TBIRD

Thunderbird Resorts Inc. ("Thunderbird") (FSE: 4TR; and Euronext: TBIRD) is pleased to announce that its 2021 Annual Report and Audited Consolidated Financial Statements have been filed with the Euronext ("Euronext Amsterdam") and the Netherlands Authority for Financial Markets ("AFM"). As a Designated Foreign Issuer with respect to Canadian securities regulations, the Annual Report is intended to comply with the rules and regulations set forth by the AFM and the Euronext Amsterdam. 

Copies of the Annual Report in the English language will be available at no cost at the Group's website at www.thunderbirdresorts.com. Copies in the English language are available at no cost at the Group's operational office in Panama and at the offices of our local paying agent ING Commercial Banking, Paying Agency Services, Location Code TRC 01.013, Foppingadreef 7, 1102 BD Amsterdam, the Netherlands (tel: +31 20 563 6619, fax: +31 20 563 6959, email: iss.pas@ing.nl). Copies are also available on SEDAR at www.SEDAR.com. 

Below are certain material excerpts from the full 2021 Annual Report, the entirety of which can be found on our website at www.thunderbirdresorts.com.

LETTER FROM CEO

Dear Shareholders and Investors:

The below summarizes the Group's performance through December 31, 2021. 

1.    CHANGES IN PERFORMANCE IN 2021

In summary, Group revenue and adjusted EBITDA from continuing operations increased by $2.1 million or 18.5% and $1.6 million or 68.8%, respectively. Consolidated Profit for the period is $289 thousand, an improvement of $2.2 million or 114.8% as compared with 2020 results. 

A.  EBITDA1: Peru property EBITDA fell by $78 thousand while Nicaragua property EBITDA increased by $1.56 million, both through December 31, 2021, as compared to the same period in 2020. Corporate Expense was reduced by $70 thousand in 2021 as compared to 2020. Adjusted EBITDA increased by $1.6 million or by 68.8% through December 31, 2021, as compared to through December 31, 2020. 

B.  Profit / (Loss):  The Group's Loss improved by approximately $2.2 million to a profit of $289 thousand for the period as compared to 2020. This improvement was the result of increased revenue of $2.1 million partially offset by increased expenses of $505 thousand in 2021 as compared to 2020. 

C.  Net Debt: Net debt as of December 31, 2021, increased to $16.1 million as compared to $15.8 million as of December 31, 2020. Due to a change in accounting policy as required by IFRS 16, the Group is required to account for the net present value of real estate operating lease contracts as Obligations under leases and hire purchase contracts. Approximately $4.7 million of our net debt is comprised of Obligations under leases and hire purchase contracts.

2.     MANAGEMENT TO MITIGATE THE RISKS OF COVID-19 

In terms of demand, Covid-19 hit the Group's markets harder than in much of the world. Hotels, in general, remained largely empty, office leases were commonly terminated or materially renegotiated and gaming facilities, like with restaurants in other parts, were often seen as greater contagion risks as compared to other businesses. Moreover, unlike in the developed markets, there were few fiscal tools and policies available to support businesses and to stimulate demand in the Group's markets.

Having said that, in 2021 and through date of 2022, Management stabilized its operations and cash management as compared to 2020, and feel reasonably confident that the Group is able to carry on with the shareholder mandate set forth in the September 21, 2016, Special Resolutions. To be prudent, however, the Group has updated its Management Statement on Going Concern as compared to the last update in its 2021 Half-year Report. See more about Group's progress directly below.

3.     MATERIAL PROGRESS TOWARD SHAREHOLDER MANDATE

The Group continues to pursue decisions that will support the best interest of shareholders according to the shareholder mandate set forth in the September 21, 2016, Special Resolutions, the status of which is summarized below in relation to the Group's key remaining assets:

A.  Peru Hotel Real Estate Converted to Apartment Units:  As of the date of publication of this 2021 Annual Report, the Group has converted its 66-suite hotel in Lima, Peru, into a 66-unit condominium apartment complex. The Group has: i) Legally sub-divided the former hotel into 66 individually titled apartment units; ii) Procured all change of use and other regulatory approvals; iii) Restructured approximately $4.5 million of senior debt based on the change of use, enabling the Group to sell units and accelerate debt payment with each sale; and iv) Executed preliminary sales agreements for approximately 40 apartment units with estimated sales value of approximately $6 million. Final bank approvals were received in April 2022, and the Group is now actively signing final sales agreements for contracted units and pursuing the sales of remaining units with a projection to generate in excess of $10 million from all unit sales, with possible completion of this transaction during 2022.

B.  Peru Office Real Estate Performance Improving:  The Group also has approximately 6,703 m2 of rentable-sellable office space, and 158 underground parking spaces. Office occupancies have improved materially in Q1 2022, rising from less than 60% occupancy in the depths of the covid crisis to approximately 80% as of the date of publication of this 2021 Annual Report. While leases are not generating the same revenue per square meter than achieved pre-covid, the Group's typical 2- to 5-year lease renewal schedule should help to recover lost revenue per meter as leases come up for renewal.

