What changed in this filing

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Item 1A. Risk Factors

2021-12-09 compared with 2020-12-15 · 210 added, 86 removed, 16 unchanged (95% of the section changed)

You should read the following discussion and analysis together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategies for our business, includes forward-looking statements that involve risks and uncertainties.

You should review the "RISK FACTORS"

below for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in this report.

If any of the following risks actually occur, our business, financial condition and results of operations could be adversely affected.

Risk Factors Relating to Our Business:

The COVID-19 pandemic and measures taken in response thereto may have a material negative impact on our business, results of operations and cash flows, and financial condition.

The extent of the impact is dependent upon future developments, which are highly uncertain and difficult to predict.

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.

should read the following discussion and analysis together with our consolidated financial statements and related notes included elsewhere

in this Annual Report on Form 10-K.

Some of the information contained in this discussion and analysis or set forth elsewhere in this

Annual Report on Form 10-K, including information with respect to our plans and strategies for our business, includes forward-looking

statements that involve risks and uncertainties.

You should review the “ Risk Factors ”

below for a discussion of important factors that could cause actual results to differ materially from the results described in or implied

by the forward-looking statements contained in this report.

If any of the following risks actually occur, our business, financial condition

and results of operations could be adversely affected.

Factors Relating to Our Business:

COVID-19 pandemic and measures taken in response thereto may have a material negative impact on our business, results of operations and

cash flows, and financial condition.

The extent of the impact is dependent upon future developments, which are highly uncertain and difficult

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 the potential to have a material impact on the Company’s business.

We began to see a significant reduction in paid attendance at our Georgia and Missouri Parks beginning the week of March 9, 2020.

Effective April 3, 2020, both Parks were closed to the public as a result of shelter-in-place mandates in Georgia and Missouri.

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, our Georgia Park reopened on May 1, 2020 and our Missouri Park reopened on May 4, 2020, with the drive-through portion of our Texas Park reopening on May 1, 2020 and the park was fully reopened on May 15, 2020.

Since we reopened each of our Parks, attendance levels at each facility have been strong from mid-May through September 2020, which has continued into our 2021 fiscal year.

There is also the potential for our attendance levels to decline after other attractions have reopened to full capacity once the COVID-19 pandemic has run its course or vaccines are in use and made widely available.

While our business has experienced a rebound subsequent to the reopening of our Parks, there may be longer-term negative impacts to our 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 our Parks are located.

Despite our efforts to manage these impacts, the ultimate impact may be material, and will depend on a number of factors beyond our 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.

The extent and duration of longer-term impacts of the COVID-19 pandemic on customer perceptions of our Parks are largely uncertain and dependent upon future developments that cannot be accurately predicted.

There is no recent historical precedent that provides insights into the longer-term impacts that the COVID-19 pandemic will have on consumer behavior.

As a result, the ultimate impact is highly uncertain and subject to change.

We do not yet know the full extent COVID-19 will have on our overall business, results of operations and cash flows, and financial position.

began to see a significant reduction in paid attendance at our Georgia and Missouri Parks beginning the week of March 9, 2020.

April 3, 2020, both 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, our Georgia Park reopened on May 1,

2020 and our Missouri Park reopened on May 4, 2020, with the drive-through portion of our Texas Park reopening on May 1, 2020 and the

park was fully reopened on May 15, 2020.

Since we reopened each of our Parks, attendance levels at each facility were strong for the

balance of our 2020 fiscal year, which continued throughout our 2021 fiscal year, compared to pre-COVID 19 comparable periods.

our business has experienced a rebound subsequent to the reopening of our Parks, there may be longer-term negative impacts to our 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 our Parks are located.

Despite our efforts to manage these impacts, the ultimate impact may be material, and will depend on a number of factors beyond our control,

including the duration and severity of the COVID-19 pandemic, the emergence of variants of the COVID-19 virus, and actions by governmental

authorities taken to contain its spread and mitigate its public health effects.

There is also the potential for our attendance levels

to moderate or decline as alternative entertainment venues reopen to full capacity once the COVID-19 pandemic has run its course or vaccines

are widely adopted and proven effective.

extent and duration of longer-term impacts of the COVID-19 pandemic on customer perceptions of our Parks are largely uncertain and dependent

upon future developments that cannot be accurately predicted.

There is no recent historical precedent that provides insights into the

longer-term impacts that the COVID-19 pandemic will have on consumer behavior.

As a result, the ultimate impact is highly uncertain and

subject to change.

We do not yet know the full extent COVID-19 will have on our overall business, results of operations and cash flows,

and financial position.

