~~UNITED~~Table ~~STATESSECURITIES~~of ~~AND EXCHANGE COMMISSION~~Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF ~~1934For the quarterly period ended January 31, 2019.~~1934

For the quarterly period ended July 31, 2019.

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF ~~1934For the transition period from to .~~1934

~~Commission~~For ~~file~~the ~~number~~transition ~~001-35363~~period from to .

Commission file number 001‑35363

Peak Resorts, Inc.

(Exact name of registrant as specified in its charter)

Missouri	43‑1793922	~~43-1793922~~
(State or other jurisdiction of	(I.R.S. Employer	~~(I.R.S. Employer~~
incorporation or organization)	Identification No.)	~~Identification No.)~~
17409 Hidden Valley Drive	63025	~~63025~~
Wildwood, Missouri	(Zip Code)	~~(Zip Code)~~
(Address of principal executive offices)

(636) 938-‑7474~~(Registrant’s telephone number, including area code)~~

(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	SKIS	NASDAQ Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-‑2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒

Non-accelerated filer ☒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 ☐ No ☒

As of ~~March~~September 119, 2019, 15,~~165~~227,~~832~~562 shares of the registrant’s common stock were outstanding.

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Introductory Note

On July 20, 2019, Peak Resorts, Inc. (“we,” “us,” “Peak Resorts,” or the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Vail Holdings, Inc., a Colorado corporation (“Parent”), VRAD Holdings, Inc., a Missouri corporation and direct, wholly-owned subsidiary of Parent (“Merger Sub”), and, solely for the purposes stated in Section 9.14 of the Merger Agreement, Vail Resorts, Inc., a Delaware corporation (“Vail Resorts”), relating to the proposed acquisition of the Company by Parent. The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will be merged with and into the Company (the “Merger”) with the Company continuing as the surviving corporation in the Merger as a direct, wholly-owned subsidiary of Parent and an indirect, wholly-owned subsidiary of Vail Resorts. Upon completion of the Merger, the Company will cease to be a publicly traded company and: (i) each share of the Company’s common stock issued and outstanding immediately prior to the Merger (other than Excluded Shares, as the term is defined in the Merger Agreement) will cease to be outstanding and will be converted into the right to receive $11.00 in cash, without interest and less any applicable withholding taxes; and (ii) each share of Series A Cumulative Convertible Preferred Stock (the “Series A Preferred Stock”) that is outstanding immediately prior to the Merger, other than Excluded Shares, will be converted into the right to receive an amount equal to the sum of: (A) $1,748.81, the product of $11.00 multiplied by the amount equal to the quotient of $1,000 divided by $6.29; plus (B) the aggregate amount of all accrued and unpaid dividends on the applicable issuance of Series A Preferred Stock as of the Merger, in cash without interest.

The closing of the Merger is subject to various closing conditions, each of which is more fully described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 22, 2019 and the Proxy Statement (as defined below). See Note 2, “Merger Agreement and Proposed Merger” for additional information.

On August 6, 2019, the Company received a letter from the United States Forest Service (the “USFS”) confirming that renewal, issuance or reissuance of the Company’s USFS permits is not required as a consequence of consummation of the Merger. On August 28, 2019, the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired with respect to the proposed acquisition of the Company by Parent. These events satisfied two of the applicable conditions to closing of the acquisition set forth in the Merger Agreement.

The closing of the Merger is also subject to adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby by the affirmative vote of the holders of at least two-thirds of the outstanding shares of common stock and Series A Preferred Stock entitled to vote at a special meeting of shareholders (the “Special Meeting”) as of the August 19, 2019 record date for the Special Meeting, voting together as a single class on an as-converted basis. On August 20, 2019, the Company filed a definitive proxy statement on Schedule 14A relating to the Merger (the “Proxy Statement”), which the Company intends to hold on September 20, 2019.

The acquisition is expected to be completed in fall 2019, however, consummation of the Merger is subject to the satisfaction or (to the extent permitted by applicable law) waiver of the conditions to the completion of the Merger more fully described in the Proxy Statement.

Unless stated otherwise, any forward-looking information contained in this report does not take into account or give any effect to the impact of the proposed Merger.

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TABLE OF CONTENTS

PART I FINANICAL INFORMATION

		Page	~~Page~~
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of January 31, 2019 (unaudited) and April 30, 2018		3
	Condensed Consolidated Balance Sheets as of July 31, 2019 (unaudited) and April 30, 2019	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended January 31, 2019 and 2018 (unaudited)		5
	Condensed Consolidated Statements of Operations for the Three Months Ended July 31, 2019 and 2018 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended January 31, 2019 and 2018 (unaudited)		6
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended July 31, 2019 and 2018 (unaudited)	5
	Notes to Unaudited Condensed Consolidated Financial Statements		8
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended July 31, 2019 and 2018 (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		33
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 4.	Controls and Procedures		33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Part II	OTHER INFORMATION
Item 4.	Controls and Procedures	27
Item 1.	Legal Proceedings		34
Part II	OTHER INFORMATION
Item 1A.	Risk Factors		34
Item 1.	Legal Proceedings	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		38
Item 1A.	Risk Factors	28
Item 3.	Defaults Upon Senior Securities		38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 4.	Mine Safety Disclosures		38
Item 3.	Defaults Upon Senior Securities	31
Item 5.	Other Information		38
Item 4.	Mine Safety Disclosures	31
Item 6.	Exhibits		39
Item 5.	Other Information	31
SIGNATURES			40
Item 6.	Exhibits	31
EXHIBIT INDEX		32	41
SIGNATURES		34

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PART I: FINANCIAL INFORMATION

~~Item~~ ITEM 1. ~~Financial~~ ~~Statements~~FINANCIAL STATEMENTS

Peak Resorts Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(dollars in thousands, except per share amounts)

		January 31,		April 30,
	July 31,		April 30,
Assets		2019		2018
	2019		2019
	(Unaudited)	~~(Unaudited)~~
Current assets:
Assets
Cash and cash equivalents	$	27,235	$	23,091
Current assets:
Restricted cash		1,542		1,163
Cash and cash equivalents	$	14,451	$	30,194
Income tax receivable		3,283		-
Restricted cash		4,173		5,240
Accounts receivable		5,525		8,560
Income tax receivable		6,454		—
Inventory		4,713		1,971
Accounts receivable		2,729		9,514
Prepaid expenses and deposits		8,027		12,731
Inventory		2,478		2,544
Total current assets		50,325		47,516
Prepaid expenses and other current assets		11,632		14,984
Property and equipment, net		293,209		204,095
Total current assets		41,917		62,476
Land held for development		38,652		37,634
Property and equipment, net		286,262		287,121
Restricted cash, construction		-		12,175
Land held for development		38,664		38,657
Goodwill		1618,~~659~~173		418,~~382~~173
Intangible assets, net		3,~~163~~032		~~731~~3,106
Other assets		1,~~601~~113		1,~~797~~115
Total assets	$	~~403~~389,~~609~~161	$	~~308~~410,~~330~~648
Liabilities and Stockholders' Equity
Current liabilities:
Revolving lines of credit	$	12,415	$	12,415
Current maturities of long-term debt		21,~~145~~214		21,~~614~~513
Accounts payable and accrued expenses		1916,~~884~~971		1214,~~079~~207
Accrued salaries, wages and related taxes and benefits		42,~~879~~506		~~922~~6,281
Unearned revenue		2822,~~641~~519		1622,~~084~~153
Current portion of deferred gain on sale/leaseback		333		333
Total current liabilities		6855,~~297~~958		4456,~~447~~902
Long-term debt, including related party
Long-term debt, including related party debt of $50,049 and $50,058, less current maturities, respectively		216,221		215,869
debt of $50,068 and $0, less current maturities		216,033		165,837
Deferred gain on sale/leaseback		2,097		2,180
Deferred gain on sale/leaseback		2,262		2,512
Deferred income taxes		18,384		18,384
Deferred income taxes		16,296		7,809
Other liabilities		651		770
Other liabilities		852		504
Total liabilities		293,311		294,105
Total liabilities		303,740		221,109
Series A preferred stock, $0.01 par value per share, $1,000 liquidation preference per share, 40,000 shares authorized, issued and outstanding		34,718		34,318
Series A preferred stock, $0.01 par value per share, $1,000 liquidation
Commitments and contingencies
preference per share, 40,000 shares authorized,
Stockholders' equity:
40,000 and 20,000 shares issued and outstanding		33,918		17,401
Common stock, $0.01 par value per share, 40,000,000 shares authorized, 15,227,562 and 15,165,832 shares issued and outstanding, respectively		152		152
Commitments and contingencies
Additional paid-in capital		96,952		96,557
Accumulated deficit		(35,972)		(14,484)
Total stockholders' equity		61,132		82,225
Total liabilities and stockholders' equity	$	389,161	$	410,648

Stockholders' equity:
Common stock, $0.01 par value per share, 40,000,000 shares
authorized, 15,165,832 and 13,982,400 shares issued
and outstanding		152		140
Additional paid-in capital		96,491		86,631
Accumulated deficit		(30,692)		(16,951)
Total stockholders' equity		65,951		69,820
Total liabilities and stockholders' equity	$	403,609	$	308,330

See accompanying notes to unaudited condensed consolidated financial statements.

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Peak Resorts, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(dollars in thousands, except per share amounts)

(Unaudited)

		Three months endedJanuary 31,						Nine months endedJanuary 31,
		Three months ended July 31,
		2019			2018			~~2019~~		~~2018~~
Net revenue	$	~~83,977~~$	9,662	$	~~59,272~~$	7,007	$	~~98,968~~	$	~~75,630~~
Operating expenses:
Resort operating costs		~~49,049~~	19,870		~~35,982~~	14,271		~~77,038~~		~~64,642~~
Depreciation and amortization		~~6,809~~	6,493		~~3,379~~	3,298		~~13,541~~		~~9,678~~
General and administrative		~~3,322~~	3,636		~~1,353~~	1,256		~~6,481~~		~~4,130~~
Real estate and other non-income taxes		888			579			2,180		1,734
Land and building rent			342			336
Land and building rent		352			362			1,024		1,054
Real estate and other taxes			895			687
Restructuring and impairment charges		-			1,586			190		1,586
Restructuring charges			—			177
Income (loss) from operations		23,557			16,031			(1,486)		(7,194)
Loss from operations			(21,574)			(13,018)
Other (expense) income:
Interest, net of amounts capitalized of
Interest, net of amounts capitalized of $0 and $173 in 2019 and 2018, respectively			(4,632)			(3,479)
$18 and $516 in 2019 and $206
Gain on sale/leaseback			83			83
and $1,151 in 2018, respectively		(4,458)			(3,529)			(11,283)		(9,736)
Other income			60			32
Gain on sale/leaseback		84			84			250		250
			(4,489)			(3,364)
Other income		22			28			69		117
Loss before income taxes			(26,063)			(16,382)
		(4,352)			(3,417)			(10,964)		(9,369)
Income tax benefit			(6,454)			(4,587)
Income (loss) before income taxes		19,205			12,614			(12,450)		(16,563)
Net loss		$	(19,609)		$	(11,795)
Income tax expense (benefit)		5,574			3,433			(3,283)		(8,235)
Less declaration and accretion of Series A preferred stock dividends			(800)			(400)
Net income (loss)	$	13,631		$	9,181		$	(9,167)	$	(8,328)
Net loss attributable to common shareholders		$	(20,409)		$	(12,195)
Less declaration and accretion of Series A preferred
Basic and diluted loss per common share		$	(1.33)		$	(0.87)
stock dividends		(720)			(400)			(1,520)		(1,200)
Cash dividends declared per common share		$	0.07		$	0.07
Net income (loss) attributable to common shareholders	$	12,911		$	8,781		$	(10,687)	$	(9,528)
Cash dividends declared per preferred share		$	20.00		$	20.00
Basic earnings (loss) per common share	$	0.86		$	0.62		$	(0.74)	$	(0.68)
Diluted earnings (loss) per common share	$	0.66		$	0.53		$	(0.74)	$	(0.68)
Cash dividends declared per common share	$	0.07		$	0.07		$	0.21	$	0.21
Cash dividends declared per preferred share	$	20.00		$	20.00		$	60.00	$	40.00

See accompanying notes to unaudited condensed consolidated financial statements.

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Peak Resorts, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(dollars in thousands)

(Unaudited)


				Additional
	Common Stock			Paid-in		Accumulated
	Shares	Dollars		Capital		Deficit		Total

Balances, April 30, 2018	13,982,400	$	140	$	86,631	$	(16,951)	$	69,820

Net loss	—		—		—		(11,795)		(11,795)
Dividends declared - common stock	—		—		—		(979)		(979)
Accretive dividend - preferred stock	—		—		—		(400)		(400)
Dividends paid as restricted stock units	—		—		10		(10)		—
Stock based compensation	—		—		46		—		46
Balances, July 31, 2018	13,982,400	$	140	$	86,687	$	(30,135)	$	56,692


Balances, April 30, 2019	15,165,832	$	152	$	96,557	$	(14,484)	$	82,225

Net loss	—		—		—		(19,609)		(19,609)
Dividends declared - common stock	—		—		—		(1,066)		(1,066)
Dividends declared - preferred, including $400 of accretive dividends	—		—		—		(800)		(800)
Dividends paid as restricted stock units	—		—		13		(13)		—
Shares issued upon vesting of restricted stock units	61,730		—		—		—		—
Stock based compensation	—		—		382		—		382
Balances, July 31, 2019	15,227,562	$	152	$	96,952	$	(35,972)	$	61,132

See accompanying notes to unaudited condensed consolidated financial statements.

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Peak Resorts, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

(Unaudited)

	Nine months endedOctober 31,
	Three months ended July 31,
	January 31,
	2019		2018
	2019		2018
Cash flows from operating activities:
Cash flows from operating activities:
Net loss	$	(19,609)	$	(11,795)
Net loss	$	(9,167)	$	(8,328)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash
Depreciation and amortization of property and equipment and intangibles		6,493		3,298
provided by (used in) operating activities:
Stock based compensation		382		56
Depreciation and amortization of property and equipment
Amortization of deferred financing costs		350		271
and intangibles		13,541		9,678
Amortization of original issue premium		(8)		—
Amortization of deferred financing costs		884		754
Amortization of other liabilities		(9)		(9)
Loss on disposal of fixed assets		424		-
Gain on sale/leaseback		(83)		(83)
Stock based compensation		132		205
Changes in operating assets and liabilities:
Amortization of original issue premium		(6)		-
Accounts receivable		6,785		5,688
Amortization of other liabilities		(27)		(27)
Income tax receivable		(6,454)		(4,587)
Gain on sale/leaseback		(250)		(250)
Inventory		66		(126)
Non-cash impairment loss		-		1,586
Prepaid expenses and other current liabilities		3,352		2,697
Deferred income tax		-		(10,447)
Other assets		2		(716)
Changes in operating assets and liabilities:
Accounts payable, accrued expenses and other liabilities		2,143		(1,700)
Income tax receivable		(3,283)		-
Accrued salaries, wages and related taxes and benefits		(3,775)		114
Accounts receivable		3,550		(884)
Unearned revenue		366		672
Inventory		(1,773)		(1,181)
Net cash used in operating activities		(9,999)		(6,220)
Prepaid expenses and deposits		5,809		(8,090)
Cash flows from investing activities:
Other assets		196		(27)
Additions to property and equipment		(5,053)		(8,177)
Accounts payable and accrued expenses		2,763		5,896
Additions to land held for development		(7)		(6)
Accrued salaries, wages and related taxes and benefits		3,298		1,425
Net cash used in investing activities		(5,060)		(8,183)
Unearned revenue		7,058		4,898
Cash flows from financing activities:
Net cash provided by (used in) operating activities		23,149		(4,792)
Payments on long-term debt and capital lease obligations		(289)		(533)
Cash flows from investing activities:
Distributions to stockholders		(1,462)		(1,379)
Business combination, net of cash acquired of $1,026 and $0		(65,667)		-
Net cash used in financing activities		(1,751)		(1,912)
Additions to property and equipment		(28,461)		(26,664)
Net decrease in cash, cash equivalents and restricted cash		(16,810)		(16,315)
Additions to land held for development		(18)		(24)
Cash, cash equivalents, and restricted cash, beginning of period		35,434		36,429
Net cash used in investing activities		(94,146)		(26,688)
Cash, cash equivalents, and restricted cash, end of period	$	18,624	$	20,114
Cash flows from financing activities:
Supplemental cash flow information:
Borrowings on long-term debt		50,174		102
Cash paid interest	$	934	$	48
Proceeds from issuance of preferred stock		16,197		-
Supplemental disclosure of noncash investing and financing activities:
Proceeds from issuance of stock warrants		3,730		-
Assets under construction included in accounts payable	$	1,418	$	353
Distributions to stockholders		(4,137)		(3,737)
Accretive dividends - Series A preferred stock	$	400	$	—
Payments on long-term debt and capital lease obligations		(1,796)		(13,217)
Accrued dividends, common and preferred	$	1,466	$	1,379
Payment of deferred financing costs		(823)		(138)
Payments on lines of credit		-		(4,500)
Borrowings on lines of credit		-		12,375

Net cash provided by (used in) financing activities		63,345		(9,115)
Net decrease in cash, cash equivalents
and restricted cash		(7,652)		(40,595)
Cash, cash equivalents, and restricted cash, beginning of period		36,429		78,478
Cash, cash equivalents, and restricted cash, end of period	$	28,777	$	37,883
Supplemental cash flow information:
Cash paid interest, including amounts prepaid
of $3,392 and $3,341, respectively.	$	5,402	$	13,431
Supplemental disclosure of noncash investing
and financing activities:
Capital lease agreements to acquire equipment	$	1,294	$	-
Assets under construction included in accounts payable	$	796	$	-
Reclassification of EB-5 funds from escrow to long term debt	$	-	$	500
Accretive dividends - Series A preferred stock	$	320	$	400
Accrued dividends, common and preferred	$	1,379	$	1,379

See accompanying notes to unaudited condensed consolidated financial statements.

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PEAK RESORTS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

(Unaudited)

Note 1. Basis of Presentation

Unaudited Interim Condensed Consolidated Financial Statements

The unaudited interim condensed consolidated financial statements of Peak Resorts, Inc. and its subsidiaries (the “Company”) reflect all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of its financial position, results of operations and cash flows. The results for the three ~~and nine~~ months ended ~~January~~July 31, 2019 are not necessarily indicative of the results expected for a full fiscal year. Due to the seasonality of the ski industry, the Company typically incurs significant operating losses during its first and second fiscal quarters. These condensed 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 April 30, ~~2018~~2019, filed with the Securities and Exchange Commission.

Nature of Business

The Company is a leading owner and operator of high-quality, individually branded ski resorts in the U.S. and, as of ~~January~~ July 31, 2019, operated 17 ski resorts primarily located in the Northeast, Mid-Atlantic and Midwest United States, 16 of which are owned. The majority of the resorts are located within 100 miles of major metropolitan markets, including New York City, Boston, Philadelphia, Baltimore, Washington D.C., Cleveland, Kansas City and St. Louis, enabling day and overnight drive accessibility. The Company’s resorts are comprised of nearly 2,200 acres of skiable terrain appropriate to a wide range of ages and abilities. The activities, services and amenities available at the Company’s resorts include skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction, zip ~~lines~~tours, golf, mountain coasters, mountain biking, hiking and other summer activities. The Company operates in a single business segment—ski resort operations.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Peak Resorts, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. On November 21, 2018, the Company completed its acquisition of all of the issued and outstanding shares of common stock of Snow Time, Inc. (“Snow Time”) ~~for~~(see ~~consideration of cash and shares of the Company’s common stock. See~~ Note 3 ~~for a description of the consideration and acquisition terms~~). These financial statements reflect the activity of Snow Time for the period since its acquisition.

Dividends

~~The~~Generally, the declaration and payment of future dividends to holders of the Company’s common stock will be at the sole discretion of the Company’s board of directors, and will depend on many factors, including the Company’s actual results of operations, financial condition, capital requirements, contractual restrictions, restrictions in the Company’s outstanding debt agreements, preference of the Company’s Series A Cumulative Convertible Preferred Stock, par value $0.01 per share (“Series A Preferred Stock”), economic conditions and other factors that could differ materially from the Company’s current expectations.

~~Cumulative~~From the date that is nine months following the date of issuance, cumulative dividends accrue on the outstanding shares of Series A Preferred Stock on a daily basis in arrears at the rate of 8% per annum on the liquidation value of $1,000 per share. All accrued and accumulated dividends on the Series A Preferred Stock shall be paid prior and in preference to any dividend or distribution on any junior securities, including the Company’s common stock, provided that the Company may declare or pay any dividend or distribution payable on the common stock in shares of common stock. The Certificate of Designation of the Series A Preferred Stock provides that, until the earlier of (i) such date as no Series A Preferred Stock

or Table ~~distribution payable on the common stock in shares~~ of common stock. The Certificate of Designation of the Series A Preferred Stock provides that, until the earlier of (i) such date as no Series A Preferred Stock remains outstanding and (ii) January 1, 2027, the Company is prohibited from paying any dividend on capital stock when there are accrued or unpaid dividends with respect to the Series A Preferred Stock. Contents

remains outstanding and (ii) January 1, 2027, the Company is prohibited from paying any dividend on capital stock when there are accrued or unpaid dividends with respect to the Series A Preferred Stock.

As discussed in Note 2, “Merger Agreement and Proposed Merger,” on July 20, 2019, the Company, entered into an Agreement and Plan of Merger with Vail Holdings, Inc., a Colorado corporation (“Parent”), VRAD Holdings, Inc., a Missouri corporation and direct, wholly-owned subsidiary of Parent (“Merger Sub”), and, solely for the purposes stated in Section 9.14 of the Merger Agreement (as defined in Note 2), Vail Resorts, Inc., a Delaware corporation (“Vail Resorts”), relating to the proposed acquisition of the Company by Parent. The Company agreed in the Merger Agreement to suspend the payment of any future dividends, other than the quarterly cash dividend declared on July 2, 2019 of $0.07 per outstanding share of its common stock, which was paid on August 9, 2019 to common shareholders of record as of July 25, 2019, and the Series A Preferred Stock dividend of $400 in the aggregate, which was paid on August 9, 2019 to the holder of the Company’s Series A Preferred Stock. Dividends on the Series A Preferred Stock will continue to accrue.

