Exhibit 10.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
For
the quarterly period ended
OR
For the transition period from __________ to __________
COMMISSION
FILE NUMBER
(Exact Name of small business issuer as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices) (Zip Code)
Issuer’s
telephone Number: (
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.
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).
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):
| Large accelerated filer ☐ | . | Accelerated filer | ☐ |
| . (Do not check if a smaller reporting company) | Smaller reporting company | ||
| Emerging growth company |
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 ☐
As of August 9, 2021, the issuer had outstanding shares of Common Stock.
Table of Contents
PARKS! AMERICA, INC and SUBSIDIARIES
INDEX
| 2 |
PARKS! AMERICA, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
As of July 4, 2021 and September 27, 2020
| July 4, 2021 | September 27, 2020 | |||||||
| ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | - | |||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Other current liabilities | ||||||||
| Current portion of long-term debt, net | ||||||||
| Total current liabilities | ||||||||
| Long-term debt, net | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity | ||||||||
| Common stock; shares authorized, at $ par value; and shares issued and outstanding, respectively | ||||||||
| Capital in excess of par | ||||||||
| Treasury stock | ( | ) | ( | ) | ||||
| Retained earnings | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 3 |
PARKS! AMERICA, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months and Nine Months Ended July 4, 2021 and June 28, 2020
| For the three months ended | For the nine months ended | |||||||||||||||
| July 4, 2021 | June 28, 2020 | July 4, 2021 | June 28, 2020 | |||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||
| Sale of animals | ||||||||||||||||
| Total net sales | ||||||||||||||||
| Cost of sales | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Tornado damage insurance recovery | - | - | - | ( | ) | |||||||||||
| Loss on disposal of operating assets | - | - | ||||||||||||||
| Income from operations | ||||||||||||||||
| Other income, net | ||||||||||||||||
| Gain on extinguishment of debt | - | - | ||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income before income taxes | ||||||||||||||||
| Income tax provision | ||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Income per share - basic and diluted | $ | $ | $ | $ | ||||||||||||
| Weighted average shares outstanding (in 000’s) - basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 4 |
PARKS! AMERICA, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
For the Three, Six and Nine Months Ended July 4, 2021 and June 28, 2020
| Shares | Amount | Capital in Excess of Par | Treasury Stock | Retained Earnings | Total | |||||||||||||||||||
| Balance at September 27, 2020 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net income for the three months ended January 3, 2021 | - | - | - | - | ||||||||||||||||||||
| Balance at January 3, 2021 | ( | ) | ||||||||||||||||||||||
| Issuance of common stock to Directors | - | - | ||||||||||||||||||||||
| Net income for the three months ended April 4, 2021 | - | - | - | - | ||||||||||||||||||||
| Balance at April 4, 2021 | ( | ) | ||||||||||||||||||||||
| Net income for the three months ended July 4, 2021 | - | - | - | - | ||||||||||||||||||||
| Balance at July 4, 2021 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Shares | Amount | Capital in Excess of Par | Treasury Stock | Retained Earnings | Total | |||||||||||||||||||
| Balance at September 29, 2019 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net loss for the three months ended December 29, 2019 | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Balance at December 29, 2019 | ( | ) | ||||||||||||||||||||||
| Issuance of common stock to Directors | - | - | ||||||||||||||||||||||
| Net loss for the three months ended March 29, 2020 | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Balance at March 29, 2020 | ( | ) | ||||||||||||||||||||||
| Net income for the three months ended June 28, 2020 | - | - | - | - | ||||||||||||||||||||
| Balance at June 28, 2020 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 5 |
PARKS! AMERICA, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine Months Ended July 4, 2021 and June 28, 2020
| For the nine months ended | ||||||||
| July 4, 2021 | June 28, 2020 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income | $ | $ | ||||||
| Reconciliation of net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Interest expense - debt financing cost amortization | ||||||||
| Interest expense - loan discount amortization | ||||||||
| Loss on disposal of assets | - | |||||||
| Stock-based compensation | ||||||||
| Gain on extinguishment of debt | ( | ) | - | |||||
| Changes in assets and liabilities | ||||||||
| (Increase) decrease in accounts receivable | ( | ) | - | |||||
| (Increase) decrease in inventory | ( | ) | ||||||
| (Increase) decrease in prepaid expenses | ( | ) | ||||||
| Increase (decrease) in accounts payable | ( | ) | ||||||
| Increase (decrease) in other current liabilities | ( | ) | ||||||
| Net cash provided by operating activities | ||||||||
| INVESTING ACTIVITIES: | ||||||||
| Acquisition of property and equipment | ( | ) | ( | ) | ||||
| Acquisition of Aggieland Safari | - | ( | ) | |||||
| Tradename registrations | ( | ) | - | |||||
| Proceeds from the disposition of property and equipment | - | |||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Payments on 2018 Term Loan | ( | ) | ( | ) | ||||
| Payments on 2020 Term Loan | ( | ) | - | |||||
| Payment of Note to Seller of Aggieland Safari | ( | ) | - | |||||
| Proceeds from 2021 Term Loan | - | |||||||
| Proceeds from 2020 Term Loan | - | |||||||
| Proceeds from Paycheck Protection Program Loans | - | |||||||
| Debt financing costs | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental Cash Flow Information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Non-Cash Investing and Financing Activities: | ||||||||
| Note to Seller of Aggieland Safari | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 6 |
PARKS! AMERICA, INC. and SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 4, 2021
NOTE 1. ORGANIZATION
Parks!
America, Inc. (“Parks!” or the “Company”) was originally incorporated on
On December 19, 2003, Royal Pacific Resources, Inc. acquired the assets of Great Western Parks LLC pursuant to a Share Exchange Agreement that resulted in the Company assuming control and changing the corporate name to Great American Family Parks, Inc. The acquisition was accounted for as a reverse acquisition in which Great Western Parks was considered to be the acquirer of Royal Pacific Resources for reporting purposes. On June 11, 2008, the Company changed its name from Great American Family Parks, Inc. to Parks! America, Inc.
The Company owns and operates through wholly owned subsidiaries three regional theme parks and is in the business of acquiring, developing and operating local and regional theme parks and attractions in the United States. The Company’s wholly owned subsidiaries are Wild Animal Safari, Inc. a Georgia corporation (“Wild Animal – Georgia”), Wild Animal, Inc., a Missouri corporation (“Wild Animal – Missouri”), and Aggieland-Parks, Inc., a Texas corporation (“Aggieland Wild Animal – Texas”). Wild Animal – Georgia owns and operates the Wild Animal Safari theme park in Pine Mountain, Georgia (the “Georgia Park”). Wild Animal – Missouri owns and operates the Wild Animal Safari theme park located in Strafford, Missouri (the “Missouri Park”). Aggieland Wild Animal – Texas owns and operates the Aggieland Wild Animal Safari theme park near Bryan/College Station, Texas (the “Texas Park”). The Company acquired the Georgia Park on June 13, 2005, the Missouri Park on March 5, 2008, and the Texas Park on April 27, 2020.
