UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2025
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of event requiring this shell company report:
Commission File Number: 001-41985
(Exact name of Registrant as specified in its charter)
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Not applicable
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Bailiwick of
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(Translation of Registrant’s name into English)
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(Jurisdiction of incorporation or organization)
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(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Exchange Act:
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Title of each class
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Trading Symbol(s)
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Name of exchange on which
registered
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The
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The
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Securities registered or to be registered pursuant to Section 12(g) of the Exchange Act:
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Exchange Act:
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or
common stock as of the close of the period covered by the annual report:
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Ordinary Shares, no par value
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933, as amended (the
“Securities Act”). Yes ☐ No ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, amended (“Exchange Act”). Yes ☐ No
☒
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 (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth
company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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☒
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Emerging growth company
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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. ☐
†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting
Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting over Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Exchange Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
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U.S. GAAP ☐
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by the International Accounting Standards Board
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Other ☐
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If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to
follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
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F-1
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Except as otherwise indicated or required by context, references in this annual report on Form 20-F (including information incorporated by reference herein, the “Report”) to “Murano PubCo”
refer to Murano Global Investments PLC and references to “we”, “us”, “our”, “our company”, “the Company”, “Murano”, “Murano Group”, or “the Group” refer to Murano Global Investments PLC and its subsidiaries.
Below are definitions of certain terms used throughout this Report.
“2031 Notes” means the 11% Senior Secured Notes due 2031 issued pursuant to the Indenture.
“2031 Notes Restructuring” means the proposed consensual liability management or restructuring transaction relating to the 2031 Notes, to be
implemented on the terms set forth in the Term Sheet and reflected in definitive documentation, if completed.
“Accor” means Accor Corporation.
“ADR” means average daily rate and is the average revenue earned (excluding food, beverage, and other non-related room services) for an occupied room
on a given day. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or a group of hotels.
“Ad-Hoc Group” means the ad hoc group of holders of the 2031 Notes representing more than 81% of the aggregate principal amount of the 2031 Notes
outstanding, with whom the Company and certain subsidiaries entered into the Lock-Up Agreement in connection with a proposed consensual restructuring transaction relating to the 2031 Notes on the terms set forth in the Term Sheet attached as
Schedule 2 to the Lock-Up Agreement.
“ALG” means ALG Servicios Financieros México, S.A. de C.V., SOFOM, E.N.R.
“Andaz Hotel” means the Andaz Mexico City Condesa hotel located in the Insurgentes 421 Hotel Complex, operated by Hyatt under the “Andaz” brand
pursuant to the Andaz Hotel Management Agreement.
“Andaz Hotel Management Agreement” means the Hotel Services Agreement, dated May 11, 2022, entered into by and between OHI421, as owner, and Hyatt, as
manager, pursuant to which, among other matters, Hyatt agreed to manage the Andaz Hotel pursuant to the terms and conditions set forth therein, as amended, supplemented and/or restated from time to time.
“Arrendadora Coppel” means Arrendadora Coppel, S.A.P.I. de C.V.
“Arrendadora Finamo” Arrendadora Finamo, S.A. de C.V.
“Baja Cruise Port” means the cruise port project in Ensenada currently
under evaluation and expected to have a capacity of 2 million passengers per year.
“Baja Marina” means the marina project in Ensenada currently under
evaluation and expected to consist of 15,000 linear ft slip spaces.
“Baja Park Development Project” means the industrial park project in Ensenada currently under evaluation and expected to consist of 363,262 sqm of
leasable space.
“Baja Retail Village” means the retail village project in Ensenada currently under evaluation and expected to have a leasable area of approximately
45,000 sqm.
“Bancomext” means Banco Nacional de Comercio Exterior, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo.
“Beach Club” means the Grand Island Beach Club located in the GIC Complex in Cancun.
“Beach Club Loan” means the loan facility provided by ALG pursuant to the terms and conditions of the secured loan agreement dated March 31, 2023 (as
amended and restated from time to time, including by means of that certain amendment agreement dated November 6, 2023), entered into between Murano World, as borrower, and ALG, as lender, for an aggregate principal amount of U.S.$20 million,
which is expected to be restructured in connection with the contemplated 2031 Notes Restructuring, on the terms to be described in the corresponding definitive documents.
“Business Combination” means the business combination effected through the Business Combination Agreement.
“CaixaBank” means CaixaBank, S.A.
“CIB/3224 Trust” means the management trust agreement No. CIB/3224 (Contrato de Fideicomiso de Administración No.
CIB/3224), dated August 10, 2023, entered into by CIBanco (currently with Multiva acting as successor trustee), solely in its capacity as trustee (fiduciario), Murano World, as settlor and
beneficiary, and the Issuer Trust, as first beneficiary solely with respect to GIC Private Unit 2, as amended and restated on September 12, 2024, and as further amended, supplemented and/or restated from time to time.
“CIBanco” means CIBanco, S.A., Institución de Banca Múltiple.
“Contractors” means any contractor authorized by Inmobiliaria Insurgentes 421 or the GIC I Trust, and supervised by Ideurban, or any other reputable
construction supervisor that may replace Ideurban, from time to time, to carry out any construction and/or work in the Insurgentes 421 Hotel Complex or the GIC I Complex, respectively.
“Coppel Lease Agreements” means the lease agreement dated November 8, 2023, between Operadora GIC I, as lessee, Arrendadora Coppel, as lessor, and
Murano World, Edificaciones BVG and Elías Sacal Cababie as joint and several obligors, under which the parties establish the terms and conditions based on which the lessor will grant the lessee the temporary use and enjoyment of the goods
described in the specific contracts that are signed from time to time by the parties, including of equipment, their accessories and spare parts, and under which, additionally, the lessee will have the obligation to pay to the lessor the rental
amount, as amended, supplemented and/or restated from time to time.
“Dreams Hotel” means the hotel currently referred to as Dreams Grand Island that is intended to form part of the GIC I Hotel within the GIC Complex in
Cancun, Quintana Roo, and to be operated by the applicable Hotel Operator pursuant to the then-effective hotel management arrangements (which may be amended, replaced or terminated from time to time, including in connection with the 2031 Notes
Restructuring).
“Edificaciones BVG” means Edificaciones BVG, S.A. de C.V.
“Ennismore” means Ennismore México, S. de R.L. de C.V. (and, as applicable, Ennismore Holdings US Inc. and/or any related affiliate), a lifestyle
hospitality company and a member of the Accor global hotel group.
“ESAGRUP” means E.S. Agrupación, S.A. de C.V., a Mexican corporation.
“Exitus” means Exitus Capital, S.A.P.I. de C.V., SOFOM, E.N.R.
“Exitus Loan” means the credit agreement dated June 30, 2025, entered into by and among Murano World, as borrower, Exitus, as lender, and ESAGRUP,
Elías Sacal Cababie and Marcos Sacal Cohen, as joint obligors, in an aggregate amount of U.S.$20.4 million at a fixed interest rate of 15%, and maturing on June 30, 2029 (as amended, supplemented and/or restated from time to time).
“Exitus Original Loans” means, collectively, the credit agreements between Murano World, as borrower, and Exitus, as lender, (a) dated May 31, 2022,
in an aggregate principal amount of U.S.$15 million at an annual fixed interest rate of 15%, and maturing on May 31, 2025, (b) dated June 26, 2023, in an aggregate principal amount of U.S.$972,300 at an annual fixed interest rate of 15%, and
maturing on December 26, 2025, (c) dated December 5, 2023, in an aggregate principal amount of U.S.$2,500,000 at an annual fixed interest rate of 15%, and maturing on December 5, 2025, and (d) dated September 30, 2024, in an aggregate principal
amount of U.S.$18.1 million at a fixed interest rate of 15%, and maturing on December 30, 2025, each as amended, supplemented and/or restated from time to time. The Exitus Original Loans were repaid in full with the proceeds from the Exitus
Loan.
“Exitus Trust” means the irrevocable management, guarantee and source of payment trust agreement No. 250 C (Contrato
de Fideicomiso Irrevocable de Garantía, Administración y Fuente de Pago No. 250 C), dated May 31, 2022, entered into by and among Exitus, acting solely as trustee (fiduciario), BVG World
(currently Murano World), as borrower, CIBanco (currently with Multiva acting as successor trustee), in its capacity trustee of the F/0455 Trust, as settlor and second place beneficiary, Elías Sacal Cababie, Marcos Sacal Cohen and ESAGRUP, as
second place beneficiaries, and Exitus and Sofoplus as first place beneficiaries, as amended, supplemented and/or restated from time to time.
“Finamo” means Administradora de Soluciones, S.A. de C.V., SOFOM, E.N.R.
“GIC Complex” means, collectively, the GIC I Hotel, the GIC Condominiums, GIC Spa, and their respective service areas, back-of-house, pools, gyms,
bars and other related areas and services, in each case as such components may be modified from time to time, including in connection with the contemplated 2031 Notes Restructuring and the implementation of the Restructuring Project.
“GIC Condominiums” means the contemplated project of residential condominiums within the GIC Complex. The development project entails the construction
and commercialization, under commercially sound brands, of approximately 1,254 residential units divided into four condominium towers.
“GIC I Hotel” means the Grand Island Cancun I hotel located in Cancun, Quintana Roo, originally consisting of the Vivid Hotel, which is operational,
and the Dreams Hotel, which was under completion, as such property, components and related operations may be reconfigured, converted or otherwise modified from time to time, including in connection with the contemplated 2031 Notes Restructuring
and the Restructuring Project.
“GIC I Hotel Management Agreement” means the Hotel Operation and Administration Services Agreement, dated September 10, 2019, entered into by and
between Hyatt Inclusive Collection, as hotel manager, and Operadora GIC I, as client, pursuant to which, among other matters, the hotel manager agreed to manage the GIC I Hotel pursuant to the terms and conditions set forth therein, as amended
on September 11, 2019, March 28, 2021, and July 11, 2023, and as further amended, supplemented and/or restated from time to time, or any replacement hotel management agreement entered into in respect of the relevant property from time to time,
including in connection with the contemplated 2031 Notes Restructuring.
“GIC I Hotel Management Agreement (Mondrian)” means the hotel management agreement, dated April 6, 2026, entered into by and between Operadora GIC I,
as client, and Ennismore, as hotel manager, and the GIC I Trust, as guarantor, pursuant to which, upon satisfaction of the applicable conditions precedent, Ennismore is expected to operate the GIC I Hotel under the “Mondrian” brand for an
initial mandatory term of 20 fiscal years commencing on the opening date.
“GIC I Lease Agreement” means the lease agreement entered into on September 5, 2019, by the GIC I Trust with Operadora GIC I pursuant to which the GIC
I Trust leases the GIC I Hotel’s properties to Operadora GIC I, both restricted subsidiaries under the Indenture, for a period of 20 years.
“GIC I Loan” means the syndicated secured mortgage loan with Sabadell, as administrative agent and collateral agent, and Sabcapital, CaixaBank, Bancomext,
Nafin and Avantta Sentir Común, S.A. de C.V., SOFOM, E.N.R, as lenders, with the appearance of Murano PV, Elías Sacal Cababie, and the CIB/3224 Trust, in an aggregate principal amount of U.S.$239,811,149.50 at an annual interest rate of term
SOFR +4.0116%, and maturing on February 5, 2033, as amended, supplemented and/or restated from time to time. The GIC I Loan was repaid in full with the proceeds from the 2031 Notes.
“GIC I Supervision Agreement” means the GIC I Supervision Agreement, dated as October 1, 2019, between
Ideurban and the GIC I Trust; or any other supervision agreement in regard to the GIC I Hotel construction entered into by the GIC I Trust and any other reputable construction supervisor that may replace Ideurban from time to time.
“GIC I Trust” means the management trust agreement No. CIB/3001 (Contrato de Fideicomiso de Administración No.
CIB/3001), dated May 28, 2018, known as “Fideicomiso Murano 2000”, entered into by CIBanco (currently with Multiva acting as successor trustee), solely in its capacity as trustee (fiduciario),
the Murano 1000 Trust, as settlor and beneficiary, Murano World, as settlor and beneficiary, the Issuer Trust, as first beneficiary solely with respect to GIC Private Unit 1, and Murano AT GV, S.A. de C.V., as manager, as amended and restated
on September 12, 2024, and as further amended, supplemented and/or restated from time to time.
“GIC II Hotel” means the Grand Island Cancun II hotel located in Cancun, Quintana Roo, that was going to be developed. Latest market developments
shifted the company´s focus towards residential development and commercialization, deciding to halt its development to prioritize GIC Condominiums to be developed in the GIC Complex.
“GIC II Hotel Management Agreement” means (i) the Hotel Operation and Administration Services Agreement, dated as of August 23, 2021, between Hyatt
Inclusive Collection, as hotel manager, and Operadora GIC II, as client, as amended, supplemented and/or restated from time to time; or (ii) any other hotel management agreement in regard to the GIC II Hotel operation entered into by CIBanco
(currently with Multiva acting as successor trustee), as trustee (fiduciario) of the GIC II Trust, and any other reputable hotel operator that may replace Hyatt Inclusive Collection, from time to time,
including in connection with the contemplated 2031 Notes Restructuring.
“GIC II Trust” means the management, guarantee and source of payment trust agreement No. CIB/3288 (Contrato de
Fideicomiso de Administración, Garantía y Fuente de Pago No. CIB/3288), dated June 3, 2019, known as “Fideicomiso Murano 4000”, entered into by CIBanco (currently with Multiva acting as successor trustee), solely in its capacity as
trustee (fiduciario), the Murano 1000 Trust, as settlor A and second beneficiary, Murano World, as settlor B and second beneficiary, and Finamo, as first beneficiary, as amended and restated on December
27, 2023, and as further amended, supplemented and/or restated from time to time.
“GIC Private Unit 1” means the private unit number one, located in Boulevard Kukulcán, in the lot marked as Supermanzana A-2 “A,” second tourist
stage, located in the Tourist Development of Cancun, Municipality of Benito Juarez, State of Quintana Roo, with a total surface area of 47,727.69 m2.
“GIC Private Unit 2” means the private unit number two, located in Boulevard Kukulcán, in the lot marked as Supermanzana A-2 “A,” second tourist
stage, located in the Tourist Development of Cancun, Municipality of Benito Juarez, State of Quintana Roo, with a total surface area of 30,431.53 m2.
“GIC Private Unit 3” means the private unit number three, located in Boulevard Kukulcán, in the lot marked as Supermanzana A-2 “A,” second tourist
stage, located in the Tourist Development of Cancun, Municipality of Benito Juarez, State of Quintana Roo, with a total surface area of 79,974.10 m2.
“GIC Private Unit 4” means the private unit number four, located in Boulevard Kukulcán, in the lot marked as
Supermanzana A-2 “A,” second tourist stage, located in the Tourist Development of Cancun, Municipality of Benito Juarez, State of Quintana Roo, with a total surface area of 21,473.30 m2.
“GIC Private Unit 5” means the private unit number five, located Boulevard Kukulcán, in the lot marked as
Supermanzana A-2 “A,” second tourist stage, located in the Tourist Development of Cancun, Municipality of Benito Juarez, State of Quintana Roo, with a total surface area of 27,632.44 m2.
“GIC Spa” means the spa to be developed in the GIC Private Unit 1.
“HCM” means HCM Acquisition Corp.
“HCM Holdings” means HCM Investor Holdings, LLC
“HCM Initial Shareholders” means shareholders in HCM prior to the completion of the Business Combination.
“HCM Warrant Agreement” means a warrant agreement, dated January 20, 2022, by and between HCM and Continental Stock Transfer & Trust Company, as
warrant agent.
“Hotel Operators” means (i) Hyatt, with respect to the Andaz Hotel, (ii) Accor, with respect to the Mondrian Hotel, and (iii) Hyatt Inclusive
Collection, with respect to the GIC I Hotel and the GIC II Hotel; provided that, with respect to the GIC I Hotel, we have entered into the GIC I Hotel Management Agreement (Mondrian) in connection with the contemplated 2031 Notes Restructuring,
pursuant to which Hyatt is expected to be replaced as hotel operator by Ennismore upon satisfaction of the conditions precedent thereunder (including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I
Hotel Management Agreement with Hyatt); or, in each case, any other reputable firm in the hotel operation industry that enters into a hotel management agreement in connection with any of the Properties, from time to time.
“Hotels” means, collectively, the hotels developed and operated in the Insurgentes 421 Hotel Complex and the GIC Complex.
“Hyatt” means Hyatt Hotels Corporation, Hyatt of Mexico, S.A. de C.V. and any subsidiary and/or affiliate thereof (including Hyatt Inclusive
Collection). References to Hyatt as a Hotel Operator in this Report are subject to the applicable hotel management arrangements and the contemplated operator transition for the GIC I Hotel in connection with the 2031 Notes Restructuring.
“Hyatt Inclusive Collection” means AMR Operaciones MX, S. de R.L. de C.V.
“Ideurban” means Ideurban Tecnologías, S.A. de C.V.
“Indenture” means the indenture dated as of September 12, 2024, among CIBanco (currently with Multiva acting as successor trustee), as trustee of the
Issuer Trust, as issuer, Operadora GIC I, CIBanco (currently with Multiva acting as successor trustee), as trustee of the CIB/3224 Trust, CIBanco (currently with Multiva acting as successor trustee), as trustee of the GIC I Trust, and Murano
PV, as guarantors, The Bank of New York Mellon, as indenture trustee, offshore collateral agent, paying agent, transfer agent and registrar, (currently with UMB Bank, N.A. acting as successor indenture trustee) and Banco Actinver, S.A.,
Institución de Banca Múltiple, Grupo Financiero Actinver, as onshore collateral agent, as amended, supplemented and/or restated from time to time.
“Inmobiliaria Insurgentes 421” means Inmobiliaria Insurgentes 421, S.A. de C.V.
“Insurgentes 421 Hotel Complex” means the 396 room and ancillary facilities consisting of the Andaz Hotel and the Mondrian Hotel in the property
identified as “Conjunto Aristos” located at Avenida Insurgentes Sur No. 421, Colonia Hipódromo Condesa, Alcaldía Cuauhtémoc, 06100, Mexico City, and their respective service areas, back-of-house, pool, gyms, bars and other related areas and
services.
“Insurgentes Lease Agreements” means, collectively, the OHI421 Lease Agreement and the OHI421 Premium Lease Agreement.
“Insurgentes Loan” means the loan agreement dated September 29, 2022 (as amended, supplemented and/or restated from time to time, including pursuant to
that certain Fourth Amendment Agreement dated July 4, 2025) entered into by Inmobiliaria Insurgentes 421, as borrower, OHI421 and OHI421 Premium, as joint obligors, and Bancomext, as lender, in an aggregate principal amount of U.S.$100 million
at an interest rate of term SOFR +3.50%, and maturing on October 7, 2037.
“Insurgentes Security Trust” means the irrevocable management, guarantee and source of payment trust agreement No. 10707 (formerly identified as No.
CIB/3109) (Contrato de Fideicomiso Irrevocable de Administración, Garantía y Fuente de Pago No. 10707 – anteriormente identificado como No. CIB/3109), dated October 3, 2018, entered into by CIBanco (with
Bancomext acting as substitute trustee pursuant to the trustee substitution agreement dated July 16, 2025), solely in its capacity as trustee (fiduciario), Bancomext, as first beneficiary and Murano
Management, Murano PV, OHI421, OHI421 Premium, and Inmobiliaria Insurgentes 421, as settlors and second beneficiaries, as amended and restated on December 18, 2025, and as further amended, supplemented and/or restated from time to time.
“Issuer Trust” means the irrevocable issuing, administration and payment trust agreement No. CIB/4323 (Contrato de
Fideicomiso Irrevocable de Emisión, Administración y Fuente de Pago No. CIB/4323), dated as of September 12, 2024, entered into by and among Murano PV, Operadora GIC I and the GIC I Trust, as settlors and second beneficiaries, CIBanco
(currently with Multiva acting as successor trustee), acting solely as trustee (fiduciario), and Banco Actinver, S.A., Institución de Banca Múltiple, Grupo Financiero Actinver, as onshore collateral
agent, as first beneficiary, as amended, supplemented and/or restated from time to time.
“Leases” means the Insurgentes Lease Agreements and the GIC I Lease Agreement.
“Lessee” means any of OHI421, OHI421 Premium and Operadora GIC I, in its capacity as lessee under the Lease to which such entity is a party to.
“Lessors” means any of Inmobiliaria Insurgentes 421 and the GIC I Trust in its capacity as lessor under the Lease to which such entity is a party to.
“Lock-Up Agreement” means the lock-up agreement dated March 10, 2026, by and among Operadora GIC I, Murano PV, Murano Global Investments PLC, Elías
Sacal Cababie and the Ad Hoc Group, relating to the proposed restructuring transaction for the 2031 Notes.
“Mondrian Hotel” means the Mondrian Mexico City Condesa hotel located in the Insurgentes 421 Hotel Complex, operated by Accor under the “Mondrian”
brand pursuant to the Mondrian Hotel Management Agreement.
“Mondrian Hotel Management Agreement” means the Hotel Management Agreement dated May 11, 2022, entered into by and between OHI421 Premium, as owner,
and Ennismore, as manager, pursuant to which, among other matters, Ennismore (now Accor) agreed to manage the Mondrian Hotel pursuant to the terms and conditions set forth therein, as amended, supplemented and/or restated from time to time.
“Multiva” means Banco Multiva, S.A., Institución de Banca Múltiple, Grupo Financiero Multiva.
“Murano 1000 Trust” means the management trust agreement No. CIB/3000 (Contrato de Fideicomiso de Administración No.
CIB/3000), known as “Fideicomiso Murano 1000”, entered into by CIBanco (currently with Multiva acting as successor trustee), solely in its capacity as trustee (fiduciario), and Murano PV, as
settlor and first beneficiary, as amended, supplemented and/or restated from time to time.
“Murano Management” means Murano Management, S.A. de C.V.
“Murano Ordinary Shares” means ordinary shares of Murano PubCo.
“Murano PV” means Murano PV, S.A. de C.V.
“Murano Warrants” means the warrants, each exercisable for one Murano Ordinary Share, at an exercise price of U.S.$11.50 per Murano Ordinary Share.
“Murano World” means Murano World, S.A. de C.V.
“Nafin” means Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo.
“Nafin Loan” means the loan agreement dated October 17, 2024, between Nafin, as lender, Murano PV, as borrower, and Elías Sacal Cababie and Marcos Sacal
Cohen, as joint obligors, pursuant to which Nafin provided a two year loan in an aggregate principal amount of U.S.$70,378,283.27, as amended, supplemented and/or restated from time to time.
“Nasdaq” means the National Association of Securities Dealers Automated Quotations a public market trading platform based in New York.
“New CayCo” means Murano Global Cayman.
“New Notes” means the amended or exchanged notes contemplated by the Term Sheet to replace, or be issued in exchange for, the 2031 Notes in connection
with the 2031 Notes Restructuring.
“Occupancy” means the total number of hotel room nights sold divided by the total number of available hotel room nights, and is a measure of the
utilization of a hotel’s available room capacity.
“OHI421” means Operadora Hotelera I421, S.A. de C.V.
“OHI421 Premium” means Operadora Hotelera I421 Premium, S.A. de C.V.
“Operadora GIC I” means Operadora Hotelera G.I., S.A. de C.V.
“Operadora GIC II” means Operadora Hotelera Grand Island II, S.A. de C.V.
“Registration Rights Agreement” means the Registration Rights Agreement, dated January 20, 2022, by and among HCM, HCM Holdings and the Cantor
Fitzgerald & Co.
“Relevant 2031 Notes Defaults” means the payment default under the Indenture resulting from the failure to pay interest due on the Notes on September
12, 2025, and March 12, 2026.
“Residential Condos” means the approximately 328 residential apartments contemplated to be developed and sold as part of the Restructuring Project, as
described in the Term Sheet.
“Resort Property in Baja Development Project” means a proposed resort under evaluation in Ensenada expected to comprise two five-star upper-upscale
resorts, one with 371 keys and a second one with 400 key on completion.
“Restructuring Project” means the contemplated conversion of the GIC I Hotel into (i) a hotel with 566 guest rooms and (ii) the Residential Condos, in
each case, as described in the Term Sheet.
“RevPAR” means the product of ADR and the Occupancy. RevPAR includes only revenue from room rentals and excludes revenues from food and beverage and
other services that we can generate in our hotels such as telephone service, laundry, and valet parking, among others. We use RevPAR to assess the rate with respect to the total available rooms.
“Sabadell” means Banco Sabadell, S.A., Institución de Banca Múltiple.
“Sabcapital” means Sabcapital, S.A. de C.V., SOFOM, E.R.
“Santander Revolving Credit Facility” means the revolving credit facility dated March 3, 2023, between Murano World, as borrower, Santander International, as lender, and Harry Sacal Cababie as
pledgor, for an uncommitted line of credit agreement in an aggregate principal amount of U.S.$1,500,000, which was repaid in full on March 27, 2026.
“SEPA” means the Standby Equity Purchase Agreement dated June 11, 2025, between Murano PubCo and YA, pursuant to which, we have the right, but not the
obligation, to sell to YA, from time to time and at our discretion, up to $500.0 million of our ordinary shares, during the 36-month period following the execution of the SEPA, subject to the terms, conditions and limitations set forth therein.
“Sofoplus” means Sofoplus, S.A.P.I. de C.V., SOFOM, E.N.R.
“Sofoplus Loan I” means the term loan between Murano World, as borrower, Elías Sacal Cababie and Marcos Sacal Cohen, as joint and several obligors,
and Sofoplus, as lender, in an aggregate principal amount of U.S.$3.6 million at an annual fixed interest rate of 16%, and maturing on October 1, 2026, as amended by that certain First Amendment Agreement, dated September 29, 2025, and as
further amended, supplemented and/or restated from time to time.
“Sofoplus Loan II” means the term loan between Murano World, as borrower, Elías Sacal Cababie and Marcos Sacal Cohen, as joint and several obligors,
and Sofoplus, as lender, in an aggregate principal amount of U.S.$6 million at an annual fixed interest rate of 16%, and maturing on February 1, 2028, as amended, supplemented and/or restated from time to time.
“Sofoplus Original Loan” means the secured term loan between Murano World, as borrower, ESAGRUP, Elías Sacal Cababie and Marcos Sacal Cohen, as joint
and several obligors, and Sofoplus, as lender, in an aggregate principal amount of U.S.$15 million at an annual fixed interest rate of 15%, and maturing on June 24, 2025, as amended by that certain First Amendment Agreement, dated September 29,
2025, and as further amended, supplemented and/or restated from time to time. The Sofoplus Original Loan was repaid in full with the proceeds of the Sofoplus Loan I and the Sofoplus Loan II.
“Term Sheet” means the term sheet setting forth the key terms of the proposed restructuring transaction relating to the 2031 Notes, attached as
Schedule 2 to the Lock-Up Agreement and disclosed by the Company on March 10, 2026.
“Vivid Hotel” means the Hyatt Vivid Grand Island, within the GIC I Hotel located in the GIC Complex in Cancun, operated by Hyatt; provided that, with
respect to the GIC I Hotel, we have entered into the GIC I Hotel Management Agreement (Mondrian) in connection with the contemplated 2031 Notes Restructuring, pursuant to which Hyatt is expected to be replaced as hotel operator by Ennismore
upon satisfaction of the conditions precedent thereunder (including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I Hotel Management Agreement with Hyatt); or any other reputable firm in the hotel
operation industry that enters into a hotel management agreement in connection with any of the Properties, from time to time.
“YA” means YA II PN, LTD., a Cayman Islands exempt limited partnership.
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
On March 20, 2024, we completed the Business Combination described in more detail under “Item 4. Information on the Company—A. History and Development of the
Company—Business Combination.” The following discussion should be read in conjunction with that description.
Financial Information
This Report includes the consolidated and combined statements of financial position of the Murano Group as of December 31, 2025 and 2024, in a consolidated basis at the level of Murano Global
Investments PLC and as of December 31, 2023, in a combined basis at the level of Murano PV and the following entities: Murano Management, Edificaciones BVG, Murano World, Inmobiliaria Insurgentes 421, OHI421, OHI421 Premium, Murano 1000 Trust,
GIC I Trust, GIC II Trust, Operadora GIC I, Operadora GIC II, and Servicios Corporativos BVG, S. A. de C. V., respectively, the related consolidated and combined statements of profit or loss and other comprehensive income, change in equity, and
cash flows for the years ended December 31, 2025, 2024 and 2023, respectively, prepared in accordance with the IFRS Accounting Standards issued by the International Accounting Standards Board (“IASB”) (the “Consolidated and Combined Financial
Statements”).
The Consolidated and Combined Financial Statements and other consolidated and combined financial information of the Murano Group, including in the section titled “Item 5. Operating and Financial Review and Prospects” included elsewhere in this Report, should be read together and reflect the financial position and results of operations of the Murano Group.
The standalone financial statements of Murano Global Investments PLC, for the years prior to December 31, 2024, are not included in this Report because it was a newly formed entity created
for the sole purpose of the Business Combination.
Prospective investors are advised to consult their professional advisors for an understanding of: (i) the differences between IFRS and other systems of generally accepted accounting
principles and how those differences might affect the financial information included in this Report and (ii) the impact that future additions to, or amendments of, IFRS principles may have on the Murano Group’s results of operations and/or
financial condition, as well as on the comparability of Murano Group’s financial information of prior periods.
The Business Combination was accounted for as a capital reorganization in accordance with IFRS 2 Share-based payment. Under this method of
accounting, there is no acquisition accounting and no recognition of goodwill or intangible assets, as HCM does not meet the definition of a “business” pursuant to IFRS 3 Business Combinations given it
consisted predominantly of cash in a trust account.
HCM is treated as the accounting “acquired” company for financial reporting purposes, and Murano PubCo is the accounting “acquirer”. This determination was primarily based on (i) Murano
Group’s shareholders holding a majority of the voting power of Murano PubCo, (ii) Murano Group’s operations substantially comprising the ongoing operations of the combined company, (iii) Murano Group’s designees comprising a portion of the
governing body of Murano PubCo, and (iv) Murano Group’s senior management comprising the senior management of Murano PubCo.
In accordance with IFRS 2, the difference in the fair value of the shares issued by Murano PubCo over the identifiable net assets of HCM at historical cost was accounted for as share-based
payment expense.
See “Item 4—Information on the Company—A. History and Development of the Company—Business Combination” for additional details regarding the Business
Combination.
Going Concern
As indicated in note 2c., to the Consolidated and Combined Financial Statements as of December 31, 2025, the total current liabilities exceed the amount of total current assets, and based
upon the Murano Group’s current plans, management believes that financial resources to fund its operations for the twelve months subsequent to the authorization and issuance of the Consolidated and Combined Financial Statements will not be
sufficient. These events or conditions, along with other matters as set forth in note 2c. to the Consolidated and Combined Financial Statements indicate that a material uncertainty exists that casts substantial doubt on our ability to continue
as a going concern. Management’s plans regarding these matters are also described in note 2c. to the Consolidated and Combined Financial Statements. Management continues evaluating strategies to obtain the additional funding necessary for
future operations and project redesign or completion, to comply with all covenants as required by the debt instruments to which entities of the Murano Group are parties to, and to be able to discharge the outstanding debt and other liabilities
as they become due. Furthermore, the Murano Group has a plan to execute a debt restructuring. While the terms of such a debt restructuring have not yet been agreed with all of the Murano Group’s lenders and creditors, and there can be no
assurance that a successful outcome will be achieved, Management believes that these efforts represent a reasonable course of action to address the Group’s financial position and mitigate the risk to our ability to continue as a going concern.