Cash and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the condensed consolidated balance sheet to the total of the same such amounts shown in the condensed consolidated statements of cash flow:

	January 31,
	July 31,
	2019		2018
Cash and cash equivalents	$	2714,~~235~~451	$	1910,~~086~~085
Restricted cash		14,~~542~~173		1,~~338~~440
Restricted cash, construction		-—		178,~~459~~589
Total cash, cash equivalents, and restricted
Total cash, cash equivalents, and restricted cash, end of period	$	18,624	$	20,114
cash, end of period	$	28,777	$	37,883

DRecently Issued Accounting Standards

Note 2. Recently Issued Accounting Standards

The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, which provides that an emerging growth company may take advantage of an extended transition period for complying with new or revised accounting standards. As an emerging growth company, the Company may delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-‑02, “Leases (Topic 842),” which requires lessees to recognize most leases on the balance sheet. This ASU requires modified retrospective adoption and will be applicable for the Company as of April 30, 2020, with early adoption permitted. The Company is currently evaluating the impact the adoption of this ASU will have on ~~its~~the Company’s consolidated financial statements, including an evaluation of the effect the standard will have on the Company’s deferred gain on sale/leaseback. While the Company expects the pattern of expense for leases it currently classifies as operating will be similar ~~under~~between the old and new guidance, it expects adoption of the new standard will result in a significant increase in assets and liabilities for right of use assets and lease obligations, respectively, for leases it currently classifies as operating. As of ~~January~~July 31, 2019, future minimum lease payments under operating leases was approximately $1314,~~019~~000.

In May 2014, the FASB issued ASU 2014-‑09, “Revenue from Contracts with Customers (Topic 606),” which was subsequently modified by other ASUs from 2015 through 2017. This ASU, as amended, provides new guidance for the recognition of revenue and provides for a five-step analysis of transactions to determine when and how revenue is recognized. This ASU establishes a core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This ASU may be adopted using either a full or modified retrospective approach and will be applicable for the Company as of April 30, 2020, with early adoption permitted. The Company expects to adopt this ASU using the modified retrospective approach and does not expect the adoption of this ASU will have a material impact on its consolidated financial statements.

Table of Contents

Note 2. Merger Agreement and Proposed Merger

Merger Agreement

On July 20, 2019 (the “Signing Date”), the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Parent, Merger Sub, and, solely for the purposes stated in Section 9.14 of the Merger Agreement, Vail Resorts, relating to the proposed acquisition of the Company by Parent.

The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will be merged with and into the Company (the “Merger”) with the Company continuing as the surviving corporation in the Merger, and, at the effective time of the Merger (the “Effective Time”): (i) each share of common stock of the Company, par value $0.01 per share issued and outstanding immediately prior to the Effective Time, other than Excluded Shares (as defined in the Merger Agreement), will cease to be outstanding and will be converted into the right to receive $11.00 in cash, without interest (the “Common Merger Consideration”); (ii) each share of Series A Preferred Stock, that is outstanding immediately prior to the Effective Time, other than Excluded Shares, will be converted into the right to receive an amount equal to the sum of: (a) $1,748.81; plus (b) the aggregate amount of all accrued and unpaid dividends on the applicable issuance of Series A Preferred Stock as of the Effective Time, in cash without interest.

Pursuant to the Merger Agreement, at the Effective Time: (i) each restricted stock unit (“RSU”) that was granted pursuant to the Company’s 2014 Equity Incentive Plan, as amended from time to time (the “Equity Incentive Plan”), that remains outstanding immediately prior to the Effective Time will become fully vested immediately prior to the Effective Time and will be cancelled and extinguished in exchange for the right to receive an amount, in cash, without interest, equal to the (a) Common Merger Consideration, multiplied by (b) number of RSUs held by such holder, less withholdings for any applicable taxes; and (ii) each warrant to purchase shares of common stock that is issued and outstanding immediately prior to the Effective Time (collectively, the “Warrants”), will be cancelled in exchange for the right to receive an amount in cash, without interest, equal to the product of: (a) the aggregate number of shares of common stock in respect of such Warrant; multiplied by (b) the excess of the Common Merger Consideration over the per share exercise price under such Warrant.

The board of directors of the Company (i) determined that the terms of the Merger Agreement, the Merger and the other transactions contemplated thereby are fair to, advisable and in the best interests of, the Company and its shareholders; (ii) adopted and approved the Merger Agreement and declared advisable the Merger Agreement and the completion by the Company of the Merger and the other transactions contemplated thereby; (iii) directed that the Merger Agreement be submitted to the shareholders of the Company for adoption; and (iv) resolved to recommend that the Company’s shareholders vote in favor of the adoption of the Merger Agreement and approve the Merger and the other transactions contemplated thereby. The closing of the Merger is subject to, among other conditions, adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby by the affirmative vote of the holders of at least two-thirds of the outstanding shares of common stock and Series A Preferred Stock entitled to vote at a special meeting of shareholders (the “Special Meeting”) as of the August 19, 2019 record date for the Special Meeting, voting together as a single class on an as-converted basis (“Company Shareholder Approval”). On August 20, 2019, the Company filed a definitive proxy statement on Schedule 14A relating to the Merger (the “Proxy Statement”), which the Company intends to hold on September 20, 2019.

In addition to the Company Shareholder Approval condition, consummation of the Merger is also subject to various customary conditions, including, but not limited to, the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and that the Company or its subsidiaries shall have, if necessary, obtained any consent, transfer, renewal, issuance or reissuance with respect to the Company’s United States Forest Service (the “USFS”) permits. On August 6, 2019, the Company received a letter from the USFS confirming that renewal, issuance or reissuance of the Company’s USFS permits is not required as a consequence of consummation of the Merger. On August 28, 2019, the applicable waiting period under the HSR Act expired with respect to the proposed acquisition of the Company by Parent. These events satisfied two of the applicable conditions to closing of the acquisition set forth in the Merger Agreement.

In Table March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which provides new guidance related to accounting for share-based payments. This ASU requires entities to record the income tax effect of share-based payments when the awards vest or are settled and clarifies the cash flow statement presentation of excess tax benefits and withholding tax payments. In addition, the ASU allows for a policy election to account for forfeitures either upon occurrence or by estimating forfeitures. This ASU requires prospective adoption and will be applicable for the Company as of April 30, 2019, with early adoption permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements. Contents

~~Note~~The 3Company is subject to customary restrictions on its ability to solicit, initiate, facilitate or encourage Alternative Proposals (as defined in the Merger Agreement) from third parties and to provide non-public information to, and participate in discussions and engage in negotiations with, third parties regarding Alternative Proposals, with customary exceptions regarding the board’s fiduciary duties under applicable law. The ~~Snow~~board ~~Time~~has ~~Acquisition~~agreed to recommend that the Company’s shareholders vote to adopt and approve the Merger Agreement, the Merger and the other transactions contemplated thereby, subject to certain customary exceptions regarding the board’s fiduciary duties under applicable law.

OnThe ~~November~~Merger ~~21,~~Agreement ~~2018~~contains certain termination rights, including the right of the Company ~~completed~~to ~~its~~terminate ~~acquisition~~the ofMerger ~~all~~Agreement ofto accept a Superior Proposal (as defined in the ~~issued~~Merger Agreement), and ~~outstanding~~provides ~~shares~~that, ofupon ~~common~~termination ~~stock~~ of ~~Snow~~the ~~Time~~Merger ~~pursuant~~Agreement toby the ~~Stock~~Company ~~Purchase~~or ~~Agreement~~Parent (upon specified conditions, the ~~“Purchase~~Company ~~Agreement”)~~will ~~entered~~be ~~into~~required ~~with~~to ~~the~~pay ~~stockholders~~Parent ofa ~~Snow~~termination ~~Time~~fee of $9,220 (the “~~Sellers~~Termination Fee”),. ~~dated~~If asthe ofMerger ~~September~~Agreement ~~24,~~is ~~2018~~terminated (by Parent or the ~~“Snow~~ ~~Time~~Company ~~Acquisition).~~following ~~Consideration~~the ~~for~~failure to obtain the ~~Snow~~Company ~~Time~~Shareholder ~~Acquisition~~Approval ~~totaled~~at ~~$71~~the Special Meeting absent a pending Alternative Proposal,~~643,~~ ~~which~~then ~~consisted~~the Company must reimburse Parent all of ~~$65,667~~its fees and expenses incurred in ~~cash,~~connection ~~net~~with ofthe ~~cash~~Merger ~~acquired~~Agreement ofand the transactions contemplated thereby, up to $13,~~026,~~000 ~~and~~in 1the aggregate. In addition,~~183,432~~ ~~shares~~subject ofto ~~common~~certain ~~stock~~exceptions ~~with~~and alimitations ~~value~~set offorth $5in the Merger Agreement,~~976~~ ~~based~~either onparty ~~the~~may ~~Company’s~~terminate ~~closing~~the ~~stock~~Merger ~~price~~Agreement onif the ~~day~~Merger is not consummated by January 21, 2020 (the ~~transaction~~“End ~~closed.~~Date”), ~~The~~subject ~~number~~to the ability of ~~shares~~either ~~issued~~party to twice extend the ~~Sellers~~End ~~was~~Date ~~determined~~for ~~pursuant~~an additional 90 days each time, in certain circumstances. Subject to certain conditions and limitations set forth in the ~~Purchase~~Merger Agreement, ~~which~~upon ~~provided~~the ~~that~~termination of the ~~Sellers~~Merger ~~had~~Agreement by the ~~right~~Parent toor ~~receive $6~~Company,~~000~~ ofthe ~~common~~Merger ~~stock~~Agreement asalso ~~determined~~provides ~~using~~for the ~~average~~payment ~~closing~~by ~~price~~the Company to Parent of the ~~common~~Termination ~~stock~~Fee ~~for~~if the 20Company ~~trading~~consummates ~~days~~a ~~immediately~~transaction ~~preceding~~with ~~the~~respect ~~closing,~~to ~~which~~an ~~was~~Alternative ~~$5.07.~~Proposal ~~The~~within ~~Company~~12 ~~acquired~~months ~~Snow~~after ~~Time~~such intermination, ~~order~~or tosigns ~~expand~~a ~~its~~definitive ~~portfolio~~agreement ofwith ~~resorts.~~respect ~~See~~to ~~Note~~such 5Alternative ~~for~~Proposal awithin ~~description~~12 ofmonths ~~the~~after ~~financing~~such ~~for~~termination ~~the~~and ~~Snow~~such ~~Time~~transaction ~~Acquisition~~is subsequently consummated.

~~Snow~~The ~~Time’s~~Company ~~resort~~has ~~properties~~made ~~include~~customary ~~Liberty~~representations, ~~Mountain~~warranties ~~Resort,~~and ~~Roundtop~~covenants ~~Mountain~~in ~~Resort~~the ~~and~~Merger ~~Whitetail~~Agreement, ~~Resort~~including, ~~which~~among ~~are~~others, ~~day~~covenants ~~and~~(1) ~~overnight~~to ~~drive~~conduct ~~ski~~its ~~resorts~~business ~~located~~ in ~~southern~~the ~~Pennsylvania~~ordinary ~~serving~~course during the ~~Baltimore~~period between the Signing Date and ~~Washington~~the Effective Time, ~~D.C.~~(2) ~~metropolitan~~not ~~areas.~~to ~~The~~engage ~~acquired~~in ~~resorts~~certain ~~also~~types ~~include~~of ~~two~~transactions ~~18-hole~~during ~~golf~~this ~~courses,~~period aunless ~~115-room~~agreed ~~hotel~~to ~~and~~in ~~conference~~writing ~~center~~by Parent, (3) to convene and ~~more~~hold ~~than~~the 20Special ~~food~~Meeting ~~and~~for ~~beverage~~the ~~locations~~purpose ~~across~~of obtaining the ~~three~~Company ~~resorts~~Shareholder Approval, ~~among~~(4) ~~other~~subject ~~amenities.~~to ~~Net~~certain ~~revenue~~conditions, ~~and~~not ~~earnings~~to ~~before~~withhold, ~~income~~withdraw, ~~tax~~amend ~~from~~or ~~the~~modify ~~resorts~~in ~~acquired~~a inmanner ~~the~~adverse ~~Snow~~to ~~Time~~Parent ~~Acquisition~~or ofMerger ~~$18~~Sub,~~984~~ ~~and~~the ~~$3,266,~~recommendation ~~respectively,~~of ~~was~~the ~~included~~board inthat the ~~condensed~~Company’s ~~consolidated~~shareholders ~~statements~~approve the adoption of ~~operations~~the ~~for~~Merger ~~three~~Agreement, and ~~nine~~(5) ~~months~~to ~~ended~~take ~~January~~any ~~31,~~and ~~2019~~all action needed to obtain any required antitrust approval for the Merger.

~~Purchase~~The ~~price~~Merger ~~allocation~~is expected to be completed in fall 2019, however, consummation of the Merger is subject to the satisfaction or (to the extent permitted by applicable law) waiver of the conditions to the completion of the Merger more fully described in the Proxy Statement.

The ~~following~~foregoing ~~table~~summary ~~summarizes~~of the ~~Company’s~~Merger ~~preliminary~~Agreement ~~estimate~~does ofnot ~~the~~purport ~~fair~~to ~~value~~be ofcomplete ~~the~~and ~~assets~~is ~~acquired~~subject to, and ~~liabilities~~qualified ~~assumed~~ in ~~the~~its ~~Snow~~entirety ~~Time Acquisition as of November 21~~by, ~~2018.~~the ~~The~~full ~~Company~~text isof in the ~~process~~Merger ofAgreement, ~~completing~~which ~~various~~was ~~valuation~~filed ~~studies~~as ~~which,~~Exhibit ~~when~~2.1 ~~completed,~~to ~~may impact~~ the ~~estimated~~Company’s ~~fair~~Current ~~value~~Report ofon ~~property~~Form ~~and~~8-K filed ~~equipment,~~on ~~identifiable~~July ~~intangible assets~~22, ~~goodwill, unearned revenue, deferred taxes, and other assets and liabilities~~2019.

Tangible assets and liabilities:
Accounts receivable	$	515
Inventories		969
Property and equipment		72,670
Land held for development		1,000
Other current assets		1,105
Accounts payable and accrued expenses		(4,473)
Accrued salaries, wages and related taxes and benefits		(659)
Unearned revenue		(5,499)
Deferred income taxes		(8,487)
Other long-term liabilities		(300)
Intangible assets:
Identifiable intangible asset		2,525
Goodwill		12,277
Total preliminary purchase price allocation	$	71,643

Voting and Support Agreements

~~Goodwill~~On the Signing Date, concurrently with the execution of the Merger Agreement, Cap 1 LLC, an affiliate of a member of the board (“Cap 1”), Richard S. Sackler, M.D. (“RS”), the Richard and ~~Identifiable~~Beth ~~Intangible~~Sackler ~~Assets~~Foundation, Inc. (the “Foundation”), David Sackler (“DS”), Timothy D. Boyd, the Company’s Chief Executive Officer, President, Chairman of the Board (“TB”), the Timothy D. Boyd Revocable Trust U/A 8/27/1996, for which Mr. Boyd is the trustee (the “TB Trust”), the Timothy D. Boyd 2011 Family Trust U/A 1/28/2011, for which Melissa K. Boyd, Mr. Boyd’s spouse, is the trustee (the “TB Family Trust”), the Melissa K. Boyd Revocable Trust U/A 8/27/1996, for which Ms. Boyd is the trustee (the “MB Trust”), and Jesse Boyd and Jessica Boyd JTWROS, Mr. Boyd’s son and daughter in law (“JB” and, together with Cap 1, RS, the Foundation, DS, TB, the TB Trust, the TB Family Trust and the MB Trust, the “Supporting Shareholders” and, each, a “Supporting Shareholder”), collectively, the Company’s largest shareholders, entered into Voting and Support Agreements (each, a “Support Agreement” and, collectively, the “Support Agreements”) with Parent.

Pursuant to the Support Agreements, each Supporting Shareholder agreed to, prior to the Expiration Date (as defined below) (i) vote (a) all shares of capital stock of the Company owned, beneficially or of record, by such Supporting

As Table of the date of these unaudited interim condensed consolidated financial statements, the Company has not completed certain valuation studies necessary to estimate the value of identifiable intangibles assets. Accordingly, the Company has established provisional values for the identifiable intangible assets which may be revised as the valuation studies are completed. The actual value of the identifiable intangible assets may differ from the provisional values, and the differences may be material. Identifiable intangible assets acquired include Snow Time’s customer relationships, trade names, liquor licenses, and water and land use agreements; and provisional values established for these items were $944, $689, $490 and $402, respectively. The liquor licenses and certain of the water rights agreements are considered indefinite lived intangible assets, and the provisional estimated useful lives of the customer lists, trade names and the remaining favorable agreements are 5 years, 15 years and 11 years, respectively. The Company expects the valuation studies will be completed during the fourth quarter of fiscal 2019.Contents

~~Goodwill~~Shareholder ~~is calculated~~ as of the ~~excess~~Signing Date, and (b) all additional shares of capital stock of the ~~purchase~~Company ~~price~~acquired ~~over~~by the ~~fair~~Supporting ~~value~~Shareholder, beneficially or of ~~net~~record, ~~tangible~~including by way of converting any convertible securities, during the period commencing with the execution and ~~identifiable~~delivery ~~intangible~~of ~~assets~~such ~~acquired.~~Support ~~Based~~Agreement ~~upon~~and expiring on the ~~preliminary~~Expiration ~~estimated~~Date, ~~fair~~among ~~value~~other things, (1) in favor of the ~~net~~adoption ~~tangible~~of ~~assets~~the ~~acquired~~Merger Agreement and the ~~provisional~~approval ~~values~~ of the ~~identifiable~~other ~~intangible~~transactions ~~assets~~contemplated ~~acquired~~thereby (collectively, the ~~goodwill~~“Proposed ~~recognized~~Transaction”), in(2) against the ~~Snow~~approval ~~Time~~or ~~Acquisition~~adoption ~~was~~of ~~$12~~any Alternative Proposal or any other proposal made in opposition to,~~131~~ or in competition with, the Proposed Transaction, and ~~represents~~(3) against any Alternative Proposal or any other action that would reasonably be expected to impede, interfere with, delay, postpone, discourage or adversely affect the ~~value~~consummation of the ~~assembled~~Proposed ~~workforce~~Transaction, and (ii) not approve any Alternative Transaction (as defined in the ~~additional~~Support ~~value~~Agreements) toby written consent. Notwithstanding the ~~Company~~foregoing, ~~expected~~the toSupporting beShareholders ~~derived~~entered ~~from~~into ~~synergies~~the Support Agreements solely in ~~combining~~their ~~the~~capacities ~~business~~as beneficial or record owners, and ~~other~~nothing ~~intangible~~therein ~~benefits. Approximately~~limits ~~$646~~or affects the actions taken by any director or officer of the ~~goodwill~~Company isaffiliated ~~expected~~with tothe beSupporting ~~deductible~~Shareholder ~~for~~solely ~~income~~in ~~tax~~his ~~purposes~~capacity as a director or officer of the Company in the exercise of his fiduciary duties as a director or officer of the Company.

The ~~Following~~shares iscovered aby ~~summary~~the Support Agreements constitute approximately 45.0% of the ~~Company’s~~issued ~~finite-lived~~ and ~~indefinite-lived~~outstanding ~~intangible~~shares ~~assets~~of common stock entitled to notice of, and ~~goodwill~~to vote at, the Special Meeting, as of ~~January~~the ~~31,~~date ~~2019~~of ~~and~~the ~~April~~Merger 30Agreement assuming the conversion of the Series A Preferred Stock, ~~2018~~as of the date of the Merger Agreement.

	January 31, 2019							April 30, 2018
		Gross carrying amount		Accumulated amortization		Net book value		Gross carrying amount		Accumulated amortization		Net book value
Trade name	$	1,457	$	166	$	1,291	$	768	$	120	$	648
Customer relationships		1,041		50		991		97		14		83
Water rights agreements		132		11		121		-		-		-
Total finite		2,630		227		2,403		865		134		731
Liquor licenses		490		-		490		-		-		-
Water and land use agreements		270		-		270		-		-		-
Total indefinite		760		-		760		-		-		-
	$	3,390	$	227	$	3,163	$	865	$	134	$	731
	Nine months ended January 31, 2019
		Beginning Balance		Additions		Ending Balance
Goodwill	$	4,825	$	12,277	$	17,102
Accumulated impairment losses		(443)		-		(443)
	$	4,382	$	12,277	$	16,659

The Support Agreements will terminate upon the earliest of (the “Expiration Date”): (i) such date and time as the Merger Agreement shall have been validly terminated pursuant to the terms of Article VIII thereof; (ii) the Effective Time; (iii) the date of any amendment, modification or supplement to the Merger Agreement that decreases the amount, or changes the form, of Merger Consideration (as defined in the Merger Agreement) payable to such Supporting Shareholder; (iv) the date upon which Parent and the Supporting Shareholder agree to terminate such Support Agreement in writing; and (v) the date upon which the board or any committee thereof makes a Company Adverse Recommendation Change (as defined in the Merger Agreement).

~~Pro~~The ~~Forma~~Company, ~~Information~~Snow Time Acquisition, Inc., a direct, wholly-owned subsidiary of the Company, and certain of its subsidiaries listed on the signature pages to the Cap 1 Support Agreement as “Subsidiary Guarantors” are also party to the Cap 1 Support Agreement. In addition to the provisions set forth in the other Support Agreements, the Cap 1 Support Agreement provides for, among other things, the consent of Cap 1, in its capacity as lender with respect to certain of the Company’s indebtedness, to the Merger.

The following unaudited pro forma information presents the combined results of operations of Peak Resorts, Inc. and Snow Time for the three and nine months ended January 31, 2019 and 2018, as if the Snow Time Acquisition had been completed on May 1, 2017, with adjustments to give effect to pro forma events that are directly attributable to the Snow Time Acquisition. The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings which may result from the consolidation of the operations of the companies. Accordingly, these unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the combined company that would have been

achieved had the acquisition occurred at the beginning of each period presented, nor are they intended to represent or be indicative of future results of operations.

