Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) Q4 2022 Earnings Call Transcript

Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) Q4 2022 Earnings Call Transcript March 28, 2023

Operator: Good morning and welcome to the Hall of Fame Resort and Entertainment Company ‘s Fourth 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. I’ll now turn on the call over to Anne Graffice, Executive Vice President, Global Marketing and Public Affairs.

Anne Graffice: Good morning, and thank you all for joining us for our fourth quarter 2022 earnings conference call. Our latest press release, supplemental slides, and Form 10-K 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 update on the company’s outlook and Benjamin Lee, our Chief Financial Officer will provide analysis of the quarter’s financial results, and an update on the company’s fiscal year ’23 financial guidance. 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 our press release. We have posted a supplementary slide deck summarizing the quarterly results as well. These slides can be accessed on our website and will be archived there along with a replay of this call. If you have any additional questions after today’s call, please contact me directly. It’s now my pleasure to turn the call over to Michael Crawford. Mike?

Michael Crawford: Good morning. Thanks, Anne, and good morning, everybody. Thank you for joining our call this morning. Hopefully, you saw our press release yesterday and you got the indication that it was intended to have, which is, we are seeing a very good results based on the execution of the company, specifically in 2022, but also in Q4. I do understand that as a society and as Americans, we like to compare quarter-over-quarter earnings. We like to look at year-over-year results. I also look at that. But I look at for a company like ours the trend line of execution. Because when you look at the trend line, this is what really leads us to the desired results we’ve articulated over the last few years. And I think our trend line has been really in a positive direction.

The execution though that we’ve talked about, it starts with the reality of the environment we face. The supply chain constrained environment and yet construction has still continued on time and on budget as of today. Almost unthinkable in the context of what’s going on and what you face probably even in your daily lives. We continue to book major events. We continue to increase attendance to campus. We sign new tenants that are going to create wonderful new experiences when guests come to visit the village at our Fan Engagement Zone and in our Center for Excellence. Our office complex that really creates a wonderful unique environment for collaboration. We are building new media. Our pipeline is continuing to be filled and you actually saw some of that execution during Super Bowl weekend with the airing of The PERFECT 10.

I’ll talk about that in just a few moments. And we’re supporting the gaming division and the execution in our gaming division. You’re seeing things like Esports come to life on campus versus our Hall of Fantasy League and Sports Betting. Fortunately for us, we were able to procure two of the necessary licenses to have a retail sports book and online sports betting partner. Before I go on though, I do just want to make reference to the fact that we have been strategic and purposeful in the decisions we’ve made for the long-term success of the Hall of Fame Resort and Entertainment Company. Now some of these decisions are not popular. I get that. But I can also tell you that sometimes leadership is not popular. And it’s not a popularity contest when you’re considering the future of a company, the team, its shareholders and frankly the community and all of our fans and guests, we have to make sound long-term business decisions that set our company up for success over and over again.

I’ve talked about the fact that we’ve continued to be on a positive trend line. We’ve also been very transparent about why we’ve made certain decisions. We always talk about we say what we’re going to do and we do what we’re going to say. It’s an incredibly difficult environment. And while many companies have taken, I would consider to be more severe steps to ensure short term successes, I personally and our company leadership team cannot think that way about a company that is literally building from the ground up in every way, a company that is driving growth through synergy, which is what our strategy was all about, from business unit to business unit, a company that’s leadership and board continues to invest in without fail or confidence in our plan.

And yet we’ve continued to be flexible and make dynamic choices to preserve value, spend money wisely and when needed, and drive growth in revenue across all our business units. That’s the takeaway for me from last year and from Q4. Now, before I go on, I want to take a step back. And you know, usually we talk about each particular business unit and we give you an update on all the progress that’s being made. But I think it’s important that we state some of the more fundamental things that our company philosophically is focused on. Of course, as shareholders, you need to expect short-term near-term execution. And I think we’re demonstrating that. We are constantly talking about the plan and the execution against the plan. And you’re starting to see that in every single vertical that we have.