COVID-19 and the resulting economic disruptions have also led to significant volatility in the capital markets.

As a smaller public company, our ability to access cash is already difficult and the impacts of COVID-19 on capital markets has likely had negatively impacted our ability to raise additional capital at a reasonable cost.

The Theme Park Industry is highly competitive and we may be unable to compete effectively.

The theme park industry is highly competitive, highly fragmented, rapidly evolving, and subject to technological change and intense marketing by providers with similar products.

One of our competitors for attracting general recreation dollars, Callaway Gardens, is located within five miles of our Georgia Park.

In May 2018, Great Wolf Resorts opened an expansive lodge and indoor waterpark within 10 miles of our Georgia Park.

In September 2017, the founder of Bass Pro Shops opened “Johnny Morris’ Wonders of Wildlife National Museum and Aquarium”, approximately 12 miles from our Missouri Park in Springfield, Missouri.

Branson, Missouri is located just 45 minutes from our Missouri Park.

As a smaller public company, our ability to access cash is already difficult and the impacts of COVID-19 on capital markets has likely

had negatively impacted our ability to raise additional capital at a reasonable cost.

economic conditions may have an adverse impact on our business, financial condition or results of operations.

business and operating results can be impacted by a number of macroeconomic factors, including but not limited to consumer confidence

and spending levels, tax rates, unemployment, consumer credit availability, raw materials costs, pandemics (such as the ongoing COVID-19

pandemic) and natural disasters, fuel and energy costs (including oil prices), and credit market conditions.

The COVID-19 pandemic has

severely impacted and will likely continue to impact many of these factors.

A general economic slowdown or recession resulting in a decrease

in discretionary spending could adversely affect the frequency with which guests choose to visit our parks and the amount that our guests

spend when they visit.

Our ability to source supplies, materials and services at reasonable costs and in a timely manner could be impacted

by adverse economic conditions in the U.S.

For example, our ability to obtain gift shop merchandise had been adversely impacted

by recent supply chain distributions at least in part attributed to collateral impacts from COVID-19.

beyond our control could damage our properties and could adversely impact attendance at our parks and result in decreased revenues.

disasters, public heath crises, epidemics, pandemics, such as the outbreak of COVID-19, terrorist activities, power outages or other

events outside our control could disrupt our operations, impair critical systems, damage our properties or reduce attendance at our parks

or require temporary park closures.

Damage to our properties could take a long time to repair and there is no guarantee that we would

have adequate insurance to cover the costs of repair or the expense of the interruption to our business.

Furthermore, natural disasters

such as fires, earthquakes or hurricanes may interrupt or impede access to our affected properties or require evacuations and may cause

attendance at our affected properties to decrease for an indefinite period.

For example, our Texas Park was closed for several weeks,

experienced power outages and sustained property damage associated with winter storms in February 2021.

The occurrence of such events

could have a material adverse effect on our business, financial condition and results of operations.

cannot predict the frequency, duration or severity of these activities and the effect that they may have on our business, financial condition

or results of operations.

Theme Park Industry is highly competitive and we may be unable to compete effectively.

theme park industry is highly competitive, highly fragmented, rapidly evolving, and subject to technological change and intense marketing

by providers with similar products.

One of our competitors for attracting general recreation dollars, Callaway Gardens, is located within

five miles of our Georgia Park.

In May 2018, Great Wolf Resorts opened an expansive lodge and indoor waterpark within 10 miles of our

Georgia Park.

In September 2017, the founder of Bass Pro Shops opened “Johnny Morris’ Wonders of Wildlife National Museum

and Aquarium”, approximately 12 miles from our Missouri Park in Springfield, Missouri.

Branson, Missouri is located just 45 minutes

from our Missouri Park.

There are a variety of animal attractions throughout southeastern Texas;

the nearest is Franklin Drive Thru Safari, within a 35-40 minute drive of our Texas Park.

Many of our current competitors are significantly larger and have substantially greater market presence as well as greater financial, technical, operational, marketing and other resources and experience than we have.

In the event that such a competitor expends significant sales and marketing resources in one or several markets we may not be able to compete successfully in such markets.

the nearest is Franklin Drive Thru Safari,

within a 35-40 minute drive of our Texas Park.

Many of our current competitors are significantly larger and have substantially greater

market presence as well as greater financial, technical, operational, marketing and other resources and experience than we have.

event that a competitor expends significant sales and marketing resources in one or several markets we may not be able to compete successfully

in such markets.

We believe that competition will continue to increase, potentially placing downward pressure on prices.

Such pressure could adversely affect our gross margins if we are not able to reduce costs commensurate with such price reductions.