The Murano Group has also considered alternative strategies with respect to the hotel operations in Cancun (including changes to the hotel management agreement and operational partners as described in this Report), which could generate
additional cash flows compared to the current commercial arrangements. In assessing these strategies, management has considered the available cash resources, inflows from the hotels that are already in operation, and future financing options
that may be available to the Murano Group such as new or restructured loan agreements and the possible financial support of the major shareholder of the Murano Group. However, the Murano Group may be unable to access further equity or debt
financing when needed or may not be successful in implementing its business continuity strategy. See “Recent Developments” and “Risk Factors—Risks Related to Murano’s Business and Operating in the Hotel Industry—Our total current liabilities
exceed the amount of the total current assets, which has placed significant doubt on our ability to continue as a going concern.” Furthermore, with respect to the Consolidated and Combined Financial Statements, the independent auditor’s
separate report relating thereto contains an explanatory paragraph that states that certain circumstances raise substantial doubt about our ability to continue as a going concern and draws attention to notes 2c., 10 and 20 of the Consolidated
and Combined Financial Statements.
Non-IFRS Measures
This Report contains certain financial measures and ratios, including EBITDA and Adjusted EBITDA that are not required by, or presented in accordance with IFRS (the “Non-IFRS Measures”).
The Murano Group presents these Non-IFRS Measures because they are measures our management uses to assess financial and operating performance, and the Murano Group believes that they and
similar measures are widely used in our industry as a means of evaluating a company’s operating performance and financing structure, and because the Murano Group believes they provide additional information on operating and financial
performance. These measures may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS standards or other generally accepted accounting principles which limit their usefulness of comparative
measures. The Non-IFRS Measures are not measurements of our performance or liquidity under IFRS and should not be considered as alternatives to operating profit or net profit from continuing operations or any other performance measures derived
in accordance with IFRS or as alternatives to cash flow from operating, investing or financing activities. We believe the Non-IFRS Measures should always be considered along with the related IFRS financial measures. We have provided the
reconciliations between the most directly comparable IFRS measures and Non-IFRS Measures below in the sections titled “Item 5. Operating and Financial Review and Prospects—Other Financial Data” in this
Report.
The Murano Group defines these Non-IFRS Measures as follows:
“EBITDA” as a measure that reflects net profit for the period, excluding interest expense, income taxes, depreciation and amortization.
“Adjusted EBITDA” as EBITDA further adjusted to exclude transaction-related expenses derived from the Business Combination.
EBITDA and Adjusted EBITDA, including any corollary terms presented on an “as adjusted” basis, may be defined differently than the ones calculated or presented by other companies, limiting
their usefulness as comparative measures. The Murano Group presents EBITDA and Adjusted EBITDA because it is widely used by securities analysts, investors and other interested parties to evaluate the profitability of companies. EBITDA
eliminates potential differences in performance caused by variations in capital structures (affecting net finance costs), tax positions (such as tax credits or tax expense) and the extent to which intangible assets are identifiable (affecting
relative amortization expense). Further, Adjusted EBITDA eliminates the costs associated with the Business Combination. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation. For example,
EBITDA and Adjusted EBITDA do not reflect:
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changes in, or cash requirements for, our working capital needs;
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our interest expense, or the cash requirements to service interest or principal payments on our indebtedness;
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our tax expense or the cash requirements to pay our taxes;
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historical cash expenditures or future requirements for capital expenditures or contractual commitments;
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the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations; and
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any cash requirements for assets to be replaced in the future (although depreciation is a non-cash charge the assets being depreciated will often have to be replaced in the future).
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Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that
will be available to us to meet our obligations. You should rely primarily on our IFRS results and use these Non-IFRS Measures only to supplement your evaluation of our performance.
Rounding
Certain numerical figures set out in this Report, including financial information presented in millions or thousands and percentages describing market shares, have been subject to rounding
adjustments and, as a result, the totals of the data in this Report may vary slightly from the actual arithmetic totals of such information. Percentages and amounts reflecting changes over time periods relating to financial and other
information set forth in “Item 5. Operating and Financial Review and Prospects” are calculated using the rounded numerical data in the narrative description thereof.
Key Performance Indicators
We have included other operating information in this Report, some of which we refer to as “key performance indicators” including ADR, Occupancy and RevPAR. We believe that it is useful to
include this operating information as we use it for internal performance analysis, and the presentation by property or project of these measures facilitates comparability with other companies in our industry, although our measures may not be
comparable with similar measurements presented by other companies. Such operating information should not be considered in isolation or construed as a substitute for measures prepared in accordance with IFRS. For a description of certain of our
key performance indicators, see “Item 5. Operating and Financial Review and Prospects.”
Translation of Mexican Peso Amounts into U.S. Dollars
The financial and other information appearing in this Report is presented in Mexican pesos. In this Report, references to “pesos”, “Ps.$” or “$” are to Mexican pesos and references to “U.S. dollars” or “U.S.$” are to United States dollars. This Report
contains translations of certain peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. These translations should not be construed as representations that the peso amounts actually represent such U.S. dollar
amounts or could be converted into U.S. dollars at the rate indicated or at all. The exchange rate we use for those convenience translations is not necessarily the same rate we used in preparing the Consolidated and Combined Financial
Statements as disclosed in the footnotes of the financial statements. This may mean, for example, that U.S. dollar-denominated items in this report may have been translated into pesos using one exchange rate and reconverted to U.S. dollars
using the convenience translation exchange rate. Unless otherwise indicated, U.S. dollar amounts that have been translated from pesos have been so translated at an exchange rate of Ps.$17.9528 per U.S.$1.00, the rate calculated by the Mexican
Central Bank (Banco de México, or the “Central Bank”) as published on December 31, 2025, in the Mexican Official Gazette of the Federation (Diario Oficial de la Federación), based on the average of wholesale foreign exchange market quotes for transactions settling within two banking business days.
Trademarks, Trade Names and Service Marks
We own or have rights to trademarks, trade names, and service marks that we use in connection with the operation of our business, including our names, logos, and website names and addresses.
Other trademarks, trade names, and service marks appearing in this Report, including those of Hyatt, AccorHotels, Accor, and Ennismore are, to our knowledge, the property of their respective owners. We also own or have rights to copyrights that
protect certain content related to our business and products. Solely for convenience, the trademarks, trade names, service marks and copyrights referred to in this Report are listed without the TM, ® and © symbols, but we will assert, to the
fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names, or service marks to
imply, and such use or display should not be construed to imply a relationship with, or endorsement or sponsorship of us by, those other parties.
Market and Industry Data
The market data and certain other statistical information included in this Report are based on independent industry publications, government publications or other published independent
sources. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. The forecasts and projections are
based on industry surveys and the preparers’ experience in the industry, and there is no assurance that any of the projected amounts will be achieved. Some data is also based on our good faith estimates. While we are not aware of any
misstatements regarding any such data, forecasts and information presented herein, you should carefully consider the inherent risks and uncertainties associated with the industry and market data included or incorporated by reference in this
Report.
Measurement Data
The standard measure of area in the real estate market in Mexico is the square meter (“sqm” or “m2”), while in
the United States the standard measure is the square foot (“sqf” or “ft2”). One square meter is equal to approximately 10.764 square feet.
This Report contains forward-looking statements. Examples of such forward-looking statements include, but are not limited to: (i) statements regarding our future financial position and
results of operations strategy, plans (including development and completion of projects), objectives, goals and targets and future developments in the markets in which we participate or are seeking to participate or anticipated regulatory
changes in the markets in which we operate or intend to operate in; and (ii) statements of assumptions underlying such statements. Words such as “believes,” “anticipates,” “should,” “estimates,” “seeks,” “forecasts,” “expects,” “may,”
“intends,” “plans,” “might,” “could,” “can,” “would,” “will,” “target,” “project,” “continue,” “aim,” “likely” and similar expressions are intended to identify forward-looking statements but are not exclusive means of identifying such
statements.
Forward-looking statements are not guarantees of future performance. These statements are based in large part on current expectations and projections about future events and financial trends
that affect or may affect our business, industry, financial condition, results of operations or prospects and/or cash flow. Although we believe that these estimates and forward-looking statements are based on reasonable assumptions, these
estimates and statements are subject to several risks and uncertainties and are made in light of the information currently available to us. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general
and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution prospective investors that a number of important factors could cause actual results to differ
materially from the plans, objectives, expectations, estimates and intentions expressed or implied in such forward-looking statements, including the following factors:
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our ability to continue as a going concern;
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increasing competition, including changes in the supply of rooms from competing resorts;
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the ability to maintain the listing of Murano Global Investments PLC Ordinary Shares on Nasdaq;
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the risk that we may fail to regain compliance with Nasdaq’s continued listing requirements, including the minimum bid price requirement, which could result in the delisting of our ordinary shares;
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general economic uncertainty and the effect of general economic conditions, including inflation, elevated interest rates and worsening global economic conditions or low levels of economic growth, on
consumer discretionary spending and the lodging industry in particular;
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changes in consumer preferences, including the popularity of the all-inclusive resort model, particularly in the luxury segment of the resort market, and the popularity of tropical beachfront vacations
compared to other vacation options or destinations;
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changes in economic, social or political conditions in the regions we operate, including changes in perception of public-safety and changes in unemployment rates and labor force availability;
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the success and continuation of our relationships with the Hotel Operators;
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the occurrence of any event, change or other circumstance that could give rise to the termination of any agreement entered with the Hotel Operators;
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the failure to satisfy required conditions under the hotel management agreements, including, but not limited to, the completion of projects with the specifications required by the Hotel Operators or at
all;
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our ability to implement strategic initiatives for our business continuity;
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•
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the risk associated with any potential corporate reorganization and related strategic changes;
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our ability to comply with contractual covenants;
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our ability to pay our obligations as those become due;
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our ability to obtain and maintain financing arrangements on attractive terms or at all;
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our ability to obtain and maintain ample liquidity to fund operations and service debt;
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our ability to successfully expand into new markets in Mexico;
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changes in applicable laws or regulations, or the interpretation and enforcement of laws and regulations, including those related to zoning, social and environmental issues;
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the effects of any future pandemic on our business and properties under development;
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the risks that uncertainty and instability resulting from current global conflicts could adversely affect our business, financial condition, and results of operations, in addition to global macroeconomic
trends;
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the risk that we experience difficulties in managing our growth, implementing business plans, forecasts, finding and developing new properties or opportunities, or expanding operations;
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the risk of downturns and the possibility of rapid change in the highly competitive industry in which we operate;
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the risk that we and our current and future collaborators are unable to successfully develop and commercialize our properties, or experience significant delays in doing so;
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the risk that we may never achieve or sustain profitability;
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the risk that we will need to raise additional capital to execute our business plan, which may not be available on acceptable terms or at all;
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the risk that third-party suppliers, including management companies, are not able to fully and timely meet their obligations;
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our ability to successfully engage in property development, including our ability to complete our projects within budget;
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our ability to successfully acquire land or properties to be able to execute on our growth strategy;
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higher interest rates, increased leasing costs, increased construction costs, distressed supply chains for construction materials, increased maintenance costs, all of which could increase our costs and
limit our ability to acquire or develop additional real estate assets;
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the risk that we are unable to secure or protect our intellectual property;
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the amount of debt that we currently have or may incur in the future;
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the risk that the contemplated 2031 Notes Restructuring may not be consummated on the terms currently contemplated, on a timely basis;
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the risk that the contemplated transition of the hotel operator for the GIC I Hotel may not be completed as expected or may adversely affect operations and projected cash flows;
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our ability to successfully implement the Restructuring Project;
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the possibility that we may be adversely affected by other economic, business, and/or competitive factors, and/or political conditions, specifically in Mexico (such as the tariffs imposed by the United
States);
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the possibility that our business may be, directly or indirectly, adversely affected by climate change effects, natural disasters, severe or extraordinary droughts or by other water scarcity scenarios
which may derive in water restrictions, change the allocation of water rights or any such other administrative act to guarantee human rights;
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events beyond our control, such as war, terrorist or cyber-attacks, mass casualty events, government shutdowns and closures, travel-related health concerns, global outbreaks of pandemics (such as the
COVID-19 pandemic) or contagious diseases, or fear of such outbreaks, weather and climate-related events, such as hurricanes, wildfires, tornadoes, floods, and droughts, and natural or man-made disasters;
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the outcome of any legal proceedings that may be instituted against the Murano Group or HCM following the completion of the Business Combination and transactions contemplated thereby;
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our ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and our ability to grow and manage growth profitably following the
Business Combination; and
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other risks and uncertainties described herein, including those under the section entitled “Item 3. Key Information—D. Risk Factors.”
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You are cautioned that the foregoing list of significant factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties,
the matters referred to in the forward-looking statements contained in this Report may not in fact occur. Many of these risks are beyond our ability to control or predict. All forward-looking statements attributable to us or persons acting on
our behalf are expressly qualified in their entirety by the cautionary statements contained throughout this Report.
Should one or more of these factors or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as
anticipated, believed, estimated, expected or intended.
You should read the sections in this Report entitled “Item 3. Key Information D—Risk Factors,” and “Item 5.
Operating and Financial Review and Prospects” for a more complete discussion of the factors that could affect our future results and the markets in which we operate. In light of these risks, uncertainties and assumptions, the
forward-looking events described in this Report may not occur. Moreover, no assurances can be given that any of the historical information, data, trends or practices mentioned and described in this Report are indicative of future results or
events.
| ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
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Not applicable.
| ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE
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Not applicable.
| ITEM 3. |
KEY INFORMATION
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| A. |
[Reserved]
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| B. |
Capitalization and Indebtedness
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Not applicable.
| C. |
Reasons for the Offer and Use of Proceeds
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Not applicable.
| D. |
Risk Factors
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You should carefully consider the risk factors below and all other information contained in this Report. The risks and uncertainties described below are not the only risks
we face. Additional risks and uncertainties that we are unaware of, or that we currently deem immaterial, also may become important factors that affect us.
If any of the risks below occur, our business, financial condition, or results of operations could be materially and adversely affected. In that case, the trading price of
the shares could decline, and you could lose all or part of your investment, and our ability to make any dividend payments to you, if declared, could be affected, and you may lose some or all of your investment.
This Report also contains forward-looking statements that regard situations that may involve risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this Report. See “Cautionary Statement Concerning Forward Looking Statements” for more information
regarding these forward-looking statements.
Risks Related to Murano’s Business and Operating in the Hotel Industry
Our total current liabilities exceed the amount of the total current assets, which has placed significant doubt on our ability to continue as a going
concern.
The Consolidated and Combined Financial Statements were prepared assuming that it will continue as a going concern. However, management has identified material uncertainties that cast
substantial doubt on the ability in the Consolidated and Combined Financial Statements to continue as a going concern. As a result, certain of these companies may be unable to realize their assets and discharge their liabilities in the normal
course of business.
The Group is an early-stage and emerging growth company. The Group has incurred significant debt primarily to fund operating expenses and finance the construction projects mentioned in note
1(a) to the Consolidated and Combined Financial Statements. As of December 31, 2025, total current liabilities exceed the amount of total current assets, and based upon the Group’s current plans, management believes that financial resources to
fund its operations for the twelve months subsequent to the authorization and issuance of the Consolidated and Combined Financial Statements will not be sufficient. In addition, as of and after December 31, 2025, certain covenants have been
breached and defaults have occurred and continue with respect to certain financial indebtedness or leases of entities of the Murano Group, as follows:
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The debt service reserve account related to the Insurgentes Loan was not fully funded as of December 31, 2025; and as a result, the covenant requiring such reserve account to remain funded was
breached. On January 7, 2026, and April 7, 2026, the Group paid the quarterly interest. In addition, the Group failed to timely deliver the appraisal report required under the Insurgentes Loan to evidence compliance with the
2:1 loan-to-value ratio as of the second anniversary of such loan (April 2025), which constituted an additional covenant breach. As of the date of the issuance of the Consolidated and Combined Financial
Statements, the Group is in process of requesting a waiver of such breaches from Bancomext. The Group also expects that additional covenant breaches may occur under the Insurgentes Loan, as the debt service coverage ratio covenant of
1.0x to 1.2x is not expected to be met during the next 12 months based on management projections. See Note 10 to the Consolidated and Combined Financial Statements.
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As of December 31, 2025, the outstanding amount of the Insurgentes Loan was U.S.$98.7 million ($1,772.6 million pesos).
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The Beach Club Loan described in note 10 (10) to the Consolidated and Combined Financial Statements is in breach, as the Group did not pay the annual interest due in December 2025 and December 2024. The
Beach Club Loan has not been accelerated and ALG has not notified any intention to accelerate the Beach Club Loan, however, pursuant to IFRS 1 “First-time Adoption of International Financial Reporting Standards”, the Beach Club Loan is
classified as current liability as of December 31, 2025. Currently, the Group is in the process of restructuring the Beach Club Loan with ALG subject to execution of definitive documents thereunder.
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The Murano Group did not make principal, interest or lease payments, as applicable, under the Exitus Loan, the Finamo Sale and Lease Back Agreements, the Finamo Loans and the Exitus Sale and Lease Back
Agreement from January to April 2026. Such payment defaults (in addition to defaults existing as of December 31, 2025) could also trigger cross-defaults under other debt and lease instruments in respect of which the Murano Group is an
obligor. Currently, Murano Group is in the process of entering into a settlement agreement with Finamo with respect to the repayment of the Finamo Sale and Lease Back Agreements and the Finamo Loans subject to execution of definitive
documents thereunder.
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| iv. |
The deadline under the Nafin Loan requiring the Dreams Hotel to be open and operating expired without compliance, and the Murano Group did not satisfy such covenant. In addition, the deadline to substitute
the mortgage over GIC Private Unit 4 and GIC Private Unit 5 with a mortgage over GIC Private Unit 3, as required under the Nafin Loan, also expired without compliance. Accordingly, covenant breaches have occurred under the Nafin Loan.
However, the Group is currently engaged in negotiations with NAFIN of the definitive documents regarding a consensual settlement of the Nafin Loan, as already approved by the internal and external committees of Nafin, which will involve
the transfer in lieu of payment (payment in kind) of the GIC Private Unit 5 (currently mortgaged in favor of Nafin) and the restructuring of the repayment terms of the then outstanding amount (after implementing its restructuring) under
the Nafin Loan which will continue secured by a mortgage over the GIC Private Unit 4. However, as of the date of the issuance of these Consolidated and Combined Financial Statements, no final agreement has been executed.
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| v. |
On September 12, 2025, and March 12, 2026, the Issuer Trust did not make the scheduled interest payment due on the 2031 Notes. Under the Indenture governing the 2031 Notes, such missed interest payments
were subject to a 30-day grace period expiring on October 12, 2025, and April 12, 2026, respectively. The Relevant 2031 Notes Defaults were not cured within such grace periods and, accordingly, Events of Default occurred under the
Indenture. Such Events of Default may also give rise to cross-defaults, rights and/or other remedies under other debt, security or related financing documents to which the Murano Group is a party or by which its assets may be bound. The
Company subsequently disclosed that it was engaging with the Ad Hoc Group of noteholders regarding a potential consensual restructuring of the 2031 Notes, and on March 10, 2026, announced an agreement on key restructuring terms and the
execution of a Lock-Up Agreement with the Ad Hoc Group. As of the date of the issuance of these Consolidated and Combined Financial Statements, the Company continues in the negotiation of the relevant definitive documents related to the
agreed restructuring terms of the 2031 Notes.
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| vi. |
The Murano Group did not make lease payments under the Coppel lease agreement from January to April 2026. Such payment defaults, together with defaults existing as of December 31, 2025, may result in
cross-defaults under other debt and lease instruments in respect of which the Murano Group is an obligor. Currently, Murano Group is in the process of negotiating with Coppel the terms of a potential repayment and settlement of the
outstanding amounts under the Coppel lease agreement.
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| vii. |
See Notes 10 and 20 of the Consolidated and Combined Financial Statements for additional details about defaults subsequent to December 31, 2025.
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In the absence of executing and implementing the relevant restructuring and/or settlement agreements described above, these defaults and/or covenant breaches may result in defaults or events of
default under other documents and instruments evidencing indebtedness or lease liabilities of Murano Group. As a result of these potential conditions, substantial doubt would exist about the ability of the Group to continue as a going concern
following twelve months after the Consolidated and Combined Financial Statements are authorized to be issued.
Certain covenant tests will arise, under the terms of the Company’s various loans and financing agreements, during the twelve months following the date on which the Consolidated and Combined Financial Statements
are authorized to be issued, which Management does not expect will be met. To address and mitigate the risks associated with such potential covenant breaches, the Murano Group is in communication with each lender and creditor to execute a debt
restructuring and/or settlement as described above. The intent of the debt restructuring is to address and resolve these risks through the implementation of definitive documents of revised terms or final settlement with the various lenders and
creditors. While the terms of such a debt restructuring have not yet been agreed with all of the Murano Group’s lenders and creditors. The Murano Group is in the process of implementing strategies with respect to the hotel operations in Cancun,
including the herein referred changes to the hotel management agreement and operational partners, which could generate additional cash flows compared to the current commercial arrangements, as well as certain payments in kind using the assets of
the Group.
Management continues evaluating strategies to obtain the required additional funding necessary for future operations, to comply with all covenants as required by certain loan agreements and/or to execute a debt
restructuring plan which would result in favorable modifications or removal of certain covenants, and to be able to discharge the outstanding debt and other liabilities as they become due. In assessing these strategies, management has considered
the available cash resources, inflows from the hotels that are already in operation, and future financing options available to the Company such as new or restructured loan agreements. However, the Company may be unable to access further equity or
debt financing when needed or may not be successful in implementing its business continuity strategy. As such, there can be no assurance that the Company will be able to obtain additional liquidity when
needed or under acceptable terms, if at all.
The Consolidated and Combined Financial Statements do not include any adjustments to the carrying amounts and classifications of assets and liabilities and reported expenses that may otherwise
be required if the going concern basis for the Group as of December 31, 2025, and for the year then ended, and for entities comprising the Group, were not appropriate.
We have substantial debt that may be called on demand of lender due to existing or future breach in covenants or defaults.
Instruments governing our existing indebtedness contain, and the instruments governing indebtedness we may incur in the future may contain, certain affirmative and negative covenants and
require us and our subsidiaries to meet certain financial ratios and tests. Our failure to comply with the obligations contained in these instruments could result in covenant breaches or events of default under the applicable instrument, which
could then result in the related debt and the debt issued under other instruments becoming immediately due and payable. In such an event, we would need to raise funds from alternative sources, which may not be available to us on favorable terms,
on a timely basis, or at all. Alternatively, such default could require us to sell our assets and otherwise curtail operations in order to pay our creditors.
As of December 31, 2025, the Murano Group had not complied with certain terms and covenants included in its debt and lease instruments, including: (i) the failure by Inmobiliaria Insurgentes
421 to fund the debt service reserve account required under the Insurgentes Loan; (ii) the interest payment default under the Beach Club Loan with respect to the annual interest due in December 2025 and 2024; (iii) the failure to make principal,
interest or lease payments, as applicable, under the Exitus Loan, the Finamo Sale and Lease Back Agreements, the Finamo Loans and the Exitus Sale and Lease Back Agreement; (iv) the failure to satisfy the covenants under the Nafin Loan requiring
the Dreams Hotel to be open and operating by June 1, 2025 and the substitution of the mortgage over GIC Private Unit 4 and GIC Private Unit 5 with a mortgage over GIC Private Unit 3; and (v) the failure by the Issuer Trust to make the scheduled
interest payment due on September 12, 2025 and March 12, 2026, in respect of the 2031 Notes, which were not cured within the applicable 30-day grace periods and therefore resulted in Events of Default under the Indenture and (vi) the failure to
make the lease payments over the Coppel Lease Agreement.
None of the Insurgentes Loan, Beach Club Loan, Exitus Loan, or Exitus Sale and Lease Back Agreement have been accelerated by Bancomext, ALG, Exitus or Coppel, respectively, and the 2031 Notes
have not been accelerated by the holders thereof. Such defaults and breaches gave rise to cross-defaults, rights and/or other remedies under other debt, security or related financing documents to which the Murano Group is a party or by which its
assets may be bound.
In addition, certain of our existing defaults have resulted in litigation and enforcement actions, which in the absence of reaching a settlement or restructuring could further adversely affect
our financial condition, liquidity and operations.
On October 13, 2025, Finamo and Arrendadora Finamo initiated a commercial enforcement proceeding (juicio oral mercantil) against Murano PV, Murano
World, Edificaciones BVG, Elías Sacal Cababie, and other related parties (Case No. 1057/2025) before the Twentieth Civil Court for Oral Proceedings (Juzgado Vigésimo de lo Civil de Proceso Oral) of Mexico
City, in connection with the alleged failure to make (i) principal and interest payments under the Finamo Loans and (ii) lease payments under the Finamo Sale and Lease Back Agreements.
As of the date of this Report, such proceedings are ongoing at a preliminary stage, and no final judgment has been issued. The court has granted precautionary measures, as well as other interim
measures. Although the Murano Group is contesting such proceedings, there can be no assurance as to the outcome of these proceedings in the absence of reaching a settlement agreement with Finamo and Arrendadora Finamo. An adverse potential
resolution could result in additional liabilities, enforcement against assets, further constraints on liquidity and operations, and could adversely affect our ongoing debt restructuring efforts.
The Murano Group is also in the stage of negotiating and drafting final documents with Finamo and Arrendadora Finamo regarding a negotiated settlement of these matters in connection with its
ongoing debt restructuring efforts. For further information, see “Item 8. Financial Information—A. Consolidated and Combined Statements and Other Financial
Information—Legal” and Arbitration Proceedings” and “Item 5. Operating and Financial Review and Prospects—B. Liquidity
and Capital Resources—Commitments and Contingencies.”
In addition, following the Relevant 2031 Notes Defaults by the Issuer Trust, the Company engaged in discussions with an ad hoc group of holders of the 2031 Notes representing more than 81% of
the aggregate principal amount of the 2031 Notes (the “Ad-Hoc Group”) and its legal and financial advisors, regarding a potential consensual restructuring of the 2031 Notes. On March 10, 2026, the Company announced an agreement on key
restructuring terms and the execution of a Lock-Up Agreement with the Ad Hoc Group in connection with the proposed consensual restructuring of the 2031 Notes. Although the Company is currently in the process of negotiating the definitive
documents related to the 2031 Notes Restructuring, there can be no assurance that the proposed restructuring will become effective or be consummated on the terms announced.
Management continues engaging in constructive discussions with applicable creditors.
We may not be able to consummate the contemplated 2031 Notes Restructuring on the terms currently contemplated, or at all, and a failure to consummate the
restructuring could materially and adversely affect our business, financial condition and results of operations.
Following the Relevant 2031 Notes Defaults by the Issuer Trust, we engaged in discussions with the Ad Hoc Group representing more than 81% of the
aggregate principal amount of the 2031 Notes. On March 10, 2026, we entered into the Lock-Up Agreement with the Ad Hoc Group reflecting an agreement in principle on the key terms of a proposed consensual restructuring transaction relating to the
2031 Notes, as set forth in the agreed Term Sheet.
The Term Sheet contemplates that the transaction may be implemented either through amendments to the 2031 Notes documentation if the consent of 100% of holders is obtained, or, if such 100%
consent is not obtained, through a voluntary out-of-court exchange of the Notes for New Notes coupled with a related consent solicitation, including consents that may, among other things, release collateral and modify or eliminate certain
covenants in respect of any 2031 Notes that remain outstanding.
The proposed transaction remains subject to a number of conditions and approvals, including the negotiation, execution and delivery of definitive
documentation consistent with the Term Sheet, completion of the contemplated operator arrangements, and, in certain circumstances, minimum tender thresholds and other customary conditions, and may not be consummated on the terms described in the
Term Sheet, or at all. If the contemplated 2031 Notes Restructuring is not consummated, or is materially delayed, we may face increased liquidity constraints, additional defaults (including cross-defaults), acceleration of indebtedness, and
potential enforcement actions, that could materially and adversely affect our ability to fund operations and service indebtedness, including the 2031 Notes.
The contemplated replacement of Hyatt as operator of the GIC I Hotel, and the implementation of the related new
operator arrangements, may not be completed on the terms currently contemplated, or at all, and could adversely affect our operations and liquidity.
In connection with the contemplated 2031 Notes Restructuring, we have entered into the GIC I Hotel Management Agreement (Mondrian) for the operation of
the GIC I Hotel; however, such agreement remains subject to the satisfaction of certain conditions precedent, including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I Hotel Management Agreement with
Hyatt, both currently subject to the process of negotiation of the corresponding definitive agreements. The successful transition of hotel operations from Hyatt to Ennismore (or any other replacement operator) involves significant operational,
commercial and execution risks, including potential delays in satisfying the applicable conditions precedent, failure to consummate the contemplated transition, costs associated with the transition, disruption to operations, and the risk that any
new operator arrangements do not generate the cash flows anticipated by management. Any failure to complete the operator transition, or any material adverse impact on hotel performance during or after such transition, could materially and
adversely affect our ability to fund operations and service indebtedness, including the 2031 Notes.
The GIC II Hotel Management Agreement may be amended, replaced or terminated in connection with the contemplated
2031 Notes Restructuring, and any failure to successfully implement these changes could adversely affect our strategy, liquidity and financial condition.
Under our prior development plans, we entered into a hotel management agreement with respect to the planned GIC II Hotel. However, in light of recent
market developments, we have halted the development of the GIC II Hotel and shifted our strategic focus towards residential development and commercialization within the GIC Complex.
In connection with the contemplated 2031 Notes Restructuring, we are implementing changes to the existing management arrangements for the GIC II Hotel,
which may result in the termination of the GIC II Hotel Management Agreement and its replacement with a new management agreement with Ennismore. Any such actions are subject to negotiation and execution of definitive documentation, and there can
be no assurance that they will be completed on acceptable terms or at all.
The replacement and termination of the GIC II Hotel Management Agreement could result in additional costs, disputes with the current or prospective
hotel operators, delays in the implementation of our revised development strategy, or adverse impacts on our liquidity and financial condition.
The contemplated 2031 Notes Restructuring is dependent, in part, on the successful sale of residential
condominium units and the operation of an escrow structure, and any failure to achieve projected sales or to access escrowed proceeds as contemplated could adversely affect our liquidity and the contemplated repayment profile of the 2031 Notes.
The Term Sheet contemplates that proceeds from the sale of certain Residential Condos and certain other amounts would be deposited into an escrow
account and applied pursuant to agreed mechanics, including permitted drawdowns for completion costs and required applications toward repayment of the New Notes. Our ability to generate proceeds from the sale of residential units depends on
pricing, demand, timing of completion, regulatory and permitting matters, and other factors beyond our control. If residential unit sales are delayed or occur at lower prices than anticipated, or if the escrow mechanics cannot be implemented as
contemplated, we may not generate sufficient liquidity to fund operations, complete the project and meet our obligations, and the contemplated restructuring may be delayed or may not be consummated.
Subsequent phases to our existing projects and potential enhancements at our hotel properties will likely require us to raise additional capital.
We accessed the debt capital markets to issue the 2031 Notes in order to complete subsequent phases of the GIC I Hotel; we will likely need to access the capital markets again or otherwise
obtain additional funds to complete subsequent phases of our existing projects, and to fund potential enhancements we may undertake at our facilities there, and elsewhere. We do not know when or if the capital markets will permit us to raise
additional funds for such phases and enhancements in a timely manner, on acceptable terms, or at all. Inability to access the capital markets, or the availability of capital only on less-than-favorable terms, may force us to delay, reduce or
cancel our subsequent phases and enhancement projects. Delay, reduction or cancellation of the subsequent phases of our projects could subject us to financial penalties, and the possibility of such penalties could require us to obtain additional
financing on unfavorable terms.
In addition, we have registered a substantial number of our ordinary shares for resale and potential issuance, including shares that may be issued pursuant to our Standby Equity Purchase
Agreement, which could result in dilution to existing shareholders and downward pressure on the market price of our ordinary shares.
We may not be able to generate sufficient cash to service all our indebtedness and may be forced to take other actions to satisfy our obligations under
such indebtedness, which may not be successful.
Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and
competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We will be unable to maintain a level of cash flows from operating activities sufficient to pay the principal, premium, if
any, and interest on our indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments
and capital expenditures, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if
successful, those alternatives may not allow us to meet our scheduled debt service obligations.
Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely
affect our financial position and results of operations.
If we cannot make scheduled payments on our debt, we will be in default and our creditors could declare outstanding principal and interest to be due and payable, causing a cross-acceleration or
cross-default under certain of our debt agreements, and we could be forced into bankruptcy, liquidation or restructuring proceedings. All of these events could result in your losing your investment in our shares or your investment being impaired.
