PARKS AMERICA, INC 10-K

ITEM 9A. CONTROLS AND PROCEDURES (a) Disclosure Controls and Procedures With the participation of the principal executive officer and principal financial officer of Parks! America (the “Registrant”), the Registrant’s management has evaluated the effectiveness of the Registrant’s disclosure controls and procedures, as required by Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the fiscal year covered by this Annual Report on Form 10-K. Based upon that evaluation, the Registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s disclosure controls and procedures were effective as of the end of the fiscal year covered by this Annual Report on Form 10-K. (b) Management’s Annual Report on Internal Control over Financial Reporting Overview Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the Company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that: 1. Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; 2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and 3. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce this risk. Management based its assessment of the Company’s internal control over financial reporting on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, management has concluded that the Company's disclosure controls and procedures and internal control over financial reporting are effective as of September 27, 2020. (c) Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting as of September 27, 2020. 20 ITEM 9B. OTHER INFORMATION None 21 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE Our executive officers and directors are as follows: Name Age Title Dale Van Voorhis 79 Chief Executive Office and Director Todd R. White 58 Chief Financial Officer and Director Mark Whitfield 59 Executive Vice President Michael D. Newman 52 Vice President of Safari Operations John Gannon 63 Director William Jump 78 Director Jeffery Lococo 63 Secretary and Director Charles Kohnen 53 Director Dale Van Voorhis Dale Van Voorhis was appointed as our Chief Executive Officer on January 27, 2011. Mr. Van Voorhis was re-appointed to our Board of Directors on March 13, 2009, and served as the Company’s Chief Operating Officer from March 28, 2009 until January 27, 2011. Mr. Van Voorhis previously served the Company in various management and board of director roles from December 2003 through December 2006. In addition, Mr. Van Voorhis has been the President of Amusement Business Consultants, Inc., an amusement industry consulting company, since its inception in 1994. Mr. Van Voorhis was President and CEO of Funtime Parks Inc. (“Funtime”) from 1982 until 1994. Funtime consisted of three parks in New York and Ohio and they generated total attendance of 2.6 million visitors in 1993. Funtime sold the three parks for $60 million in 1994. Mr. Van Voorhis has over 40 years of experience in the amusement/entertainment industry. Todd R. White Todd R. White was appointed the Chief Financial Officer of Parks! America on May 31, 2013 and was appointed as a Director of the Company effective January 1, 2014. Prior to joining the Company, from 1992 through 2011, Mr. White was an executive with The Scotts Miracle-Gro Company in a variety of roles, and served most recently as its Vice President, Global Controller from 2005 through 2011. Mr. White was with Price Waterhouse in Cincinnati, Ohio from 1986 to 1992. He received a B.A. in business administration from The Ohio State University and an M.B.A. from the University of Wisconsin-Madison. He currently serves on the Board of Managers of Spring Brook Farm Cheese, LLC, which is wholly owned by the Farms for City Kids Foundation. Mark Whitfield Mark Whitfield joined Parks! America, Inc. and was appointed Executive Vice President on September 21, 2020. Mr. Whitfield's 42 year amusement park career began in 1979 at Six Flags Theme Parks, where he was Manager of Games & Attractions, and Merchandise and Director of Revenue at six of the current and former Six Flags parks. Most recently, Mr. Whitfield was a Senior Director of Revenue at PARC Management in Jacksonville, and for the last 10 years as General Manager at Palace Entertainment parks in San Dimas, California and in the Wisconsin Dells. He is very active in the community and served with distinction as an elected Village Trustee in Lake Delton, Wisconsin, President and Board Chair of the Sauk County, Economic Development Corporation, co-Commissioner of the Baraboo-Dells Airport, as well as serving on the Board of Directors at the San Dimas Chamber of Commerce and the Wisconsin Dells Visitors & Convention Bureau. Mr. Whitfield brings extensive experience and consistent positive results in financial/EBITDA growth, employee development, marketing, operations and in-park revenue. Mr. Whitfield has a BA in Communication and Political Science, and a Masters of Liberal Arts from Houston Baptist University. Mr. Whitfield relocated to Bryan-College Station, Texas and is based out of the Aggieland Wild Animal Safari park which the company acquired on April 27, 2020. Michael D. Newman Michael D. Newman was appointed Vice President of Safari Operations of Parks! America on May 1, 2018. Mr. Newman joined the Company in April 2010, and was the General Manager of Wild Animal – Georgia from February 2011 through April 2018. Prior to joining the Company, Mr. Newman, founded and managed Castle Appraisal Service, a residential and commercial real estate appraisal company. Mr. Newman has held in various management roles with retail and banking companies. Mr. Newman also has a background in Biology and Animal Husbandry. He is a member of the Exotic Wildlife Association and the First Baptist Church in LaGrange, Georgia. Mr. Newman received a Bachelor degree in business management from The University of Georgia. 22 John Gannon John Gannon has 33 years of experience in the amusement park, waterpark, and zoo industry. After 14 years of service, Mr. Gannon retired the Columbus Zoo and Aquarium in January 2020, most recently serving as its Senior Vice President responsible for managing all for profit ventures, including its waterpark, its amusement park section and its golf course. Prior to joining the Columbus Zoo and Aquarium, Mr. Gannon was with Six Flags, Premier Parks and Funtime Inc. for a combined total of 19 years. During his time with Six Flags, Mr. Gannon served as Vice President of Finance, with responsibility over the eastern United States and Europe. Mr. Gannon is a CPA and started his career with Ernst & Young. Mr. Gannon continues to serve as a consultant with the Columbus Zoo and Aquarium, and he is a member of the International Association of Amusement Parks and Attractions (IAAPA) and the World Waterpark Association (WWA). In 2017, Governor John Kasich appointed Mr. Gannon to the Ohio Department of Agriculture Advisory Board on Amusement Ride Safety. Mr. Gannon earned a Bachelor’s of Science degree in Accounting from the University of Akron. William Jump William S. Jump is a principal owner of Out of Africa Wildlife Park LLC, a wild animal attraction located in Camp Verde, Arizona. His responsibilities include heading-up the redevelopment and expansion of the Park. Mr. Jump is also involved in ownership and development of land around the Park. Leading and serving with several organizations, Mr. Jump is also actively involved in promoting economic development in the Verde Valley. Prior to moving to Sedona from Ohio, Mr. Jump was President and a Director of DEC Investment Group, Inc., which was the general partner of several partnerships, which owned and managed large apartment complexes, primarily in the western United States. Mr. Jump was also principal owner of DCMC Construction Management Company, which built and managed many multi-family projects. Prior to his 25 years with DEC, Mr. Jump was the CEO of two other privately held companies, where his responsibilities included raising capital for expansion, and leading various mergers and acquisitions. Mr. Jump started his career with Cummins Engine Company, becoming Vice President responsible for domestic and international operations. He and his family lived in Sao Paulo, Brazil for six years. During his 18 years at Cummins, Mr. Jump gained experience in the acquisition of businesses and properties. Mr. Jump earned a Bachelor’s in business degree from the University of Colorado. Jeffery Lococo Jeffery Lococo was appointed Secretary of the Company on January 27, 2011 and has been a Director of the Company since May 2006. Mr. Lococo is President of Lococo Company LLC, an industry leading consulting firm in the amusement and resort industry segment. Mr. Lococo began his career