Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's discussion and analysis of financial condition and results of operations

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained herein that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are often identified by the use of words such as, but not limited to, "will," "anticipate," "estimates," "should," "expect," "guidance," "project," "intend," "plan," "strategy," "believe" and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Factors that could cause or contribute to our results differing materially from those expressed or implied by forward-looking statements include, but are not limited to, those identified below, and those discussed in the section titled "Risk Factors" included in our Form 10-K for the fiscal year ended December 31, 2024 as filed with the Securities and Exchange Commission ("SEC") on March 26, 2025, and in our reports subsequently filed with the SEC. The forward-looking statements set forth herein speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Unless the context otherwise requires, the "Company", "we," "our," "us" and similar terms refer to Hall of Fame Resort & Entertainment Company, a Delaware corporation.

The following discussion should be read in conjunction with the Company's Form 10-K for the year ended December 31, 2024, filed with the SEC and the condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Form 10-Q.

Business Overview

We are a resort and entertainment company leveraging the power and popularity of professional football and its legendary players in partnership with the National Football Museum, Inc., doing business as the Pro Football Hall of Fame ("PFHOF"). Headquartered in Canton, Ohio, we own the Hall of Fame Village, which is a multi-use sports and entertainment destination centered around the PFHOF's campus and the DoubleTree by Hilton located in downtown Canton. We have created a diversified set of revenue streams through the development of themed attractions, premier entertainment programming and sponsorships. We continue to pursue a diversified strategy across three business verticals, including destination-based assets, Hall of Fame Village, Hall of Fame Village Media and Gold Summit Gaming.

The strategic plan for Hall of Fame Village involves three phases: Phase I, Phase II, and Phase III. Phase I of the Hall of Fame Village is operational, consisting of the Tom Benson Hall of Fame Stadium, the ForeverLawn Park (ownership reduced to 20% as of January 11, 2024), and Hall of Fame Village Media. The Tom Benson Hall of Fame Stadium hosts multiple sports and entertainment events, including the National Football League ("NFL") Hall of Fame Game, Enshrinement and Concert for Legends during the annual Pro Football Hall of Fame Enshrinement Week. The ForeverLawn Park hosts camps and tournaments for football players, as well as athletes from across the country in other sports such as lacrosse, rugby and soccer. Hall of Fame Village Media leverages the sport of professional football to produce exclusive programming. Hall of Fame Village Media has created short-form and long-form media entertainment through multiple distribution channels. This includes The Perfect Ten, Inspired, The GOAT Code, Next Man Up: NFL Alumni Academy and Hometown Heroes.

We have procured licenses in the State of Ohio for both a physical sports betting operation and online sports betting platform. We have entered into an agreement with Instabet, Inc. doing business as betr ("Betr") as our mobile management services provider. Currently, the Company does not have a sports betting partner for its retail sports book. In addition, the gaming vertical hosts multiple eSports tournaments within the destination along with other types of gaming tournaments and interactive events.

We have developed new hospitality, attractions, and corporate assets as part of our Phase II development plan. Phase II components of the Hall of Fame Village include the Constellation Center for Excellence (an office building including retail and meeting space, that opened in November 2021), the Center for Performance (a convention center/field house, that opened in August of 2022), the Play Action Plaza (completed in August of 2022), the Fan Engagement Zone (retail promenade), core and shell for Retail I (completed in August of 2022), and the core and shell of Retail II (completed in November of 2022), and two hotels (one to-be-constructed on campus, and one in downtown Canton that opened in November 2020). Phase III expansion plans may include a potential mix of residential space, additional attractions, entertainment, dining, merchandise and more.

Key Components of the Company's Results of Operations

Revenue

We generate revenue from various streams such as sponsorship agreements, rents, events, exclusive programming, attractions and hotel and restaurant operations. The sponsorship arrangements, in which the customer sponsors an asset or event and receives specified brand recognition and other benefits over a set period of time, recognize revenue on a straight-line basis over the time period specified in the contract. Revenue for rents, cost recoveries, and events are recognized at the time the respective event or service has been performed. Rental revenue for long term leases is recorded on a straight-line basis over the term of the lease beginning on the commencement date.