We will be dependent on the operation and business of our hotel properties for substantially all of our revenue.
We will generate indirectly substantially all of our revenues from the hotel management agreements. Our performance depends on the performance of the hotel operators, as well as their ability
to pay for certain items related to our properties, such as renovation and maintenance expenses related to furniture, fixtures and other equipment and operating supplies and equipment, insurance, marketing and promotional expenses and costs,
among others. We cannot assure you that our properties will generate sufficient revenues, assets, and liquidity to satisfy these obligations or the payment obligations under the hotel management agreements.
We will rely solely on the income and cash flows from the investments made in the properties. Defaults by our hotel operators under the hotel management agreements could materially and
adversely affect our business, financial condition, and results of operations.
If the hotel operators or third-party only travel agencies consolidate through merger and/or acquisition transactions, we may experience undefined and
unknown costs related to integrating processes and systems, less negotiating power over contracts and/or higher costs of obtaining customers.
The hotel operators consolidating with third parties through mergers and/or acquisitions could adversely affect our hotel properties due to the undefined and unknown costs associated with the
integration of property-level point of sale and back-of-house computer systems and other technology-related processes, the training and other labor costs associated with the merging of labor forces, and the impact of reward point program
consolidation. Additionally, the potential consolidation could impact our leveraging power in future management agreement negotiations. Consolidation of third-party online travel agencies (“OTAs”) could lead to less negotiating power that the
hotel operators have in setting contract terms for pricing and commissions paid to OTAs. The consolidation of these distribution channels may reduce operating profits and/or higher costs of obtaining customers.
Delays in receiving refunds of value added tax paid in connection with our acquisition and construction of hotels could have a material adverse effect on
our cash flow and results of operations.
We are required to pay value added tax (“VAT”) in connection with the acquisition and construction of our hotels pursuant to the Mexican Value Added Tax Law (Ley
del Impuesto al Valor Agregado), which under certain circumstances will result in favorable balances. To the extent the applicable requirements are fulfilled, the competent tax authorities should refund to us such favorable balances
within 40 business days following the filing of the request for refund with such authorities, in accordance with the provisions of Article 22 of the Mexican Federal Tax Code (Código Fiscal de la Federación).
To the extent that we pay a substantial amount of VAT in connection with acquisitions and experience delays in receiving the corresponding refunds, our cash flow and results of operations could be materially and adversely affected.
We may be subject to adverse legislative or regulatory tax changes that could affect our operations.
At any time, the U.S. federal, state or local, Mexican federal or local, or other non-U.S. tax laws or regulations or the judicial or administrative interpretations of those laws or regulations
or the policies of the taxing agency or authority may be changed. We cannot predict when or if any new U.S. federal, state or local, Mexican federal or local, or other non-U.S. tax law, regulation or judicial interpretation will be adopted,
promulgated, or may become effective, and any such law, regulation or interpretation may take effect retroactively. In particular, the Mexican government has anticipated that a tax reform is to be presented to the Mexican Congress for discussion
and thus could potentially be enacted in the near future. Any such change in, or any new, tax law, regulation or administrative or judicial interpretation could adversely affect us and holders of our shares. There is no assurance that such reform
or any other reform will not be enacted in the future. In addition, there can be no assurance that new tax laws, regulations, and interpretations or changes in existing tax laws, regulations, and interpretations would not have a material adverse
effect on our business, prospects, results of operations, and financial condition. The effects of such changes have not been, and cannot be quantified.
We and our hotel operators may be subject to audits by the tax authorities.
Pursuant to Mexican tax provisions, we and our hotel operators (as any taxpayers) may be subject to the exercise of the powers of the tax authorities to verify their level of compliance with
the applicable tax provisions. We cannot guarantee that such powers will not be exercised or, if applicable, that they will be favorably resolved. Therefore, in the event that the tax authorities determine that we or our hotel operators are not
in compliance with tax obligations, such authorities could impose, collect and enforce tax assessments, fines and/or guarantees, which, if material, could adversely affect our financial condition and results of operations.
We may not be able to deliver projects on time and within our estimated budget.
The budget estimated for the construction and development of our projects under completion is based on construction costs incurred to date, architectural and design documents and is subject to
change as the construction progresses and as contract packages are let into the marketplace. Major projects of the scope and scale undertaken by us are subject to significant development, construction and timing risks, including the following:
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changes to, or mistakes in, project plans and specifications, some of which may require the approval of state and local regulatory agencies;
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changes requested by or disputes with, hotel operators;
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engineering problems, including defective plans and specifications;
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shortages of, and price increases in, energy, materials, and skilled and unskilled labor, and inflation in key supply markets;
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delays in delivery of materials or furniture, fixtures or equipment;
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changes to, or mistakes in budgeting;
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the financial health of our contractor and subcontractors;
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changes in laws and regulations, or the interpretation and enforcement of laws and regulations, applicable to real estate development or construction projects;
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the financial health of our contractor and subcontractors;
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labor disputes or other work delays or stoppages, including needing to redo work;
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disputes with and defaults by contractors, subcontractors, consultants and suppliers;
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site conditions differing from those anticipated;
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environmental issues, including the discovery of unknown environmental contamination;
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health and safety incidents and site accidents;
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weather interferences or delays;
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fires and other natural or human-made disasters; and
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other unanticipated circumstances or cost increases.
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The development costs of our future projects are estimates only, actual development costs may be higher than expected and we may not have access to
additional capital to fund our property development projects and/or otherwise fulfill our business strategy.
Our plans and specifications for the development of our future projects are not complete and may be subject to change. Our current budget is based on our preliminary plans, which are subject to
change. We currently expect the total development and construction costs of the projects to be on preliminary estimate in the order of U.S.$670 million. While we believe that our overall budget for the construction costs for these properties is
reasonable, a significant portion of these construction costs are only initial estimates, and the actual construction costs may be significantly higher than expected. We currently expect that existing cash resources together with borrowings under
our existing financings, will not be sufficient to fund the currently foreseeable construction budget of our development projects and/or otherwise be sufficient to fulfill our business strategy. Therefore, we will likely need additional capital
in the future. Our ability to obtain bank financing or to access the capital markets for future debt or equity offerings may be limited by our financial condition, results of operations or other factors, such as our credit rating or outlook at
the time of any such financing or offering and the covenants in our existing debt agreements, as well as by general economic conditions and contingencies and uncertainties that are beyond our control. Therefore, we cannot assure you that we will
be able to obtain additional capital and/or that we will be able to obtain bank financing or access the capital markets on commercially reasonable terms or at all.
We execute transactions with related parties that third parties could deem not to be arms’ length.
In the ordinary course of our business, we execute various transactions with companies owned or controlled directly or indirectly by us and by our and affiliates. We have policies in place that
we are required to follow to ensure that transactions with affiliates are entered into on terms that are at least as favorable to us as those that would be obtainable at the time for a comparable transaction or series of similar transactions in
arm’s-length dealings with an unrelated third person. In addition, we do undertake a transfer pricing analysis in accordance with Mexican tax regulations to help ensure that the price paid in any such transaction is fair to us and our affiliated
counterparty. We intend to continue to enter into transactions with our subsidiaries and affiliates in the future in conformity with applicable laws. Entering into these types of transactions could cause conflicts of interest to arise. We cannot
guarantee that any potential conflict of interest that could arise as a result of transactions with related parties will be resolved advantageously for us. In the event that such conflicts are resolved less advantageously for us, they could
adversely affect our business, financial condition and results of operations.
Contractual and other disagreements with or involving our current and future third-party hotel managers could make us liable to them or result in
litigation costs or other expenses.
We do not operate some of our hotels. As a result, we are unable to directly implement strategic business decisions with respect to the daily operation and marketing of our hotels, such as
decisions with respect to the setting of room rates, repositioning of a hotel, food and beverage pricing and certain similar matters. Although we consult with the hotel operators with respect to strategic business plans, the hotel operators are
under no obligation to implement any of our recommendations with respect to such matters. Our management agreements require us and our managers to comply with operational and performance conditions that are subject to interpretation and could
result in disagreements, and we expect this will be true of any management agreements that we enter into with future third-party hotel managers or operators. We cannot predict the outcome of any arbitration or litigation related to such
agreements, the effect of any negative judgment against us or the amount of any settlement that we may enter into with any third party. In the event we terminate a management agreement early and the hotel manager considers such termination to
have been wrongful, they may seek damages. Additionally, we may be required to indemnify our third-party hotel managers and affiliates against disputes with third parties pursuant to our management agreements. An adverse result in any of these
proceedings could materially and adversely affect our revenues and profitability.
Thus, even if we believe our hotels are being operated inefficiently or in a manner that does not result in satisfactory occupancy rates, RevPAR, ADR or operating profits, we may not have
sufficient rights under our hotel operating agreements to enable us to force the hotel operator to change its method of operation. We generally can only seek redress if a hotel operator violates the terms of the applicable operating agreement,
and then only to the extent of the remedies provided for under the terms of the agreement. Some of the operating agreements have lengthy terms and may not be terminable by us before the agreement’s expiration. In the event that we are able to and
do replace any of our hotel operators, we may experience significant disruptions at the affected hotels, which may adversely affect our ability to make distributions to holders of Murano Ordinary Shares or Murano Warrants.
In addition, in connection with the contemplated 2031 Notes Restructuring, we have entered into a new hotel management agreement with Ennismore for the operation of the GIC I Hotel. However,
such agreement remains subject to the satisfaction of certain conditions precedent, including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I Hotel Management Agreement with Hyatt. The successful
transition to Ennismore (or any other replacement operator) involves significant operational and execution risks, including potential delays in satisfying the applicable conditions precedent, increased costs, disruption to operations, and the
risk that any replacement operator arrangements do not generate the cash flows anticipated by management. Any failure to complete the contemplated operator transition, or any material adverse impact on hotel performance during or after such
transition, could materially and adversely affect our business, liquidity and results of operations.
We are dependent on the performance of our hotel managers.
Our Insurgentes 421 Hotel Complex in Mexico City is managed by Hyatt and Accor pursuant to separate hotel management agreements that expire on December 31, 2043. The GIC I Hotel is currently
managed by Hyatt pursuant to management agreements that will expire on December 31, 2038. However, in connection with the contemplated 2031 Notes Restructuring, the Term Sheet contemplates a replacement of the operator for the GIC I Hotel, and
these arrangements may be amended, terminated or replaced. We could be materially and adversely affected if any third-party hotel manager fails to provide quality services and amenities, fails to maintain a quality brand name or otherwise fails
to manage our hotels in our best interest, and could be held financially responsible for the actions and inactions of our third-party hotel managers pursuant to our management agreements. In addition, our third-party hotel managers manage, and in
some cases may own or lease, or may have invested in or may have provided credit support or operating guarantees to hotels that compete with our hotels, any of which could result in conflicts of interest. As a result, third-party managers may
make decisions regarding competing lodging facilities that are not in our best interests.
We will not control the operation of the properties and we are not in a position to directly implement strategic business decisions regarding the day-to-day operation of our hotel properties,
such as setting room rates, food and beverage prices, marketing activities, promotion, and other similar matters, and we will be dependent on our hotel operators to carry out the operation of our hotel properties. Although we have structured and
will aim to structure our hotel management agreements so that we have significant visibility with respect to the operation of our hotel properties, and such agreements impose certain performance goals on the hotel operators, we cannot assure that
the hotel operators will be able to successfully operate our hotel properties efficiently and profitably, and if they fail to do so, it could have a material adverse effect on our business, financial condition and results of operations.
The success of our properties largely depends on our ability to establish and maintain good relationships with third-party hotel managers. If we are unable to maintain good relationships with
our third-party hotel managers, we may be unable to renew existing management agreements or expand relationships with them. Additionally, opportunities for developing new relationships with additional third-party managers may be adversely
affected. This, in turn, could have an adverse effect on our results of operations and our ability to execute our growth strategy. In the event that we terminate any of our management agreements, we can provide no assurances that we could find a
replacement hotel manager or that any replacement hotel manager will be successful in operating our hotels. If any of the foregoing were to occur, it could materially and adversely affect us.
Cyber threats and the risk of data breaches or disruptions of our hotel managers’ or our own information technology systems could materially adversely
affect our business.
Our hotel managers are dependent on information technology networks and systems, including the internet, to access, process, transmit and store proprietary and customer information, including
personally identifiable information of hotel guests, including credit card numbers.
These information networks and systems can be vulnerable to threats such as system, network, or internet failures; computer hacking or business disruption, including through network- and
email-based attacks as well as social engineering; cyber-terrorism; cyber extortion; viruses, worms or other malicious software programs; and employee error, negligence or fraud. The risk of a security breach or disruption, particularly through
cyber-attack or cyber intrusion, including by computer hackers, nation-state affiliated actors and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world
have increased. We rely on our hotel managers to protect proprietary and customer information from these threats. Any compromise of our own network or hotel managers’ networks could result in a disruption to our booking or sales systems or other
operations, in increased costs (e.g., related to response, investigation, and notification) or in potential litigation and liability. In addition, public disclosure or loss of customer or proprietary information could result in damage to the
hotel manager’s reputation, a loss of confidence among hotel guests, reputational harm for our hotels, potential litigation and increased regulatory oversight, including governmental investigations, enforcement actions, and regulatory fines, any
of which may have a material adverse effect on our business, financial condition, and results of operations. In the conduct of our business, we rely on relationships with third parties, including cloud data storage and other information
technology service providers, suppliers, distributors, contractors, and other external business partners, for certain functions or for services in support of key portions of our operations. These third-party entities are subject to similar risks
as we are relating to cybersecurity, privacy violations, business interruption, and systems and employee failures and an attack against such third-party service provider or partner could have a material adverse effect on our business.
In addition to the information technologies and systems our hotel managers use to operate our hotels, we have our own corporate technologies and systems that are used to access, store,
transmit, and manage or support a variety of business processes and employee personally identifiable information. We may be required to expend significant attention and financial resources to protect these technologies and systems against
physical or cybersecurity incidents and even then, our security measures may subsequently be deemed to have been inadequate by regulators or courts given the lack of prescriptive measures in data security and cybersecurity laws. There can be no
assurance that the security measures we have taken to protect the contents of these systems will prevent failures, inadequacies, or interruptions in system services or that system security will not be compromised through system or user error,
physical or electronic break-ins, computer viruses, or attacks by hackers. Any such compromise could have a material adverse effect on our business, our financial reporting and compliance, and could subject us to or result in liability claims,
litigation, monetary losses or regulatory oversight, investigations or penalties which could be significant. In addition, the cost and operational consequences of responding to cybersecurity incidents and implementing remediation measures could
be significant.
Like many corporations, our information networks and systems are a target of attacks. In addition, third-party providers of data hosting or cloud services may experience cybersecurity incidents
that may involve data we share with them. Although the incidents that we have experienced to date have not had a material effect on our business, financial condition or results of operations, such incidents could have a material adverse effect on
us in the future.
While we are in the process of obtaining cybersecurity insurance, there are no assurances that the coverage would be adequate in relation to any incurred losses. Moreover, as cyber-attacks
increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as adequate for our operations.
In addition, increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new
laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm us.
In addition, our hotel managers and certain third-party service providers may utilize artificial intelligence technologies in connection with the operation of our Hotels. The use of such
technologies may introduce additional risks, including inaccurate or biased outputs, lack of transparency in automated decision-making, data privacy concerns and evolving regulatory requirements. Given our reliance on third parties, we have
limited visibility into, and control over, their use of such technologies, and any failure to appropriately manage these risks could adversely affect our business, financial condition and results of operations.
Costs associated with, or failure to maintain, brand operating standards may materially and adversely affect our results of operations and profitability.
The terms of our management agreements generally require us to meet specified operating standards and other terms and conditions, and compliance with such standards may be costly. Failure by
us, or any hotel management company that we engage, to maintain these standards or other terms and conditions could result in a franchise license being canceled or the franchisor requiring us to undertake a costly property improvement program. If
an agreement is terminated due to our failure to make required improvements or to otherwise comply with its terms, we also may be liable to the counterparty for a termination payment, which could materially and adversely affect our results of
operations and profitability.
If we were to lose a brand license, the underlying value of a particular hotel could decline significantly (including from the loss of brand name recognition, marketing support, guest loyalty
programs, brand manager or franchisor central reservation systems or other systems), which could require us to recognize an impairment on the hotel. Furthermore, the loss of a franchise license at a particular hotel could harm our relationship
with the franchisor or brand manager and cause us to incur significant costs to obtain a new franchise license or brand management agreement for the particular hotel. Accordingly, if we lose one or more franchise licenses or brand management
agreements, it could materially and adversely affect our results of operations and profitability as well as limit or slow our future growth.
Our efforts to develop, redevelop or renovate our properties, in connection with our active asset management strategy, could be delayed or become more
expensive, which could reduce revenues or impair our ability to compete effectively.
If not maintained, the condition of certain of our properties could negatively affect our ability to attract guests or result in higher operating and capital costs. These factors could reduce
revenues or profits from these properties. There can be no assurance that our planned replacements and repairs will occur, or even if completed, will result in improved performance. In addition, these efforts are subject to a number of risks,
including the following: construction delays or cost overruns; delays in obtaining, or failure to obtain, zoning, occupancy and other required permits or authorizations; government restrictions on the size or kind of development; changes in
economic conditions that may result in weakened or lack of demand for improvements that we make or negative project returns; and lack of availability of rooms or meeting spaces for revenue-generating activities during construction, modernization
or renovation projects. If our properties are not updated to meet guest preferences or brand standards under our management and franchise agreements, if properties under development or renovation are delayed in opening as scheduled, or if
renovation investments adversely affect or fail to improve performance, our operations and financial results could be negatively affected.
We are subject to risks associated with the concentration of our Hotels in the Hyatt and Accor family of brands.
Our properties currently utilize brands owned by Hyatt and Accor, and subject to the satisfaction of certain conditions precedent in connection with the contemplated 2031 Notes Restructuring,
certain of our properties are expected to transition from Hyatt-branded properties to brands operated by Ennismore. As a result, our ability to attract and retain guests depends, in part, on the public recognition of these brands and their
associated reputation. Changes in ownership or management practices, the occurrence of accidents or injuries, force majeure events, crime, individual guest notoriety or similar events at our hotels or other properties managed, owned, or leased by
these brands can harm our reputation, create adverse publicity, subject us to legal claims and cause a loss of consumer confidence in our business. If the Hyatt, Accor, Ennismore or any other brand operator that may manage our properties from
time to time become obsolete or consumers view them as unfashionable or lacking in consistency and quality, we may be unable to attract guests to our hotels, which could adversely affect our business, financial condition, or results of
operations. In addition, any adverse developments or deterioration in Hyatt’s or Accor’s business and affairs, reputation or financial condition could impair its ability to manage our properties and could have a material adverse effect on us.
Our properties are geographically concentrated in Mexico City, Cancun and Ensenada and, accordingly, we could be disproportionately harmed by adverse
changes to these markets, natural disasters, climate change and related regulations.
Our existing and projected entire room count is concentrated in Mexico City and Cancun. This concentration exposes us to greater risk to local economic or business conditions, changes in hotel
supply in these markets, and other conditions than more geographically diversified hotel companies, including the increasingly presence of Hyatt due to the agreement with Grupo Piñero, a Spain-based hotel operator and leisure services provider
announced in October 2024, in which it added approximately 3,200 keys to Hyatt’s all-inclusive hotel offering and a new brand to the portfolio, including four hotels in the Riviera Maya under the Bahia Principe brand, and the acquisition of Playa
Hotels & Resorts announced in January 2025, in which it added approximately 8,000 keys to Hyatt’s hotel portfolio (approximately 4,000 keys in Mexico), which further increased Hyatt’s brand presence, increasing nearby competition for the GIC
Complex in Cancun.
An economic downturn, an increase in hotel supply, a force majeure event, a natural disaster, changing weather patterns and other physical effects of climate change (including supply chain
disruptions), a terrorist attack or similar event in any one of these markets likely would cause a decline in the hotel market and adversely affect occupancy rates, the financial performance of our hotels in these markets and our overall results
of operations, which could be material, and could significantly increase our costs.
Over time, our hotel properties located in coastal markets, and other areas that may be impacted by climate change are expected to experience increases in storm intensity and rising sea-levels
causing damage to our hotel properties, while hotels in other markets may experience prolonged variations in temperature or precipitation that may limit access to the water needed to operate our hotel properties, increasing operating costs at our
hotels, such as the cost of water or energy, and requiring us to expend funds as we seek to repair and protect our hotels against such risks. The effects of climate change may also affect our business by increasing the cost of (or making
unavailable) property insurance on terms we find acceptable in areas most vulnerable to such events. There can be no assurance that climate change will not have a material adverse effect on our hotels, operations, or business.
If the insurance that we carry does not sufficiently cover damage or other potential losses or liabilities involving our properties, including as a result
of terrorism and climate change, our profits could be reduced.
Because certain types of losses are uncertain, including natural disaster, the effects of climate change or other catastrophic losses, they may be uninsurable or prohibitively expensive. There
are also other risks that may fall outside the general coverage terms and limits of our policies. Market forces beyond our control could limit the scope of the insurance coverage that we can obtain or may otherwise restrict our ability to buy
insurance coverage at reasonable rates. In the event of a substantial loss, the insurance coverage that we carry may not be sufficient to pay the full value of our financial obligations, our liabilities or the replacement cost of any lost
investment or property. Furthermore, certain of our properties may qualify as legally permissible nonconforming uses and improvements, including certain of our iconic and most profitable properties, and we may not be permitted to rebuild such
properties as they exist now or at all, regardless of insurance proceeds, if such properties are destroyed. Any loss of this nature, whether insured or not, could materially adversely affect our results of operations and prospects.
We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor.
While our hotel managers are and will be primarily responsible for hiring and maintaining the labor force at our hotels, we are subject to the costs and risks generally associated with the
hotel labor force, and increased labor costs due to factors like labor shortages and resulting increases in wages, additional taxes, or requirements to incur additional employee benefits costs may adversely impact our operating costs. Labor
costs, including wages, can be particularly challenging at those of our hotels with unionized labor, and additional hotels may be subject to new collective bargaining agreements in the future.
From time to time, strikes, lockouts, public demonstrations or other negative actions and publicity may disrupt hotel operations at any of our properties, negatively impact our reputation or
the reputation of our brands, or harm relationships with the labor forces at our properties in operation or under development. We also may incur increased legal costs and indirect labor costs as a result of contract disputes or other events. The
resolution of labor disputes or new or re-negotiated labor contracts could lead to increased labor costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs. Furthermore, labor agreements may
limit the ability of our hotel managers to reduce the size of hotel workforces during an economic downturn because collective bargaining agreements are negotiated between the hotel managers and labor unions. As we do not directly employ the
employees at our hotels, we do not have the ability to control the outcome of these negotiations.
Terrorist acts, armed conflict, civil unrest, criminal activity, and threats thereof, and other events impacting the security of travel or of our
contractors or the perception of security of travel or that of our contractors could adversely affect the demand for travel and lodgings.
Acts of terrorism and violent crime have had an adverse effect on tourism, travel and the availability of air service and other forms of transportation. The threat or possibility of future
terrorist acts, an outbreak, escalation and/or continuation of hostilities or armed conflict abroad, such as the war between Russia and Ukraine, the Israel-Palestine conflict, the war between Israel and Iran, criminal violence, civil unrest, or
the possibility thereof, including any escalation or expansion of such conflicts, or the involvement of additional countries, which could lead to broader geopolitical instability, volatility in global markets, increases in energy prices or a
global economic slowdown, the issuance of travel advisories by sovereign governments, and other geopolitical uncertainties have had and may have an adverse impact on the demand for vacation packages and consequently the pricing for vacation
packages. In addition, criminal violence, organized crime activity and related security incidents in Mexico, including incidents that may result in localized disruptions to transportation, travel advisories or heightened security concerns in
regions where we operate or develop projects, may adversely affect demand for travel to Mexico and our properties. Decreases in demand and reduced pricing in response to such decreased demand would adversely affect our business by reducing our
profitability.
All the properties in our portfolio are located in Mexico, and Mexico has experienced criminal violence for years, primarily due to the activities of drug cartels and related organized crime.
There have occasionally been instances of criminal violence near our properties, including our properties under development in Cancun and Ensenada. Criminal activities and the possible escalation of violence or other safety concerns, including
food and beverage safety concerns, associated with them in regions where our resorts are located, or an increase in the perception among our prospective guests of an escalation of such violence or safety concerns, could instill and perpetuate
fear among prospective guests and may lead to a loss in business at our properties in Mexico because these guests may choose to vacation elsewhere or not at all. In addition, increases in violence, crime or civil unrest or other safety concerns
in any other location where we may own a resort in the future may also lead to decreased demand for our resorts and negatively affect our business, financial condition, liquidity, results of operations and prospects.
We face significant competition in the lodging industry in Mexico.
The lodging industry in Mexico is highly competitive. This competition could reduce occupancy levels and rental revenues at our properties, which would adversely affect our operations. We face
competition from many sources. We face competition from other lodging facilities both in the immediate vicinity of our properties and the geographic markets in which the properties will be located. In addition, increases in operating costs due to
inflation may not be offset by increased room rates. We also face competition from recognized lodging brands with which we are not associated.
We also face competition from online marketplaces focused on customer-to-customer virtual platforms, like Airbnb, which enables people to lease or rent short-term lodging, including vacation
rentals, apartment rentals, homestays, hostel beds, or hotel rooms to its customers.
Some of our competitors may have substantially greater marketing and financial resources than us. If our hotel management companies are unable to compete successfully or if our competitors’
marketing strategies are effective, our business, financial condition and results of operations may be adversely affected.
The increasing use of internet travel intermediaries by consumers could have a material adverse effect on us.
Some of our vacation packages are expected to be booked through Internet travel intermediaries, including, but not limited to, Travelocity.com, Expedia.com and Priceline.com. As these Internet
bookings increase, these intermediaries may be able to obtain higher commissions, reduced room rates or other significant contract concessions from us. If consumers develop loyalty to Internet reservations systems rather than to our booking
system or the brands under which we operate, the value of our hotels could deteriorate and we could be materially and adversely affected, including our financial results.
There is increased competition from global hospitality branded companies in the all-inclusive market segment.
As demand for all-inclusive stays has increased, we have seen U.S. and European global hospitality branded companies enter the all-inclusive market segment. Increased competition from global
branded hospitality companies may result in reduced market share and lower returns on investment for us as the increasing interest of global hospitality brands in the all-inclusive segment attracts more institutional capital to our target
markets, increasing competition for the acquisition of hospitality assets. The entrance by global branded hospitality companies into the all-inclusive market segment may impact our ability to secure third-party management agreements as global
hospitality branded companies are able to offer management agreements bundled with their branding services and a lower fee structure, resulting in increased competition for the management of all-inclusive resorts.
We have significant exposure to currency exchange rate risk.
Revenue from hotel operations is primarily received in U.S. dollars and the majority of our operating expenses are incurred locally at our properties and are denominated in Mexican pesos. Our
outstanding debt borrowings are payable largely in U.S. dollars and our functional reporting currency is Mexican pesos. An increase in the relative value of the Mexican peso, in which we incur most of our costs, relative to the U.S. dollar, in
which our revenue from operations is primarily denominated, would adversely affect our results of operations. Our current policy is not to hedge against changes in foreign exchange rates and we therefore may be adversely affected by appreciation
in the value of the Mexican peso against the U.S. dollar, or to prolonged periods of exchange rate volatility. These fluctuations may negatively impact our financial condition, liquidity, and results of operations to the extent we are unable to
adjust our pricing accordingly.
Furthermore, appreciation of the Mexican peso relative to the U.S. dollar could make fulfillment of our U.S. dollar denominated obligations more challenging and could have a material adverse
effect on us, including our business, financial condition, liquidity, results of operations and prospects.
Our projects, and any future acquisition, expansion, repositioning, redesigning, and rebranding projects will be subject to timing, budgeting, and other
risks, which could have a material adverse effect on us.
We may develop, acquire, expand, reposition, or rebrand resorts (such as the GIC Complex, the Resort Property in Baja Development Project, the Baja Park Development Project, the Baja Cruise
Port, the Baja Marina and the Baja Retail Village we are currently developing or expect to begin developing) from time to time as suitable opportunities arise, taking into consideration general economic conditions. To the extent that we determine
to develop, acquire, expand, reposition, redesign or rebrand resorts or convert resorts to condominiums, we could be subject to risks associated with, among others:
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construction delays or cost overruns that may increase project costs;
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receipt of zoning, occupancy and other required governmental permits and authorizations;
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additional works or project changes requested by hotel operators;
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strikes or other labor issues;
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development costs incurred for projects that are not pursued to completion;
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investment of substantial capital without, in the case of developed or repositioned resorts, immediate corresponding income;
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results that may not achieve our desired revenue or profit goals;
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acts of nature such as earthquakes, hurricanes, floods or fires that could adversely impact a resort;
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ability to raise capital, including construction or acquisition financing; and
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governmental restrictions on the nature or size of a project.
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We have seen certain construction timelines lengthen due to competition for skilled construction labor, disruption in the supply chain for materials, especially as a result of COVID-19, and
these circumstances could replicate or worsen in the future. As a result of the foregoing, we cannot assure you that any development, acquisition, expansion, repositioning, redesign and/or rebranding project, including the development of the GIC
Complex, the Resort Property in Baja Development Project, the Baja Park Development Project, the Baja Cruise Port, the Baja Marina and the Baja Retail Village, will be completed on time or within budget or if the ultimate rates of investment
return are below the returns forecasted at the time the relevant project was commenced. If we are unable to complete a project on time or within budget, the resort’s projected operating results may be adversely affected, which could have a
material adverse effect on us, including our business, financial condition, liquidity, results of operations and prospects.
Given the beachfront locations of the GIC Complex, we are particularly vulnerable to extreme weather events, such as hurricanes, which may increase in
frequency and severity as a result of climate change.
We have been and may continue to be adversely impacted by the consequences of climate change, such as increases in the frequency, duration and severity of extreme weather events and changes in
precipitation and temperature, which have resulted and may continue to result in physical damage or a decrease in demand for our properties, all of which are located in coastal beachfront locations that are vulnerable to significant property
damage from hurricanes, tropical storms and flooding. Although we believe we have adequate insurance, there is no assurance that, given the increasing burdens on insurance companies from extreme weather events, we will be able to continue to
obtain adequate insurance against these types of losses, or that our insurers will in the future be in a position to satisfy our claims. In addition, the costs of insurance against these types of events have increased in recent years.
In addition, changes in applicable legislation and regulation on climate change could result in increased capital expenditures, such as a result of changes in building codes or requirements to
improve the energy efficiency of the properties. In addition, the ongoing transition to non-carbon-based energy presents certain risks for us and our target customers, including macroeconomic risks related to high energy costs and energy
shortages, among other things. Furthermore, legislative, regulatory, or other efforts to combat climate change or other environmental concerns could result in future increases in taxes, restrictions on or increases in the costs of supplies,
transportation, and utilities, any of which could increase our operating costs, and necessitate future investments in facilities and equipment.
Climate change also presents additional risks beyond our control which can adversely impact demand for hospitality products and services, our operations, and our financial results. For example,
GIC Complex properties are located at or around sea level and are therefore vulnerable to rising sea levels and erosion. Climate change-related impacts may also result in a scarcity of resources, such as water and energy, at some or all of the
regions in which our results are located. Furthermore, increasing awareness around sustainability, the impact of air travel on climate change and the impact of over-tourism may contribute to a reduction in demand from certain guests visiting our
resorts.
We also face investor-related climate risks. Investors are increasingly taking into account environmental, social, and governance factors, including climate risks, in determining whether to
invest in companies. Our exposure to the risks of climate change may adversely impact investor interest in our securities. These risks also include the increased pressure to make commitments, set targets, or establish goals to take actions to
meet them, which could expose us to market, operational, execution and reputational costs or risks.
Consequences of climate change, such as the appearance of large masses of sargassum seaweed in the Yucatán Peninsula and beach erosion effects, could
result in decreased tourism appetite in Cancun.