In addition, the pace of technological change makes it impossible for us to predict whether we will face new competitors using different technologies to provide the same or similar products offered or proposed to be offered by us.

If our competitors were to provide better and more cost effective products, our business could be materially and adversely affected.

We face strong competition from numerous entertainment alternatives.

In addition to competing with other themed and amusement parks, our venues compete with other types of recreational venues and entertainment alternatives, including but not limited to movies, sports attractions, vacation travel and video games.

There can be no assurance that we will successfully differentiate ourselves from these entertainment alternatives or that consumers will consider our entertainment offerings to be more appealing than those of our competitors.

The increasing availability and quality of technology-based entertainment has provided families with a wider selection of entertainment alternatives in their homes, including home entertainment units, in-home and online gaming, as well as on-demand streaming video and related access to various forms of entertainment.

In addition, traditional theme parks have been able to reduce the cost and increase the variety of their attractions by implementing technologies that cannot be readily incorporated by wild animal attractions such as our Parks.

The suspension or termination of any of our business licenses may have a negative impact on our business.

We maintain a variety of business licenses issued by federal, state and local government agencies that are required to be renewed periodically.

Such pressure

could adversely affect our gross margins if we are not able to reduce costs commensurate with such price reductions.

In addition, the

pace of technological change makes it impossible for us to predict whether we will face new competitors using different technologies

to provide the same or similar products offered or proposed to be offered by us.

If our competitors were to provide better and more cost

effective products, our business could be materially and adversely affected.

face strong competition from numerous entertainment alternatives.

addition to competing with other themed and amusement parks, our venues compete with other types of recreational venues and entertainment

alternatives, including but not limited to movies, sports attractions, vacation travel and video games.

There can be no assurance that

we will successfully differentiate ourselves from these entertainment alternatives or that consumers will consider our entertainment

offerings to be more appealing than those of our competitors.

The increasing availability and quality of technology-based entertainment

has provided families with a wider selection of entertainment alternatives in their homes, including home entertainment units, in-home

and online gaming, as well as on-demand streaming video and related access to various forms of entertainment.

In addition, traditional

theme parks have been able to reduce the cost and increase the variety of their attractions by implementing technologies that cannot

be readily incorporated by wild animal attractions such as our Parks.

suspension or termination of any of our business licenses may have a negative impact on our business.

maintain a variety of business licenses issued by federal, state and local government agencies that are required to be renewed periodically.

We cannot guarantee that we will be successful in renewing all of our licenses on a periodic basis.

The suspension, termination or expiration of one or more of these licenses could have a significant adverse affect on our revenues and profits.

In addition, any changes to the licensing requirements for any of our licenses could affect our ability to maintain the licenses.

Our insurance coverage may not be adequate to cover all possible losses that we could suffer, and our insurance costs may increase.

Companies engaged in the theme park business may be sued for substantial damages in the event of an actual or alleged accident.

An accident occurring at our Parks or at competing parks may reduce attendance, increase insurance premiums, and negatively impact our operating results.

Our properties contain drive-through, safari style animal parks, and there are inherent risks associated with allowing the public to interact with animals.

Although we carry liability insurance to cover this risk, there can be no assurance that our coverage will be adequate to cover liabilities, or that we will be able to afford or obtain adequate coverage should a catastrophic incident occur.

We currently have $6.0 million of liability insurance per occurrence, which is capped at $10.0 million in aggregate.

We will continue to use reasonable commercial efforts to maintain policies of liability, fire and casualty insurance sufficient to provide reasonable coverage for risks arising from accidents, fire, weather, other acts of God, and other potential casualties.

There can be no assurance that we will be able to obtain adequate levels of insurance to protect against suits and judgments in connection with accidents or other disasters that may occur in our Parks.

We may not identify or complete acquisitions in a timely, cost-effective manner, if at all.

Our business plan includes expansion via the acquisition of additional local or regional theme parks and attractions, if attractive opportunities arise.

The suspension, termination or expiration

of one or more of these licenses could have a significant adverse affect on our revenues and profits.

In addition, any changes to the requirements for any of our licenses could affect our ability to maintain the licenses.

insurance coverage may not be adequate to cover all possible losses that we could suffer, and our insurance costs may increase.

engaged in the theme park business may be sued for substantial damages in the event of an actual or alleged accident.

An accident occurring

at our Parks or at competing parks may reduce attendance, increase insurance premiums, and negatively impact our operating results.

properties contain drive-through, safari style animal parks, and there are inherent risks associated with allowing the public to interact

with animals.