The Company’s Parks are open year round but experience increased seasonal attendance, typically beginning in the latter half of March through early September. As a result, the Company’s combined third and fourth quarter attendance based net sales have historically ranged from 68% to 72% of its annual net sales.
COVID-19
In March 2020, the World Health Organization characterized COVID-19, a disease caused by a novel strain of a coronavirus, as a pandemic. The rapid spread of COVID-19 has resulted in governmental authorities throughout the United States implementing a variety of containment measures with the objective of slowing the spread of the virus, including travel restrictions, shelter-in-place orders and business shutdowns. The COVID-19 pandemic and these containment measures have had, and could continue to have, a material impact on the Company’s business.
The rapid acceleration of the COVID-19 pandemic in the United States occurred at the beginning of the Company’s annual high season. Beginning the week of March 9, 2020, the Company began to see a significant reduction in paid attendance at its Georgia and Missouri Parks. Effective April 3, 2020, the Company’s Georgia and Missouri Parks were closed as a result of shelter-in-place mandates in Georgia and Missouri. Also note that prior to the acquisition of the Texas Park, its operations were suspended for the majority of April 2020 due to a shelter-in-place mandate in Texas.
In compliance with respective state issued guidelines, the Georgia Park and the Texas Park each reopened on May 1, 2020, and the Missouri Park reopened on May 4, 2020. Subsequent to reopening, attendance levels were strong at each of the Company’s three Parks for the balance of its 2020 fiscal year, which continued through the first 31 weeks of its 2021 fiscal year. However, there may be longer-term negative impacts to the Company’s business, results of operations and cash flows, and financial condition as a result of the COVID-19 pandemic. These negative impacts may include changes in customer behavior and preferences causing significant volatility or reductions in Park attendance, increases in operating expenses to comply with additional hygiene-related protocols, limitations in the Company’s ability to recruit and maintain staffing, limitations on the Company’s employees ability to work and travel, and significant changes in the economic or political conditions in the areas the Company’s Parks are located. Despite the Company’s efforts to manage these potential impacts, the ultimate impact may be material, and will depend on a number of factors beyond its control, including the duration and severity of the COVID-19 pandemic and actions by governmental authorities taken to contain its spread and mitigate its public health effects. There is also the potential for attendance levels at the Company’s Parks to moderate or decline as alternative entertainment venues reopen to full capacity once the COVID-19 pandemic has run its course or vaccines are widely adopted and proven effective. While attendance based net sales remain strong versus the comparable pre-COVID-19 period, the Company has experienced a decline in attendance based net sales and attendance for weeks 32 through 44 of its 2021 fiscal year versus the comparable period of its 2020 fiscal year.
| 7 |
PARKS! AMERICA, INC. and SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 4, 2021
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The Company’s unaudited consolidated financial statements for the three months and nine months ended July 4, 2021 and June 28, 2020 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 September 27, 2020.
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 2021 fiscal year, October 3 will be the closest Sunday, and for the 2020 fiscal year, September 27 was the closest Sunday. The 2021 fiscal year will be comprised of 53-weeks, while the 2020 fiscal year was comprised of 52-weeks. This fiscal calendar aligns the Company’s fiscal periods closely with the seasonality of its business. The high season typically ends after the Labor Day holiday weekend. The period from October through early March is geared towards maintenance and preparation for the next busy season, which typically begins at Spring Break and runs through Labor Day.
Financial and Concentrations Risk: The Company does not have any concentration or related financial credit risks. The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits.
Trade
Accounts Receivable: The theme parks are a payment upfront business; therefore, the Company typically carries little or no accounts
receivable. The Company had $
Inventory:
Inventory consists of gift shop items, animal food, and concession and park supplies, and is stated at the lower of cost or net
realizable value. Cost is determined on the first-in, first-out method. The gross profit method is used to determine the change in gift
shop inventory for interim periods. Inventories are reviewed and reconciled annually, because inventory levels turn over rapidly. The
Company had inventory of $
| 8 |
PARKS! AMERICA, INC. and SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 4, 2021
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property and Equipment: Property and equipment are stated at cost. Depreciation is computed on the straight-line method over the estimated useful lives of the assets, which range from three to thirty-nine years. A summary is included below.
| July 4, 2021 | September 27, 2020 | Depreciable Lives | ||||||||
| Land | $ | $ | ||||||||
| Mineral rights | ||||||||||
| Ground improvements | ||||||||||
| Buildings and structures | ||||||||||
| Animal shelters and habitats | ||||||||||
| Park animals | ||||||||||
| Equipment - concession and related | ||||||||||
| Equipment and vehicles - yard and field | ||||||||||
| Vehicles - buses and rental | ||||||||||
| Rides and entertainment | ||||||||||
| Furniture and fixtures | ||||||||||
| Projects in process | ||||||||||
| Property and equipment, cost | ||||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||||
| Property and equipment, net | $ | $ | ||||||||
Depreciation
expense for the three months ended July 4, 2021 and June 28, 2020 totaled $
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:
| July 4, 2021 | September 27, 2020 | |||||||
| Deferred revenue | $ | $ | ||||||
| Accrued sales taxes | ||||||||
| Accrued wages and payroll taxes | ||||||||
| Accrued property taxes | ||||||||
| Accrued income taxes | - | |||||||
| Other accrued liabilities | ||||||||
| Other current liabilities | $ | $ | ||||||
Financial Instruments: The carrying amounts of financial instruments are considered by management to be their estimated fair values due to their short-term maturities or due to the fact they were entered into during the Company’s 2021 and 2020 fiscal years. Securities that are publicly traded are valued at their fair market value as of the balance sheet date presented.
| 9 |
PARKS! AMERICA, INC. and SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 4, 2021
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 fee revenues from advance online ticket purchases are
deferred until the customers’ visit to the parks. Revenues from retail and concession sales are generally recognized upon the concurrent
receipt of payment and delivery of goods to the customer. Sales taxes billed and collected are not included in revenue. Deferred revenues
from advance online admission tickets were $
The Company periodically sells surplus animals created from the natural breeding process that occurs within the parks. All animal sales are reported as a separate revenue line item. Animal sales are recognized at a point in time when control transfer to the customer, which is generally determined when title, ownership and risk of loss pass to the customer, all of which generally occurs upon delivery of the animal. Based on the Company’s assessment of control indicators, sales are recognized when animals are delivered to the customer.
The Company provides disaggregation of revenue based on geography in “Note 10: Business Segments”, as it believes this best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.
Advertising
and Marketing Costs: The Company expenses advertising and marketing costs as incurred. Advertising and marketing expense for
the three months ended July 4, 2021 and June 28, 2020 totaled $
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 () shares for award of stock options, including qualified incentive stock options and performance stock bonuses. To date, grants or awards have been made pursuant to the Plan and the Company did not submit the Plan for consideration to the Company’s stockholders at its last meeting of stockholders.
