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Disposition
6 Months Ended
Jun. 30, 2024
Disposition [Abstract]  
Disposition

Note 13: Disposition

 

On January 11, 2024, HOF Village completed the sale to Sandlot Facilities, LLC (“Sandlot”) for a $10 million purchase price, subject to adjustment, of 80% of a newly formed limited liability company named Sandlot HOFV Canton SC, LLC (“Sports Complex Newco”), to which the Company, HOF Village and HOF Village Youth Fields, LLC had contributed the ForeverLawn Sports Complex business prior to closing. The transaction occurred pursuant to the terms of the Membership Interest Purchase Agreement, dated December 22, 2023 (the “Purchase Agreement”), among the Company, HOF Village, Sandlot and Sandlot Youth Sports Holdings, LLC. Under the Purchase Agreement, Sandlot held back $1.5 million of the Purchase Price (which is included in “Prepaid expenses and other assets” on the Company’s condensed consolidated balance sheets) to secure certain indemnification obligations of the Company and HOF Village, which holdback will be released by Sandlot for the benefit of HOF Village in three $500,000 increments at 6, 12 and 18 months after the January 11, 2024 closing date of the Transaction, subject to post-closing adjustment of the Purchase Price and any indemnification claims pursuant to the Purchase Agreement. During July 2024, the Company received the first of such holdback payments.

 

In connection with this transaction, the Company recognized a loss on the sale of the sports complex of $140,041, as follows:

 

Purchase price  $10,000,000 
Working capital adjustment   (214,222)
Net purchase price   9,785,778 
      
Less: transaction costs   (159,144)
Less: book value of net assets sold   (12,213,120)
Plus: investment retained   2,446,445 
Loss on sale  $(140,041)

 

The Company will account for the remaining investment in the sports complex as an equity-method investment and record its share of profit or loss as “income/(loss) from equity method investment” on its condensed consolidated statements of operations.