Cancun has been exposed to elevated sea levels. Rising sea level in the Caribbean creates, among others, beach erosion, storm surges of hurricanes, and large masses of sargassum seaweed. The
impact of hurricanes, such as Hurricane Wilma in 2005, can cause the sand in the beaches to be washed away. As sea level rises, storm surges from hurricanes will be higher. Since 2009, Mexico launched a project to restore seven miles of beach and
is expected to continue.
In recent years, the quantity of sargassum seaweed that has washed up onshore in various geographies in Mexico has increased. If not removed promptly, the sargassum seaweed can overrun the
beach, making it difficult to access the water and it generates a foul odor if allowed to rot on the beach. In recent years, the heightened level of sargassum seaweed has led to negative media coverage and increased awareness of the potential
problem.
Since 2011, tourism to Mexico’s Yucatán Peninsula has been heavily impacted by large masses of sargassum seaweed washing up on the beaches, with the largest seaweed event occurring in 2019.
Seaweed deters beach tourism, potentially shifting tourism inland towards many types of recreational activities, such as theme parks, cenotes (sinkholes), cultural tours and restaurants, or to beach destinations in other regions or countries.
Since the first massive seaweed arrivals in Mexico in 2011, there have been a number of initiatives to investigate the impacts and management of sargassum in the region. In 2019, a government’s sargassum containment strategy headed by the
Ministry of Navy was established. The existence of large masses of sargassum seaweed in the Yucatán Peninsula could materially and adversely affect our operating results.
Although the GIC Complex is located on the Nichupté Lagoon and not on the beach, a decrease in the attractiveness of the overall Cancun area as a tourist destination as a result of the above
could have a material adverse effect on our business.
We cannot predict the impact that changing climate conditions, as well as legal, regulatory, and social responses thereto, may have on our business.
Various scientists, environmentalists, international organizations, regulators, and other commentators believe that global climate change has added, and will continue to add, to the
unpredictability, frequency, and severity of natural disasters (including, but not limited to, hurricanes, tornadoes, freezes, other storms, and fires) in certain parts of the world. A number of legal and regulatory measures as well as social
initiatives have been introduced in an effort to reduce greenhouse gases and other carbon emissions, which some believe may be chief contributors to global climate change. We cannot predict the impact that changing climate conditions, if any,
will have on our results of operations or our financial condition. Moreover, we cannot predict how legal, regulatory, and social responses to concerns about global climate change will impact our business.
Furthermore, we anticipate that pending regulations under the General Law on Climate Change (Ley General de Cambio Climático) in Mexico, which are
expected to impose an internal system to limit emissions and introduce tradable permits and other measures to achieve its goal of greenhouse gas reduction, may affect our operations and/or result in environmental liability.
Our hotels will require ongoing and often costly maintenance, renovations, and capital improvements.
Our hotels will have an ongoing need for maintenance, renovations, and other capital improvements, including replacements, from time to time, of furniture, fixtures, and equipment. In addition,
Hyatt and other internationally recognized hotel brands may require periodic capital improvements by us as a condition of maintaining the use of their brands. We may need to finance the cost of maintenance, renovations and/or capital improvements
and we may not have access to financings on reasonable terms or at all. In addition to liquidity risks, these capital improvements may result in declines in revenues while rooms are out of service due to capital improvement projects or other
risks. The costs of these capital improvements or any of the above noted factors could have a material adverse effect on us, including our financial condition, liquidity, and results of operations.
Our business is susceptible to reductions in discretionary consumer and corporate spending due to global economic conditions.
Consumer demand for resorts, trade shows, and conventions and the type of luxury amenities that we offer are particularly sensitive to changes in the global economy, which adversely impact
discretionary spending on leisure activities. Changes in discretionary consumer spending or consumer preferences brought about by factors such as perceived or actual general global economic conditions, high unemployment, weakness in housing or
oil markets, perceived or actual changes in disposable consumer income and wealth, an economic recession, and changes in consumer confidence in the global economy, or fears of war and future acts of terrorism and mass violence have in the past
and could in the future reduce customer demand for the type of luxury amenities and leisure activities we expect to offer, which could impose downward pressure on pricing and, in turn, have a significant negative impact on our future operating
results. Our success depends in part on our hotel operators’ ability to anticipate consumers’ preferences and react to those trends, and any failure to do so may negatively impact our operating results.
The seasonality of the lodging industry could have a material adverse effect on us.
The lodging industry is seasonal in nature, which can be expected to cause quarterly fluctuations in our revenues. The seasonality of the lodging industry and the location of our hotels in
Mexico will generally result in the greatest demand for our resorts between mid-December and April of each year, yielding higher occupancy levels and package rates during this period. This seasonality in demand is expected to result in
predictable fluctuations in revenue, results of operations and liquidity, which are expected to be higher during the first quarter of each year than in successive quarters. We can provide no assurances that these seasonal fluctuations will, in
the future, be consistent with the historical experience in the sector or whether any shortfalls that occur as a result of these fluctuations will not have a material adverse effect on us.
The cyclical nature of the lodging industry may cause fluctuations in our operating performance.
The lodging industry is highly cyclical in nature. Fluctuations in operating performance are caused largely by general economic and local market conditions, which subsequently affect levels of
business and leisure travel. In addition to general economic conditions, new hotel and resort room supply is an important factor that can affect the lodging industry’s performance, and over-building has the potential to further exacerbate the
negative impact of an economic recession. Room rates and occupancy levels tend to increase when demand growth exceeds supply growth. A decline in lodging demand, or increase in lodging supply, could result in returns that are substantially below
expectations, or result in losses, which could have a material adverse effect on us, including our business, financial condition, liquidity, results of operations and prospects. Further, the costs of running a hotel tend to be more fixed than
variable. As a result, in an environment of declining revenue, the rate of decline in earnings is likely to be higher than the rate of decline in revenue.
If the hotel operators are unable to recruit, train and retain qualified management and employees, our business could be significantly harmed.
In order to operate our hotels effectively, the operators will need to recruit numerous executives, managers, and employees with hospitality industry experience. We cannot assure you that a
sufficient number of qualified employees will be available to meet the hotel operators’ labor needs, particularly given the intense competition for skilled employees in the Mexico City and Cancun markets.
We cannot assure you that our hotel operators will find suitable and qualified candidates for all the positions required to fill before the opening of our hotels. We also cannot assure you
that, once hired, the hotel operators will retain their employees or find suitable and qualified replacements for those employees whose employment terminates. If a hotel operator is unable to attract, hire and retain an adequate number of
suitable and qualified employees, our business may be significantly impaired.
Our hotels may contain or develop harmful mold or suffer from other indoor air quality issues, which could lead to liability for adverse health effects or
property damage, or cost for remediation.
When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of
time. Some molds may produce airborne toxins or irritants. Indoor air quality issues can also stem from inadequate ventilation, chemical contamination from indoor or outdoor sources, and other biological contaminants such as pollen, viruses, and
bacteria. Indoor exposure to airborne toxins or irritants can be alleged to cause a variety of adverse health effects and symptoms, including allergies or other reactions. As a result, the presence of significant mold or other airborne
contaminants at any of our hotels could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants or to increase ventilation and could expose us to liability from third parties if a personal
injury occurs.
The departure of any key personnel with significant experience and relationships in the lodging industry from any of our hotels could materially and
adversely impede or impair our ability to compete effectively and limit future growth prospects.
We depend on the experience and relationships of the senior management team of our hotel operators to manage the day-to-day operations of the hotels. The hotel operators’ senior management team
has an extensive network of lodging industry contacts and relationships. We can provide no assurances that any of the key personnel of the hotel operators will continue working with the hotel operators. The departure of any of our key personnel
of the hotel operator who has significant experience and relationships in the lodging industry could materially and adversely impede or impair our ability to compete effectively and limit future growth prospects.
From time to time, we and/or our affiliates may be involved in legal and other proceedings.
From time to time, we and/or our affiliates may be involved in disputes with various parties related to the financing, construction, and operation of the properties, including contractual
disputes with lenders, contractors, suppliers, and construction workers or property damage or personal liability claims. Regardless of the outcome, these disputes may lead to legal or other proceedings and may result in foreclosures, substantial
costs, delays in our development schedule, and the diversion of resources and management’s attention. We intend to carry insurance to cover most business risks, but there can be no assurance that the insurance coverage we have will cover all
claims that may be asserted against us. Should any ultimate judgments or settlements not be covered by insurance or exceed our insurance coverage, such uncovered losses could increase our costs and thereby lower our profitability. There can also
be no assurance that we will be able to obtain the appropriate and sufficient types and levels of insurance once the properties are operating. Our affiliates have in the past been involved in legal and other proceedings and may be involved in
other proceedings in the future. Regardless of insurance coverage, if any legal or other proceedings in which we and/or our affiliates may be involved are finally resolved against us and/or our affiliates interest, any such resolution may have a
material adverse effect on our properties and operations and/or may negatively impact our reputation.
We and our hotel operators are subject to the risk of increased lodging operating expenses.
Together with the hotel operators, we are subject to the risk of increased lodging operating expenses, including, but not limited to, the following cost elements:
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wage and benefit costs;
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repair and maintenance expenses;
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employee liabilities;
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energy costs;
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property and other taxes;
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insurance costs; and
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other operating expenses.
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The need for business-related travel and, thus, demand for rooms in our hotels may be materially and adversely affected by the increased use of
business-related technology.
The increased use of teleconference and video-conference technology by businesses could result in decreased business travel as companies increase the use of technologies that allow multiple
parties from different locations to participate at meetings without traveling to a centralized meeting location, such as our hotels. To the extent that such technologies play an increased role in day-to-day business and the necessity for
business-related travel decreases, demand for our hotel rooms may decrease, and we could be materially and adversely affected.
Lack of sufficient air service to Mexico City, Cancun or Ensenada could adversely affect our business.
Nearly all of our prospective international customers travel to Mexico City, Cancun or Ensenada by air. Although we believe that the current level of air service to Mexico City, Cancun and
Ensenada is adequate, any interruption or reduction of air service would prevent many prospective customers from visiting our hotels and reduce our sales and the growth of our business. Many of our guests rely on a combination of scheduled
commercial airline services and tour operator services for passenger connections, and price increases or service changes by airlines or tour operators could reduce our occupancy rates and revenue levels and, therefore, have a material adverse
effect on our business, financial condition, and results of operations.
Many of our guests depend on a combination of scheduled commercial airline services and tour operator services to transport them to airports near our
resorts.
Increases in the price of airfare, due to increases in fuel prices or other factors, would increase the overall travel cost to our guests and may adversely affect demand for our hotels. Changes
in commercial airline services or tour operator services as a result of strikes, weather or other events, or the lack of availability due to schedule changes or a high level of airline bookings, could reduce our occupancy rates and revenue levels
and, therefore, have a material adverse effect on our business, financial condition and results of operations.
Illiquidity of real estate investments could significantly impede our ability to sell our Hotels or otherwise respond to adverse changes in our Hotels
performance.
Because real estate investments are relatively illiquid, our ability to sell a hotel promptly for reasonable prices in response to changing economic, financial and investment conditions will be
limited. The real estate market is affected by many factors beyond our control that could impact the timing of a disposition, including adverse changes in economic and market conditions, changes in interest and tax rates and in the availability
and cost and other terms of debt financing, and changes in governmental laws and regulations.
In addition, we may be required to expend funds to correct defects, terminate contracts or to make improvements before a resort can be sold. We can provide no assurances that we will have funds
available, or access to such funds, to correct those defects or to make those improvements. In acquiring or developing a hotel, we may agree to lock-out provisions or tax protection agreements that materially restrict us from selling that
property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These factors and any others that would impede our ability to respond to adverse changes in the
performance of our resorts or a need for liquidity could materially and adversely affect us, including our financial results.
Increases in property taxes would increase our operating costs.
The Insurgentes 421 Hotel Complex, the Vivid Hotel and any future hotels within the GIC Complex are expected to be subject to real estate and personal property taxes, especially upon any
development, redevelopment, rebranding, repositioning, and renovation. These taxes may increase as tax rates change and as our properties are assessed or reassessed by taxing authorities. If property taxes increase, we would incur a corresponding
increase in our operating expenses, which could have a material adverse effect on us, including our business, financial condition, liquidity, results of operations and prospects.
Our properties and operations are subject to extensive environmental, health and safety laws and regulations.
Our properties and operations are subject to numerous covenants, laws, regulations, rules, codes and to oversight by various federal, state and local governmental authorities, including those
related to ecological ordinance, environmental impact, municipal land use matters and forest land use change authorizations, health and safety, fire protection and seismic matters in each of the places in Mexico in which we operate.
These laws and regulations require that we obtain, and maintain (as applicable) several permits in connection with the site preparation, construction and operation of our businesses, which can
sometimes impose restrictive covenants or are conditioned to the fulfillment of actions such as the obtaining of prior approval from other local authorities or communities so that they become in full force and effect and we can initiate site
preparation and construction; the issuance of these permits can also be delayed due to extreme backlog in the processing of authorizations by some authorities, causing rippled delays in our prospective project schedules and may require us to
incur significant additional costs on short notice which may adversely affect our financial condition to move forward with the development of our projects. Our growth strategy may be adversely affected by our ability to obtain permits, licenses
and approvals. Our failure to obtain such permits, licenses and approvals could have a material adverse effect on our business, financial condition and results of operations.
We are also exposed to the risk of a sudden increase in becoming liable for contamination at any Murano Group’s properties or resorts which could be the result of third-party actions on-site or
migrating from nearby areas and/or the number of complaints against us as a result of changes in the existing regulation (or in the interpretation thereof), such as the enactment of various legal reforms to allow class actions, those that seek
the protection of indigenous or afro Mexican communities’ rights or to protect other diffuse and collective human rights such as the human right to access to water.
In addition, future changes in the regulation applicable to our industry may result in the risk of temporary water restrictions, revocation of concession titles impeding us to use national
assets such as federal maritime terrestrial zones adjacent to our properties, the imposition of bans or restrictions on the use of certain products, vape smoking bans in our restaurants, increases in the taxation of luxury goods or the sale of
alcohol or high-calorie beverages, restrictions on the hours of operation of our restaurants, convention centers, etc. and we may incur costs that have a material adverse effect on our results of operations and financial condition as a result
thereof or of any liabilities under or potential violations of environmental, health and safety laws and regulations.
We anticipate that the regulation of our business operations under Mexican federal, state and local environmental laws and regulations will increase and become more stringent over time. We
cannot predict the effects of such changes, if any, that the adoption of additional or more stringent environmental laws and regulations would have on our results of operations, cash flows, capital expenditure requirements or financial condition.
We will require additional capital to meet our financial obligations and support business growth, and this capital might not be available on acceptable
terms or at all.
We intend to continue to make significant investments to support our business growth and expect to require additional funds to respond to business challenges. Accordingly, we may need to engage
in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we
issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other
financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable
to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when and if we require it, our ability to continue to support our business growth and to respond to business challenges could be
significantly impaired, and our business may be harmed.
We have incurred significant additional indebtedness, which may impair our ability to raise further capital or impact our ability to service our debt.
We have incurred significant additional indebtedness during recent periods. Our additional indebtedness may impair our ability to raise further capital, including to expand our business, pursue
strategic investments, and take advantage of financing or other opportunities that we believe to be in the best interests of Murano and our shareholders.
Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness depends on our future performance, which is subject to economic, financial,
competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be
required to adopt one or more alternatives, such as selling assets, curtailing spending, restructuring debt, or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will
depend on the capital markets and our financial condition at such time. Our additional indebtedness may also impact our ability to service our debt and to comply with financial covenants and the other terms of our relevant credit arrangements, in
which case our lenders might pursue available remedies up to and including terminating our credit arrangements and foreclosing on available collateral.
While we have implemented efforts to curtail spending and restructure existing indebtedness, there is no assurance that any such efforts will be successful or will have intended effect on our
available cash.
Our recurring losses and negative cash flow from operations, as well as current cash and liquidity projections, raise substantial doubt about our ability
to continue as a going concern.
Based on recurring losses from operations for the year ended December 2025, and the three months ended March 31, 2026 as well as current cash and liquidity projections, we have concluded that
there is substantial doubt about our ability to continue as a going concern for the next twelve months. Our consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments to
reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result if we do not continue as a going concern. You should not rely on our consolidated balance
sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to shareholders, in the event of liquidation.
Risks Related to Doing Business in Mexico
All of Murano’s assets are located in Mexico. Therefore, we are subject to political, economic, legal, and regulatory risks specific to Mexico and the
Mexican real estate industry and lodging sector and are vulnerable to an economic downturn, other changes in market conditions, or natural disasters in Mexico or in the regions where our properties are located.
Our operating entities are incorporated in Mexico, and all our assets and operations are located in Mexico. As a result, we are subject to political, economic, legal, and regulatory risks
specific to Mexico, including the general condition of the Mexican real estate industry, lodging sector, and the Mexican economy, the devaluation of the peso as compared to the U.S. dollar, Mexican inflation, interest rates, regulation,
confiscatory taxation and regulation, expropriation, social instability, and political, social, and economic developments in Mexico.
Our business may be significantly affected by the Mexican economy’s general condition, by the depreciation of the peso, inflation, and high-interest rates in Mexico, or by political
developments in Mexico. Declines in growth, high rates of inflation, and high-interest rates in Mexico have a generally adverse effect on our operations. If inflation in Mexico increases while economic growth slows, our business, financial
condition, and results of operations will be affected. In addition, high-interest rates and economic instability could increase our costs of financing.
In the past, the rating agencies rating Mexico and PEMEX have downgraded both Mexico and PEMEX and/or placed them on negative outlooks. On July 18, 2024, Fitch Ratings has affirmed Mexico’s
Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR) at ‘BBB-’; with a stable rating outlook. On November 14, 2024, Moody’s assigned Mexico a rating of Baa2; with a stable rating outlook. We cannot ensure that the rating agencies will
not announce downgrades of Mexico and/or PEMEX in the future and any such downgrades could adversely affect the Mexican economy and, consequently, our business, financial condition, results of operations, and prospects.
Political instability in Mexico could negatively affect our operating results.
In Mexico, political instability has been a determining factor in business investment. Significant changes in laws, public policies and/or regulations could affect Mexico’s political and
economic situation, which could, in turn, adversely affect our business.
Mexican political events may affect our business operations. President Claudia Sheinbaum’s political party and its allies hold a majority in the Chamber of Deputies (Cámara de Diputados) and the Senate (Senado de la República) and a strong influence in various local legislatures. The federal administration has significant power to implement
substantial changes in law, policy, and regulations in Mexico, including recent Constitutional and legal reforms affecting the judiciary and other institutional frameworks, which could affect our business, results of operations, financial
condition, and prospects. We cannot predict whether potential changes in Mexican governmental and economic policy could adversely affect Mexico’s economic conditions or the sector in which we operate. We cannot provide any assurances that
political developments in Mexico, over which we have no control, will not have an adverse effect on our business, results of operations, financial condition, and prospects. Recent and future reforms affecting the judiciary, electoral
institutions, the political system or other key areas of economic regulation may increase uncertainty regarding the legal and regulatory environment applicable to our business and investments in Mexico.
Social and political instability in or affecting Mexico could adversely affect our business, financial condition, and results of operations, as well as market conditions and prices of our
securities. These and other future developments in the Mexican political or social environment may cause disruptions to our business operations and decreases in our sales and net income.
Our assets are located in Mexico and are therefore subject to the provisions of the National Law of Domain Extinction (Ley Nacional de Extinción de
Dominio).
The National Law of Domain Extinction (Ley Nacional de Extinción de Dominio, the “LNED”) empowers the public prosecutor (agente del ministerio público) to exercise the extinction of domain action with respect to all types of assets related to crimes in a broad range of categories, including organized crime, kidnapping, crimes related to
hydrocarbons, oil and petrochemicals, crimes against health, human trafficking, crimes for acts of corruption, cover-ups, crimes committed by public servants, theft of vehicles, resources of illicit origin and extortion. Pursuant to the LNED, the
extinction of domain action may be exercised with respect to assets related to any of these crimes, including if the assets are used by a party other than the owner of the asset in order to commit the crime.
The LNED permits a final judgment on domain extinction even in certain cases when the criminal trial has not yet concluded; provided the governmental authority determines that solid and
reasonable grounds exist to infer the existence of assets that are covered by the LNED. In such cases, if the affected person were to later prove its innocence and the asset has already been monetized, the affected person would only be able to
recover the proceeds from the monetization of the asset.
Legal remedies are available to challenge the enforcement of the LNED on the grounds of a possible violation of human and constitutional rights such as property rights and the presumption of
innocence. Should our assets ever be challenged under LNED grounds, in order to defend our rights, it may be necessary to incur significant costs due to litigation and/or full or partial loss of the assets subject to domain extinction
proceedings. All of the foregoing could adversely affect our business, financial condition and results of operations.
Fluctuations in the U.S. economy or the global economy, in general, may adversely affect Mexico’s economy and our business.
Mexico’s economy is vulnerable to global market downturns and economic slowdowns. Moreover, Mexico’s economy is largely influenced by economic conditions in the United States and Canada as a
result of various factors, including the volume of commercial transactions under the United States-Mexico-Canada Agreement (the “USMCA”) and the level of U.S. investments in Mexico. Therefore, events and conditions that affect the U.S. economy
can also directly and indirectly affect our business, financial condition, and results of operations.
The global economy, including Mexico and the United States, has been materially and adversely affected by a significant lack of liquidity, disruption in the credit markets, reduced business
activity, rising unemployment, a decline in interest rates, and erosion of consumer confidence during recent periods of recession. This situation has had a direct adverse effect on the purchasing power of our customers in Mexico. The
macroeconomic environment in which we operate is beyond our control, and the future economic environment may continue to be less favorable than in recent years. The risks associated with current and potential changes in the Mexican and United
States economies are significant and could have a material adverse effect on our business, financial condition, and results of operations.
Developments in other countries, particularly the United States, could materially affect the Mexican economy and, in turn, our business, financial
condition and results of operations.
The U.S. economy heavily influences the Mexican economy, and therefore, the deterioration of the United States’ economy, the status of the USMCA or other related events may impact the economy
of Mexico. Economic conditions in Mexico have become increasingly correlated to economic conditions in the United States as a result of the North American Free Trade Agreement, which has induced higher economic activity between the two countries
and increased the remittance of funds from Mexican immigrants working in the United States to Mexican residents. In 2023 Mexico surpassed China as the largest exporter to the U.S. and on an annual basis, as of December 31, 2024, U.S.$505.9
billion or 84% of Mexico’s total exports were purchased by the United States, the single country with the highest share of trade with Mexico. The USMCA is subject to its first joint review in 2026, and it remains uncertain whether such review
will result in amendments to the agreement, changes in its implementation, stricter rules of origin, additional trade measures or other policy shifts that could significantly adversely affect the Mexican economy. These economic and political
consequences could adversely affect our business, financial condition, and results of operations.
Likewise, any action taken by the current U.S. or Mexico administrations, including changes to the USMCA, the 2026 joint review process thereunder, potential changes in rules of origin, tariffs
or other trade measures, and/or other U.S. government policies that may be adopted by the U.S. administration, could have a negative impact on the Mexican economy, such as reductions in the levels of remittances, reduced commercial activity or
bilateral trade or declining foreign direct investment in Mexico. In addition, increased or perceptions of increased economic protectionism in the United States, Mexico and other countries could potentially lead to lower levels of trade and
investment and economic growth, which could have a similarly negative impact on the Mexican economy. These economic and political consequences could adversely affect our business, financial condition, and results of operations.
We cannot make assurances that any events in the United States or elsewhere will not materially and adversely affect us.
Tariffs and trade restrictions could increase our costs and delay our projects.
The United States has imposed tariffs on various goods from Mexico and Canada, including key construction materials like steel and aluminum. These trade barriers—for example, tariffs of up to
25% (and in certain cases higher) on imported steel and aluminum products—have driven up the cost of critical building components needed for our development projects. Tariffs broadly raise prices across the supply chain for essential inputs such
as cement, lumber, copper, steel and aluminum, directly increasing our construction expenses in Mexico. Trade measures can also disrupt supply chains: tariffs often slow down customs processing and cause material shortages or delivery delays,
which put our projects at risk of schedule overruns and higher costs. If our construction costs surge or projects are delayed due to tariff-related issues, we may not be able to fully offset these impacts or pass them on to customers, which could
adversely affect our profitability.
Trade tensions also create broader risks for our industry, especially in the hospitality sector. In retaliation to U.S. tariffs, Mexico has in the past implemented, and may in the future
implement, retaliatory tariffs or other trade measures in response to U.S. tariffs or trade restrictions. Such retaliatory measures can increase the cost of goods and services in our hotels and resorts. For instance, higher duties on imported
food and beverages can raise operating costs for our projects in Mexico. Similarly, Canada and other U.S. trading partners have responded with their own counter‑tariffs on U.S. products, compounding the potential supply disruptions and cost
pressures on materials and goods we rely on. These trade actions could also dampen economic activity or spur inflation in Mexico and Canada, which may reduce business investment, consumer spending, and travel in those markets—factors that are
important to our operations.
Moreover, the regulatory trade environment is in flux, and shifting policies make long-term project planning challenging. Major trade negotiations and agreements (such as the transition from
North American Free Trade Agreement to the USMCA) have been influenced by tariff disputes, and future policy changes, including in connection with the 2026 joint review of the USMCA, potential changes to rules of origin, regional sourcing
requirements, tariffs or other trade measures, could occur with little warning. This unpredictability means the costs and availability of construction materials, as well as the viability of cross-border projects, can change abruptly. We cannot
predict further developments in trade policy, and existing or future tariffs or other trade restrictions (including retaliatory measures) could materially and adversely affect our development projects, operating results and financial position.
General economic uncertainty and weak demand in the lodging industry could have a material adverse effect on us.
Our business strategy depends significantly on demand for vacations generally and, more specifically, on demand for all-inclusive vacation packages. Weak economic conditions and other factors
beyond our control, including high levels of unemployment and underemployment, in North America, especially the United States and Mexico, Europe and Asia could reduce the level of discretionary income or consumer confidence in the countries from
which we source our guests and have a negative impact on the lodging industry. We cannot provide any assurances that demand for all-inclusive vacation packages will remain consistent with or increase from current levels. Furthermore, our business
is focused primarily on, and our acquisition strategy targets the acquisition of resorts in, the all-inclusive segment of the lodging industry (and properties that we believe can be converted into all-inclusive resorts in a manner consistent with
our business strategy). This concentration exposes us to the risk of economic downturns in the lodging industry broadly and, more specifically, in the leisure dominated all-inclusive segment of the lodging industry. As a result of the foregoing,
we could experience a prolonged period of decreased demand and price discounting in our markets, which would negatively affect our revenues and could have a material adverse effect on us, including our business, financial condition, liquidity,
results of operations and prospects.
If the Mexican government imposes exchange controls and/or other similar restrictions, the Mexican economy and our operations may be negatively affected.
In the past, the Mexican economy has experienced a balance of payment deficits and shortages in foreign exchange reserves. There can be no assurance that the Mexican government will not
institute a restrictive exchange control policy or other restrictions. If the Mexican government imposes exchange controls and/or other similar restrictions, the Mexican economy and our operations may be negatively affected.
Security risks in Mexico could increase, and this could adversely affect the Mexican economy and our business, financial condition, and results of
operations.
In recent years, Mexico has experienced a period of increasing criminal activity and particularly high homicide rates, primarily due to organized crime. The presence of violence among drug
cartels, and between these and the Mexican law enforcement and armed forces, or an increase in other types of crime, pose a risk to our business, and might negatively impact business continuity.
The U.S. Department of State and the U.S. Embassy in Mexico have continued to issue travel advisories and security alerts regarding safety and security risks in Mexico, including in 2026 in
connection with localized security incidents and related disruptions. While certain key tourism markets in which we operate, including Mexico City and Quintana Roo (including Cancun), may at times remain subject to lower advisory levels than
higher-risk regions, they may nonetheless remain subject to ‘exercise increased caution’ or similar advisories. Continuing travel advisories by the U.S. Department of State in these and other states, and any future travel advisories issued by the
U.S. or other countries could reduce tourism to Mexico generally or any of the regions in which our hotels are located. Additionally, localized security incidents in Mexico may also result in temporary flight disruptions, road blockages,
operational interruptions or heightened traveler caution, including in tourism-focused regions. Any such effects could adversely affect occupancy at our hotels, which could have a material adverse effect on our business, financial condition, and
results of operations.
We are subject to anti-corruption, anti-bribery, anti-money laundering, and antitrust laws and regulations in Mexico.
We are subject to anti-corruption, anti-bribery, anti-money laundering, antitrust and other international laws and regulations and are required to comply with the applicable laws and
regulations of Mexico. In addition, we are subject to regulations on economic sanctions that restrict our dealings with certain sanctioned countries, individuals, and entities. There can be no assurance that our internal policies and procedures
will be sufficient to prevent or detect all inappropriate practices, fraud, or violations of law by our affiliates, employees, directors, officers, partners, agents, and service providers or that any such persons will not take actions in
violation of our policies and procedures. Any violations by us of anti-bribery and anti-corruption laws or sanctions regulations could have a material adverse effect on our business, financial condition, results of operations, and reputation.
We are subject to laws applicable to the development of our properties, including stricter environmental laws and regulations.
The development of our properties is subject to strict regulations at federal and local levels. If we fail to comply with these regulations, we could be subject to fines and/or lose the right
to develop the properties. Government agencies are empowered to implement laws, regulations, and standards that could adversely affect the operations and the value of the Properties, which could rely on political considerations.
In addition, the viability of hotel developments could depend on obtaining permits, authorizations, concessions, and other contracts issued by federal or local governmental authorities. If we
fail to obtain any such permits, authorizations, concessions and other contracts, our hotel development projects could be subject to fines and/or we could lose the right to develop the projects.
The hotel development projects are also subject to compliance with Mexican environmental laws, which in recent years became stricter and resulted in additional compliance-related expenses.
Mexican federal authorities, including the Ministry of Environment and Natural Resources, the Federal Environmental Protection Agency, the Mexican Water Commission, and local authorities, are empowered to file civil, administrative, and criminal
proceedings against companies that violate environmental laws, the terms of their permits, and/or cause environmental damages. They may also halt any development that does not comply with applicable law.
We are also subject to certain environmental compliance costs, including associated air emissions, the use, storage and disposal of hazardous and toxic substances, and wastewater disposal. Our
failure to comply with any such laws, including any required permits or licenses, or publicity resulting from actual or alleged compliance failures, could result in substantial fines or possible revocation of our authority to conduct some of our
operations or otherwise have an adverse effect on our business. Environmental laws may also impose potential liability on a current or former owner or operator of real property for, among other things, investigation, removal, or remediation of
hazardous or toxic substances at our currently or formerly owned or leased real property, regardless of whether or not we knew of, or caused, the presence or release of such substances. From time to time, we may be required to remediate such
substances or remove, abate, or manage asbestos, mold, radon gas, lead, or other hazardous conditions at our properties. The presence or release of such toxic or hazardous substances at our currently or formerly owned or leased properties could
result in limitations on or interruptions to our operations or in third-party claims for personal injury, property or natural resource damages, business interruption or other losses, including liens in favor of the government for costs the
government incurs in cleaning up contamination. Such claims and the need to investigate, remediate or otherwise address hazardous, toxic, or unsafe conditions could adversely affect our operations, the value of any affected real property, or our
ability to sell, lease or assign our rights in any such property, or could otherwise harm our business or reputation. In addition, we also may be liable for the costs of remediating contamination at off-site waste disposal facilities to which we
have arranged for the disposal, transportation, or treatment of hazardous substances without regard to whether we complied with environmental laws in doing so. Environmental, health and safety requirements have also become, and may continue to
become, increasingly stringent, and our costs may increase as a result. New or revised laws and regulations or new interpretations of existing laws and regulations, such as those related to climate change, could affect the operation of our
properties, or result in significant additional expense and operating restrictions on us or our hotel managers.