Our owned hotel revenues primarily consist of hotel room sales, revenue from accommodations sold in conjunction with other services (e.g., package reservations), food and beverage sales, and other ancillary goods and services (e.g., parking) related to owned hotel property and events. Revenue is recognized when rooms are occupied or goods and services have been delivered or rendered, respectively. Payment terms typically align with when the goods and services are provided.

Restaurant revenue at Company-operated restaurants and concessions is recognized when payment is tendered at the point of sale, net of sales tax, discounts and other sales related taxes.

Our media content and distribution revenue is recognized as content is released. Our gaming license revenue is recognized over the term of the license agreement.

We expect our revenues to continue to increase as we add in additional events, tenants, experiences and open additional assets.

Operating Expenses

Our operating expenses include event/media production expenses, personnel expenses, campus maintenance expenses, food and beverage cost of sales, hotel operating expenses, and depreciation expense. These expenses have increased with completion of Phase II assets and we would expect these will continue to increase after completion of additional events, programming, and assets, and Phase III development.

Our depreciation expense includes the related costs of owning and operating significant property and entertainment assets. These expenses have grown through completion of the Phase I and Phase II development.

Recent Developments

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard

On January 10, 2025, the Company received a deficiency letter (the "Notice") from the Listing Qualifications Department (the "Staff") of the Nasdaq Stock Market, LLC ("Nasdaq") stating that the Company failed to hold an annual meeting of stockholders within 12 months after its fiscal year ended December 31, 2023, as required by Nasdaq Listing Rule 5620(a) (the "Annual Meeting Requirement").

The Notice had no immediate impact on the listing of the Company's common stock (the "Common Stock") on Nasdaq.

On February 18, 2025, we submitted to the Staff a plan of compliance which describes the circumstances under which it became noncompliant with the Annual Meeting Requirement and the Company's plan with which it will regain compliance. The Staff has determined to grant the Company an extension until June 30, 2025 to regain compliance with the Annual Meeting Requirement by holding an annual meeting of shareholders.

On April 10, 2025, we received a deficiency letter from the Listing Qualifications Department of the Nasdaq notifying us that, for the last 30 consecutive business days, the bid price for our common stock (the "Common Stock") had closed below $1.00 per share, which is the minimum bid price required to maintain continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule5550(a)(2) (the "Minimum Bid Requirement").

The Notice has no immediate effect on the listing of the Common Stock. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has 180 calendar days to regain compliance with the Minimum Bid Requirement. To regain compliance, the closing bid price of the Common Stock must be at least $1.00 per share for a minimum of ten consecutive business days during this 180-day period, at which time the Staff will provide written notification to the Company that it complies with the Minimum Bid Requirement, unless the Staff exercises its discretion to extend this ten-day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H). The compliance period for the Company will expire on October 7, 2025.

Second Amendment to Note and Security Agreement

On January 24, 2025, the Company and its subsidiaries HOF Village Newco, LLC, a Delaware limited liability company ("Newco"), HOF Village Retail I, LLC, a Delaware limited liability company ("Retail I"), and HOF Village Retail II, LLC, a Delaware limited liability company ("Retail II," and collectively with the Company, Newco, Retail I "Borrowers") entered into a Second Amendment to Note and Security Agreement ("Second Amendment"), with CH Capital Lending, LLC, a Delaware limited liability company ("Lender" or "CHCL"). CHCL is an affiliate of Stuart Lichter, a director of the Company.

Pursuant to the Second Amendment, which modifies the previously disclosed Note and Security Agreement, dated November 14, 2024, as amended by the First Amendment, dated January 10, 2025, the parties agreed to: (i) modify the definition of "Facility Amount" in Section 1 of the original note to increase such amount from $2,000,000 to $4,150,000, which allows Borrowers to request up to an additional $2,150,000 loan for general corporate purposes, subject to certain restrictions; and (ii) amend the definition of "Maturity Date" to mean the earliest to occur of (a) closing of the proposal to take the Company private; (b) the termination date, as defined in any definitive agreement and plan of merger entered in connection with a take private transaction, if applicable; or (c) the occurrence of certain events of default under the original instrument. As part of the agreement, Borrowers agree to establish a springing deposit account control agreement (the "DACA") for a control account to hold cash collateral. Borrowers may use funds in the control account for ordinary business purposes, subject to the terms of the DACA.

