UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 1, December 31, 2023

COMMISSION FILE NUMBER 000-51254

Parks! America, Inc.

(Exact Name of small business issuer as specified in its charter)

1300 Oak Grove Road

Pine Mountain, GA 31822

(Address of principal executive offices) (Zip Code)

Issuer’s telephone Number: (706(706)) 663-8744

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February 10, 2023,2024, the issuer had 75,227,05875,726,851 outstanding shares of Common Stock.

Securities registered pursuant to Section 12(g) of the Act:

Table of Contents

PARKS! AMERICA, INC and SUBSIDIARIES

INDEX

PARKS! AMERICA, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of JanuaryDecember 31, 2023 (UNAUDITED) and October 1, 2023 and October 2, 2022

The accompanying notes are an integral part of these consolidated financial statements.

PARKS! AMERICA, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For the Three Months Ended January 1,December 31, 2023 and January 2, 20221, 2023

The accompanying notes are an integral part of these consolidated financial statements.

PARKS! AMERICA, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

For the Three Months Ended January 1,December 31, 2023 and January 2, 20221, 2023

The accompanying notes are an integral part of these consolidated financial statements.

PARKS! AMERICA, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Three Months Ended January 1,December 31, 2023 and January 2, 20221, 2023

The accompanying notes are an integral part of these consolidated financial statements.

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

January 1,December 31, 2023

NOTE 1. ORGANIZATION

Parks! America, Inc. (“Parks!” or the “Company”) owns and operates through wholly owned subsidiaries three regional themesafari parks and is in the business of acquiring, developing and operating local and regional theme parksentertainment assets 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 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 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’s 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 attendance based net salespark revenues were 62.1%60.4% and 60.3%62.1% of annual attendance based net salespark revenues for the Company’s 20222023 and 20212022 fiscal years, respectively.

COVID-19 Considerations

In 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. The Company implemented several measures to mitigate the impacts of the pandemic on our business and financial position. During the initial shutdown period, the Company reduced staffing, applied for and received Paycheck Protection Program (“PPP”) loans and reduced discretionary spending. In addition, the Company delayed closing the Texas Park acquisition to renegotiate various terms, primarily focused on reducing the cash requirements of the acquisition in the subsequent year.

In early April 2020, the Company’s Georgia and Missouri Parks closed to the public due to shelter-in-place mandates. In addition, the Company’s 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 the Company’s parks reopened in early May 2020. After reopening, attendance levels increased significantly at each of the Company’s parks for the balance of its 2020 fiscal year, which continued throughout its 2021 fiscal year in comparison to comparable pre-COVID-19 periods. While attendance based net sales remain higher compared to comparable pre-COVID-19 periods, the Company experienced a decline in comparable year-over-year attendance based net sales and attendance for the last 22 weeks of its 2021 fiscal year and for its entire 2022 fiscal year, respectively.

As the COVID-19 pandemic illustrates, the Company’s future operations are dependent on factors outside of management’s knowledge or control, including the duration and severity of this pandemic or similar public health risks. Although we have experienced attendance gains and strong cash flows subsequent to reopening our 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 to 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 options. There is also the possibility that one, or a combination of these risk factors, may have a material negative impact on the Company’s business, results of operations, cash flows, and financial condition.

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

January 1, 2023

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: The Company’saccompanying unaudited condensed consolidated financial statements as of January 1, 2023 and January 2, 2022 and for the three months ended January 1, 2023 and January 2, 2022 are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with instructions to Form 10-Q and Article 10 of Regulation S-X. 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. Interim results are not necessarily indicative of the results for a full fiscal year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2022.1, 2023.

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 20232024 fiscal year, October 1September 29 will be the closest Sunday, and for the 20222023 fiscal year, October 21 was the closest Sunday. 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 Breakin the latter half of March through early September.

PARKS! AMERICA, INC. and runs through Labor Day.SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

December 31, 2023

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Financial and Concentrations Risk: The Company does not have any significant concentration or related financial credit risks. The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits.concentrations.

Fair Value: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, or an exit price. Inputs to valuation techniques used to measure fair value may be observable or unobservable, and valuation techniques used to measure fair value should maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The fair value hierarchy consists of three broad levels based on the ranks of the quality and reliability of inputs used to determine the fair values. Level 1 inputs consist of quoted prices in active markets for identical assets or liabilities. Level 2 inputs consist of quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. Level 3 inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Assets and liabilities recognized or disclosed at fair value on a recurring basis include our term debt.

As of December 31, 2023 and October 1, 2023, the fair value of our long-term debt was $3.68 million and $3.83 million, respectively. The measurement of the fair value of long-term debt is based upon inquiries of the financial institutions holding the respective loans and is considered a Level 2 fair value measurement. The respective carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these instruments.

Cash and Cash Equivalents: The Company maintains its cash and cash equivalents with high credit quality financial institutions. The Company considers all highly liquid financial instruments with maturities of three months or less to be cash equivalents. The Company maintains cash and cash equivalent in deposit accounts which may at times exceed federally insured limits. As of December 31, 2023 and October 1, 2023, cash and cash equivalents consisted of cash on deposit and a money market account.

Short-term Investments: The Company periodically invests in certificates of deposit and classifies its certificates of deposit as cash and cash equivalents or short-term investments and reassesses the appropriateness of the classification of its investments at the end of each reporting period. Certificates of deposit held for investment with an original maturity date greater than three months are carried at amortized cost and reported as short-term investments on the consolidated balance sheets. As of December 31, 2023, the Company had $1.01 million in three certificates of deposit, including accrued interest, all classified as short-term investments. Two of these certificates of deposit secured lines of credit, as detailed in “Note 5: LINES OF CREDIT”. The Company did not have any certificates of deposit as of October 1, 2023.