Income Taxes: The Company utilizes the asset and liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and the tax basis of the assets and liabilities, and are measured using the enacted tax rates and laws. Management periodically reviews the Company’s deferred tax assets to determine whether their value can be realized based on available evidence. A valuation allowance is established when management believes it is more likely than not, that such tax benefits will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change.
| 10 |
PARKS! AMERICA, INC. and SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 4, 2021
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
Basic and diluted net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the applicable weighted average number of common shares outstanding in each period.
Dividend Policy: The Company has not yet adopted a policy regarding payment of dividends.
Recent Accounting Pronouncements:
Income Taxes
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes (“Update 2019-12”), which removes certain exceptions for investments, intraperiod allocations and interim tax calculations, and adds guidance to reduce the complexity in accounting for income taxes. Update 2019-12 is effective for annual periods beginning after December 15, 2020, with early adoption permitted. The various amendments in Update 2019-12 are applied on a retrospective basis, modified retrospective basis and prospective basis, depending upon the amendment. The Company is in the process of evaluating the impact of this amendment on its consolidated financial statements; however, it is not anticipated to be material.
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.
| 11 |
PARKS! AMERICA, INC. and SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 4, 2021
NOTE 3. ACQUISITION
On
The following table sets forth the purchase consideration paid to the members of Aggieland Safari and the amount of assets acquired and liabilities assumed as of the acquisition date:
| Sources of consideration paid to Aggieland Safari Members: | ||||
| Cash advances | $ | |||
| Cash at closing | ||||
| 2020 Term Loan | ||||
| Aggieland Seller Note | ||||
| Less cash received | ( | ) | ||
| Total consideration | $ | |||
| Purchase price allocation: | ||||
| Inventories | $ | |||
| Property and equipment | ||||
| Deferred revenue | ( | ) | ||
| Total net assets acquired | $ | |||
The purchase price has been allocated based on an estimate of the fair value of assets acquired and liabilities assumed as of the acquisition date. The determination of estimated fair value requires management to make significant estimates and assumptions.
The following table presents supplemental pro forma information for the nine month period ended June 28, 2020 as if the acquisition had occurred at the beginning of the Company’s 2020 fiscal year. The unaudited pro forma information includes adjustments for depreciation expense on property and equipment acquired, interest expense on debt incurred related to the acquisition, and the related income tax effects, as well as the elimination of property and equipment impairment charges recorded by Aggieland Safari prior to the acquisition. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected at the beginning of the Company’s 2020 fiscal year.
| For the nine months ended | ||||
| June 28, 2020 | ||||
| Total net sales | $ | |||
| Net income | $ | |||
| Income per share - basic and diluted | $ | |||
| 12 |
PARKS! AMERICA, INC. and SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 4, 2021
NOTE 4. LONG-TERM DEBT
On
On
On
The
Aggieland Seller Note represented a deferred portion of the Aggieland Wild Animal – Texas purchase price, had a face value
of $
As
a result of the initial negative economic impacts and uncertainties caused by the COVID-19 pandemic, Wild Animal – Georgia and
Wild Animal – Missouri each applied for Paycheck Protection Program (“PPP”) loans. On April 14, 2020 and
Interest
expense of $
| 13 |
PARKS! AMERICA, INC. and SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 4, 2021
NOTE 4. LONG-TERM DEBT (CONTINUED)
The following table represents the aggregate of the Company’s outstanding long-term debt:
| As of | ||||||||
| July 4, 2021 | September 27, 2020 | |||||||
| Loan principal outstanding | $ | $ | ||||||
| Less: unamortized debt financing costs | ( | ) | ( | ) | ||||
| Gross long-term debt | ||||||||
| Less current portion of long-term debt, net of unamortized costs and discount | ( | ) | ( | ) | ||||
| Long-term debt | $ | $ | ||||||
As of July 4, 2021, the scheduled future principal maturities of the Company’s long-term debt by fiscal year are as follows:
| 2021 | ||||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| thereafter | ||||
| Total | $ |
NOTE 5. LINE OF CREDIT
NOTE 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.
Officers,
Directors and their controlled entities own approximately
| 14 |
PARKS! AMERICA, INC. and SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 4, 2021
NOTE 7. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Effective
as of
Effective
as of
Effective
as of
As
of July 4, 2021, the Company has not adopted any deferred compensation plans. Each of the foregoing employment agreements contains provisions
for severance compensation in the event an agreement is (i) terminated early by the Company without cause ($
NOTE 8. INCOME TAXES
For
the nine month period ended July 4, 2021, the Company reported pre-tax income of $
NOTE 9. COMMITMENTS AND CONTINGENCIES
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 $
On May 21, 2019, the Company’s Missouri Park was struck by a tornado and sustained property damage, primarily to the “walk about”, the more traditional zoo-like section of the park, as well as to several auxiliary buildings. The park was closed at the time of this event and no employees were injured. While a few animals sustained non-life threatening injuries, no animals were killed or escaped.
As
a result of the tornado damage, through September 29, 2019, the Company had written-off $
| 15 |
PARKS! AMERICA, INC. and SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 4, 2021
NOTE 9. COMMITMENTS AND CONTINGENCIES (CONTINUED)
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.
NOTE 10. BUSINESS SEGMENTS
The Company manages its operations on an individual location basis. Discrete financial information is maintained for each Park and provided to management for review and as a basis for decision-making. The primary performance measures used to allocate resources are Park earnings before interest and tax expense, and free cash flow.
The following tables present financial information regarding each of the Company’s reportable segments:
| For the three months ended | For the nine months ended | |||||||||||||||
| July 4, 2021 | June 28, 2020 | July 4, 2021 | June 28, 2020 | |||||||||||||
| Total net sales: | ||||||||||||||||
| Georgia | $ | $ | $ | $ | ||||||||||||
| Missouri | ||||||||||||||||
| Texas | ||||||||||||||||
| Consolidated | $ | $ | $ | $ | ||||||||||||
| Income (loss) before income taxes: | ||||||||||||||||
| Georgia | $ | $ | $ | $ | ||||||||||||
| Missouri | ( | ) | ( | ) | ||||||||||||
| Texas | ( | ) | ( | ) | ||||||||||||
| Segment total | ||||||||||||||||
| Corporate | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income, net | ||||||||||||||||
| Gain on extinguishment of debt | - | - | ||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Consolidated | $ | $ | $ | $ | ||||||||||||
| As of | ||||||||
| July 4, 2021 | September 27, 2020 | |||||||
| Total assets: | ||||||||
| Georgia | $ | $ | ||||||
| Missouri | ||||||||
| Texas | ||||||||
| Corporate | ||||||||
| Consolidated | $ | $ | ||||||
NOTE 11. SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to July 4, 2021 to the date these financial statements were issued and has determined that no material subsequent events have occurred from the date of these unaudited consolidated financial statements through the date of this filing.
| 16 |
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’s 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 September 27, 2020.
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.
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, 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.