The development of properties in Mexico is subject to laws and regulations governing urban development, sanitation, security, and protection of the environment. With respect to environmental
matters, we could be subject to financial and other liabilities pursuant to laws and regulations relating to the management of hazardous waste and contaminated sites. These laws and regulations could require the affected property owners to absorb
the costs of cleaning and remediating such sites jointly and severally with the sellers of the property without regard to fault and independent of any claims the owners of the affected property may have against sellers of the property.
Additionally, the transfer of contaminated sites is subject to the approval of the Secretary of Environment and Natural Resources (Secretaría de Medio Ambiente y Recursos Naturales, or “SEMARNAT”). If
SEMARNAT’s authorization is not obtained within the timeframe required for a transaction, we may incur additional costs and delays relating to the expansion of our portfolio or the disposition of properties.
Additionally, the Mexican government has the authority to initiate civil, administrative, or criminal legal actions against companies and enjoin developments that do not comply with applicable
environmental laws.
It is possible that our properties could require cleaning and remediation, for which the costs could be high and not covered by our insurance policies. In addition, if any of our properties are
subject to applicable environmental laws, we could incur delays in development and additional expenses for cleaning and remediation.
Our failure to comply with applicable laws and regulations related to our hotel development projects, including environmental laws, could have material adverse effect on our business, financial
condition, and results of operations.
Governmental regulation may adversely affect the operation of our properties and our business as a whole.
The hotel industry is subject to extensive federal, state, and local governmental regulations, including those relating to the service of alcoholic beverages, the preparation and sale of food,
building and zoning requirements and data protection, cybersecurity, and privacy. We and our hotel managers are also subject to licensing and regulation by state and local departments relating to health, sanitation, fire, and safety standards,
and to laws governing our relationships with employees, including minimum wage requirements, overtime, working conditions and citizenship requirements. Our existing systems may be unable to satisfy changing regulatory requirements and employee
and customer expectations or may require significant additional investments or time to do so.
Risks Related to Murano Being a Public-Company
Murano will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new
compliance initiatives and corporate governance practices.
As a public company, Murano has incurred and will continue to incur significant legal, accounting, and other expenses that it did not incur as a private company. For example, Murano is subject
to the reporting requirements of the Exchange Act and is required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations of the U.S.
Securities and Exchange Commission (“SEC”) and Nasdaq.
We expect that compliance with these requirements will increase legal and financial compliance costs and will make some activities more time-consuming and costly. In addition, our management
and other personnel may be required to divert their attention from operational and other business matters to devote substantial time to these public company requirements. In particular, we are incurring significant expenses and devoting
substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act, which will increase further when Murano is no longer an “emerging growth company” as defined under the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”). As a public company, Murano will likely hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and may need to establish an internal
audit function.
Murano is an “emerging growth company”, and the reduced disclosure requirements applicable to emerging growth companies may make our securities less
attractive to investors.
Murano is an “emerging growth company,” as defined in the JOBS Act. As a result, Murano is taking advantage of certain exemptions from various reporting requirements that are applicable to
other public companies that are not emerging growth companies, including, the ability to furnish two rather than three years of income statements and statements of cash flows in various required filings, and not being required to include an
attestation report on internal control over financial reporting issued by our independent registered public accounting firm. As a result, our shareholders and prospective investors may not have access to certain information that they deem
important. Murano could be an emerging growth company for up to five years, although it could lose that status sooner if its gross revenue exceeds U.S.$1.07 billion, if Murano issues more than U.S.$1.0 billion in nonconvertible debt in a
three-year period, or if the fair value of its shares held by non-affiliates exceeds U.S.$700.0 million (and Murano has been a public company for at least 12 months and have filed one annual report on Form 20-F).
We cannot predict if prospective investors will find our securities less attractive if we rely on these exemptions. If they find our securities less attractive as a result, there may be a less
active trading market for our securities and our share price may be more volatile.
Murano may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses, and subject us to U.S.
GAAP reporting requirements which may be difficult for us to comply with.
As a “foreign private issuer,” Murano is not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act and related rules and regulations.
Under those rules, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us
on June 30, 2026.
In the future, Murano could lose its foreign private issuer status if a majority of its ordinary shares are held by residents in the United States and it fails to meet any one of the additional
“business contacts” requirements. Although Murano intends to follow certain practices that are consistent with U.S. regulatory provisions applicable to U.S. companies, its loss of foreign private issuer status would make such provisions
mandatory. The regulatory and compliance costs to Murano under U.S. securities laws if it is deemed a U.S. domestic issuer may be significantly higher. If Murano is not a foreign private issuer, it will be required to file periodic reports and
prospectuses on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. For example, it would become subject to the Regulation FD promulgated by the SEC, aimed at
preventing issuers from making selective disclosures of material information. It also may be required to modify certain of its policies to comply with good governance practices associated with U.S. domestic issuers. Such conversion and
modifications will involve additional costs. In addition, it may lose our ability to rely upon exemptions from certain corporate governance requirements of Nasdaq that are available to foreign private issuers. For example, Nasdaq’s corporate
governance rules require listed companies to have, among other things, a majority of independent board members and independent director oversight of executive compensation, nomination of directors, and corporate governance matters. Nasdaq rules
also require shareholder approval of certain share issuances, including approval of equity compensation plans. As a foreign private issuer, Murano is permitted to follow home country practice in lieu of the above requirements. While it is not
currently using the following exemptions from certain Nasdaq corporate governance standards as of the date of this Report, as long as it relies on the foreign private issuer exemption to certain of Nasdaq’s corporate governance standards, a
majority of the directors on its board of directors are not required to be independent directors, its remuneration committee is not required to be comprised entirely of independent directors and it will not be required to have a nominating and
corporate governance committee. Also, Murano would be required to change its basis of accounting from IFRS as issued by the IASB to U.S. GAAP, which may be difficult and costly for it to comply with. If Murano loses its foreign private issuer
status and fails to comply with U.S. securities laws applicable to U.S. domestic issuers, it may have to de-list from Nasdaq and could be subject to investigation by the SEC, Nasdaq, and other regulators, among other materially adverse
consequences.
Murano Group’s financial reporting infrastructure requires enhancement to meet the requirements of a public company.
We are required to meet onerous standards of financial reporting and control to satisfy the needs of a company listed on Nasdaq and significant changes and enhancements are required to staffing
and infrastructure to deliver these requirements. The Murano Group is the consolidation and combination of several private entities under common control in 2024 and prior years, respectively; however, such entities were previously managed as a
family business. We were not previously required to perform an evaluation of internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act and it is likely if an evaluation had been performed, certain
control deficiencies may have been identified, and those control deficiencies could have also represented one or more material weaknesses.
Murano Group has identified material weaknesses in its internal control over financial reporting.
In connection with the audit of Murano Group’s Consolidated and Combined Financial Statements as of and for the year ended December 31, 2025, Murano Group’s management identified deficiencies
that Murano Group concluded represented material weaknesses in its internal control over financial reporting primarily attributable to its lack of an effective control structure and sufficient financial reporting and accounting personnel. The
material weaknesses in the control framework were identified and include the following:
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Lack of management review regarding the identification and assessment of the proper accounting of non-routine transactions.
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Failure of design and implementation controls to properly evaluate the appropriateness of consolidated financial statements and disclosures in accordance with the applicable framework.
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The Group does not have sufficient technical personnel with an appropriate level of technical experience required for timely and accurate financial accounting in accordance with IFRS and reporting
requirements, and
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Lack of sufficient technological infrastructure.
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This could result in material misstatements in Murano Group’s historical financial reports and, if Murano Group is unable to successfully remediate the material weaknesses, the accuracy and
timing of Murano Group’s financial reporting may be adversely affected, investors may lose confidence in the accuracy and completeness of Murano Group’s financial reports, and the market price of our common shares may be materially and adversely
affected.
The Murano Group is continuously enhancing the financial reporting infrastructure and internal control environment for the newly combined business, including the incorporation in the near
future of qualified personnel with appropriate technical accounting knowledge and experience with respect to the design and implementation of a robust system of internal controls, the application of IFRS, and the implementation of a reporting
structure to deliver internal and external reporting befitting a Nasdaq listed company. Currently, the Murano Group finalized the migration of the accounting system to Oracle Net Suite starting January 2026, a robust ERP that will help the Murano
Group to reduce manual processes and enhance the control environment. We cannot assure you these actions will be effective to address any material weaknesses and if unable to successfully address them, we could be unable to report financial
results accurately on a timely basis. Any failure to timely provide required financial information could materially and adversely impact us, including a potential loss of investor confidence or delisting.
We may not be able to satisfy the listing requirements of Nasdaq or maintain a listing of our common stock on Nasdaq.
We are required to meet certain financial and liquidity criteria to maintain our Nasdaq listing. If we violate Nasdaq listing requirements or fail to meet any of its listing standards our
common stock may be delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock from Nasdaq may
materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. The delisting of our common stock would
significantly impair our ability to raise capital and the value of your investment.
If we fail to regain compliance with Nasdaq’s minimum bid price requirement, our ordinary shares could be delisted from Nasdaq, which would materially
adversely affect liquidity, trading price and our ability to raise capital.
On April 13, 2026, we received a notification letter from the Listing Qualifications Department of Nasdaq indicating that, based on the closing bid price of our ordinary shares for the prior 30
consecutive business days, we are no longer in compliance with Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of $1.00 per share.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided with a compliance period of 180 calendar days, or until October 5, 2026, to regain compliance with the minimum bid
price requirement. To regain compliance, the closing bid price of our ordinary shares must meet or exceed $1.00 per share for a minimum of ten consecutive business days during the applicable compliance period. If we do not regain compliance
within this initial period, we may be eligible for an additional compliance period, subject to meeting certain continued listing requirements and providing Nasdaq with written notice of our intention to cure the deficiency.
If we are unable to regain compliance with the minimum bid price requirement within the applicable compliance periods, our ordinary shares may be subject to delisting from Nasdaq. A delisting
could materially adversely affect the liquidity of our ordinary shares, reduce market visibility, increase price volatility, and impair our ability to raise capital through equity or equity-linked financings. In addition, a delisting could reduce
investor confidence and limit the ability of our shareholders to buy and sell our ordinary shares in an efficient manner.
We have considered, and may in the future pursue, a corporate reorganization that could materially and adversely affect holders of our
ordinary shares.
Following the completion of the contemplated debt restructuring, management has considered a potential corporate reorganization designed to improve operational, administrative and ownership
efficiency within the Group. Any such corporate reorganization could involve, among other things, transfers of assets and liabilities, changes to the Group’s organizational structure and business model, and the separation of operations between
different stakeholder groups.
The implementation, timing and terms of any such corporate reorganization are uncertain and would be subject to a number of conditions and approvals, which may include, among others, the
successful completion of the contemplated debt restructuring, required corporate and shareholder approvals, third-party consents, regulatory considerations, and the receipt of a fairness opinion. There can be no assurance that any corporate
reorganization will be pursued or consummated, or, if pursued, that it will be consummated on terms and within timeframes that are favorable to us or our shareholders.
If implemented, a corporate reorganization could result in significant operational disruption, increased costs, and the loss of synergies, including as a result of the reallocation of assets,
liabilities and operations within the Group. In addition, any internal transfers or reorganization of assets and liabilities could adversely affect the value, liquidity and market perception of our ordinary shares, including if our asset base,
cash flows or risk profile changes materially as a result of such transactions. A corporate reorganization could also trigger, or require waivers or consents under, provisions in existing financing arrangements and other material agreements, and
may result in tax or regulatory consequences, any of which could adversely affect us and our stakeholders.
The fair value of our fixed assets requires subjective judgment and may be subject to volatility, which could significantly affect our financial
condition.
The valuation of our fixed assets is inherently subjective due to the individual nature of the assets as well as the observable and unobservable inputs that are used in the calculation, as a
result, valuations are subject to uncertainty. Our fixed assets measured at fair value include land, construction in process and investment properties. The accounting policy choice under IFRS is a matter of judgment, in which case we believe that
best reflects the nature of our business. We determine the fair value of our assets using accredited independent appraisers.
Observable and unobservable inputs may be subject to change, volatility, uncertainty and may not be available in the future periods. As a result, there is no assurance that the valuations of
our interests in the properties reflected in our financial statements would reflect actual sale prices even where any such sales occur shortly after the financial statements are prepared.
Our results of operations include gain on revaluation adjustments on investment properties, which may fluctuate significantly over financial periods.
For the year ended December 31, 2025, we had a gain on revaluation of investment properties of Ps.$75 million. The adjustments were not actual cash flow transactions or generated from the sales
or rental of our investment properties. Unless such investment properties are disposed of at similarly revalued amounts, we will not realize the actual cash flow. The amount of revaluation adjustments has been, and will continue to be,
significantly affected by the prevailing property markets and will be subject to market fluctuations.
We cannot guarantee whether changes in market conditions will increase, maintain or decrease the fair value gains on our investment properties at historical levels or at all. In addition, the
fair value of our investment properties may materially differ from the amount we receive from any actual sale of an investment property. If there is any material downward adjustment in the revaluation of our investment properties in the future or
if our investment properties are disposed of at significantly lower prices than their valuation or appraised value, our business, financial condition, and results of operations may be materially and adversely affected.
The fair value of our fixed assets (including construction in process and land) may be harmed by certain factors that may entail impairment losses not
previously recorded.
Certain circumstances may affect the fair value of our real estate assets (whether operating or under construction), including, among other things: (i) a decrease in the average room rates and
occupancy rates in our Insurgentes 421 Hotel Complex and the Vivid Hotel, (ii) an increase in the applicable discounts rates at which we discount the anticipated operational cash flow of our assets, (iii) the absence of or modifications to
permits or approvals required for the construction and/or operation of any real estate asset, (iv) delays in completion of works beyond the anticipated target, (v) cost overruns, (vi) potential lawsuits that may affect our operations, whether or
not we are a party thereto, (vii) full or partial eminent domain proceedings (with or without compensation) regarding such real estate assets; and (viii) findings indicating soil or water contamination or the existence of historical or geological
antiquities that may require us to absorb significant cleaning, purification or preservation costs. In addition, certain laws and regulations applicable to our business where the legislation process undergoes constant changes may be subject to
frequent and substantially different interpretations, and agreements which may be interpreted by governmental authorities so as to shorten the term of use of real estate, which may be accompanied by a demolition or nationalization order with or
without compensation, may significantly affect the value of such real estate asset.
In addition to the items set forth above, our investment in our Insurgentes 421 Hotel Complex and the Vivid Hotel is subject to varying degrees of risk related to the ownership and operation of
real property. The fair value of the assets and income from our Insurgentes 421 Hotel Complex and the Vivid Hotel may be materially adversely affected by:
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changes in global and national economic conditions, including global or national recession;
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a general or local slowdown in the real property market, such as the recent global slowdown;
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political events that may have a material adverse effect on the hotel industry;
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competition from other lodging facilities, and oversupply of hotel rooms in Mexico City and Cancun;
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material changes in operating expenses, including as a result of changes in real property tax systems or rates or labor laws;
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changes in the availability, cost and terms of financing;
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the effect of present or future environmental laws;
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our ongoing need for capital improvements and refurbishments; and
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material changes in governmental rules and policies.
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Murano may be or become a PFIC, which could result in adverse U.S. federal income tax consequences to U.S. holders of Murano Ordinary Shares or Murano
Warrants.
In general, a non-U.S. corporation, such as Murano, will be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes in any taxable year in which, after applying
relevant look-through rules with respect to the income and assets of its subsidiaries, (i) 75% or more of its gross income is passive income, and/or (ii) 50% or more of the value of its assets (generally based on the quarterly average of the
value of its assets during such year) is attributable to assets, including cash, that produce passive income or are held for the production of passive income. Passive income generally includes dividends, interest, certain royalties and rents,
annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains.
Based on the expected composition of Murano’s gross assets and income and the manner in which Murano expects to operate its business in 2026 and future years, Murano does not expect to be
classified as a PFIC for U.S. federal income tax purposes for Murano’s 2026 taxable year or in the foreseeable future. However, whether Murano is a PFIC is a factual determination made annually, and Murano’s status could change depending, among
other things, upon changes in the composition and relative value of its gross receipts and assets. Accordingly, there can be no assurances Murano will not be a PFIC for its 2026 taxable year or any future taxable years.
If Murano is a PFIC for any taxable year during which a U.S. holder owns Murano Ordinary Shares, the U.S. holder generally will be subject to adverse U.S. federal income tax consequences and
additional reporting requirements. U.S. holders of Murano Ordinary Shares and Murano Warrants should consult their tax advisors regarding the application of the PFIC rules to Murano and the risks of investing in a company that may be a PFIC. See
“Material U.S. Federal Income Tax Considerations-Application of the PFIC Rules to Murano Ordinary Shares and Murano Warrants.”
Risk Related to the Ownership of Murano Ordinary Shares
Murano’s board of directors and management have significant control over Murano’s business.
Murano’s directors and executive officers beneficially own, directly or indirectly, in the aggregate, approximately 69,152,609 Murano Ordinary Shares, representing a maximum aggregate of
approximately 86.75% of the combined voting power of Murano’s outstanding capital stock (excluding any warrants, options or other securities exercisable for Murano Ordinary Shares). As a result, in addition to their day-to-day management roles,
Murano’s executive officers and directors are able to exercise significant influence on Murano’s business as shareholders, including influence over election of members of the board of directors and the authorization of other corporate actions
requiring shareholder approval.
If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our securities, the price of our
securities could decline.
The trading market for Murano’s securities will be influenced by the research and reports that industry or securities analysts may publish about Murano, its business, market or competitors.
Securities and industry analysts do not currently, and may never, publish research on Murano. If no securities or industry analysts commence coverage of Murano, Murano’s share price and trading volume would likely be negatively impacted. If any
of the analysts who may cover Murano change their recommendation regarding Murano Ordinary Shares adversely, or provide more favorable relative recommendations about its competitors, the price of Murano Ordinary Shares would likely decline. If
any analyst who may cover Murano were to cease coverage or fail to regularly publish reports, Murano could lose visibility in the financial markets, which in turn could cause its share price or trading volume to decline.
There are no current plans to pay cash dividends on Murano Ordinary Shares for the foreseeable future.
Murano may retain future earnings, if any, for future operations, expansion and debt repayment and has no current plans to pay any cash dividends for the foreseeable future. Any decision to
declare and pay dividends as a public company in the future will be made at the discretion of Murano’s board of directors and will depend on, among other things, Murano’s results of operations, financial condition, cash requirements, contractual
restrictions, applicable law and other factors that Murano’s board of directors may deem relevant. In addition, Murano’s ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness it or its
subsidiaries incur. As a result, you may not receive any return on an investment in Murano Ordinary Shares unless you sell your shares for a price greater than that which you paid for it.
If Murano were to pay dividends, holders of Murano Ordinary Shares could be subject to withholding taxes on those dividends.
As a matter of current United Kingdom tax law, Murano is not required to withhold any amounts on account of United Kingdom tax at source from dividend payments it makes in respect of the Murano
Ordinary Shares. However, there is no guarantee that the United Kingdom will not change its laws in the future to impose withholding tax on dividends.
An active trading market for Murano Ordinary Shares may not develop.
Prior to the Business Combination, there was no public market for Murano Ordinary Shares. We cannot predict the extent to which investor interest in us will lead to the development of a trading
market on Nasdaq or otherwise, or how liquid that market might become. If an active market does not develop, you may have difficulty selling any Murano Ordinary Shares. An inactive market may also impair Murano’s ability to raise capital by
selling Murano Ordinary Shares and may impair our ability to acquire or make investments in companies, products or technologies for which we may issue equity securities to pay for such acquisition or investment.
Future resales of the Murano Ordinary Shares issued in connection with the Business Combination may cause the market price of Murano Ordinary Shares to
drop significantly.
Murano’s pre-Business Combination shareholders and the HCM Initial Shareholders hold maximums of approximately 87.2% and 11.1%, respectively, of Murano Ordinary Shares following the Business
Combination. As of the date of this Report, the lock-up periods applicable to such shareholders have expired, and such shareholders are generally permitted to sell their Murano Ordinary Shares, subject to applicable securities law requirements.
On a fully-diluted basis, the HCM Initial Shareholders would hold a maximum of 9.1% of the total outstanding shares assuming maximum redemptions. Sales of Murano Ordinary Shares by such shareholders, including pursuant to any effective
registration statement or in accordance with Rule 144 under the Securities Act, may occur in the open market or in privately negotiated transactions, which could increase volatility in the trading price of the Murano Ordinary Shares or put
significant downward pressure on the price of the Murano Ordinary Shares. Further, sales of Murano Ordinary Shares could encourage short sales by market participants. Generally, short selling means selling a security, contract or commodity not
owned by the seller. The seller is committed to eventually purchase the financial instrument previously sold. Short sales are used to capitalize on an expected decline in the security’s price. As such, short sales of Murano Ordinary Shares could
have a tendency to depress the price of the Murano Ordinary Shares, which could further increase the potential for short sales.
Murano cannot predict the size of future issuances or sales of Murano Ordinary Shares or the effect, if any, that future issuances and sales of Murano Ordinary Shares will have on the market
price of the Murano Ordinary Shares. Sales of substantial amounts of Murano Ordinary Shares (including those shares issued in connection with the Business Combination), or the perception that such sales could occur, may materially and adversely
affect prevailing market prices of Murano Ordinary Shares.
The market price for Murano Ordinary Shares may be subject to substantial fluctuations, which may make it difficult for you to sell your shares at the
volumes, prices and times desired.
The market price of Murano Ordinary Shares may be highly volatile, which may make it difficult for you to sell your shares at the volumes, prices and times desired. Some factors that may have a
significant effect on the market price of Murano Ordinary Shares include:
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actual or anticipated fluctuations in our operating results or those of our competitors;
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changes in economic or business conditions;
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changes in governmental regulation; and
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publication of research reports about us, our competitors, or our industry, or changes in, or failure to meet, estimates made by securities analysts or ratings agencies of our financial and operating
performance, or lack of research reports by industry analysts or ceasing of analyst coverage.
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Murano’s issuance of additional securities in connection with financings, acquisitions, investments, equity incentive plans or otherwise would dilute all
other shareholders.
Murano may issue additional securities in the future. Any such issuance would result in dilution to all other shareholders. In the future, Murano may issue additional securities, including as a
grant of equity awards to employees, directors and consultants under our equity incentive plans, to raise capital through equity financings or to acquire or make investments in companies, products or technologies for which we may issue equity
securities to pay for such acquisition or investment. Any such issuances of additional securities may cause shareholders to experience significant dilution of their ownership interests and the per share value of Murano Ordinary Shares to decline.
Murano’s board of directors will have the ability to issue blank check preferred securities, which may discourage or impede acquisition efforts or other
transactions.
Murano’s board of directors will have the power, subject to applicable law, to issue series of preferred securities that could, depending on the terms of the series, impede the completion of a
merger, tender offer or other takeover attempt. For instance, subject to applicable law, a series of preferred securities may impede a business combination by including class voting rights, which would enable the holder or holders of such series
to block a proposed transaction. Murano’s board of directors will make any determination to issue shares of preferred securities based on its judgment as to our and our shareholders’ best interests. Murano’s board of directors, in so acting,
could issue shares of preferred securities having terms which could discourage an acquisition attempt or other transaction that some, or a majority, of the shareholders may believe to be in their best interests or in which shareholders would have
received a premium for their securities over the then-prevailing market price of the securities.
Jersey company law will require that Murano meet certain additional financial requirements before it can declare dividends, make distributions or
repurchase shares.
Under the Jersey Companies Law, Murano will be able to declare dividends, make distributions from any source (other than the nominal capital account or capital redemption reserve) or repurchase
its own shares using any source of funding. The directors of a Bailiwick of Jersey company which authorize a distribution or repurchase of its own shares must make a statutory solvency statement in the form set out in the Jersey Companies Law.
| A. |
History and Development of the Company
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Business Combination
On March 20, 2024, Murano PubCo announced the completion of the previously announced business combination with HCM, pursuant to the amended & restated business combination agreement, dated
as of August 2, 2023, by and among Murano, HCM, Murano PV, Elías Sacal Cababie, ESAGRUP, Murano Global B.V., a Dutch private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) under Dutch law, having its official
seat in Amsterdam, the Netherlands and registered with the Dutch trade register under number 89192877, MPV Investment B.V., a private limited liability company under Dutch law, having its official seat in Amsterdam, the Netherlands and registered
with the Dutch trade register under number 89196651, and New CayCo (the “Original Business Combination Agreement”, as amended by the First Amendment to the Business Combination Agreement, dated as of December 31, 2023, the “Business Combination
Agreement”).
In connection with, and prior to, the Business Combination, on March 1, 2024, Murano converted from a private limited company operating under the name “Murano Global Investments Ltd.” into a
public limited company operating under the name “Murano Global Investments PLC”.
Pursuant to the terms of the Business Combination Agreement, among other things, the following transactions occurred: (i) New CayCo merged with and into HCM, the separate corporate existence of
New CayCo ceasing with HCM being the surviving company and a wholly owned direct subsidiary of Murano Global Investments (the “Merger”) and (ii) HCM changed its name to “Murano Global Hospitality Corp”. The surviving company is centrally managed
and controlled from, and resident for tax purposes in, the United Kingdom.
In addition, at the effective time of the Merger, (i) each issued and outstanding HCM ordinary share, par value $0.0001 per share (the “HCM Ordinary Shares”) was automatically canceled and
extinguished, and each holder of HCM Ordinary Shares received merger rights representing a corresponding number of Murano ordinary shares, no par value per share (the “Murano Ordinary Shares”), and (ii) each issued and outstanding warrant to
purchase one HCM Ordinary Share automatically ceased to represent a right to acquire an HCM Ordinary Share and converted into and represent a right to acquire Murano Ordinary Shares (each, a “Murano Warrant”) and each Murano Warrant (a) has an
exercise price of $11.50 per whole warrant required to purchase one Murano Ordinary Share, and (b) will expire on the five-year anniversary of the closing date of the Business Combination (i.e., March 20, 2029).
As a result of the foregoing transactions, there were 79,242,873 ordinary shares and 16,875,000 warrants outstanding as of March 20, 2024.
On March 14, 2024 Murano Global Investments incorporated the entity Murano Service Operations Limited in Dublin, Ireland. The purpose of the new entity is to help Murano to optimize the
performance of its operating assets by acting as a marketing and business services provider to the Murano Group.
On March 21, 2024, Murano’s ordinary shares and warrants commenced trading on the Nasdaq under the symbols, “MRNO” and “MRNOW,” respectively.
Murano Group Reorganization Prior to Business Combination
Prior to and in connection with the Business Combination, the Murano Group implemented a corporate reorganization consisting of share transfers and assignments of trust rights with the purpose
of, among other aspects, Murano Global Investments becoming the ultimate parent company of the Murano Group consolidating all the subsidiaries of the Group as well as being the shareholder of 99.99% of the stock of Murano PV (the “Murano Group Reorganization”).
Pursuant to the Murano Group Reorganization, prior to and in preparation for the share transfers and assignments described below: (i) Murano World, as lender, and Murano PV, as borrower,
entered into a loan agreement for an amount of Ps.$34,419,809.11, to fund Murano PV’s share acquisitions; and (ii) Murano PV carried out a capital reduction in its variable capital stock in the amount of Ps.$16,363,928.
For more information about the Murano Group Reorganization transactions, see “Item 5—Operating and Financial Review and Prospects—A. Operating Results—Murano
Group Reorganization Prior to Business Combination.”
Corporate Information
Our principal corporate offices are located at 25 Berkeley Square, London W1J 6HN, United Kingdom (+44 20 7404 4140) and at FFCC de Cuernavaca No. 20, 12 Floor, Lomas de Chapultepec, Sección
III, Miguel Hidalgo, 11000, Mexico City, Mexico (+52-55-92-67-83-60). Murano Group’s website address is https://www.murano.com.mx/en/. This URL is intended to be an inactive textual reference only. It is not intended to be an active
hyperlink to our website. The information on our website, even if it might be accessible through a hyperlink resulting from this URL, is not and shall not be deemed to be incorporated into this Report and you should not rely on any such
information in making your decision whether to purchase our ordinary shares.
The SEC also maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http www.sec.gov.
This URL is intended to be an inactive textual reference only. It is not intended to be an active hyperlink.
Recent Developments
Agreement on the 2031 Notes Restructuring
On September 12, 2025, and March 12, 2026, the Issuer Trust did not make the scheduled interest payment due on the 2031 Notes. Under the Indenture
governing the 2031 Notes, such missed interest payments were subject to a 30-day grace period expiring on October 12, 2025, and April 12, 2026, respectively. The Relevant 2031 Notes Defaults were not cured within such grace period and,
accordingly, Events of Default occurred under the Indenture. Such Events of Default may also give rise to cross-defaults, rights and/or other remedies under other debt, security or related financing documents to which the Murano Group is a party
or by which its assets may be bound. As a result, the Company engaged in discussions with the Ad Hoc Group regarding the potential 2031 Notes Restructuring.
On March 10, 2026, the Company announced that it had reached an agreement with the Ad Hoc Group, representing more than 81% of the aggregate principal
amount of the 2031 Notes outstanding, on the key terms of a proposed restructuring transaction relating to the 2031 Notes, as set forth in the Term Sheet. The Company also announced that, in order to support a successful implementation of the
proposed transaction, it had entered into the Lock-Up Agreement with the Ad Hoc Group.
The proposed transaction contemplates, among other things, amending the existing 2031 Notes documentation (if 100% holder consent is obtained) or, if
such consent is not obtained, implementing an out-of-court exchange of the Notes for New Notes coupled with a related consent solicitation, and includes terms relating to maturity extension, interest mechanics and project-related arrangements in
the GIC Complex.
In addition, the Term Sheet contemplates, among other things, the replacement of Hyatt as operator of the GIC I Hotel with Ennismore, and the
restructuring of the existing Beach Club Loan. The proposed transaction is also expected to be implemented through a set of definitive agreements and other instruments, including amendments and/or supplemental documentation relating to the 2031
Notes and related trust and security arrangements, as well as project and operator documentation.
The consummation of the proposed transaction remains subject to a number of conditions and approvals, including the negotiation, execution and delivery
of definitive documentation consistent with the Term Sheet, completion of the contemplated operator arrangements, and, in certain circumstances, minimum tender thresholds and other customary conditions. There can be no assurance that it will be
consummated on the terms described in the Term Sheet.
For additional information, see “Item 3.D. Risk Factors” and “Item 5. Operating and Financial Review and
Prospects—Liquidity and Capital Resources - 11% Senior Secured Notes due 2031.”
Continued listing requirements of Nasdaq
On April 13, 2026, the Company announced that it has received a letter (the “Notification Letter”) from the Listing Qualifications Department of Nasdaq notifying the Company
that, based on the closing bid price of the Company's ordinary shares for the prior 30 consecutive business days, the Company no longer meets the continued listing requirements under Nasdaq Listing Rule 5550(a)(2), which requires a minimum bid
price of $1 per share.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided with a compliance period of 180 calendar days, or until October 5, 2026, to regain compliance with the minimum bid price
requirement. To regain compliance, the closing bid price of the Company’s ordinary shares must meet or exceed $1.00 per share for a minimum of 10 consecutive business days during the compliance period.
If the Company does not regain compliance within the initial compliance period, the Company may be eligible for an additional 180-day compliance period. To qualify for such additional period, the Company would be
required to meet the continued listing requirements for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and to
provide written notice of its intention to cure the deficiency.
The Company intends to monitor the closing bid price of its ordinary shares and may, if appropriate, consider available options to regain compliance with the Nasdaq minimum bid price requirement.
Nasdaq Public Float Review
On April 28, 2026, the Company received an information request from Nasdaq regarding the calculation of its public float and market value of publicly held shares. Nasdaq requested updated shareholder information to
confirm compliance with the applicable listing requirements. The Company has provided the requested information and, as of the date of this Report, no formal determination has been made by Nasdaq.
SEPA Equity Issuances
In connection with the SEPA, on January 28, 2026, the Group issued 2,000,000 ordinary shares to YA, of which YA initially sold 1,835,000 ordinary shares on that date for an amount of approximately U.S.$3,646,000.