with the Marriott Corporation theme park division, and progressed through middle management to General Manager level in 1990 with Funtime. From 1994 to 2000, Mr. Lococo held various executive vice president level positions with Six Flags Inc. Mr. Lococo joined Great Wolf Resorts Inc. in March of 2000 as General Manager of Great Wolf Lodge Sandusky, Ohio, and in 2005, was promoted to Corporate Vice President of Resort Operations for all Great Wolf Lodge Resorts. Mr. Lococo has over 35 years of experience in the theme/water park, entertainment and hospitality industry. Charles Kohnen Charles Kohnen has been a director of the Company since October 19, 2010. Mr. Kohnen has a diverse business background including experience with planning and executing management strategies for turnaround companies. From 1998 to 2006 he was Managing Partner of Kohnen Realty Co., a real estate and stock investment company that he co-founded, where he was responsible for all aspects of the business including the coordination of all legal, accounting and buyout matters. Mr. Kohnen has also served as Chairman of a privately held restaurant located in Cincinnati, Ohio. Mr. Kohnen also serves on the Board of one non-profit organization and earned a Bachelor of Science degree in General Business from Miami University in Oxford, Ohio. Involvement in Certain Legal Proceedings During the past ten years none of the following events have occurred with respect to any of our directors or executive officers or any of the persons nominated by our board to become a director of the Company. 1. A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; 2. Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); 3. Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities: 23 i. Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; ii. Engaging in any type of business practice; or iii. Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; 4. Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3)(i) above, or to be associated with persons engaged in any such activity; 5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; 6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; 7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: i. Any Federal or State securities or commodities law or regulation; or ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease- and-desist order, or removal or prohibition order; or iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or 8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. Audit Committee Our Audit Committee is responsible for: (1) overseeing the accounting and financial reporting processes of the Company, including the audits of the Company’s consolidated financial statements; (2) appointing, compensating and overseeing the work of the independent registered public accounting firm employed by the Company; (3) assisting the Board in its oversight of: (a) the integrity of the Company’s consolidated financial statements, and (b) the independent registered public accounting firm’s qualifications and independence; and (4) undertaking the other matters required by applicable rules and regulations of the SEC. Our Audit Committee is comprised of three directors, Charles Kohnen, Jeffery Lococo, and Dale Van Voorhis. The Board has determined that Dale Van Voorhis qualifies as an “audit committee financial expert” as that term is defined in the applicable SEC Rules. Our Audit Committee met four times in the twelve-month period ended September 27, 2020. Compensation Committee Our Compensation Committee determines matters pertaining to the compensation and expense reporting of certain of our executive officers, and administers our stock option, incentive compensation, and employee stock purchase plans. The Compensation Committee is composed of four Directors, John Gannon, William Jump, Charles Kohnen, and Jeffery Lococo. Our Compensation Committee met two times during the twelve-month period ended September 27, 2020. 24 Code of Ethics We have not adopted a Code of Ethics. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% stockholders are required by the SEC regulations to furnish our Company with copies of all Section 16(a) reports they file. Based upon a review of those forms and any written representations regarding the need for filing Forms 5, to the best of the Company’s knowledge, no required Section 16(a) reports were filed late. ITEM 11. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth information regarding compensation paid to our principal executive officer, principal financial officer, and our other executive officers, for the years ended September 27, 2020, September 29, 2019 and September 30, 2018. Salary Bonus Stock Award Option Awards Non-Equity Incentive Plan Compensation Change in Pension Value and Non-Qualified Deferred Compensation Earnings All Other Compensation Total Name & Principal Position Year ($) ($) ($) ($) ($) ($) ($) ($) Dale Van Voorhis 2020 93,333 20,000 8,500 - - - - 121,833 Chief Executive Officer and 2019 90,000 18,000 4,625 - - - - 112,625 Director - Parks! America 2018 90,000 20,000 - - - - 5,750 115,750 Michael D. Newman 2020 102,167 17,000 - - - - 3,661 122,828 Vice President of Safari 2019 96,250 15,000 - - - - 5,492 116,742 Operations - Parks! America 2018 92,656 20,000 - - - - 5,035 117,691 Todd R. White 2020 73,750 20,000 8,500 - - - - 102,250 Chief Financial Officer and 2019 67,500 18,000 4,625 - - - - 90,125 Director - Parks! America 2018 60,000 20,000 5,750 - - - - 85,750 Mark Whitfield 2020 2,596 10,000 - - - - - 12,596 Executive Vice President 2019 - - - - - - - - James Meikle (1) 2020 - - - - - - - - President - Wild Animal Safari, Inc. 2019 - - - - - - 88,167 88,167 and Wild Animal, Inc., Director and 2018 78,750 30,000 - - - - 5,750 114,500 Chief Operating Officer - Parks! America (1) On November 28, 2018, Mr. Meikle passed away. 25 DIRECTOR COMPENSATION The following table sets forth with respect to the named director, compensation information inclusive of equity awards and payments made in the year ended September 27, 2020. Fees Earned or Paid in Cash Stock Awards Option Awards Non-Equity Incentive Plan Compensation Change in Pension Value and Non-Qualified Deferred Compensation Earnings All Other Compensation Total Name ($) Shares/($) ($) ($) ($) ($) ($) Dale Van Voorhis -- 50,000 -- -- -- -- $8,500 ($8,500) Jeffery Lococo -- 50,000 -- -- -- -- $8,500 ($8,500) Charles Kohnen -- 50,000 -- -- -- -- $8,500 ($8,500) Todd R. White -- 50,000 -- -- -- -- $8,500 ($8,500) Historically, each director was awarded an annual grant of 25,000 Shares for their service to the Company. Beginning in our 2018 fiscal year, we provided each director with the option of receiving their annual grant in Shares or the cash equivalent, based on the Share price on the date of grant. Beginning in our 2020 fiscal year, our annual director compensation is based on a dollar award, with each director provided the option of receiving that compensation in all Shares, all cash or a combination thereof. Employment Agreements Effective as of June 1, 2020, the Company and Dale Van Voorhis, the Company’s Chairman and Chief Executive Officer, entered into an employment agreement (the “2020 Van Voorhis Employment Agreement”). Pursuant to the 2020 Van Voorhis Employment Agreement, Mr. Van Voorhis receives an initial base annual compensation in the amount of $100,000 per year, subject to annual review by the Board of Directors. The 2020 Van Voorhis Employment Agreement has a term of two years and entitles Mr. Van Voorhis to participate in any deferred compensation plan the Company may adopt during the term of his employment with the Company. Effective as of January 1, 2019, the Company and Todd R. White, the Company’s Chief Financial Officer, entered into an employment agreement (the “2019 White Employment Agreement”). The 2019 White Employment Agreement has a term of three years, with minimum annual compensation of $70,000 in year one, $75,000 in year two and $80,000 in year three, and entitles Mr. White to participate in any deferred compensation plan the Company may adopt during the term of his employment with the Company. Effective as of May 1, 2018, the Company entered into an employment agreement with Michael D. Newman (the “Newman Employment Agreement”) to serve as the Company’s Vice President of Safari Operations. Mr. Newman had been the general manager of Wild Animal – Georgia since February 2011. Pursuant to the Newman Employment Agreement, Mr. Newman received an initial base annual compensation of $95,000 per year, subject to annual review by the Board of Directors. Mr. Newman also received a $5,000 signing bonus. Effective as of May 1, 2020, Mr. Newman’s annual compensation was set at $108,000. The Newman Employment Agreement has a term of five years and entitles Mr. Newman to participate in any deferred compensation plan the Company may adopt during the term of his employment with the Company. Each of the foregoing employment agreements contains provisions for severance compensation in the event an agreement is (i) terminated early by the Company without cause ($266,667 in aggregate) or (ii) in the event of a change in control of the Company ($531,667 in aggregate), as well as disability and death payment provisions ($141,500 in aggregate). Effective as of July 1, 2017, the Company and James Meikle, then the Company’s President and Chief Operating Officer, entered into the “2017 Meikle Employment Agreement”. The 2017 Meikle Employment Agreement had a term of two years, with an initial base annual compensation in the amount of $135,000 per year. On November 28, 2018, Mr. Meikle passed away. Pursuant to the death benefit terms of the 2017 Meikle Employment Agreement, during the three month period ended December 30, 2019, the Company recorded a provision of approximately $88,000, which was distributed to his estate on January 15, 2020. 