And it’s important that you understand that in the context of the strategy. We are collectively building in every way. It all comes down to the fact that we believe in the strategy, we believe in the potential, but we have to be flexible and dynamic to create shareholder value. And I think that’s what we’re doing. I spoke many times about the executive team and the board increasing ownership in the company through purchases in the open market or even taking part of their compensation, their cash compensation in stock to increase their ownership in the company. Again, I want to reiterate, you know, if the belief is that we’re making short-term decisions that are going to harm our shareholders or the value that they hold in the company, I’m not sure where that belief comes from or where that perception comes from.

No one in our company has sold shares. No one has reduced their ownership position. And in fact, between the board and the management team, we own approximately 35% of the company collectively. We are all in this together. I realize the share price is not where we want it to be. The value of the company, frankly, is woefully undervalued, and I’ll speak to that in just a moment. But we’re utilizing this ownership mindset to make the right decisions for the company for the long-term success. We’re not doing things to just try and make something happen to get a short-term blip in our stock price. That’s what other companies do in this sort of difficult environment. At a recent board meeting, I recommended to our board and our board approved it, but even my own compensation, the stock that would be awarded to me would only be awarded through performance grants, performance stock units, not restricted stock units.

And so my 2023 compensation is going to be based on, as will 2022 performance. And that’s what I think you should expect from me as the President and CEO of this company. I am invested in it. I believe in it so deeply and I believe in the execution of our team. It’s been amazing. Our company is undervalued. That will change. And I want to show my demonstration to that by saying I don’t want shares that I haven’t earned. I want shares based on the performance and aligning my interest with the company has always been my belief in long-term success. Again, ownership, mindset, focus not only on the day to day execution, but makes sure our strategy is continuing to evolve and we make dynamic decisions to put in place the assets, the content and the environments that we need to have in a high quality way for long-term success.

Our largest shareholder, Industrial Realty Group just continues to be amazing for us. The support that they provide, not only in terms of loan support, direct financial support, but indirect financial support by helping us restructure some of the debt. The balance sheet continues to improve. We’re not done there and we continue to have conversations with IRG. They are here in it for the long-term. Again, you will have seen they have not sold a share and in fact for their support they have continued to say we want to take stock in the company because we believe in the management team and the plan so deeply that value is going to continue to grow. Not only is it our largest shareholder, though, the community, the political system in Ohio, in the county, in the city.

We have been very purposeful. Again, I use that word and strategic around where financing comes from. Now, make no mistake, this is a difficult traditional lending environment. You see rates continuing to rise. We are in an inflationary environment and yet the world is with the banking system, sort of unsure about the direction the Fed is going to take. We haven’t just simply sat back and said we’re going to place our eggs in a traditional lending bank, be it large, regional or small. We’ve gone out and gotten loans from public and private financing like TDD bonding, TMUD, Transformational Mixed-Use Development, which is not a loan. We have taken out pace lending this — this clean energy financing. A lot of these things that we’ve done to put in place to support our cap stack are really longer term, higher quality debt.

And while I’ve heard comments from some shareholders that the debt profile of the company continues to be of a concern. For me, I have seen and if you’ve watched over the last two years, the evolution of our capital stack and the debt profile to allow us to get the right runway to be successful for the long-term. The group that I lead and the board that oversees the governance of the company sees a very strong upward trajectory and a long-term success plan that we continue to believe very deeply. That long-term mindset allows us to make those tough decisions that I talked about. Now, one of those obviously was the reverse stock split that we completed in December. Now, many of you probably on this call would say and did say that was going to destroy the value of this company and that management was doing this for selfish gain, that we were only interested in our own well-being.