Borrowers agreed to grant additional security to Lender to include the equity interests of any Borrower in HOF Village Retail I, LLC and HOF Village Retail II, LLC; all net income earned by Borrowers from the operation of the Gridiron Gastropub restaurant; and all rights of any Borrower, including any revenue received by any Borrower, under certain sponsorship agreements.

Third Amendment to Note and Security Agreement

On February 21, 2025, the Company entered into a Third Amendment to Note and Security Agreement ("Third Amendment"), with CHCL.

The Third Amendment modifies the definition of "Facility Amount" in Section 1 of the original note and security agreement (as amended prior to the Third Amendment) to increase the facility amount from $4,150,000 to $5,150,000 allowing the Borrowers to request an additional $1,000,000 for general corporate purposes, subject to certain restrictions.

Fourth Amendment to Note and Security Agreement

On March 18, 2025, the Company entered into a Fourth Amendment to Note and Security Agreement ("Fourth Amendment"), with CHCL.

The Fourth Amendment modifies the definition of "Facility Amount" in Section 1 of the original note and security agreement to increase the facility amount from $5,150,000 to $6,500,000 allowing the Borrowers to request an additional $1,350,000 for general corporate purposes, subject to certain restrictions.

Resignation of President, Chief Executive Officer and Chairman

On March 12, 2025, Michael Crawford informed the Board of Directors of the Company that he intends to resign as President, Chief Executive Officer, and Chairman of the Board of Directors. The resignation is not due to any disagreement with the Company on any matter related to its operations, policies, or practices. Mr. Crawford is resigning to pursue another career opportunity. The Board has begun the process of recruiting and evaluating candidates to succeed Mr. Crawford.

Mr. Crawford and the Company and its subsidiary HOF Village Newco, LLC (collectively, the "Parties") have entered into a Retention and Consulting Agreement, dated March 18, 2025 (the "Retention and Consulting Agreement"), which provides that Mr. Crawford shall be paid an aggregate retention bonus of $300,000, including $73,000 for the agreed-upon value of unused accrued vacation, payable in increments of $100,000 on each of March 31, 2025, April 30, 2025, and May 31, 2025, provided that Mr. Crawford continues to serve as President, Chief Executive Officer, and Chairman of the Board through May 18, 2025 (the "Employment Termination Date"). Until the Employment Termination Date, Mr. Crawford would also continue to receive his base salary and other benefits due under the Amended and Restated Employment Agreement among the Parties dated November 22, 2022, as amended by Amendment to Amended and Restated Employment Agreement, effective May 1, 2023 (as amended, the "Employment Agreement"). Mr. Crawford agrees his termination of employment on the Employment Termination Date will constitute neither termination by the Company without cause nor termination by Mr. Crawford for good reason under the Employment Agreement. No sooner than the Employment Termination Date, and no later than 14 days after the Employment Termination Date, Mr. Crawford shall deliver to the Company an effective and irrevocable general release of claims.

Under the Retention and Consulting Agreement, Mr. Crawford will provide up to 10 hours per week of consulting services to the Company between the Employment Termination Date and August 18, 2025 (the "Consulting Period"). During the Consulting Period, the Company shall pay Mr. Crawford a consulting fee of $500 per hour.

Omnibus Extension of Certain Debt Instruments

On March 31, 2025, we entered into a formal omnibus extension of debt instruments ("Omnibus Extension")with CH Capital Lending, LLC, a Delaware limited liability company ("CHCL"), IRG, LLC, a Nevada limited liability company("IRG"), and Midwest Lender Fund, LLC, a Delaware limited liability company ("MLF" individually; IRG, CHCL, and MLF referred to collectively as "Lenders"). The impacted agreements include the following, as amended from time to time (collectively, "Subject IRG Debt Instruments"):

(a)

that certain Term Loan Agreement (as amended or modified from time to time), dated December 1, 2020, as assigned to CHCL in its capacity as "Administrative Agent" for itself and the other lenders, on March 1, 2022, and all agreements, instruments, and promissory notes executed in connection with such Term Loan Agreement, as subsequently amended;