The following table summarizes the unaudited pro forma revenues and earnings of the combined companies:

	Three months ended				Nine months ended
	January 31,				January 31,
	2019		2018		2019		2018
Net revenue	$	84,665	$	83,607	$	107,069	$	107,414
Income (loss) before income taxes	$	17,800	$	19,876	$	(24,633)	$	(18,685)

The pro forma net income was adjusted to give effect to pro forma events which are directly attributable to the Snow Time Acquisition. Adjustments to the pro forma net income for the three months ended January 31, 2019 included: i) the exclusion of $295 of acquisition-related costs incurred by Peak Resorts, Inc, ii) the addition of interest and financing cost amortization of $213 and iii) the reduction of $211 of net expense related to fair value adjustments to acquisition-date net assets acquired. Adjustments to the pro forma net income for the three months ended January 31, 2018 included the addition of interest and financing cost amortization of $971 and the reduction of $211 of net expense related to fair value adjustments to acquisition-date net assets acquired. Adjustments to the pro forma net income for the nine months ended January 31, 2019 included: i) the exclusion of $626 and $29 of acquisition-related costs incurred by Peak Resorts, Inc. and Snow Time, respectively, ii) the addition of interest and financing cost amortization of $2,171 and iii) the reduction of $349 of net expense related to fair value adjustments to acquisition-date net assets acquired. Adjustments to the pro forma net income for the nine months ended January 31, 2018 included the addition of interest and financing cost amortization of $2,913 and the reduction of $285 of net expense related to fair value adjustments to acquisition-date net assets acquired.

Transaction Costs

During the three ~~and nine~~ months ended ~~January~~July 31, 2019, the Company incurred ~~$295~~merger-related ~~and~~costs of $~~626~~2, ~~respectively~~308, ~~of acquisition related costs~~ which ~~have~~are ~~been~~ included in general and administrative ~~costs~~expenses in the condensed consolidated statements of operations.

Note 3. The Snow Time Acquisition

On November 21, 2018, the Company completed its acquisition of Snow Time in a transaction pursuant to which Snow Time became a wholly owned subsidiary of the Company (the “Snow Time Acquisition”).

Purchase Price Allocation

During the three months ended July 31, 2019, the Company completed various valuation studies and finalized its estimates of the fair value of the assets acquired and liabilities assumed in the Snow Time Acquisition.

Table of Contents

The following table summarizes the fair value of the net assets acquired in the Snow Time Acquisition on November 21, 2018.


Tangible assets and liabilities:
Accounts receivable	$	208
Inventories		969
Property and equipment		70,433
Land held for development		1,000
Other current assets		1,103
Accounts payable and accrued expenses		(4,166)
Accrued salaries, wages and related taxes and benefits		(714)
Unearned revenue		(5,499)
Deferred income taxes		(7,707)
Other long-term liabilities		(300)
Intangible assets:
Identifiable intangible asset		2,525
Goodwill		13,791
Net assets acquired	$	71,643

Pro Forma Information

The following unaudited pro forma information presents the combined results of operations of Peak Resorts, Inc. and Snow Time for the three months ended July 31, 2018, as if the Snow Time Acquisition had been completed on May 1, 2018, with adjustments to give effect to pro forma events that are directly attributable to the Snow Time Acquisition. The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings which may result from the consolidation of the operations of the companies. Accordingly, these unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the combined company that would have been achieved had the acquisition occurred at the beginning of each period presented, nor are they intended to represent or be indicative of future results of operations.

The following table summarizes the unaudited pro forma revenues and earnings of the combined companies for the three months ended July 31, 2018:


Net revenue	$	10,735
Net loss	$	(16,569)

The pro forma net loss was adjusted to give effect to pro forma events which are directly attributable to the Snow Time Acquisition. Adjustments to the pro forma net income for the three months ended July 31, 2018 included: i) the addition of interest and financing cost amortization of $973 and ii) the increase of $1,387 of net expense related to fair value adjustments to acquisition-date net assets acquired.

Note 4. Income Taxes

The Company’s effective income tax rates were 2924.18% and 2628.40% for the three ~~and nine~~ months ended ~~January~~July 31, 2019, ~~respectively. The 2019 effective rates give effect to the expected operating results of the resort properties acquired in the Snow Time Acquisition~~ and ~~the discrete tax effects of non-deductible costs incurred in connection with that acquisition. The November~~ 2018 ~~acquisition of the Snow Time resort properties will result in the inclusion of their operating results only for the ski season~~, ~~the profitable period of their annual operations~~respectively.

~~Income~~The effective tax ~~receivable~~rate offor ~~$3,283~~the asthree ofmonths ~~January~~ended July 31, 2019, iswas abased ~~result~~on of the expected full-year effective tax rate for the ~~Company’s fiscal~~ year ending April 30, ~~2019,~~2020 ~~applied~~and togives ~~its~~effect ~~loss~~to ~~before~~the ~~income~~discrete tax ~~for~~effects ~~the~~of ~~nine~~non-deductible ~~months~~costs ~~ended~~incurred ~~January~~in ~~31,~~connection ~~2019.~~with ~~Due to~~ the ~~seasonality~~Merger ~~of the ski industry, the Company typically incurs significant operating losses during its first and second fiscal quarters~~Agreement.

The 2018 tax rates reflect the enactment of the Tax Cuts and Job Act of 2017, which made broad changes to the federal tax code, including permanent reduction of the U.S. corporate statutory rate from 35.0% to 21.0% as of January 1, 2018. As the Company is a calendar year taxpayer, the income tax benefit for the nine months ended January 31, 2018 reflects the application of expiring tax rates through December 31, 2017 and the then newly enacted tax rates for the period after that date. This resulted in effective tax rates of 27.2% and 49.7% for the three and nine months ended January 31, 2018, respectively. The disproportionate appearance of the effective tax rate is a result of the seasonality of the Company’s earnings. In addition, the income tax benefit of $8,235 for the nine months ended January 31, 2018, included a discrete benefit of $124 resulting from re-measurement of deferred tax assets and liabilities as of December 31, 2017, based on the lower, newly enacted rates at which they were expected to reverse. 12

13Table of Contents

~~Deferred~~ Income ~~income~~ tax ~~assets~~receivable ~~and~~of ~~liabilities~~$6,454 ~~are~~as ~~measured~~of atJuly ~~enacted~~31, ~~tax~~2019, ~~rates~~is ina result of applying the ~~respective~~expected ~~jurisdictions~~tax ~~where~~rate for the Company’s ~~operates.~~fiscal Inyear ~~assessing~~ending ~~the~~April ~~ability~~30, 2020, to ~~realize~~its ~~deferred~~loss before income tax ~~assets,~~for the ~~Company~~three ~~considers~~months ~~whether~~ended itJuly is31, ~~more~~2019. ~~likely~~Due ~~than~~to ~~not~~the ~~that~~seasonality ~~some~~of ~~portion~~the orCompany’s ~~all~~business, ~~deferred~~the ~~tax~~Company ~~assets~~typically ~~will~~incurs ~~not~~significant beoperating ~~realized,~~losses ~~and~~during aits ~~valuation~~first ~~allowance~~and ~~would~~second befiscal ~~provided if necessary~~quarters.

InDeferred ~~connection~~income ~~with~~tax ~~the~~assets ~~acquisition~~and ofliabilities ~~Snow~~are ~~Time,~~measured ~~the~~at ~~Company~~enacted ~~recognized~~tax ~~$8,487~~rates ofin ~~deferred~~the ~~tax~~respective ~~liabilities~~jurisdictions aswhere athe ~~result~~Company ofoperates. ~~the~~In ~~difference~~assessing in the ~~tax~~ability ~~basis~~to ~~and~~realize ~~estimated~~deferred ~~fair~~tax ~~values~~assets, of the ~~net~~Company ~~assets~~considers ~~acquired.~~whether ~~The~~it ~~tax~~is ~~effect~~more oflikely ~~significant~~than ~~temporary~~not ~~differences~~that ~~representing~~some portion or all deferred tax assets ~~and~~will ~~liabilities~~not atbe ~~January~~realized. Any ~~31,~~necessary ~~2019~~valuation ~~and~~allowance ~~April~~based ~~30,~~on ~~2018,~~that ~~are~~assessment aswould ~~follows:~~be provided if necessary.

	January 31,		April 30,
	2019		2018
Deferred tax assets:
Deferred gain on sale/leaseback	$	598	$	598
Accrued compensation		226		226
Unearned revenue		637		637
Net operating loss carryforwards		7,028		7,028
		8,489		8,489
Valuation allowance		(350)		(350)
		8,139		8,139
Deferred tax liabilities:
Property and equipment		(23,621)		(15,948)
Intangible assets		(587)		-
Prepaid expenses		(128)		-
Unearned revenue		(99)		-
		(24,435)		(15,948)
	$	(16,296)	$	(7,809)

Deferred income tax assets include those related to existing net operating loss carryforwards. In connection with the Company’s initial public offering in November 2014, a change of ownership in the Company occurred pursuant to the provisions of the Tax Reform Act of 1986. As a result, the Company’s usage of its net operating loss carryforwards will be limited each year; however, management believes the full benefit of those carryforwards will be realized prior to their respective expiration dates. The Company monitors the activity in its stock and should an ownership change occur under the Tax Reform Act of 1986, management would reassess the ability to realize net operating loss carryovers and provide additional valuation allowances, if necessary.

The Company does not have any material uncertain tax positions.

Note 5. Property and Equipment

The composition of property and equipment is as follows:

	January 31,		April 30,
	July 31,		April 30,
	2019		~~2018~~2019
Land and improvements	$	7073,~~488~~544	$	5473,~~785~~486
Buildings and improvements		~~149~~144,~~020~~127		75141,~~321~~439
Equipment, furniture and fixtures		~~196~~204,~~765~~775		~~175~~201,~~532~~773
Construction in progress		87,~~692~~836		168,~~787~~198
		424,965		322,425
		430,282		424,896
Less: accumulated depreciation and amortization		~~131~~144,~~756~~020		~~118~~137,~~330~~775
	$	~~293~~286,~~209~~262	$	~~204~~287,~~095~~121

~~Property~~Note 6. ~~and~~Credit ~~equipment~~Facilities ~~balances as of January 31, 2019, reflect the preliminary estimate of the fair value of property~~ and ~~equipment~~Long‑term ~~acquired from Snow Time.~~Debt

Note 6. Credit Facilities, Long‑term Debt and Preferred Stock Issuance

The composition of long-term debt is as follows:

	January 31,			April 30,
		July 31,				April 30,
	~~2019~~	2019		~~2018~~	2019
EPR Secured Notes due 2034	$	~~93,162~~$	93,162	$	~~93,162~~$	93,162
EPR Secured Notes due 2036		~~21,000~~	21,000		~~21,000~~	21,000
EB-5 Development Notes due 2021		~~52,000~~	52,000		~~52,000~~	52,000
Term Loan due 2020		50,068			-
Term Loan due 2020, related party debt			50,049			50,058
Wildcat Mountain Note due 2020		~~3,081~~	2,978		~~3,231~~	3,030
Capital Leases		~~2,394~~	1,565		~~2,426~~	1,746
Other borrowings		~~964~~	459		~~1,184~~	514
Less: Unamortized debt issuance costs		~~(4,491)~~	(3,778)		~~(4,552)~~	(4,128)
		218,178			168,451
			217,435			217,382
Less: Current maturities		~~(2,145)~~	(1,214)		~~(2,614)~~	(1,513)
	$	~~216,033~~$	216,221	$	~~165,837~~$	215,869

~~Term Loan due 2020~~13

~~The~~Table ~~Company financed part~~ of the cash consideration paid in the Snow Time Acquisition with a $50,000 senior secured term loan (the “Term Loan”) from Cap 1 LLC (“Cap 1”) pursuant to the terms of the Credit Agreement entered into with Cap 1 on November 21, 2018 (the “Credit Agreement”). Amounts due under the Term Loan are referred to in the table above as the “Term Loan due 2020.”Contents

~~The~~In ~~Term~~addition ~~Loan~~to ~~has~~the ancredit ~~initial~~facilities ~~term~~listed ofabove, ~~two~~the ~~years~~Company ~~and~~maintains ~~bears~~a ~~interest~~$10,000 atworking ~~6.95%,~~capital ~~payable~~line ~~quarterly,~~of ~~subject~~credit toand a ~~2.0%~~$15,000 ~~increase~~acquisition ~~upon~~line anof ~~event~~credit ofwith ~~default.~~Royal ~~The~~Banks ~~Term~~of ~~Loan~~Missouri. isAs ~~secured~~of byJuly 31, ~~all~~2019, ~~real~~nothing ~~property~~was onoutstanding ~~which~~under the ~~Snow~~working ~~Time~~capital ~~resorts~~line ~~are~~of ~~located~~credit and ~~improvements~~$12,415 ~~thereon. Amounts~~was ~~due~~outstanding under the ~~Term~~acquisition ~~Loan~~line ~~may~~of becredit, ~~prepaid~~and ~~without~~$10,000 ~~penalty.~~and $2,585 was unused and available under the lines of credit, respectively.

~~The Term Loan matures on November 30~~As of July 31, ~~2020 and may be extended for an additional one-year period at the Company’s option~~2019, ~~so long as no event of default has occurred. If extended,~~ the Company has agreed to issue Cap 1 a warrant to purchase 666,667 shares of common stock, exercisable immediately from the issuance date and for up to ten years from the date of issuance, at $7.50 per share (the “Extension Warrant”). The Extension Warrant was ~~not~~in ~~issued~~compliance ~~upon closing the Term Loan and~~ will ~~only~~all bedebt ~~issued~~covenants ifunder ~~the~~its ~~Company~~various ~~exercises~~credit ~~the~~facility ~~one-year~~and ~~Term~~debt ~~Loan extension right~~agreements.

As consideration for the Term Loan and in lieu of fees, the Company also issued Cap 1 a warrant to purchase 1,750,000 shares of common stock at $10.00 per share, which is exercisable immediately and expires ten years from the date of issuance (the “Financing Warrant”).

During the three and nine months ended January 31, 2019, the Company paid Cap 1 $386 of interest related to the Term Loan. As of January 31, 2019, $290 of interest was accrued and payable to Cap 1 related to the Term loan.

Issuance of Preferred Stock and Option Warrants

As a condition to the funding of the Term Loan, and for aggregate consideration of $20,000, the Company exercised its existing option (the “Cap 1 Option”) to issue to Cap 1 an additional 20,000 shares of Series A Cumulative Convertible Preferred Stock (the “Series A Preferred Stock”), along with additional warrants (the “Option Warrants”) to purchase shares of common stock that expire 12 years from the date of issuance, as follows: i) 1,538,462 shares of common stock at $6.50 per share; ii) 625,000 shares of common stock at $8.00 per share; and iii) 555,556 shares of common stock at $9.00 per share. The Cap 1 Option is provided for in the terms of the Securities Purchase Agreement between the Company and Cap 1, dated as of August 22, 2016, entered into

in connection with the issuance of the initial 20,000 shares of Series A Preferred Stock and accompanying warrants to Cap 1 in November 2016. The Company used the Cap 1 Option proceeds to fund the remainder of the cash portion of the Snow Time Acquisition purchase price.

The exercise prices of the Option Warrants must be paid in cash. At the Company’s option, the exercise price of the Financing Warrant may be paid in whole or in part in cash or settled through a cashless exercise.

The rights and preferences of the Series A Preferred Stock include, among other things, the following:

Seniority. The Series A Preferred Stock generally rank, with respect to liquidation, dividends and redemption, i) senior to common stock and to any other junior capital stock; ii) on parity with any parity capital stock; iii) junior to any senior capital stock; and iv) junior to all of the Company’s existing and future indebtedness (as defined). Until the earlier of the date that no Series A Stock remains outstanding and January 1, 2027, the Company is prohibited from paying cash dividends on common stock if there are accrued and unpaid dividends with respect to the Series A Preferred Stock.

Dividend Rights. From and after the date that is nine months from the date of issuance, cumulative dividends accrue on the Series A Preferred Stock on a daily basis in arrears at the rate of 8% per annum on the liquidation value of $1,000 per share. All accrued and accumulated dividends on the Series A Preferred Stock shall be paid prior and in preference to any dividend or distribution on or redemption of any junior securities, provided that the Company may, prior to the payment of all accrued and accumulated dividends on the Series A Preferred Stock, i) declare or pay any dividend or distribution payable on the common stock in shares of common stock; or ii) repurchase common stock held by employees or consultants of the Company upon termination of their employment or services pursuant to agreements providing for such repurchase. The Company may also redeem or repurchase junior securities at any time when there are no accrued or accumulated unpaid dividends on the Series A Preferred Stock.

Liquidation. In the event of any liquidation (as defined), dissolution or winding up of the Company, the holders of Series A Preferred Stock shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders, before any payment shall be made to the holders of junior securities, and subject to the rights of any parity or senior securities, an amount in cash equal to $1,000 per share plus all unpaid accrued and accumulated dividends.

Redemption. The Series A Preferred Stock is subject to redemption at the option of the Company at a price of $1,250 per share, plus all unpaid accrued and accumulated dividends, at any time on or after the third anniversary of the issuance of the Series A Preferred Stock that the average closing price of the Company’s common stock on the 30 trading days preceding notice of the exercise of the redemption right is greater than $8.18.

Conversion. Upon the earlier of a change of control or the nine-month anniversary of the date of issuance, the holders of the Series A Preferred Stock have the right to convert the Series A Preferred Stock into shares of common stock equal to the number of shares to be converted, times the liquidation value, divided by the conversion price and receive in cash all accrued and unpaid dividends. The initial conversion price per share is $6.29, subject to adjustment pursuant to the terms of the Certificate of Designation. Holders of the Series A Preferred Stock also have basic anti-dilution rights.

Voting Rights. Each holder of Series A Preferred Stock shall be entitled to vote, on an as-converted basis, with holders of outstanding shares of common stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Company.

The Company entered into a Registration Rights Agreement with Cap 1, dated November 21, 2018, granting certain registration rights with respect to the shares of common stock underlying the Series A Preferred Stock, Option Warrants and Financing Warrant. The terms and registration rights applicable to the Extension Warrant, if issued, are expected to be substantially the same as those applicable to the Financing Warrant.

Also on November 21, 2018, in connection with the closing of the Term Loan and the Snow Time Acquisition, the Company, Cap 1 and Timothy D. Boyd, Stephen J. Mueller and Richard K. Deutsch (the “Management Stockholders”) entered into the Amended and Restated Stockholders’ Agreement (the “Stockholders’ Agreement”) which added the new shares of Series A Preferred Stock, Option Warrants, Financing Warrant and Extension Warrant, and the shares of Common Stock underlying such securities, to the scope of Stockholders’ Agreement entered into by the parties in 2016. The Stockholders’ Agreement otherwise remains unchanged and i) provides Cap 1 a right to nominate a director to sit on the Company’s board of directors so long as Cap 1 beneficially owns, on a fully diluted, as-converted basis, at least 20% of the outstanding equity securities of the Company, ii) restricts transfers of the Company’s securities by Cap 1 and the Management Stockholders, iii) provides Cap 1 with a right of first offer to purchase shares of the Company’s common stock from the Management Stockholders, iv) grants Cap 1 preemptive rights with respect to future issuances of securities, and v) requires Cap 1’s approval, so long as it meets certain ownership requirements (as defined), in order for the Company to a) materially change the nature of its business or b) acquire or dispose of any resorts, assets or properties for aggregate consideration equal to or greater than 30% of the enterprise value (as defined) of the Company and its subsidiaries.

Valuation of Term Loan, Preferred Stock and Stock Warrants

The Company accounts for stock warrants as either equity or liability awards based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded at fair value as of the date of issuance with no further adjustments to their valuations made. When multiple financial instruments are issued in conjunction with other financial instruments, the amounts recognized for each instrument is recorded based on the proceeds received allocated to each instrument based on its relative fair value. The aggregate $70,000 received as consideration for the Term Loan due 2020, the additional 20,000 shares of Series A Preferred Stock and the associated common stock warrants have been allocated in the amount of $50,073, $16,197, and $3,730, respectively. The difference between the face amount of the Term Loan due 2020 and its fair value has been recorded as an original issue premium and will be amortized to interest expense over its term. No value has been assigned to the Extension Warrant as it was not issued.

Royal Banks of Missouri Credit Facility

In addition to the credit facilities listed above, the Company maintains a $10,000 working capital line of credit and a $15,000 acquisition line of credit with Royal Banks of Missouri pursuant to a credit agreement that was renewed by the Company and Royal Banks of Missouri on December 27, 2018 (the “Royal Banks Credit Facility”). The Royal Banks Credit Facility expires on December 27, 2019.

As of January 31, 2019, nothing was outstanding under the working capital line of credit and $12,415 was outstanding under the acquisition line of credit, and $10,000 and $2,585 was unused and available under the lines of credit, respectively.

As of January 31, 2019, the Company was in compliance will all debt covenants under its various credit facility and debt agreements.

Note 7. Concentrations of Credit Risk and Fair Value Measurements

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. The Company’s cash, cash equivalents and restricted cash are on deposit with financial institutions where such balances will, at times, be in excess of federally insured limits. The Company has not experienced any losses associated with such deposits.

Fair Value of Measurements

The Company measures the fair value of assets and liabilities using a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1 - observable inputs such as quoted prices in active markets; Level 2 - inputs, other than quoted market prices in active markets, which are observable, either directly or indirectly; and Level 3 - valuations derived from valuation techniques in which one or more significant inputs are unobservable. In addition, the Company may use various valuation techniques, including the market approach, using comparable market prices; the income approach, using present value of future income or cash flow; and the cost approach, using the replacement cost of assets.

