is now adding multiple ways to for you to engage. So go out there, 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 you tune in. 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 multiple ways in which we intend to monetize and grow revenue through this league and its unique offering. Also in our gaming division, the thing that's probably been closely followed, most closely followed, is sports betting. And what I hope you will have seen is both of our applications, retail betting and mobile betting, have 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 and the best chance as we're going through the application process, which is cumbersome, but 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're anxiously awaiting, um, you know, our approvals, but as we are waiting, we're watching things like in July, Ohio setting records for, uh, gaming for the casinos and the racinos, $210 million. Um, unbelievable how people are enhancing and engaging with sports now, through betting. And we're wanting to bring new and different opportunities for our guests to do that. Rush Street Interactive is a high quality. I know Richard Swartz, he is committed to, he is their CEO. He is a high quality individual committed to delivering experiences, immersive experiences. He and I, the moment we spoke, I knew we were aligned and I knew we could create something fantastic together at the village. And then you will have seen, Our new mobile betting partner, Better. Joey Levy and a guy by the name of Jake Paul. You might have heard of him. Tens of millions of followers around the world. This is a guy and two gentlemen that I, you know, have had the chance to interact with. They get it. They get where the future is going. They get where the future consumers and sports bettors would like to engage. Micro betting is fun. It's allowing our fans to enhance the way they view all sports, not just football. They are forward-looking, and we see a ton of synergies between our company and theirs. By the way, Jake is starting a new media show. He's 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 on-site presence at the Village. Stay tuned. Let me turn to partnerships and sponsorships. I've talked about strategically maximizing sponsor dollars. You now see we're growing our event slate. 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, Vic Gregovitz. He's putting together a team. We already have a great team in place. And he's really laser focused now on monetizing the great progress the company has made. We are 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 from a 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 that 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 and obtaining construction lending. We believe they're 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 now. We have mediation planned 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 in binding arbitration in the state of Ohio. We cannot simply accept that this relationship is in breach. We are not in breach. We do not feel we're in breach. And so we have an obligation to you as shareholders to continue to pursue this, to rectify this situation. However, in the meantime, we are also in parallel working with Johnson Controls to better define the products and services that they offer and how it fits into what we are building and the operation that we're running. And some of which, those types of things, we are 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. 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 Lee 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.