26 Stock Option and Award Plan A Stock Option and Award Plan (the “Plan”) providing for incentive stock options and performance bonus awards for executives, employees, and directors was approved by our Board of Directors on February 1, 2005, however, the Plan has not been submitted to the stockholders for approval. The Plan sets aside five million (5,000,000) shares for award of stock options, including qualified incentive stock options and performance stock bonuses. To date, no grants or awards have been made pursuant to the Plan and we did not submit the Plan for consideration to the Company’s stockholders at the last meeting of stockholders. ITEM 12. EQUITY COMPENSATION PLAN INFORMATION AND SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information relating to the ownership of common stock by (i) each person known by us to be the beneficial owner of more than five percent of the outstanding shares of our common stock, (ii) each of our directors, (iii) each of our named executive officers, and (iv) all of our executive officers and directors as a group. Unless otherwise indicated, the information relates to these persons, beneficial ownership as of December 10, 2020. Except as may be indicated in the footnotes to the table and subject to applicable community property laws, each person has the sole voting and investment power with respect to the shares owned. The address of each beneficial owner is care of Parks! America, Inc., 1300 Oak Grove Road, Pine Mountain, GA 31822, unless otherwise set forth below that person's name. Name Number of Shares Owned Percent (1) Title Dale Van Voorhis 15,989,911 21.3% Chief Executive Officer and Director Todd R. White (2) 1,242,320 1.7% Chief Financial Officer and Director Charles Kohnen (3) 21,702,970 28.9% Director Jeffery Lococo 531,970 0.7% Secretary and Director Focused Compounding Fund, LP 12,729,271 17.0% 1700 Alma Drive, Suite 460 Plano, TX 75075 (1) Based upon shares of common stock issued and outstanding as of December 10, 2020, except that shares of common stock underlying options and warrants exercisable within 60 days of the date hereof are deemed to be outstanding. (2) 410,350 of the Company’s shares owned by Mr. White are held jointly with his spouse. (3) 15,140,000 of the Company’s shares owned by Mr. Kohnen are held jointly with his spouse. Officers, directors and their controlled entities, as a group, controlled approximately 52.6% of the outstanding common stock of the Company as of December 10, 2020. The information as to shares beneficially owned has been individually furnished by our respective directors, named executive officers and other stockholders, or taken from documents filed with the SEC. 27 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Except as set forth below, none of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with the Company or in any presently proposed transaction that has or will materially affect the Company: · Any of our directors or officers; · Any person proposed as a nominee for election as a director; · Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; · Any of our promoters; and · Any relative or spouse of any of the foregoing persons who has the same house as such person. Director Independence Of the members of the Company’s Board of Directors, John Gannon, Charles Kohnen, Jeffery Lococo and William Jump are considered to be independent under the listing standards of the Rules of NASDAQ set forth in the NASDAQ Manual (note, our common shares are not currently listed on NASDAQ or any other national securities exchange, and this reference is used for definitional purposes only). ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit Fees As disclosed on a Form 8-K filed with the U.S. Securities and Exchange Commission on April 10, 2020, GBQ Partners LLC was appointed as our independent registered accounting firm effective April 8, 2020. Our prior independent registered public accounting firm, Tama, Budaj & Raab, P.C. Certified Public Accountants (“TBR”), resigned as effective April 8, 2020. On a combined basis, fees billed by our independent registered public accounting firms, for the audit and quarterly reviews of our financial statements and services that are normally provided by an accountant in connection with statutory and regulatory filings or engagements for the years ended September 27, 2020 and September 29, 2019 were approximately $46,000 and $42,000, respectively. Tax Fees The aggregate fees billed by TBR, for professional services rendered for tax compliance, tax advice and tax planning for the years ended September 27, 2020 and September 29, 2019 were approximately $6,500 and $6,500, respectively. All Other Fees Our independent registered public accounting firms billed no other fees for the years ended September 27, 2020 and September 29, 2019. Audit Committee Pre-Approval Policies and Procedures The audit committee is required to pre-approve the audit and non-audit services performed by our independent registered public accounting firm in order to assure that the provision of such services do not impair the registered public accounting firm’s independence. 28 PART IV ITEM 15. EXHIBITS 3.1 Articles of Incorporation of Great American Family Parks, Inc. dated July 17, 2002 (incorporated by reference to the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on August 4, 2005). 3.2 Amended Articles of Incorporation of Great American Family Parks, Inc. dated January 26, 2004 (incorporated by reference to the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on August 4, 2005). 3.3 Bylaws of Great American Family Parks, Inc. dated January 30, 2004 (incorporated by reference to the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on August 4, 2005). 3.4 Great American Family Parks 2005 Stock Option Plan dated February 1, 2005 (incorporated by reference to the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on August 4, 2005). 3.5 Amended Bylaws of the Company, as of January 17, 2011 (incorporated by reference to the Annual Report on Form 10-KT filed by the Company on December 29, 2012). 3.6 Amended Bylaws of the Company as of June 12, 2012 (incorporated by reference to the Report on Form 8-K filed by with the Securities and Exchange Commission on July 16, 2012). 21.1 Subsidiaries of the Registrant. 23.1 Consent of GBQ Partners LLC dated December 15, 2020. 23.2 Consent of Tama, Budaj & Raab, P.C. Certified Public Accountants dated December 15, 2020. 