Although we carry liability insurance to cover this risk, there can be no assurance that our coverage will be adequate

to cover liabilities, or that we will be able to afford or obtain adequate coverage should a catastrophic incident occur.

currently have $6.0 million of liability insurance per occurrence, which is capped at $10.0 million in aggregate.

We will continue to

use reasonable commercial efforts to maintain policies of liability, fire and casualty insurance sufficient to provide reasonable coverage

for risks arising from accidents, fire, weather, other acts of God, and other potential casualties.

There can be no assurance that we

will be able to obtain adequate levels of insurance to protect against suits and judgments in connection with accidents or other disasters

that may occur in our Parks.

may not identify or complete acquisitions in a timely, cost-effective manner, if at all.

business plan includes expansion via the acquisition of additional local or regional theme parks and attractions, if attractive opportunities

There can be no assurance that we will be successful in acquiring and operating additional local or regional theme parks and attractions.

Competition for acquisition opportunities in the theme park industry is intense as there are a limited number of parks within the United States that could reasonably qualify as acquisition targets for us.

Our acquisition strategy is dependent upon, among other things, our ability to:

Competition for acquisition opportunities in the theme park industry is intense as there are a limited number of parks within the United

States that could reasonably qualify as acquisition targets for us.

Our acquisition strategy is dependent upon, among other things, our

identify acquisition opportunities;

1 unchanged sentence

and obtain necessary regulatory approvals.

Our ability to pursue our acquisition strategy may be hindered if we are not able to successfully identify acquisition targets or obtain the necessary financing or regulatory approvals, including but not limited to those arising under federal and state antitrust and environmental laws.

Significant amounts of additional financing may be necessary for the implementation of our Business Plan.

The Company may require additional debt and equity financing to pursue its business plan.

There can be no assurance that we will be successful in obtaining additional financing.

to pursue our acquisition strategy may be hindered if we are not able to successfully identify acquisition targets or obtain the necessary

financing or regulatory approvals, including but not limited to those arising under federal and state antitrust and environmental laws.

amounts of additional financing may be necessary for the implementation of our Business Plan.

Company may require additional debt and equity financing to pursue its business plan.

There can be no assurance that we will be successful

in obtaining additional financing.

Lack of additional funding could force us to substantially curtail our expansion plans.

Furthermore, the issuance by the Company of any additional securities would dilute the ownership of existing stockholders and may affect the price of our common stock.

Our ownership of real property subjects us to environmental regulation, which creates uncertainty regarding future environmental expenditures and liabilities.

We may be required to incur costs to comply with environmental requirements, such as those relating to discharges to air, water and land;

the issuance by the Company of any additional securities would dilute the ownership of existing stockholders and may affect the price

of our common stock.

ownership of real property subjects us to environmental regulation, which creates uncertainty regarding future environmental expenditures

and liabilities.

may be required to incur costs to comply with environmental requirements, such as those relating to discharges to air, water and land;

the handling and disposal of solid and hazardous waste;

and the cleanup of properties affected by hazardous substances.

Under these and other environmental requirements we may be required to investigate and clean up hazardous or toxic substances or chemical releases at one of our properties.

As an owner or operator, we could also be held responsible to a governmental entity or third party for property damage, personal injury and investigation and cleanup costs incurred by them in connection with any contamination.

Environmental laws typically impose cleanup responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants.

The liability under environmental laws has been interpreted to be joint and several unless the harm is divisible and there is a reasonable basis for allocation of the responsibility.

The costs of investigation, remediation or removal of those substances may be substantial, and the presence of those substances, or the failure to remediate a property properly, may impair our ability to use our property.

Under these and

other environmental requirements we may be required to investigate and clean up hazardous or toxic substances or chemical releases at

one of our properties.

As an owner or operator, we could also be held responsible to a governmental entity or third party for property

damage, personal injury and investigation and cleanup costs incurred by them in connection with any contamination.

Environmental laws

typically impose cleanup responsibility and liability without regard to whether the owner or operator knew of or caused the presence

of the contaminants.

The liability under environmental laws has been interpreted to be joint and several unless the harm is divisible

and there is a reasonable basis for allocation of the responsibility.

The costs of investigation, remediation or removal of those substances

may be substantial, and the presence of those substances, or the failure to remediate a property properly, may impair our ability to

use our property.

We are not currently aware of any material environmental risks regarding our properties.

However, we may be required to incur costs to remediate potential environmental hazards or to mitigate environmental risks in the future.

We are dependent upon the services of our Executive Officers and consultants.

Our success is heavily dependent on the continued active participation of our executive officers.

Loss of the services of one or more of these officers could have a material adverse effect upon our business, financial condition or results of operations.