On February 2, 2026, the Group issued an additional 363,500 ordinary shares and YA sold 528,500 ordinary shares for an amount of approximately U.S.$787,640.
Expiration of De-SPAC Lock-Up
On March 20, 2026, the two-year lock-up period applicable to the transfer restrictions on the ordinary shares held by Murano’s pre-Business Combination shareholders and the HCM Initial Shareholders in connection with the Business Combination
(as described in Note 1.b.2024(ix)(b)) expired.
Repayment of Santander Revolving Credit Facility
On March 27, 2026, the Group repaid in full the Santander Revolving Credit Facility described in note 10 (6) to the Consolidated and Combined Financial Statements, which had an outstanding balance of
U.S.$1,498,204.
Payment Defaults and Ongoing Discussions with Creditors
As of the date of the issuance of the Consolidated and Combined Financial Statements, the Group had not made certain interest, principal or lease payments, as applicable, under
the instruments described in Note 10 (2)., (3)., (4)., (5)., (8)., (9). and (10) for the period from January 1st, 2025, through May 15, 2026. In addition, the Group
expects to deliver the audited financial information required under the 2031 Notes after the expiration of the 120-day period following year-end 2025, which constitutes an additional default thereunder. Management is reviewing actual and
potential defaults and is actively engaged in discussions with the relevant lenders and creditors to seek: 1) waivers or other accommodations in connection with the contemplated debt restructuring, or 2) consensual settlements or restructurings
that may involve the transfer in lieu of payment (payment in kind) of mortgaged assets securing the applicable indebtedness. However, as of the date of the issuance of the Consolidated and Combined Financial Statements, no final agreements have
been reached with respect to such matters.
New Hotel Management Agreement for the GIC I Hotel (Ennismore)
On April 6, 2026, in connection with the contemplated 2031 Notes Restructuring, we entered into a new hotel management agreement with Ennismore for the operation of the GIC I Hotel. Such
agreement remains subject to the satisfaction of certain conditions precedent, including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I Hotel Management Agreement with Hyatt, and accordingly Hyatt
continues to operate the GIC I Hotel as of the date of this Report.
The new hotel management agreement with Ennismore also contemplates that, in connection with its implementation and the contemplated repositioning of the GIC I Hotel and residential component
as part of the Restructuring Project, additional related hotel and residential arrangements may be entered into with Ennismore or its affiliates, including consultancy, branding/marketing and residential management documentation.
Potential Corporate Reorganization
Following the completion of the contemplated debt restructuring, management has considered a potential corporate reorganization designed to improve operational, administrative and ownership
efficiency within the Murano Group. Any such corporate reorganization could involve, among other things, transfers of assets and liabilities, changes to the Group’s organizational structure and business model, and the separation of operations
between different stakeholder groups.
Any such corporate reorganization has not been finalized, and its implementation (including timing and terms) would be subject to a number of conditions and approvals, which may include, among others, the
successful completion of the contemplated debt restructuring, required corporate and shareholder approvals, third-party consents, regulatory considerations and the receipt of a fairness opinion. There can be no assurance that any corporate
reorganization will be pursued or consummated, or, if pursued, that it will be consummated on particular terms or within any particular timeframe. See “Item 3.D. Risk Factors—We have considered, and may in the future pursue, a corporate reorganization that could materially and adversely affect holders of our ordinary shares.”
World Trade Center Sublicense Agreement
The sublicense agreement with FRANA entered into in connection with a contemplated World Trade Center development project was early terminated after the conditions for termination were met, namely: (i) the Company
failed to commence use of the sublicensed property within four (4) years following the effective date of the agreement; and (ii) the Company failed to make the corresponding IP-related payments. Such termination was effected without liability to
either party, and the parties remain open to negotiating and entering into a new agreement in the future.
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Business Overview
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Overview
On March 20, 2024, Murano PubCo, completed the Business Combination described in more detail under “Item 4. Information on the Company—A. History and
Development of the Company-Business Combination.” As a result, on March 21, 2024, Murano’s ordinary shares and warrants commenced trading on Nasdaq under the symbols, “MRNO” and “MRNOW,” respectively.
We are an international development corporate group with extensive experience in the structuring, development and assessment of industrial, residential, corporate office, and hotel projects in
Mexico with a vision to create competitive and leading investment vehicles for the acquisition, consolidation, operation, and development of real estate assets. We also provide comprehensive services, including the execution, construction,
management, and operation of a wide variety of industrial, business, tourism real estate projects, among others. We have a national footprint and international outreach aimed at institutional real estate investors.
We were formed primarily to develop and manage a portfolio of hotel and resort properties in Mexico City, Cancun, and Ensenada. We currently own (i) Operational Hotels in Mexico City and
Cancun, (ii) Project Under Completion in Cancun and (iii) Projects to be Developed in Cancun and Ensenada.
As discussed under “Item 4.A—Recent Developments—Potential Corporate Reorganization,” following the completion of the contemplated debt restructuring,
management has considered a potential corporate reorganization, and any such reorganization may involve transactions between affiliated entities, subject to applicable approvals and definitive documentation. Any such corporate reorganization has
not been finalized and may not be pursued or consummated. Accordingly, the description of our current operations in this Item 4.B reflects the Group’s existing portfolio and business as of the date of this Report.
Operational Hotels
Our current portfolio of operational hotels (the “Operational Hotels”) consists of:
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Andaz Hotel: the Andaz Mexico City Condesa operated by Hyatt, is part of the Insurgentes 421 Hotel Complex in Mexico City. Completed in 2022 and has been operational since
the first quarter of 2023, the Andaz Hotel has 213 rooms and several amenities, including a sky bar “Cabuya Rooftop”, multiple restaurants, an auditorium, breakout rooms, a business center, a pet friendly area and restaurant for pets, the
“Wooftop”, a gym and a spa. It also has a 954.31 sqm ballroom with a crystal dome with a capacity for 49 tables and 588 guests.
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Mondrian Hotel: the Mondrian Mexico City Condesa operated by Accor, is part of the Insurgentes 421 Hotel Complex in Mexico City. Completed in 2022 and has been
operational since the first quarter of 2023, the Mondrian Hotel has 183 rooms and several amenities, including “Distrito Mondrian” meeting rooms, a “Terraza” bar and a “Flower Shop” coffee shop.
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Vivid Hotel: the Hyatt Vivid Grand Island, currently operated by Hyatt, is part of the GIC I Hotel within the GIC Complex in Cancun, subject to any amendment, termination
or replacement of the applicable hotel management arrangements in connection with the contemplated 2031 Notes Restructuring. Completed and operational since April 2024, the Vivid Hotel is an adult-only brand all-inclusive hotel
categorized as five-star upper scale with 400 rooms and several amenities, including one main buffet, one coffee shop, the vantage club for VIPs, seven specialty restaurants, six bars, gym, spa, one retail shop, and 1,010 sqm space for
events.
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The Grand Island Beach Club is part of the GIC Complex in Cancun and commenced operations in April 2024. The Beach Club provides services to the Vivid Hotel and will provide services to other
hotel and/or hospitality components within the GIC Complex from time to time, including any future hotels, Residential Condos or other components that may be developed or reconfigured as part of the contemplated 2031 Notes Restructuring.
Project Under Completion
The GIC Complex has historically been described as being developed in two phases. Phase one was initially planned to include 1,016 hotel rooms under two brands: (i) 400 rooms, which are
operational under the “Vivid” brand, an adults-only concept, and (ii) 616 rooms, which were planned to operate under the “Dreams” brand, a family-friendly offering. The timing and scope of the Phase one buildout, including any opening timeline
for the Dreams component, have been subject to ongoing review and will be modified and terminated in connection with the contemplated 2031 Notes Restructuring and the related project reconfiguration described below.
The World Trade Center development project previously contemplated as part of the GIC Complex is no longer being pursued following the termination of the related sublicense agreement. See “Item 4.A—Recent Developments—World Trade Center Sublicense Agreement.”
The Group is currently conducting a strategic review of the GIC I Hotel and the broader GIC Complex. While prior plans contemplated the full buildout of 1,016 hotel rooms, the Term Sheet
contemplates the Restructuring Project as a reconfiguration of the GIC Complex (including a hotel with 566 guest rooms and up to 328 Residential Condos) and the contemplated replacement of Hyatt as operator with Ennismore (or an affiliate or
successor), in each case subject to definitive documentation and other conditions. In connection with the contemplated 2031 Notes Restructuring, we have entered into the GIC I Hotel Management Agreement (Mondrian) with Ennismore for the operation
of the GIC I Hotel, pursuant to which Hyatt is expected to be replaced as operator upon satisfaction of the applicable conditions precedent, including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I
Hotel Management Agreement with Hyatt.
Projects to be Developed
We currently own the following projects that we plan to develop (the “Projects to be Developed”):
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GIC Phase II: part of the new strategic pipeline, phase two is planned to consist of a total of approximately 1,254 condominiums, divided into four condominium towers with
partial views of the ocean, lagoon and/or adjacent golf course owned by Iberostar. The list of amenities includes pools, tennis court, volleyball court, snack bar, firepits, jungle gym, pet garden, spa, coworking rooms, among others. The
Group’s management and board of directors are continuously evaluating the plan for phase two of the GIC Complex. We expect the development of the first 466 condominiums to cost approximately U.S.$87.2 million.
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Baja Cruise Port: Development of a cruise port with a capacity of 2 million passengers per year. The Group is in early-stage discussions regarding financing terms with a
national bank and has signed a memorandum of understanding with a major global cruise line operator. We expect the development of the Baja Cruise Port to cost approximately U.S.$136 million.
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Baja Marina: Development of a marina consisting on approximately 15,000 linear ft slip spaces. We expect the development of the Baja Marina to cost approximately U.S.$32
million.
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Baja Retail Village: Development of Baja Retail Village with a leasable area of approximately 45,000 sqm. We expect the development of the Retail Village to cost
approximately U.S.$55 million.
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Resort Property in Baja Development Project: this resort is expected to have two five-star upper-upscale resorts, one with 371 keys and a second one with 400 keys. Based
on preliminary estimates, we expect the development of the Resort Property in Baja Development Project to cost approximately U.S.$180 million. We have not yet begun the process of trying to secure financing for the development of this
project. Therefore, we do not know when and if we will be able to begin construction of this project.
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Baja Park Development Project: this industrial park project in Ensenada, will consist of 363,262 sqm of
leasable space. This project is currently under evaluation, and we have not yet begun the process of trying to secure financing for its development. Therefore, we do not know when and if we will be able to begin construction of this
project. We expect the development of the Baja Park to cost approximately U.S.$122 million.
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The GIC Phase II, the Resort Property in Baja Development Project, the Baja Park Development Project, the Baja Cruise Port, the Baja Marina and the Baja Retail Village are projects that we plan to develop subject
to planning and environmental approvals as well as Murano Group being able to secure financing on acceptable terms.
Our portfolio is expected to be comprised of all-inclusive resorts and residential condominiums, several of which will share the following characteristics: (i) prime beachfront locations; (ii)
convenient air access from a number of North American and other international gateway markets; (iii) strategic locations in popular vacation destinations in Mexico with strong government commitments to tourism; (iv) high quality physical
condition; and (v) capacity for further growth through incremental renovation or repositioning opportunities. We believe that the resorts of our portfolio will have a competitive advantage due to their location, amenities offering, large-scale
and guest-friendly design.
Management of the Hotels
We have entered into long-term hotel management agreements with (i) Hyatt, under the Andaz brand, to operate the Andaz Hotel (part of the Insurgentes 421 Hotel Complex in Mexico City), (ii)
Accor, under the Mondrian brand, to operate the Mondrian Hotel (part of the Insurgentes 421 Hotel Complex in Mexico City), and (iii) Hyatt, through Hyatt Inclusive Collection, to operate the Vivid Hotel and the Dreams Hotel (part of the GIC I
Hotel in Cancun). In connection with the contemplated 2031 Notes Restructuring, we have entered into the GIC I Hotel Management Agreement (Mondrian) with Ennismore for the operation of the GIC I Hotel, pursuant to which Hyatt is expected to be
replaced as operator upon satisfaction of the applicable conditions precedent, including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I Hotel Management Agreement with Hyatt.
The Group is currently conducting a strategic review of the GIC I Hotel and the broader GIC Complex. While prior plans contemplated the full buildout of 1,016 hotel rooms, the Term Sheet
contemplates the Restructuring Project as a reconfiguration of the GIC Complex (including a hotel with 566 guest rooms and up to 328 Residential Condos).
We believe these to be world-renowned hotel management companies recognized for their high-quality service, sophisticated and innovative loyalty programs, vacation clubs, modern reservation
systems and global distribution channels.
Market Opportunity
We believe there is an extraordinary market opportunity for our hotels, which are located in the two largest business and leisure destinations in Mexico. Mexico City is a significant cultural
center and business hub representing approximately between 15% and 16 % of the country’s GDP. While there are multiple hotel developments that compete with us in terms of quality and geographic location within the city, most of these will be
opening after 2026 and are of a smaller scale.
Cancun is the top destination in the Caribbean with more than two times the number of passenger arrivals as Puerto Rico, its closest competitor. We estimate that total passenger traffic in
Cancun in upcoming years will be near the historical levels seen before the COVID-19 pandemic. In the last several years, the number of total passengers visiting Cancun has grown at a considerably higher pace than the number of hotel rooms,
creating an opportunity in the hospitality industry.
Competitive Strengths
We believe the following are our key competitive strengths:
Luxury Hotel Assets with Naturally Hedged Revenues at Strategic International Destinations
We own five-star upper-scale Hotels, consisting of: (i) the Andaz Hotel and the Mondrian Hotel, currently operational, in the Insurgentes 421 Hotel Complex in Mexico City, and (ii) the GIC I
Hotel in Cancun, consisting of the Vivid Hotel, currently operational, and the Dreams Hotel. We believe the Hotels and resort properties therein represent a competitive advantage due to their privileged locations in areas with dynamic demand
characteristics and high barriers to entry, strong brand affiliations, superior amenities offerings, and their large-scale and cutting-edge architectural design. The properties’ prime real estate and strategic locations are expected to generate
significant tourist interest and business activity and strong demand for superior lodging.
The Insurgentes 421 Hotel Complex is located in the Condesa neighborhood, one of the trendiest and most popular districts in Mexico City, Mexico’s most important business and cultural center.
Surrounded by tourist attractions, landmarks, parks and a vibrant restaurant scene, Condesa is located within walking distance of Paseo de la Reforma, close to the city’s historic center and main financial district, and only 12 kilometers from
Mexico City’s international airport, the country’s largest in terms of passenger traffic. GIC I Hotel all-inclusive luxury resort is located in the area between Delfines Beach and the Nichupté Lagoon in Cancun, Mexico’s leading tourist
destination, next to the Iberostar Golf Club in the north of Punta Nizuc, the archeological zone of San Miguelito, and only 14 kilometers away from Cancun’s international airport, the country’s second largest in terms of passenger traffic.
The strategic locations attract substantial international demand from leisure and business visitors, including guests from the United States and Canada. Accordingly, we expect that a
substantial portion of our revenues will be denominated in or linked to the U.S. dollar, while most of our operating expenses will be in pesos, providing us with a natural hedge for our U.S. dollar-denominated debt. It is market practice to quote
and charge daily rates for luxury hotels in U.S. dollars in both Mexico City and Cancun.
In addition, we expect the Hotels to feature state-of-the-art technology and amenities, including restaurants, bars, conference centers, ballrooms, pools, spas, gyms and, in the case of the GIC
Complex. We have designed and believe our properties are positioned to be the preferred destination for leisure, business and group travelers.
Attractive Industry Fundamentals in the Mexican Leisure and Business Travel Sectors
Mexico is a preferred tourist destination with a consistently high level of annual visitors. During 2020, largely due to the impact of the COVID-19 pandemic, Mexico ranked second among the
world’s most visited countries and first in the Americas. Prior to 2020, Mexico ranked seventh among the world’s most visited countries. Mexico’s tourism industry has shown strong and sustained fundamentals through the years. Its rich cultural
and natural offering is supported by a superior tourism-related infrastructure and high connectivity with key gateway markets in the United States and Canada through well-connected airports. The country’s tourism industry has proven to be
resilient even throughout the COVID-19 pandemic, which had a material adverse impact on the tourism industry globally. Mexico suffered the lowest decline in tourism out of the top 10 travel destinations in the world.
The destinations where our properties are located experienced significant growth in international tourism prior to the COVID-19 pandemic, with relatively high occupancy rates in Cancun and
Mexico City. Cancun has been consistently ranked as the most popular tourist destination in the Caribbean, based on World Bank data, and one of the most visited cities in the world. It also receives a large share of visitors from the United
States and Canada.
Mexico City, the country’s capital, is also a popular tourist destination, with three UNESCO World Heritage Sites containing five historic buildings dating back to the 16th century. Mexico City
is known as a popular tourist destination and a technology hub characterized by a thriving modern business environment. Mexico City’s booming business scene likely results from its unique ability to offer opportunities to combine business and
culture at a reasonable cost. The city is an important financial center and global economic hub and is often described as the cultural Mecca of Latin America.
As global travel and tourism continue to increase post the COVID-19 pandemic, we expect a strong and sustainable recovery in the lodging industry in Mexico. We believe that our properties are
exceptionally well-located to allow them to benefit from long-term positive trends in the tourism markets of Cancun and Mexico City.
Long-term Strategic Partnerships with World Class Designers, Construction Companies, and Hotel Operators with Global Premium Hospitality Brands
We benefit from the experience and expertise of our internationally recognized design, construction, engineering, and project management partners. The GIC Complex has been designed by HOK, the
largest U.S.-based design, architecture, engineering and urban planning firm-and GIC Complex’s landscaping, outdoor amenities and aquatic parks have been designed by EDSA, a renowned U.S.-based planning, landscape architecture and design firm.
The supervision of the construction and engineering process is managed by Ideurban, a leading construction management firm with over 70 years of experience managing the construction of emblematic hotels in Mexico, including the St. Regis Ciudad
de Mexico, St. Regis Punta Mita and Westin Brisas Ixtapa. We believe the skills and capabilities of these partners and their substantial experience successfully designing, constructing, and managing premier quality hotels and resorts enhances the
value of our properties.
Hyatt is the largest operator of luxury hotels in Mexico and the Caribbean, and of luxury all-inclusive resorts in the world. As of December 31, 2025, Hyatt had approximately 100 hotels in
Mexico, 63 million Loyalty program members, and presence in over 83 countries across the globe. Accor is a leading hotel management service provider with more than 880,000 rooms across 110 + countries and more than 1,527 hotels in development.
Accor is a leading global hospitality group operating through an integrated business model that includes hotel ownership, management, franchising, and brand platforms across a diversified
portfolio spanning the luxury, premium, midscale, and economy segments. Leveraging a globally recognized brand ecosystem and a comprehensive operating platform, Accor delivers services to guests while creating value for owners, partners, and
other stakeholders, positioning itself as an integrated hospitality ecosystem beyond traditional hotel operations.
For over 50 years, Accor has pursued a strategy focused on innovation, brand development, and geographic expansion, supported by a culture of openness and a commitment to sustainable and
responsible hospitality. In 2024, Accor formalized its corporate purpose following a company-wide consultation process, reinforcing its longstanding emphasis on purpose-driven hospitality and establishing a guiding framework for its strategic
decisions and day-to-day operations across all markets in which it operates.
Hyatt and Accor are industry-leading hotel operators with world-renowned premium hotel brands and by partnering with them we expect to maximize the cost structure and performance of our
properties by leveraging their superior customer-oriented approach, marketing capabilities and profound experience as hotel operators. More specifically, their sophisticated loyalty and vacation club programs, modern and robust reservation
systems, global distribution channels, marketing infrastructure, effective product segmentation and strong customer awareness will position our properties among the top hotels and resorts in Mexico City and Cancun.
Insurgentes 421 Hotel Complex
The Andaz Hotel is operated by Hyatt under the Andaz brand (owned by Hyatt), who has a strong combination of global loyalty programs and local know-how in the location. Additionally, the Mondrian Hotel is operated by Accor under the Mondrian brand (owned by Accor) as its first luxury hotel property in Mexico City, making the location its flagship hotel in Latin America. As such, we believe
Accor will have strong incentives to provide high-quality management. Though the Andaz Hotel and the Mondrian Hotel are separate hotels and operators, both brands coexist within the same building, allowing for operating efficiencies, a wider
product offering and capturing a larger target market.
In addition, to maximize our partnership with Hyatt and Accor we have structured long-term hotel management agreements. Accor’s agreement for the Mondrian Hotel includes a fee arrangement tied
to occupancy and performance targets consistent with the quality of the property, based on a minimum amount of adjusted gross operating profit. As part of that agreement, Accor will be entitled to a base fee of 2.0% of gross revenue the first
year, as well as fees related to food & beverage (up to 2% of gross revenue per annum); in addition, Accor will be paid an incentive fee of 15% over the special adjusted gross operating profit (meaning the gross operating profit, less the
following: (i) base fee; (ii) all property taxes; (iii) insurance costs; (iv) replacement reserve contribution; and (v) an amount equal to eight percent (8%) of the total project costs (which is the sum of all costs and expenses incurred by
OHI421 Premium in connection with the development, construction, initial furnishing and initial equipment of the Mondrian Hotel and an aggregate amount of $200,000 per key at the Mondrian Hotel)).
In respect of the Andaz Hotel, Hyatt will be entitled to a base fee as follows: (a) (i) 1.6% of gross revenue in the first fiscal year, (ii) 2.1% of gross revenue in the second fiscal year, and
(iii) 2.6% of gross revenue in the third and subsequent fiscal years; and (b) a royalty fee of 0.4% of gross revenue per annum. In addition, Hyatt is entitled to an incentive fee payment if the gross operating profit margin exceeds 20.01%. The
incentive fee will be based on a percentage of annual gross profits, with multiple step-ups capped at 10% when gross operating profit margin exceeds 40%.
GIC Complex
Following the execution of the Lock-Up Agreement and the agreement with the Ad Hoc Group, the Company is pursuing a reconfiguration of the GIC I Hotel. Under the contemplated Restructuring
Project, the property would consist of a hotel with approximately 566 guest rooms and a residential component of approximately 328 Residential Condos.
In connection with this plan, and the contemplated 2031 Notes Restructuring, we have entered into the GIC I Hotel Management Agreement (Mondrian) with Ennismore for the operation of the GIC I
Hotel, pursuant to which Hyatt is expected to be replaced as hotel operator upon satisfaction of the applicable conditions precedent, including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I Hotel
Management Agreement with Hyatt.
The GIC I Hotel is currently operated by Hyatt, through Hyatt Inclusive Collection, under the Dreams (family oriented, non-operational) and Vivid (adults only, operational since April 2024)
brands, subject to the contemplated replacement of the operator for the GIC I Hotel in connection with the 2031 Notes Restructuring.
The Group is currently conducting a strategic review of the GIC I Hotel and the broader GIC Complex. While prior plans contemplated the full buildout of 1,016 hotel rooms, the Term Sheet
contemplates the Restructuring Project as a reconfiguration of the GIC Complex (including a hotel with 566 guest rooms and up to 328 Residential Condos).
Committed Sponsor and Experienced Management Team with a Solid Track Record
The Murano Group is an experienced real estate developer dedicated to acquiring, developing, and owning high-end residential properties, luxury hotels, and industrial real estate in Mexico.
Murano Group’s current portfolio of city and beach properties spans the country’s most popular and desirable cities. Since its formation in 1999, Murano Group has sold 2,174 condominiums, and has developed, or is in the process of developing,
multiple resorts and hotels. It has also invested over U.S.$64.6 million in its landbank and constructed over 465,555 sqm, investing U.S.$435.7 million in aggregate.
Green Certified Hotels with a Long-Term Commitment to Sustainability
The Andaz Hotel and the Mondrian Hotel have qualified for the EDGE Green Building Certification. Excellence in Design for Greater Efficiencies (“EDGE”) is a green building standard and
certification system developed by the International Finance Corporation and applicable in 140 countries. The areas of assessment on the environmental performance of the buildings include: (i) climate conditions of the location, (ii) building type
and output use, (iii) design and specifications and (iv) calculation of end-use demand, which considers overall energy demand, heating, ventilation and air condition, water demand and estimations on rainwater harvesting or recycled waters
on-site. To achieve an EDGE certification, a building must demonstrate a minimum of 20% reduction in operational energy consumption, water use, and embodied energy in materials as compared to typical local practice.
Investment Grade Property Insurance Providers
The properties are covered by top investment grade insurance providers. The GIC I Hotel is covered by GMX Seguros and the Andaz and Mondrian Hotels in Mexico City are covered by AXA Insurance.
The insurance policies are designed to uphold high standards of coverage, including: (i) full building replacement cost, (ii) building, improvements and adaptations, contents and consequential losses, and (iii) covered risks including earthquake,
hydro-meteorological and fire.
Business and Growth Strategies
Maximize Profitability through Active Asset Management
We intend to continually improve the operating performance and profitability of our portfolio. To do so, together with the hotel operators, we will seek to identify revenue-enhancement
opportunities and drive cost efficiencies to maximize the operating performance, cash flow, and value of each property. As active owners, we provide direction and oversight to the hotel operators and continuously evaluate their plans and
strategies, including those to be implemented to optimize the performance of each property. To that end, we will regularly conduct sales, marketing, and financial performance reviews designed to identify strengths and weaknesses that can be
addressed to enhance property performance and conduct periodic on-site meetings with property and regional personnel and in-depth operational reviews focused on identifying new and ongoing margin improvement initiatives.
Maintain a Stable and Efficient Capital Structure
We are committed to maintaining a capital structure in line with our cash flow generation while providing attractive returns for our shareholders. We seek to tailor our debt portfolio to ensure
a reasonable cost of capital, and to match the long-term nature of our asset base. We are also focused on maintaining appropriate levels of liquidity.
Leverage Our Partnerships with Leading Industry Hotel Operators to Drive Occupancy, ADR and RevPAR Growth
We leverage our partnerships with Hyatt and Accor (subject to the contemplated operator transition for the GIC I Hotel in connection with the 2031 Notes Restructuring)_and utilize their
world-renowned brands, depth of experience, unique understanding of resort operations, track record in our specific markets, robust reservation and marketing infrastructure and networks, effective product segmentation, vacation club services,
loyalty programs, and strong customer awareness. We believe these experienced operators will deliver a distinctive lodging experience to our hotel guests, and their operational expertise will drive occupancy, ADR and RevPAR growth at our
properties. We also believe their substantial experience and expertise in our markets will mitigate the hotel integration and utilization risk that may otherwise exist with new entrants in the competitive Mexico City and Cancun markets.
Diversify our Revenue Mix
We expect to capitalize on the state-of-the-art amenities at the Hotels, as well as their strategic locations, to diversify our revenue mix. We expect the superior amenities at our properties,
including restaurants, bars, spas, and facilities for large conferences, banquets, and weddings, will provide an additional source of operating cash flows and reduce overall sensitivity to seasonal changes in demand for lodging among leisure and
business travelers. We also believe that the operation of the properties of the Hotels under different brands that target different demographics and customer preferences will further diversify our sources of revenue.
Integrated ESG Strategy, Environmental Certifications and Green Bond Framework
We expect to implement an integrated environmental and corporate governance (“ESG”) strategy. We recognize that developing real estate assets is a high-impact industry with respect to
environmental, social and governance factors. Consequently, we have adopted a construction model that includes sound environmental features in our buildings by controlling our construction process, focusing on the environmental performance of our
properties, and emphasizing energy efficiency.
Our strategy relies on innovation and sustainability as the fundamental pillars to develop our projects, which will drive us to generate value while designing and operating highly efficient and
sustainable hotels. We will implement projects that engage sustainable construction, champion social priorities related to construction, and serve as a model for ethical governance in the real estate and hospitality sector. In order to have a
clear and constant assessment of the implementation of these practices, we will use commercially reasonable efforts to have all our properties certified by EDGE.
Furthermore, we prioritize social, environmental, and biodiversity issues in all the locations in which we operate. Our corporate social responsibility activities have the ultimate goal of
positively impacting one or more of the 17 United Nations’ Sustainable Development Goals, with a focus on those sustainable development goals for which it has a greater responsibility, such as creating more sustainable cities, promoting
innovation in industrial sectors and fighting climate change, in the context of the environment in which we operate and the nature of our business as a real estate developer.
Develop and Maintain Dialogue with all Stakeholders in the Community and Protect the Environment
We intend to continue to work proactively to identify, evaluate, and work to control all safety risks and prevent any negative impact on our Group’s employees and contractors, as well as the
communities and the environment in the vicinity of our existing assets. We intend to continue to follow strict policies for environmental protection in our operations aligned with applicable laws and regulations and international sustainable
business practices. We intend to develop trustworthy relationships based on transparency and mutual benefit with our communities, workers, subcontractors, suppliers, guests, and all of our relevant stakeholders.
Description of the Properties
See “Item 4. Information on the Company—D. Property, Plant and Equipment” for descriptions of our properties and the construction methods, material
agreements and project agreements related to our properties.
See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Debt” for descriptions of the existing indebtedness related
to our properties.
Insurance
Murano Group’s resorts carry what Murano Group believes are appropriate levels of insurance coverage for a business operating in the lodging real estate industry in Mexico. This insurance
includes coverage for general liability, property, workers’ compensation and other risks with respect to Murano Group’s business and business interruption coverage.
This general liability insurance provides coverage for claims resulting from Murano Group’s operations, goods and services, and vehicles. Murano Group believes these insurance policies are
adequate for foreseeable losses, and on terms and conditions that are reasonable and customary with solvent insurance carriers.
Competition
Our hotels will compete with other hotels for guests in each of their markets on the basis of several factors, including, among others, location, quality of accommodations, convenience, brand
affiliation, room rates, service levels and amenities, and level of customer service. Competition is often specific to the individual markets in which our hotels are located and includes competition from existing and new hotels operated under
premium brands in the segments in which we operate. We believe that hotels such as the hotels in our portfolio, that are affiliated with leading national and international brands, such as the brands of Hyatt and Accor, enjoy the competitive
advantages associated with operating under such brands. Increased competition could harm our occupancy and revenues and may require us to provide additional amenities or make capital improvements that we otherwise would not have to, which may
materially and adversely affect our operating results and liquidity.
The existing and upcoming luxury hotel offerings are aligned with the vibrant pulse of the city, providing a deep connection to the local culture and unique experiences. Andaz Condesa and
Mondrian Condesa embody this vision, delivering high-end hospitality with a focus on contemporary design and cultural integration. In the coming years, these hotels are expected to continue benefiting from the dynamic luxury market in the area,
with potential increases in rates as competition and demand for authentic and sophisticated experiences continue to grow.
Cancun is the top destination in the Caribbean with more passenger arrivals than Dominican Republic, its closest competitor. We estimate that total passenger traffic in Cancun in upcoming years
will maintain its levels achieved in 2025, which are in-line with levels seen before the COVID-19 pandemic; having surpassed pre-pandemic levels since 2022. In the last several years, the number of total passengers visiting Cancun has grown at a
considerably higher pace than the number of hotel rooms, creating an opportunity in the hospitality industry. Available hotel rooms in Cancun, according to the most recent available data for December 2025 shows 35,995 available hotel rooms,
compared to 35,115 available hotel rooms in 2019, prior to the COVID-19 pandemic. Since 2022, passenger arrivals in Cancun had already surpassed 2019´s figures.
Seasonality
The seasonality of the lodging industry and the location of Murano’s resorts in Mexico and the Caribbean generally result in the greatest demand between mid-December and April of each year,
yielding higher occupancy levels and package rates during this period. This seasonality in demand has resulted in predictable fluctuations in revenue, results of operations and liquidity, which are consistently higher during the first quarter of
each year than in successive quarters.
Marketing
The commercial strategy for Hyatt Vivid Grand Island emphasizes targeted promotions across key markets, including the USA, Canada, Asia, Latin America, and Europe, supported by major campaigns
like “Savor the Sunshine” and partnerships with OTAs and tour operators. The hotel focuses on growing segments such as weddings, golf, and MICE, while leveraging direct channels and loyalty programs like World of Hyatt. Customized offers for
niche markets and exclusive UVC promotions further enhance demand generation and brand positioning throughout the year.