Accounts Receivable: The themeCompany’s safari parks are principally a payment upfront business; therefore, the Company typicallygenerally carries little or nolimited accounts receivable. The Company had $3,33513,938 and $4,40536,172 of accounts receivable as of January 1,December 31, 2023 and October 2, 2022,1, 2023, 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 based 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 $542,147431,546 and $541,986419,149 as of January 1,December 31, 2023 and October 2, 2022,1, 2023, respectively.

Prepaid Expenses: The Company prepays certain expenses primarily due to legal or contractual requirements. The following is a breakdown of prepaid expenses:

SCHEDULE OF PREPAID EXPENSES

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

January 1,December 31, 2023

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.years. A summary is included below.

SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT

Depreciation expense for the three months ended December 31, 2023 and January 1, 2023 and January 2, 2022 totaled $212,700220,200 and $193,075212,700, respectively.

Intangible Assets: Intangible assets consist primarily of software implementation costs,a site master plan, website domains and tradename registrations, which are reported at cost and are being amortized over a period of three to fifteen years.ten years. Amortization expense for the three months ended December 31, 2023 and January 1, 2023 and January 2, 2022 totaled $4,4843,003 and $04,484, respectively.

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:

SCHEDULE OF OTHER CURRENT LIABILITIES

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

January 1,December 31, 2023

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

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 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.

Deferred revenues from advance online admission tickets, and season passes and memberships were $172,199173,557 and $193,912143,511 as of January 1,December 31, 2023 and October 2, 2022,1, 2023, respectively, and is included within Other Current Liabilities in the accompanying consolidated balance sheets.

The Company periodically sells surplus animals created from the natural breeding process that occurs within the parks. All animalAnimal sales are reported as a separate revenue line item. Animal sales are recognized at a point in time when control transfers 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 8:10: 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.

Advertising and Marketing Costs: The Company expenses advertising and marketing costs as incurred. Advertising and marketing expense for the three months ended December 31, 2023 and January 1, 2023 and January 2, 2022 totaled $205,435241,826 and $307,873205,435, respectively.

Leases: The Company determines if an arrangement contains a lease at inception and accounts for all leases in accordance with ASC 842, Leases. If an arrangement contains a lease, the Company performs a classification test to determine if the lease is an operating lease or a financing lease. Right of use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right of use assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Right of use assets are amortized over the lease term. Lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term. The discount rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate, unless the rate implicit in the lease is readily determinable. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the life of the lease, unless management believes there is an alternative systematic basis which better represents the pattern which the Company will consume the economic benefits thereof and is included within general and administrative expenses. As a practical expedient, the Company does not recognize right-of-use assets and lease liabilities for leases with an original term of one year or less. Any non-lease components are not included within the lease right-of-use asset and lease liability, are reflected as an expense in the period incurred.

In October 2021, the Company entered a financing lease for certain property related to a Christmas Lights drive through display at its Missouri Park. Effective September 27, 2022, the Company terminated this financing lease, acquiring the leased property related to the Christmas Lights display for $85,000 in exchange for a mutual release of obligations under the lease agreement and recognized a lease termination gain of $2,011. During the three months ended January 2, 2022 the Company recognized right of use asset amortization and interest expense related to this lease of $154,831 and $2,011, respectively.

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

January 1, 2023

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 the 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 the 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.

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

December 31, 2023

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 the guidance in FASB ASC 740 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 January 1,December 31, 2023 or October 2, 2022.1, 2023.

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:

Credit Losses – Financial Instruments

In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326), which significantly changes the impairment modelhow entities measure credit losses for most financial assets, to require measurementincluding accounts receivable and recognition of expected credit losses for financial assets held,held-to-maturity marketable securities, replacing the existing“incurred loss” model with an “expected loss” model under which allowances are based on expected rather than incurred loss model.losses. ASU No. 2016-13 is effectivebecame for annual reporting periods beginning afterthe Company in the three months ended December 15, 2022, including interim reporting periods within those annual reporting periods. Early31, 2023. The adoption is permitted. The Company is currently evaluatingof ASU No. 2016-13 had an immaterial impact on the impact of the new guidance on its consolidated financial statements and related disclosures, however, it is not anticipated to be material.Company.

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.

NOTE 3. TORNADO EXPENSES AND ASSET WRITE-OFFS

During March 26-27, 2023, the Company’s 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. The 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.

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

January 1,December 31, 2023

NOTE 3. TORNADO EXPENSES AND ASSET WRITE-OFFS (CONTINUED)

For the year ended October 1, 2023, the Company incurred $780,941 of 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, the Company recorded related asset write-offs of $275,297, primarily associated with damage to various animal exhibits, several buildings, fencing and other infrastructure. No severe weather and tornado related expenses were recorded during the three months ended December 31, 2023 and January 1, 2023, respectively.

The Company has also made capital investments of $615,000 through October 1, 2023 related to severe weather and tornado damage rebuilding projects. Approximately $31,500 of capital investments during the three months ended December 31, 2023 are associated with ongoing severe weather and tornado damage rebuilding projects.

The Company has been working with its insurance providers regarding tornado damage related coverage and insurance proceeds totaling $687,283 were received through October 1, 2023, factoring in deductibles and co-insurance. The Company expects to receive additional insurance proceeds of up to $50,000. The Company continues to work with local, state, and federal agencies to explore options to assist with offsetting tornado related clean-up, repair and rebuilding costs.

NOTE 4. LONG-TERM DEBT

On June 18, 2021, the Company, through its wholly owned subsidiary Wild Animal – Georgia, completed a refinancing transaction (the “2021 Refinancing”“2021 Refinancing”) with Synovus Bank (“Synovus”). The 2021 Refinancing included a term loan in the original principal amount of $1.95 million (the “2021 Term Loan”). The 2021 Term Loan bears interest at a rate of 3.75% per annum and is payable in monthly installments of approximately $26,480, based on a seven-year amortization period. The 2021 Term Loan has a maturity date of June 18, 2028. The 2021 Term Loan is secured by a security deed on the assets of Wild Animal – Georgia. The Company paid a total of approximately $1,514 in fees and expenses in connection with the 2021 Refinancing. The outstanding balance of the 2021 Term Loan was $1.581.31 million as of January 1,December 31, 2023.