31.1 Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Certification by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 29 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf as of December 15, 2020 by the undersigned, thereunto duly authorized. PARKS! AMERICA, INC. By: /s/ Dale Van Voorhis Dale Van Voorhis Chief Executive Officer and Director (Principal Executive Officer) In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE By: /s/ Dale Van Voorhis Dale Van Voorhis Chief Executive Officer and Director December 15, 2020 (Principal Executive Officer) By: /s/ John Gannon John Gannon Director December 15, 2020 By: /s/ William Jump William Jump Director December 15, 2020 By: /s/ Charles Kohnen Charles Kohnen Director December 15, 2020 By: /s/ Jeffery Lococo Jeffery Lococo Secretary and Director December 15, 2020 By: /s/ Todd R. White Todd R. White Chief Financial Officer and Director December 15, 2020 (Principal Financial Officer) 30 ITEM 8 PARKS! AMERICA, INC. and SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements of Parks! America and Subsidiaries Page Report of Independent Registered Public Accounting Firms F-1 Consolidated Balance Sheets as of September 27, 2020 and September 29, 2019 F-3 Consolidated Statements of Operations for the years ended September 27, 2020 and September 29, 2019 F-4 Consolidated Statement of Changes in Stockholders’ Equity for the years ended September 27, 2020 and September 29, 2019 F-5 Consolidated Statements of Cash Flows for the years ended September 27, 2020 and September 29, 2019 F-6 Notes to the Consolidated Financial Statements F-7 31 Board of Directors and Shareholders Parks! America, Inc. Report of Independent Registered Public Accounting Firm Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Parks! America, Inc. (the “Company”) as of September 27, 2020, the related consolidated statements of operations, shareholders’ equity, and cash flows for the year then ended, and related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 27, 2020, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ GBQ Partners LLC GBQ Partners LLC We have served as the Company’s auditor since 2020. Columbus, Ohio December 15, 2020 F-1 Tama, Budaj & Raab P.C. Certified Public Accountants Phone (248) 626-3800 32783 Middlebelt Rd Farmington Hills, MI 48334 www.tbrcpa.com REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Parks! America, Inc. Pine Mountain, Georgia Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Parks! America, Inc. and Subsidiaries (“the Company”) as of September 29, 2019, and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for the year then ended (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 29, 2019 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Tama, Budaj & Raab , P . C . Tama, Budaj & Raab, P.C. We served as the Company’s auditors from 2015 through 2019 Farmington Hills, Michigan December 12, 2019 F-2 PARKS! AMERICA, INC. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of September 27, 2020 and September 29, 2019 September 27, 2020 September 29, 2019 ASSETS Cash $ 5,505,716 $ 3,787,815 Inventory 200,891 195,201 Prepaid expenses 148,732 147,529 Total current assets 5,855,339 4,130,545 Property and equipment, net 13,654,800 6,620,405 Intangible assets, net - 600 Other assets 12,144 11,786 Total assets $ 19,522,283 $ 10,763,336 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Accounts payable $ 178,485 $ 96,270 Other current liabilities 599,390 384,160 Current portion of long-term debt, net 1,221,009 204,355 Total current liabilities 1,998,884 684,785 Long-term debt, net 5,797,392 1,154,013 Total liabilities 7,796,276 1,838,798 Stockholders’ equity Common stock; 300,000,000 shares authorized, at $.001 par value; 75,021,537 and 74,821,537 shares issued and outstanding, respectively 75,021 74,821 Capital in excess of par 4,889,316 4,855,516 Treasury stock (3,250) (3,250) Retained earnings 6,764,920 3,997,451 Total stockholders’ equity 11,726,007 8,924,538 Total liabilities and stockholders’ equity $ 19,522,283 $ 10,763,336 The accompanying notes are an integral part of these consolidated financial statements . F-3 PARKS! AMERICA, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended September 27, 2020 and September 29, 2019 For the year ended September 27, 2020 September 29, 2019 Net sales $ 9,440,986 $ 6,104,275 Sale of animals 66,278 79,979 Total net sales 9,507,264 6,184,254 Cost of sales 962,047 673,667 Selling, general and administrative 4,115,323 3,399,145 Depreciation and amortization 576,139 453,968 Tornado damage and expenses, net (24,373) 80,444 Loss on disposal of operating assets, net 29,121 32,693 Income from operations 3,849,007 1,544,337 Other income, net 27,788 27,104 Interest expense (182,926) (76,003) Income before income taxes 3,693,869 1,495,438 Income tax provision 926,400 398,900 Net income $ 2,767,469 $ 1,096,538 Income per share - basic and diluted $ 0.04 $ 0.01 Weighted average shares outstanding (in 000's) - basic and diluted 74,964 74,791 The accompanying notes are an integral part of these consolidated financial statements. F-4 PARKS! AMERICA, INC. and SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY For the Years Ended September 27, 2020 and September 29, 2019 Capital in Excess of Par Treasury Stock Retained Earnings Total Shares Amount Balance at September 30, 2018 74,721,537 $ 74,721 $ 4,837,116 $ (3,250) $ 2,900,913 $ 7,809,500 Issuance of common stock to Directors 100,000 100 18,400 - - 18,500 Net income for the year ended September 29, 2019 - - - - 1,096,538 1,096,538 Balance at September 29, 2019 74,821,537 $ 74,821 $ 4,855,516 $ (3,250) $ 3,997,451 $ 8,924,538 Issuance of common stock to Directors 200,000 200 33,800 - - 34,000 Net income for the year ended September 27, 2020 - - - - 2,767,469 2,767,469 Balance at September 27, 2020 75,021,537 75,021 4,889,316 (3,250) 6,764,920 11,726,007 The accompanying notes are an integral part of these consolidated financial statements. F-5 PARKS! AMERICA, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended September 27, 2020 and September 29, 2019 For the year ended September 27, 2020 September 29, 2019 OPERATING ACTIVITIES: Net income $ 2,767,469 $ 1,096,538 Reconciliation of net income to net cash provided by operating activities: Depreciation and amortization expense 576,139 453,968 Interest expense - debt financing cost amortization 4,603 2,240 Interest expense - loan discount amortization 7,517 - Tornado damage asset write-offs - 56,339 Loss on disposal of assets 29,121 32,693 Stock-based compensation 34,000 18,500 Changes in assets and liabilities (Increase) decrease in inventory 4,310 44,803 (Increase) decrease in prepaid expenses (1,203) (15,673) Increase (decrease) in accounts payable 82,215 4,033 Increase (decrease) in other current liabilities 176,230 164,717 Net cash provided by operating activities 3,680,401 1,858,158 INVESTING ACTIVITIES: Acquisition of property and equipment (525,409) (554,039) Acquisition of Aggieland Safari, net of cash acquired (6,373,500) - Proceeds from the disposition of property and equipment 17,832 6,533 Net cash used in investing activities (6,881,077) (547,506) FINANCING ACTIVITIES: Payments on 2018 Term Loan (207,135) (197,097) Proceeds from 2020 Term Loan 5,000,000 - Proceeds from Paycheck Protection Program Loans 188,087 - Debt financing costs (62,375) - Net cash provided by (used in) financing activities 4,918,577 (197,097) Net increase in cash 1,717,901 1,113,555 Cash at beginning of period 3,787,815 2,674,260 Cash at end of period $ 5,505,716 $ 3,787,815 Supplemental Cash Flow Information: Cash paid for interest $ 150,484 $ 74,518 Cash paid for income taxes $ 844,000 $ 422,900 Non-Cash Investing and Financing Activities: Note to Seller of Aggieland Safari $ 728,500 $ - The accompanying notes are an integral part of these consolidated financial statements. F-6 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 1. ORGANIZATION Parks! America, Inc. (“Parks!” or the “Company”) was originally incorporated on July 30, 1954 as Painted Desert Uranium & Oil Co., Inc. in Washington State. On October 1, 2002, Painted Desert Uranium & Oil Co., Inc. changed its name to Royal Pacific Resources, Inc. and its corporate domicile to the State of Nevada. On December 19, 2003, Royal Pacific Resources, Inc. acquired the assets of Great Western Parks LLC pursuant to a Share Exchange Agreement that resulted in the Company assuming control and changing the corporate name to Great American Family Parks, Inc. The acquisition was accounted for as a reverse acquisition in which Great Western Parks was considered to be the acquirer of Royal Pacific Resources for reporting purposes. On June 11, 2008, the Company changed its name from Great American Family Parks, Inc. to Parks! America, Inc. The Company owns and operates through wholly owned subsidiaries three regional theme parks and is in the business of acquiring, developing and operating local and regional theme parks and attractions in the United States. The Company’s wholly owned subsidiaries are Wild Animal Safari, Inc. a Georgia corporation (“Wild Animal – Georgia”), Wild Animal, Inc., a Missouri corporation (“Wild Animal – Missouri”), and Aggieland-Parks, Inc., a Texas corporation (“Aggieland Wild Animal – Texas”). Wild Animal – Georgia owns and operates the Wild Animal Safari theme park in Pine Mountain, Georgia (the “Georgia Park”). Wild Animal – Missouri owns and operates the Wild Animal Safari theme park located in Strafford, Missouri (the “Missouri Park”). Aggieland Wild Animal – Texas owns and