The Company’s financial instruments consist of cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities, long-term debt and preferred stock. For cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities, the carrying amounts approximate fair market value due to their short-term nature. The estimated fair values of the Company’s debt instruments and preferred stock as of July 31, 2019 and April 30, 2019, is as follows:

The estimated fair values of the Company’s debt instruments and preferred stock as of January 31, 2019, is as follows:


July 31, 2019
			Carrying
	Fair Value		Amount		Balance Sheet Classification
EPR Secured Notes due 2034	$	116,717	$	93,162	Long-term debt, less current maturities
EPR Secured Notes due 2036		18,563		21,000	Long-term debt, less current maturities
EB-5 Development Notes due 2021		44,956		52,000	Long-term debt, less current maturities
Term Loan due 2020, related party debt		50,000		50,049	Long-term debt, less current maturities
Wildcat Mountain Note due 2020		2,865		2,978	Long-term debt, including current maturities
Capital leases and other borrowings		2,024		2,024	Long-term debt, less current maturities
Series A Preferred Stock		69,886		34,718	Series A preferred stock

April 30, 2019
			Carrying
	Fair Value		Amount		Balance Sheet Classification
EPR Secured Notes due 2034	$	101,033	$	93,162	Long-term debt, less current maturities
EPR Secured Notes due 2036		17,451		21,000	Long-term debt, less current maturities
EB-5 Development Notes due 2021		43,998		52,000	Long-term debt, less current maturities
Term Loan due 2020, related party debt		50,000		50,058	Long-term debt, less current maturities
Wildcat Mountain Note due 2020		2,897		3,030	Long-term debt, including current maturities
Capital leases and other borrowings		2,260		2,260	Long-term debt, less current maturities
Series A Preferred Stock		31,777		34,318	Series A preferred stock

	January 31, 2019
	Fair Value		Carrying Amount		Balance Sheet Classification
EPR Secured Notes due 2034	$	98,502	$	93,162	Long-term debt, less current maturities
EPR Secured Notes due 2036		16,982		21,000	Long-term debt, less current maturities
Term Loan due 2020		50,000		50,068	Long-term debt, less current maturities
EB-5 Development Notes due 2021		43,068		52,000	Long-term debt, less current maturities
Wildcat Mountain Note due 2020		2,976		3,081	Long-term debt, including current maturities
Capital leases and other borrowings		3,358		3,358	Long-term debt, including current maturities
Series A Preferred Stock		29,613		33,918	Series A preferred stock

~~The~~Table ~~Company estimated the fair value~~ of the EPR Secured Notes, Term Note due 2020, EB-5 Development Notes and Wildcat Mountain Note using a discounted cash flow approach and Level 2 inputs, including market borrowing yields for instruments of similar maturities and Level 3 inputs, including the Company’s credit rating. The Company estimated the fair value of the Series A Preferred Stock using Level 2 inputs, including market yields for similar instruments. The Company estimated the fair value of capital leases and other borrowings to approximate their carrying value. Contents

The Company estimated the fair value of the EPR Secured Notes, Term Loan due 2020, EB‑5 Development Notes and Wildcat Mountain Note using a discounted cash flow approach and Level 2 inputs, including market borrowing yields for instruments of similar maturities and Level 3 inputs, including the Company’s credit rating. The Company estimated the fair value of the Series A Preferred Stock using Level 2 inputs, including market yields for similar instruments. The Company estimated the fair value of capital leases and other borrowings to approximate their carrying value.

Note 8. Commitments and Contingencies

Loss ~~contingencies~~Contingencies

The Company is periodically involved in various claims and legal proceedings, many of which occur in the normal course of business. Management routinely assesses the likelihood of adverse judgments or outcomes, including consideration of its insurance coverage and, in the opinion of the Company’s management, the ultimate liabilities resulting from such claims and proceedings will not have a material adverse effect on its business, financial condition, results of operations or cash flows.

Leases

The Company leases certain land, land improvements, buildings and equipment under noncancelable operating leases. Certain of the leases contain escalation provisions based generally on changes in the consumer price index with maximum annual percentage increases capped at rates between 1.5% to 4.5%. Additionally, certain leases contain contingent rental provisions which are based on revenue. The Company paid no contingent rentals in the periods presented.

Note 9. Stock-Based Compensation

Stock-based compensation expense was recognized in general and administrative expense in the accompanying consolidated condensed statements of operations for the three ~~and nine~~ months ended ~~January~~July 31, 2019 and 2018 in the amounts of $25382 and $~~132~~56, respectively;. ~~and~~As ~~for~~of ~~the~~July ~~three~~31, ~~and~~2019, ~~nine~~unrecognized ~~months~~compensation ~~ended~~expense ~~January~~related ~~31,~~to ~~2018~~grants inof ~~the~~RSUs ~~amounts~~was of $481,010 and ~~$205,~~will ~~respectively~~be recognized over a weighted average period of approximately 1.8 years.

Restricted Stock Units

Under the ~~Company’s 2014~~ Equity Incentive Plan ~~(the~~and ~~“2014~~applicable ~~Plan”)~~award agreements, ~~the~~RSUs ~~Company~~give ~~granted~~the ~~36,195~~holder ~~restricted~~the ~~stock~~right ~~units~~to receive (~~“RSUs”~~i) ~~during~~ the ~~nine~~number ~~months~~of ~~ended~~shares ~~January~~of ~~31,~~common ~~2019,~~stock ~~with~~underlying athe ~~weighted-average~~RSUs ~~grant~~or ~~date~~(ii) ~~fair~~as ~~value~~may ~~per~~be ~~unit~~elected ofby ~~$5.18;~~the ~~and~~compensation ~~granted~~committee ~~43,600~~of ~~RSUs during~~ the ~~nine~~board ~~months~~of ~~ended January 31~~directors, ~~2018,~~cash ~~with~~equal ato ~~weighted-average~~the ~~grant~~closing ~~date~~sale ~~fair~~price ~~value~~ per ~~unit~~share of ~~$4.30.~~common ~~The~~stock ~~2014~~on ~~Plan~~the ~~requires~~trading ~~that~~day ~~whenever~~immediately ~~the~~prior ~~Company~~to ~~pays~~the adistribution ~~cash~~date ~~dividend~~times onthe ~~its~~number ~~common~~of shares itunderlying ~~also~~the ~~pay~~RSUs. anOutstanding ~~equivalent~~RSUs ~~dividend~~accrue dividends in the form of ~~RSUs~~additional ~~on any~~ RSUs ~~outstanding~~based ason of the ~~dividend~~market ~~date.~~price ~~During~~of the ~~nine~~Company’s ~~months~~common ~~ended~~stock ~~January~~on ~~31, 2019 and 2018,~~ the ~~Company~~date ~~issued~~cash ~~6,672 RSUs and 4,644 RSUs, respectively, as payment of~~ dividends onare ~~outstanding~~paid ~~RSUs.~~to Asthe ofCompany’s ~~January~~common ~~31, 2019, 189,647 RSUs were outstanding, of which 152,958 were vested~~stockholders.

~~Note 10.~~RSUs ~~Earnings~~granted ~~(Loss)~~to ~~Per~~non-employee ~~share~~members of the board of directors as part of their annual retainers generally vest one year from the date of grant and will be distributed to the holder on a date that is six months after the date the holder ceases to be a member of the Company’s board.

~~The~~On ~~computation~~May 8, 2019, the Company granted 140,000 RSUs to certain key employees. One-half of ~~basic~~each ~~and~~RSU ~~diluted~~award ~~loss~~will ~~per~~vest ~~share~~on ~~for~~the first anniversary of the ~~three~~grant date, and ~~nine~~one-half ~~months~~of ~~ended~~the ~~January~~RSU ~~31,~~award ~~2019~~will ~~and~~vest ~~2018~~on the second anniversary of the grant date provided that the holder is asemployed ~~follows:~~by the Company at that time. Vested RSUs will be distributed to the holder immediately upon vesting.

		Three Months ended January 31,				Nine Months ended January 31,
	2019		2018		2019		2018
Basic earnings (loss) per share:
Net income (loss) attributable to common
shareholders (numerator)	$	12,911	$	8,781	$	(10,687)	$	(9,528)
Weighted average number of shares outstanding:
Common stock		14,908,564		13,982,400		14,291,121		13,982,400
Vested restricted stock units		152,706		99,885		126,035		67,807
Basic average shares outstanding (denominator)		15,061,270		14,082,285		14,417,156		14,050,207
Basic earnings (loss) per common share	$	0.86	$	0.62	$	(0.74)	$	(0.68)
Diluted earnings (loss) per share:
Net income (loss) attributable to common shareholders		12,911		8,781		(10,687)		(9,528)
Effect of 2016 issued Series A preferred stock dividends
on numerator		400		400		-		-
Effect of 2018 issued Series A preferred stock dividends
on numerator		320		-		-		-
Numerator for diluted earnings per share calculation	$	13,631	$	9,181	$	(10,687)	$	(9,528)
Basic average shares outstanding		15,061,270		14,082,285		14,417,156		14,050,207
Dilutive effect of conversion of preferred stock (2016 issue)		3,179,650		3,179,650		-		-
Dilutive effect of conversion of preferred stock (2018 issue)		2,488,422		-		-		-
Dilutive effect of unvested restricted stock units		36,195		43,600		-		-
Diluted average shares outstanding (denominator)		20,765,537		17,305,535		14,417,156		14,050,207
Diluted earnings (loss) per common share	$	0.66	$	0.53	$	(0.74)	$	(0.68)

On June 26, 2019, the Company granted 185,190 RSUs to employee participants in the Company’s Annual Incentive Plan. One-third of each RSU award vested immediately on the grant date, and one-third will vest on each of the first and second anniversaries of the grant date, provided that the holder is employed by the registrant at that time. Vested RSUs will be distributed to the reporting person immediately upon vesting.

1915

~~The~~Table ~~Company’s outstanding unvested RSUs as~~ of January 31, 2019 and 2018, respectively, have been excluded from the calculations of diluted earnings per share for the nine-month periods then ended because their impact would be anti-dilutive. In addition, the effect of the Company’s Series A Cumulative Convertible Preferred Stock (the “Series A Preferred Stock”), issued in November 2016, has been excluded from the calculation of diluted earnings per share for the nine months ended January 31, 2019 and 2018, because the impact would be antidilutive. Additionally, the Company’s Series A Cumulative Convertible Preferred Stock (the “Series A Preferred Stock”), issued in November 2018, has been excluded from the calculation of diluted earnings per share for the nine months ended January 31, 2019, because the impact would be antidilutive. In addition, warrants to purchase shares of common stock have been excluded from the calculation of diluted earnings per share for the three and nine months ended January 31, 2019 and 2018, because the impact would be anti-dilutive.Contents

~~Note~~The ~~11.~~following ~~Restructuring~~table ~~and~~summarizes ~~Impairment~~RSU activity for the three months ended July 31, 2019:

As of April 30, 2018, the Company closed a restaurant and certain hotel-like amenities at a condominium building adjacent to its Attitash ski resort and terminated a related rental management agreement (the “Attitash Hotel Closure”). For the three and nine months ended January 31, 2019, the Company incurred restructuring charges of $0 and $190, respectively, in connection with the Attitash Hotel Closure, which included professional service fees and costs to maintain the facility until the date of its disposal in August 2018.


			Weighted
			Average
			Grant Date
			Per Share
	RSUs		Fair Value
Outstanding, April 30, 2019	192,571	$	5.04
RSU awards granted	325,190		4.14
Dividends paid in RSUs during period	2,996		5.04
Released during period	(61,730)		3.95
Outstanding, July 31, 2019	459,027	$	4.55

Vested, April 30, 2019	155,317		5.00
Vested during period	64,146
Released during the period	(61,730)
Vested, July 31, 2019	157,733	$	5.00

~~Total~~RSUs ~~costs~~outstanding ~~through~~as ~~January~~of July 31, 2019, ~~associated~~had ~~with~~an ~~the~~aggregate ~~Attitash~~intrinsic ~~Hotel~~value ~~Closure~~of ~~include~~ $14,~~586~~990; ~~of asset impairment charges, $36 of severance expense~~ and ~~$260~~RSUs ofreleased ~~other~~during ~~costs.~~the Asthree ofmonths ~~January~~ended July 31, 2019, ~~the~~had ~~Company~~an ~~expects~~aggregate itintrinsic ~~will~~value ~~not~~of ~~incur future additional charges related to the Attitash Hotel Closure~~$244.

20Note 10. Earnings (Loss) Per Share

The computation of basic and diluted loss per share for the three months ended January 31, 2019 and 2018 is as follows:


	Three Months ended July 31,
	2019		2018

Net loss attributable to common shareholders	$	(20,409)	$	(12,195)
Weighted number of shares:
Common stock		15,189,987		13,982,400
Outstanding vested Restricted Stock Units		157,496		103,203
		15,347,483		14,085,603
Basic and diluted loss per share	$	(1.33)	$	(0.87)

The Company’s outstanding unvested RSUs as of July 31, 2019 and 2018, have been excluded from the calculations of diluted earnings per share for the three-month periods then ended because their impact would be anti-dilutive. In addition, warrants to purchase 7,188,036 shares of common stock and the effect of the Company’s Series A Preferred Stock have been excluded from the calculation of diluted earnings per share for the three months ended July 31, 2019 and 2018, because the impact would be antidilutive.

Note 11. Subsequent Events

Litigation Related to the Merger

On August 28, 2019, an alleged shareholder of the Company, Earl M. Wheby Jr., filed a putative class action and derivative complaint in St. Louis County Circuit Court, 21st Judicial Circuit of Missouri, against each of the members of the Company’s board of directors, Vail Resorts, Parent and Merger Sub, purportedly in relation to the Company’s entry into the Merger Agreement. The complaint asserts a claim for breach of fiduciary duty against the defendants. The complaint alleges, among other things, that the directors breached their fiduciary duties in connection with the Merger due to certain deal protection provisions in the Merger Agreement and disseminated a materially misleading proxy statement. The complaint seeks, among other things, an order enjoining the defendants from proceeding with, consummating or closing

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the proposed Merger; in the event the proposed Merger is consummated, an order rescinding it and setting it aside or awarding rescissory damages; and unspecified attorneys’ and experts’ fees.

On August 29, 2019, an alleged shareholder of the Company filed a complaint in the United States District Court for the Eastern District of Missouri, Eastern Division, against the Company and each of the members of the Company’s board of directors, purportedly in relation to the Company’s entry into the Merger Agreement. The complaint asserts claims under Section 14(a) and Section 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and rules promulgated thereunder, based on allegations that the Proxy Statement omitted to disclose certain material facts allegedly necessary to make statements made in the Proxy Statement not misleading and/or misrepresented certain allegedly material information. The complaint seeks, among other things, an order enjoining the defendants from proceeding with, consummating or closing the proposed Merger and any vote on the proposed Merger, unless and until the defendants disclose and disseminate to the Company’s shareholders the allegedly material information identified in the complaint; in the event the proposed Merger is consummated, an order rescinding it and setting it aside or awarding rescissory damages; and unspecified attorneys’ and experts’ fees.

On September 6, 2019, an alleged shareholder of the Company, Eammon Carleton, filed a complaint in the United States District Court for the Southern District of New York, against the Company and each of the members of the Company’s board of directors, purportedly in relation to the Company’s entry into the Merger Agreement. The complaint asserts claims under Section 14(a) and Section 20(a) of the Exchange Act and rules promulgated thereunder, based on allegations that the Proxy Statement omitted to disclose certain material facts allegedly necessary to make statements made in the Proxy Statement not misleading and/or misrepresented certain allegedly material information. The complaint seeks, among other things, an order enjoining the defendants from proceeding with, consummating or closing the proposed Merger; in the event the proposed Merger is consummated, an order rescinding it and setting it aside or awarding rescissory damages; an order directing the defendants to disseminate a proxy statement that does not contain purportedly misleading statements or material omissions; and unspecified attorneys’ and experts’ fees.

The Company believes that the allegations against it in each of the foregoing lawsuits lack merit, however, there can be no assurance that any of the defendants will prevail in any one or more of the lawsuits. The Company is not able to estimate any possible loss from this litigation at this time. It is possible that additional lawsuits may be filed in connection with the proposed Merger.

Merger Developments

On August 6, 2019, the Company received a letter from the USFS confirming that renewal, issuance or reissuance of the Company’s USFS permits is not required as a consequence of consummation of the Merger. On August 28, 2019, the applicable waiting period under the HSR Act expired with respect to the proposed acquisition of the Company by Parent. These events satisfied two of the applicable conditions to closing of the acquisition set forth in the Merger Agreement.

The closing of the Merger is subject to certain other closing conditions, including adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby by the affirmative vote of the holders of at least two-thirds of the outstanding shares of common stock and Series A Preferred Stock entitled to vote at the Special Meeting of shareholders as of the August 19, 2019 record date for the Special Meeting, voting together as a single class on an as-converted basis. On August 20, 2019, the Company filed a definitive proxy statement on Schedule 14A relating to the Merger, which the Company intends to hold on September 20, 2019.

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

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q (the “Report”) and with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, ~~2018~~2019 filed with the Securities and Exchange Commission. In addition to historical financial information, the following discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Unless the context suggests otherwise, references in this Report to the “Company”, “Peak”, “our”, “us”, or “we” refer to Peak Resorts, Inc. and its consolidated subsidiaries.

Forward-Looking Statements

Except for any historical information contained herein, the matters discussed in this Report contain certain “forward-looking statements'' within the meaning of the federal securities laws. This includes statements regarding our future financial position, economic performance, results of operations, business strategy, budgets, projected costs, plans and objectives of management for future operations, and the information referred to under “Management's Discussion and Analysis of Financial Condition and Results of Operations.”

These forward-looking statements generally can be identified by the use of forward-looking terminology, such as “may,'' “will,'' “expect,'' “intend,'' “estimate,'' “anticipate,'' “believe,'' “continue'' or similar terminology, although not all forward-looking statements contain these words. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, you are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. Unless otherwise required by law, we also disclaim any obligation to update our view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made in this Report. Important factors that could cause actual results to differ materially from our expectations include, among others:

the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

the failure to obtain Peak Resorts shareholder approval of the proposed Merger or the failure to satisfy the closing conditions in the Merger Agreement;

risks related to disruption of management’s attention from the Company’s ongoing business operations due to the proposed Merger;

the effect of the announcement of the proposed Merger on the ability of the Company to retain and hire key personnel and maintain relationships with its customers, suppliers, operating results and business generally;

unexpected costs, liabilities or delays involving the proposed Merger;

uncertainty surrounding the proposed Merger, including the timing of the consummation of the Merger;

the outcome of any legal proceeding relating to the proposed Merger;

weather, including climate change;

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seasonality;

availability of funds for capital expenditures and operations;

competition with other indoor and outdoor winter leisure activities and ski resorts;

the leases and permits for property underlying certain of our ski resorts;

ability to integrate new acquisitions and transition acquired operations, systems and personnel;

environmental laws and regulations;

our dependence on key personnel;

the effect of declining revenues on margins;

the future development and continued success of our Mount Snow and Hunter Mountain ski resorts;

our reliance on information technology;

our current dependence on our primary lender and the lender's option to purchase certain of our ski resorts;

our dependence on a seasonal workforce;

our ability to avoid or recover from cyber and other security breaches and other disruptions; and

the securities market.

You should also refer to Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K, and Part II, Item 1A, “Risk Factors” of this Report, for a discussion of factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may prove to be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time-frame, or at all.

Recent Events ~~- The Snow Time Acquisition and Related Financing~~

~~The~~Merger ~~Snow~~Agreement ~~Time~~and ~~Acquisition~~Proposed Merger

On ~~November~~July 2120, ~~2018~~2019, we ~~completed~~entered ~~our~~into ~~acquisition~~an ofAgreement ~~all~~and Plan of Merger (the ~~issued~~“Merger ~~and~~Agreement”) ~~outstanding~~with ~~shares~~Vail ofHoldings, ~~common~~Inc., ~~stock~~a ofColorado ~~Snow~~corporation ~~Time~~(“Parent”), ~~pursuant~~VRAD toHoldings, ~~the~~Inc., ~~Stock~~a ~~Purchase~~Missouri ~~Agreement~~corporation ~~(the~~and direct, wholly-owned subsidiary of Parent (“~~Purchase~~Merger ~~Agreement~~Sub”), ~~entered~~and, ~~into~~solely ~~with~~for the ~~stockholders~~purposes ofstated ~~Snow~~in ~~Time~~Section (9.14 of the Merger Agreement, Vail Resorts, Inc., a Delaware corporation (“~~Sellers~~Vail Resorts”), ~~dated~~relating asto the proposed acquisition of ~~September~~the 24Company by Parent. The Merger Agreement provides that, ~~2018~~upon the terms and subject to the conditions set forth therein, Merger Sub will be merged with and into the Company (the “~~Snow~~Merger”) ~~Time~~with ~~Acquisition~~the ).Company ~~Consideration~~continuing ~~for~~as the ~~Snow~~surviving ~~Time~~corporation ~~Acquisition~~in ~~totaled~~the ~~$71.6~~Merger ~~million~~as a direct, ~~which~~wholly-owned ~~consisted~~subsidiary of ~~$66.7~~Parent ~~million~~and inan ~~cash~~indirect, ~~net~~wholly-owned subsidiary of ~~cash~~Vail ~~acquired~~Resorts. ofUpon ~~$1.0~~completion ~~million,~~of ~~and~~the 1Merger,~~183,432~~ ~~shares~~the ofCompany ~~common~~will ~~stock~~cease ~~with~~to be a ~~value~~publicly oftraded ~~$6.0~~company ~~million~~and: ~~based~~(i) oneach share of the Company’s ~~closing~~common stock ~~price~~issued onand ~~the~~outstanding ~~day~~immediately ~~the~~prior ~~transaction~~to ~~closed.~~the ~~The~~Merger ~~number~~(other ofthan ~~shares~~Excluded ~~issued~~Shares, toas the ~~Sellers~~term ~~was~~is ~~determined~~defined ~~pursuant~~in to the ~~Purchase~~Merger Agreement,) ~~which~~will ~~provided~~cease ~~that~~to ~~the~~be ~~Sellers~~outstanding ~~had~~and will be converted into the right to receive $611.000 ~~million~~in cash, without interest and less any applicable withholding taxes; and (ii) each share of ~~common~~Series ~~stock~~A asCumulative ~~determined~~Convertible ~~using~~Preferred Stock (the ~~average~~“Series ~~closing~~A ~~price~~Preferred ofStock”) that is outstanding immediately prior to the ~~common~~Merger, ~~stock~~other ~~for~~than Excluded Shares, will be converted into the 20right ~~trading~~to ~~days~~receive ~~immediately~~an ~~preceding~~amount equal to the ~~closing~~sum of: (A) $1,748.81, ~~which~~the ~~was~~product of $511.0700 multiplied by the amount equal to the quotient of $1,000 divided by $6.29; Weplus ~~acquired~~(B) ~~Snow~~the ~~Time~~aggregate inamount ~~order~~of toall ~~expand~~accrued ~~our~~and ~~portfolio~~unpaid dividends on the applicable issuance of ~~resorts.~~Series A Preferred Stock as of the Merger, in cash without interest.

Snow Time’s resort properties include Liberty Mountain Resort, Roundtop Mountain Resort and Whitetail Resort, which are day and overnight drive ski resorts located in southern Pennsylvania serving the Baltimore and Washington, D.C. metropolitan areas. The acquired resorts also include two 18-hole golf courses, a 115-room hotel and conference center and more than 20 food and beverage locations across the three resorts, among other amenities.19

~~Term~~Table ~~Loan~~of ~~Financing~~Contents

WeThe ~~financed~~closing ~~part~~ of the ~~cash~~Merger ~~consideration~~is ~~paid~~subject to various closing conditions, each of which is more fully described in the ~~Snow~~Company’s ~~Time~~Current ~~Acquisition~~Report ~~with~~on aForm ~~$50.0~~8-K ~~million~~filed ~~senior~~with ~~secured~~the ~~term~~Securities ~~loan~~and ~~(the~~Exchange ~~“Term~~Commission ~~Loan”)~~on ~~from~~July ~~Cap~~22, 12019 ~~LLC~~and the Proxy Statement (~~“Cap~~as 1”defined below). ~~pursuant~~See Note 2 to the ~~terms~~unaudited ofcondensed ~~the~~consolidated ~~Credit~~financial ~~Agreement~~statements ~~entered~~included ~~into~~ with ~~Cap~~this 1report, on“Merger ~~November~~Agreement ~~21,~~and ~~2018~~Proposed ~~(the~~Merger,” ~~“Credit~~for ~~Agreement”)~~additional information.

~~The~~On ~~Term~~August ~~Loan~~6, ~~has~~2019, anthe ~~initial~~Company ~~term~~received ofa ~~two~~letter ~~years~~from ~~and~~the ~~bears~~United ~~interest~~States atForest ~~6.95%,~~Service ~~payable~~(the ~~quarterly~~“USFS”) confirming that renewal, ~~subject~~issuance toor areissuance ~~2.0%~~of ~~increase~~the ~~upon~~Company’s anUSFS ~~event~~permits is not required as a consequence of ~~default.~~consummation ~~The~~of ~~Term~~the ~~Loan~~Merger. On isAugust ~~secured~~28, by2019, ~~all~~the ~~real~~applicable ~~property~~waiting onperiod ~~which~~under the ~~Snow~~Hart-Scott-Rodino ~~Time~~Antitrust ~~resorts~~Improvements ~~are~~Act ~~located~~of ~~and~~1976, ~~improvements~~as ~~thereon~~amended, expired with respect to the proposed acquisition of the Company by Parent. ~~Amounts~~ ~~due~~These ~~under~~events satisfied two of the ~~Term~~applicable ~~Loan~~conditions ~~may~~to beclosing ~~prepaid~~of ~~without~~the ~~penalty~~acquisition set forth in the Merger Agreement.

The ~~Term~~closing ~~Loan~~of ~~matures~~the onMerger ~~November~~is ~~30,~~also ~~2020~~subject ~~and~~to ~~may~~adoption beof ~~extended~~the ~~for~~Merger anAgreement ~~additional~~and ~~one-year~~approval ~~period~~of atthe ~~our~~Merger ~~option,~~and soother ~~long~~transactions asby nothe ~~event~~affirmative vote of ~~default~~the ~~has~~holders ~~occurred.~~of Ifat ~~extended,~~least wetwo-thirds ~~have~~of ~~agreed~~the tooutstanding ~~issue~~shares ~~Cap~~of 1common astock ~~warrant~~and Series A Preferred Stock entitled to ~~purchase~~vote ~~666,667~~at ~~shares~~a special meeting of ~~common~~shareholders ~~stock,~~(the ~~exercisable~~“Special ~~immediately~~Meeting”) ~~from~~as of the ~~issuance~~August ~~date~~19, ~~and~~2019 record date for upthe toSpecial ~~ten~~Meeting, ~~years~~voting ~~from~~together ~~the~~as ~~date~~a ofsingle ~~issuance,~~class aton ~~$7.50~~an ~~per~~as-converted ~~share~~basis. ~~(the~~On ~~“Extension~~August ~~Warrant”).~~20, ~~The~~2019, ~~Extension~~the ~~Warrant~~Company ~~was~~filed ~~not~~a ~~issued~~definitive ~~upon~~proxy ~~closing~~statement ~~the~~on ~~Term~~Schedule ~~Loan~~14A ~~and~~relating ~~will~~to ~~only~~the beMerger ~~issued~~(the if“Proxy weStatement”), ~~exercise~~which the ~~one-year~~Company ~~Term~~intends ~~Loan~~to ~~extension~~hold ~~right~~on September 20, 2019.

AsOur ~~consideration~~board ~~for~~of directors adopted and approved the ~~Term~~Merger ~~Loan~~Agreement and declared advisable the Merger Agreement and the completion by the Company of the Merger and the other transactions contemplated thereby, and has recommended that our shareholders vote in ~~lieu~~favor of ~~fees~~the adoption of the Merger Agreement and approve the Merger and the other transactions contemplated thereby at the Special Meeting. Certain of the Company’s largest shareholders, weincluding ~~also~~Timothy ~~issued~~Boyd, our President, Chief Executive Officer and Chairman of the Board, and Cap 1 aLLC ~~warrant~~(“Cap 1”), have entered into voting and support agreements pursuant to ~~purchase~~which 1they have agreed to,~~750~~ among other things,~~000~~ and subject to certain conditions, vote shares representing approximately 45.0% of ~~common~~the ~~stock~~total atshares ~~$10.00~~entitled ~~per~~to ~~share~~notice of, ~~which~~and isto ~~exercisable~~vote ~~immediately~~at, ~~and~~the ~~expires~~Special ~~ten~~Meeting, ~~years~~as ~~from~~of the date of ~~issuance~~the (Merger Agreement, in favor of the proposal to the adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby. See Note 2 to the unaudited condensed consolidated financial statements included with this report, “~~Financing~~Merger ~~Warrant~~Agreement and Proposed Merger,”) for additional information. The acquisition is expected to be completed in fall 2019, however, consummation of the Merger is subject to the satisfaction or (to the extent permitted by applicable law) waiver of the conditions to the completion of the Merger more fully described in the Proxy Statement.

~~Issuance~~We have incurred merger-related costs of ~~Preferred~~approximately ~~Stock~~$2.3 million, which are included in general and administrative expenses in our condensed consolidated statement of operations for the three months ended July 31, 2019.

As a condition to the funding of the Term Loan, and for aggregate consideration of $20.0 million, we exercised our existing option (the “Cap 1 Option”) to issue to Cap 1 an additional 20,000 shares of Series A Cumulative

Convertible Preferred Stock (the “Series A Preferred Stock”), along with additional warrants (the “Option Warrants”) to purchase shares of common stock that expire 12 years from the date of issuance, as follows: i) 1,538,462 shares of common stock at $6.50 per share; ii) 625,000 shares of common stock at $8.00 per share; and iii) 555,556 shares of common stock at $9.00 per share. The Cap 1 Option is provided for in the terms of the Securities Purchase Agreement between the Company and Cap 1, dated as of August 22, 2016, entered into in connection with the issuance of the initial 20,000 shares of Series A Preferred Stock and accompanying warrants to Cap 1 in November 2016. The Company used the Cap 1 Option proceeds to fund the remainder of the cash portion of the Snow Time Acquisition purchase price.

The exercise prices of the Option Warrants must be paid in cash. At our option, the exercise price of the Financing Warrant may be paid in whole or in part in cash or settled through a cashless exercise.

The rights and preferences of the Series A Preferred Stock include, among other things, the following:

Seniority. The Series A Preferred Stock generally rank, with respect to liquidation, dividends and redemption, i) senior to common stock and to any other junior capital stock; ii) on parity with any parity capital stock; iii) junior to any senior capital stock; and iv) junior to all of our existing and future indebtedness (as defined). Until the earlier of the date that no Series A Stock remains outstanding and January 1, 2027, we are prohibited from paying cash dividends on common stock if there are accrued and unpaid dividends with respect to the Series A Preferred Stock.

Dividend Rights. From and after the date that is nine months from the date of issuance, cumulative dividends accrue on the Series A Preferred Stock on a daily basis in arrears at the rate of 8% per annum on the liquidation value of $1,000 per share. All accrued and accumulated dividends on the Series A Preferred Stock shall be paid prior and in preference to any dividend or distribution on or redemption of any junior securities, provided that the Company may, prior to the payment of all accrued and accumulated dividends on the Series A Preferred Stock, i) declare or pay any dividend or distribution payable on the common stock in shares of common stock; or ii) repurchase common stock held by our employees or consultants upon termination of their employment or services pursuant to agreements providing for such repurchase. We may also redeem or repurchase junior securities at any time when there are no accrued or accumulated unpaid dividends on the Series A Preferred Stock.

Liquidation. In the event of any liquidation (as defined), dissolution or winding up of our company, the holders of Series A Preferred Stock shall be entitled to be paid out of the assets of our company available for distribution to its stockholders, before any payment shall be made to the holders of junior securities, and subject to the rights of any parity or senior securities, an amount in cash equal to $1,000 per share plus all unpaid accrued and accumulated dividends.

Redemption. The Series A Preferred Stock is subject to redemption at our option at a price of $1,250 per share, plus all unpaid accrued and accumulated dividends, at any time on or after the third anniversary of the issuance of the Series A Preferred Stock that the average closing price of our common stock on the 30 trading days preceding notice of the exercise of the redemption right is greater than $8.18.

We entered into a Registration Rights Agreement with Cap 1, dated November 21, 2018, granting certain registration rights with respect to the shares of common stock underlying the Series A Preferred Stock, Option Warrants and Financing Warrant. The terms and registration rights applicable to the Extension Warrant, if issued, are expected to be substantially the same as those applicable to the Financing Warrant.

Stockholders’ Agreement

On November 21, 2018, in connection with the closing of the Term Loan and the Snow Time Acquisition, our company, Cap 1 and Timothy D. Boyd, Stephen J. Mueller and Richard K. Deutsch (the “Management Stockholders”) entered into the Amended and Restated Stockholders’ Agreement (the “Stockholders’ Agreement”) which added the new shares of Series A Preferred Stock, Option Warrants, Financing Warrant and Extension Warrant, and the shares of Common Stock underlying such securities, to the scope of Stockholders’ Agreement entered into by the parties in 2016. The Stockholders’ Agreement otherwise remains unchanged and i) provides Cap 1 a right to nominate a director to sit on the Company’s board of directors so long as Cap 1 beneficially owns, on a fully diluted, as-converted basis, at least 20% of the outstanding equity securities of the Company, ii) restricts transfers of the Company’s securities by Cap 1 and the Management Stockholders, iii) provides Cap 1 with a right of first offer to purchase shares of the Company’s common stock from the Management Stockholders, iv) grants Cap 1 preemptive rights with respect to future issuances of securities, and v) requires Cap 1’s approval, so long as it meets certain ownership requirements (as defined), in order for the Company to a) materially change the nature of its business or b) acquire or dispose of any resorts, assets or properties for aggregate consideration equal to or greater than 30% of the enterprise value (as defined) of the Company and its subsidiaries.

Company Overview

We are a leading owner and operator of high-quality, individually branded ski resorts in the U.S. With the acquisition of Snow Time, Inc. (“Snow Time”) we operate 17 ski resorts primarily located in the Northeast, Mid-Atlantic and Midwest, 16 of which we own. The majority of our resorts are located within 100 miles of major metropolitan markets, including New York City, Boston, Philadelphia, Baltimore, Washington D.C., Cleveland, Kansas City and St. Louis, enabling day and overnight drive accessibility. Our resorts are comprised of nearly 2,200 acres of skiable terrain that appeal to a wide range of ages and abilities. We offer a breadth of activities, services and amenities, including skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction and zip lines, mountain biking and other summer activities. We believe that both the day and overnight drive segments of the ski industry are appealing given their stable revenue base, high margins and attractive risk-adjusted returns. We have ~~successfully~~maintained ~~acquired 14 ski resorts since~~ our ~~incorporation~~targeted ~~in 1997, and we expect to continue executing this strategy. We and our subsidiaries operate in a single business segment—resort operations.~~

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acquisition growth strategy and successfully acquired 14 ski resorts since our incorporation in 1997. We and our subsidiaries operate in a single business segment—resort operations.

Business Overview

Capital Projects

24As part of our mission to build value by investing in our current properties through expansions, new products and amenities that will elevate our customers’ skiing and off-season experiences, during the first three months of fiscal 2020 we completed capital improvement projects at our Hidden Valley resort, and initiated capital improvement projects at our Liberty Mountain, Roundtop Mountain and Whitetail Mountain resorts.

As· ~~part~~At ofHidden ~~our mission to build value by investing in our current properties through expansions~~Valley, ~~new~~we ~~products~~completed ~~and amenities that will elevate our customers’ skiing and off-season experiences, during~~ the ~~first~~construction ~~nine months~~ of ~~fiscal~~a ~~2019~~zip weline ~~completed~~tour ~~capital~~which ~~improvement~~opened ~~projects~~in atMay ~~our Hunter Mountain and Mount Snow resorts, and continued to move forward with a project at our Hidden Valley resort~~2019.

· At ~~Hunter~~Liberty Mountain Resort, weRoundtop ~~completed~~Mountain ~~the~~Resort ~~Hunter~~and ~~North~~Whitetail ~~expansion~~Mountain ~~project~~we toinitiated ~~increase~~projects ~~the~~to ~~resort’s~~improve ~~skiable~~snowmaking ~~acreage~~capabilities bywhich ~~approximately~~we ~~25%~~plan ~~and~~to ~~add~~complete ~~automated~~in ~~snowmaking,~~advance aof ~~six-passenger~~the ~~detachable~~2019/2020 ~~high-speed~~ski ~~chair lift and parking area~~season.

· At Mount Snow, we completed construction on the Carinthia Ski Lodge project. The Carinthia Ski Lodge project includes the construction of a new ski lodge at the resort’s Carinthia base, comprised of a three-story, 36,000-square foot skier service building which includes i) a restaurant, cafeteria and bars with seating for over 600 people, ii) retail facilities, and iii) a sales center for lift tickets and equipment rentals.

· At Hidden Valley, we completed the permitting process and began to source materials and make site improvements for the construction of a zip line tour which we anticipate will generate additional sales and diversify that resort’s revenue base. We anticipate completing the project during the spring of 2019.

Seasonality of Business

Our resort operations are seasonal in nature and revenue and profits from operations are substantially lower and have historically resulted in losses from late spring to late fall, which occur during our first and second fiscal quarters. Revenue and profits generated by our summer operations have historically not been sufficient to fully offset our operating expenses during the same timeframe. Therefore, our operating results for any interim period are not necessarily indicative of the results that may be achieved for any subsequent quarter or for a full year.

2521

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Results of Operations

Three Months ~~Ended~~ended ~~January~~July 31, 2019, Compared with the Three Months ended ~~January~~July 31, 2018

The following table presents our condensed unaudited consolidated statements of operations for the three months ended ~~January~~July 31, 2019 and 2018 (dollars in thousands):

	Three months ended January 31,
	Three months ended
	2019		2018		$ change		% change
	July 31,
Revenues:
	2019		2018		$ change			% change
Lift and tubing tickets	$	45,252	$	31,398	$	13,854	44.1%
Revenues:
Food and beverage		133,~~460~~543		92,~~248~~745		~~4,212~~798	~~45.5%~~	29.1%
Equipment rental		7,438		6,264		1,174	18.7%
Hotel/lodging		1,983		1,444		539		37.3%
Ski instruction		7,512		4,866		2,646	54.4%
Retail		245		212		33		15.6%
Hotel/lodging		2,986		2,782		204	7.3%
Summer activities		3,100		1,909		1,191		62.4%
Retail		5,117		3,566		1,551	43.5%
Other		791		697		94		13.5%
Other		2,212		1,148		1,064	92.7%
		9,662		7,007		2,655		37.9%
		83,977		59,272		24,705	41.7%
Costs and Expenses:
Costs and Expenses:
Resort operating costs:
Resort operating costs:
Labor and labor related expenses		11,501		8,388		3,113		37.1%
Labor and labor related expenses		24,152		18,779		5,373	28.6%
Retail and food and beverage cost of sales		1,131		894		237		26.5%
Retail and food and beverage cost of sales		6,812		5,271		1,541	29.2%
Power and utilities		1,126		967		159		16.4%
Power and utilities		5,786		3,809		1,977	51.9%
Other		6,112		4,022		2,090		52.0%
Other		12,299		8,123		4,176	51.4%
		19,870		14,271		5,599		39.2%
		49,049		35,982		13,067	36.3%
Depreciation and amortization		6,493		3,298		3,195		96.9%
Depreciation and amortization		6,809		3,379		3,430	101.5%
General and administrative expenses		3,636		1,256		2,380		189.5%
General and administrative expenses		3,322		1,353		1,969	145.5%
Real estate and other non-income taxes		895		687		208		30.3%
Real estate and other non-income taxes		888		579		309	53.4%
Land and building rent		342		336		6		1.8%
Land and building rent		352		362		(10)	-2.8%
Restructuring charges		—		177		(177)		-100.0%
Impairment loss		-		1,586		(1,586)	-100.0%
		31,236		20,025		11,211		56.0%
		60,420		43,241		17,179	39.7%
Loss from operations		(21,574)		(13,018)		(8,556)		65.7%
Income from operations		23,557		16,031		7,526	46.9%
Other (expense) income:
Other (expense) income:
Interest, net of interest capitalized of $0 and $173 in 2019 and 2018, respectively		(4,632)		(3,479)		(1,153)		33.1%
Interest, net of interest capitalized of $18 and $206 in 2019 and 2018, respectively		(4,458)		(3,529)		(929)	26.3%
Gain on sale/leaseback		83		83		—		0.0%
Gain on sale/leaseback		84		84		-	0.0%
Other income		60		32		28		87.5%
Other income		22		28		(6)	-21.4%
		(4,489)		(3,364)		(1,125)		33.4%
		(4,352)		(3,417)		(935)	27.4%
Loss before income taxes		(26,063)		(16,382)		(9,681)		59.1%
Income before income taxes		19,205		12,614		6,591	52.3%
Income tax benefit		(6,454)		(4,587)		(1,867)		40.7%
Income tax expense		5,574		3,433		2,141	62.4%
Net loss	$	(19,609)	$	(11,795)	$	(7,814)		66.2%
Net income	$	13,631	$	9,181	$	4,450	48.5%
Reported EBITDA	$	(12,773)	$	(9,543)	$	(3,230)		33.8%
Reported EBITDA	$	30,661	$	20,996	$	9,665	46.0%

26Net Revenue. Net revenue increased by $2.7 million, or 37.9%, for the three months ended July 31, 2019, compared with the three months ended July 31, 2018. The increase is primarily attributable to i) $3.7 million of revenue associated with the resort properties acquired in the Snow Time Acquisition and ii) a $1.0 million decrease in revenues at legacy Peak Resorts properties. The decreased revenues at legacy Peak Resorts properties are primarily attributable to a decline in the volume of summer festivals, which negatively impacted summer activities, food and beverage and lodging revenue.

~~Net~~ Resort ~~Revenue~~Operating Costs. ~~Net~~Resort ~~revenue~~operating costs increased by $245.7 6 million, or 4139.72%, for the three months ended ~~January~~July 31, 2019, compared with the ~~three~~same ~~months~~period ~~ended~~in ~~January~~the ~~31,~~prior ~~2018~~year. The increase is primarily attributable to i) $~~19.0 million of revenue associated with the resort properties acquired in the Snow Time Acquisition and ii) a $~~5.6 million increase in revenues at legacy Peak Resorts properties. The increased revenues at legacy Peak Resorts properties are primarily attributable to an earlier opening of our 2018/2019 ski season at the majority of our resorts and favorable weather conditions which increased skier visits, partially offset by reduced lodging and food and beverage sales at our Attitash resort as a result of our decision to cease operations of a hotel/restaurant facility as of the beginning of fiscal year 2019 (the “Attitash Hotel Closure”). 9

Resort Operating Costs. Resort operating costs increased $13.1 million, or 36.3%, for the three months ended January 31, 2019, compared with the same period in the prior year. The increase is primarily attributable to i) $11.2 million of resort operating costs associated with the resort properties acquired in the Snow Time Acquisition and ii) a $1.9 million increase in resort operating costs at legacy Peak Resorts properties. The increased operating costs at legacy Peak Resorts properties are primarily attributable to i) increased power and utility costs a result of a greater number of operating days as well as increased electric transmission charges associated with two of our Pennsylvania resorts, and ii) increased costs of goods sold associated with higher retail and food and beverage sales, partially offset by a decrease in labor costs associated with i) the Attitash Hotel Closure and iii) our ongoing efforts to manage staffing levels at our resorts.22

~~Depreciation~~Table ~~and Amortization. Depreciation and amortization expense increased by approximately $3.4 million, or 101.5%, to $6.8 million, primarily as a result~~ of i) additional depreciable assets added during the third quarter of fiscal 2019, including property and equipment acquired from Snow Time and the Hunter Mountain expansion project and Carinthia Ski Lodge project assets, and ii) additional amortizing intangible assets added during the third quarter of fiscal 2019 as a result of the Snow Time Acquisition.Contents

~~General~~million ~~and~~of ~~Administrative~~resort ~~Costs.~~operating ~~General~~costs ~~and~~associated ~~administrative~~with ~~expenses~~the ofresort ~~approximately~~properties ~~$3.3~~acquired ~~million~~in ~~for~~ the ~~three~~Snow ~~months~~Time ~~ended~~Acquisition ~~January~~and ~~31, 2019, increased by approximately $2.0 million, or 145.5%, primarily as a result of i) a $0.7 million increase in performance-based incentive compensation,~~ ii) a $0.~~4 million loss on the disposal of property and equipment, and iii) $0.~~3 million ofdecrease ~~professional~~in ~~fees~~resort ~~and~~operating ~~other~~ costs ~~associated~~at ~~with~~legacy ~~the~~Peak ~~Snow~~Resorts ~~Time Acquisition~~properties.

~~Real~~Depreciation ~~Estate~~and Amortization. Depreciation and ~~Other~~amortization ~~Non-Income~~expense ~~Taxes.~~increased ~~Real~~by ~~estate~~approximately ~~and~~$3.2 ~~other~~million, ~~non-income~~or ~~taxes~~96.9%, ofto $06.95 million for the three months ended ~~January~~July 31, 2019, ~~increased~~primarily byas ~~approximately~~a ~~$0.3~~result ~~million,~~of ori) ~~53.4%,~~additional asdepreciable ~~compared~~assets toadded during the ~~$0.6~~last ~~million~~three quarters of ~~real~~fiscal ~~estate~~2019, ~~and~~including ~~other~~$70.4 ~~non-income~~million ~~taxes~~of ~~for~~property ~~the~~and ~~same~~equipment ~~period~~acquired infrom ~~fiscal~~Snow ~~2018.~~Time ~~The~~and ~~increase~~the isHunter aMountain ~~result~~expansion ~~of approximately~~project ~~$0.2~~and ~~million~~Carinthia ~~real~~Ski ~~estate~~Lodge ~~taxes~~project ~~associated~~assets, ~~with~~and ~~the~~ii) ~~resort~~additional ~~properties~~amortizing ~~acquired~~intangible inassets added during the ~~Snow~~third ~~Time~~quarter ~~Acquisition~~of asfiscal ~~well~~2019 as ~~rate~~a ~~increases~~result ~~and~~of ~~higher~~the ~~assessed~~Snow ~~values~~Time ~~at certain legacy Peak Resorts properties~~Acquisition.

~~Restructuring~~General and ~~Impairment~~Administrative ~~Charges~~Costs. ~~During~~General ~~the~~and ~~third~~administrative ~~quarter~~expenses of ~~fiscal~~approximately ~~2018~~$3.6 million for the three months ended July 31, we2019, ~~recognized~~increased aby approximately $12.64 million, ~~asset~~or ~~impairment~~189.5%, ~~charge~~primarily ~~upon~~as ~~our~~a ~~decision~~result toof $2.3 ~~cease~~million ~~operations~~ of ~~the~~professional ~~hotel~~fees ~~facility~~and atother ~~our~~costs ~~Attitash~~associated ~~resort~~with the Merger.

~~Interest,~~Real ~~Net~~Estate and Other Non-Income Taxes. ~~Net~~Real ~~interest~~estate ~~expense~~and other non-income taxes of $40.59 million for the three months ended ~~January~~July 31, 2019, increased by approximately $0.92 million, or 2630.3%, as compared to the $30.57 million of ~~net~~real ~~interest~~estate ~~expense~~and other non-income taxes for the ~~three~~same ~~months~~period ~~ended~~in ~~January~~fiscal ~~31, 2018~~2019. The increase inis ~~net~~a ~~interest expense relates~~ primarily toa i)result ~~approximately $0.6 million~~ of ~~interest~~real onestate ~~the~~taxes ~~$50~~associated ~~million~~with ~~Term Loan due 2020 which began accruing during~~ the ~~quarter,~~resort ~~ii)~~properties aacquired ~~$0.2 million decrease~~ in the ~~amount~~Snow ofTime ~~capitalized interest during the third quarter of fiscal 2019, as compared to the same quarter in fiscal 2018, and iii) an increase in interest rates on variable rate debt~~Acquisition.

~~Income~~Restructuring ~~Taxes~~Charges. ~~Income~~During ~~tax expense increased $2.1 million, or 62.4%, to $5.6 million for~~ the ~~three~~first ~~months~~quarter ~~ended~~of ~~January~~fiscal ~~31,~~ 2019 ~~as compared with the three months ended January 31~~, ~~2018,~~we asrecognized ~~a result of an increase in our effective tax rate applied to a larger earnings before income taxes~~$0. ~~Our effective income tax rates were 27.8% and 27.~~2% ~~for~~million ~~the three months ended January 31, 2019 and 2018, respectively. The November 2018 acquisition~~ of restructuring ~~the~~charges related ~~Snow~~to ~~Time resort properties will result in~~ the ~~inclusion~~closure of ~~their operating results only for~~ the ~~ski~~hotel ~~season,~~facility ~~the~~at ~~profitable~~our ~~period~~Attitash ~~of their annual operations~~resort. ~~The 2018 tax rate reflects the enactment of the Tax Cuts and Jobs Act of 2017, which permanently reduced the U.S. corporate statutory rate from 35.0% to 21.0% as of January 1, 2018.~~

27Interest, Net. Net interest expense of $4.6 million for the three months ended July 31, 2019, increased by $1.2 million, or 33.1%, as compared to the $3.5 million of net interest expense for the three months ended July 31, 2018. The increase in net interest expense relates primarily to i) approximately $0.9 million of interest on the $50 million Term Loan due 2020 which began accruing during the third quarter of fiscal 2019, ii) a $0.2 million decrease in the amount of capitalized interest during the first quarter of fiscal 2020, as compared to the same quarter in fiscal 2019, and iii) an increase in interest rates on variable rate debt.

Income Taxes. Income tax benefit increased $1.9 million, or 40.7%, to $6.5 million for the three months ended July 31, 2019 as compared with the three months ended July 31, 2018. As compared to the first quarter of fiscal 2019, the increase is primarily attributable to a larger pretax net loss in the first quarter of fiscal 2020 as compared with the first quarter of fiscal 2019.

Reported EBITDA. We have specifically chosen to include “Reported EBITDA” (which we define as net income (loss) before interest, income taxes, depreciation, amortization, gain on sale/leaseback, other income and expense and other non-recurring items) as a measurement of our results of operations because we consider this measurement to be a significant indication of our financial performance and available capital resources. Because of large depreciation and other charges relating to our ski resorts operations, it is difficult for management to fully and accurately evaluate our financial results and available capital resources using net income alone. In addition, the use of this non-U.S. GAAP measure provides an indication of our ability to service debt, and we consider it an appropriate measure to use because of our highly leveraged position.

We believe that by providing investors with Reported EBITDA, they will have a clearer understanding of our financial performance and cash flows because Reported EBITDA i) is widely used in the ski industry to measure a company’s operating performance without regard to items excluded from the calculation of such measure; ii) helps investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our capital structure and asset base from our operating results; and iii) is used by our ~~board of directors, management and our lenders for various purposes, including as a measure of our operating performance and as a basis for planning.~~

Table of Contents

board of directors, management and our lenders for various purposes, including as a measure of our operating performance and as a basis for planning.

The items we exclude from net income (loss) to arrive at Reported EBITDA are significant components for understanding and assessing our financial performance and liquidity. Reported EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income (loss), net change in cash and cash equivalents or other financial statement data presented in our condensed consolidated financial statements as indicators of financial performance or liquidity. Because Reported EBITDA is not a measurement determined in accordance with U. S. GAAP and is susceptible to varying calculations, Reported EBITDA, as presented, may not be comparable to other similarly titled measures of other companies, limiting its usefulness as a comparative measure.

Reconciliations of net income to EBITDA for the three months ended ~~January~~July 31, 2019 and 2018, were as follows (dollars in thousands):

	Three months ended
	Three months ended July 31,
	January 31,
	2019		2018
	2019		2018
Net loss	$	(19,609)	$	(11,795)
Net income	$	13,631	$	9,181
Income tax benefit		(6,454)		(4,587)
Income tax expense		5,574		3,433
Interest expense, net		4,632		3,479
Interest expense, net		4,458		3,529
Depreciation and amortization		6,493		3,298
Depreciation and amortization		6,809		3,379
Merger Agreement related costs		2,308		—
Impairment loss		-		1,586
Restructuring charges		—		177
Acquisition related costs		295		-
Other income		(60)		(32)
Other income		(22)		(28)
Gain on sale/leaseback		(83)		(83)
Gain on sale/leaseback		(84)		(84)
Reported EBITDA	$	(12,773)	$	(9,543)
Reported EBITDA	$	30,661	$	20,996

Reported EBITDA ~~increased~~decreased by $93.72 million, or 4633.08%, for the three months ended ~~January~~July 31, 2019, as compared with the same period in the prior year, primarily as a result of i) approximately $72.75 million of Reported EBITDA loss associated with the resort properties acquired in the Snow Time Acquisition, and ii) ~~increased~~ lower revenue ~~offset~~and byincreased ~~lower relative~~ operating expenses onat legacy Peak Resorts operations.

Nine Months Ended January 31, 2019, Compared with the Nine Months ended January 31, 2018

The following table presents our unaudited condensed consolidated statements of operations for the nine months ended January 31, 2019 and 2018 (dollars in thousands):

	Nine months ended January 31,
	2019		2018			$ change	% change
Revenues:
Lift and tubing tickets	$	45,372	$	31,398	$	13,974	44.5%
Food and beverage		18,852		14,813		4,039	27.3%
Equipment rental		7,442		6,264		1,178	18.8%
Ski instruction		7,539		4,866		2,673	54.9%
Hotel/lodging		5,874		6,637		(763)	-11.5%
Retail		5,855		4,236		1,619	38.2%
Summer activities		4,436		4,459		(23)	-0.5%
Other		3,598		2,957		641	21.7%
		98,968		75,630		23,338	30.9%
Costs and Expenses:
Resort operating costs:
Labor and labor related expenses		39,731		36,389		3,342	9.2%
Retail and food and beverage cost of sales		8,869		7,141		1,728	24.2%
Power and utilities		7,866		5,398		2,468	45.7%
Other		20,572		15,714		4,858	30.9%
		77,038		64,642		12,396	19.2%
Depreciation and amortization		13,541		9,678		3,863	39.9%
General and administrative expenses		6,481		4,130		2,351	56.9%
Real estate and other non-income taxes		2,180		1,734		446	25.7%
Land and building rent		1,024		1,054		(30)	-2.8%
Restructuring charges		190		1,586		(1,396)	-88.0%
		100,454		82,824		17,630	21.3%
Loss from operations		(1,486)		(7,194)		5,708	-79.3%
Other (expense) income:
Interest, net of interest capitalized of $516 and $1,151 in 2019 and 2018, respectively		(11,283)		(9,736)		(1,547)	15.9%
Gain on sale/leaseback		250		250		-	0.0%
Other income		69		117		(48)	-41.0%
		(10,964)		(9,369)		(1,595)	17.0%
Loss before income taxes		(12,450)		(16,563)		4,113	-24.8%
Income tax benefit		(3,283)		(8,235)		4,952	-60.1%
Net loss	$	(9,167)	$	(8,328)	$	(839)	10.1%
Reported EBITDA	$	12,871	$	4,070	$	8,801	216.2%

Net Revenue. Net revenue increased $23.3 million, or 30.9%, for the nine months ended January 31, 2019, compared with the nine months ended January 31, 2018. The increase is primarily attributable to i) $19.0 million of revenue associated with the resort properties acquired in the Snow Time Acquisition and ii) a $4.2 million increase in revenues at legacy Peak Resorts properties. The increased revenues at legacy Peak Resorts properties are primarily attributable to an earlier opening of our 2018/2019 ski season at the majority of our resorts and favorable weather conditions which increased skier visits, partially offset by reduced lodging and food and beverage sales resulting from Attitash Hotel Closure.

Resort Operating Costs. Resort operating costs increased $12.4 million, or 19.2%, for the nine months ended January 31, 2019, compared with the same period in the prior year. The increase is primarily attributable to i) $11.2 million of resort operating costs associated with the resort properties acquired in the Snow Time Acquisition and ii) a $1.9 million increase in resort operating costs at legacy Peak Resorts properties. The increased operating costs at legacy Peak Resorts properties are primarily attributable to i) increased power and utility costs a result of a greater number of operating days as well as increased electric transmission charges associated with two of our Pennsylvania resorts, and ii) increased costs of goods sold associated with higher retail and food and beverage sales, partially offset by a decline in labor costs. The decline in labor costs resulted from i) the Attitash Hotel Closure and ii) reduced workers compensation insurance expense as a result of the final settlement of certain policy years for certain resorts, partially offset by increased labor costs at our resorts in New York, Missouri and Vermont, as a result of increased state minimum wage rates.

General and Administrative Costs. General and administrative expenses increased $2.4 million, or 56.9%, for the nine months ended January 31, 2019 compared with the nine months ended January 31, 2018, primarily as a result of i) a $0.7 million increase in performance-based incentive compensation, ii) a $0.4 million loss on the disposal of property and equipment, and iii) $0.6 million of professional fees and other costs associated with the Snow Time Acquisition.

Depreciation and Amortization. Depreciation and amortization expense increased by approximately $3.9 million, or 39.9%, to $13.5 million, primarily as a result of i) additional depreciable assets added during the third quarter of fiscal 2019, including property and equipment acquired from Snow Time and the Hunter Mountain expansion project and Carinthia Ski Lodge project assets, and ii) additional amortizing intangible assets added during the third quarter of fiscal 2019 as a result of the Snow Time Acquisition.

Real Estate and Other Non-Income Taxes. Real estate and other non-income taxes of $2.2 million for the nine months ended January 31, 2019, increased by $0.4 million, or 25.7%, as compared to the $1.7 million of real estate and other non-income taxes for the same period in fiscal 2018. The increase is a result of i) approximately $0.2 million real estate taxes associated with the resort properties acquired in the Snow Time Acquisition, ii) rate increases and higher assessed values at certain legacy Peak Resorts properties, and iii) real estate tax refunds we received in fiscal 2018 as a result of an appeal of certain prior year taxes.

Restructuring Charges. In September 2018, we disposed of the long-term assets related to our Attitash Hotel operations which ceased as of the beginning of fiscal 2019. For the nine months ended January 31, 2019, we incurred restructuring charges of $0.2 million in connection with the Attitash Hotel Closure, which included professional service fees and costs to maintain the facility until it was disposed of. Total costs through January 31, 2019 associated with the Attitash Hotel Closure include $1.6 million of asset impairment charges and $0.3 million of other costs. As of January 31, 2019, we do not expect to incur any additional related costs.

Interest, Net. Net interest expense of $11.3 million for the nine months ended January 31, 2019, increased by $1.6 million, or 15.9%, as compared to the $9.7 million of net interest expense for the nine months ended January 31, 2018. The increase in net interest expense relates primarily to i) approximately $0.6 million of interest on the $50 million Term Loan due 2020 which began accruing during the third quarter, ii) a $0.6 million decrease in the amount of capitalized interest during the first three quarters of fiscal 2019, as compared to the same period in fiscal 2018, and iii) an increase in interest rates on variable rate debt.

Income Taxes. Income tax benefit decreased $5.0 million, or 60.1%, to $3.3 million for the nine months ended January 31, 2019 as compared with the nine months ended January 31, 2018, as result of a decrease in our effective tax rate applied to a smaller loss before income taxes. Our overall effective income tax rates were 26.4% and 49.7% for the nine months ended January 31, 2019 and 2018, respectively. The 2019 rate reflects the effect of post-acquisition date earnings and higher effective tax rate attributable to the acquired Snow Time resort properties. The 2018 tax rate reflects the enactment of the Tax Cuts and Jobs Act of 2017, which permanently reduced the U.S. corporate statutory rate from 35.0% to 21.0% as of January 1, 2018, including the effect of that change relative to the seasonality of our business and the re-measurement of our deferred income tax assets and liabilities at December 31, 2017 to reflect the effect on their future reversal at the lower, newly enacted tax rates.

Reported EBITDA. Reconciliations of net loss to Reported EBITDA for the nine months ended January 31, 2019 and 2018, were as follows (dollars in thousands):

	Nine months ended
	January 31,
	2019		2018
Net loss	$	(9,167)	$	(8,328)
Income tax benefit		(3,283)		(8,235)
Interest expense, net		11,283		9,736
Depreciation and amortization		13,541		9,678
Acquisition related costs		626		-
Restructuring and impairment charges		190		1,586
Other income		(69)		(117)
Gain on sale/leaseback		(250)		(250)
Reported EBITDA	$	12,871	$	4,070

Reported EBITDA increased by $8.8 million, or 216.2%, for the nine months ended January 31, 2019, as compared with the same period in the prior year, primarily a result of i) approximately $7.7 million of Reported EBITDA associated with the resort properties acquired in the Snow Time Acquisition, and ii) increased revenue offset by lower relative operating expenses.

Liquidity and Capital Resources

Significant Sources of Cash

Our available cash is consistently highest in our fourth quarter primarily due to the seasonality of our resort business. We had $2714.25 million of cash and cash equivalents as of ~~January~~July 31, 2019, compared with $2330.12 million at April 30, ~~2018~~2019. Cash of $2310.10 million ~~was provided by operating activities~~ and $46.82 million was used in operating activities during the ~~nine~~three months ended ~~January~~July 31, 2019 and 2018, respectively. We generate the majority of our cash from operations during the ski season, which occurs during our third and fourth quarters. We currently anticipate cash flow from operations will continue to provide a significant source of our future cash flows. We expect our liquidity needs for the near term and the next fiscal year will be met by operating cash flows (primarily those generated in our third and fourth fiscal quarters) and additional borrowings under our various credit agreements, as needed.

3124

~~Long-term~~ Table ~~debt at January 31, 2019 and April 30, 2018 consisted primarily~~ of borrowings pursuant to the loans and other credit facilities with EPR Properties, our primary lender, Royal Banks of Missouri, our primary banking partner, Cap1 and our EB-5 partnerships. We have presented in the table below the composition of our long-term debt as of January 31, 2019 and April 30, 2018 (dollars in thousands):Contents

	January 31,		April 30,
	2019		2018
EPR Secured Notes due 2034	$	93,162	$	93,162
EPR Secured Notes due 2036		21,000		21,000
EB-5 Development Notes due 2021		52,000		52,000
Term Loan due 2020		50,068		-
Wildcat Mountain Note due 2020		3,081		3,231
Capital Leases		2,394		2,426
Other borrowings		964		1,184
Less: Unamortized debt issuance costs		(4,491)		(4,552)
		218,178		168,451
Less: Current maturities		(2,145)		(2,614)
	$	216,033	$	165,837

Long-term debt at July 31, 2019 and April 30, 2019 consisted primarily of borrowings pursuant to the loans and other credit facilities with EPR Properties, our primary lender, Royal Banks of Missouri, our primary banking partner, Cap 1 and our EB-5 partnerships. We have presented in the table below the composition of our long-term debt as of July 31, 2019 and April 30, 2019 (dollars in thousands):

In addition to the credit facilities listed above, the Company maintains a $10.0 million working capital line of credit and a $15.0 million acquisition line of credit with Royal Banks of Missouri. As of January 31, 2019, nothing was outstanding under the working capital line of credit, and $12.4 million was outstanding under the acquisition line of credit, and $10.0 million and $2.6 million was unused and available under the lines of credit, respectively.


	July 31,			April 30,
	2019		2019
EPR Secured Notes due 2034	$	93,162	$	93,162
EPR Secured Notes due 2036		21,000		21,000
EB-5 Development Notes due 2021		52,000		52,000
Term Loan due 2020, related party debt		50,049		50,058
Wildcat Mountain Note due 2020		2,978		3,030
Capital Leases		1,565		1,746
Other borrowings		459		514
Less: Unamortized debt issuance costs		(3,778)		(4,128)
		217,435		217,382
Less: Current maturities		(1,214)		(1,513)
	$	216,221	$	215,869

In addition to the credit facilities listed above, the Company maintains a $10.0 million working capital line of credit and a $15.0 million acquisition line of credit with Royal Banks of Missouri. As of ~~January~~July 31, 2019, wenothing ~~were~~was inoutstanding ~~compliance~~under ~~will~~the ~~all~~working ~~debt~~capital ~~covenants~~line of credit, and $12.4 million was outstanding under ~~our~~the ~~various~~acquisition line of credit, ~~facilities~~and $10.0 million and ~~debt~~$2.6 ~~agreements~~million was unused and available under the lines of credit, respectively.

As of July 31, 2019, we were in compliance will all debt covenants under our various credit facilities and debt agreements.

Cash Flow

~~Nine~~Three Months ~~Ended~~ended ~~January~~July 31, 2019 Compared with the ~~Nine~~Three Months ~~Ended~~ended ~~January~~July 31, 2018

Cash of $2310.10 million was ~~provided~~used byin operating activities in the first ~~nine~~quarter ~~months~~ of fiscal ~~2019~~2020, a $273.98 million increase when compared with the $46.82 million of cash used in the first ~~nine~~quarter ~~months~~ of fiscal ~~2018~~2019. The ~~Positive~~increased ~~changes~~use inof ~~working~~cash ~~capital~~was ~~were~~primarily ~~partially offset by~~ a ~~lower~~result ~~net~~of ~~loss~~changes ~~for~~in ~~the~~working ~~first~~capital ~~nine months of fiscal 2019~~items. As compared to the first ~~nine~~quarter ~~months~~ of fiscal ~~2018~~2019, ~~positive~~ changes in working capital balances during the first ~~half~~quarter of fiscal ~~2019~~2020 included i) the impact of ~~prepaying~~incentive ~~interest~~compensation ~~during~~payments ~~fiscal 2018 and ii) the impact~~ of aamounts ~~larger~~accrued ~~volume~~at ofApril ~~advanced~~30, ~~season~~2019 ~~pass~~and ~~installment~~ii) ~~sales at~~ the ~~end~~impact of ~~fiscal~~cash ~~2018~~losses ~~and~~during athe ~~larger~~first ~~volume~~quarter of ~~advanced~~fiscal ~~season~~2020 ~~pass~~at ~~sales~~resorts ~~during~~acquired in the ~~first~~Snow ~~half~~Time ~~of fiscal 2019~~Acquisition.