On April 27, 2020, the Company, through its wholly owned subsidiary Aggieland-Parks, Inc., acquired Aggieland Wild Animal – Texas,Texas. The purchase price of $7.1 million was financed in part with a $5.0 million loan (the “2020“2020 Term Loan”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 $1.38 million. The 2020 Term Loan 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 $53,213 beginning in May 2021. The Company 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 $903,222 of 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 $3.252.77 million as of January 1,December 31, 2023. The Company iswas in compliance with the liquidity and annual debt coverage ratio financial covenantscovenant of the 2020 Term Loan.Loan as of October 1, 2023. For the year ended October 1, 2023, the Company was not in compliance with the annual debt service coverage ratio covenant of the 2020 Term Loan, due to the lost revenues, as well as net expenses and write-offs driven by the March 2023 severe weather and tornado damage at its Georgia Park. The Company requested and First Financial granted a waiver of this violation for the year ended October 1, 2023.

Interest expense of $58,73651,445 and $68,89658,736 for the three month periods ended December 31, 2023 and January 1, 2023, and January 2, 2022, respectively, includes $1,472 and $1,472 of debt closing costs amortization, in each period. Interest expense for the three month period ended January 2, 2022 also includes financial lease cost amortization of $2,011.respectively.

The following table represents the aggregate of the Company’s outstanding long-term debt:

SCHEDULE OF OUTSTANDING LONG-TERM DEBT

As of January 1, 2023, the scheduled future principal maturities of the Company’s long-term debt by fiscal year are as follows:

SCHEDULE OF MATURITIES OF LONG-TERM DEBT

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

December 31, 2023

NOTE 4. LONG-TERM DEBT (CONTINUED)

The following table represents the aggregate of the Company’s outstanding long-term debt:

SCHEDULE OF LONG TERM DEBT

As of December 31, 2023, the scheduled future principal maturities of the Company’s long-term debt by fiscal year are as follows:

SCHEDULE OF MATURITIES OF LONG-TERM DEBT

NOTE 5. LINES OF CREDIT

On October 19, 2023, the Company, through its wholly owned subsidiary Aggieland Wild Animal – Texas, entered a line of credit of up to $350,000 with First Financial (the “2023 First Financial LOC”). The 2023 First Financial LOC is scheduled to mature on October 11, 2024 and carries an interest rate of 5.6% on any portion utilized. The 2023 First Financial LOC is secured by a $350,000 certificate of deposit issued by First Financial, which also matures on October 11, 2024 and pays the Company an effective interest rate of 3.6%. The Company paid a $500 origination fee for the 2023 First Financial LOC.

On October 24, 2023, the Company, through its wholly owned subsidiary Wild Animal – Georgia, entered a line of credit of up to $450,000 with Synovus (the “2023 Synovus LOC”). The 2023 Synovus LOC is scheduled to mature on October 24, 2024 and carries an interest rate of 7.75% on any portion utilized. The 2023 Synovus LOC is secured by a $450,000 certificate of deposit issued by Synovus, which matures on November 13, 2024 and pays the Company an effective interest rate of 5.25%. The Company paid a $4,500 origination fee for the 2023 First Financial LOC.

As of December 31, 2023, the Company had not made any borrowings against either of these lines of credit.

Interest expense for the three month periods ended December 31, 2023 and January 1, 2023, includes $1,250 and $0 of line of credit fee amortization, respectively.

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

December 31, 2023

NOTE 4.6. STOCKHOLDERS’ EQUITY

Shares of common stock issued for service to the Company are valued based on market price on the date of the award.

On December 4, 2023, the Company declared its annual compensation award to seven directors for their service on the Board of Directors. Seven directors were awarded $10,000 each and three directors received a total of $10,000 for serving as committee chairpersons and as a non-employee officer, with such compensation to be paid all in shares of the Company’s common stock, all in cash or a combination thereof, at each director’s election. Five directors elected to receive all shares and two directors elected all cash. Based on the closing stock price of $0.275 per share on December 4, 2023, a total of 209,088 shares were issued on February 2, 2024. The total compensation award cost of $79,999 was reported as an expense in the three month period ended December 31, 2023, comprised of $57,499 in stock-based compensation and $22,500 of cash payments.

On February 2, 2023, the Company declared its annual compensation award to seven directors for their service on the Board of Directors. Seven directors were awarded $10,000 each and three directors received a total of $10,000 for serving as committee chairpersons and as a non-employee officer, with such compensation to be paid all in shares of the Company’s common stock, all in cash or a combination thereof, at each director’s election. Five directors elected to receive all shares, one director elected to receive 60% in shares and 40% in cash, and one director elected all cash. Based on the closing stock price of $0.40 per share on February 2, 2023, a total of 162,500 shares are expected to be distributed by February 28,were issued on March 9, 2023. The total compensation award cost of $80,000 will bewas reported as an expense in the three month period ended April 2, 2023.2023, comprised of $65,000 in stock-based compensation and $15,000

of cash payments.

On December 13, 2021,Effective February 14, 2023, Lisa Brady the Company declared its annual compensation award to seven directors for their service on the Board of Directors. Five directors were awarded $10,000 each, two new directors were awarded $2,222 each,Company’s President and two directors received a total of $7,500 for serving as committee chairpersons and as a non-employee officer, with such compensation to be paid allChief Executive Officer vested in128,205 shares of the Company’s common stock, all in cash or a combination thereof, at each director’s election. Five directors elected to receive all shares, one director elected to receive 60% in shares and 40% in cash, and one director elected all cash. Based onaccordance with the closing stock priceterms of $0.553 per share on December 13, 2021, a total of 84,888 shares were distributed on February 21, 2022.her employment agreement. The totalCompany recorded compensation award cost of $61,94450,000 was reported as an expense in the three month period ended JanuaryApril 2, 2022.

On December 13, 2021,2023 and the Company awarded a non-director officer $10,000 to be paid in shares of the Company’s common stock, totaling 18,083 shares basedwere issued on the closing stock price of $0.553 per share on December 13, 2021, which were distributed on February 21, 2022, and $10,000 of compensation expense was reported in the three month period ended January 2, 2022.May 23, 2023.

Officers, directors and their controlled entities own approximately 53.433.4% of the outstanding common stock of the Company as of January 1,December 31, 2023.

NOTE 5.7. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

Employment Agreements:

Effective November 14, 2022, the Company and LisaMs. Brady, the Company’s President and Chief Executive Officer, entered into an employment agreement (the “Brady Employment Agreement”). Pursuant to the Brady Employment Agreement, Ms. Brady receives an initial base annual compensation in the amount of $175,000 per year, subject to annual review by the Board of Directors. Ms. Brady is entitled to receive an annual Performance Incentive of up to 25% of her base annual compensation, subject to performance milestones. Ms. Brady received a $50,000 award of shares of Company stock, which vested on February 14, 2023, after her first ninety days of employment. The number of shares of this award totaled 128,205 based on the $0.39 closing price of the Company’s stock on November 14, 2022. Ms. Brady is also scheduled to receive share awards of sharesthe Company’s common stock with a total value of Company stock, $50,000 after the first ninety days of employment, and $50,000, $60,000, $70,000 and $75,000 as of the last day of the Company’s fiscal year from its 2023 fiscal year through its 2026 fiscal year, respectively. The number of shares awarded is to be based on the average price of the Company’s stock on the date of the award. Each award will vest ratably over a threein one-third increments, with the first third vesting on the date of the award, the second third vesting on the first anniversary of the award and the final third vesting on the second anniversary of the award. The number of shares of the 2023 fiscal year period.award totaled 135,135 based on the $0.37 closing price of the Company’s stock on September 29, 2023, of which 45,045 vested as of that date. Ms. Brady also received a $5,000 sign-on bonus. The Brady Employment Agreement has a term of five years and entitles Ms. Brady to participate in any deferred compensation plan the Company may adopt during the term of her employment with the Company. For the three month periods ended December 31, 2023 and January 1, 2023, the Company recorded stock-based compensation of $9,169 and $0, respectively, related to the Brady Employment Agreement.

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

December 31, 2023

NOTE 7. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

Effective June 1, 2022, the Company and Dale Van Voorhis, the Company’s Chairman of the Board, entered into an employment agreement (the “2022 Van Voorhis Employment Agreement”). Mr. Van Voorhis has been part of the Company’s executive management since 2009, and most recently served as the Company’s Interim CEO from June 1, 2022 until Ms. Brady was hired.hired in November 2022. Mr. Van Voorhis will serveserved as Special Advisor to the CEO from November 2022 through May 31, 2023. Pursuant to the 2022 Van Voorhis Employment Agreement, Mr. Van Voorhis receivesreceived annual compensation in the amount of $100,000 from June 1, 2022 through May 31, 2023 and annual compensation of $50,000 from June 1, 2023 throughuntil May 31, 2024. In addition,Effective February 7, 2024, the Company’s Board of Directors terminated the 2022 Van Voorhis Employment Agreement pursuant to its terms and removed Mr. Van Voorhis as the Company’s Chairman of the Board, Additionally, Mr. Van Voorhis was removed from the Company’s Strategic Growth and Audit Committees. Mr. Van Voorhis will continue to serve as a member of the Company’s Strategic Growth and Audit Committees during the two year termBoard of his employment with the Company.

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

January 1, 2023

NOTE 5. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

Employment Agreements:Directors.

Effective as of January 1, 20222024, the Company and Todd R. White, the Company’s Chief Financial Officer, entered into an employment agreement (the “2022“2024 White Employment Agreement”). Pursuant to the 20222024 White Employment Agreement, Mr. White receives an initial base annual compensation in the amount of $90,000 per year, which will increase to $95,000 effective March 1, 2024, subject to annual review by the Board of Directors. The 20222024 White Employment Agreement has a term of two years and entitles Mr. White 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 ($316,667245,833 in aggregate) or (ii) in the event of a change in control of the Company ($406,667335,833 in aggregate), as well as disability and death payment provisions ($174,167157,500 in aggregate). As of January 1,December 31, 2023, the Company has not adopted any deferred compensation plans.

NOTE 6.8. INCOME TAXES

For the three month period ended January 1,December 31, 2023, the Company reported a pre-tax loss of $183,560474,455. For the fiscal year ending October 1, 2023, the Company expects to generate pre-tax income and to record a tax provision at a blended effective federal and state income tax rate of approximately 27.0%. Based on a year-to-date federal pre-tax loss and State of Georgia pre-tax income, the Company recorded an income tax benefit of $30,600105,200, comprised of a federal benefit of $97,500 forand a net state benefit of $7,700. For the three month period ended January 1, 2023, the Company reported income pre-tax loss of $183,560, and recorded a tax benefit of $30,600, comprised of a federal benefit of $40,400 and a State of Georgiastate expense of $9,800. The Company’s net income tax benefit of $110,200 for the three month period ended January 2, 2022, comprised of a federal benefit of $112,000 and a State of Georgia expense of $1,800.

NOTE 7.9. COMMITMENTS AND CONTINGENCIES

On December 16, 2022, the Company received notice that on August 10, 2022 a former employee of Aggieland Wild Animal – Texas, filed a Complaint in the 361^st361st District Court of Brazos County, Texas (case no. 22-001839-CV-361), alleging the Company and Aggieland-Parks, Inc. committed several instances of employment discrimination. The Complaint seeks unspecified economic, compensatory and punitive damages, as well as attorney’s fees and costs. The Company is vigorously defending this claim.

On February 17, 2021, two children of James Meikle, the Company’s former President and Chief Operating Officer, filed a Complaint in the Eighth Judicial District Court, Clark County, Nevada (case no. A-21-829563-C), alleging the Company was obligated under Mr. Meikle’s Employment Agreement to purchase at least $540,000 of life insurance for Mr. Meikle, who passed away on November 28, 2018. The Complaint was seeking damages of $540,000, as well as interest and expenses. The trial date was set for February 14, 2023. Effective August 5, 2022, the Company agreed to pay the plaintiffs $100,000 to settle this Complaint and obtain a full release for any related complaints. The release was completed on August 26, 2022, the Company issued payment for the settlement amount on August 31, 2022, and an order of dismissal was filed on September 19, 2022

Except as noted 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.

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

January 1,December 31, 2023

NOTE 8.10. BUSINESS SEGMENTS

The Company manages its operations on an individual location basis. Discrete financial information is maintained for each Park and provided to management for review and as a basis for decision-making. The primary performance measuresmeasure used to allocate resources are Park earnings before interest, taxes, depreciation and tax expense, and free cash flow.amortization expenses.

The following tables present financial information regarding each of the Company’s reportable segments:

SCHEDULE OF REVENUE BY REPORTING SEGMENTS

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

January 1,December 31, 2023

NOTE 9.11. FAIR VALUE MEASUREMENTSSPECIAL MEETING OF SHAREHOLDERS AND CONTESTED PROXY

AsOn December 22, 2023, Focused Compounding Fund, LP (together with the participants in its solicitation, “Focused Compounding”) submitted documents to the Company purporting to provide qualifying notice (the “Purported Notice”) as to a demand that the Company hold a special meeting of January 1, 2023stockholders (if held, including any adjournment, postponement or rescheduling thereof, the “Special Meeting”). Pursuant to the Purported Notice, the Special Meeting would be held for the purpose of asking stockholders to consider and October 2, 2022,vote upon a number of proposals, including a proposal for the fair valueremoval of all directors currently serving on our long-term debt was $4.45 millionBoard and $4.61 million, respectively.a proposal for the election of a new Board comprised entirely of Focused Compounding’s slate of three candidates. The measurementSpecial Meeting is currently scheduled to be held on February 26, 2024. Stockholders of record at the fair valueclose of long-term debt is based upon inquiriesbusiness on February 8, 2024 are entitled to notice of and to vote at the financial institutions holding the respective loans and is considered a Level 2 fair value measurement.Special Meeting.

The respective carrying valuesIn addition, the Company’s Board of cash, accounts receivable, accounts payable, and accrued liabilities approximate fair value becauseDirectors has called an annual meeting of stockholders to be held on June 6, 2024 (the “2024 Annual Meeting”). At the 2024 Annual Meeting, stockholders will have an opportunity to, among other things, vote on the election of directors to the Board. Stockholders who wish to present a proposal for inclusion in the Company’s proxy statement for the 2024 Annual Meeting must ensure that the proposal is received by the Secretary of the short maturity of these instruments.Company at its principal executive offices at 1300 Oak Grove Road, Pine Mountain, Georgia 31822 no later than February 25, 2024, which the Company has determined is a reasonable time before the Company begins to print and send its proxy materials in connection with the 2024 Annual Meeting. Such stockholder proposals must comply with the proxy rules relating to stockholder proposals, in particular Rule 14a-8 under the Exchange Act, in order to be eligible for inclusion in the Company’s proxy statement for the 2024 Annual Meeting. On January 26, 2024, the Company received purported notice from Focused Compounding stating its intention to nominate four candidates for election as directors at the 2024 Annual Meeting.

NOTE 10.12. SUBSEQUENT EVENTS

The Company has analyzed its operations subsequent to January 1,December 31, 2023 to the date these financial statements were issued and has determined, thatexcept for matters disclosed in “NOTE 7. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES” and “NOTE 11. SPECIAL MEETING OF SHAREHOLDERS AND CONTESTED PROXY” no material subsequent events have occurred from the date of these unaudited consolidated financial statements, except as follows: on February 2, 2023, the Company declared its annual compensation award to seven directors for their service on the Board of Directors. For more information regarding this matter, see “NOTE 4. STOCKHOLDERS’ EQUITY” herein.statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is a supplement to the accompanying unaudited consolidated financial statements and provides additional information on the Company’sour businesses, current developments, financial condition, cash flows and results of operations. The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with our Annual Report on Form 10-K for the fiscal year ended October 2, 2022.1, 2023.

Forward-Looking Statements

Except for the historical information contained herein, this Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve risks and uncertainties, including, among other things, statements concerning: our business strategy; liquidity and capital expenditures; future sources of revenues and anticipated costs and expenses; and trends in industry activity generally. Such forward-looking statements include, among others, those statements including the words such as “may,” “will,” “should,” “expect,” “plan,” “could,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or similar language or by discussions of our outlook, plans, goals, strategy or intentions.intentions.

Our actual results may differ significantly from those projected in the forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including, but not limited to, the risks outlined under “Risk Factors” in this Quarterly Report, that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. For example, assumptions that could cause actual results to vary materially from future results include, but are not limited to: competition from other parks, inclement weather conditions during our primary tourist season, the price of animal feed and the price of gasoline. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, we cannot guarantee future results, levels of activity, performance or achievements. Additional risks have been added to our business by the near-term and long-term impacts of the COVID-19 pandemic on the operations of our Parks, including customers perceptions of engaging in the activities involved in visiting our Parks, our ability to hire and retain employees in light of the issues posed by the COVID-19 pandemic, and our ability to maintain sufficient cash to fund operations due to the possible negative impact on our Park revenues associated with potential future disruptions in demand as a result of the pandemic.

The forward-looking statements we make in this Quarterly Report are based on management’s current views and assumptions regarding future events and speak only as of the date of this report. We assume no obligation to update any of these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements, except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission.

Special Meeting of Shareholders and Contested Proxy

On December 22, 2023, Focused Compounding Fund, LP (together with the participants in its solicitation, “Focused Compounding”) submitted documents to us purporting to provide qualifying notice (the “Purported Notice”) as to a demand that we hold a special meeting of stockholders (if held, including any adjournment, postponement or rescheduling thereof, the “Special Meeting”). Pursuant to the Purported Notice, the Special Meeting would be held for the purpose of asking stockholders to consider and vote upon a number of proposals, including a proposal for the removal of all directors currently serving on our Board and a proposal for the election of a new Board comprised entirely of Focused Compounding’s slate of three candidates. The Special Meeting is currently scheduled to be held on February 26, 2024. Stockholders of record at the close of business on February 8, 2024 are entitled to notice of and to vote at the Special Meeting.

In addition, our Board has called an annual meeting of stockholders to be held on June 6, 2024 (the “2024 Annual Meeting”). At the 2024 Annual Meeting, stockholders will have an opportunity to, among other things, vote on the election of directors to the Board. Stockholders who wish to present a proposal for inclusion in the Company’s proxy statement for the 2024 Annual Meeting must ensure that the proposal is received by the Secretary of the Company at its principal executive offices at 1300 Oak Grove Road, Pine Mountain, Georgia 31822 no later than February 25, 2024, which we have determined is a reasonable time before the Company begins to print and send its proxy materials in connection with the 2024 Annual Meeting. Such stockholder proposals must comply with the proxy rules relating to stockholder proposals, in particular Rule 14a-8 under the Exchange Act, in order to be eligible for inclusion in the Company’s proxy statement for the 2024 Annual Meeting. On January 26, 2024, we received purported notice from Focused Compounding stating its intention to nominate four candidates for election as directors at the 2024 Annual Meeting.

Overview

Through 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 Park”).

Our 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 salespark revenues were 62.1%60.4% and 60.3%62.1% of annual attendance based net salespark revenues for our 20222023 and 20212022 fiscal years, respectively. Since the acquisition of our Texas Park, the combined third and fourth quarter concentration of our salespark revenues has been reduced.

In responseDuring 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 the outbreakmany of the COVID-19 pandemic, governmental authorities throughout the United States implemented a variety of containment measures with the objective of slowing the spreadPark’s animal enclosures, fencing and other infrastructure. The Walkabout Adventure Zoo (“Walkabout”) portion of the virus, including travel restrictions, shelter-in-place orders and business shutdowns. In early April 2020, ourproperty was particularly hard hit. 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 to20 days, including for most of its acquisition, due to a shelter-in-place mandate. We implemented several measures to mitigate the impactstraditionally busy spring break period, which has historically comprised approximately 10%-15% of its annual revenue. The drive-through safari section of the pandemicGeorgia Park reopened on our business and financial position. 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 requirementsApril 15th. The Walkabout portion of the acquisitionPark has reopened in phases, with the subsequent year.first phase on May 6th and the second phase on July 2nd. Approximately one-quarter of the Walkabout remains closed.

As 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 compliance with respective state issued guidelines, eachaddition, 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.

Our 2024 fiscal year capital plan reflects the further strategic rebuild of our parks reopened in early May 2020. After reopening, attendance levels increased significantlyGeorgia 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 for the balanceparks. The centerpiece of our 2020 fiscal year, which continued throughout2024 capital plan is a new restroom building and main entry plaza at our 2021 fiscal yearGeorgia 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 comparison to comparable pre-COVID-19 periods. We experiencedimproving the overall guest experience and will pave the way for a decline in comparable year-over-year attendance based net salesnew standard. The new main entry plaza will provide an improved arrival experience and attendance for the last 22 weeks of our 2021 fiscal year anda place for our entire 2022 fiscal year, respectively. While we experienced a comparable 52-week attendance-based sales decline for our 2022 fiscal year comparedguests 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,dwell, which we believe illustrates a significant increase in local and regional awareness of each park, a critical development with positive long-term ramificationswill positively impact our Georgia Park 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).decades to come.

Although we have experienced attendance gainsAlso in Georgia, our carnivore night house will be rebuilt, a capybara encounter area will be added, roadway infrastructure improved, and strong cash flows subsequentadditional fencing and sidewalks repaired. We continue to take a strategic and measured approach to the reopeningrebuild 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. We remain committed to our long-term vision for our parks, afterand we believe our 2024 capital plan balances additional needs from the initial closures atGeorgia Park tornado and deferred maintenance, along with the beginningaddition of the pandemic, there mayguest facing improvements and amenities. Our 2024 fiscal year capital plan anticipates spending approximately $1.4 million, which will again be longer-term negative impactsfully funded from our existing cash and continues 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 expensesdemonstrate our commitment to meet consumer expectations and perceptions, limitations in our ability to recruit and maintain staffing, as well as increasing wages required to retain and recruit staff. There is also the potentialbuilding for attendance levels at our parks to moderate or decline as alternative entertainment venues are now open and consumers have broader travel and entertainment options.long-term, sustainable growth.

We 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. AmongIn addition to rebuilding and improving our Georgia Park Walkabout, among our highest priorities over the next several years is continuingare the integration of our Texas Park, continual enhancement of the overall guest experience, at each ofstreamlining and optimizing our parks, as well assystems, operating standards and practices, and increasing per capita revenue, through the introduction of new programming and enhancedmore targeted marketing efforts. As ourOur Texas Park first opened to the public in May 2019 and we believe there remains tremendouslong-term potential to increase attendance by increasing the local and regional awareness of this facility via advertising and promotion. We are pleased withremain encouraged by the expandedhigher levels of attendance at our Missouri Park since it reopenedwhich began in Maythe spring of 2020 and plan on prudently leveraging the increased exposure of this facility to continue to build on this recent success.

Our 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 fiscal year capital plan targets substantial guest-facing enhancements along with necessary continued investments in infrastructure, maintenance and plant integrity at all three of our parks, delivering a marketable attraction at each property. Notable investments include the upgrade of a central node in the Georgia walkabout including multiple animal enclosures, a new otter exhibit in Missouri, as well as an additional pasture in Texas, which will enable visitors to feed zebras, and eventually giraffes, directly from their vehicles. Our 2023 fiscal year capital plan also includes investment in fleet vehicles, roadways and accessing public water in Texas in order to open full-service food and beverage operations. We believe our 2023 fiscal year capital plan sets 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 establish a timeline for this project during our 2023 fiscal year. Our 2023 fiscal year 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.

Our long-term business plan also includes adjacent expansion and expansion via the acquisition of additional local or regional theme parksentertainment 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 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.

Strong annual operating cash flow over the past several fiscal years has provided us with incremental operating margin, funded significant increases in capital investment, and providedallowed us with the financial strength to completepaydown debt following the Aggieland Safari acquisition.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. However, our current size and operating model leaves us little room for error. Any future capital raised by us is likely tomay 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.

Results of Operations for the Three Month Period Ended January 1, 2023 as Compared to Three Month Period Ended January 2, 2022near term.

We manage our operations on an individual location basis. Discrete financial information is maintained for each park and provided to our corporate management for review and as a basis for decision-making. The primary performance measuresmeasure used to allocate resources are Park earnings before interest, taxes, depreciation and tax expense, and free cash flow.amortization expenses. We use this measure of operating profit to gauge segment performance because we believe this measure is the most indicative of performance trends and the overall earnings potential of each segment.

Results of Operations for the Three Month Period Ended December 31, 2023 as Compared to Three Month Period Ended January 1, 2023

The following table shows our consolidated and segment operating results for the three month periods ended January 1,December 31, 2023 and January 2, 2022:1, 2023:

Total Net Sales

Our total net salesrevenues for the three month period ended January 1,December 31, 2023 were $1.86$1.90 million, a decreasean increase of $83,379,$36,246, compared to the three month period ended January 2, 2022.1, 2023. Our Parks’ combined attendance based netpark revenues were $1.81 million, a decrease of $8,345 or 0.5%, while animal sales decreasedwere $88,391, an increase of $44,591.

Georgia park revenues were $1.22 million, a decrease of $79,170 or 6.1%, while animal sales were $23,839, a decrease of $19,961. Missouri park revenues increased by $124,472$4,506 or 6.4%2.1%, to $224,271, while animal sales increased by $41,093.

Our Georgia Park’s attendance based net sales decreased$17,450. Texas park revenues increased by $13,099$66,319 or 1.0%21.9%, to $1.30 million,$368,792, while animal sales increased by $43,800. Our Missouri Park’s attendance based net sales decreased by $47,630 or 17.8%, to $219,765, while animal sales decreased by $2,707. Our Texas Park’s attendance based net sales increased by $63,743 or 17.4%, to $302,473.$47,102.

For the three month period ended January 1,December 31, 2023, paid attendance at our Georgia,Texas and Missouri and Texas Parks decreasedincreased by approximately 10.2%29.0% and 18.1%, 23.5%while attendance at our Georgia Park was flat. Our Texas and 23.3%, respectively. We believe our attendance levels forMissouri Parks benefited from the three month period ended January 1, 2023 were unfavorablytransition to a new ad agency, with an increased focus on digital marketing, in addition to favorable year-over-year weather. Our Georgia Park was negatively impacted by unfavorable weather, conditionsparticularly during several weekendskey weekend and key holiday periods. We are encouraged by the consumer response to our holiday annual membership promotion which drove a more than 9-fold increase in associated sales compared to the first quarter of 2023. Annual membership park revenues are recognized ratably over the 12-month period applicable to the pass.

Segment Operating Margin

Our segment income from operations was $69,265$223,049 for the three month period ended December 31, 2023, a decrease of $63,125, compared to a segment income from operations of $286,174 for the three month period ended January 1, 2023, a net increase of $206,809, compared to a segment loss from operations of $137,544 for the three month period ended January 2, 2022.2023. Our Georgia Park generated segment operating income of $388,098,$365,842, a decrease of $10,672,$101,765, primarily attributable to lower attendance based netpark revenues, lower animal sales as well asand higher general operating expenses, partially offset by higher animal saleslower compensation and lower advertising expense.expenses. Our Missouri Park generated a segment operating loss of $162,569, a decrease$106,768, an increase of $243,340,$15,299, primarily attributable to special events spending in the prior year, as well as lowerhigher animal feed and advertising and compensation expenses, partially offset by lower attendance based nethigher animal sales and a gain on asset sales in the prior year.park revenues. Our Texas Park generated a segment operating loss of $156,264, an increase$36,025, a decrease of $25,859, primarily attributable to lower attendance based net$53,939, as higher park revenues and animal sales, were partially offset by lowerhigher advertising expense.and animal feed costs.

Corporate Expenses

Corporate spending decreasedexpenses increased by $128,904$220,899 to $223,702$444,326 during the three month period ended January 1,December 31, 2023, primarily due to higher professional fees driven by the eliminationactivist investor matter that emerged in the latter half of executive bonuses andDecember 2023, the timing of director compensation.Directors fees, which were declared in the three month ended April 2, 2023, partially offset by lower compensation expense.

Depreciation and Amortization Expense

Depreciation and amortization expense for the three month period ended December 31, 2023 increased by $6,019, to $223,203, primarily attributable to higher depreciation expense for our Georgia and Texas Parks, partially offset by lower depreciation expense for our Missouri Park.

(Gain) Loss on Asset Disposals, Net

Our net loss on asset disposals for the three month period ended December 31, 2023 was $14,417, primarily attributable to animal deaths prior to the end of their estimated life expectancy.

Other Income, Net

Other income, net for the three month period ended December 31, 2023 increased by $2,707,$6,274, to $29,613,$35,887, attributable to higher interest income, partially offset by lower mineral rights royalty income forfrom our Texas Park.Park property.

Interest Expense

Interest expense for the three month period ended January 1,December 31, 2023 decreased by $10,160,$7,291, to $58,736,$51,445, primarily attributable to a reduction in term loan interest, as well as imputed interest on a right of use asset in the prior year.interest.

Income Taxes

For the three month period ended January 1,December 31, 2023, we reported a pre-tax loss of $183,560. For the fiscal year ending October 1, 2023 we expect to generate pre-tax income and to record a tax provision at a blended effective federal and state income tax rate of approximately 27.0%.$474,455. Based on a year-to-date blend of federal and State of Georgia pre-tax income,losses, we recorded an income tax benefit of $30,600$105,200 for the three month period ended January 1,December 31, 2023.

Net Income (Loss) and Income (Loss) Per Share

For the three month period ended January 1,December 31, 2023, we reported a net loss of $152,960$369,255 or $0.00 per basic share and per fully diluted share, compared to a net loss of $421,940$152,960 or $0.01$0.00 per basic share and per fully diluted share, for the three month period ended January 2, 2022,1, 2023, resulting in a decreasean increase of $268,980.$216,295. This decrease in our net lossincrease is primarily attributable to a $243,340$220,899 increase in Corporate expenses, a $101,765 decrease in segment income for our Georgia Park, a $15,299 increase in the segment loss for our Missouri Park, and a $128,904 decrease$20,436 combined increase in Corporate spending, a $10,160 decrease in interestdepreciation and amortization expense and a $2,707 increase in other income,loss on asset disposals, partially offset by a $25,859 increase$53,939 reduction in the segment loss for our Texas Park, a $10,672$6,274 increase in other income, a $7,291 decrease in segment income for our Georgia Park,interest expense and a $79,600 decrease$74,600 increase in our seasonal income tax benefit.

Financial Condition, Liquidity and Capital Resources

Financial Condition and Liquidity

Our primary sources of liquidity are cash generated by operations and borrowings under our loan agreements. Historically, our slow season starts after Labor Day in September and runs until Spring Break, which typically begins toward the middle to end of March. The first and second quarters of our fiscal year have historically generated negative cash flow, requiring us to use cash generated from prior fiscal years, as well as borrowing on a seasonal basis, to fund operations and prepare our Parks for the busy season during the third and fourth quarters of our fiscal year.

In October 2023, we established two 12-month lines of credit totaling $800,000, primarily to provide seasonal borrowing capacity for our 2024 fiscal year, each secured by a certificate of deposit. As a result of our improved cash position, during our 20222023 fiscal year we did not utilize any seasonal borrowing, nor dohave we anticipate usingused any seasonal borrowing during our 20232024 fiscal year.year through the date of this report.

Our working capital was $4.36$3.21 million as of January 1,December 31, 2023, compared to $4.67$3.69 million as of October 2, 2022.1, 2023. The decrease in working capital primarily reflects cash used for capital investments, and scheduled term loan payments and net cash used in operating activities during the three month period ended January 1,December 31, 2023.

Total loan debt, including current maturities, as of January 1,December 31, 2023 was $4.78$4.04 million compared to $4.96$4.23 million as of October 2, 2022.1, 2023. The decrease in total loan debt is the result of scheduled term loan payments during the three month period ended January 1,December 31, 2023.

As of January 1,December 31, 2023, we had equity of $15.20$14.68 million and total loan debt of $4.78$4.04 million, resulting in a debt to equity ratio of 0.310.27 to 1.0, compared to 0.320.28 to 1.0 as of October 2, 2022.1, 2023.

Operating Activities

Net cash used in operating activities was $81,035 for the three month period ended December 31, 2023, compared to $381,220 for the three month period ended January 1, 2023, compared to $172,173 for the three month period ended January 2, 2022, resulting in an increasea net decrease of $209,047, primarily due to paying down current liabilities, partially$300,185, as our higher net loss was more than offset by reduction in our net loss.lower cash used for working capital.

Investing Activities

Net cash used in investing activities was $216,168 for the three month period ended December 31, 2023, compared to $187,207 for the three month period ended January 1, 2023, compared to $272,667 for the three month period ended January 2, 2022.resulting in an increase of $28,961. Our capital spending for the three month period ended January 1,December 31, 2023 was $181,741,$230,166, compared to $272,667$181,741 for the three month period ended January 2, 2022.1, 2023.

Financing Activities

Net cash used in financing activities was $195,170 for the three month period ended December 31, 2023, compared to $181,621 for the three month period ended January 1, 2023, compared to $334,327 for the three month period ended January 2, 2022, resulting in a decreasean increase of $152,706. During the three months ended January 2, 2022 we made $160,863 of payments on a financing lease obligation.$13,549.

Subsequent Events

On February 2, 2023, we declared the annual compensation award to seven directors for their service on our Board of Directors. For more information regarding this matter, seeSee in “NOTE 4. STOCKHOLDERS’ EQUITY”7. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES” and “NOTE 11. SPECIAL MEETING OF SHAREHOLDERS AND CONTESTED PROXY” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report.Report

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity or capital expenditures.

Critical Accounting Policies and Estimates

The preceding discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements included elsewhere in this Quarterly Report. Our significant accounting policies are set forth in “NOTE 2. SIGNIFICANT ACCOUNTING POLICIES” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report, which should be reviewed as they are integral to understanding results of operations and financial position. The Parks! America, Inc. Annual Report on Form 10-K for the fiscal year ended October 2, 20221, 2023 includes additional information about us, and our operations, financial condition, critical accounting policies and accounting estimates, and should be read in conjunction with this Quarterly Report.