The commercial strategy for Mondrian Mexico City Condesa prioritized maximizing the average daily rate and departmental profits through dynamic pricing and cost control, while securing
corporate and incentive group business despite space limitations. Direct booking campaigns such as “Book Direct & Save” and “Suite Savings” drove growth in the average daily rate, complemented by aggressive pricing strategies through online
travel agencies and wholesale channels to build occupancy. Marketing efforts boosted visibility and conversions through digital channels, social media, and targeted email campaigns.
The commercial strategy for Andaz prioritized revenue growth in the transient and group segments through loyalty promotions, negotiated corporate rates, and strong wholesaler partnerships,
while mitigating shortfalls in banquets. Key accounts and online travel agencies drove demand, supported by proactive sales blitzes and digital marketing campaigns. Expense control and dynamic pricing further enhanced profitability despite
challenges in the group and events business.
Cyclicality
The lodging industry is highly cyclical in nature. Fluctuations in operating performance are caused largely by general economic and local market conditions, which subsequently affect levels of
business and leisure travel. In addition to general economic conditions, new hotel and resort room supply is an important factor that can affect the lodging industry’s performance, and over-building has the potential to further exacerbate the
negative impact of an economic recession. Room rates and occupancy tend to increase when demand growth exceeds supply growth. A decline in lodging demand, or increase in lodging supply, could result in returns that are substantially below
expectations, or result in losses, which could have a material adverse effect on Murano’s business, financial condition, liquidity and results of operations. Further, many of the costs of running a resort are fixed rather than variable. As a
result, in an environment of declining revenues, the rate of decline in earnings is likely to be higher than the rate of decline in revenues.
Intellectual Property
Murano and its affiliates own rights to trademarks, trade names, and service marks that they use in connection with the operation of their business, including their corresponding names, logos,
and website names and addresses. Other trademarks, trade names, and service marks, including those of Mondrian, Hyatt Hotels Corporation and Hyatt. Murano and its affiliates have rights to copyrights that protect certain content related to their
business and products. In the highly competitive lodging real estate industry in which Murano and its Affiliates operate, trademarks, service marks, trade names and logos are very important to the success of their businesses.
Environmental Matters
Murano Group is subject to Mexican laws that address a wide variety of issues, including those that impose liability for contamination at Murano Group’s resorts, and those regulating the use
and disposal of hazardous regulated substances and wastes. Murano Group may incur costs to comply with environmental laws and regulations, and could be subject to fines and penalties for non-compliance with applicable laws.
Our operations are subject to laws, regulations, rules and standards, including those related to ecological ordinance, environmental impact and risk assessments, municipal land use matters and
forest land use change authorizations, air pollution, flora and fauna conservation, efficient or rational use of natural resources, health and safety matters, and to oversight by various federal, state and/or local environmental authorities in
each of the places in Mexico in which we operate. See “Item 3. Key Information—D. Risk Factors-Risks Related to Murano’s Business and Operating in the Hotel Industry—Our properties and operations are subject to
extensive environmental, health and safety laws and regulations.”
These laws and regulations require that we obtain and maintain (as applicable) several permits in connection with the site preparation, construction and operation of our businesses, which can
sometimes be conditioned to the fulfillment of affirmative covenants so that they become in full force and effect and we can initiate construction. We believe we are in material compliance with obligations applicable to our projects established
in environmental laws and regulations.
Relevant environmental authorities
Ministry of Environment and Natural Resources (Secretaría de Medio Ambiente y Recursos Naturales) is the federal environmental regulator with authority
to formulate and implement environmental policies as well as to grant environmental permits that fall under their jurisdiction, including environmental impact authorizations to engage in certain activities such as real estate developments
(housing, hospitality, etc.) in coastal environments, forest land use change approval, the registration as a hazardous waste generator and the approval of plans for remedial action in contaminated sites.
The Federal Attorney for Environmental Protection (Procuraduría Federal de Protección al Ambiente, or PROFEPA) functions as SEMARNAT’s enforcement arm
with authority to undertake inspection visits, impose sanctions for breaches to federal environmental laws and regulations, halt a non-complying development or bring legal actions in court seeking remediation or compensation for environmental
damages. Mexican environmental legislation follows the “polluter pays” principle.
Each state and local authority has equivalent Secretariats, Ministries or Departments to those at the federal level mentioned above.
Environmental legal framework
Federal Congress has been granted powers to enact laws establishing concurrent authority among the Federal, state, municipal governments as well as those of the administrative areas (demarcaciones territoriales) of Mexico City in matters related to the protection of the environment, the preservation and restoration of ecological equilibrium. The General Law of Ecological Equilibrium and
Environmental Protection (Ley General del Equilibrio Ecológico y la Protección al Ambiente), or LGEEPA, is the foundational statute of the Mexican environmental regulatory framework. Through this law, the
Federal Congress has distributed powers and functions among all three levels of government and has established overarching policies and instruments to regulate environmental matters, including permits. Development regulations to legal provisions
in the LGEEPA are encompassed in a number of Regulations to the LGEEPA on matters of air emissions, environmental impact evaluation, environmental noise and voluntary environmental audits that can lead to certifications.
Other relevant environmental laws which may apply to our business are:
| • |
The General Law on Sustainable Forest Development.
|
| • |
The General Law for the Prevention and the Integral Management of Waste.
|
| • |
The National Waters Law.
|
| • |
The General Law on Waters.
|
The environmental legal framework in Mexico is supplemented by many international conventions, treaties and agreements on environmental protection. These international instruments, upon
ratification by the senate, become a part of Mexican law.
Technical standards establishing binding specifications, standards, values, and characteristics applicable to any product, process, service, or activity supplement the environmental legal
framework. These standards colloquially called NOMs dictate maximum allowable pollutant limits and list hazardous waste, substances, endangered species, etc.
In addition, the Mexican state congresses may issue specific environmental laws and regulations on those matters falling under their respective jurisdictions which are not expressly reserved
for the federal jurisdiction. Local ordinances may also be imposed and applied at a municipal level.
Core project approvals for site preparation, construction or refurbishing, and operation of our Mexico City and Cancun hotels in matters of environmental impact, forest land use change, and air
emissions have been granted, including the Comprehensive Environmental License for Mexico City (Licencia Ambiental Única para la Ciudad de México) for the hotel operating in Mexico City and the
Environmental Operational License for fixed sources of emissions by the Ministry of Ecology and Environment of the state of Quintana Roo.
We endeavor to ensure that all of our business operations and projects are in material compliance at all times with the applicable environmental laws, regulations and governmental directives,
and with our own environmental covenants. We believe that we are taking appropriate measures to ensure compliance, nonetheless, due to the complex nature of the environmental legal framework applicable to our operations, and that we are subject
to oversight by several Federal, state and local environmental authorities, it is possible that we may from time to time discover that we have failed to obtain, renew or fulfill our obligations under any material permit required for the operation
of our projects, requiring us to take action as soon as practical. We are currently working on a specific review of some of our environmental permits to determine whether affirmative actions are required to correct deviations and inconsistencies
detected between our federal environmental impact authorization for our hotels in Cancun and municipal permitting for construction.
Regulatory Overview
General
Our hotels are subject to various Mexican federal, state and local laws, ordinances and regulations, including regulations relating to zoning, fire and safety requirements, among others. We
believe that each of our hotels has obtained, or is in the process of obtaining or renewing, the material permits and approvals required to operate its business, subject to ongoing compliance reviews and any applicable corrective or
regularization measures. See “Item 3. Key Information—D. Risk Factors—Risks Related to Murano’s Business and Operating in the Hotel Industry—Our properties and operations are subject to extensive environmental,
health and safety laws and regulations.”
In Mexico, each of our hotels is generally required to obtain and maintain the applicable municipal operating permits and, where applicable, state-level licenses, registrations or
authorizations required to operate locally. We must also comply with applicable tourism-related registration, disclosure and classification requirements, including registration of our hotels and rates, as applicable, with the Mexican National
Tourism Registry (Registro Nacional de Turismo), in accordance with the General Tourism Law and related regulations. State and municipal laws in Mexico also regulate fire safety. Additionally, each of our
hotels is required to have sanitation licenses and hotel construction projects are required to have a construction license and must comply with several zoning and land-use regulations. We believe that we are in material compliance with all
applicable sanitation and construction licenses in Mexico, and zoning and land-use regulations applicable to our operations, subject to ongoing permit reviews, renewals, extensions and any corrective or regularization measures that may be
required from time to time.
In addition, our operations are subject to consumer protection regulations such as the Federal Law of Consumer Protection (Ley Federal de Protección al
Consumidor) and other regulations issued by the Mexican Consumer Protection Agency (Procuraduría Federal del Consumidor).
Approvals from federal, state and municipal regulatory entities may be necessary at various stages of the construction and development of a hotel. Generally, development requires, among other
approvals: (i) approval of preliminary development, which includes authorization of the design and the use of the land, as well as preliminary agreements with Comisión Federal de Electricidad (the Mexican government-owned electricity company),
water organisms at state or municipal levels for water, wastewater collection, treatment and disposal in order to provide the development with energy, water and connection to the sewage system, respectively; (ii) approval of the subdivision of
land, as applicable; and (iii) a construction license.
Finally, in addition to the regulations described above, each of our hotels is subject to extensive federal, state and municipal regulations and on a periodic basis, we must obtain various
licenses and permits, including, but not limited to, those relating to the operation of restaurants, swimming pools, fitness club facilities, parking garages, the sale of alcoholic beverages, advertisement and occupational health and safety.
We believe that the Insurgentes 421 Hotel Complex and GIC Complex (up to its current development stage) are in material compliance with applicable laws and regulations and have obtained, or are
in the process of obtaining, renewing or regularizing, the material licenses and permits applicable to their current operations and development stage, and that our business will continue to be conducted in substantial compliance with applicable
laws.
Expropriation and Dispossession
In Mexico, the government has the authority to expropriate properties or assets if there are justified public interest or national security reasons. Under Mexican applicable law including,
among others, the Mexican Constitution and Expropriation Law (Ley de Expropiación), the government is required to indemnify the owner of the property subject to expropriation. If there is disagreement in
connection with the indemnification amount, the determination of such amount may be submitted to a judicial authority. There are no specific rules with respect to the indemnification amount we would receive in the event of expropriation, provided
that the affected owner is generally entitled to indemnification in accordance with applicable law. If there is disagreement in connection with the indemnification amount, the determination of such amount may be submitted to a judicial authority.
In addition, under the Mexican Constitution and Mexican applicable law, including the National Law of Domain Extinction (Ley Nacional de Extinción de Dominio), our rights in respect of certain properties
could be challenged or affected in connection with criminal activities carried out by third parties at or through such properties, subject in each case to the applicable legal proceedings and remedies. As of the date of the Consolidated and
Combined Financial Statements, none of the Properties were subject to an expropriation or dispossession proceeding.
Overview of Mexico and the Mexican Lodging Industry
Macroeconomic Overview
During 2025, the Mexican economy continued to expand despite continued uncertainty regarding global economic conditions, prevailing inflationary pressures, high interest rates and adverse
economic effects from global conflicts. Mexico’s real GDP increased by 0.9 % in the three months ended March 31, 2026, vs. the prior three-month period ended December 31, 2025. Real GDP is expected to grow up to 1.5 % in the twelve-month period
ending December 31, 2026.
Moreover, Mexico continues to show a robust labor market with an unemployment rate was 2.6 % as of March 31, 2026, a 0.2% increase from the rate as of December 31, 2025. As of March 31, 2026,
the economically active population in Mexico (fifteen years of age and older) was 61.1 million. As of March 31, 2026, the minimum wages in Mexico, as applicable since January 1, 2026, were Ps. $440.87 per day for municipalities in the Zona Libre de la Frontera Norte (Northern Border Free Trade Zone) and Ps. 315.04 per day for the rest of Mexico, an increase of 5 % and 13 %, respectively, from the applicable minimum wages in effect from
January 1, 2025 to December 31, 2025.
Mexico’s sovereign ratings were fully investment grade as of March 31, 2026, standing at a Baa2 with a “negative” outlook by Moody’s, a BBB with a “stable” outlook by S&P, and a BBB- with a
“stable” outlook by Fitch.
Market Opportunity
We believe there is an extraordinary market opportunity for our hotels, which are located in the two largest business and leisure destinations in Mexico. Mexico City is a significant cultural
center and business hub representing approximately 14.8 % of the country’s GDP, per the most recent data for the twelve-month period ending December 31, 2025.
Cancun is the top destination in the Caribbean with more passenger arrivals than Dominican Republic, its closest competitor. We estimate that total passenger traffic in Cancun in upcoming years
will maintain its levels achieved in 2025, which have surpassed those seen before the COVID-19 pandemic. In the last several years, the number of total passengers visiting Cancun has grown at a considerably higher pace than the number of hotel
rooms, creating an opportunity in the hospitality industry. Available hotel rooms in Cancun, per the most recent available data for December 2025 shows 35,995 available hotel rooms, compared to 35,115 available hotel rooms in 2019, prior to the
COVID-19 pandemic. By 2022, passenger arrivals in Cancun had already surpassed 2019´s figures.
The Mexican Lodging Industry
The travel & leisure sector is a key economic engine for the Mexican economy, representing 8.6% of its GDP as of 2025. International arrivals to Mexico have quickly recovered, standing just
0% above pre-pandemic levels and showing positive momentum with a 5.8 % increase against 2024. Overall occupancy levels in Mexico have also quickly rebounded almost reaching pre-pandemic levels as of March 31, 2026.
Mexico is the most visited destination in Latin America and the 6th most visited country in the world by
international tourists.
|
Ranking
2025
|
Country
|
2025
|
2024
|
2019
|
% Δ
2024
|
% Δ
2019
|
|
1
|
France
|
N/A
|
102 m
|
91 m
|
N/A
|
N/A
|
|
2
|
Spain
|
97 m
|
94 m
|
84 m
|
3%
|
15%
|
|
3
|
United States
|
68 m
|
72 m
|
79 m
|
-6%
|
-14%
|
|
4
|
Turkey
|
62 m
|
61 m
|
51 m
|
2%
|
22%
|
|
5
|
Italy
|
62m
|
58 m
|
65 m
|
7%
|
-5%
|
|
6
|
Mexico
|
48 m
|
45 m
|
45 m
|
7%
|
7%
|
|
7
|
Germany
|
N/A
|
38 m
|
40 m
|
N/A
|
N/A
|
|
8
|
Japan
|
43 m
|
37 m
|
32 m
|
16%
|
34%
|
|
9
|
Greece
|
38.0 m
|
36 m
|
31 m
|
6%
|
23%
|
|
10
|
Thailand
|
33 m
|
36 m
|
40 m
|
-8%
|
-18%
|
Source: World Tourism Organization
Note: France and Germany have not provided timely information for 2025 international tourist arrivals; they are both expected to hold their positions in the ranking, thus shown in 1st and 7th place, respectively.
In the three-month period ending March 31, 2026, Mexico’s incoming tourism base mainly comprises visitors from investment grade, hard currency denominated countries such as the United States,
Canada, Argentina, Colombia, and the United Kingdom.
Source: Mexico’s Ministry of Tourism
Moreover, Mexico City and Cancun continue to be the top Mexican destinations for international tourists to Mexico. These cities together represented approximately 62.2% of total airport
arrivals in Mexico during the twelve-month period ending December 31, 2025; and Cancun remains the most visited Caribbean destination by passenger arrivals. The trend is expected to continue as there has been a strong flow of foreign direct
investment into short-term stay projects to meet increasing visitor demand. During the twelve-months ended December 31, 2025, 7.8% of all foreign direct investment in Mexico was destined for tourism short-stay projects, an increase of 6.8%
compared to the same period in 2024. Additionally, both cities, Mexico City and Cancun, continue to show higher occupancy levels compared to the rest of Mexico.
Source: INEGI, Mexico’s Ministry of Tourism
| C. |
Organizational Structure
|
The following diagram sets forth our current corporate structure following the Business Combination and related corporate reorganization, including the subsidiaries of Murano PubCo:
| D. |
Property, Plant and Equipment
|
Description of the Properties
Hotels
Insurgentes 421 Hotel Complex
The Insurgentes 421 Hotel Complex is located in Colonia Condesa, a trendy and upscale neighborhood in Mexico City that is surrounded by tourist attractions, landmarks, parks and a vibrant
restaurant scene. Condesa is within walking distance of the Roma neighborhood and Paseo de la Reforma, one of the city’s main avenues, close to the city’s historic center and main financial district, and only 12 kilometers away from Mexico City’s
international airport.
The building where the Insurgentes 421 Hotel Complex is located was built in 1961 and designed by José Luis Benlliure, a renowned Spanish architect, painter and sculptor. This historic
building, formerly known as the Aristos, has long been considered an icon of the city’s architectural style and was declared part of the artistic heritage of Mexico City by the National Institute of Fine Arts (Instituto
Nacional de Bellas Artes) and the Ministry of Housing and Urban Development (Secretaría de Desarrollo Urbano y Vivienda). Murano Group acquired the building in 2006 and began conversion of the
property into an upscale international business hotel in 2018. The development of the Insurgentes 421 Hotel Complex was completed in the last quarter of 2022 and became operational in the first quarter of 2023.
The Insurgentes 421 Hotel Complex consists of three independent buildings connected by a central square. The first building faces West and is located on Avenida
de los Insurgentes. It is 55 meters high and consists of a Lower Ground and 16 floors with 213 rooms, which is operated under the Andaz brand, focused on business travelers. The second building faces North and is located on
Aguascalientes Street. It is 34.45 meters high and consists of a Ground Floor and nine floors with 183 rooms, which is operated under the Mondrian brand, which is geared toward lifestyle tourism and sophisticated leisure travelers. The third
building faces South and can be accessed from the central square. It consists of a lower ground and three floors encased by a large crystal ballroom. The Insurgentes 421 Hotel Complex also has an underground garage accessible from Aguascalientes
Street.
The Andaz Hotel is operated by Hyatt, has 213 rooms and several amenities, including a sky bar “Cabuya Rooftop”, multiple restaurants, an auditorium, breakout rooms, a business center, a pet
friendly area and restaurant for pets, the “Wooftop”, a gym and a spa. It also has a 954.31 sqm ballroom with a crystal dome with a capacity for 49 tables and 588 guests.
The Mondrian Hotel is the first luxury Accor hotel in Mexico and its flagship location in Latin America. Pursuant to the Hotel Management Agreement with Accor, 183 rooms are operated under the
Mondrian brand.
According to the appraisal report for 2025, the market value of the Insurgentes 421 Hotel Complex property was U.S.$92.3 million and this valuation was adopted as of December 31, 2025.
The Group had invested U.S.$121.4 million to complete the development of the Insurgentes 421 Hotel Complex.
GIC Complex
The GIC Complex, once fully developed, is expected to be a large-scale hotel and residential complex situated in the area between Delfines Beach and the Nichupté Lagoon in Cancun. Its strategic
location-one of the closest five-star developments to the Cancun International Airport and in proximity to the city’s major entertainment areas-combined with state-of-the-art design and premium amenities, positions it as a flagship destination in
Cancun. Envisioned as a destination within a destination, the GIC Complex will include all-inclusive hotel resorts, residential components, and an array of offerings designed to cater to both leisure and business travelers of all ages.
In light of recent market conditions and the evolving hospitality landscape, the Murano Group’s management and board of directors have updated the Group’s strategic development pipeline to
prioritize the development and commercialization of residential units.
At present, the Group is conducting a strategic review of the GIC I Hotel and the GIC Complex. While prior plans contemplated the full buildout of 1,016 hotel rooms, the Term Sheet contemplates
the Restructuring Project as a reconfiguration of the GIC Complex, including the conversion of the existing site into (i) a hotel with 566 guest rooms and (ii) the Residential Condos. In addition, in connection with the contemplated 2031 Notes
Restructuring, we have entered into the GIC I Hotel Management Agreement (Mondrian) with Ennismore for the operation of the GIC I Hotel, pursuant to which Hyatt is expected to be replaced as operator upon satisfaction of the applicable conditions
precedent, including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I Hotel Management Agreement with Hyatt. This review also includes an assessment of funding needs, potential changes to the development
timeline, and any necessary amendments, termination or replacement of the applicable hotel management and operations arrangements.
Cancun remains the premier destination in the Caribbean due to its accessibility from major international markets, including numerous daily direct flights from the United States, Canada, and
Europe. The total number of passengers visiting Cancun has consistently outpaced the growth in hotel room inventory, creating a compelling opportunity in the region’s hospitality and residential markets. Given the GIC Complex’s appeal to
international visitors and the dynamics of the local market, we currently expect that substantially all of its revenues will be denominated in U.S. dollars.
GIC I Hotel
The GIC Complex has historically been described as being developed in two phases. Phase one was initially planned to include 1,016 hotel rooms across two brands: (i) 400 rooms that are
operational under the “Vivid” brand, an adults-only concept; and (ii) 616 rooms planned under the “Dreams” brand, a family-friendly offering. The scope and timing of the Phase one buildout, including any opening timeline for the Dreams component,
remain under review and may be modified in connection with the contemplated 2031 Notes Restructuring.
The Vivid Hotel is an adult-only brand all-inclusive hotel categorized as five-star upper scale with 400 rooms operated under the Vivid brand and which opened in April 2024. The Dreams Hotel
was originally to be completed and operational in the fourth quarter of 2025 as a family-friendly brand hotel categorized as five-star upper scale with 616 rooms operated under the Dreams brand; however, the scope and timing of such component are
currently under review in connection with the contemplated 2031 Notes Restructuring and the Restructuring Project.
At present, the Group is conducting a strategic review of the GIC I Hotel and the GIC Complex. While prior plans contemplated the full buildout of 1,016 hotel rooms, the Term Sheet contemplates
the Restructuring Project as a reconfiguration of the GIC Complex, including the conversion of the existing site into (i) a hotel with 566 guest rooms and (ii) the Residential Condos. In addition, in connection with the contemplated 2031 Notes
Restructuring, we have entered into the GIC I Hotel Management Agreement (Mondrian) with Ennismore for the operation of the GIC I Hotel, pursuant to which Hyatt is expected to be replaced as operator upon satisfaction of the applicable conditions
precedent, including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I Hotel Management Agreement with Hyatt. This review also includes an assessment of funding needs, potential changes to the
development timeline, and any necessary amendments, termination or replacement of the applicable hotel management and operations arrangements.
When fully operational, the GIC I Hotel is expected to have the following amenities: A beach club, two rooftop terraces each with a bar, eight specialty restaurants, two coffee shops, two
premium lounge bars for VIPs, two extra bars next to the specialty restaurants, two buffet restaurants, two pool restaurants, two gyms plus a jungle gym, two lobby bars, two sunset bars, two cavas, two swim-up bars, a kids club, a barefoot grill,
a ceviche outlet, a food truck, two snack bars, a terrace lounge, two retail stores, a wedding terrace, a jogging track, two areas for breakout rooms of 200 sqm each, a 400 sqm space for events indoors with a 650 sqm terrace overlooking both the
lagoon and the golf course and direct access to the golf course owned by Iberostar.
The GIC I Hotel is located within walking distance of Delfines beach and close to the El Rey Archaeological Zone and National Park. The GIC I Hotel is currently operated by Hyatt’s subsidiary
Hyatt Inclusive Collection (subject to the contemplated replacement of the operator for the GIC I Hotel in connection with the 2031 Notes Restructuring).
According to an appraisal report issued by CBRE, a real estate consulting and appraisal firm, the market value of the GIC I Hotel on December 31, 2025, was U.S.$326.4 million for the hotel as
well as U.S$134.3 million for the residential component.
GIC Phase II
Under the previous development plan, Murano intended to develop another hotel as part of phase two of the GIC Complex, the GIC II Hotel. However, in light of recent market developments and the
Company’s strategic focus on residential development and commercialization, Murano has halted the development of the GIC II Hotel in order to prioritize the GIC Condominiums.
Design of the GIC Complex
The GIC Complex has been designed by HOK Group, Inc. (“HOK”), the largest U.S.-based design, architecture, engineering and urban planning firm. HOK has
been recognized for six consecutive years on the American Institute of Architect’s (AIA) “Top 10 Green Projects List,” one of the industry’s best-known awards program for sustainable design excellence. The landscaping, outdoor amenities and
aquatic parks have been designed by EDSA, Inc. (“EDSA”), a renowned U.S.-based planning, landscape architecture and design firm.
The Resort and Industrial Park in Baja Development Project
The Group has also evaluated the Bajamar project. The initial plan for developing a 5-star upper-upscale resort and an industrial park has been modified as follows:
| - |
Development of a cruise port with a capacity of 2 million passengers per year. The Group has signed an MOU with a major global cruise line operator.
|
| - |
Development of Baja Marina, 15,000 linear ft slip spaces.
|
| - |
Development of an industrial park for leasing purposes.
|
| - |
Development of Baja Retail Village for leasing purposes
|
| - |
Development of two five-star upper-upscale resorts, one with 371 keys and a second one with 400 keys.
|
The project is currently under evaluation, and we have not yet begun the process of securing financing for completion. Therefore, we do not know when and if we will be able to begin
construction of this project.
Asset Management of our Properties
We employ a proactive asset management approach to maximize the performance of our hotels through revenue enhancement and cost-containment measures. As committed owners, we provide direction
and oversight to the hotel operators and continuously evaluate their plans and strategies, including those to be implemented to optimize the performance of each of our properties. To that end, we regularly conduct sales, marketing, and financial
performance reviews designed to identify strengths and weaknesses that can be addressed to enhance property performance and conduct periodic on-site meetings with property and regional personnel, and in-depth operational reviews focused on
identifying new and ongoing margin improvement initiatives.
Construction
The Murano Group has engaged or will directly engage with experienced contractors to carry out the construction of the Project Under Completion. In addition, we have engaged Ideurban as manager
and supervisor of the construction of the project. With more than 70 years of experience, Ideurban is one of Mexico City’s leading urban development companies delivering a complete range of integrated real estate solutions and construction
services. Supporting the needs of communities, governments, commerce and industry in Mexico, Ideurban has led projects in markets ranging from hospitality (including a portfolio of emblematic hotels throughout Mexico), residential, retail, and
commercial to highway infrastructure, mixed-use developments and urban planning.
Description of Certain Project Agreements
The following is a summary of selected provisions of certain project agreements related to the Insurgentes 421 Hotel Complex and the GIC Complex and is not considered to be
a full statement of the terms of each such agreement. The following summaries are qualified in their entirety by reference to the applicable agreements or drafts of agreements and are subject to the full text of those documents, some of which are
in Spanish. Unless otherwise stated, any reference in this Report to any agreement will mean such agreement and all schedules, exhibits and attachments thereto, as amended, supplemented or otherwise modified and in effect as of the date of this
Report.
Insurgentes 421 Hotel Complex
Andaz Hotel Management Agreement
On May 11, 2022, OHI421 entered into a hotel management agreement with Hyatt of Mexico, S.A. de C.V., as hotel manager, pursuant to which the hotel manager operates 213 guest rooms part of the
Insurgentes 421 Hotel Complex under the label of Andaz Mexico City Condesa, for a period of 20 mandatory years starting on December 31, 2022.
| • |
Key Terms
|
| • |
Hyatt has the right to extend the term of the Andaz Hotel Management Agreement for a 10-year additional term unless Hyatt gives notice to OHI421 of its intention not to renew at least 12 calendar months
prior to the expiration date.
|
| • |
Hyatt is responsible and has the authority to direct all aspects of the operation of the Andaz Hotel, including, but not limited to, (i) personnel management and human resources policies and resolving
employment disputes, (ii) determining the terms of guest admittances, (iii) use and services provided by the Andaz Hotel, (iv) marketing and booking process, (v) collection of revenue and payment of operating expenses, and (vi) prepare
accounting books and records reflecting the results of the operations of the Andaz Hotel.
|
| • |
Hyatt has the authority to institute, conduct, defend and settle in the name and on behalf of OHI421, legal proceedings arising from the ordinary course of the Andaz Hotel operations including: (i) routine
collection matters; (ii) evictions or removal of guests or other persons occupying the Hotel; (iii) enforcement of any rights (including termination); (iv) personnel and employment matters; and (v) claims governed by insurance.
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| • |
OHI421 is responsible for, among others, (i) the procurement and receipt of any governmental approval required in connection with the Insurgentes 421 Hotel Complex and its renewal including all costs,
expenses and fees thereof, (ii) the sale, transfer or any other disposition of all or any portion of the Andaz Hotel, (iii) the financing or refinancing of the Andaz Hotel, (iv) settling any property insurance claims that relate to any
casualty or any condemnation awards, (v) entering any transaction with an affiliate of Hyatt, and (vi) settling legal proceedings relating to ownership, constructions and development of the Andaz Hotel.
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| • |
Hyatt is entitled to receive compensation as follows: (a) a base fee, payable monthly, in an amount equal to (i) 1.6% of the cumulative revenue of the hotel from the opening date until the end of the first
fiscal year of operations, (ii) 2.1% of the cumulative revenue of the hotel from the start of the second fiscal year of operations until the end of the second fiscal year of operations, and (iii) thereafter, 2.6% of the cumulative revenue
of the hotel, and (b) an incentive fee equal to a percentage of adjusted profit (a percentage of adjusted profit means, for any relevant period, the amount, not less than zero equal to the excess (if any) of (x) gross operating profit for such period over (y) the sum of the base fee and the license fee earned for such period (but not the incentive fee) (but only to the extent that such
amounts are not otherwise deducted in computing gross operating profit)) of the Andaz Hotel, subject to the Andaz Hotel achieving the relevant adjusted profit margin (which for any fiscal year shall mean the percentage calculated by
dividing (x) adjusted profit for such fiscal year by (y) revenue of the hotel for such fiscal year), payable monthly, as described in the table below:
|
|
Tier
|
Adjusted Profit Margin
|
Incentive Fee earned.
(monthly, as preliminary
installments of the Incentive Fee)
|
|
Between 0 and up to and including 20%
|
No Incentive Fee
|
|
|
Greater than 20.01% and up to including 25%
|
6% of the Adjusted Profit
|
|
|
Greater than 25.01% and up to and including 30%
|
7% of the Adjusted Profit
|
|
|
Greater than 30.01% and up to and including 35%
|
8% of the Adjusted Profit
|
|
|
Greater than 35.01% and up to and including 40%
|
9% of the Adjusted Profit
|
|
|
Greater than 40%
|
10% of the Adjusted Profit
|
| • |
Hyatt will have the right, at its discretion, to extend the operating term for an additional 10-year period.
|
| • |
Termination Events
|
| • |
The occurrence of any of the following events not cured within the grace period provided under the Andaz Hotel Management Agreement will be deemed as an event of default that is not remedied within 30 days:
(i) failure of OHI421 to make any payment to Hyatt or its affiliates, (ii) the filing of a voluntary petition in bankruptcy or insolvency or a petition for reorganization under any bankruptcy or insolvency law by either party, (iii)
breach by any of the parties of any material covenants including representations, warranties, or conditions set forth thereunder, (iv) any assignment or transfer by a party in violation of any financing undertaken by OHI421 or impacting
the Andaz Hotel that fails to satisfy the financing conditions, and (v) any default by guarantor under the guaranty.
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| • |
A non-defaulting party shall have the right to terminate the Andaz Hotel Management Agreement by the occurrence of any event of default of the other party by delivering a written notice. The rights of
termination shall be in addition to, and not in lieu of, any other rights or remedies provided, being understood, and agreed that the exercise of the remedy of termination shall not constitute an election of remedies and shall be without
prejudice to any other rights or remedies.
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| • |
OHI421 has the right to terminate the Andaz Hotel Management Agreement if the Andaz Hotel does not meet the requirements of the performance test2 applicable to the most recently concluded performance test period3. The Andaz Hotel would not meet the requirements for
passage of the performance test in any performance test period in which the Andaz Hotel failed both applicable tests in each consecutive fiscal year comprising the performance test period.