And again, I’m going to make a pretty a couple of pretty bold statements here. When I just think about a couple of things that I talked about over the last few points that I made. Does this company sound like a company that is interested in only diluting its shareholders for selfish gain? I’m not sure how anyone who really understands what our company has accomplished. All while considering what’s best for our shareholders make these types of assumptions. I’m really not. 35% of the company owned by internal shareholders. Companies have gone out after they’ve done these reverse stock splits and raised capital immediately diluting their shareholders again. We did not do that. And in fact, we haven’t even used the at the market offering since last September.

Why? Because we want to be responsible for how we’re spending money, where we’re bringing money in to ensure that we’re trying to preserve the value of our company and for our shareholders. But yet we saw traders that don’t really understand long-term strategy. Traders that are in this for a day, traders that are trying to make a quick buck sell shares at significant discounts to asset values, pushing our price to book ratio down to 0.2X multiple and a market capitalization to below $40 million. It’s astonishing to me when you look at our numbers and we finished Q4 with roughly $50 million of cash in the bank, roughly $450 million of assets built, many of which are up and operational. Another $170 million of assets being built right now. How anyone could justify that valuation for our company.

We are severely undervalued. And we’re that way because I do believe that there is this narrative, there is the misguided assumptions being made about the action we’ve taken to support our growth and false assertions of doing things to intentionally devalue the company and hurt the shareholders, of which we’re 35%. Again, I make that point to really reemphasize the fact that do not listen to the rhetoric, do not listen to people who are trying to purposely cause damage for their gains. That’s not what this company is about and it’s not what it’s been about. You see execution. You see that we’re planning and we’re building according to our strategy that we’ve articulated. Now that strategy starts with putting together high quality products and experiences and experiences and product that people want and desire, product and experiences that people already are participating in.

The Doubletree Hotel ranks in the top 5% of service of all Doubletree’s nationwide. That’s in Canton, Ohio. It’s a part of our company. We have stressed that we want a high quality asset there with great service, period. Last week we opened Don Shula’s American Kitchen, one of a kind restaurant, one of a kind for our destination. This location has been a wow from the time you walk in to the first — to the first time you taste the food, to the service you receive. And we are getting five star ratings across the board. People are experiencing a level of food product and an environment in our — in our region that I think sets a new standard. We’re booking talent like Dave Chappelle last year that enables great talent like Kevin Hart to come back this year.

Journey to Zac Brown. There are more of these talents that you’re going to be hearing about and I mean in the very near-term. The USFL came last year and said, wow, you guys made it impossible for us not to come back this year. They played their semi-finals and their championship here. What do they do this year? They add two permanent teams from their league to play out of our Tom Benson Hall of Fame Stadium because of the service that they got, because of the visitors that attended those games, because of the inclusive package and the synergy we could offer with meeting rooms and food and beverage and hotel stays. And now they’re seeing all of these other assets come to life with just enhances their ability to create an environment for their guests and our guests to come and enjoy over and over again.

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Everything we’re building fits together in a purposeful way to realize synergies across all our business units. I’m seeing it all come together. I am really pleased with the team and how they’re executing. The story we’ve been discussing with the public is now starting to bear fruit. Our revenue grew significantly year-over-year, even without recognizing revenue from our largest sponsor, Johnson Controls, which contributed roughly $4 million in 2021. We not only didn’t miss that revenue, we exceeded that revenue. Now, some may say, yeah, but if you would have had that revenue, you would have exceeded it even more. I can’t deny that. But the reason why I’m so pleased is we’ve diversified. As we’ve always said, where revenue comes from now. It’s not just about sponsorships.

In the early days of this company, we had partners that believed so deeply in the vision they were willing to invest sponsorship partnership dollars to help us build and grow. Now you’re seeing revenue come from different areas. You’re seeing it come from tenant leases, you’re seeing it come from food and beverage sales. You’re seeing it come from rides, you’re seeing it come from our media and gaming division in a more meaningful way. If you’re looking at our presentation online, you see that thing I call the Wheel of Fortune. Why is it the Wheel of Fortune? Because it’s — it’s sort of like a flywheel. It’s interconnected. Once it starts moving, the inertia continues, it growing and it keeps moving faster and faster. I’m seeing the wheel start to turn on its own.