C.  Nicaragua Gaming and Real Estate Assets:  As of the publication date of this 2021 Annual Report, the Group continued to own a 56% interest in a Nicaraguan holding company that owns the following assets: i) Gaming: Three full casinos and three slot parlors with a combined approximately 630 gaming positions; and ii) Real Estate: Approximately 4,562 m2 of land divided among 5 parcels as more fully detailed on page 14. While not precisely segmented herein, Nicaragua EBITDA has experienced material recovery from the 2nd half of 2021 through Q1 2022.

D.  Costa Rica Real Estate Asset:  As of the publication of this 2021 Annual Report, the Group continues to own a 50% interest in a Costa Rican entity that owns the 11.6-hectare real estate property known as "Tres Rios."  Tres Rios, with its own, dedicated off ramp, is located close to the country's 2nd largest mall on the highway between the capital city of San Jose and the commuter city of Cartago.

The Group will continue to pursue decisions that will support the best interest of shareholders according to the shareholder mandate set forth in the September 21, 2016, Special Resolutions.

Salomon Guggenheim

Chief Executive Officer and President

April 30, 2022

1. "EBITDA" is not an accounting term under IFRS, and refers to earnings before net interest expense, income taxes, depreciation and amortization, equity in earnings of affiliates, minority interests, development costs, other gains and losses, and discontinued operations. "Property EBITDA" is equal to EBITDA at the country level(s). "Adjusted EBITDA" is equal to property EBITDA less "Corporate expenses," which are the expenses of operating the parent company and its non-operating subsidiaries and affiliates.

GROUP OVERVIEW

The Group's consolidated profit / (loss) summary for the twelve months ended December 31, 2021, as compared with the same period of 2020 is contained in the Group's Annual Report for year ending December 31, 2021, located at www.thunderbirdresorts.com. In summary, Group revenue and adjusted EBITDA increased by $2.1 million or 18.5% and $1.6 million or 68.8%, respectively. Consolidated Profit for the period is $289 thousand, an improvement of $2.2 million or 114.8% as compared with 2020 results.

RISK MANAGEMENT

For more detail on Risk Factors, see Chapter 8 of the Annual Report.

MANAGEMENT STATEMENT ON "GOING CONCERN"

Management has reviewed their plan with the Directors and has collectively formed a judgment about the going concern of the Group. In arriving at this judgment, Management has prepared the cash flow projections of the Group. The Group has suffered recurring losses over the past years. In response to the recurring losses of the previous years, Management has taken actions which will be described in the following paragraphs. 

Directors have reviewed this information provided by Management and have considered the information in relation to the financing uncertainties in the current economic climate, the Group's existing commitments and the financial resources available to the Group. Specifically, Directors have considered: (i) there are probably no sources of new financing available to the Group; (ii) the Group has limited trading exposures to our local suppliers and retail customers; (iii) other risks to which the Group is exposed, the most significant of which is considered to be regulatory risk; (iv) sources of Group income, including management fees charged to and income distributed from its various operations; (v) cash generation and debt amortization levels; (vi) fundamental trends of the Group's businesses; (vii) ability to re-amortize and unsecured lenders; and (viii) level of interest of third parties in the acquisition of certain operating assets, and status of genuine progress and probability of closing within the Going Concern period.  The Directors have also considered certain critical factors that might affect continuing operations, as follows: 

• Special Resolution:  On September 21, 2016, the Group's shareholders approved a special resolution that, among other items, authorized the Board of Directors of the Corporate to sell "any or all remaining assets of the Corporation in such amounts and at such times as determined by the Board of Directors." This resolution facilitates the sale of any one or any combination of assets required to support maintaining of a going concern by the Group.
• Corporate Expense and Cash Flow: Corporate expense has decreased materially in recent years, and continues to decrease, but still must accommodate for compliance as a public company.
• Liquidity and Working Capital: As of the date of publication of this 2021 Annual Report, the Group forecasts operating with lower levels of reserves and working capital until such time as liquidity events might occur. Selling assets will be critical to creating a healthy level of working capital reserves for periods beyond the Going Concern period.

While the below events or lack thereof may create uncertainty and cast doubt on going concern, the Group believes that it is in a stronger position to sustain going concern as of the publication date of this 2021 Annual Report as compared to recent years during the covid crisis.