(b)

that certain Secured Cognovit Promissory Note, effective as of November 7, 2022, by and among certain of the Borrowers, as makers, and JKP Financial, LLC ("JKP"), as holder, as modified by the Omnibus Release of Youth Fields Borrower from Certain Debt Instruments, dated as of January 11, 2024, by CHCL, IRG, JKP, and/or MLF, in favor of HOF Village Youth Fields, LLC, and the Omnibus Extension of Debt Instruments, dated April 7, 2024, which relates to that certain Secured Cognovit Promissory Note, dated as of June 19, 2020, made by certain of the Borrowers, as assigned by HOF Village, LLC to Newco pursuant to that certain Contribution Agreement dated as of June 30, 2020, by and between HOF Village, LLC and Newco, and as amended by that certain First Amendment to Secured Promissory Note, dated as of December 1, 2020 and the Joinder and Second Amendment to Secured Cognovit Promissory Note, dated as of March 1, 2022, among Newco, HOF Village Hotel II, LLC, the Company, and JKP, which note was assigned by JKP to IRG Master Holdings, LLC, effective January 15, 2025, as subsequently assigned effective January 15, 2025 to CHCL;

(c)

that certain Secured Cognovit Promissory Note, dated effective as of November 7, 2022, made by certain of the Borrowers, as modified by the Omnibus Release of Youth Fields Borrower from Certain Debt Instruments, dated as of January 11, 2024, by CHCL,IRG, JKP, and/or MLF, in favor of HOF Village Youth Fields, LLC, which was assigned by JKP to IRG Master Holdings, LLC, effective January 15, 2025, as subsequently assigned effective January 15, 2025 to CHCL;

(d)

that certain Second Amended and Restated Secured Cognovit Promissory Note, dated effective as of November 7, 2022, from certain of the Borrowers and others to CHCL as subsequently amended;

(e)

that certain Joinder and Second Amended and Restated Secured Cognovit Promissory Note, dated effective as of November 7, 2022, from certain of the Borrowers and others to IRG as may have been subsequently amended; and

(f)

that certain Secured Cognovit Promissory Note, dated effective as of November 7, 2022, from certain of the Borrowers and others to MLF as may have been subsequently amended, which relates to that certain Cognovit Promissory Note, dated as of April27, 2022, from certain of the Borrowers to MLF as may have been subsequently amended.

Pursuant to the Omnibus Extension, the Borrower and Lenders agreed to extend the maturity date of the Subject IRG Debt Instruments to September 30, 2025.

Amendment to Note Purchase Agreement

On March 31, 2025, we entered into an Amendment to Note Purchase Agreement (the "Amendment") with holders of approximately 79% of the outstanding 8.00% Convertible Notes due 2025 ("8.00% Convertible Notes") issued under the Note Purchase Agreement dated as of July 1, 2020, as amended, restated, supplemented and otherwise modified from time to time up to March 31, 2025, by and among the Company and the purchasers listed on the signature pages hereto. The Amendment extends the maturity date of 8.00% Convertible Notes to December 31, 2025. CHCL, which signed the Amendment, owns approximately 43% of the outstanding 8.00% Convertible Notes. CHCL is an affiliate of Stuart Lichter, a director of the Company.

Fifth Amendment to Note and Security Agreement

On April 25, 2025, we entered into a Fifth Amendment to Note and Security Agreement ("Fifth Amendment"),with CHCL.

The Fifth Amendment modifies the definition of "Facility Amount" in Section 1 of the original note and security agreement (as amended prior to the Fifth Amendment) to increase the facility amount from $6,500,000 to $8,000,000 allowing the Borrowers to request an additional $1,500,000 for general corporate purposes, subject to certain restrictions.

Agreement and Plan of Merger

On May 7, 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with HOFV Holdings, LLC, a Delaware limited liability company ("Parent"), Omaha Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent ("Merger Sub", and together with Parent, the "Buyer Parties"), and, solely as guarantor of certain of Parent's obligations under the Merger Agreement, CH Capital Lending, LLC, a Delaware limited liability company ("Guarantor" or "CHCL").

The Merger Agreement provides that, among other things and on the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger (the "Effective Time"), (a) Merger Sub will merge with and into the Company (the "Merger"), with the Company surviving the Merger as a wholly owned subsidiary of Parent (the "Surviving Corporation"), (b) each issued and outstanding share of common stock of the Company, par value $0.0001 per share (the "Company Common Stock"), as of immediately prior to the Effective Time (other than Owned Company Shares (as defined below) or dissenting shares) will be converted into the right to receive $0.90 in cash without interest and subject to applicable withholding (the "Merger Consideration"), (c) each share of Company Common Stock held in the treasury of the Company, any shares of Company Common Stock owned by the Buyer Parties, and any shares of Company Common Stock owned by affiliates of the Buyer Parties immediately prior to the Effective Time (collectively, "Owned Company Shares") will automatically be canceled and will cease to exist without any conversion thereof or consideration paid therefor, (d) each share of 7.00% Series A Cumulative Redeemable Preferred Stock, par value $0.0001 per share, of the Company and each share of 7.00% Series C Convertible Preferred Stock, par value $0.0001 per share, of the Company immediately prior to the Effective Time will automatically be canceled and will cease to exist without any conversion thereof or consideration paid therefor, and (e) each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time will automatically be converted into and become one fully paid, nonassessable share of common stock, par value $0.0001 per share, of the Surviving Corporation, which will thereafter represent the ownership of shares of common stock of the Surviving Corporation.

The Merger Agreement and the other transactions contemplated thereby (the "Transaction") were approved by our Board of Directors (the "Company Board") based upon the unanimous recommendation of a special committee thereof consisting only of independent and disinterested directors. Subject to the terms of the Merger Agreement, the Company Board resolved to recommend that the Company's stockholders vote in favor of adoption of the Merger Agreement and approval of the Merger.

Sixth Amendment to Note and Security Agreement

On May 13, 2025, we entered into a Sixth Amendment to Note and Security Agreement ("Sixth Amendment"), CHCL. The Sixth Amendment (i) modifies the definition of "Facility Amount" in Section 1 of the original note and security agreement (as amended prior to the Sixth Amendment) to increase the facility amount from $8,000,000 to $10,000,000 allowing the Borrowers to request an additional $2,000,000 for general corporate purposes, subject to certain restrictions; (ii) extends the maturity date for the facility to September 30, 2025; (iii) modifies the first paragraph of Section 2 to set forth distinct processes for payroll-related requests versus all other advancement requests; and (iv) amends and restates Section 5.06 to indicate the Company and CHCL will use good faith efforts to achieve any take private transaction deal milestones including development of an analysis setting forth Borrower's estimated weekly working capital requirements for the period commencing May 1, 2025 and ending July 31, 2025.

Seventh Amendment to Note and Security Agreement

On May 27, 2025, we entered into a Seventh Amendment to Note and Security Agreement ("Seventh Amendment"), with CHCL. The Seventh Amendment modifies the definition of "Facility Amount" in Section 1 of the original note and security agreement (as amended prior to the Seventh Amendment) to increase the facility amount from $10,000,000 to $12,000,000 allowing the Borrowers to request an additional $2,000,000 for general corporate purposes, subject to certain restrictions.

Eighth Amendment to Note and Security Agreement

On June 18, 2025, the Company, entered into an Eighth Amendment to Note and Security Agreement ("Eighth Amendment"), with CHCL. The Eighth Amendment modifies the definition of "Facility Amount" in Section 1 of the original note and security agreement (as amended prior to the Eighth Amendment) to increase the facility amount from $12,000,000 to $14,000,000 allowing the Borrowers to request an additional $2,000,000 for general corporate purposes, subject to certain restrictions.

Ninth Amendment to Note and Security Agreement

On July 24, 2025, the Company entered into a Ninth Amendment to Note and Security Agreement ("Ninth Amendment") with CHCL.

The Ninth Amendment modifies the definition of "Facility Amount" in Section 1 of the original note and security agreement (as amended prior to the Ninth Amendment) to increase the facility amount from $14,000,000 to $15,000,000 allowing the Borrowers to request an additional $1,000,000 for general corporate purposes, subject to certain restrictions

Results of Operations

The following table sets forth information comparing the components of net loss for the three months ended June 30, 2025 and the comparable period in 2024:

		For the Three Months Ended June 30,
		2025				2024
Revenues
Sponsorships, net of activation costs		$	636,546			$	626,831
Event, rents, restaurant and other revenue			1,848,461				2,191,900
Hotel revenues			1,857,262				1,880,938
Total revenues			4,342,269				4,699,669
Operating expenses
Operating expenses			4,220,719				7,199,196
Hotel operating expenses			1,604,243				1,708,961
Depreciation expense			4,235,983				4,181,191
Total operating expenses			10,060,945				13,089,348
Loss from operations			(5,718,676	)			(8,389,679	)
Other income (expense)
Interest expense, net			(5,978,073	)			(6,475,614	)
Amortization of discount on note payable			(236,773	)			(1,054,650	)
Change in fair value of warrant liability			41,000				(1,000	)
Gain on sale of asset			-				1,502
Loss on extinguishment of debt			-				(3,763	)
Other income			-				500,000
Loss from equity method investments			(3,084	)			(65,778	)
Total other expense			(6,176,930	)			(7,099,303	)
Net loss		$	(11,895,606	)		$	(15,488,982	)
Preferred stock dividends			(266,000	)			(266,000	)
Loss attributable to non-controlling interest			-				-
Net loss attributable to HOFRE stockholders		$	(12,161,606	)		$	(15,754,982	)
Net loss per share, basic and diluted		$	(1.82	)		$	(2.41	)
Weighted average shares outstanding, basic and diluted			6,698,994				6,527,988

Three Months Ended June 30, 2025 as Compared to the Three Months Ended June 30, 2024

Sponsorship Revenues

Sponsorship revenues totaled $636,546 for the three months ended June 30, 2025, as compared to $626,831 for the three months ended June 30, 2024, representing an increase of $9,715, or 1.5%. This increase was primarily due to new sponsorship contracts.

Event, rents, restaurant and other revenues

Revenue from event, rents, restaurant and other revenues was $1,848,461 for the three months ended June 30, 2025, compared to $2,191,900 for the three months ended June 30, 2024, for a decrease of $343,439, or 15.7%. The decrease was primarily due to a decrease in revenue from events, food & beverage sales, rentals, and parking.

Hotel Revenues

Hotel revenue was $1,857,262 for the three months ended June 30, 2025, compared to $1,880,938 from the three months ended June 30, 2024 for a slight decrease of $23,676, or 1.3%. The decrease in hotel revenues was primarily driven by decreased occupancy offset by an increase in the average daily rate.

Operating Expenses

Operating expense was $4,220,719 for the three months ended June 30, 2025, compared to $7,199,196 for the three months ended June 30, 2024, for a decrease of $2,978,477, or 41.4%. This decrease was primarily driven by a decrease in production fees for our events and media, a decrease in personnel and related benefits costs, as well as a decrease in professional fees.

Hotel Operating Expenses

Hotel operating expense was $1,604,243 for the three months ended June 30, 2025, compared to $1,708,961 for the three months ended June 30, 2024, for a decrease of $104,718, or 6.1%. This decrease was primarily driven by lower occupancy levels during the quarter along with increased efficiencies in the Company's operations.

Depreciation Expense

Depreciation expense was $4,235,983 for the three months ended June 30, 2025, compared to $4,181,191 for the three months ended June 30, 2024, for an increase of $54,792, or 1.3%. The increase in depreciation expense is primarily the result of the completion of additional major assets being put into service.

Interest Expense

Total interest expense was $5,978,073 for the three months ended June 30, 2025, compared to $6,475,614 for the three months ended June 30, 2024, for a decrease of $497,541, or 7.7%. The decrease in total interest expense was primarily due to the termination of the waterpark ground lease.

Amortization of Debt Discount

Total amortization of debt discount was $236,773 for the three months ended June 30, 2025, compared to $1,054,650 for the three months ended June 30, 2024, for a decrease of $817,877, or 77.5%. The decrease is primarily due to certain debt instruments reaching full amortization upon maturity.

Change In Fair Value of Warrant Liability

The change in fair value warrant liability was $41,000 for the three months ended June 30, 2025, compared to $1,000 for the three months ended June 30, 2024, for a decrease of $42,000 or 30.6%. The decrease in change in fair value of warrant liability was due primarily to a change in our stock price.

Gain on sale of asset

The gain on sale of asset was $0 for the three months ended June 30, 2025, compared to $1,502 for the three months ended June 30, 2024 which was due to the sale of some office equipment.

Loss on extinguishment of debt

The loss on extinguishment of debt was $0 for the three months ended June 30, 2025, compared to $3,763 for the three months ended June 30, 2024. The loss on extinguishment of debt was due to the restructuring of certain of our debt instruments during the quarter.

Other income

Other income was $0 for the three months ended June 30, 2025, compared to $500,000 for the three months ended June 30, 2024. Our other income during 2024 was due to a grant from a government entity.

Loss from equity method investments

The loss from equity method investments was $3,084 for the three months ended June 30, 2025, compared to $65,778 for the three months ended June 30, 2024. The loss from equity method investments was due to the Sandlot arrangement, which was entered into on January 11, 2024.

Six Months Ended June 30, 2025 as Compared to the Six Months Ended June 30, 2024

		For the Six Months Ended June 30,
		2025				2024
Revenues
Sponsorships, net of activation costs		$	1,202,809			$	1,486,562
Event, rents, restaurant and other revenue			2,959,106				4,246,777
Hotel revenues			3,125,687				3,157,645
Total revenues			7,287,602				8,890,984
Operating expenses
Operating expenses			9,889,854				13,349,560
Hotel operating expenses			3,018,944				2,683,393
Depreciation expense			8,469,808				8,339,941
Total operating expenses			21,378,606				24,372,894
Loss from operations			(14,091,004	)			(15,481,910	)
Other income (expense)
Interest expense, net			(11,502,527	)			(12,997,148	)
Amortization of discount on note payable			(1,385,492	)			(2,009,972	)
Change in fair value of warrant liability			75,000				48,000
Loss on sale of asset			-				(138,539	)
Loss on extinguishment of debt			-				(3,763	)
Other income			-				500,000
Loss from equity method investments			(60,533	)			(35,826	)
Total other income (expense)			(12,873,552	)			(14,637,248	)
Net loss		$	(26,964,556	)		$	(30,119,158	)
Preferred stock dividends			(532,000	)			(532,000	)
Non-controlling interest			-				8,588
Net loss attributable to HOFRE stockholders		$	(27,496,556	)		$	(30,642,570	)
Net loss per share - basic and diluted		$	(4.11	)		$	(4.71	)
Weighted average shares outstanding, basic and diluted			6,686,039				6,507,016

Sponsorship Revenues

Sponsorship revenues totaled $1,202,809 for the six months ended June 30, 2025 as compared to $1,486,562 for the six months ended June 30, 2024, for a decrease of $283,753, or 15.7%. This decrease was primarily driven by the expiration of certain sponsorship agreements.

Event, rents, restaurant and other revenues

Revenue from event, rents, restaurant and other revenues was $2,959,106 for the six months ended June 30, 2025 compared to $4,246,777 for the six months ended June 30, 2024, for a decrease of $1,287,671, or 30.3%. This decrease was primarily driven by a decrease in the number of larger scale events.

Hotel Revenues

Hotel revenue was $3,125,687 for the six months ended June 30, 2025 compared to $3,157,645 from the six months ended June 30, 2024 for a decrease of $31,958, or 1.0%.

Operating Expenses

Operating expense was $9,889,854 for the six months ended June 30, 2025 compared to $13,349,560 for the six months ended June 30, 2024, for a decrease of $3,459,706, or 25.9%. This decrease was driven by lower personnel and related benefits costs, a decrease in production and related costs for our events and media productions, and a decrease in professional fees.

Hotel Operating Expenses

Hotel operating expense was $3,018,944 for the six months ended June 30, 2025 compared to $2,683,393 for the six months ended June 30, 2024 for an increase of $335,551, or 12.5%. This increase was driven by a reversal of property tax expense taken in the first quarter of 2024.

Depreciation Expense

Depreciation expense was $8,469,808 for the six months ended June 30, 2025 compared to $8,339,941 for the six months ended June 30, 2024, for an increase of $54,792, or 1.3%. The increase was primarily the result of putting additional assets into service during 2024.

Interest Expense

Total interest expense was $11,502,527 for the six months ended June 30, 2025 compared to $12,997,148 for the six months ended June 30, 2024, for a decrease of $1,494,621, or 11.5%. The decrease in total interest expense was primarily due to the termination of the waterpark ground lease.

Amortization of Debt Discount

Total amortization of debt discount was $1,385,492 for the six months ended June 30, 2025 compared to $2,009,972 for the six months ended June 30, 2024, for a decrease of $624,480, or 31.1%. The decrease is primarily due to certain debt instruments reaching full amortization upon maturity.