I’ve discussed the strategy earlier in the call. What synergy does. And from my background, working for a company like the Walt Disney Company, when you have business verticals that you can create an experience, you can create a physical asset in one. Your goal should be to traverse the other two and drive value there. Let me give you an example of that. The USFL again. Two teams playing out of our Tom Benson Hall of Fame Stadium. We receive revenue for the rental of that stadium. We receive concession revenue every time a game is played. We receive hotel revenue. We see rentals for practicing out at our ForeverLawn Sports Complex and in our Center for Performance. These are nationally televised games. So it enhances our ability to attract new sponsors because new sponsors say, wow, you have x number of games being played nationally now.

You have media content that helps drive new sponsors, partners. That’s exciting to me. Fans come out to play to enjoy these games. They also go to Shula’s. They also go to Brew Kettle or Topgolf and play and have fun food and beverage experiences there. Topgolf , Brew Kettle opens end of next month. Again, giving ourselves more ways to monetize people that are visiting was always part of the goal. Having them go over to Play-Action Plaza now with the Red Zone giant wheel open where riders are already riding, paying for those rides, bundling packages together to include a visit to the Pro Football Hall of Fame, a ride on the forward pass, maybe food and beverage. We had the ability to create an even more dynamic environment by having our entire property being set up as a designated outdoor recreation area, which allows guests to go from one facility to another with a cocktail in their hand and really create this immersive environment that I’ve continued to talk about, one that people want to be in.

The execution of the strategy is working and it’s growing and that’s how we continue to drive revenue. I’ll talk about fantasy. Fantasy football is another way in which we drive synergy. We’re hosting a very large scale fantasy football conference at the beginning of the NFL season on campus. That event will be held at the CFP. That’s rental revenue for the CFP. That’s food and beverage revenue. It’s revenue that feeds our strategy model, with guests staying at the Doubletree Hotel, having meetings and meeting rooms there, being entertained in our Fan Engagement Zone and Play-Action Plaza. The point that I’m making is one plus one equals three in a synergy strategy. It’s not about you get one thing, it’s direct revenue. It’s one thing that has direct revenue that equates to multiple areas of indirect revenue.

We achieved record attendance in FY’22 and we will build on — going forward. Our expectation, just as one example, and we don’t report overall attendance numbers. In ’22, we had roughly 300,000 participants playing in any number of different sports out at our ForeverLawn Sports Complex. We expect to increase that to almost 400,000 this year. In addition to the ForeverLawn Sports Complex, we opened the Center for Performance in November. We immediately filled that location every single day, not only with sports. We’re now hosting large scale dinners and conventions. We have a home and garden show coming. We have major events like the fantasy event that I talked about that are going there. It’s a unique asset that allows us to flatten seasonality or to deseasonalize where revenue comes from.

When you live in an environment like Ohio, revenue sometimes can be limited. This is a fact. I’m not creating this to have a narrative. I really enjoy Cedar Point. Cedar Point is something I grew up with. But when you have an outdoor ion ride park that can only operate seven months out of the year, you have a blip in where revenue can come in as a seasonality factor. We’re trying to flatten that seasonality so that we have a more balanced view of where revenue is and we can maximize the assets year round. And the partnerships that are available to us are extended even further as we do have that opportunity to maximize revenue. Look, we’ve proven we can be creative and how we balance growth. When you balance growth, you also balance revenue growth and you reduce that seasonality that I talked about.