Cash of $945.1 million was used by investing activities in the first ~~nine~~three months of fiscal ~~2019~~2020, ana ~~increase~~decrease of $673.41 million when compared with the $268.72 million used in the first ~~nine~~three months of fiscal ~~2018~~2019. Investing cash flows in fiscal ~~2019~~2020 related primarily to i)additions ~~net~~to ~~cash~~property ~~paid~~and toequipment ~~acquire~~associated ~~Snow~~with ~~Time,~~the ~~and~~completion ~~ii)~~of ~~additions~~Hidden toValley ~~property~~Zip ~~and~~Tour ~~equipment~~project, ~~associated~~snow ~~with~~making ~~the~~improvement ~~construction~~projects ofat the ~~Carinthia~~resorts ~~Ski~~we ~~Lodge,~~acquired ~~Hunter~~in ~~North~~the ~~expansion~~Snow ~~and~~Time ~~Hidden~~Acquisition ~~Valley~~and ~~Zip~~maintenance ~~Tour~~capital ~~projects~~expenditures. Additions to property and equipment during the first ~~nine~~three months of fiscal ~~2018~~2019 related primarily to the construction of the ~~West~~Carinthia ~~Lake~~Ski ~~Water~~Lodge, Hunter North expansion and ~~Carinthia~~Hidden ~~Ski~~Valley ~~Lodge~~Zip Tour projects.

Cash of $631.38 million was ~~provided~~used by financing activities in the first ~~nine~~three months of fiscal ~~2019~~2020, ana ~~increase~~decrease of $720.4 1 million when compared with the $9.1.9 million used in the first ~~nine~~three months of fiscal ~~2018~~2019. Financing cash flows in the first ~~nine~~quarter ~~months~~ of fiscal ~~2019~~2020 included ~~i) approximately~~ $700.3 million of ~~proceeds~~debt ~~from~~repayments ~~the~~and ~~Term~~$1.5 million of

3225

~~Loan~~ Table ~~and the issuance~~ of preferred stock and common stock warrants to finance the Snow Time Acquisition, ii) approximately $0.1 million of other borrowings and capital leases, partially offset by, iii) 1.8 million of debt repayments, iv) $0.8 million of financing fees related to the Term Loan, and v) $4.1 million of distributions to stockholders. Financing cash flows in the first nine months of fiscal 2018 included i) the net repayment of approximately $5.3 million of credit facility and long-term debt, ii) $3.7 million of distributions to stockholders and iii) $0.1 of financing fees. Contents

distributions to stockholders. Financing cash flows in the first quarter of fiscal 2019 included $0.5 million of debt repayments and $1.4 million of distributions to stockholders.

Significant Uses of Cash

As of ~~January~~July 31, 2019, our cash uses are currently expected to include i) operating expenditures, ii) capital expenditures, and iii) debt service. We have historically invested significant cash in capital expenditures for our resort operations and expect to continue to invest in the future.

Capital expenditures, including capital lease agreements, during the first ~~nine~~three months of fiscal ~~2019~~2020 were $295.81 million and included $111.31 million ~~related~~ to complete the ~~Hunter~~Hidden ~~Mountain~~Valley ~~expansion~~Zip Tour project, $100.58 million on ~~the~~snow ~~Carinthia~~making ~~Ski~~improvement ~~Lodge~~projects ~~project,~~at ~~$0.7~~the ~~million~~resorts onwe ~~the~~acquired ~~Hidden~~in ~~Valley~~the ~~Zip~~Snow ~~Tour~~Time ~~project~~Acquisition and $7.3.2 million to maintain and enhance our resort properties. We currently anticipate that for the full ~~2019~~2020 fiscal year, we will spend between approximately $3011.50 million to $3313.50 million on capital expenditures. Included in our total capital spending for the fiscal year, we expect to spend approximately $8.5 million to $9.5 million on resort maintenance capital expenditures, which includes projects needed to maintain and improve the level of service and overall experiences we strive to provide our visitors. Our total expenditures through January 31, 2019 on the Hunter Mountain expansion project have been approximately $11.3 million; however, the ultimate project costs may be between $9.5 million and $10.5 million as we are actively pursuing tax incentives related to the project. Because the three resorts we acquired in November 2018 in the Snow Time Acquisition were largely prepared for the 2018/2019 ski season, we do not expect to make significant capital expenditures at these resorts during the remainder of fiscal 2019.

As of ~~January~~July 31, 2019, 40,000 shares of our Series A Preferred Stock were outstanding, 20,000 of which were issued to Cap 1 in connection with the Snow Time Acquisition which closed in November 2018. The terms of the Series A Preferred Stock provide that cumulative dividends accrue on a daily basis in arrears at the rate of 8.0% per annum on the liquidation value of $1,000 per share, beginning nine months from the date of issuance. ~~Dividends~~Accordingly, ~~will~~during ~~begin~~August of 2019, dividends began accruing on the 20,000 shares of Series A Preferred Stock issued ~~to Cap 1~~ in November 2018 ~~in August 2019~~. All accrued and accumulated dividends on the Series A Preferred Stock must be paid prior and in preference to any cash dividend on our common stock. In addition, until the earlier of i) such date as no Series A Preferred Stock remains outstanding and ii) January 1, 2027, we are prohibited from paying any dividend on common stock when there are accrued or unpaid dividends with respect to the Series A Preferred Stock. ~~We intend to pay the~~ Series A Preferred Stock dividends ofequate to approximately $0.~~4 million per quarter for the next two quarters and $0.~~8 million per quarter~~, thereafter, when dividends on the additional shares of Series A Preferred Stock begin to accrue~~.

During the first ~~nine~~three months of fiscal ~~2019~~2020, we paid common stock dividends of $21.91 million ($0.07 per share of common stock on ~~each of~~ May ~~11, 2018, August~~ 10, ~~2018 and November 27, 2018~~2019), and declared a cash dividend of $1.1 million ($0.07 per share of common stock to common stockholders of record on ~~January~~July 2425, 2019), which we paid on ~~February~~August 89, 2019. The declaration and payment of future dividends will be at the sole discretion of our board of directors, and will depend on many factors, including our actual results of operations, financial condition, capital requirements, contractual restrictions, restrictions in our debt agreements, preference of our Series A Preferred Stock, economic conditions and other factors that could differ materially from our current expectations.

33The Company agreed in the Merger Agreement to suspend the payment of any future dividends, other than the quarterly cash dividend declared on July 2, 2019 of $0.07 per outstanding share of its common stock, which was paid on August 9, 2019 to common shareholders of record as of July 25, 2019, and the Series A Preferred Stock dividend of $0.4 million, which was paid on August 9, 2019 to the holder of the Company’s Series A Preferred Stock. Dividends on the Series A Preferred Stock will continue to accrue.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Interest~~Not ~~Rate Risk~~applicable.

As of January 31, 2019, we had $126.6 million of outstanding borrowings with variable interest rates, and we may have additional variable rate debt in the future. Accordingly, our earnings and cash flows could be affected by changes in interest rates in the future. Interest rates on $93.2 million of our variable interest rate borrowings are capped such that they cannot increase by more than a factor of 1.015 annually, and interest rates on $21.0 million of our variable interest rate borrowings are capped such that they cannot increase by more than a factor of 1.0175 annually. As a result, we do not believe a 10% movement in the reference rates applicable to our outstanding borrowings with variable interest rates would have a material effect on our financial condition, operating results or cash flows.

We do not perform any interest rate hedging activities related to our outstanding debt.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rules 13a-‑15(e) and 15d-‑15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report on Form 10-‑Q. Based on that evaluation, management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-‑Q, are functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. A controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Change in Internal Control over Financial Reporting

There have been no changes in the Company'’s internal control over financial reporting during the period covered by this Quarterly Report on Form 10-‑Q identified in connection with the evaluation required by Rules 13a-‑15(d) and 15d-‑15(d) under the Exchange Act that have materially affected, or that are reasonably likely to materially affect, the Company'’s internal control over financial reporting. During the third quarter of fiscal 2019, the Company completed the acquisition of Snow Time. As permitted by SEC staff interpretive guidance that an assessment of a recently acquired business may be omitted from the scope of evaluation in the year of acquisition, management excluded Snow Time from its interim evaluation of internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

We are not aware of any pending or threatened legal proceedings against us that could have a material adverse effect on our business, operating results or financial conditions, except as discussed below with respect to litigation relating to the proposed Merger. The ski industry is characterized by periodic litigation and as a result, we may be involved in various additional legal proceedings from time to time.

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the Company’s board of directors, purportedly in relation to the Company’s entry into the Merger Agreement. The complaint asserts claims under Section 14(a) and Section 20(a) of the Exchange Act and rules promulgated thereunder, based on allegations that the Proxy Statement omitted to disclose certain material facts allegedly necessary to make statements made in the Proxy Statement not misleading and/or misrepresented certain allegedly material information. The complaint seeks, among other things, an order enjoining the defendants from proceeding with, consummating or closing the proposed Merger and any vote on the proposed Merger, unless and until the defendants disclose and disseminate to the Company’s shareholders the allegedly material information identified in the complaint; in the event the proposed Merger is consummated, an order rescinding it and setting it aside or awarding rescissory damages; and unspecified attorneys’ and experts’ fees.

The Company believes that the allegations against it in each of the foregoing lawsuits lack merit, however, there can be no assurance that any of the defendants will prevail in any one or more of the lawsuits. It is possible that additional lawsuits may be filed in connection with the proposed Merger.

Item 1A. RISK FACTORS.

We have included in Part I, Item 1A of our Annual Report on Form 10-‑K for the year ended April 30, ~~2018~~2019, a description of certain risks and uncertainties that could have a material adverse effect on our business, financial condition, results of operations or cash flows. In addition to those risk factors, we have identified the following additional risk factors related to ~~Snow~~the ~~Time Acquisition~~Merger.

~~Risks~~The ~~Relating~~announcement toand pendency of the ~~Snow~~Merger ~~Time~~may ~~Acquisition~~have an adverse effect on our business, financial condition, operating results and cash flows.

~~The~~On ~~Snow~~July ~~Time~~20, ~~Acquisition~~2019, ~~could~~we ~~harm~~entered ~~our~~into ~~business~~the Merger Agreement with Parent, ~~operating~~Merger ~~results~~Sub, orand, ~~financial~~solely ~~condition~~for the purposes stated in Section 9.14 of the Merger Agreement, Vail Resorts, relating to the proposed acquisition of the Company by Parent. Upon consummation of the Merger pursuant to the Merger Agreement, the Company will continue as the surviving corporation as a direct, wholly-owned subsidiary of Parent and an indirect, wholly-owned subsidiary of Vail Resorts.

WeUpon ~~may~~the ~~incur~~terms ~~substantial~~and ~~expenses~~subject into ~~connection~~the ~~with~~conditions ~~the~~set ~~integration~~forth ofin the ~~business,~~Merger ~~policies~~Agreement, ~~procedures,~~at ~~operations,~~the ~~technologies~~Effective Time, ~~and~~(i) ~~systems~~each share of ~~Snow~~the ~~Time. There~~Company’s ~~are~~common astock ~~large~~issued ~~number~~and ofoutstanding ~~systems~~immediately ~~and~~prior ~~functions~~to ~~that~~the ~~must~~Merger be(other ~~integrated,~~than ~~including,~~Excluded ~~but~~Shares) ~~not~~will ~~limited~~cease to, ~~management~~be ~~information,~~outstanding ~~accounting~~ and ~~finance,~~will ~~payroll,~~be ~~and~~converted ~~benefits~~into ~~and~~the ~~regulatory~~right ~~compliance. Acquisitions~~to ~~are~~receive ~~particularly~~$11.00 ~~challenging~~in ~~because~~cash, ~~the~~without ~~prior~~interest ~~practices~~and ofless ~~target~~any ~~companies~~applicable ~~may~~withholding ~~not~~taxes; ~~meet~~and ~~the~~(ii) ~~requirements~~each ofshare ~~the Sarbanes-Oxley Act~~ of ~~2002~~Series orA ~~U.S.~~Preferred ~~GAAP~~Stock ~~standards applicable to publicly traded companies. While we have assumed~~ that ais ~~certain~~outstanding ~~level~~immediately ofprior ~~expenses~~to ~~would~~the ~~be incurred~~Merger, ~~there~~other ~~are~~than aExcluded ~~number~~Shares, ofwill ~~factors~~be ~~beyond~~converted ~~our~~into ~~control~~the ~~that~~right ~~could~~to ~~affect~~receive ~~the~~an ~~total~~ amount orequal to the ~~timing~~sum of: ~~all~~(A) ~~of the expected integration expenses~~$1,748. ~~Moreover~~81, ~~many of~~ the ~~expenses~~product ~~that~~of $11.00 ~~will~~multiplied ~~be incurred,~~ by ~~their nature, are difficult to estimate accurately at~~ the ~~present~~amount ~~time.~~equal

~~We may be unable to successfully integrate our business with the business of Snow Time and realize the anticipated benefits of the Snow Time Acquisition.~~28

~~The~~Table ~~Snow Time Acquisition involves the combination~~ of the businesses of two companies that currently operate as independent companies. Our management will be required to devote significant attention and resources to integrating our business practices and operations with those of Snow Time. Potential difficulties we may encounter as part of the integration process include, but are not limited to, the following: Contents

·to ~~inability~~the toquotient ~~successfully~~of ~~combine~~$1,000 ~~our~~divided ~~business~~by ~~with~~$6.29; plus (B) the ~~business~~aggregate amount of ~~Snow~~all ~~Time~~accrued inand aunpaid ~~manner~~dividends ~~that~~on ~~permits~~the usapplicable toissuance ~~achieve~~of ~~the~~Series ~~full~~A ~~synergies~~Preferred ~~anticipated~~Stock ~~from~~as of the ~~acquisition;~~Merger, in cash without interest.

· Uncertainty ~~complexities~~about ~~associated~~the ~~with~~effect ~~managing~~of the proposed Merger on our employees, partners, customers and other third parties may disrupt our season pass and other sales and marketing or other key business activities and ~~the~~may have a material adverse effect on our business, offinancial ~~Snow~~condition, ~~Time~~operating results and cash flows. Current and prospective employees may experience uncertainty about their roles following the Merger, ~~including~~and this may have an effect on our corporate culture. There can be no assurance we will be able to attract and retain key talent to the ~~challenge~~same extent that we have previously been able to attract and retain employees. Any loss or distraction of ~~integrating~~such ~~complex~~employees ~~systems~~could have a material adverse effect on our business, ~~technology~~financial condition and operating results. In addition, ~~networks~~we have devoted, and will continue to devote, significant management and other ~~assets~~internal ofresources ~~each~~towards the completion of the ~~companies~~Merger inand aplanning ~~seamless~~for ~~manner~~integration, ~~that~~which ~~minimizes~~could ~~any~~materially ~~adverse~~adversely ~~impact~~affect onour ~~customers~~business, ~~suppliers,~~financial ~~employees~~condition, operating results and ~~other~~cash ~~constituencies;~~flows. Parties with which we have business relationships may experience uncertainty as to the future of such relationships and may delay or defer certain business decisions, seek alternative relationships with third parties or seek to alter their present business relationships with us. Parties with whom we otherwise may have sought to establish business relationships may seek alternative relationships with third parties.

· The ~~integrating~~Merger Agreement generally requires us to operate our business in the ~~workforces~~ordinary course pending consummation of the ~~two~~proposed ~~companies~~Merger ~~while~~and ~~maintaining~~generally ~~focus~~restricts onus ~~providing~~from ~~consistent~~taking certain specified actions until the Merger is completed. These restrictions may affect our ability to execute our business strategies, ~~high~~to ~~quality~~respond ~~customer~~effectively ~~service;~~to competitive pressures and industry developments, and to attain our financial and other goals and may otherwise harm our business, financial condition, operating results and cash flows.

· The ~~potential~~failure ~~unknown~~to ~~liabilities~~complete ~~and~~the ~~unforeseen~~Merger ~~increased~~in ~~expenses~~a timely manner or ~~delays~~at ~~associated~~all ~~with~~could negatively impact the ~~acquisition,~~market ~~including~~price ~~costs~~of toour ~~integrate~~common ~~the~~stock ~~two~~as ~~companies~~well ~~that~~as ~~may~~adversely ~~exceed~~affect ~~anticipated~~our ~~costs~~business, financial condition, operating results and cash flows.

~~Any~~Completion of the ~~difficulties~~Merger ~~listed~~is ~~above~~subject ~~could~~to ~~adversely~~conditions ~~affect~~beyond our ~~ability~~control tothat ~~maintain~~may ~~relationships~~prevent, ~~with~~delay ~~resort~~or ~~visitors,~~otherwise ~~suppliers,~~adversely ~~employees,~~affect ~~lenders~~its completion in a material way, including the requirement that the Merger Agreement be adopted and ~~other~~the ~~constituencies~~Merger orand ~~our~~the ~~ability~~transactions contemplated thereby be approved by the affirmative vote of the holders of at least two-thirds of the outstanding shares of common stock and Series A Preferred Stock entitled to ~~achieve~~vote at the ~~anticipated~~Special ~~benefits~~Meeting as of the ~~Snow~~August ~~Time~~19, ~~Acquisition~~2019 record date for the Special Meeting, voting together as a single class on an as-converted basis. The Company intends to hold the Special Meeting on September 20, 2019.

35The Merger cannot be completed until the conditions to closing are satisfied or (if permissible under applicable law) waived. On August 6, 2019, the Company received a letter from the USFS confirming that renewal, issuance or reissuance of the Company’s USFS permits is not required as a consequence of consummation of the Merger. On August 28, 2019, the applicable waiting period under the HSR Act expired with respect to the proposed acquisition of the Company by Parent. While these events satisfied two of the applicable conditions to closing of the acquisition set forth in the Merger Agreement, consummation of the Merger is subject to the satisfaction or (to the extent permitted by applicable law) waiver of the conditions to the completion of the Merger more fully described in the Proxy Statement. We cannot guarantee that the remaining closing conditions set forth in the Merger Agreement will be satisfied or, even if satisfied, that no event of termination will take place. In the event that the Merger is not completed for any reason, the holders of our capital stock will not receive any payment for their shares of capital stock in connection with the proposed Merger. Instead, we will remain an independent public company and the holders of our capital stock will continue to own their shares of stock.

Our actual financial and operating results after the Snow Time Acquisition could differ materially from any expectations or guidance provided by us concerning future results, including (without limitation) expectations or guidance with respect to the financial impact of any cost savings and other potential synergies. 29

WeTable ~~currently expect to realize an increase in gross revenue and other synergies as a result~~ of the Snow Time Acquisition. These expectations are subject to numerous assumptions, however, including assumptions derived from our diligence efforts concerning the status of and prospects for Snow Time’s business, and assumptions relating to the near-term prospects for our industry generally and the markets for Snow Time’s resorts in particular. Additional assumptions that we have made include, without limitation, the following:Contents

· If ~~projections~~the Merger or a similar transaction is not completed, the share price of ~~future~~our ~~revenues;~~common stock may drop to the extent that the current market price of our common stock reflects an assumption that a transaction will be completed.

· Furthermore, ~~anticipated~~if ~~cost~~the ~~savings~~Merger ~~and~~is significantly delayed or not completed, we may suffer other ~~synergies~~consequences ~~associated~~that ~~with~~could ~~the~~adversely ~~Snow~~affect ~~Time~~our ~~Acquisition;~~business, results of operations and stock price, including the following:

· ~~our~~we ~~capital~~could ~~structure~~be ~~after~~required to pay a termination fee of up to $9.22 million to Parent, and up to $3.0 million of Parent’s fees and expenses incurred in connection with the ~~Snow~~Merger ~~Time~~Agreement ~~Acquisition~~and related transactions, under certain circumstances as described in the Merger Agreement;

· ~~amount~~we ofwould ~~goodwill~~have ~~and~~incurred ~~intangibles~~significant ~~that~~costs ~~will~~in ~~result~~connection ~~from~~with the ~~Snow~~Merger ~~Time~~that ~~Acquisition~~we would be unable to recover;

· ~~the~~we ~~fair~~may ~~value~~be ofsubject ~~the~~to ~~assets~~negative ~~acquired~~publicity ~~and~~or ~~liabilities~~be ~~assumed~~negatively ~~from~~perceived ~~Snow~~by ~~Time~~the investment or business communities;

· ~~certain~~we ~~other~~may ~~purchase~~be ~~accounting~~subject ~~adjustments~~to ~~that~~legal weproceedings ~~expect~~related to ~~record~~any indelay ~~our~~or ~~financial~~failure ~~statements~~to incomplete ~~connection with~~ the ~~Snow Time Acquisition~~Merger;

· ~~acquisition~~any ~~related~~disruptions ~~costs~~to our business resulting from the announcement and pendency of the Merger, including ~~transaction~~any ~~costs~~adverse ~~payable~~changes toin our ~~financial~~relationships with our customers, ~~legal~~suppliers, other business partners and ~~accounting~~employees, ~~advisors~~may continue or intensify in the event the Merger is not consummated; and

· ~~other~~we ~~financial~~may ~~and~~not ~~strategic~~be ~~risks~~able to take advantage of ~~the~~alternative ~~Snow~~business ~~Time~~opportunities ~~Acquisition~~or effectively respond to competitive pressures.

WeThere ~~cannot~~can ~~provide~~be ~~any~~no ~~assurances~~assurance ~~with~~that ~~respect to the accuracy of~~ our ~~assumptions~~business, ~~including~~financial ~~our assumptions with respect to future revenues or revenue growth rates~~condition, ifoperating ~~any,~~results ~~of Snow Time,~~ and wecash ~~cannot~~flows ~~provide~~will ~~assurances~~not ~~with~~be ~~respect~~adversely ~~to our ability to realize any cost savings that we currently anticipate. Risks and uncertainties that could cause our actual results to differ materially from currently anticipated results include~~affected, ~~but~~as ~~are~~compared ~~not limited~~ to, ~~those discussed in this “Risk Factors” section and those relating to~~ our ~~business~~condition ~~and~~prior ~~industry as discussed in our filings with the SEC. Any failure~~ to ~~integrate Snow Time successfully and to realize~~ the ~~financial~~announcement ~~benefits~~of ~~we currently anticipate from~~ the ~~Snow~~Merger, ~~Time~~if ~~Acquisition would have a material adverse impact on our future operating results and financial condition and could materially and adversely affect~~ the ~~trading~~Merger ~~price~~is ornot ~~trading volume of our common stock~~consummated.