• Peru Real Estate Sales: As of the date of publication of this 2021 Annual Report, the Group has converted its 66-suite hotel in Lima, Peru into a 66-unit condominium apartment complex. The Group has: i) Legally sub-divided the former hotel into 66 individually titled apartment units; ii) Procured all change of use and other regulatory approvals; iii) Restructured approximately $4.5 million of senior debt based on the change of use, enabling the Group to sell units and accelerate debt payment with each sale; and iv) Executed preliminary sales agreements for approximately 40 apartment units with estimated sales value of over $6 million. Final bank approvals were received in April 2022, and the Group is now actively signing final sales agreements for contracted units and pursuing the sales of remaining units with a projection to generate in excess of $10 million from all unit sales, with possible completion of this transaction during 2022. If for whatever reason the Group is not able to complete the sales of sufficient units to pay down its senior secured lender and related government supported debt in Peru (combined of approximately $5M) and to partially pay down its remaining unsecured debt, this could harm the Group's ability to remain as a going concern in 2024.
• Other liquidity events:  If the Group is not able to create other liquidity events from its remaining Peru, Costa Rica and Nicaragua assets in 2023-2024, it is reasonable to expect that unsecured lenders may pursue years of litigation against the Group at that time, though as to whether or not this would have an impact on Going Concern at that time is hard to assess.

Considering the above, Management and Directors are satisfied that the consolidated Group has adequate resources to mitigate the uncertainty and that the Group is able to continue as a going concern for at least the 12 months following the filing date of this report. For these reasons, Management and Directors have therefore prepared the consolidated financial statements on a going concern basis.

THUNDERBIRD RESORTS, INC. CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Expressed in thousands of United States dollars) For the year ended December 31, 2021, were approved by the Board of Directors on April 30, 2022, and are contained in the 2021 Annual Report posted at www.thunderbirdresorts.com. The consolidated financial statements and the accompanying notes are an integral part of these consolidated financial statements. 

SUBSEQUENT EVENTS

These are the material events to disclose from December 31, 2021, through the release of this 2021 Annual Report

Peru Hotel Real Estate Converted to Apartment Units: As of the date of publication of this 2021 Annual Report, the Group has converted its 66-suite hotel in Lima, Peru, into a 66-unit condominium apartment complex. The Group has: i) Legally sub-divided the former hotel into 66 individually titled apartment units; ii) Procured all change of use and other regulatory approvals; iii) Restructured approximately $4.5 million of senior debt based on the change of use, enabling the Group to sell units and accelerate debt payment with each sale; and iv) Executed preliminary sales agreements for approximately 40 apartment units with estimated sales value of over $6 million. Final bank approvals were received in April 2022, and the Group is now actively signing final sales agreements for contracted units and pursuing the sales of remaining units with a projection to generate in excess of $10 million from all unit sales, with possible completion of this transaction during 2022.     

ABOUT THE COMPANY

Thunderbird Resorts Inc. is an international provider of branded casino and hospitality services, focused on markets in Latin America. Its mission is to "create extraordinary experiences for our guests. "Additional information about the Group is available at www.thunderbirdresorts.com. 

Contact: Peter Lesar, Chief Financial Officer ∙ Phone: (507) 223-1234 ∙ Email: plesar@thunderbirdresorts.com

Cautionary Notice:  Cautionary Notice: The Annual Report referred to in this release contains certain forward-looking statements within the meaning of the securities laws and regulations of various international, federal, and state jurisdictions. All statements, other than statements of historical fact, included in the Annual Report, including without limitation, statements regarding potential revenue and future plans and objectives of Thunderbird are forward-looking statements that involve risk and uncertainties. There can be no assurances that such statements will prove to be accurate and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Thunderbird's forward-looking statements include competitive pressures, unfavorable changes in regulatory structures, and general risks associated with business, all of which are disclosed under the heading "Risk Factors" and elsewhere in Thunderbird's documents filed from time-to-time with the Euronext Amsterdam and other regulatory authorities. Included in the Annual Report are certain "non-IFRS financial measures," which are measures of Thunderbird's historical or estimated future performance that are different from measures calculated and presented in accordance with IFRS, within the meaning of applicable Euronext Amsterdam rules, that are useful to investors. These measures include (i) Property EBITDA consists of income from operations before depreciation and amortization, write-downs, reserves and recoveries, project development costs, corporate expenses, corporate management fees, merger and integration costs, income/(losses) on interests in non-consolidated affiliates and amortization of intangible assets. Property EBITDA is a supplemental financial measure we use to evaluate our country-level operations. (ii) Adjusted EBITDA represents net earnings before interest expense, income taxes, depreciation and amortization, equity in earnings of affiliates, minority interests, development costs, and gain on refinancing and discontinued operations. Adjusted EBITDA is a supplemental financial measure we use to evaluate our overall operations. Property EBITDA and Adjusted EBITDA are supplemental financial measures used by management, as well as industry analysts, to evaluate our operations. However, Property and Adjusted EBITDA should not be construed as an alternative to income from operations (as an indicator of our operating performance) or to cash flows from operating activities (as a measure of liquidity) as determined in accordance with generally accepted accounting principles.

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