We have added partnerships and content and we monetize those in multiple different ways. The media vertical, a good example. Not only are we creating traditional media, but we’re also creating non-traditional media as well. I use the Hall of Fame Village pass, the NFT, the digital collectible that comes with entitlements, that comes with a closer connection to all of the product that we have, gaining access to exclusive things and parties, gaining access to information that around things prior to other guests coming to the village or guests viewing some of our media content or being involved in our — our gaming environments. We sold out of our Diamond passes. Navy passes are now of a very limited quality. We will continue to enhance that type of experience for those that are deeply committed to our company.

THE PERFECT 10 distribution was also something that I thought was incredible for a media company that literally has been stood up for about a year, maybe a year and a half. If you want to argue that, we have now added multiple things to the pipeline, some of which you’ve heard Gone Fishin’ with Jimmy Johnson, Rasheed Wallace, Shannon Sharpe partnerships, PERFECT 10 distribution. These are things that I would say our media team has had significant accomplishments in a very short period of time, and THE PERFECT 10 being distributed over national television on Fox TV the weekend of the Super Bowl, Saturday night before the Super Bowl is unprecedented for a company our size. It shows you the type of content, the stories that we can create are so valuable and so unique that even a company like Fox says, wow, we want that.

We want that to be part of our offering. Sports Betting went live in January. We have put a lot of effort into our mobile betting partner Betr. I think the company is off to a great start. We’re exceeding where we thought we were going to be and where they thought we were going to be. Micro Betting is a very engaging way to place sports bets in that ecosystem. They have enhanced their platform with more traditional betting opportunities as well. I think that’s attracting new guests. But we wanted to make sure we separated ourselves in a new betting environment against other very large competitors, traditional competitors. We wanted to give guests an opportunity for that Micro Betting space to really take hold, and it has. We didn’t just though say we wanted Betr to be our on-site partner.

This is another strategic decision that we made as a company. Instead of taking cash, we took an investment position in Betr. Long term thinking, ownership thinking, that type of mentality allows us to diversify where risk comes in at the company level. It also allows us to diversify where revenue comes in. Betr has now gone on and received betting application or put in betting applications and received approval from the State of Massachusetts and also Virginia. Already our investment, what it’s valued at is going to net greater yield for us simply because we had the vision to say we want you to be successful in Ohio, but your success everywhere else, we want to be a part of as well. And then lastly, we’re continuing to build that gaming division.

You saw we had Esports tournaments. We’ve announced more Esports tournaments, tournaments drive attendance, attendance drives buys, attendance drives stays, attendance drives awareness around all the things that we’re doing. When you look at and package the types of events now that the campus at the Village is hosting between magic shows to football games, the big scale concerts like Kevin Hart, Zac Brown, the fact that we’re creating an immersive environment there for our enshrinement weekend. Black College Football Hall of Fame kick-off classic. The list of events is growing, and we’re giving things to this region that had never been given before. We’re giving them opportunities to experience our product and the quality of our product. I’ll stop by saying and then I’ll come back after our Q&A.

We’re going to do this a little non-traditionally today. I’d like to take Q&A after Ben makes his remarks on the financing front. I’m going to start by saying we’re being responsible with what we do. An example of that is the cash on hand that we had at the end of Q4, roughly $50 million. We’re being responsible as to when we spend that. We’re spending it when needed. You’re going to hear Ben talk about just in time financing. I’ve talked about that for years. There’s no reason to go out and spend cash or take cash in before we need it. The water park is starting to be built very quickly. We’re going to start spending cash there. But in the meantime, we’re not letting that cash set in a non-interest bearing checking account. We’ve put it in short-term interest bearing vehicles to generate revenue to our company, which is what you would expect in a responsible way.

And so it’s another example of how management looks at managing decisions, leading the company in a strategic way that sets up for mid and long-term success versus just focusing on short-term execution to be able to sit here on these calls and say look at what we did this quarter. You should be asking us, what are you doing to ensure our long-term success? The reverse split was a decision we needed to make to ensure compliance with NASDAQ listing rules so that you shareholders had access to your shares and you could trade them freely. The more execution that we do, the more the trend line, the positive continues to grow, the more results that you are going to be able to expect from us, both from a financial point of view, but also from a creation of experiences and assets that are going to drive long-term value for us and for you as shareholders for many, many, many years to come.

Ben let me turn it over to you now.

Benjamin Lee: Yeah. Thanks, Mike, and good morning, everyone. Moving on to financial results. As Anne mentioned earlier, we filed our fiscal 2022 Form 10-K post-market yesterday. That document is available on the SEC website as well as our Investor relations site. Fourth quarter total revenue was $3.1 million, which represents an increase of 2% from the same period in the prior year. Fiscal year 2022 revenue was $16 million, an increase of 48% from the prior year. Full year revenue growth was primarily driven by higher event revenue at the Hall of Fame Village and significant increases in operating revenue at our Doubletree Hotel. While sponsorship revenue was down from the prior year due to the previously disclosed dispute with Johnson Controls, revenue growth and diversification have improved.

The company’s revenue mix has evolved significantly over the past three years as we’ve completed construction of many Phase 2 assets and realized revenue from our media and gaming verticals. For example, in 2020, sponsorship revenue accounted for approximately 90% of total revenue compared to only 17% of total revenue in 2022. This change in revenue mix highlights the synergies and the diverse revenue streams we are creating from event revenue, tenting and rentals, hotel and restaurant revenue, media and gaming. We expect the revenue streams will continue to broaden and grow. Fourth quarter adjusted EBITDA was minus $5.5 million and minus $25.3 million for the full year. The company continued to invest in headcount and other resource needs as we’ve opened destination assets and developed our other business verticals.

We expect to see operating leverage improve throughout the course of this year. The company posted a net loss of $18.5 million in the quarter, partially offset by the change in fair value of our warrant liabilities, which increased by $400,000. Under US GAAP, the fair value of these liabilities will decline and income will improve if the company’s stock price declines. The company would experience the opposite effect when our stock price moves higher. While this line item on the financial statements will vary based on the company’s stock price, it does not impact our cash flow from operations, cash and cash equivalents or liquidity for all prior and future periods. Moving to the balance sheet. We finished the quarter with a cash and liquid investment balance of approximately $51 million compared to $33 million at the end of the third quarter.

Both values are inclusive of our restricted cash balances and investments held to maturity. With a larger cash balance, we’ve been investing excess funds in short-term treasuries due to attractive yields and to better match timing of cash outflows. The company’s primary usage of cash continues to be driven by construction expenditures with approximately 17 million spent during the fourth quarter. This cash usage was offset by proceeds obtained from various financing instruments during the quarter. Our net debt balance increased to $171 million compared to $164 million at the end of the third quarter and $101 million at the end of 2021. The increase in notes payable during the quarter was primarily due to increased principal amounts related to TDD bonds.

In addition, the company finalized two long-term sale leaseback transactions related to the Fan Engagement Zone and Water Park totalling $68.2 million. During 2022, we lengthened maturities considerably while maintaining an average interest rate well below current high yield debt rates. This information is highlighted in the supplemental slides posted on the Investor Relations website. Our ability to complete these transactions at favourable rates shows that our thoughtful and pragmatic approach is allowing us to position the balance sheet for future growth. Likewise, our ability to secure this critical financing is supported by our largest shareholder, Industrial Realty Group and many other active stakeholders, including the City of Canton, Stark County and the State of Ohio.

I’d also like to provide a bit more detail on the company’s current debt profile, as it’s important to highlight two very key points. First, the company’s ability to execute and raise capital in an ever changing credit and macro environment, and two, our intense focus on taking on the right kind of debt and optimizing the capital stack for each asset. We recognize that all debt is not created equal, so we act to take advantage of the most favourable structures available to us. I’ll provide a few examples. First, and as previously noted, the Hall of Fame Village is situated in a tourism development district or TDD that allows for the collection of additional sales taxes in the district to support future development. The company is able to bond against this future tax revenue whereby we receive upfront loan proceeds with future debt service being covered by the ongoing sales tax within the district which we own and manage.

In 2022, we raised $7.5 million through this program, supported by the State of Ohio’s Enterprise Bond Fund. We have also used tax increment financing whereby a portion of future real estate taxes associated with developed assets are used to pay for improvements made. As a final example, the company was awarded $15.8 million in transformational mixed use development tax credits as a result of the positive economic impact our development is expected to have on the region and the state. The key message here is that we’ve been able to restructure debt to align with the company’s growth path. We’ve used numerous types of creating creative financing vehicles and will continue to work towards achieving the best capital structure for the long-term success of the company.

Moving to guidance. Previously, we provided our fiscal 2023 outlook during the third quarter earnings call in November. At this time we are reiterating our forecast for 2023 revenue growth in excess of 75% when compared to 2022. Adjusted EBITDA is expected to improve by approximately 60%, driven by our focus on monetizing existing and newly developed physical and virtual assets. In closing, the company is mindful of the current economic environment and will remain intensely focused on driving profitability through synergistic and diversified revenue streams and disciplined cost management while making strategic investments to support our continued growth. We will continue to analyse and optimize our capital structure to deliver long-term value to all shareholders.

And finally, as you’ve come to expect, we will continue to provide transparent and timely updates to all of our shareholders as we move ahead. Operator, we would now like to open the line for any questions.

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Q&A Session

Operator: Thank you. We will now be conducting a question-and answer-session. Thank you. Our first question is from David Marsh with Singular Research. Please proceed with your question.

David Marsh: Hi. Good morning, guys. A couple of housekeeping questions on financial reporting quickly, if I may. First, with regard to the expense line, you guys had been reporting commission expense as a separate line item throughout the fiscal year, but you’ve not reported it as a standalone item in the fourth quarter. I was just wondering where that move to?

Benjamin Lee: Yeah, David, good question. We just consolidated it up. It’s really just to simplify reporting, really to condense some of the line items that were in the financials. As you can imagine, for a reader, it gets to be complex as we move ahead as a company. So it’s really just simplification of what we’re reporting here. We can certainly follow up with you on our call after this. I know we have some time scheduled to review exactly how that lays out in the financial statements.

David Marsh: Okay. And then next, with regard to the gaming vertical, will you be reporting that as a separate line item going forward once we start realizing revenue and do one?

Benjamin Lee: Yeah, good question. Right away. Probably not likely. However, as we move ahead, as we continue to grow as an organization, you know, that’s something that we’ll consider making sure that we’re reporting by business vertical, more segment type of reporting. We’re just not at a point yet to do that in terms of scale and scope of revenue, but certainly for transparency, for future financial statements, that’s something we’ll look into.

David Marsh: Okay. Then with regard to the investments on the balance sheet, you classified some as held to maturity, which is interesting, something I typically would see in a financial institution type reporting. Are these assets with durations longer than one year in the case of the held to maturity?

Benjamin Lee: No, no, really, everything we’ve been focused on and Mike alluded to this in his opening comments and myself as well in my prepared remarks is that we’re investing everything that we have in terms of cash, very short-term. So very short duration assets, all fully credit secured. So US Treasuries is really where we’ve been focused and everything that we’ve invested to date has been six months or less.

David Marsh: Okay, really helpful. And then just in terms of operational, business operational question, if I may, with regard to the gaming vertical, could you guys provide an update? I mean, we are here at like March 28th, three days left in the quarter. Could you give us some idea or some flavour of what you’re seeing in terms of revenue from Betr? And then could you provide us with an operational update with regard to the physical sports book that’s going to be on campus, please?

Benjamin Lee: Yeah, I can take the first.

Michael Crawford: Oh, go ahead. Go ahead, Ben.