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”). On April 27, 2020, we acquired substantially all the assets of Aggieland Safari LLC and related entities (“Aggieland Safari”), for additional information see “NOTE 3. ACQUISITION” of the Notes to the Consolidated Financial Statements (Unaudited).
Our Parks are open year round but experience increased seasonal attendance, typically beginning in the latter half of March through early September. As a result, our combined third and fourth quarter net sales have historically ranged from 68% to 72% of our annual attendance based net sales. Based on trending since mid-May 2021, it is likely our combined third and fourth quarter net sales for our 2021 fiscal year will be in the range of 60% to 62% of our annual attendance based net sales for our 2021 fiscal year.
| 17 |
Through our fiscal year ended September 27, 2020, our annual net sales, adjusted income before income taxes and net cash provided by operating activities have improved significantly over the past five to six fiscal years. These improvements are primarily attributable to a combination of increased attendance based revenues and strong operating cost controls. Our Georgia Park in particular has benefitted from several 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 our 2019 fiscal year and the resulting improvements in our financial position provided us with the resources to pursue and ultimately close the Aggieland Safari acquisition during our 2020 fiscal year.
The rapid acceleration of the COVID-19 pandemic in the United States occurred at the beginning of our 2020 fiscal year annual high season. We began to see a significant reduction in paid attendance at our Georgia and Missouri Parks beginning the week of March 9, 2020. Effective April 3, 2020, both Parks were closed as a result of shelter-in-place mandates in Georgia and Missouri. Also note that prior to our acquisition of our Texas Park, its operations were suspended for the majority of April 2020 due to a shelter-in-place mandate in Texas.
In compliance with respective state issued guidelines, our Georgia Park and our Texas Park each reopened on May 1, 2020, and our Missouri Park reopened on May 4, 2020. Attendance levels were strong at each of our three Parks for the balance of our 2020 fiscal year, which continued through the first 31 weeks of our 2021 fiscal year. We believe the strong year-over-year attendance growth each of our Parks has experienced since reopening in early May 2020 reflects the principally outdoor nature of the family-friendly, wild animal education and entertainment experience provided at each of our Parks. The experience offered at each of our Parks is particularly attractive during the COVID-19 pandemic as potential guests are seeking outdoor entertainment options. While we have seen many repeat customers since reopening in early May 2020, we have also experienced an increase in first time visitors seeking an outdoor entertainment alternative. We believe this has increased the local and regional awareness for each of our Parks, which we believe will have positive longer-term ramifications for our business.
However, there remains the possibility of longer-term negative impacts to our business, results of operations and cash flows, and financial condition as a result of the COVID-19 pandemic. These negative impacts may include changes in customer behavior and preferences causing significant volatility or reductions in attendance at one or more of our Parks, increases in operating expenses to comply with additional hygiene-related protocols, limitations in our ability to recruit and maintain staffing, limitations on our employees ability to work and travel, and significant changes in the economic or political conditions in the areas our Parks are located. Despite our efforts to manage these potential impacts, the ultimate impact may be material, and will depend on a number of factors beyond our control, including the duration and severity of the COVID-19 pandemic and actions by governmental authorities taken to contain its spread and mitigate its public health effects. There is also the potential for attendance levels at our Parks to moderate or decline as alternative entertainment venues reopen to full capacity once the COVID-19 pandemic has run its course or vaccines are widely adopted and proven effective. While attendance based net sales remain strong versus the comparable pre-COVID-19 period, we have experienced a decline in attendance based net sales and attendance for weeks 32 through 44 of our 2021 fiscal year versus the comparable period of our 2020 fiscal year. Based on trending since mid-May 2021, it is likely our combined sales for the fourth quarter of our 2021 fiscal year will decline versus the prior year comparable period in the range of 15% to 25%.
We are committed to leveraging the strong operating model we have established at our Georgia Park, with a focus on increasing attendance, as well as increasing 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. 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 during the latter half of our 2020 fiscal year and the first nine months of our 2021 fiscal year. We plan on leveraging the increased exposure of this facility to continue to build on this recent success.
Our business plan includes expansion via the acquisition of additional local or regional theme parks and attractions, if attractive opportunities arise. We believe 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 growth in our annual operating cash flow over the past five to six fiscal years has provided us with incremental cash flow, and provided us with the financial strength to complete the Aggieland Safari acquisition. 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.
| 18 |
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 measures used to allocate resources are Park earnings before interest and tax expense, and free cash flow. 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 reportable segment.
Results of Operations for the Three Month Period Ended July 4, 2021 as Compared to Three Month Period Ended June 28, 2020
The three month periods ended July 4, 2021 and June 28, 2020 each comprised 13 weeks. However, given the forward shift in our 2021 fiscal year calendar, in addition to reported sales comparisons, we will provide 13-week comparable sales. Given our Parks were closed for the majority of April 2020 and experienced significant attendance gains starting in May 2020, this calendar shift has a significant impact on our comparable 13-week attendance based net sales for the three month period ended July 4, 2021. Further, since our Texas Park was effectively included for the full three month period ended June 28, 2020, with the acquisition on April 27, 2020 and our Park closures for the majority of April 2020, pro forma sales are essentially the same as the sales comparisons presented.
The following table shows our consolidated and segment operating results for the three month periods ended July 4, 2021 and June 28, 2020:
| Georgia Park | Missouri Park | Texas Park | Consolidated | |||||||||||||||||||||||||||||
| Fiscal 2021 | Fiscal 2020 | Fiscal 2021 | Fiscal 2020 | Fiscal 2021 | Fiscal 2020 | Fiscal 2021 | Fiscal 2020 | |||||||||||||||||||||||||
| Total net sales | $ | 2,724,847 | $ | 2,376,593 | $ | 618,185 | $ | 464,540 | $ | 531,068 | $ | 379,075 | $ | 3,874,100 | $ | 3,220,208 | ||||||||||||||||
| Segment income (loss) from operations | 1,721,101 | 1,666,295 | 158,419 | 123,448 | (31,482 | ) | 126,432 | 1,848,038 | 1,916,175 | |||||||||||||||||||||||
| Segment operating margin % | 63.2 | % | 70.1 | % | 25.6 | % | 26.6 | % | -5.9 | % | 33.4 | % | 47.7 | % | 59.5 | % | ||||||||||||||||
| Corporate expenses | (178,560 | ) | (167,328 | ) | ||||||||||||||||||||||||||||
| Other income, net | 16,996 | 3,293 | ||||||||||||||||||||||||||||||
| Gain on extinguishment of debt | 64,617 | - | ||||||||||||||||||||||||||||||
| Interest expense | (91,958 | ) | (64,165 | ) | ||||||||||||||||||||||||||||
| Income before income taxes | $ | 1,659,133 | $ | 1,687,975 | ||||||||||||||||||||||||||||
Total Net Sales
Our total net sales for the three month period ended July 4, 2021 were $3.87 million, an increase of $653,892 versus the three month period ended June 28, 2020. Our Parks’ combined attendance based net sales increased by $620,335 or 19.4%, and animal sales increased by $33,557. On a comparable 13-week basis, our attendance based net sales increased by $226,279 or 6.3%.
Our Georgia Park’s attendance based net sales increased by $341,370 or 14.4%, to $2.72 million, while animal sales increased by $6,884 to $8,000. Our Missouri Park’s attendance based net sales increased by $166,925 or 37.0%, to $618,185, while animal sales decreased by $13,280 to $0. Our Texas Park’s attendance based net sales increased by $112,040 or 29.7%, to $488,830, while animal sales increased by $39,953 to $42,238.
On a comparable 13-week basis, our Georgia Park’s attendance based net sales increased by $63,226 or 2.4%, our Missouri Park’s attendance based net sales increased by $110,996 or 21.9%, and our Texas Park’s attendance based net sales increased by $52,057 or 11.9%.
For the three month period ended July 4, 2021, paid attendance at our Missouri Park and Texas Park increased by approximately 22.5% and 26.0%, respectively, while paid attendance at our Georgia Park decreased by 8.6%. On a comparable 13-week basis, paid attendance at our Missouri Park and Texas Park increased by approximately 8.7% and 10.8%, respectively, while paid attendance at our Georgia Park decreased by 17.9%.
Segment Operating Margin
Our consolidated segment income from operations was $1.85 million for the three month period ended July 4, 2021, a decrease of $68,137, compared to $1.92 million for the three month period ended June 28, 2020. Our Georgia Park generated segment operating income was $1.72 million, an increase of $54,806, primarily attributable to higher attendance based net sales, partially offset by higher cost of sales, and higher compensation, advertising, and general operating expenses. Our Missouri Park generated segment operating income of $158,419, an increase of $34,971, primarily attributable to higher attendance based net sales, partially offset by higher cost of sales, and higher compensation and general operating expenses. Our Texas Park generated a segment operating loss of $31,482, a net decline of $157,914, primarily attributable to higher cost of sales, and higher compensation, advertising and general operating expenses, partially offset by higher attendance based net sales and higher animal sales.
| 19 |
Corporate Expenses
Corporate spending increased by $11,232 to $178,560 during the three month period ended July 4, 2021, primarily due to higher compensation and travel expenses, partially offset by lower professional fees.
Other Income, Net
Other income, net increased by $13,703, to $16,996, primarily attributable to mineral rights royalty income for our Texas Park.
Gain on Extinguishment of Debt
On May 25, 2021, we received notification the SBA approved our Wild Animal – Missouri Paycheck Protection Program (“PPP”) loan forgiveness application, resulting in a gain on extinguishment of debt totaling $64,617 for the three month period ended July 4, 2021.
Interest Expense
Interest expense for the three month period ended July 4, 2021 increased by $27,793, to $91,958, primarily as a result of debt incurred related to the acquisition of our Texas Park on April 27, 2020.
Income Taxes
For the three month period ended July 4, 2021, we reported pre-tax income of $1.66 million. For the fiscal year ending October 3, 2021 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 25.0%. Based on the year-to-date mix of federal and state income, we recorded an income tax provision of $392,300 for the three month period ended July 4, 2021.
Net Income and Income Per Share
For the three month period ended July 4, 2021, we reported net income of $1.27 million or $0.02 per basic share and per fully diluted share, compared to a net income of $1.27 million or $0.02 per basic share and per fully diluted share, for the three month period ended June 28, 2020, resulting in an increase of $658. The increase in our net income is attributable to a $54,806 increase in segment income for our Georgia Park, a $34,971 increase in segment income for our Missouri Park, a $64,617 gain on extinguishment of debt, an increase of $13,703 in other income, as well as a $29,500 decrease in our tax provision, largely offset a $157,914 net decrease in segment income for our Texas Park, a $11,232 increase in Corporate expenses, and a $27,793 increase in interest expense.
Results of Operations for the Nine Month Period Ended July 4, 2021 as Compared to Nine Month Period Ended June 28, 2020
Our 2021 fiscal year will be comprised of 53-weeks, compared to our 2020 fiscal year which was comprised of 52-weeks. The extra week in our 2021 fiscal year occurred in the three months ended January 3, 2021. As such, in addition to nine month period reported attendance sales comparisons, attendance based sales analyses will include comparable 40-week sales comparisons.
The following table shows our consolidated and segment operating results for the nine month periods ended July 4, 2021 and June 28, 2020:
| Georgia Park | Missouri Park | Texas Park | Consolidated | |||||||||||||||||||||||||||||
| Fiscal 2021 | Fiscal 2020 | Fiscal 2021 | Fiscal 2020 | Fiscal 2021 | Fiscal 2020 | Fiscal 2021 | Fiscal 2020 | |||||||||||||||||||||||||
| Total net sales | $ | 5,903,635 | $ | 3,906,651 | $ | 1,157,862 | $ | 672,924 | $ | 1,515,985 | $ | 379,075 | $ | 8,577,482 | $ | 4,958,650 | ||||||||||||||||
| Segment income (loss) from operations | 3,401,355 | 2,077,917 | (1,768 | ) | (190,241 | ) | (26,948 | ) | 126,432 | 3,372,639 | 2,014,108 | |||||||||||||||||||||
| Segment operating margin % | 57.6 | % | 53.2 | % | -0.2 | % | -28.3 | % | -1.8 | % | 33.4 | % | 39.3 | % | 40.6 | % | ||||||||||||||||
| Corporate expenses | (677,848 | ) | (602,056 | ) | ||||||||||||||||||||||||||||
| Other income, net | 44,315 | 18,797 | ||||||||||||||||||||||||||||||
| Gain on extinguishment of debt | 189,988 | - | ||||||||||||||||||||||||||||||
| Interest expense | (267,578 | ) | (99,077 | ) | ||||||||||||||||||||||||||||
| Income before income taxes | $ | 2,661,516 | $ | 1,331,772 | ||||||||||||||||||||||||||||
| 20 |
Total Net Sales
Our total net sales for the nine month period ended July 4, 2021 were $8.58 million, an increase of $3.62 million versus the nine month period ended June 28, 2020. Our Parks’ combined attendance based net sales increased by $3.53 million or 71.9%, and animal sales increased by $85,219. On a pro forma basis, assuming our Texas Park was acquired at the beginning of our 2020 fiscal year, our attendance based net sales increased by $2.88 million or 51.7%, and animal sales increased by $84,019. On a pro form basis for the comparable 40-weeks ended July 4, 2021, our attendance based net sales increased by $2.46 million or 41.1%.
Our Georgia Park’s attendance based net sales increased by $1.96 million or 50.5%, to $5.85 million, while animal sales increased by $34,819 to $56,885. Our Missouri Park’s attendance based net sales increased by $494,931 or 75.4%, to $1.15 million, while animal sales decreased by $9,993 to $6,850. Our Texas Park generated attendance based net sales of $1.45 million and animal sales of $62,677. On a pro forma basis, our Texas Park’s attendance based net sales increased by $422,325 or 41.0% and animal sales increased by $61,477.