operates the Aggieland Wild Animal Safari theme park near Bryan/College Station, Texas (the “Texas Park”). The Company acquired the Georgia Park on June 13, 2005, the Missouri Park on March 5, 2008, and the Texas Park on April 27, 2020. The Parks are open year round but experience increased seasonal attendance, typically beginning in the latter half of March through early September. As a result, our combined third and fourth quarter net sales have historically ranged from 68% to 72% of our annual net sales. COVID-19 In March 2020, the World Health Organization characterized COVID-19, a disease caused by a novel strain of a coronavirus, as a pandemic. The rapid spread of COVID-19 has resulted in governmental authorities throughout the United States implementing a variety of containment measures with the objective of slowing the spread of the virus, including travel restrictions, shelter-in-place orders and business shutdowns. The COVID-19 pandemic and these containment measures have had, and could continue to have, a material impact on the Company’s business. The rapid acceleration of the COVID-19 pandemic in the United States occurred at the beginning of the Company’s annual high season. The Company began to see a significant reduction in paid attendance at its Georgia and Missouri Parks beginning the week of March 9, 2020. Effective April 3, 2020, the Company’s Georgia and Missouri Parks were closed to the public as a result of shelter-in-place mandates in Georgia and Missouri. Also note that prior to the Company’s acquisition of the Texas Park, its operations were also closed to the public for the majority of April 2020 due to a shelter-in-place mandate in Texas. In compliance with respective state issued guidelines, the Georgia Park and the Texas Park each reopened on May 1, 2020, and the Missouri Park reopened on May 4, 2020. Subsequent to reopening, attendance levels have been strong at each of the Company’s three Parks from mid-May through the end of its 2020 fiscal year. However, there may be longer-term negative impacts to the Company’s business, results of operations and cash flows, and financial condition as a result of the COVID-19 pandemic. These negative impacts include changes in customer behavior and preferences causing significant volatility or reductions in Park attendance, increases in operating expenses to comply with additional hygiene-related protocols, limitations in our ability to recruit and maintain staffing, limitations on our employees ability to work and travel, and significant changes in the economic or political conditions in the areas the Company’s Parks are located. Despite the Company’s efforts to manage these impacts, the ultimate impact may be material, and will depend on a number of factors beyond its control, including the duration and severity of the COVID-19 pandemic and actions by governmental authorities taken to contain its spread and mitigate its public health effects. F-7 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The Company’s consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes that the disclosures made are adequate to make the information presented not misleading. The information reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods set forth herein. Principles of Consolidation: : The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries (Wild Animal – Georgia, Wild Animal – Missouri and Aggieland Wild Animal – Texas). All material inter-company accounts and transactions have been eliminated in consolidation. Accounting Method: The Company recognizes income and expenses based on the accrual method of accounting. Estimates and Assumptions: Management uses estimates and assumptions in preparing financial statements in accordance with GAAP. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements. Fiscal Year End: The Company’s fiscal year-end is the Sunday closest to September 30, and its quarterly close dates are also determined by the Sunday closest to the end of each quarterly reporting period. For the 2020 fiscal year, September 27 was the closest Sunday, and for the 2019 fiscal year, September 29 was the closest Sunday. Both fiscal years were comprised of 52-weeks. This fiscal calendar aligns the Company’s fiscal periods closely with the seasonality of its business. The high season typically ends after the Labor Day holiday weekend. The period from October through early March is geared towards maintenance and preparation for the next busy season, which typically begins at Spring Break and runs through Labor Day. Business Combinations: The Company’s acquisition of Aggieland Safari, on April 27, 2020, was accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations . In purchase accounting, identifiable assets acquired and liabilities assumed, are recognized at their estimated fair values at the acquisition date, and any remaining purchase price is recorded as goodwill. In determining the fair values of assets acquired and liabilities assumed, the Company makes significant estimates and assumptions, particularly with respect to long-lived tangible and intangible assets. Critical estimates used in valuing tangible and intangible assets include, but are not limited to, future expected cash flows, discount rates, market prices and asset lives. Although estimates of fair value are based upon assumptions believed to be reasonable, actual results may differ. See “NOTE 3: ACQUISITION” for more information. Financial and Concentrations Risk: The Company does not have any concentration or related financial credit risks. The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. Trade Accounts Receivable: The theme parks are a payment upfront business; therefore, the Company typically carries little or no accounts receivable. The Company had no accounts receivable as of September 27, 2020 and September 29, 2019, respectively. Inventory: Inventory consists of gift shop items, animal food, and concession and park supplies, and is stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out method. The gross profit method is used to determine the change in gift shop inventory for interim periods. Inventories are reviewed and reconciled annually, because inventory levels turn over rapidly. The Company had inventory of $200,891 and $195,201 as of September 27, 2020 and September 29, 2019, respectively. F-8 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property and Equipment: Property and equipment are stated at cost. Depreciation is computed on the straight-line method over the estimated useful lives of the assets, which range from three to thirty-nine years. A summary is included below. September 27, 2020 September 29, 2019 Depreciable Lives Land $ 6,389,470 $ 2,507,180 not applicable Mineral rights 276,000 - 25 years Ground improvements 2,334,172 1,142,926 7-25 years Buildings and structures 3,798,098 3,023,569 10-39 years Animal shelters and habitats 2,098,947 1,412,802 10-39 years Park animals 1,166,583 559,425 5-10 years Equipment - concession and related 232,281 184,441 3-15 years Equipment and vehicles - yard and field 556,168 451,459 3-15 years Vehicles - buses and rental 237,075 219,910 3-5 years Rides and entertainment 224,578 204,778 5-7 years Furniture and fixtures 26,057 10,427 5-10 years Projects in process 34,290 100,616 Property and equipment, cost 17,373,719 9,817,533 Less accumulated depreciation (3,718,919) (3,197,128) Property and equipment, net $ 13,654,800 $ 6,620,405 Intangible Assets: Intangible assets consist of franchising fees, which are reported at cost and are being amortized over a period of 60 months. Impairment of Long-Lived Assets: The Company reviews its major assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If an asset is considered impaired, then impairment will be recognized in an amount determined by the excess of the carrying amount of the asset over its fair value. Other Current Liabilities: The following is a breakdown of other current liabilities: September 27, 2020 September 29, 2019 Deferred revenue $ 273,386 $ 100,704 Accrued sales taxes 69,101 31,674 Accrued property taxes 68,530 59,723 Accrued income taxes 46,402 - Accrued wages and payroll taxes 42,774 111,150 Other accrued liabilities 99,197 80,909 Other current liabilities $ 599,390 $ 384,160 Financial Instruments: The carrying amounts of financial instruments are considered by management to be their estimated fair values due to their short-term maturities or due to the fact they were entered into during the Company’s 2020 fiscal year. Securities that are publicly traded are valued at their fair market value as of the balance sheet date presented. Revenue