The ~~obligations~~Merger ~~and~~Agreement ~~liabilities~~contains ofprovisions ~~Snow~~that ~~Time,~~could ~~some~~discourage ofor ~~which~~deter ~~may~~a bepotential ~~unanticipated~~competing oracquirer ~~unknown,~~that ~~may~~might be ~~greater~~willing ~~than~~to wepay ~~have~~more ~~anticipated,~~to ~~which~~effect ~~may~~an ~~diminish~~alternative ~~the~~transaction ~~value~~with ~~of Snow Time to~~ us.

~~Snow~~The ~~Time’s~~Merger ~~obligations~~Agreement ~~and~~contains ~~liabilities~~provisions that, ~~some~~subject ofto ~~which~~certain ~~may~~exceptions, ~~not~~limit ~~have~~our ~~been~~ability ~~disclosed~~ to usinitiate, solicit or ~~may~~knowingly ~~not~~encourage, beor ~~reflected~~engage in discussions or ~~reserved~~negotiations ~~for~~with inrespect ~~Snow~~to, ~~Time’s~~or ~~historical~~provide ~~financial~~non-public ~~statements~~information in connection with, ~~may~~a beproposal ~~greater~~from ~~than~~a wethird ~~have~~party ~~anticipated~~with respect to an alternative transaction. ~~The~~In ~~obligations~~addition, ~~and~~under ~~liabilities~~specified ofcircumstances ~~Snow~~in ~~Time~~which the Merger Agreement is terminated, we could ~~have~~be required to pay a ~~material~~termination ~~adverse~~fee ~~effect~~of onup ~~Snow~~to ~~Time’s~~$9.22 ~~value~~million to usParent. It is possible that these or onother ~~our~~provisions ~~business,~~in ~~financial~~the ~~condition,~~Merger orAgreement ~~results~~might ofdiscourage ~~operations.~~a Inpotential ~~the~~competing ~~event~~acquirer that wemight ~~are~~have ~~responsible~~an ~~for~~interest ~~liabilities~~in ~~substantially~~acquiring inall ~~excess~~or ofa ~~any~~significant ~~amounts~~part ~~recovered~~of ~~through~~our ~~rights~~company tofrom ~~indemnification~~considering or ~~alternative~~proposing ~~remedies~~an ~~that~~acquisition or might beresult ~~available~~in toa ~~us,~~potential orcompeting ~~any~~acquirer ~~applicable~~proposing ~~insurance,~~to wepay ~~could~~a ~~suffer~~lower ~~consequences~~per ~~that~~share ~~would~~price ~~substantially~~to ~~reduce~~acquire our ~~earnings~~common ~~and~~stock ~~cash~~than ~~flows~~it ormight otherwise ~~materially~~have ~~and~~proposed ~~adversely~~to ~~affect~~pay. ~~our~~Additional ~~business,~~information ~~financial~~regarding ~~condition,~~these orrestrictions ~~results~~is ofprovided ~~operations~~in the definitive proxy statement on Schedule 14A that we filed with the Securities and Exchange Commission on August 20, 2019.

~~Risks~~Litigation ~~Relating~~challenging tothe Merger Agreement may prevent the ~~Term~~Merger ~~Loan~~from being consummated at all or within the expected timeframe and may result in substantial costs to us.

~~We may not be able to refinance, extend or repay the Term Loan when it comes due, which would have a material adverse effect on our financial condition.~~30

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~~Under~~ As ~~the~~described ~~Credit~~in ~~Agreement~~Item 1, we“Legal ~~are~~Proceedings,” ~~required~~three tocomplaints ~~repay~~have ~~the~~been ~~Term~~filed ~~Loan~~by ~~debt~~alleged inshareholders ~~full~~of ~~within two years from~~ the ~~date~~Company ofagainst the ~~Term~~Company ~~Loan~~and ~~closing,~~each ~~subject~~of tothe amembers ~~one-year~~of ~~extension~~the atCompany’s ~~our~~board ~~option.~~of Wedirectors, ~~anticipate~~purportedly ~~that we will need to refinance the Term Loan debt~~ in ~~order~~relation to ~~repay~~ the ~~Term~~Company’s ~~Loan~~entry ~~funds when they mature, which may include entering~~ into ~~a new credit facility or~~ the ~~issuance~~Merger ~~of debt or equity capital~~Agreement. IfEach weof ~~are unable to repay~~ the ~~Term~~complaints ~~Loan~~seek, ~~debt~~among atother ~~maturity~~things, ~~and~~orders weenjoining ~~are~~consummation ~~otherwise~~of ~~unable to extend~~ the ~~maturity~~Merger ~~date~~unless orand ~~refinance~~until ~~this~~such ~~obligation,~~matters wehave ~~would~~been ~~be in default~~resolved. WeIf ~~cannot~~injunctive ~~provide~~relief ~~any~~is ~~assurances~~granted ~~that~~in weany ~~will~~one beor ~~able~~more ~~to raise the necessary amount~~ of ~~capital to repay~~ the ~~Term Loan debt~~lawsuits, orthen ~~that~~the weMerger ~~will~~may not be ~~able~~consummated toat ~~extend~~all ~~the maturity date~~ or ~~otherwise~~within ~~refinance~~the ~~this~~expected ~~obligation~~timeframe. AAlso, ~~default~~if on the ~~Term~~Company’s ~~Loan~~insurance ~~would~~provider ~~result~~were into adeny ~~default~~coverage under the existing ~~credit~~insurance ~~agreements,~~policies ~~and~~covering ~~our~~such ~~lenders~~actions ~~would~~or ~~have~~should ~~the~~such ~~right~~policies fail to ~~exercise~~cover ~~their~~the ~~rights~~costs ~~and~~of ~~remedies~~defending toany ~~collect,~~one ~~which~~or ~~would~~more ~~include~~of ~~foreclosing~~the onlawsuits, ~~our~~we ~~assets and~~ may ~~require~~incur ussubstantial ~~to seek bankruptcy protection.~~costs

~~Receipt~~We ofwill ~~the~~incur ~~Term~~substantial ~~Loan~~transaction ~~funds~~fees and ~~issuance~~costs ofin ~~additional~~connection ~~Series~~with ~~A Preferred Stock significantly increases our leverage and further reduces~~ the ~~cash available, which may impair our flexibility to operate our business~~Merger.

~~Receipt~~As of July 31, 2019, we have incurred $2.3 million of expenses and fees for professional services and other transaction costs in connection with the ~~Term~~Merger ~~Loan~~and ~~significantly~~expect ~~increased~~to ~~our~~continue ~~already~~to ~~substantial~~incur ~~debt~~additional significant costs. AsA amaterial ~~result~~portion of these expenses are payable by us whether or not the Merger is completed. Furthermore, if our shareholders do not vote to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby by the requisite two-thirds affirmative vote and the Merger Agreement is terminated, the Merger Agreement requires us to reimburse Parent for all of its fees and expenses incurred in connection with the Merger Agreement and related transactions up to $3.0 million. While we ~~face~~have ~~increased~~assumed ~~risk~~that a certain amount of ~~default~~transaction onexpenses will be incurred, factors beyond our ~~debt~~control ~~obligations~~could ~~and~~affect anthe ~~increase~~total inamount ~~debt~~or ~~service~~the ~~requirements~~timing of these expenses. WeMany ~~may~~of ~~also~~the ~~incur~~expenses ~~additional~~that ~~indebtedness~~will inbe incurred, by their nature, are difficult to estimate accurately. These expenses may exceed the ~~future~~costs historically borne by us. These costs could adversely affect our business, financial condition, operating results and cash flows.

The amount of our outstanding debt and debt service obligations, as well as our increased Series A Preferred Stock dividend obligations, may have significant, and potentially adverse, consequences to us and our stockholders, including:

· impairing our ability to meet one or more of the financial covenants contained in our existing debt agreements or to generate cash sufficient to pay interest or principal due under those agreements, which could result in an acceleration of some or all of our outstanding debt;

· limiting our ability to borrow money, dispose of assets, or fund our working capital, capital expenditures, dividend payments, debt service, strategic initiatives or other obligations;

· limiting our flexibility in planning for, or reacting to, changes in the economy, the markets, regulatory requirements, our operations or our business;

· making us more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;

· making us more vulnerable to downturns in the economy or our business;

· requiring a substantial portion of our cash flow from operations to make debt service payments;

· preventing us from taking advantage of business opportunities, including other resort acquisitions, as they arise; and

· inhibiting our ability to pay cash dividends on our common stock, repurchase common stock or redeem Series A Preferred Stock.

To the extent that we incur additional indebtedness, the risks described above could increase. In addition, our actual cash requirements in the future may be greater than expected. Our cash flow from operations may not be sufficient to service our outstanding debt or to repay the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets, or otherwise raise funds on acceptable terms, or at all, to service or refinance our debt.

Risks Related to Our Capital Structure and Ownership of our Common Stock

The issuance of shares of our Series A Preferred Stock to Cap 1 reduces the relative voting power of holders of our common stock, may dilute the ownership of such holders and may adversely affect the market price of our common stock.

As holders of our Series A Preferred Stock are entitled to vote on an as-converted basis together with holders of our common stock on all matters submitted to a vote of the holders of our common stock, the issuance of 20,000 additional Series A Preferred Stock to Cap 1 further reduces the relative voting power of the holders of our

common stock. Upon closing the Snow Time Acquisition, Cap 1 and its affiliates hold approximately 37.9% of the voting power of the Company. This significant voting power and ownership interest could adversely affect prevailing market prices of our common stock. Furthermore, sales by holders of a substantial number of shares of our common stock in the public market, or the perception that such sales might occur, could have a material adverse effect on the price of our common stock.

Cap 1 may exercise significant influence over us and may be able to control us in the future.

Under the terms of the Series A Preferred Stock, the Series A Preferred Stock generally ranks, with respect to the liquidation, dividends and redemption, senior to other securities. The Amended and Restated Stockholders’ Agreement entered into with Cap 1 in connection with the Snow Time Acquisition provides that, so long as the Cap 1 beneficially owns, on an as-converted basis, at least 11.4% of the outstanding equity securities of the Company, Cap 1’s approval is required in order for the Company or any subsidiary to: i) materially change the nature of its business from owning, operating and managing ski resorts; or ii) acquire or dispose of any resorts, assets, or properties for aggregate consideration equal to or greater than 30% of the enterprise value of the Company and its subsidiaries.

The Amended and Restated Stockholders’ Agreement further grants to Cap 1 the right to nominate a director so long as it beneficially owns, on an as-converted basis, at least 20% of the outstanding equity securities of the Company, subject to satisfaction of reasonable qualification standards and Nominating and Corporate Governance Committee approval of the nominee. Notwithstanding the fact that all directors will be subject to fiduciary duties to us and to applicable law, the interests of the directors designated by Cap 1 may differ from the interests of our security holders as a whole or of our other directors.

Assuming the conversion of the Series A Preferred Stock and exercise of all warrants held by Cap 1 as of the Snow Time Acquisition closing, Cap 1 would own approximately 54% of the outstanding shares of our common stock. Additional preemptive rights and rights of first offer in the documents governing the Series A Preferred Stock, Option Warrants, Financing Warrant and Extension Warrant may allow Cap 1 to maintain its ownership position upon the issuance of additional equity capital by the Company. Holders of our Series A Preferred Stock are entitled to vote, on an as-converted basis, together with holders of our common stock on all matters submitted to a vote of the holders of our common stock. While obtaining 54% of the Company’s voting power would require Cap 1 to pay approximately $57.5 million in aggregate exercise prices ranging from $6.50 to $10.00 per share, Cap 1 may, in the future, have the ability to control the outcome of any matter submitted for the vote of the holders of our common stock.

Our Series A Preferred Stock has rights and privileges that are not held by, and are preferential to, the rights of holders of our common stock, which could adversely affect our liquidity and financial condition, and may result in the interests of the holders of our Series A Preferred Stock differing from those of our common stockholders.

The holders of Series A Preferred Stock have the right to receive a liquidation preference entitling them to be paid out of our assets available for distribution to stockholders before any payment may be made to holders of any other class or series of capital stock as well as a preferential right to receive cumulative dividends at the rate of 8% per annum on the liquidation value of $1,000 per share. The holders of our Series A Preferred Stock also have certain redemption and conversion rights, and there are limitations on the Company’s ability to redeem other securities.

These dividend obligations could impact our liquidity and reduce the amount of cash flows available for working capital, capital expenditures, growth opportunities, acquisitions, common stock dividends and other general corporate purposes. Our obligations to the holders of our Series A Preferred Stock could limit our ability to obtain additional financing or increase our borrowing costs, which could have a material adverse effect on our business, financial condition, results of operations or cash flows. The preferential rights could also result in divergent interests between the holders of shares of Series A Preferred Stock and holders of our common stock.

The issuance of the Series A Preferred Stock, Option Warrants, Financing Warrant and Extension Warrant, and the common stock issuable upon conversion or exercise thereof, may impact the control of the Company. The existence of a single stockholder with this level of significant ownership percentage and director nomination

rights may discourage or deter third parties from attempting to gain control of the Company, which could result in stockholders not being able to participate in any possible premiums which might be obtained in the absence of anti-takeover provisions. Any transaction which may be so discouraged or avoided could be a transaction that the Company’s common stockholders might consider to be in their best interests. However, the Board of Directors has a fiduciary duty to act in the best interests of the Company’s stockholders at all times.

Conversion and exercise of the securities issued in connection with the Snow Time Acquisition and Term Loan financing could result in the issuance of a significant amount of additional shares of our common stock, which could depress the trading price of the common stock.

Conversion of the Series A Preferred Stock and exercise of the Option Warrants, Financing Warrant and Extension Warrant, if granted, issued in connection with the Term Loan will result in the issuance of a significant amount of Peak Resorts common stock. The issuance of such a significant amount of our common stock could depress the trading price of the common stock.

The market price of our common stock may decline as a result of the Snow Time Acquisition or the issuance of additional securities to Cap 1.

We currently anticipate that the Snow Time Acquisition will be accretive to earnings per share, after factoring in synergies and excluding costs to achieve synergies and other one-time costs related to the Snow Time Acquisition. This expectation is based on preliminary estimates that are subject to change and risks and uncertainties, as described in this Quarterly Report on Form 10-Q and elsewhere in the Company’s reports filed with the SEC. We could also encounter additional transaction and integration-related costs, may fail to realize all of the benefits anticipated in the Snow Time Acquisition, or be subject to other factors that affect preliminary estimates. Any of these factors could cause a decrease in our earnings per share or decrease the expected accretive effect of the Snow Time Acquisition and contribute to a decrease in the price of our common stock.

In addition, we are unable to predict the potential effects of the issuance of the Series A Preferred Stock, Option Warrants, Financing Warrant and Extension Warrant, and the common stock underlying these securities, on the trading activity and market price of our common stock. Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales might occur, could have a material adverse effect on the price of 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.

None.

Item 5. OTHER INFORMATION.

(a)

None.

(b) There have been no material changes to the procedures by which stockholders may recommend nominees to the Company’s board of directors implemented in the quarter ended ~~January~~July 31, 2019.

Item 6. EXHIBITS.

The exhibits filed or furnished are set forth in the Exhibit Index at the end of this Quarterly Report on Form 10-‑Q.

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~~SIGNATURES~~Table of Contents

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PEAK RESORTS, INC.
	By:	/s/ TIMOTHY D. BOYD
Date: March 13, 2019		Timothy D. Boyd
		Chief Executive Officer, President and
		Chairman of the Board
	By:	/s/ CHRISTOPHER J. BUB
Date: March 13, 2019		Christopher J. Bub
		Chief Financial Officer, Vice President and Secretary

EXHIBIT INDEX

These exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K.

Exhibit
ExhibitNumber		Description
Number		Description
2.1*		Agreement and Plan of Merger, dated as of July 20, 2019, by and among Vail Holdings, Inc., VRAD Holdings, Inc., Peak Resorts, Inc. and, solely for the purposes stated in Section 9.14, Vail Resorts, Inc. (filed as Exhibit 2.1 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).
4.1		Warrant No. 4 issued to Cap 1 LLC, dated as of November 21, 2018 (filed as Exhibit 4.1 to the Current Report on Form 8-K filed on November 23, 2018 and incorporated herein by reference).
3.1		Amendment to Amended and Restated By-laws of Peak Resorts, Inc. (filed as Exhibit 3.1 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).
4.2		Warrant No. 5 issued to Cap 1 LLC, dated as of November 21, 2018 (filed as Exhibit 4.2 to the Current Report on Form 8-K filed on November 23, 2018 and incorporated herein by reference).
10.1		Form of Peak Resorts, Inc. Employee Restricted Stock Unit Agreement (filed as Exhibit 10.1 to the Current Report on Form 8-K filed on May 9, 2019 and incorporated herein by reference).
4.3		Warrant No. 6 issued to Cap 1 LLC, dated as of November 21, 2018 (filed as Exhibit 4.3 to the Current Report on Form 8-K filed on November 23, 2018 and incorporated herein by reference).
10.2		Voting, Support and Consent Agreement, dated as of July 20, 2019, by and among Vail Holdings, Inc., Cap 1, LLC, Peak Resorts, Inc., Snow Time Acquisition, Inc. and the subsidiary guarantors listed on the signature pages thereto (filed as Exhibit 10.1 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).
4.4		Warrant No. 7 issued to Cap 1 LLC, dated as of November 21, 2018 (filed as Exhibit 4.4 to the Current Report on Form 8-K filed on November 23, 2018 and incorporated herein by reference).
10.3		Voting and Support Agreement, dated as of July 20, 2019, by and among Vail Holdings, Inc. and Richard S. Sackler, M.D. (filed as Exhibit 10.2 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).
10.1		Credit Agreement among Snow Time Acquisition, Inc., Snow Time, Inc. and Cap 1 LLC, dated as of November 21, 2018 (filed as Exhibit 10.1 to the Current Report on Form 8-K filed on November 23, 2018 and incorporated herein by reference).
10.4		Voting and Support Agreement, dated as of July 20, 2019, by and among Vail Holdings, Inc. and the Richard and Beth Sackler Foundation, Inc. (filed as Exhibit 10.3 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).
10.2		Amended and Restated Stockholders’ Agreement among Peak Resorts, Inc., Timothy D. Boyd, Stephen J. Mueller, Richard K. Deutsch and Cap 1 LLC, dated as of November 21, 2018 (filed as Exhibit 10.2 to the Current Report on Form 8-K filed on November 23, 2018 and incorporated herein by reference).
10.5		Voting and Support Agreement, dated as of July 20, 2019, by and among Vail Holdings, Inc. and David Sackler (filed as Exhibit 10.4 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).
10.3		Amended and Restated Voting Agreement among Peak Resorts, Inc., Cap 1 LLC, Timothy D. Boyd, Stephen J. Mueller and Richard K. Deutsch, dated as of November 21, 2018 (filed as Exhibit 10.3 to the Current Report on Form 8-K filed on November 23, 2018 and incorporated herein by reference).
10.6		Voting and Support Agreement, dated as of July 20, 2019, by and among Vail Holdings, Inc. and Timothy D. Boyd (filed as Exhibit 10.5 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).
10.4		Registration Rights Agreement between Peak Resorts, Inc. and Cap 1 LLC, dated as of November 21, 2018 (filed as Exhibit 10.4 to the Current Report on Form 8-K filed on November 23, 2018 and incorporated herein by reference).
10.7		Voting and Support Agreement, dated as of July 20, 2019, by and among Vail Holdings, Inc. and the Timothy D. Boyd Revocable Trust U/A 8/27/1996 (filed as Exhibit 10.6 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).
10.8		Voting and Support Agreement, dated as of July 20, 2019, by and among Vail Holdings, Inc. and the Timothy D. Boyd 2011 Family Trust U/A 1/28/2011 (filed as Exhibit 10.7 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).

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10.5		First Renewal of the Restated Credit Facility, Loan and Security Agreement by and between Peak Resorts, Inc., Hidden Valley Golf and Ski, Inc., Paoli Peaks, Inc., Snow Creek, Inc., L.B.O. Holding, Inc., and SNH Development, Inc., dated as of December 27, 2018 (filed as Exhibit 10.1 to the Current Report on Form 8-K filed on December 27, 2018 and incorporated herein by reference).
10.6		Renewed Working Line Promissory Note from Peak Resorts, Inc., Hidden Valley Golf and Ski, Inc., Paoli Peaks, Inc., Snow Creek, Inc., LBO Holding, Inc., and SNH Development, Inc. in favor of Royal Banks of Missouri, dated as of December 27, 2018 (filed as Exhibit 10.2 to the Current Report on Form 8-K filed on December 27, 2018 and incorporated herein by reference).
10.7		Renewed Acquisition Line Promissory Note from Peak Resorts, Inc., Hidden Valley Golf and Ski, Inc., Paoli Peaks, Inc., Snow Creek, Inc., LBO Holding, Inc., and SNH Development, Inc. in favor of Royal Banks of Missouri, dated as of December 27, 2018 (filed as Exhibit 10.3 to the Current Report on Form 8-K filed on December 27, 2018 and incorporated herein by reference).
31.1		Certification of Principal Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
31.2		Certification of Principal Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32.1		Certification of Chief Executive Officer and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (18 USC. Section 1350).
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

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10.9		Voting and Support Agreement, dated as of July 20, 2019, by and among Vail Holdings, Inc. and the Melissa K. Boyd Revocable Trust U/A 8/27/1996 (filed as Exhibit 10.8 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).

10.10		Voting and Support Agreement, dated as of July 20, 2019, by and among Vail Holdings, Inc. and Jesse Boyd and Jessica Boyd JTWROS (filed as Exhibit 10.9 to the Current Report on Form 8-K filed on July 22, 2019 and incorporated herein by reference).

31.1		Certification of Principal Executive Officer, pursuant to Rule 13a‑14(a)/15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

31.2		Certification of Principal Financial Officer, pursuant to Rule 13a‑14(a)/15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

32.1		Certification of Chief Executive Officer and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (18 USC. Section 1350).

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to supplementally furnish copies of any omitted schedules to the Securities and Exchange Commission upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PEAK RESORTS, INC.

	By:	/s/ TIMOTHY D. BOYD

Date: September 13, 2019		Timothy D. Boyd
		Chief Executive Officer, President and
		Chairman of the Board


	By:	/s/ CHRISTOPHER J. BUB

Date: September 13, 2019		Christopher J. Bub
		Chief Financial Officer, Vice President and Secretary

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