Further, our success and achievement of our growth plans depend on our ability to recruit, hire, train and retain other highly qualified technical and managerial personnel.

Competition for qualified employees among companies in the theme park industry is intense, and the loss of any such persons, or an inability to attract, retain and motivate any additional highly skilled employees required for the expansion of the Company’s activities, could have a materially adverse effect on the Company.

The inability of the Company to attract and retain the necessary personnel, and consultants and advisors could have a material adverse effect on the Company’s business, financial condition or results of operations.

Risk Factors Relating to Our Common Stock:

Our Common Stock is subject to the “penny stock” rules of the SEC and the trading market in our Common Stock is limited, which makes transactions in our Common Stock cumbersome and may reduce the value of an investment in our Common Stock.

Our common stock is considered a "penny stock"

and the sale of our stock by you will be subject to the "penny stock rules"

However, we may be required

to incur costs to remediate potential environmental hazards or to mitigate environmental risks in the future.

are dependent upon the services of our Executive Officers, key personnel and consultants.

success is heavily dependent on the continued active participation of our executive officers.

Loss of the services of one or more of

these officers could have a material adverse effect upon our business, financial condition or results of operations.

our success and achievement of our growth plans depend on our ability to recruit, hire, train and retain other highly qualified technical

and managerial personnel.

Competition for qualified employees among companies in the theme park industry is intense, and the loss of

any such persons, or an inability to attract, retain and motivate any additional highly skilled employees required for the expansion

of the Company’s activities, could have a materially adverse effect on the Company.

The inability of the Company to attract and

retain the necessary personnel, and consultants and advisors could have a material adverse effect on the Company’s business, financial

condition or results of operations.

labor and employee benefit costs may reduce our results of operations.

We also depend on a seasonal workforce, many of whom are

paid at minimum wage.

is a primary component in the cost of operating our business.

Our ability to control labor costs is subject to numerous external factors,

including market pressures with respect to prevailing wage rates, unemployment levels, and health and other insurance costs, as well

as the impact of legislation or regulations governing labor relations, minimum wage, and healthcare benefits.

Furthermore, our operations

are dependent in part on a seasonal workforce, many of whom are paid at or near minimum wage.

We seek to manage seasonal wages and the

timing of the hiring process to ensure the appropriate workforce is in place for peak and low seasons;

however, we may be unable to recruit

and hire sufficient personnel to meet our business needs.

In addition, we cannot guarantee that material increases in the cost of securing

our workforce will not occur in the future.

Increased state or federal minimum wage requirements, general wages or an inadequate workforce

could have an adverse impact on our results of operations.

We anticipate that the recent upward pressures on general wage rates will

increase our salary, wage and benefit expenses in our 2022 fiscal year and beyond, and further legislative changes or competitive wage

rates could continue to increase these expenses in the future.

Factors Relating to Our Common Stock:

Common Stock is subject to the “penny stock” rules of the SEC and the trading market in our Common Stock is limited, which

makes transactions in our Common Stock cumbersome and may reduce the value of an investment in our Common Stock.

common stock is considered a “penny stock” and the sale of our stock by you will be subject to the “penny stock rules”

The penny stock rules require broker-dealers to take steps before making any penny stock trades in customer accounts.

As a result, the market for our shares could be illiquid and there could be delays in the trading of our stock, which would negatively affect your ability to sell your shares and could negatively affect the trading price of your shares.

We do not expect to pay dividends for some time, if at all.

As of the date of this report, no cash dividends have been paid on our common stock.

We expect that any income from operations will be devoted to our future operations and growth, as well as to service our debt.

a result, the market for our shares could be illiquid and there could be delays in the trading of our stock, which would negatively affect

your ability to sell your shares and could negatively affect the trading price of your shares.

do not expect to pay dividends for some time, if at all.

of the date of this report, no cash dividends have been paid on our common stock.

We expect that any income from operations will be devoted

to our future operations and growth, as well as to service our debt.

We do not expect to pay cash dividends in the near future.

Any future determination as to the payment of dividends on our common stock will be at the discretion of our Board of Directors and will depend on our earnings, operating and financial condition, capital requirements and other factors deemed relevant by our Board of Directors.

The provisions of credit agreements, which we may enter into from time to time, may also restrict the declaration of dividends on our common stock.

determination as to the payment of dividends on our common stock will be at the discretion of our Board of Directors and will depend

on our earnings, operating and financial condition, capital requirements and other factors deemed relevant by our Board of Directors.

The provisions of credit agreements, which we may enter into from time to time, may also restrict the declaration of dividends on our

common stock.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors