What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-12-12 compared with 2022-12-15 · 276 added, 296 removed, 143 unchanged (80% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

discussion and analysis of results of operations and financial condition (“MD&A”) is a supplement to the

accompanying consolidated financial statements and provides additional information on our businesses, current developments,

financial condition, cash flows and results of operations.

The following discussion should be read in conjunction with our

consolidated financial statements for the fiscal year ended October 2, 2022 provided in this Annual Report on Form 10-K.

statements contained herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform

These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ

materially, as discussed more fully herein.

discussion and analysis of results of operations and financial condition (“MD&A”) is a supplement to the accompanying

consolidated financial statements and provides additional information on our businesses, current developments, financial condition, cash

flows and results of operations.

The following discussion should be read in conjunction with our consolidated financial statements for

the fiscal year ended October 1, 2023 provided in this Annual Report on Form 10-K.

Certain statements contained herein may constitute

forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements involve a number

of risks, uncertainties and other factors that could cause actual results to differ materially, as discussed more fully herein.

forward-looking information set forth in this Annual Report on Form 10-K is based on management’s current views and assumptions

6 unchanged sentences

in the section entitled “ Risk Factors ” in this Annual Report on Form 10-K.

our wholly owned subsidiaries, we own and operate three regional theme parks and are in the business of acquiring, developing and operating

local and regional theme parks and attractions in the United States.

Our 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

On April 27, 2020, we acquired substantially all the assets of Aggieland Safari LLC and related entities (“Aggieland

parks are open year round, but experience increased seasonal attendance, typically beginning in the latter half of March through

early September.

Combined third and fourth quarter net sales were 62.1% and 60.3% of annual attendance based net sales for our 2022

and 2021 fiscal years, respectively.

Since the acquisition of our Texas Park, the combined third and fourth quarter concentration of

our sales has been reduced.

The table below outlines our annual net sales, reported

and adjusted income before income taxes, earnings before interest, taxes, depreciation and amortization (“EBITDA”), and net

cash provided by operating activities for the last five fiscal years.

For the past several years, our Georgia Park has benefitted from

a number of positive factors including strong and stable management, the addition of online ticket sales in June 2015, growth and positive

economic conditions in the greater Atlanta area, as well as positive guest perceptions of this park.

Our strong results through fiscal

2019 and the resulting improvements in our financial position provided us with the resources to pursue and ultimately complete the Aggieland

Safari acquisition.

Total net sales

Reported income before income taxes

% of total net sales

Adjusted income before income taxes (*)

% of total net sales

our wholly owned subsidiaries, we own and operate three regional safari parks and are in the business of acquiring, developing and

operating local and regional entertainment assets and attractions in the United States.

Our 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 –

Wild Animal – Georgia owns and operates the Wild Animal Safari park in Pine Mountain, Georgia (the

“Georgia Park”).

Wild Animal – Missouri owns and operates the Wild Animal Safari park located in Strafford,

Missouri (the “Missouri Park”).

Aggieland Wild Animal – Texas owns and operates the Aggieland Wild Animal Safari

park near Bryan/College Station, Texas (the “Texas Park”).

On April 27, 2020, we acquired substantially all the assets

of Aggieland Safari LLC and related entities (“Aggieland Safari”).

parks are open year round, but experience increased seasonal attendance, typically beginning in the latter half of March through early

Combined third and fourth quarter park

revenues were 60.4% and 62.1% of annual park

revenues for our 2023 and 2022

fiscal years, respectively.

Since the acquisition of our Texas Park, the combined third and fourth quarter concentration of our park

has been reduced.

March 26-27, 2023, our Georgia Park experienced extensive damage, caused by an EF-3 tornado and over nine inches of rain, resulting in

more than 4,500 fallen trees and damage to many of the Park’s animal enclosures, fencing and other infrastructure.

The Walkabout

Adventure Zoo (“Walkabout”) portion of the property was particularly hard hit.

Our Georgia Park was closed for 20 days, including

for most of its traditionally busy spring break period, which has historically comprised approximately 10%-15% of its annual revenue.

The drive-through safari section of the Georgia Park reopened on April 15th.

The Walkabout portion of the Park has reopened in phases,

with the first phase on May 6th and the second phase on July 2nd.

Approximately one-quarter of the Walkabout remains closed.

table below outlines our annual net sales, reported and adjusted income before income taxes, earnings before interest, taxes, depreciation

and amortization (“EBITDA”), and net cash provided by operating activities for the last five fiscal years.

Attendance at

our parks benefited in 2020 and 2021 from the COVID-19 pandemic which drove an increase in demand for outdoor entertainment.

revenue remains above pre-pandemic levels, however, is down from the high in 2021.

In 2023, our park revenue was negatively impacted

by approximately $1.0 million at our Georgia Park from the March severe weather and tornado event, subsequent closure and multi-phased

Total revenues

Reported income (loss) before income taxes

% of total revenues

Adjusted income (loss) before income taxes (*)

% of total revenues

Net cash provided by operating activities

% of total net sales

- Excludes a $100,000 legal settlement charge in 2022, a $189,988 gain on extinguishment of debt in 2021, $24,373 of tornado related

insurance proceeds in 2020, $80,444 of tornado damage asset write-offs and costs in 2019, and $130,532 of deferred financing costs write-offs

EBITDA is not a measurement of operating performance

computed in accordance with generally accepted accounting principles (“GAAP”) and should not be considered as a substitute

for operating income, net income or cash flows from operating activities computed in accordance with GAAP.

We believe that EBITDA is a

meaningful measure as it is widely used by analysts, investors and comparable companies in our industry to evaluate our operating performance

on a consistent basis, as well as more easily compare our results with those of other companies in our industry.

% of total revenues

Excludes net tornado expenses and asset write-offs of $368,955 in 2023, a $100,000 legal settlement charge in 2022, a $189,988 gain on

extinguishment of debt in 2021, $24,373 of tornado related insurance proceeds in 2020, and $80,444 of tornado damage asset write-offs

and costs in 2019.

is not a measurement of operating performance computed in accordance with generally accepted accounting principles

(“GAAP”) and should not be considered as a substitute for operating income, net income or cash flows from operating

activities computed in accordance with GAAP.

We believe that EBITDA is a meaningful measure as it is widely used by analysts,

investors and comparable companies in the entertainment and attractions industry to evaluate our operating performance on a

consistent basis, as well as more easily compare our results with those of other companies in our industry.

We also believe EBITDA

is a meaningful measure of park-level operating profitability.

EBITDA is a supplemental measure of our operating results and is not intended

to be a substitute for operating income, net income or cash flows from operating activities as defined under GAAP.

following table provides a reconciliation of our reported income before income taxes to our EBITDA for our five most recent fiscal years:

Reported income before income taxes

EBITDA is a supplemental measure of our operating results and is not

intended to be a substitute for operating income, net income or cash flows from operating activities as defined under

following table provides a reconciliation of our income before income taxes to our EBITDA for our five most recent fiscal years:

Income (loss) before income taxes

Interest expense

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(Gain) loss on disposal of operating assets, net

Tornado damage and expenses, net

Legal settlement

Gain on extinguishment of debt

Tornado damage and expenses, net

Write-off of loan fees - prepayment

response to the outbreak of the COVID-19 pandemic, governmental authorities throughout the United States implemented 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.

We implemented several measures to mitigate the impacts of the pandemic on our business and financial

During the initial shutdown period, we reduced staffing, applied for and received Paycheck Protection Program

(“PPP”) loans and reduced discretionary spending.

In addition, we delayed closing the Texas Park acquisition to

renegotiate various terms, primarily focused on reducing the cash requirements of the acquisition in the subsequent year.

early April 2020, our Georgia and Missouri Parks closed to the public due to shelter-in-place mandates.

In addition, our Texas Park,

was closed to the public for the month prior to its acquisition, due to a shelter-in-place mandate.

In compliance with respective state

issued guidelines, each of our parks reopened in early May 2020.

After reopening, attendance levels increased significantly at each of

our parks for the balance of our 2020 fiscal year, which continued throughout our 2021 fiscal year in comparison to comparable pre-COVID-19

We experienced a decline in comparable year-over-year attendance based net sales and attendance for the last 22 weeks of our

2021 fiscal year and for our entire 2022 fiscal year, respectively.

we experienced a comparable 52-week attendance-based sales decline for our 2022 fiscal year compared to the elevated pandemic levels,

our overall sales remain at significantly higher levels when compared to pre-COVID-19 periods.

On a combined basis, attendance-based

sales of our Georgia and Missouri Parks for our 2022 fiscal year were up approximately 43.0% compared to the comparable pre-COVID-19

2019 fiscal year, which we believe illustrates a significant increase in local and regional awareness of each park, a critical development

with positive long-term ramifications for our business.

(Note, our Texas Park, acquired on April 27, 2020, originally opened in May 2019;

therefore, a full year of sales is not available for pre-COVID-19 periods).

we have experienced attendance gains and strong cash flows subsequent to the reopening our of parks after the initial closures at the

beginning of the pandemic, 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 may include changes in customer behavior

and preferences, increases in operating expenses to meet consumer expectations and perceptions, limitations in our ability to recruit

and maintain staffing, as well as increasing wages required retain and recruit staff.

There is also the potential for attendance levels

at our parks to moderate or decline as alternative entertainment venues are now open and consumers have broader travel and entertainment

are committed to leveraging the strong operating model we have established at our Georgia Park at all three of our properties, with a

focus on increasing attendance through enhanced marketing efforts and focused capital investments, as well as continuing to prudently

increase the average revenue generated per guest visit via concession and gift shop revenues.

Among our highest priorities over the next

several years is continuing the integration of our Texas Park, continual enhancement of the overall guest experience at each of our parks,

as well as the introduction new programming and enhanced marketing efforts.

As our Texas Park first opened to the public in May 2019,

we believe there remains tremendous potential to increase attendance by increasing the local and regional awareness of this facility

via advertising and promotion.

We are pleased with the expanded attendance at our Missouri Park since it reopened in May 2020 and plan

on leveraging the increased exposure of this facility to continue to build on this recent success.

2023 fiscal year capital investment plan remains elevated versus historical levels, however, is lower than the $1.84 million record level

of capital spending during our 2022 fiscal year.

Our 2023 capital plan targets substantial guest-facing enhancements at all three of

our parks, delivering a marketable attraction at each property and setting the stage for longer-term master planning and optimization

at every park.

Our plan to open a significant new giraffe exhibit at our Georgia Park during our 2022 fiscal year experienced delays

due to a highly inflationary period for building materials and a challenging labor market.

We remain committed to this showcase attraction

and expect to make progress on this project during our 2023 fiscal year, however the opening date is still unknown.

Our 2023 projected

capital investment spending will again be fully funded from our existing cash and continues to demonstrate our commitment to building

for long-term, sustainable growth.

long-term business plan also includes expansion via the acquisition of additional local or regional theme parks and attractions.

acquisitions, if any, should not unnecessarily encumber the Company with additional debt that cannot be justified by current operations.

We may also pursue contract management opportunities for themed attractions owned by third parties.

By using a combination of equity,

debt and other financing options, we intend to carefully monitor stockholder value in conjunction with the pursuit of growth.

annual operating cash flow over the past several fiscal years has provided us with incremental cash flow, provided us with the financial

strength to complete the Aggieland Safari acquisition and has funded a significant increase in capital investment.

However, our current

size and operating model leave us little room for error.

Any future capital raised by us is likely to result in dilution to existing

stockholders.

It is possible that cash generated by, or available to, us may not be sufficient to fund our capital and liquidity needs

for the near-term.

the year ended October 1, 2023, we incurred $780,941 of Georgia Park severe weather and tornado related expenses, primarily due to tree

and other debris removal, repairing and replacing underground water pipes throughout the property, as well as general clean-up efforts.

In addition, related asset write-offs of $275,297, primarily associated with damage to various animal exhibits, several buildings, fencing

and other infrastructure.

These expenses and asset write-offs were partially offset by insurance proceeds totaling $687,283, net of deductibles

and co-insurance.

During our 2023 fiscal year we also made capital investments of approximately $615,000 at our Georgia Park for rebuilding

projects as a direct result of the tornado event.

a result of the near-term needs associated with the tornado recovery effort at our Georgia Park, we revised our 2023 fiscal year

capital investment plan.

Two significant new marketable attractions in our Georgia Park Walkabout, an enhanced ring-tailed lemur

exhibit and new aviary, featuring macaws and a budgie parrot feeding experience, were not significantly impacted by the tornado

event and opened on May 6, 2023.

In addition, a new marquee otter exhibit opened in May 2023 at our Missouri Park

Walkabout and a fourth drive-through pasture at our Texas Park opened in early March 2023, allowing guests to feed zebras and camels

directly from their vehicles.

2023 fiscal year capital also included investment in fleet vehicles, roadways and other necessary safety-related capital projects.

Due to the significant unplanned spending driven by the Georgia severe weather and tornado event, we paused our project related to

accessing public water in Texas as well as several other minor projects to manage cash flow.

Our plan to open a significant new

giraffe exhibit at our Georgia Park, initiated during our 2022 fiscal year, experienced delays due to a highly inflationary period

for building materials and a challenging labor market.

While we remain committed to this showcase attraction, the severe weather and

tornado event caused the management team to reprioritize capital projects.

We also mutually agreed to terminate the contract

with the initial design and general contracting partner for this project, resulting in a $196,000 project cost write-off.

to establish a revised timeline for a new giraffe exhibit at our Georgia Park during our 2024 fiscal year.

2024 fiscal year capital plan reflects the further strategic rebuild of our Georgia Park following the March 2023 severe weather

event and continues to set the stage for longer-term master planning and optimization at each of our parks.

The centerpiece of our

2024 capital plan is a new restroom building and main entry plaza at our Georgia Park.

The existing restroom building was near the

end of its useful life, and the tornado damage rendered it beyond repair.

We believe this investment is paramount in improving the

overall guest experience and will pave the way for a new standard.

The new main entry plaza will provide an improved arrival

experience and a place for our guests to dwell, which we believe will positively impact our Georgia Park for decades to

in Georgia, our carnivore night house will be rebuilt, a capybara encounter area will be added, roadway infrastructure improved, and

additional fencing and sidewalks repaired.

We continue to take a strategic and measured approach to the rebuild at our Georgia Park,

ensuring we put in place a product that will withstand the test of time and improve the guest, animal and staff experience,

ultimately delivering higher revenue and profitability.

At our Missouri Park, the 2024 capital plan is focused on activation of a

guest-facing pond within the Walkabout featuring a nature trail and floating dock, the expansion of shade structures,

additional rental vehicles, and equipment capital.

Capital spending planned for 2024 at our Texas Park will be focused on key

infrastructure needs, including hay storage, the completion of the keeper facility and general safety related improvements.

remain committed to our long-term vision for our parks, and we believe our 2024 capital plan balances additional needs from the

Georgia Park tornado and deferred maintenance, along with the addition of guest facing improvements and amenities.

Our 2024 fiscal year capital plan anticipates spending approximately $1.4 million, which

will again be fully funded from our existing cash and continues to demonstrate our commitment to building for long-term, sustainable

are committed to leveraging the strong operating model we have established at our Georgia Park at all three of our properties, with

a focus on increasing attendance through enhanced marketing efforts and focused capital investments, as well as continuing to

prudently increase the average revenue generated per guest visit via concession and gift shop revenues.

In addition to rebuilding

and improving our Georgia Park Walkabout, among our highest priorities over the next several years are the enhancement of the

overall guest experience, streamlining and optimizing our systems, operating standards and practices, and increasing per capita

revenue, through the introduction of new programming and more targeted marketing efforts.

Our Texas Park opened to the public in May

2019 and we believe there remains long-term potential to increase attendance by increasing the local and regional awareness of this

facility via advertising and promotion.

We remain encouraged by the higher levels of attendance at our Missouri Park which began in

the spring of 2020 and plan on prudently leveraging the increased exposure of this facility to continue to build on this

long-term business plan also includes adjacent expansion and expansion via the acquisition of additional local or regional entertainment

assets and attractions.

We believe adjacent development and acquisitions, if any, should not unnecessarily encumber the Company with

additional debt that cannot be justified by current operations.

We may also pursue contract management opportunities for attractions

owned by third parties.

By using a combination of equity, debt and other financing options, we intend to carefully monitor stockholder

value in conjunction with the pursuit of growth.

annual operating cash flow over the past several fiscal years has provided us with incremental operating margin, funded significant

increases in capital investment, allowed us to paydown debt following the Aggieland Safari acquisition in 2020, and quickly reopen

after the significant damage and business interruption caused by the March 2023 severe weather event at our Georgia Park.

our current size and operating model leaves us little room for error.

Any future capital raised by us may result in dilution to

existing stockholders.

It is possible that the cash generated by, or available to, us may not be sufficient to fund our capital and

liquidity needs for the near term.

and Segment Results of Operations for the Year Ended October 1, 2023 as Compared to the Year Ended October 2, 2022

6 unchanged sentences

we believe this measure is the most indicative of performance trends and the overall earnings potential of each segment.

2022 fiscal year was comprised of 52-weeks, compared to our 2021 fiscal year which was comprised of 53-weeks.

Therefore, in addition

to full year reported attendance based sales comparisons, attendance based sales analyses will include comparable 52-week sales comparisons.

following table shows our consolidated and segment operating results for the years ended October 1, 2023 and October 2, 2022:

Total net sales

Segment income (loss) from

operating margin %

Missouri Park

Total revenues

Segment income (loss) from operations

Segment operating margin %

Corporate expenses

Other income, net

Tornado expenses and write-offs, net

Legal settlement

Gain on extinguishment of debt

before income taxes

Company’s total net sales for the year ended October 2, 2022 decreased by $1.12 million, to $10.74 million compared to

$11.86 million for the year ended October 3, 2021.

Our Parks’ combined attendance based net sales decreased by $1.05 million or

9.0%, and animal sales decreased by $75,607.

On a comparable 52-week basis, our attendance based net sales decreased by $848,862 or 7.4%.

a reported basis, our Georgia Park’s attendance based net sales decreased by $881,252 or 11.1%, to $7.07 million, our Missouri

Park’s attendance based net sales decreased by $101,592 or 5.7%, to $1.67 million, and our Texas Park’s attendance based

sales decreased by $62,623 or 3.2%, to $1.88 million.

a comparable 52-week basis, our Georgia Park’s attendance based net sales decreased by $748,701 or 9.6%, our Missouri Park’s

attendance based net sales decreased by $76,473 or 4.4%, and our Texas Park’s attendance based sales decreased by $23,688 or 1.2%.

On comparable 52-week basis, paid attendance at our Georgia Park decreased by approximately 17.9%, paid attendance our Missouri Park

decreased by approximately 15.7%, while paid attendance at our Texas Park increased by approximately 2.2%.

Other income, net

Interest expense

Income (loss) before income taxes

total revenues for the year ended October 1, 2023 were $9.44 million, a decrease of $1.30 million, compared to the year ended

October 1, 2022.

Our park revenues decreased by $1.34 million or 12.6%, while animal sales increased by $34,457.

As a result of a

severe weather and tornado event on March 26-27, 2023, our Georgia Park was closed for 20 days, with the drive through section of

the park reopening on April 15th and roughly three-quarters of the Walkabout portion reopening in two phases, on May 6th and July 2nd, respectively.

Based on the comparable prior year period, we believe Georgia Park revenues were negatively impacted

by approximately $1.0 million due to the severe weather and tornado related closure and phased reopening during the year ended

October 1, 2023.

On a pro forma basis, assuming flat park revenues for our Georgia Park from March 26th through May 6th, our park

revenues for the year ended October 1, 2023 decreased by approximately $356,000 or 3.2%.

park revenues were $5.82 million, a decrease of $1.24 million or 17.5%, while animal sales increased by $27,473.

On a pro forma basis,

assuming flat sales during the severe weather and tornado closure and phased reopening period, Georgia park revenues decreased by approximately

$240,000 or 3.4%.

Missouri park revenues increased by $25,220 or 1.5%, to $1.69 million, while animal sales decreased by $24,057.

park revenues decreased by $120,667 or 6.4%, to $1.76 million, while animal sales increased by $31,041.

the year ended October 1, 2023, paid attendance at our Missouri Park increased by 15.3%, while paid attendance at our Georgia and Texas

Parks decreased by 17.1% and 6.7%, respectively.

Adjusted for the severe weather and tornado closure and phased reopening impact, on

a pro forma basis, Georgia Park paid attendance decreased by approximately 3.8%, which we believe was driven by lost momentum following

the closure and phased reopening, and increased regional competition.

We also believe unfavorable weather and a challenged consumer spending

landscape, particularly in our fiscal fourth quarter, proved to be a headwind across all three of our parks, as well as for the overall

Operating Margin

consolidated segment operating margin decreased $2.36 million, resulting in segment income from operations of $2.30 million for the year

ended October 2, 2022 compared to segment income from operations of $4.66 million for the year ended October 3, 2021.

Our Georgia Park’s

segment income was $2.90 million, a decrease of $1.62 million, principally attributable to lower attendance based net sales and lower

animal sales, as well as higher compensation and benefits, advertising, insurance and general operating expenses, partially offset by

higher margins on gift shop and food service sales.

Our Missouri Park generated a segment operating loss of $344,404, a net decrease

of $547,001, primarily attributable to lower attendance based net sales, as well as higher special event, advertising, compensation,

depreciation and general operating expenses, partially offset by gains on asset dispositions.

Our Texas Park generated a segment loss

of $254,834, an increase of $191,912, primarily attributable lower attendance based net sales, as well as higher advertising, benefits,

insurance, depreciation and general operating expenses, partially offset by higher animal sales, higher margins on gift shop and food

service sales, and lower losses on asset dispositions.

spending increased by $99,810 to $995,946 during the year ended October 2, 2022, primarily due to higher professional fees, compensation

and benefits, travel and insurance expenses.

consolidated segment operating margin decreased $1.16 million, resulting in segment income from operations of $1.14 million for the

year ended October 1, 2023 compared to segment income from operations of $2.30 million for the year ended October 2, 2022.

Georgia Park’s segment income was $1.51 million, a decrease of $1.38 million, principally attributable to lower park revenues

and the associated margin loss related to the severe weather and tornado closure, as well as higher general operations spending and

higher asset write-offs, partially offset by lower advertising expense and higher animal sales.

Our Missouri Park generated a

segment operating loss of $18,153, compared to a segment operating loss of $344,404 for the year ended October 2,2022, resulting in

a net improvement of $326,251, primarily attributable to higher park revenues and expenses for a drive-through Christmas lights

display which negatively impacted fiscal 2022.

Our Missouri Park segment income was also favorably impacted by lower advertising and

wage expenses, and improved margins on in-park revenues, partially offset by lower animal sales and higher depreciation expense.

Our Texas Park generated a segment loss of $353,982, compared to $254,834 for the year ended October 2, 2022, resulting in an

increase of $99,148, primarily attributable to lower park revenues, as well as higher depreciation expense and asset write-offs,

partially offset by higher animal sales and improved margins on in-park revenues.

spending increased by $204,361 to $1.20 million for the year ended October 1, 2023, primarily attributable to higher wages due to management

redundancies during the executive transition period and higher professional fees.

Expenses and Write-offs, Net

a result of the damage caused by the March 2023 severe weather and tornado event at our Georgia Park, we recorded $780,941 of

related expenses, primarily due to tree and other debris removal, repairing and replacing underground water pipes throughout the

property, as well as general clean-up and reopening efforts.

In addition, we recorded asset write-offs of $275,297, primarily

associated with damage to various animal exhibits, several buildings, fencing and other infrastructure.

These expenses and

write-offs were partially offset by $687,283 of insurance proceeds from our commercial property coverage.

For additional

information, see “N ote 3.

TORNADO EXPENSES AND ASSET WRITE-OFFS” of the

Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

Settlement Charge

4 unchanged sentences

AND CONTINGENCIES ” of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

income, net, was $91,276 for the year ended October 2, 2022, an increase of $25,962, primarily attributable to higher mineral rights

royalty income for our Texas Park.

on Extinguishment of Debt

the year ended October 3, 2021, we received notification the SBA approved both of our PPP loan forgiveness

applications, resulting in a gain on extinguishment of debt totaling $189,988.

expense for the year ended October 2, 2022 was $261,621, a decrease of $74,323, primarily as a result of the lower interest rate associated

with the June 2021 refinancing of our Synovus term loan and scheduled principal payments on our term loans over the trailing 12 month

period, as well as the retirement of the Aggieland Seller Note in June 2021.

the year ended October 2, 2022, we generated income before income taxes of $1.03 million and recorded a tax provision of $302,800, for

income, net, was $80,230 for the year ended October 1, 2023, a decrease of $11,046, primarily attributable to higher other expenses and

lower mineral rights royalty income from our Texas Park property, partially offset by higher interest income.

expense for the year ended October 1, 2023 was $222,396, a decrease of $39,225, primarily attributable to a reduction in term loan

interest expense, as well as imputed interest on a right of use asset in the prior year.

the year ended October 1, 2023, we generated a pre-tax loss of $572,421 and recorded a tax benefit provision of $88,683, resulting in

an effective tax rate of approximately 15.5%, which was unfavorably impacted by state income taxes due to operating losses for our Missouri

1 unchanged sentence

For the year ended October 2, 2022, we generated income before income taxes of $1.03 million and recorded a tax provision

of $882,000, for an effective tax rate of approximately 24.0%, which was favorably impacted by the non-taxable PPP loan forgiveness.

of $302,000, resulting in an effective tax rate of approximately 29.4%, which was also unfavorably impacted by state income taxes due

to operating losses for our Missouri and Texas Parks.

For additional information, see “N ote

Taxes ” of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

Income Taxes ” of the Notes to the Consolidated Financial Statements included

in this Annual Report on Form 10-K.

Income and Income Per Share

reported net income for the year ended October 2, 2022 was $727,491 or $0.01 per basic share and per fully diluted share, a decrease

reported net loss for the year ended October 1, 2023 was $483,738 or $0.01 per basic share and per fully diluted share, a net decrease

of $1.21 million or $0.02 per basic and fully diluted share, as compared with reported net income of $727,491 million or $0.01 per basic

3 unchanged sentences

October 2, 2022

Net income (loss)

Tornado expenses and write-offs, net

Tax impact - Tornado expenses and write-offs

Legal settlement

Tax impact - legal settlement

Gain on extinguishment of debt

Adjusted net income

Adjusted net income (loss)

shown in the table above, several one-time items impacted our year-over-year reported net income comparison.

Our 2022 fiscal year

included a legal settlement charge of $100,000.

Our 2021 fiscal year included a gain on extinguishment of debt totaling $189,988.

Management believes that adjusted net income, excluding one-time items, should be considered in evaluating the ongoing operating

performance of our business.

Excluding the after-tax effect of these items, our 2022 and 2021 fiscal year adjusted net income would

have been $800,491 and $2.61 million, respectively, resulting in a decrease in adjusted net income of $1.81 million.

The decrease in

our adjusted net income is attributable to a $1.62 million decrease in the segment income for our Georgia Park, a $547,001 net

decline in the segment income for our Missouri Park, a $191,912 increase in the segment loss for our Texas Park, a $99,810 increase

in Corporate expenses, partially offset by a $74,323 decrease in interest expense, a $25,962 increase in other income and a $552,200

decrease in our adjusted income tax provision.

Our 2023 fiscal year included

$368,955 of Georgia Park severe weather and tornado related expenses and asset write-offs, net of insurance proceeds.

Our 2022 fiscal

year included a legal settlement charge of $100,000.

Management believes that adjusted net income, excluding one-time items, should be

considered in evaluating the ongoing operating performance of our business.

Excluding the $269,335 after-tax effect of the Georgia Park

net tornado expenses and asset write-offs for the year ended October 1, 2023, as well as the $73,000 after-tax expense associated with

a legal settlement during the year ended October 2, 2022, our adjusted net income decreased $1.01 million.

This decrease is primarily

attributable to a $1.38 million decrease in segment income for our Georgia Park, a $204,361 increase in Corporate expenses, a $99,148

increase in the segment loss for our Texas Park, and a $11,046 decrease in other income, partially offset by a $326,251 decrease in the

segment loss for our Missouri Park, a $39,225 decrease in interest expense and a $318,863 net decrease in our adjusted income tax expense.

Condition, Liquidity and Capital Resources

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As a result of our improved cash position, during our 2023 and 2022 fiscal years we did not utilize any seasonal

June 18, 2021, we entered a new $1.95 million, seven-year term loan (the “2021 Term Loan”) with Synovus Bank (“Synovus”),

at an annual interest rate of 3.75%.

The 2021 Term Loan replaced our 2018 borrowing facility with Synovus Bank, which included a term

loan in the original principal amount of $1.60 million at 5.00% per annum and a $350,000 line of credit at 4.75% per annum.

off the balance outstanding on the 2018 Term Loan, the net additional borrowings on the 2021 Term Loan were $930,222 and the line of

credit was not renewed.

Combined with available cash, we used the incremental proceeds from the 2021 Term Loan to paydown $1.0 million

of the 2020 Term Loan used to finance our Texas Park acquisition, which has a 5.00% annual interest rate.

Overall, we estimate this refinancing

will generate approximately $24,375 in annual interest savings.

working capital was $3.69 million as of October 1, 2023, compared to $4.67 million as of October 2, 2022.

The year-over-year decrease

in working capital primarily reflects cash used for capital investments and scheduled term loan payments, partially offset by cash generated

by operating activities during our 2022 fiscal year.

in working capital primarily reflects cash used for capital investments, Georgia Park tornado clean-up expenses, net of insurance proceeds,

and scheduled term loan payments, partially offset by cash generated by operating activities during our 2023 fiscal year.

loan debt, including current maturities, as of October 1, 2023 was $4.23 million compared to $4.96 million as of October 2, 2022.

year-over-year decrease in total loan debt the result scheduled term loan payments during our 2022 fiscal year.

year-over-year decrease in total loan debt was the result of scheduled term loan payments during our 2023 fiscal year.

of October 1, 2023, we had equity of $14.99 million and total loan debt of $4.23 million, resulting in a debt to equity ratio of 0.28

to 1.0, compared to 0.32 to 1.0 as of October 2, 2022.

cash provided by operating activities was $1.54 million for our 2022 fiscal year, compared to $3.31 million, for our 2021 fiscal year,

resulting in a decrease of $1.77 million, principally due to lower net income.

2022 fiscal year included $1.84 million of capital improvements, compared to $988,901 spent on capital improvements during our 2021 fiscal

year, representing an increase of $850,490.

cash provided by operating activities was $927,478 for our 2023 fiscal year, compared to $1.54 million, for our 2022 fiscal year, resulting

in a decrease of $613,241, principally due to lower net income and net working capital usage, partially offset by non-cash expenses.

2023 fiscal year investing activities included $1.56 million of capital improvements, compared to $1.84 million spent on capital improvements

during our 2022 fiscal year, a decrease of $281,547, and other net investing activities decreased by $12,781.

our 2023 fiscal year, property and equipment investing at our Georgia Park included various enclosure updates including the addition

of a state-of-the-art ring-tailed lemur exhibit, an aviary and walk-in budgie parrot feeding experience, the general rebuild of many

areas impacted by the severe weather and tornado event, as well as guest rental vehicle fleet and capital equipment additions.

our Missouri Park, 2023 fiscal year property and equipment investments included the completion of a new otter

exhibit which opened in May 2023, renovations of various animal shelters and exhibits, and capital equipment additions.

Texas Park, 2023 fiscal year property and equipment investments included several animal acquisitions, an additional drive-through

zone for zebras and camels, and several capital maintenance projects.

our 2022 fiscal year, property and equipment investing at our Georgia Park included various animal acquisitions, additions to animal

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to our gift shop, annual improvements to our drive-through roads, and spending on annual requirements for our rental vehicle fleet.

our Missouri Park, 2022 fiscal year property and equipment investments included various animal acquisitions, the addition of a new otter

exhibit scheduled to open in our 2023 fiscal year, renovations of various animal shelters and exhibits, ground and electrical improvements

our Missouri Park, 2022 fiscal year property and equipment investments included various animal acquisitions, the initial phases of a new otter

exhibit which opened in 2023, renovations of various animal shelters and exhibits, ground and electrical improvements

to support a new Christmas Lights display, enhancements to and expansion of our food service capabilities, the addition of playground

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vehicles for customer rental and related service equipment, other equipment additions, and various improvements focused on introducing

expanded food service operations, expected to fully launch in fiscal 2023.

our 2021 fiscal year, property and equipment investing at our Georgia Park included improvements to our drive-through road and other

infrastructure improvements, various improvements to our concession and food service capabilities, improvements and additions to animal

shelters and exhibits, spending on annual requirements for our rental vehicle fleet, and the acquisition of various animals.

Missouri Park, 2021 fiscal year property and equipment investments included improvements and additions to animal shelters and exhibits,

the acquisition of various animals, fencing improvements, improvements to our gift shop, and the acquisition of various equipment.

our Texas Park, 2021 fiscal year property and equipment investments included improvements to animal shelters and exhibits, the acquisition

of various park equipment, drive through road improvements, and the acquisition of various animals.

cash used in financing activities was $866,193 for the year ended October 2, 2022, compared to $1.20 million for the year ended October

3, 2021, resulting in a decrease of $333,969.

our 2022 fiscal year, cash used in financing activities was for scheduled payments on our term loans, as well as principal payments on

a financing lease obligation prior to its termination in September 2022.

June 2021, we entered into the 2021 Term Loan for $1.95 million, using those proceeds to pay off the $1.02 million outstanding balance

of our 2018 Term Loan.

Combined with additional cash, we used the net remaining proceeds of the 2021 Term Loan to prepay $1.0 million

against our 2020 Term Loan.

In addition, on June 29, 2021, we paid off the $750,000 Aggieland Safari Seller Note.

Excluding the $1.0

million prepayment of the 2020 Term Loan, net principal payments against our combined term loans totaled $448,648 for the year ended

October 3, 2021.

expanded food service operations.

cash used in financing activities totaled $738,617 for the year ended October 1, 2023, compared to $866,193 million for the year ended October

2, 2022, resulting in a decrease of $127,576, primarily due to principal payments on a Missouri Park Christmas Lights financing lease

obligation entered into near the beginning of our 2022 fiscal year and terminated before the end of our 2022 fiscal year.

June 18, 2021, through our wholly owned subsidiary Wild Animal – Georgia, we completed a refinancing transaction (the “2021

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April 27, 2020, through our wholly owned subsidiary Aggieland-Parks Inc., we acquired Aggieland Wild Animal – Texas.

acquisition was financed with the “2020 Term Loan” from First Financial Bank (“First Financial”) and the

“Aggieland Seller Note ” (as defined below).

The 2020 Term Loan in the original principal amount of $5.0 million from

First Financial is secured by substantially all 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,

and required interest only monthly payments through April 2021.

The 2020 Term Loan requires monthly payments of approximately

$53,213 beginning in May 2021.

We paid a total of approximately $62,375 in fees and expenses in connection with the 2020 Term Loan.

On June 30, 2021, the Company used the incremental proceeds of the 2021 Term Loan, combined with additional funds, to paydown $1.0

million against the 2020 Term Loan, which had an outstanding balance of $3.37 million as of October 2, 2022.

Aggieland Seller Note represented a deferred portion of the purchase price, had a face value of $750,000, bore no interest, had a maturity

date of June 30, 2021, and was secured by a second priority subordinated lien and security interest in the acquired mineral rights and

the animal inventory.

We 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 was amortized as interest expense over the 14 month period of the note.

On June 29, 2021,

the Company paid off the Aggieland Seller Note.

July 11, 2018, through our wholly owned subsidiary Wild Animal – Georgia, we completed a refinancing transaction (the “2018

Refinancing”) with Synovus.

The 2018 Refinancing included a term loan in the original principal amount of $1.6 million (the “2018

The 2018 Term Loan had an interest rate of 5.0% per annum and was payable in monthly payments of approximately $22,672,

based on a seven-year amortization period.

The 2018 Term Loan had 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 was secured by a security deed on the assets of Wild Animal – Georgia.

We paid a total of approximately $15,680 in fees and expenses in connection with the 2018 Refinancing.

The 2021 Term Loan replaced our

2018 Term Loan with Synovus, which had an outstanding balance of $1.02 million, and was paid off with the proceeds of the 2021 Term Loan.

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 PPP loans.

On April 14, 2020 and April 16, 2020, we received two unsecured PPP loans

totaling $188,087.

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

was two years, with an interest rate of 1.0% per annum.

All payments were deferred for the first twelve months of these PPP loans, with

accrued interest being added to the principal during the payment deferral period.

Under the terms of the CARES Act, some or all the PPP

loan proceeds were eligible to be forgiven, based on use for specified purposes, subject to limitations and ongoing rulemaking by the

We applied for forgiveness of the full amount of both the Wild Animal – Georgia and Wild Animal – Missouri PPP loans

in March 2021.

Effective March 29, 2021 and May 25, 2021, the SBA approved the Forgiveness Applications for Wild Animal – Georgia

and Wild Animal – Missouri, respectively, including forgiveness of accrued interest, resulting in a gain on extinguishment of debt

totaling $189,988 during the year ended October 3, 2021.

November 14, 2022, Lisa Brady was appointed as the Company’s President and CEO, replacing Dale Van Voorhis, who had been

serving as interim President and CEO since June 1, 2022.

Among other duties, Ms.

Brady is responsible for

leading the day-to-day operations of the Company, evaluating and recommending strategic initiatives, as well as working with the

management team to implement and execute approved strategic growth initiatives.

Van Voorhis will continue as Chairman of the

Company’s Board of Directors and as a special advisor to Ms.

In part, this acquisition was financed with the “2020 Term Loan” from First Financial Bank (“First Financial”).

2020 Term Loan in the original principal amount of $5.0 million from First Financial is secured by substantially all 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, and required interest only monthly payments through April 2021.

2020 Term Loan requires monthly payments of approximately $53,213 beginning in May 2021.

We paid a total of approximately $62,375 in

fees and expenses in connection with the 2020 Term Loan.

On June 30, 2021, the Company used the incremental proceeds of the 2021

Term Loan, combined with additional funds, to paydown $1.0 million against the 2020 Term Loan, which had an outstanding balance of

$2.89 million as of October 1, 2023.

Balance Sheet Arrangements

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and therefore impaired.

We recognize revenues when a performance obligation

has been satisfied by transferring control of promised services or products to our guests/customers in an amount that reflects the amount

we have received or expect to receive in exchange for those services or products.

Park admission revenues for annual passes and memberships

are deferred and recognized as revenue on a pro-rata basis over the term of the pass or membership.

Park admission fee revenues from advance

online ticket purchases are deferred until the customers’ visit to the parks.

Advance online tickets can generally be used anytime

during the one year period from the date of purchase.

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.

recognize revenues when a performance obligation has been satisfied by transferring control of promised services or products to our guests/customers

in an amount that reflects the amount we have received or expect to receive in exchange for those services or products.

Park admission

revenues for annual passes and memberships are deferred and recognized as revenue on a pro-rata basis over the term of the pass or membership.

Park admission fee revenues from advance online ticket purchases are deferred until the customers’ visit to the parks.

online tickets can generally be used anytime during the one year period from the date of purchase.

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.

for Income Taxes

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to the extent we believe these assets will more likely than not be realized.

In making such determination, we consider all available

In making such a determination, we consider all available

evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent

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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

financial statements and related notes are set forth at pages F-1 through F-18.

financial statements and related notes are set forth on pages F-1 through F-18.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 7. Management’s Discussion and Analysis