Hall of Fame Resort Seeks Shareholder Approval for Reverse Stock Split

CANTON — A special meeting of shareholders has been called by Hall of Fame Resort & Entertainment Co. to approve a proposal to address the company’s declining stock price.

The company wants the shareholders to authorize the board of directors to institute a reverse stock split. This move would turn multiple stocks into a single stock, multiplying the stock’s value. Hall of Fame Resort is asking shareholders to allow the board to consider a 1:10 split and a 1:25 split. If approved, the board must decide by next May which option to use.

The goal is to ensure Hall of Fame Resort shares continue to trade on the Nasdaq stock market. The company is at risk of delisting because the stock is trading at less than $1 per share.

Helping the stock price by using a reverse stock split was one of four options discussed when Hall of Fame Resort president and CEO Michael Crawford reviewed second-quarter results in early August. Other options are to get the stock price above $1 per share and stay there for 10 consecutive days, ask the Nasdaq for a 180-day extension, or exit the Nasdaq exchange.

Hall of fame :The company reported higher revenue in the second quarter thanks to events and the use of hotels

Crawford discussed the reverse stock split in a YouTube video called “The Huddle” that the company occasionally produces. The Hall of Fame Resort wants to comply with Nasdaq rules, he said.

“We can’t risk being disbarred. It’s not an option for us,” Crawford said in the video.

The company hopes to go through 10 trading days with a price above $1 per share, but that depends on traders, the economy, and market volatility.

“While hope is a good thing to have, it’s never a good strategy to try to deploy,” Crawford said.

“We have to act,” he said later in the video.

The decision rests with the board of directors, if the shareholders approve the demerger

If shareholders approve the reverse stock split, the board will have until May 5, 2023 to decide whether it will be used and which option to use.

Whether the company’s board of directors will use the stock split remains unclear.

Shareholders who held shares as of August 1 have been invited to a virtual meeting on September 29. Votes can be cast in advance or on the day of the meeting.

The company urges shareholders to vote yes and support the reverse stock split.

If approved and used, the value of the stock will likely exceed the required price. For example, the company’s stock closed Tuesday with a value of 81.5 cents, or 10 shares worth $8.15 and 25 shares worth $20.375. If the reverse stock split converted 10 shares into a single share, the new single $8.15 share would satisfy the Nasdaq requirement.

Hall of fame :Hall of Fame Village development comes to life

The majority of the company’s 117.6 million shares – more than 72.9 million shares – are held by directors and officers of the company. More than 67.6 million shares are tied to board member Stuart Lichter through several of his companies, which help fund the development of the Hall of Fame Village.

Stock was used by Hall of Fame Resort as it borrows from different entities to build Hall of Fame Village. The project opened the Constellation Center for Excellence, ForeverLawn Sports Complex, Play-Action Plaza and a Performance Center. It is nearing completion of the Fan Engagement Zone mall and plans to open a 180-room hotel and water park later this year.

Threatened with radiation

In May, Nasdaq officials warned the Hall of Fame Resort that it faced delisting after the company’s shares traded below $1 a share for 30 days. The company was given 180 days for the stock price to recover.

If a stock is taken off the Nasdaq exchange, it may be traded over-the-counter or on other exchanges. The management of the Hall of Fame Resort prefers to remain on the most important exchange of the Nasdaq.

Over the past 52 weeks, Hall of Fame Resort shares have traded in a range as low as 52.2 cents and as high as $3.39 per share. The price fell below $1 per share in April and fell to its lowest trading levels in June and July.

The stock price started to recover in August. The shares closed above $1 on four trading days between Aug. 3 and Aug. 8, then the price fell for a day. From Aug. 10 to Aug. 19 – seven trading days – shares once again closed above $1 before falling on Aug. 22.

As investors pushed stocks above $1 in early August, they apparently weren’t keen on the idea of ​​a stock split.

The company filed plans for the stock split with the United States Securities and Exchange Commission on August 26, a Friday. When trading resumed on Monday, the price fell more than 25 cents and closed at 79.5 cents per share. The stock price remained in the 80 cents per share range throughout the week and fell below 70 cents in Friday trading.

Contact Edd at 330-580-8484 or [email protected] On Twitter: @epritchardREP

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