Other Commitments

9 Months Ended

Sep. 30, 2023

Other Commitments [Abstract]

Other Commitments

Note 7: Other Commitments

Management Agreement with Crestline Hotels & Resorts

On October 22, 2019, the Company entered into a management agreement with Crestline Hotels & Resorts (“Crestline”). The Company appointed and engaged Crestline as the Company’s exclusive agent to supervise, direct, and control management and operation of the DoubleTree Canton Downtown Hotel. In consideration of the services performed by Crestline, the Company agreed to the greater of: 2.75% of gross revenues (which increased from 2% in the beginning of the agreement) or $10,000 per month in base management fees and other operating expenses. The agreement will be terminated on the fifth anniversary of the commencement date, or October 22, 2024. For the three months ended September 30, 2023 and 2022, the Company incurred $61,830 and $51,466, respectively in management fees, and for the nine months ended September 30, 2023 and 2022, $162,581 and $114,310, respectively in management fees.

Management Agreement with Shula’s Steak Houses, LLLP

On October 7, 2020, the Company entered into a management agreement with Shula’s Steak Houses, LLLP (“Shula’s”). The Company appointed and engaged Shula’s to develop, operate and manage the Don Shula’s American Kitchen restaurant. In consideration of the services performed by Shula’s, the Company agreed to a monthly license/management fee in an amount equal to five percent of gross sales. The initial term of the agreement is for a period of ten years. For the three months ended September 30, 2023 and 2022, the Company incurred $34,322 and $0, respectively, in management fees, and for the nine months ended September 30, 2023 and 2022, $77,801 and $0, respectively, in management fees.

Constellation EME Express Equipment Services Program

On February 1, 2021, the Company entered into a contract with Constellation whereby Constellation will sell and/or deliver materials and equipment purchased by the Company. The Company is required to maintain an escrow account held by Constellation, representing adequate assurance of future performance. Constellation will invoice the Company in 60 monthly installments, which began in April 2021 for $103,095. Additionally, the Company has one note payable with Constellation. See Note 4 for more information.

Sports Betting Agreements

On July 14, 2022, Newco entered into an Online Market Access Agreement with Instabet, Inc. doing business as betr (“BETR”), pursuant to which BETR will serve as a Mobile Management Services Provider (as defined under applicable Ohio gaming law) wherein BETR will host, operate and support a branded online sports betting service in Ohio, subject to procurement of all necessary licenses. The initial term of the Online Market Access Agreement is ten years.

As part of this agreement, Newco will receive a limited equity interest in BETR and certain revenue sharing, along with the opportunity for sponsorship and cross-marketing. The limited equity interest was in the form of penny warrants initially valued at $4,000,000 at the grant date. The grant date value of these warrants were recorded as deferred revenue (within Other Liabilities on the condensed consolidated Balance Sheets) and will be amortized over the life of the sports betting agreement. The Company is also recognizing the change in fair value of the warrants under “change in fair value of investments available for sale” on the condensed consolidated statements of operations.

On November 2, 2022, the Company secured conditional approval from the state for mobile and retail sports betting. The Ohio Casino Control Commission provided the required authorization for HOFV to gain licensing for a physical sports betting operation – called a sportsbook – as well as an online sports betting platform, under Ohio’s sports betting law H.B.29. As of January 1, 2023, sports betting is legal in Ohio for anyone in the state that is of legal betting age. The conditional approval requires that the Company accept bets under both the mobile and retail sports books prior to December 31, 2023.  The Company satisfied that condition for the mobile sports book.  However, the Company does not currently have a sports betting partner for its retail sports book.  If the Company does not take an in-person sports bet through an approved retail partner at its designated facility by December 31, 2023, or otherwise obtain a waiver to this requirement, then the Ohio Casino Control Commission may take administrative actions to revoke the Company’s retail license. The Company is in communication with the Ohio Casino Control Commission regarding a potential waiver that would extend this deadline.

Other Liabilities

Other liabilities consisted of the following at September 30, 2023 and December 31, 2022:

	September 30, 2023		December 31, 2022
Activation fund reserves	$	3,601,209	$	3,511,185
Deferred revenue		7,617,867		6,867,970
Deposits and other liabilities		495,498		300,549
Total	$	11,714,574	$	10,679,704

Other Commitments

The Company has other commitments, as disclosed in Notes 6, 8 and 9 within these condensed consolidated footnotes.