On a comparable 40-week basis, our Georgia Park’s attendance based net sales increased by $1.67 million or 39.9%, our Missouri Park’s attendance based net sales increased by $431,933 or 60.1%, and on a pro forma basis our Texas Park’s attendance based net sales increased by $362,542 or 33.2%.
For the nine month period ended July 4, 2021, paid attendance at our Georgia Park and Missouri Park increased by approximately 25.6% and 58.2%, respectively, while on a pro forma basis, paid attendance at our Texas Park increased approximately 33.2%. On a comparable 40-week basis, paid attendance at our Georgia Park, Missouri Park and Texas Park increased by approximately 17.1%, 44.8%, and 28.2%, respectively.
Segment Operating Margin
Our consolidated segment income from operations was $3.37 million for the nine month period ended July 4, 2021, an increase of $1.36 million, compared to segment income from operations of $2.01 million for the nine month period ended June 28, 2020. Our Georgia Park’s segment operating income was $3.40 million, resulting in an increase of $1.32 million, principally attributable to higher attendance based net sales, partially offset by higher cost of sales, and higher compensation, advertising and general operating expenses. Our Missouri Park generated a segment operating loss of $1,768, an improvement of $188,473, primarily attributable to higher attendance based net sales, partially offset by higher cost of sales, and higher compensation, advertising and general operating expenses, as well as an insurance recovery in the nine months ended June 28, 2020. Our Texas Park generated a segment operating loss of $26,948, compared to segment income of $126,432, resulting in a net decrease of $153,380. On a pro forma basis, our Texas Park generated a segment income of approximately $56,300 for the nine month period ended June 28, 2020, resulting in a net decline of $83,248, primarily attributable to higher advertising, compensation and general operating expenses, partially offset by higher attendance based net sales and higher animal sales.
Corporate Expenses
Corporate spending increased by $75,792 to $677,848 during the nine month period ended July 4, 2021, primarily due to higher compensation and travel expenses, partially offset by lower professional fees.
Other Income, Net
Other income, net increased by $25,518, to $44,315, primarily attributable to mineral rights royalty income for our Texas Park, partially offset by lower interest income.
Gain on Extinguishment of Debt
During the nine months ended July 4, 2021, we received notification the SBA approved both our Wild Animal – Georgia and Wild Animal – Missouri PPP loan forgiveness applications, resulting in a gain on extinguishment of debt totaling $189,988.
Interest Expense
Interest expense for the nine month period ended July 4, 2021 was $267,578, an increase of $168,501, primarily as a result of debt incurred related to the acquisition of our Texas Park on April 27, 2020.
| 21 |
Income Taxes
For the nine month period ended July 4, 2021, we reported pre-tax income of $2.66 million. For the fiscal year ending October 3, 2021 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 25.0%. Based on the year-to-date mix of federal and state income, we recorded an income tax provision of $628,700 for the nine month period ended July 4, 2021.
Net Income and Income Per Share
For the nine month period ended July 4, 2021, we reported net income of $2.03 million or $0.03 per basic share and per fully diluted share, compared to a net income of $986,872 or $0.01 per basic share and per fully diluted share, for the nine month period ended June 28, 2020, resulting in an increase of $1.05 million. The increase in our net income is attributable to a $1.32 million increase in segment income for our Georgia Park, a $188,473 decrease in the segment loss for our Missouri Park, a $189,988 gain on extinguishment of debt, as well as an increase of $25,518 in other income, partially offset by a $153,380 net decrease in segment income for our Texas Park, a $75,792 increase in Corporate expenses, a $168,501 increase in interest expense, and a $283,800 increase in our income tax provision.
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 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. As a result of our improved cash position, during our 2020 fiscal year we did not utilize any seasonal borrowing, nor do we anticipate using any seasonal borrowing during our 2021 fiscal year.
As a result of the initial negative impacts of the COVID-19 pandemic on our attendance revenues, we took actions to reduce spending while our Parks were closed to the public during the majority of April 2020. We also secured PPP loans to support the payroll for our employees during the Park closures and uncertainties regarding when we would be able to reopen our Parks. 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”). During the next twelve to eighteen months our focus will continue to be on running our Parks in a manner that supports the health and safety of our guests, employees and animals, at the same time prudently managing our cash flows. Any significant slowdown in revenues or unusual capital outlays may require us to reduce spending and potentially seek additional capital.
On June 18, 2021, we entered into 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. After paying off the balance outstanding on the 2019 Term Loan, the net additional borrowing on the 2021 Term Loan was $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 $1.00 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.
Our working capital was $5.00 million as of July 4, 2021, compared to $3.86 million as of September 27, 2020. This increase in working capital primarily relates to cash flow provided by operating activities, partially offset by capital investments and the payoff of the Aggieland Seller Note during the nine month period ended July 4, 2021.
Total loan debt, including current maturities, as of July 4, 2021 was $5.83 million compared to $7.02 million as of September 27, 2020.
As of July 4, 2021, we had equity of $13.80 million and total loan debt of $5.83 million, resulting in a debt to equity ratio of 0.42 to 1.0 compared to 0.60 to 1.0 as of September 27, 2020.
Operating Activities
Net cash provided by operating activities was $2.34 million for the nine month period ended July 4, 2021, compared to $1.81 million for the nine month period ended June 28, 2020, resulting in an increase of $536,461, primarily as a result of a higher net income partially offset by higher net working capital uses.
| 22 |
Investing Activities
Net cash used in investing activities was $860,265 for the nine month period ended July 4, 2021, compared to $6.83 million for the nine month period ended June 28, 2020. Our capital spending for the nine month period ended July 4, 2021 was $887,473, compared to $461,465 for the nine month period ended June 28, 2020. On April 27, 2021, we acquired Aggieland Safari, investing $6.37 million in cash.
Financing Activities
Net cash used in financing activities was $1.03 million for the nine month period ended July 4, 2021, compared to net cash provided by financing activities of $4.97 million for the nine month period ended June 28, 2020.
In June 2021, we entered into the 2021 Term Loan for $1.95 million, using those proceeds to pay off the $930,222 outstanding balance of our 2018 Term Loan, as well as prepay $1.00 million against our 2020 Term Loan. In addition, on June 29, 2021, we paid off the $750,000 Aggieland Safari Seller Note. For the nine months ended July 4, 2021, scheduled payments against our combined term loans totaled $277,956.
During the nine month ended June 29, 2020, net cash provided by financing activities related to our Aggieland acquisition totaled $4.94 million, cash provided by PPP loans totaled $188,087 was provided by PPP loans, while cash used for scheduled payments against our 2018 Term Loan were $154,446.
Subsequent Events
None
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 September 27, 2020 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
ITEM 4. CONTROLS AND PROCEDURES
Parks! America, Inc. (the “Registrant”) maintains “controls and procedures,” as such term is defined under the Securities Exchange Act of 1934, as amended (“the Exchange Act”) in Rule 13a-15(e) promulgated thereunder, that are designed to ensure that information required to be disclosed in the Registrant’s Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, the Registrant’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, the Registrant’s management was necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
| 23 |
With the participation of its principal executive officer and principal financial officer of the Registrant, the Registrant’s management has evaluated the effectiveness of the Registrant’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Exchange Act) as of the end of the fiscal quarter covered by this Quarterly Report. Based upon the evaluation, the Registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s disclosure controls and procedures were effective at a reasonable assurance level.
In addition, there were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 13a-15(e) promulgated under the Exchange Act) that occurred during the Registrant’s fiscal quarter ended July 4, 2021 that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
PART II
ITEM 1. LEGAL PROCEEDINGS
On February 17, 2021, two children of James Meikle, our 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 we were 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 seeks damages of $540,000, as well as interest and expenses. We deny we were obligated to purchase such life insurance and are vigorously opposing this claim.
Except as noted above, we are not a party to any pending legal proceeding, nor are any of our properties 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 our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.
ITEM 1A. RISK FACTORS
You should read the MD&A together with our unaudited consolidated financial statements and related notes, each included elsewhere in this Quarterly Report, in conjunction with the Parks! America, Inc. Annual Report on Form 10-K for the fiscal year ended September 27, 2020. Some of the information contained in the MD&A or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategies for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” below for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in this report. If any of the following risks actually occur, our business, financial condition and results of operations could be adversely affected.
Risk Factors Relating to Our Business:
The COVID-19 pandemic and measures taken in response thereto may have a material negative impact on our business, results of operations and cash flows, and financial condition. The extent of the impact is dependent upon future developments, which are highly uncertain and difficult to predict.
In March 2020, the World Health Organization characterized COVID-19, a disease caused by a novel strain of a coronavirus, as a pandemic. The rapid spread of COVID-19 has resulted in governmental authorities throughout the United States implementing a variety of containment measures with the objective of slowing the spread of the virus, including travel restrictions, shelter-in-place orders and business shutdowns. The COVID-19 pandemic and these containment measures have the potential to have a material impact on the Company’s business.
Beginning the week of March 9, 2020, we began to see a significant reduction in paid attendance at our Georgia and Missouri Parks. Effective April 3, 2020, both Parks were closed to the public as a result of shelter-in-place mandates in Georgia and Missouri. Also note that prior to the acquisition of our Texas Park, its operations were also closed to the public for the majority of April 2020 due to a shelter-in-place mandate in Texas. In compliance with respective state issued guidelines, our Georgia Park reopened on May 1, 2020 and our Missouri Park reopened on May 4, 2020, with the drive-through portion of our Texas Park reopening on May 1, 2020 and the park fully reopened on May 15, 2020. Since we reopened each of our Parks, attendance levels at each facility were strong for the balance of our 2020 fiscal year, which continued through the 31 weeks of our 2021 fiscal year.
| 24 |
While our business has experienced a rebound subsequent to the reopening of our Parks, there may be longer-term negative impacts to our business, results of operations and cash flows, and financial condition as a result of the COVID-19 pandemic. These negative impacts may include changes in customer behavior and preferences causing significant volatility or reductions in Park attendance, increases in operating expenses to comply with additional hygiene-related protocols, limitations in our ability to recruit and maintain staffing, limitations on our employees ability to work and travel, and significant changes in the economic or political conditions in the areas our Parks are located. Despite our efforts to manage these potential impacts, the ultimate impact may be material, and will depend on a number of factors beyond our control, including the duration and severity of the COVID-19 pandemic and actions by governmental authorities taken to contain its spread and mitigate its public health effects. There is also the potential for our attendance levels to moderate or decline as alternative entertainment venues reopen to full capacity once the COVID-19 pandemic has run its course or vaccines are widely adopted and proven effective.
The extent and duration of longer-term impacts of the COVID-19 pandemic on customer perceptions of our Parks are largely uncertain and dependent upon future developments that cannot be accurately predicted. There is no recent historical precedent that provides insights into the longer-term impacts that the COVID-19 pandemic will have on consumer behavior. As a result, the ultimate impact is highly uncertain and subject to change. We do not yet know the full extent COVID-19 will have on our overall business, results of operations and cash flows, and financial position. COVID-19 and the resulting economic disruptions have also led to significant volatility in the capital markets. As a smaller public company, our ability to access cash is already difficult and the impacts of COVID-19 on capital markets has likely had negatively impacted our ability to raise additional capital at a reasonable cost.
The Theme Park Industry is highly competitive and we may be unable to compete effectively.
The theme park industry is highly competitive, highly fragmented, rapidly evolving, and subject to technological change and intense marketing by providers with similar products. One of our competitors for attracting general recreation dollars, Callaway Gardens, is located within five miles of our Georgia Park. In May 2018, Great Wolf Resorts opened an expansive lodge and indoor waterpark within 10 miles of our Georgia Park. In September 2017, the founder of Bass Pro Shops opened “Johnny Morris’ Wonders of Wildlife National Museum and Aquarium”, approximately 12 miles from our Missouri Park in Springfield, Missouri. Branson, Missouri is located just 45 minutes from our Missouri Park. There are a variety of animal attractions throughout southeastern Texas; the nearest is Franklin Drive Thru Safari, within a 35-40 minute drive of our Texas Park. Many of our current competitors are significantly larger and have substantially greater market presence as well as greater financial, technical, operational, marketing and other resources and experience than we have. In the event that such a competitor expends significant sales and marketing resources in one or several markets we may not be able to compete successfully in such markets. We believe that competition will continue to increase, potentially placing downward pressure on prices. Such pressure could adversely affect our gross margins if we are not able to reduce costs commensurate with such price reductions. In addition, the pace of technological change makes it impossible for us to predict whether we will face new competitors using different technologies to provide the same or similar products offered or proposed to be offered by us. If our competitors were to provide better and more cost effective products, our business could be materially and adversely affected.
We face strong competition from numerous entertainment alternatives.
In addition to competing with other themed and amusement parks, our venues compete with other types of recreational venues and entertainment alternatives, including but not limited to movies, sports attractions, vacation travel and video games. There can be no assurance that we will successfully differentiate ourselves from these entertainment alternatives or that consumers will consider our entertainment offerings to be more appealing than those of our competitors. The increasing availability and quality of technology-based entertainment has provided families with a wider selection of entertainment alternatives in their homes, including home entertainment units, in-home and online gaming, as well as on-demand streaming video and related access to various forms of entertainment. In addition, traditional theme parks have been able to reduce the cost and increase the variety of their attractions by implementing technologies that cannot be readily incorporated by wild animal attractions such as our Parks.
The suspension or termination of any of our business licenses may have a negative impact on our business.