Change in Fair Value of Warrant Liability

The change in fair value warrant liability was $75,000 for the six months ended June 30, 2025 compared to $48,000 for the six months ended June 30, 2024, for a change of $27,000 or 56.3%. The change in fair value of warrant liability was primarily due to a change in our stock price.

Loss on sale of asset

The loss on sale of asset was $0 for the six months ended June 30, 2025, compared to $138,539 for the six months ended June 30, 2024. The loss on sale of asset was due to the sale of office equipment and the sale of our sports complex.

Loss on extinguishment of debt

The loss on extinguishment of debt was $0 for the six months ended June 30, 2025, compared to $3,763 for the six months ended June 30, 2024. The loss on extinguishment of debt was due to the restructuring of a portion of our debt arrangements.

Other income

Other income was $0 for the six months ended June 30, 2025, compared to $500,000 for the six months ended June 30, 2024. Our other income during 2024 was related to a government grant we received during the period.

Loss from equity method investments

The loss from equity method investments was $60,533 for the six months ended June 30, 2025, compared to $35,826 for the six months ended June 30, 2024. The loss from equity method investments was due to the Sandlot arrangement, which was entered into on January 11, 2024.

Liquidity and Capital Resources

We have sustained recurring losses through June 30, 2025, and our accumulated deficit was $301.1 million as of such date. Since inception, the Company's operations have been funded principally through the issuance of debt and equity. As of June 30, 2025, we had approximately $0.8 million of unrestricted cash and $4.4 million of restricted cash. Through June 30, 2026, we have $126 million in debt principal payments coming due. At August 12, 2025, the Company's cash position is deficient and certain payments for our operations are not being made in the ordinary course of business.

Certain of our liquidity requirements have been, and may continue to be, funded in part by loans from CHCL, an affiliate of the Company's director Stuart Lichter, and certain other affiliates of Mr. Lichter.

We will need to raise additional financing to accomplish our development plan and fund our working capital. We are seeking to obtain additional funding through debt, construction lending, and equity financing. There are no assurances that we will be able to raise capital on terms acceptable to the Company or at all. Cash flows generated from our operations are insufficient to meet our current operating costs. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our financial condition and operating results, or we may not be able to continue to fund or must significantly curtail our ongoing operations. These conditions raise substantial doubt about our ability to continue as a going concern to sustain operations for at least one year from the issuance of these condensed consolidated financial statements. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Cash Flows

Since inception, we have primarily used our available cash to fund our project development expenditures. The following table sets forth a summary of cash flows for the periods presented:

		For the Three Months Ended June 30,
		2025				2024
Cash (used in) provided by:
Operating Activities		$	(6,304,920	)		$	(5,310,177	)
Investing Activities			(122,732	)			(3,777,401	)
Financing Activities			7,221,520				3,714,860
Net increase (decrease) in cash and restricted cash		$	793,868			$	(5,372,718	)

Cash Flows for the Three Months Ended June 30, 2025 as Compared to the Three Months Ended June 30, 2024

Operating Activities

Net cash used in operating activities was $6.3 million for the six months ended June 30, 2025, a change of $1.0 million from the same period in the prior year. The decrease in cash provided by operating activities was primarily attributable to a decrease of $3.3 million in amortization of financing liability, and a $1.2 decrease in the change in due to affiliates, offset by a $3.2 million decrease in net loss.

Investing Activities

Net cash used in investing activities was $0.1 million during the six months ended June 30, 2025, compared to $3.8 million for the three months ended June 30, 2024. The Company experienced a decrease of $8.1 in the proceeds from the sale of assets during the period, offset by an $11.8 million decrease in additions to project development costs and property and equipment.

Financing Activities

Net cash provided by financing activities was $7.2 million during the six months ended June 30, 2025, an increase of $3.5 million from the same period last year. The increase was primarily attributable to a decrease of $8.2 million in repayments of notes payable, offset by a decrease of $2.2 million in notes payable proceeds and a decrease of $3.5 million in proceeds from our financing liability.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of June 30, 2025.

Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. In accordance with U.S. GAAP, we base our estimates on historical experience and on various other assumptions we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

For information on our significant accounting policies please refer to Note 2 to our Unaudited Condensed Consolidated Financial Statements.