Recognition: The Company recognizes revenues in accordance with ASC 606, Revenues from Contracts with Customers . Under ASC 606, the Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocation the transaction price to the performance obligation in the contract; and (5) recognize revenue when (or as) the Company satisfies the performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. F-9 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenues from park admission fees are recognized at the point in time control transfers to the customer, which is generally when the customer accepts access to the park and the Company is entitled to payment. Park admission fee revenues from advance online ticket purchases are deferred until the customers’ visit to the parks. Revenues from retail and concession sales are generally recognized upon the concurrent receipt of payment and delivery of goods to the customer. Sales taxes billed and collected are not included in revenue. The Company periodically sells surplus animals created from the natural breeding process that occurs within the parks. All animal sales are reported as a separate revenue line item. Animal sales are recognized at a point in time when control transfer to the customer, which is generally determined when title, ownership and risk of loss pass to the customer, all of which generally occurs upon delivery of the animal. Based on the Company’s assessment of control indicators, sales are recognized when animals are delivered to the customer. The Company provides disaggregation of revenue based on geography in “NOTE 10: BUSINESS SEGMENTS”, as it believes this best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Deferred revenues from advance online admission tickets were $273,386 and $100,704 as of September 27, 2020 and September 29, 2019, respectively, and is included within Other Current Liabilities in the accompanying consolidated balance sheets Advertising and Marketing Costs: The Company expenses advertising and marketing costs as incurred. Advertising and marketing expense for the year ended September 27, 2020 and September 29, 2019 totaled $749,411 and $583,388, respectively. Stock Based Compensation: The Company recognizes stock based compensation costs on a straight-line basis over the requisite service period associated with the grant. The Company awards shares to its Board of Directors for service on the Board. The shares issued to the Board are “restricted” and are not to be re-sold unless an exemption is available, such as the exemption afforded by Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The Company recognizes the expense based on the fair market value at time of the grant. The Company typically awards its annual Director compensation around the end of each calendar year. A Stock Option and Award Plan (the “Plan”) providing for incentive stock options and performance bonus awards for executives, employees, and directors was approved by the Company’s Board of Directors on February 1, 2005, however, the Plan has not been submitted to the stockholders for approval. The Plan sets aside five million (5,000,000) shares for award of stock options, including qualified incentive stock options and performance stock bonuses. To date, no grants or awards have been made pursuant to the Plan and the Company did not submit the Plan for consideration to the Company’s stockholders at its last meeting of stockholders. Income Taxes: The Company utilizes the asset and liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and the tax basis of the assets and liabilities, and are measured using the enacted tax rates and laws. Management periodically reviews the Company’s deferred tax assets to determine whether their value can be realized based on available evidence. A valuation allowance is established when management believes it is more likely than not, that such tax benefits will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change. The Company follows guidance issued by the FASB ASC 740, “Income Taxes”, with respect to accounting for uncertainty in income taxes. A tax position is recognized as a benefit only if it is “more-likely-than-not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than fifty percent likely of being realized on examination. For tax positions not meeting the “more-likely-than-not” test, no tax benefit is recorded. The Company has no unrecognized tax benefits under guidance related to tax uncertainties. The Company does not anticipate the unrecognized tax benefits will significantly change in the next twelve months. Any tax penalties or interest expense will be recognized in income tax expense. No interest and penalties related to unrecognized tax benefits were accrued as of September 27, 2020 or September 29, 2019. F-10 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basic and Diluted Net Income (Loss) Per Share: Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise any common share rights unless the exercise becomes anti-dilutive. Basic and diluted net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the applicable weighted average number of common shares outstanding in each period. Dividend Policy: The Company has not yet adopted a policy regarding payment of dividends. Recent Accounting Pronouncements: Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes (“Update 2019-12”) , which removes certain exceptions for investments, intraperiod allocations and interim tax calculations, and adds guidance to reduce the complexity in accounting for income taxes. Update 2019-12 is effective for annual periods beginning after December 15, 2020, with early adoption permitted. The various amendments in Update 2019-12 are applied on a retrospective basis, modified retrospective basis and prospective basis, depending upon the amendment. The Company is in the process of evaluating the impact of this amendment on our consolidated financial statements; however, it is not anticipated to be material. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) , which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASC 2016-16 is effective for annual reporting periods beginning after December 15, 2023, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which provides optional relief through specific exceptions and practical expedients for transitioning away from reference rates that are expected to be discontinued. The relief generally applies to eligible modifications of contractual terms that change (or have the potential to change) the amount or timing of contractual cash flows related to replacement of a reference rate. The relief allows such modifications to be accounted for as continuations of existing contracts without additional analysis. The optional relief is available from March 2020 through December 31, 2022. The Company is currently evaluating the impact of this ASU. Equity Securities, Equity Method Investments and Certain Derivatives In January 2020, the FASB issued ASU 2020-01, “Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815.” This ASU clarifies the interaction between accounting standards related to equity securities, equity method investments and certain derivatives. The effective date of the standard will be for annual periods beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. Except as noted, the Company does not expect recently issued accounting standards or interpretations to have a material impact on the Company’s financial position, results of operations, cash flows or financial statement disclosures. F-11 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 3. ACQUISITION On April 27, 2020, the Company, through a newly formed subsidiary, Aggieland-Parks, Inc., a Texas corporation, acquired substantially all the assets of Aggieland Safari LLC, Ferrill Creek Ranch LLC, and Vernell Investments LLC (combined the “Aggieland Assets”), primarily consisting of the Aggieland Safari Adventure Zoo and Safari Park (“Aggieland Safari”), including animal inventory, real estate, mineral rights, and certain equipment and other assets necessary to operate Aggieland Wild Animal – Texas. Aggieland Wild Animal – Texas is situated on 250 acres of a 450-acre property, located approximately 25 miles northeast of Bryan/College Station, Texas and 120 miles northwest of downtown Houston. The total purchase price for the Aggieland Assets was $7,102,000, after determination of the fair value of the seller note. The transaction was financed with a $5,000,000 loan (the “2020 Term Loan”) from First Financial Bank, N.A. (“First Financial”), a seller note with a face value of $750,000 (the “Aggieland Seller Note”), and cash totaling $1,375,000. The 