We maintain a variety of business licenses issued by federal, state and local government agencies that are required to be renewed periodically. We cannot guarantee that we will be successful in renewing all of our licenses on a periodic basis. The suspension, termination or expiration of one or more of these licenses could have a significant adverse affect on our revenues and profits. In addition, any changes to the licensing requirements for any of our licenses could affect our ability to maintain the licenses.
| 25 |
Our insurance coverage may not be adequate to cover all possible losses that we could suffer, and our insurance costs may increase.
Companies engaged in the theme park business may be sued for substantial damages in the event of an actual or alleged accident. An accident occurring at our Parks or at competing parks may reduce attendance, increase insurance premiums, and negatively impact our operating results. Our properties contain drive-through, safari style animal parks, and there are inherent risks associated with allowing the public to interact with animals. Although we carry liability insurance to cover this risk, there can be no assurance that our coverage will be adequate to cover liabilities, or that we will be able to afford or obtain adequate coverage should a catastrophic incident occur.
We currently have $6.0 million of liability insurance per occurrence, which is capped at $10.0 million in aggregate. We will continue to use reasonable commercial efforts to maintain policies of liability, fire and casualty insurance sufficient to provide reasonable coverage for risks arising from accidents, fire, weather, other acts of God, and other potential casualties. There can be no assurance that we will be able to obtain adequate levels of insurance to protect against suits and judgments in connection with accidents or other disasters that may occur in our Parks.
We may not identify or complete acquisitions in a timely, cost-effective manner, if at all.
Our business plan includes expansion via the acquisition of additional local or regional theme parks and attractions, if attractive opportunities arise. There can be no assurance that we will be successful in acquiring and operating additional local or regional theme parks and attractions. Competition for acquisition opportunities in the theme park industry is intense as there are a limited number of parks within the United States that could reasonably qualify as acquisition targets for us. Our acquisition strategy is dependent upon, among other things, our ability to: identify acquisition opportunities; obtain debt and equity financing; and obtain necessary regulatory approvals. Our ability to pursue our acquisition strategy may be hindered if we are not able to successfully identify acquisition targets or obtain the necessary financing or regulatory approvals, including but not limited to those arising under federal and state antitrust and environmental laws.
Significant amounts of additional financing may be necessary for the implementation of our Business Plan.
The Company may require additional debt and equity financing to pursue its business plan. There can be no assurance that we will be successful in obtaining additional financing. Lack of additional funding could force us to substantially curtail our expansion plans. Furthermore, the issuance by the Company of any additional securities would dilute the ownership of existing stockholders and may affect the price of our common stock.
Our ownership of real property subjects us to environmental regulation, which creates uncertainty regarding future environmental expenditures and liabilities.
We may be required to incur costs to comply with environmental requirements, such as those relating to discharges to air, water and land; the handling and disposal of solid and hazardous waste; and the cleanup of properties affected by hazardous substances. Under these and other environmental requirements we may be required to investigate and clean up hazardous or toxic substances or chemical releases at one of our properties. As an owner or operator, we could also be held responsible to a governmental entity or third party for property damage, personal injury and investigation and cleanup costs incurred by them in connection with any contamination. Environmental laws typically impose cleanup responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants. The liability under environmental laws has been interpreted to be joint and several unless the harm is divisible and there is a reasonable basis for allocation of the responsibility. The costs of investigation, remediation or removal of those substances may be substantial, and the presence of those substances, or the failure to remediate a property properly, may impair our ability to use our property. We are not currently aware of any material environmental risks regarding our properties. However, we may be required to incur costs to remediate potential environmental hazards or to mitigate environmental risks in the future.
We are dependent upon the services of our Executive Officers, key personnel and consultants.
Our success is heavily dependent on the continued active participation of our executive officers. Loss of the services of one or more of these officers could have a material adverse effect upon our business, financial condition or results of operations.
Further, our success and achievement of our growth plans depend on our ability to recruit, hire, train and retain other highly qualified technical and managerial personnel. Competition for qualified employees among companies in the theme park industry is intense, and the loss of any such persons, or an inability to attract, retain and motivate any additional highly skilled employees required for the expansion of the Company’s activities, could have a materially adverse effect on the Company. The inability of the Company to attract and retain the necessary personnel, and consultants and advisors could have a material adverse effect on the Company’s business, financial condition or results of operations.
| 26 |
Risk Factors Relating to Our Common Stock:
Our Common Stock is subject to the “penny stock” rules of the SEC and the trading market in our Common Stock is limited, which makes transactions in our Common Stock cumbersome and may reduce the value of an investment in our Common Stock.
Our common stock is considered a “penny stock” and the sale of our stock by you will be subject to the “penny stock rules” of the SEC. The penny stock rules require broker-dealers to take steps before making any penny stock trades in customer accounts. As a result, the market for our shares could be illiquid and there could be delays in the trading of our stock, which would negatively affect your ability to sell your shares and could negatively affect the trading price of your shares.
We do not expect to pay dividends for some time, if at all.
As of the date of this report, no cash dividends have been paid on our common stock. We expect that any income from operations will be devoted to our future operations and growth, as well as to service our debt. We do not expect to pay cash dividends in the near future. Any future determination as to the payment of dividends on our common stock will be at the discretion of our Board of Directors and will depend on our earnings, operating and financial condition, capital requirements and other factors deemed relevant by our Board of Directors. The provisions of credit agreements, which we may enter into from time to time, may also restrict the declaration of dividends on our common stock.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
| 27 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PARKS! AMERICA, INC. | ||
| August 11, 2021 | By: | /s/ Dale Van Voorhis |
| Dale Van Voorhis | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| 28 |
Exhibit 10.1
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULES 13a-14(a)/15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Dale Van Voorhis, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Parks! America, Inc. (the “registrant”) for the quarter ended July 4, 2021; | ||
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | ||
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | ||
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. | ||
| Date: August 11, 2021 | |
| /s/ Dale Van Voorhis | |
| Dale Van Voorhis | |
| Chief Executive Officer | |
| (Principal Executive Officer) | |
| Parks! America, Inc. |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULES 13a-14(a)/15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Todd R. White, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Parks! America, Inc. (the “registrant”) for the quarter ended July 4, 2021; | ||
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | ||
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | ||
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. | ||
| Date: August 11, 2021 | |
| /s/ Todd R. White | |
| Todd R. White | |
| Chief Financial Officer | |
| (Principal Financial Officer) | |
| Parks! America, Inc. |
Exhibit 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Parks! America, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:
The Quarterly Report on Form 10-Q for the quarter ended July 4, 2021 (the “Form 10-Q”) of the Company fully complies with the requirement of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Dated: August 11, 2021 | |
| /s/ Dale Van Voorhis | |
| Dale Van Voorhis | |
| Chief Executive Officer | |
| (Principal Executive Officer) | |
| Parks! America, Inc. | |
| Dated: August 11, 2021 | |
| /s/ Todd R. White | |
| Todd R. White | |
| Chief Financial Officer | |
| (Principal Financial Officer) | |
| Parks! America, Inc. |
A signed original of this written statement required by Section 906 has been provided to Parks! America, Inc. and will be retained by Parks! America, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.