2020 Term Loan is secured by substantially all of the Aggieland Assets, as well as guarantees from the Company and its subsidiaries. The 2020 Term Loan bears interest at a rate of 5.0% per annum, has a maturity date of April 27, 2031, with interest only payable monthly through April 2021. The Aggieland Seller Note represents a deferred portion of the purchase price, bears no interest, has a maturity date of June 30, 2021, and is secured by a second priority subordinated lien and security interest in the acquired mineral rights and the animal inventory. The Company applied a 2.5% discount rate to determine a fair value of $728,500 for the Aggieland Seller Note as of April 27, 2020. The following table sets forth the purchase consideration paid to the members of Aggieland Safari and the amount of assets acquired and liabilities assumed as of the acquisition date: Sources of consideration paid to Aggieland Safari Members: Cash advances $ 125,000 Cash at closing 1,250,000 2020 Term Loan 5,000,000 Aggieland Seller Note 728,500 Less cash received (1,500) Total consideration $ 7,102,000 Preliminary purchase price allocation: Inventories $ 10,000 Property and equipment 7,131,000 Deferred revenue (39,000) Total net assets acquired $ 7,102,000 The purchase price has been allocated based on an estimate of the fair value of assets acquired and liabilities assumed as of the acquisition date. The determination of estimated fair value requires management to make significant estimates and assumptions. The following table presents supplemental pro forma information for the years ended September 27, 2020 and September 29, 2019 as if the acquisition had occurred at the beginning of the Company’s 2019 fiscal year. The unaudited pro forma information includes adjustments for depreciation expense on property and equipment acquired, interest expense on debt incurred related to the acquisition, and the related income tax effects, as well as the elimination of property and equipment impairment charges recorded by Aggieland Safari prior to the acquisition. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected at the beginning of the Company’s 2019 fiscal year. For the year ended September 27, 2020 September 29, 2019 Total net sales $ 10,165,664 $ 7,775,138 Net income $ 2,613,578 $ 670,149 Income per share - basic and diluted $ 0.03 $ 0.01 F-12 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 4. LONG-TERM DEBT On April 27, 2020, the Company acquired Aggieland Wild Animal – Texas, see “NOTE 3. ACQUISITION”, financing the transaction with the 2020 Term Loan from First Financial and the Aggieland Seller Note. The 2020 Term Loan in the original principal amount of $5,000,000 from First Financial is secured by substantially all of the Aggieland Wild Animal – Texas assets, as well as guarantees from the Company and its subsidiaries. The 2020 Term Loan bears interest at a rate of 5.0% per annum, has a maturity date of April 27, 2031, with interest only payable monthly through April 2021. The Company paid a total of approximately $62,375 in fees and expenses in connection with the 2020 Term Loan. The Aggieland Seller Note represents a deferred portion of the purchase price, has a face value of $750,000, bears no interest, has a maturity date of June 30, 2021, and is secured by a second priority subordinated lien and security interest in the acquired mineral rights and the animal inventory. The Company applied a 2.5% discount rate to determine a fair value of $728,500 for the Aggieland Seller Note as of April 27, 2020 and the resulting $21,500 discount will be amortized as interest expense over the 14 month period until the note matures. Including the remaining unamortized discount, the recorded value of the Aggieland Seller Note as of September 27, 2020 was $736,015. On July 11, 2018, the Company, through its wholly owned subsidiary Wild Animal – Georgia, completed a refinancing transaction (the “2018 Refinancing”) with Synovus Bank (“Synovus”). The 2018 Refinancing included a term loan in the original principal amount of $1,600,000 (the “2018 Term Loan”). The 2018 Term Loan bears interest at a rate of 5.0% per annum and is payable in monthly payments of approximately $22,672, based on a seven year amortization period. The 2018 Term Loan has a maturity date of June 11, 2021, with an option to renew at 5.0% per annum for an additional 49-month term. The 2018 Term Loan is secured by a security deed on the assets of Wild Animal – Georgia. The Company paid a total of approximately $15,680 in fees and expenses in connection with the 2018 Refinancing. The outstanding balance of the 2018 Term Loan was $1,164,113 as of September 27, 2020. As a result of the significant negative economic impacts and uncertainties caused by the COVID-19 pandemic, Wild Animal – Georgia and Wild Animal – Missouri each applied for Paycheck Protection Program (“PPP”) loans. On April 14, 2020 and April 16, 2020, the Company received two unsecured PPP loans totaling $188,087. Including accrued interest, the principal outstanding on the Company’s PPP loans was $188,925 as of September 27, 2020. The PPP was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27, 2020, and is administered by the U.S. Small Business Administration (the “SBA”). The term of the PPP loans is two years, with an interest rate of 1.0% per annum. All payments are deferred for the first six months of these PPP loans, with accrued interest being added to the principal during the payment deferral period. After the initial six-month deferral period, monthly principal and interest payments will be due until maturity for any portion of the PPP loans not forgiven. Under the terms of the CARES Act, some or all of the PPP loan proceeds are eligible to be forgiven. The amount of the PPP loans eligible to be forgiven are based on the use of the proceeds for payroll costs, mortgage interest, rent or utility costs, and the maintenance of employee and compensation levels, subject to limitations and ongoing rulemaking by the SBA. While not assured, the Company anticipates a substantial portion of its PPP loan proceeds will be used for costs that are eligible for forgiveness, based on the current SBA guidelines. The Company will continue to account for its PPP loans under their defined terms until such time as forgiveness is granted by the SBA. Interest expense of $182,926 and $76,003 for the year ended September 27, 2020 and September 29, 2019, respectively, includes $12,120 and $2,240, respectively, of amortization of debt closing costs in each period. As of September 27, 2020 September 29, 2019 Loan principal outstanding $ 7,089,053 $ 1,371,248 Less: unamortized debt financing costs (70,652) (12,880) Gross long-term debt 7,018,401 1,358,368 Less current portion of long-term debt, net of unamortized costs and discount (1,221,009) (204,355) Long-term debt $ 5,797,392 $ 1,154,013 F-13 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 4. LONG-TERM DEBT (CONTINUED) As of September 27, 2020, the scheduled future principal maturities, by fiscal year, are as follows: 2021 1,228,921 2022 702,949 2023 661,959 2024 696,447 2025 689,273 thereafter 3,109,504 Total $ 7,089,053 NOTE 5. LINE OF CREDIT On July 11, 2018, the Company, through its wholly owned subsidiary Wild Animal – Georgia, completed the 2018 Refinancing with Synovus. The 2018 Refinancing includes a line of credit of up to $350,000 (the “2018 LOC”). The 2018 LOC bears interest at a rate of 4.75% and interest only payments are due monthly. The 2018 LOC is secured by a security deed on the assets of Wild Animal – Georgia. The 2018 LOC matures on July 11, 2021, with an option to renew for an additional three-year term. If necessary, the Company intends to utilize the 2018 LOC to fund seasonal working capital needs. As of September 27, 2020 and September 29, 2019, respectively, there was no outstanding balance against the Company’s LOC. When applicable, any advance on a Company LOC is recorded as a current liability. NOTE 6. STOCKHOLDERS’ EQUITY Shares of common stock issued for service to the Company are valued based on market price on the date of issuance. On December 5, 2019, the Company declared its annual compensation award to four Directors for their service on the Board of Directors. Each Director was awarded $8,500, to be paid all in shares, all in cash or a combination thereof, at each Director’s election. All four Directors elected to receive shares of the Company’s common stock, totaling 50,000 each, based on the closing stock price of $0.17 per share on December 5, 2019. The total award cost of $34,000 was reported as an expense in the first quarter of the 2020 fiscal year, and the Company distributed each award on January 8, 2020. On January 14, 2019, the Company declared its annual award to five Directors for their service on the Board of Directors. Each Director was awarded 25,000 shares at $0.185 per share or the cash equivalent of $4,625. Four Directors elected to receive shares of the Company’s common stock, while the estate of one Director elected to receive its award in cash. The total award cost of $23,125 was reported as an expense in the second quarter of the 2019 fiscal year, and the Company distributed each award on January 16, 2019. Officers, Directors and their controlled entities own approximately 52.6% of the outstanding common stock of the Company as of September 27, 2020. NOTE 7. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES Employment Agreements: Effective as of June 1, 2020, the Company and Dale Van Voorhis, the Company’s Chairman and Chief Executive Officer, entered into an employment agreement (the “2020 Van Voorhis Employment Agreement”). Pursuant to the 2020 Van Voorhis Employment Agreement, Mr. Van Voorhis receives an initial base annual compensation in the amount of $100,000 per year, subject to annual review by the Board of Directors. The 2020 Van Voorhis Employment Agreement has a term of two years and entitles Mr. Van Voorhis to participate in any deferred compensation plan the Company may adopt during the term of his employment with the Company. Effective as of January 1, 2019, the Company and Todd R. White, the Company’s Chief Financial Officer, entered into an employment agreement (the “2019 White Employment Agreement”). The 2019 White Employment Agreement has a term of three years, with minimum annual compensation of $70,000 in year one, $75,000 in year two and $80,000 in year three, and entitles Mr. White to participate in any deferred compensation plan the Company may adopt during the term of his employment with the Company. F-14 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 7. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (CONTINUED) Effective as of May 1, 2018, the Company entered into an employment agreement with Michael D. Newman (the “Newman Employment Agreement”) to serve as the Company’s Vice President of Safari Operations. Mr. Newman had been the general manager of Wild Animal – Georgia since February 2011. Pursuant to the Newman Employment Agreement, Mr. Newman received an initial base annual compensation of $95,000 per year, subject to annual review by the Board of Directors. Mr. Newman also received a $5,000 signing bonus. Effective as of May 1, 2020, Mr. Newman’s annual compensation was set at $108,000. The Newman Employment Agreement has a term of five years and entitles Mr. Newman to participate in any deferred compensation plan the Company may adopt during the term of his employment with the Company. As of September 27, 2020, the Company has not adopted any deferred compensation plans. Each of the foregoing employment agreements contains provisions for severance compensation in the event an agreement is (i) terminated early by the Company without cause ($266,667 in aggregate) or (ii) in the event of a change in control of the Company ($531,667 in aggregate), as well as disability and death payment provisions ($141,500 in aggregate). Effective as of July 1, 2017, the Company and James Meikle, then the Company’s President and Chief Operating Officer, entered into the “2017 Meikle Employment Agreement”. The 2017 Meikle Employment Agreement had a term of two years, with an initial base annual compensation in the amount of $135,000 per year. On November 28, 2018, Mr. Meikle passed away. Pursuant to the death benefit terms of the 2017 Meikle Employment Agreement, during the three month period ended December 30, 2019, the Company recorded a provision of approximately $88,000, which was distributed to his estate on January 15, 2020. NOTE 8. INCOME TAXES For the years ended September 27, 2020 and September 29, 2019, the Company reported a pre-tax profit of $3,693,869 and $1,495,438, respectively. The Company’s provision for income taxes consists of the following: For the year ended September 27, 2020 September 29, 2019 Federal $ 740,800 $ 291,500 State 185,600 107,400 Total tax provision $ 926,400 $ 398,900 The Company’s provision for Federal income tax consists of the following: For the year ended Federal income tax benefit attributable to: September 27, 2020 September 29, 2019 Current operations $ 775,716 $ 314,042 State tax benefit (38,976) (22,554) Other 4,060 12 Net provision for Federal income taxes $ 740,800 $ 291,500 For the fiscal years ended September 27, 2020 and September 29, 2019, the Company recorded a provision for State of Georgia income taxes of $185,600 and $107,400, respectively. F-15 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 9. COMMITMENTS AND CONTINGENCIES On May 21, 2019, the Company’s Missouri Park was struck by a tornado and sustained property damage, primarily to the “walk about”, the more traditional zoo-like section of the park, as well as to several auxiliary buildings. The park was closed at the time of this event and no employees were injured. While a few animals sustained non-life threatening injuries, no animals were killed or escaped. As a result of the tornado damage, through September 29, 2019, the Company had written-off $56,339 related to the net book value of property destroyed and damaged, and incurred $24,105 of cleanup and repair expenses. Through September 29, 2019, the Company had capitalized $66,376 of expenditures related to improvements associated with the tornado damage. The Company capitalized an additional $71,478 of improvements associated with the tornado damage during the year ended September 27, 2020. On April 15, 2020, the Company received $24,373 of insurance proceeds, partially offsetting the costs and expenses incurred in the recovery from the tornado damage. On August 14, 2019, Marlton Wayne LP (“Marlton”) filed a Complaint in the Eighth Judicial District Court, Clark County, Nevada (case no. A-19-800214-8), seeking ten categories of documents from the Company. This Complaint followed a letter from Marlton sent on July 22, 2019, demanding an inspection of certain books and records of the Company. On March 13, 2020, the Company and Marlton entered into an agreement to dismiss the case without prejudice, with each party reserving their respective rights as related to attorney fees. Except as described above, the Company is not a party to any pending legal proceeding, nor is its property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of its business. None of the Company’s directors, officers or affiliates is involved in a proceeding adverse to its business or has a material interest adverse to its business. F-16 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 10. BUSINESS SEGMENTS The Company manages its operations on an individual location basis. Discrete financial information is maintained for each Park and provided to corporate management for review and as a basis for decision-making. The primary performance measures used to allocate resources are Park earnings before interest and tax expense, and free cash flow. The following tables present financial information regarding each of the Company’s reportable segments: For the year ended September 27, 2020 September 29, 2019 Total net sales: Georgia $ 6,878,994 $ 5,228,291 Missouri 1,449,781 955,963 Texas 1,178,489 - Consolidated $ 9,507,264 $ 6,184,254 Income (loss) before income taxes: Georgia $ 4,113,926 $ 2,686,369 Missouri 84,836 (295,634) Texas 433,916 - Segment total 4,632,678 2,390,735 Corporate (783,671) (846,398) Other income, net 27,788 27,104 Interest expense (182,926) (76,003) Consolidated $ 3,693,869 $ 1,495,438 Depreciation and amortization: Georgia $ 258,779 $ 245,637 Missouri 238,560 208,331 Texas 78,800 - Corporate 12,120 2,240 Consolidated $ 588,259 $ 456,208 Capital expenditures Georgia $ 193,116 $ 295,498 Missouri 190,928 258,541 Texas 141,365 - Consolidated $ 525,409 $ 554,039 As of September 27, 2020 September 29, 2019 Total assets: Georgia $ 8,352,457 $ 7,910,710 Missouri 3,120,166 2,690,572 Texas 7,919,577 - Corporate 130,083 162,054 Consolidated $ 19,522,283 $ 10,763,336 F-17 PARKS! AMERICA, INC. and SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 27, 2020 NOTE 11. SUBSEQUENT EVENTS The Company has analyzed its operations subsequent to September 27, 2020 to the date these financial statements were issued and has determined that no material subsequent events have occurred from the date of these consolidated financial statements through the date of filing. F-18