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| • |
Any sum that is not paid by either party as when due shall bear interest at the interest rate (means the lesser of (a) the prime rate announced from time to time in the Wall Street Journal plus 5%, and (b)
the maximum rate of interest permissible under applicable laws, compounded monthly. In the event that the Wall Street Journal ceases to publish the prime rate, then subsection (a) shall be the prime rate announced form time to time by
JPMorgan Chase Bank, N.A. (and its successors)) from the date when such sum becomes due to the date of payment.
|
| • |
Governing Law
|
| • |
The Andaz Hotel Management Agreement is governed by Mexican law. Any disputes arising from this agreement will be subject to arbitration with the Rules of the International Chamber of Commerce.
|
Mondrian Hotel Management Agreement
On May 11, 2022, OHI421 Premium entered into a hotel management agreement with Ennismore, as hotel manager, pursuant to which the hotel manager operates 183 rooms, two restaurants and one bar
part of the Insurgentes 421 Hotel Complex under the label of Mondrian Mexico City Condesa, for a period of 20 mandatory years starting on December 31, 2022.
| • |
Key Terms
|
| • |
The term of Mondrian Hotel Management Agreement will be extended for an additional 10-year period if neither party delivers a written notice of termination 180 days prior to the last date of the initial
term, and which could be subsequently extended for an additional 10-year period provided that neither party delivers a written notice of termination 180 days prior to the last date of the term, or first renewal term, as applicable.
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| • |
Ennismore shall have discretion in the supervision, operation, direction, control and management of the Mondrian Hotel and it will have the exclusive right to (i) manage the Mondrian Hotel without
interference from OHI421 Premium other than any inspection and auditing rights it may have under the Mondrian Hotel Management Agreement, (ii) determine all policies and procedures for the operation of the Mondrian Hotel, (iii) implement,
in the name and on behalf of OHI421 Premium, all policies and procedures applicable to Mondrian Hotels in the region.
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| • |
OHI421 Premium must, among others, (i) ensure the standard of the Mondrian Hotel to be always maintained, (ii) provide sufficient working capital to ensure that the operation of the Hotel is to be
undertaken as a manner required by Ennismore’s standards, (iii) comply with all its legal requirements with respect to the Mondrian Hotel, (iv) acknowledge that the Mondrian Hotel Management Agreement does not give it any right, title, or
interest in or to any of Ennismore’s standards, except as a license during its term to have such standards use with respect to the operation of the Mondrian Hotel, and (v) obtain or maintain all approvals, consents, licenses, permits and
authorizations as may be necessary for the occupation and operation of the Mondrian Hotel at its cost and expense during the term of the Mondrian Hotel Management Agreement.
|
| • |
Ennismore is entitled to receive a base fee, payable monthly, in an amount equal to (i) 2.0% of the total revenue of the hotel from the opening date until the end of the first fiscal year of operations,
(ii) 2.5% of the total revenue of the hotel from the start of the second fiscal year of operations until the end of the second fiscal year of operations, and (iii) 3% of the total revenue of the hotel thereafter.
|
| • |
Ennismore is entitled to an incentive fee, payable monthly, in an amount equal to 15% of the special adjusted gross operating profit of the hotel (meaning the gross operating profit, less the following: (i)
base fee; (ii) all property taxes; (iii) insurance costs; (iv) replacement reserve contribution; and (v) an amount equal to eight percent (8%) of the total project costs (which is the sum of all costs and expenses incurred by OHI421
Premium in connection with the development, construction, initial furnishing and initial equipment of the Mondrian Hotel and an aggregate amount of $200,000 per key at the Mondrian Hotel).
|
| • |
Ennismore is entitled to receive a food and beverage fee, payable monthly, equal to 2% of the food and beverage revenue.
|
| • |
None of the base fee, the incentive fee, and/or the food and beverage fee shall be subordinated to any payments, if OHI421 Premium fails to pay to Ennismore in a timely manner, Ennismore is authorized to
transfer such amounts from the replacement reserve account to the operating account and withdraw such amounts from the operating account.
|
| • |
Ennismore shall not without the prior written consent of OHI421 directly or indirectly operate, franchise, or license another hotel branded and named as Mondrian located within five kilometers of the
Mondrian Hotel.
|
| • |
The employees of the Mondrian Hotel will work under the supervision of Ennismore but shall be considered from a labor perspective to be under OHI421 Premium.
|
| • |
OHI421 Premium must obtain insurance as specified in the Mondrian Hotel Management Agreement.
|
| • |
OHI421 Premium shall defend, indemnify, protect, and hold Ennismore and its affiliates and its officers, directors, shareholders, partners, members, employees, agents and representatives harmless from any
claims in connection with the (i) development, construction, marketing, sales, ownership or operation of the Hotel or any component thereof; or (ii) by reason of any action taken or omitted to be taken pursuant to the Mondrian Hotel
Management Agreement.
|
| • |
Ennismore shall defend, indemnify, protect and hold OHI421 Premium and its officers, directors, shareholders, partners, members, employees, agents and representatives harmless from and against all claims,
demands, damages, judgments, costs, losses, penalties, fines, liens, arising in connection with the operation of the Mondrian Hotel by reason of (i) Ennismore gross negligence; or (ii) willful misconduct on the part of Ennismore or its
affiliates.
|
| • |
Ennismore shall have the right to transfer its rights and obligations under the Mondrian Hotel Management Agreement to (i) any person who is a successor or transferee which may result from any merger,
consolidation, or reorganization of Ennismore, or (ii) Accor SA, Ennismore or any of their affiliates provided that the transferee assumes all of Ennismore’s obligations under the Mondrian Hotel Management Agreement and is in a position
to operate the Mondrian Hotel.
|
| • |
OHI421 Premium shall not transfer its rights and obligations under the Mondrian Hotel Management Agreement unless (i) it has given 90 days’ prior written notice to Ennismore, (ii) the transfer is to an
acceptable transferee, (iii) at the date of transfer all amounts owed to Ennismore and its affiliates have been paid in full and all amounts accrued that will become due after the transfer shall be reserved in an account under Ennismore’s
control, and (iv) the transferee enters into a written agreement with Ennismore to be bound by the terms and conditions of the Mondrian Hotel Management Agreement.
|
| • |
Termination Events
|
| • |
Termination may arise if any of the following occurs (each, a default under the Mondrian Hotel Management Agreement): (i) failure to pay any amount due and payable, (ii) failure to perform any covenants or
obligations, (iii) material breach of any representation or warranty, (iv) insolvency default, (v) breach of the Hotel Consultancy Services Agreement (as defined in the Mondrian Hotel Management Agreement) entered between OHI421 and the
Hotel Consultant (as defined in the Mondrian Hotel Management Agreement) will result in a default by either of the parties, and, exclusively for Ennismore (vi) losing the use of the Mondrian brand, and (vii) abandoning the operation of
the Mondrian Hotel for longer than 15 days unless otherwise agreed upon with OHI421 Premium.
|
| • |
Following a default (as defined in the Mondrian Hotel Management Agreement) and provided that the default continues for a period of 30 days the non-defaulting party may terminate the Mondrian Hotel
Management Agreement without prejudice to any rights, actions or remedies either party may have thereunder. If the default can be cured but not within such period, the period will be extended to such longer period as it is reasonable but
no longer than 60 days.
|
| • |
In case of an insolvency default the non-defaulting party may terminate the Mondrian Hotel Management Agreement with immediate effect by serving a notice on the defaulting party.
|
| • |
In the event of rescission or earlier termination due to causes attributable to OHI421 Premium, in addition to all amounts owed and repayment of any unamortized key money to Ennismore, a termination penalty
equal to the net present value of the following amounts calculated using a discount rate of 8% in each instance, discounted to the date of termination will be applied:
|
| • |
if termination occurs during years 1 to 4, the penalty shall be an amount equal to $130,158 multiplied by the remaining months of the term,
|
| • |
if termination occurs in year 5 of thereafter, the penalty shall be an amount equal to the average monthly fees for the 12 months period prior to the date of termination, in which 12 months preceding period
no force majeure event has occurred, multiplied by the remaining months of the term.
|
| • |
OHI421 Premium shall have the right to terminate the Mondrian Hotel Management Agreement without the need for a court order, if in any Termination Test Period, the Mondrian Hotel suffers (i) a GOP Failure,
and (ii) a REVPAR Failure (in each case as defined in the Mondrian Hotel Management Agreement).
|
| • |
Governing Law
|
| • |
The Mondrian Hotel Management Agreement is governed by Mexican Law. Any disputes arising from this agreement will be subject to arbitration with the Rules of the International Chamber of Commerce.
|
Insurgentes Lease Agreements
On October 10, 2018, and as amended and restated on May 11, 2022, Inmobiliaria Insurgentes 421, as lessor, entered into a lease agreement with OHI421, as lessee, through which the lessee is
required to use the relevant property exclusively to operate it under the terms of the corresponding hotel management agreement (the “OHI421 Lease Agreement”). Lessee shall pay lessor a base rent of U.S.$50,000 within the first 15 days of each
month, plus a variable rent equivalent to 95% (ninety five percent) of the gross operating profit of the lessee for the calendar year ended. The lease agreement has a 20-year term. As of December 31, 2025, the base rent amounted to U.S.$600,000
and the variable rent amounted U.S.$8.2 million.
On May 11, 2022, Inmobiliaria Insurgentes 421, as lessor, entered into a lease agreement with OHI421 Premium, as lessee, through which the lessee is required to use the property exclusively to
operate it under the terms of the corresponding hotel management agreement (the “OHI421 Premium Lease Agreement”). Lessee shall pay lessor a base rent of U.S.$50,000 within the first 15 days of each month, plus a variable rent equivalent to 95%
of the gross operating profit of the lessee for the calendar year ended. The lease agreement has a 20-year term. As of December 31, 2025, the base rent amounted U.S.$600,000, and the variable rent amounted U.S.$1.2 million.
As part of the collateral to secure the Insurgentes Loan, among others, Inmobiliaria Insurgentes 421 contributed (i) the ownership of the property of the Insurgentes 421 Hotel Complex, (ii) its
collection rights under and in respect of the Insurgentes Lease Agreements and (iii) its collection rights in regard to any potential sale of the Insurgentes 421 Hotel Complex. See “Item 5.B. Liquidity and
Capital Resources—Debt” for descriptions of the material agreements.
| • |
Key Terms
|
| • |
The term of the Insurgentes Lease Agreements may be extended by mutual agreement of its parties after negotiating new terms, conditions and rental structure.
|
| • |
The rent amount, terms and conditions are revisited every three years to take into consideration inflation rates and market conditions, among others.
|
| • |
In case of delayed payment of rent, a default interest rate at 20% calculated annually shall be applied.
|
| • |
The Insurgentes Lease Agreements contain terms and conditions customary for a transaction of its nature, pursuant to which the lessee, among others, will: (i) allow the lessor to inspect the Andaz Hotel or
the Mondrian Hotel, as applicable; (ii) comply with any law or requirement (including environmental laws); (iii) leave and deliver Andaz Hotel or the Mondrian Hotel, as applicable, properties to the lessor in the same condition as
delivered; (iv) maintain necessary permits, licenses or authorizations for operation and occupancy of Andaz Hotel or the Mondrian Hotel, as applicable; (v) notify of any judicial or administrative process (including related to compliance
with environmental regulations) initiated against any of the parties related to Andaz Hotel or the Mondrian Hotel, as applicable; (vi) pay and withhold taxes (except those that must be paid by the lessor, pursuant to the Insurgentes Lease
Agreements); (vii) prepare and deliver quarterly and annual financial information. On the other hand, the lessor will: (i) deliver the derivative and material possession of Andaz Hotel or the Mondrian Hotel, as applicable, properties and
allow the use by the lessee; (ii) not interfere with the management and operation of the Andaz Hotel or the Mondrian Hotel, as applicable; (iii) maintain Andaz Hotel or the Mondrian Hotel, as applicable properties in good conditions,
among others.
|
| • |
The permitted use of Andaz Hotel or the Mondrian Hotel, as applicable, properties is restricted to the use in accordance with the Andaz Hotel Management Agreement or the Mondrian Hotel Management Agreement,
as applicable, which restricts it to activities typically conducted by a hotel such as hospitality services, restaurant services, sale of alcoholic and non-alcoholic beverages, among others.
|
| • |
The permits and licenses required to operate the Andaz Hotel or the Mondrian Hotel, as applicable, must be obtained and maintained by the lessee or the Hotel Operator.
|
| • |
The lessee shall indemnify the lessor, its employees, agents, contractors or consultants, from any claim arising from any harm, disease or death that take place in the Andaz Hotel or the Mondrian Hotel, as
applicable, as long as not due to the negligence or bad faith of the lessor; labor claims, payment of taxes due by the lessee, among others specified in the Insurgentes Lease Agreements.
|
| • |
Termination Events
|
| • |
The Insurgentes Lease Agreements may be terminated by the lessor if (i) the lessee incurs in any event of default and fails to cure such breach within the applicable grace period, (ii) the lessee uses the
hotel for any purpose other than within the permitted use under the hotel management agreements, (iii) if the lessee assigns or transfers by any means the use of the hotel to any third party without the lessor’s prior consent, and (iv) if
the corresponding hotel management agreement is terminated by causes attributable to the lessee.
|
| • |
Governing Law
|
| • |
The Insurgentes Lease Agreements are governed by the laws of Mexico City and are subject to the jurisdiction of the courts of Mexico City.
|
The Insurgentes Lease Agreements contain terms and conditions customary for a transaction of its nature, pursuant to which the lessee, among others, will: (i) allow the lessor to inspect the
Andaz Hotel or the Mondrian Hotel, as applicable; (ii) comply with any law or requirement (including environmental laws); (iii) leave and deliver Andaz Hotel or the Mondrian Hotel, as applicable, properties to the lessor in the same condition as
delivered.
Exitus Sale and Lease Back Agreement
On December 12, 2019, Edificaciones BVG, as lessee, Exitus as lessor, and Marcos Sacal Cohen as joint and several obligor, entered into a master lease agreement through which Exitus grants to
Edificaciones BVG the use and enjoyment of equipment in exchange for a monthly consideration for a 36-month term, subject to renewals (“Exitus Sale and Lease Back Agreement”). As of December 31, 2025 the
opening balance of this agreement was re-paid in full.
| • |
Key Terms
|
| • |
BVG Edificaciones has the obligation to pay to Exitus an origination fee and a commission for investigation and/or formalization expenses, which will be determined in the lease addenda, plus the
corresponding VAT per implemented lease.
|
| • |
The lease addendum or addenda executed pursuant to the Exitus Lease Agreement shall constitute a net lease and Edificaciones BVG undertakes to make all payments thereunder.
|
| • |
Edificaciones BVG agrees to and shall comply with (i) all laws, regulations, decrees, rules and orders of any governmental agency or agency, relating to the installation, use or operation of the equipment
to maintain in effect any required licenses, authorizations, concessions, permits, registrations and other documentation, (ii) shall only use the equipment for the activities of the regular course of business (iii) shall use and store the
equipment precisely in the place determined for such purpose, (iv) shall receive the equipment directly from the supplier, (v) paying expenses related to the handling, operation and maintenance of the equipment, (vi) to keep and maintain
its corporate structure, existence and legal personality without changes in stature as well as to allow Exitus to inspect the equipment, (vii) to take all actions to recover the equipment or defend the use and enjoyment thereof (viii) to
update its financial information and deliver balances, (ix) to deliver financial statements (x) obtain and maintain insurance for the equipment.
|
| • |
Exitus may assign its rights under the Exitus Sale and Lease Back Agreement without requiring consent form Edificaciones BVG. Edificaciones BVG shall not assign its rights or obligations under the Exitus
Sale and Lease Back Agreement unless prior written consent from Exitus is obtained.
|
| • |
Termination Events
|
| • |
Exitus may terminate the Exitus Sale and Lease Back Agreement if Edificaciones BVG (i) fails to pay on the indicated date any periodical or rent payment as well as any other payment at its expense or in the
annexes and that the non-compliance persists for more than 10 (ten) calendar days, (ii) fails to perform or observe any obligation, covenant, condition or agreement thereunder, (iii) makes any misrepresentation regarding any terms
contained thereunder, (iv) enters into dissolution or liquidation, (v) attempts to remove, sell, convey, convey, encumber, forfeit or sublet the equipment or any part thereof, (vi) fails to obtain the applicable insurance, (vii) fails to
comply with a court order or arbitrations award.
|
| • |
Governing Law
|
| • |
The Exitus Sale and Lease Back Agreement is governed by the laws of Mexico City and the parties are subject to the jurisdiction of the courts of Mexico City.
|
GIC Complex
GIC I Hotel
GIC I Hotel Management Agreement
On September 10, 2019, Operadora GIC I entered into a hotel management agreement (as amended on September 11, 2019, March 28, 2021, and July 11, 2023, and as may be further amended from time to
time) with AMR Operaciones MX, S. de R.L. de C.V. (Hyatt Inclusive Collection), as hotel manager, pursuant to which the hotel manager operates the GIC I Hotel for a period of 20 mandatory years starting on the date in which the hotel manager
gives notice of receipt of the GIC I Hotel. The GIC I Initial Period commenced on April 1, 2024.
In connection with the contemplated 2031 Notes Restructuring, including the transactions contemplated by the Lock‑Up Agreement dated March 10, 2026, we have entered into the GIC I Hotel
Management Agreement (Mondrian) with Ennismore for the operation of the GIC I Hotel, pursuant to which Hyatt Inclusive Collection is expected to be replaced as hotel manager upon satisfaction of the applicable conditions precedent, including the
effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I Hotel Management Agreement. As of the date of this Report, such conditions precedent have not been satisfied and the GIC I Hotel Management Agreement remains
in effect.
Accordingly, the summary below describes the material terms of the existing GIC I Hotel Management Agreement with Hyatt Inclusive Collection, which remains the operative hotel management
agreement for the GIC I Hotel as of the date of this Report.
| • |
Key Terms
|
| • |
The term of the GIC I Hotel Management Agreement automatically renews for successive five-year extension periods, unless either party notifies the other of its intent not to renew at least 12 (twelve)
calendar months prior to the expiration date.
|
| • |
Hyatt Inclusive Collection will have, in the name and on behalf of Operadora GIC I, the control and faculty to make decisions regarding the operation and commercialization, maintaining the control, as well
as the management, over such activities and over all the GIC I Hotel’s assets.
|
| • |
The hotel must be operational by the second quarter of 2024, it being understood that, in case of force majeure, this deadline will be extended for a period
equivalent to the period that said force majeure event lasts.
|
| • |
The hotel will be designed to the Hyatt Inclusive Collection standards specified in the GIC I Hotel Management Agreement.
|
| • |
Operadora GIC I will maintain operating capital equal to the amount agreed in the Approved Annual Budget (as defined in the GIC I Hotel Management Agreement) and make the necessary equity contributions for
the operation of the hotel and to cover all applicable pre-operative costs.
|
| • |
Hyatt Inclusive Collection will be entitled to an administrative fee equal to 3% of annual gross revenue of the GIC I Hotel and an incentive fee equal to 10% of gross profit of the GIC I Hotel.
|
| • |
In case of delay in payments of the administrative fee or the incentive fee, there shall be a default interest of 12% per year of pending amounts or Hyatt Inclusive Collection can discount the pending fees
from the gross revenues.
|
| • |
Operadora GIC I will reimburse Hyatt Inclusive Collection for (i) commercialization and sales costs (up to 6.0% of annual gross revenues paid monthly), (ii) expenses related to sales generated through the
call center and website set up by Hyatt Inclusive Collection which will amount to 5% of sales generated through that conduit, and (iii) reimbursement for group services.
|
| • |
Hyatt Inclusive Collection will maintain the GIC I Hotel in good conditions and will have the right to, at the expense of the Operadora GIC I, make certain changes and improvements to the GIC I Hotel.
|
| • |
The employees of the GIC I Hotel will work under the supervision of Hyatt Inclusive Collection, but shall be considered from a labor perspective to be under the Operadora GIC I.
|
| • |
Operadora GIC I must obtain insurance as specified in the GIC I Hotel Management Agreement, including insurance for litigation and damages to the GIC I Hotel.
|
| • |
Operadora GIC I will indemnify Hyatt Inclusive Collection, any subsidiaries, affiliates or any directors, employees or advisors for any claim that arises in relation to the GIC I Hotel Management Agreement,
unless there has been gross negligence or bad faith.
|
| • |
Hyatt Inclusive Collection will have a right of first refusal if we decide to sell the hotel. Pursuant to this right, it will be entitled to a 60-day due diligence period.
|
| • |
Hyatt Inclusive Collection will have the right to assign its rights and obligations under the GIC I Hotel Management Agreement to an affiliate, subsidiary or related party, without the need to obtain prior
consent from Operadora GIC I, as long as the assignee proves that it has control of Hyatt Inclusive Collection and the necessary experience to operate the hotel.
|
| • |
Operadora GIC I has the right to assign our rights and obligations under the GIC I Hotel Management Agreement to an affiliate, subsidiary or related party, without the need to obtain prior consent from
Hyatt Inclusive Collection.
|
| • |
Except for the rights and obligations under the financing documents, we may not sell, assign, transfer or in any other way alienate the rights that correspond to the GIC I Hotel, either through sale or any
other form of disposition of the GIC I Hotel, of the shares and/or any other similar corporate interest during the first two years of the initial period.
|
| • |
Termination Events
|
| • |
Hyatt Inclusive Collection may terminate the GIC I Hotel Management Agreement under the following circumstances (each subject to a 30-day cure period): (i) non-payment of fees or reimbursements, (ii)
failure to maintain the required operating capital, (iii) insolvency or bankruptcy, (iv) loss of material permits affecting operations, (v) failure to obtain and/or maintain insurance coverage, (vi) interference with Hyatt Inclusive
Collection’s operations, and (vii) failure to meet construction milestones. In such events and if Hyatt Inclusive Collection terminates the GIC I Hotel Management Agreement, Operadora GIC I shall pay the following penalties to Hyatt
Inclusive Collection:
|
| • |
A conventional penalty equivalent to 50% of the total of the Administration Fee (as defined in the GIC I Hotel Management Agreement) and the Incentive Fee (as defined in the GIC I Hotel Management
Agreement) of the last 12 months of operation multiplied by the remaining fiscal years of the validity of the GIC I Hotel Management Agreement.
|
| • |
If termination occurs before the 12 months mentioned in the previous paragraph can be counted, then the conventional penalty will be the amount resulting from multiplying $2,500 by the number of rooms
provided in the Contract by the number of years remaining of the Validity (as defined in the GIC I Hotel Management Agreement) of the GIC I Management Agreement.
|
| • |
If the termination of the GIC I Hotel Management Agreement occurs after 12 months can be counted, but before 4 fiscal years can be counted, then the conventional penalty will be the equivalent to the total
of the sum of the Administration Fee and the incentive fee of the last 12 months multiplied by three.
|
| • |
Operadora GIC I may terminate the GIC I Hotel Management Agreement under the following circumstances (each subject to a 30-day cure period except for (i)): (i) Hyatt Inclusive Collection fails to make the
guaranteed payments, (ii) insolvency or bankruptcy of Hyatt Inclusive Collection, (iii) Hyatt Inclusive Collection abandons the hotel premises for five business days, (iv) Hyatt Inclusive Collection fails to renew any permits affecting
operations; (v) Hyatt Inclusive Collection fails to meet at least 85% of gross operating profit for two consecutive years and does not cover the shortfall.
|
| • |
Governing Law
|
| • |
The GIC I Hotel Management Agreement is governed by the laws of Mexico and the parties are subject to the jurisdiction of the courts of Cancun, Quintana Roo or Mexico City as chosen by the plaintiff.
|
GIC I Hotel Management Agreement (Mondrian)
On April 6, 2026, Operadora GIC I entered into a new hotel management agreement with Ennismore, as hotel manager, and the GIC I Trust, as guarantor, pursuant to which, upon satisfaction of the
applicable conditions precedent, Ennismore is expected to operate the GIC I Hotel under the “Mondrian” brand for an initial mandatory term of 20 fiscal years commencing on the opening date (the “GIC I Hotel Management Agreement (Mondrian)”).
The effectiveness of, and commencement of operations by Ennismore under, the GIC I Hotel Management Agreement (Mondrian) is subject to the satisfaction of certain conditions precedent,
including (i) the valid termination of the existing GIC I Hotel Management Agreement with Hyatt and (ii) the effectiveness of the 2031 Notes Restructuring in accordance with the Term Sheet. As of the date of this Report, such conditions precedent
have not been satisfied and Hyatt continues to operate the GIC I Hotel. The GIC I Hotel Management Agreement (Mondrian) contemplates an opening date no later than September 1, 2026, subject to certain extension rights.
Key Terms
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The GIC I Hotel Management Agreement (Mondrian) contemplates that, on or about the effective date, Operadora GIC I and Ennismore (or one of its affiliates) will enter into certain ancillary agreements,
including: (i) a hotel and residential consultancy services agreement, pursuant to which Operadora GIC I will renovate and convert the GIC I Hotel and the Residential Condos to applicable brand standards; (ii) a brand license and
marketing agreement in connection with the marketing and sale of the Residential Condos and the participation of the owners of the Residential Condos in a rental program; and (iii) a residential management agreement, pursuant to which
Ennismore will manage, on an exclusive basis, the residential project comprising the Residential Condos.
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The term of the GIC I Hotel Management Agreement (Mondrian) will automatically renew for up to two additional five-year renewal terms unless either party provides notice of non-renewal at least 180 days
prior to the expiration of the initial term or the first renewal term, as applicable.
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Ennismore will have, in the name and on behalf of Operadora GIC I, the exclusive right to operate, manage and commercialize the GIC I Hotel, subject to the approval rights expressly reserved to Operadora
GIC I under the GIC I Hotel Management Agreement (Mondrian).
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The agreement contemplates that the GIC I Hotel must be operational no later than September 1, 2026, which date may be extended at Operadora GIC I’s option by up to 90 days and, in the event of force
majeure, by up to an aggregate of 18 months.
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The GIC I Hotel will be operated in accordance with the “Mondrian” brand standards, and the Restructuring Project
contemplates the conversion of the GIC I Hotel into a hotel with 566 guest rooms and the Residential Condos.
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Ennismore will be entitled to a base fee equal to 2.0% of total operating revenue of the GIC I Hotel for the first fiscal year, 2.5% for the second fiscal year and 3.0% for each subsequent fiscal year, plus
an incentive fee ranging from 0% to 9% of adjusted gross operating profit of the GIC I Hotel based on the operating margin achieved in the applicable fiscal year.
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Operadora GIC I will also pay certain system fees, including a sales and marketing fee equal to 1.5% of total operating revenue, reservation fees based on booking channel, an AccorConnect fee equal to 0.22%
of rooms revenue (subject to an annual cap of €20,000), and loyalty program fees based on eligible guest expenditures.
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Ennismore (or one of its affiliates) is required to deposit into an escrow account held in the name of the Issuer Trust a financial contribution of U.S.$12,735,000 (the “Access Fee Contribution”) no later
than 10 days prior to the opening date. The Access Fee Contribution will amortize over the initial term of the GIC I Hotel Management Agreement (Mondrian) and may be used to fund the termination of the existing Hyatt arrangement and
capital expenditures in connection with the Restructuring Project. If the GIC I Hotel Management Agreement (Mondrian) is terminated prior to full amortization (other than as a result of an insolvency default by Ennismore), Operadora GIC I
will be required to refund the unamortized portion of the Access Fee Contribution.
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As a condition to the funding of the Access Fee Contribution, the agreement contemplates that a consent, subordination, non-disturbance and attornment agreement (the “SNDA”) will be entered into among
Ennismore, Operadora GIC I and the relevant secured parties under the Indenture and related security documents. The SNDA will prevail over the GIC I Hotel Management Agreement (Mondrian) in the event of inconsistency for so long as the
2031 Notes (or, following effectiveness of the 2031 Notes Restructuring, the New Notes) remain outstanding. In addition, any future security interest granted over the GIC I Hotel or the GIC I Hotel Management Agreement (Mondrian), other
than under existing financing arrangements, will be subject to a substantially similar subordination, non-disturbance and attornment arrangement and specified financial ratio requirements.
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The repayment of the unamortized Access Fee Contribution is guaranteed by the GIC I Trust on a joint and several basis with Operadora GIC I.
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The GIC I Hotel Management Agreement (Mondrian) contains restrictions on transfers by Operadora GIC I of its rights under the agreement and its interest in the GIC I Hotel and the Beach Club, including
requirements that certain transfers be made jointly, that the transferee qualify as an acceptable transferee, and that prior notice be delivered to Ennismore.
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The agreement includes a radius restriction pursuant to which, during the first 10 fiscal years of the initial term, neither Ennismore nor its affiliates may own, operate, franchise or license another hotel
or serviced apartments branded “Mondrian” within 18 kilometers of the GIC I Hotel, subject to specified exceptions.
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Termination Events
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Ennismore may terminate the GIC I Hotel Management Agreement (Mondrian), subject to applicable cure periods, upon specified events of default by Operadora GIC I, including payment defaults, material
covenant breaches, material breaches of representations and warranties, insolvency events, breaches under the related hotel and residential consultancy services agreement, failure to meet applicable construction milestones in connection
with the Restructuring Project, and sanctions/compliance-related “Prohibited Person” events. In such circumstances, Operadora GIC I may be required to pay (in addition to all accrued amounts and, subject to the terms of the agreement, the
unamortized Access Fee Contribution) a termination payment based on the net present value of projected or historical base fees and incentive fees, depending on the timing of termination during the term.
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Operadora GIC I may terminate the GIC I Hotel Management Agreement (Mondrian), subject to applicable cure periods, upon specified events of default by Ennismore, including material covenant breaches,
insolvency events, sanctions/compliance-related “Prohibited Person” events, and certain performance test failures (subject to Ennismore’s cure right through payment of the applicable shortfall). In the event of termination due to an
insolvency default by Ennismore, repayment of the unamortized Access Fee Contribution is waived.
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Governing Law
The GIC I Hotel Management Agreement (Mondrian) is governed by the laws of Mexico. Disputes arising out of or in connection with the agreement are subject to ICC
arbitration seated in Miami, Florida, conducted in English, following a mandatory mediation period.
GIC I Lease Agreement
On September 5, 2019, the GIC I Trust entered into a lease agreement with Operadora GIC I pursuant to which the GIC I Trust leases the GIC I Hotel’s properties to Operadora GIC I, both
restricted subsidiaries under the Indenture, for a period of 20 years.
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Key Terms
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As long as the lessee is in compliance with the terms of the GIC I Lease Agreement, the parties may agree to extend the agreement.
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The lessee will pay a variable rent equivalent to variable rent equivalent to 98% of the gross revenue, payable within the first four months of each year. The variable rent pending from the previous year
has priority in order of payment, followed by the variable rent.
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The rent may be paid in pesos, calculated at the exchange rate published by the Mexican Central Bank on the previous business day to the payment date.
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The rent amount, terms and conditions are revisited every three years in order to take into consideration inflation rates and market conditions, among others. The rent structure may be modified if there is
a change in law, with the lessor’s prior written consent.
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There shall be monthly interest payments in case of delayed payment of rent, in accordance with the legal interest rate (9% per annum) provided under the Federal Civil Code.
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The GIC I Lease Agreement contains terms and conditions customary for a transaction of its nature, pursuant to which the lessee, among others, will: (i) allow the lessor to inspect the GIC I Hotel; (ii)
comply with any law or requirement (including environmental laws); (iii) leave and deliver GIC I Hotel’s properties to the lessor in the same condition as delivered; (iv) maintain necessary permits, licenses or authorizations for
operation and occupancy of GIC I Hotel’s properties; (v) notify of any judicial or administrative process (including related to compliance with environmental regulations) initiated against any of the parties related to GIC I Hotel’s
properties; (vi) pay and withhold taxes (except those that must be paid by the lessor, pursuant to the GIC I Lease Agreement); (vii) prepare and deliver quarterly and annual financial information. On the other hand, the lessor will: (i)
deliver the derivative and material possession of GIC I Hotel’s properties and allow the use by the lessee; (ii) not interfere with the management and operation of the GIC I Hotel; (iii) maintain GIC I Hotel’s properties in good
conditions, among others.
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The permitted use of GIC I Hotel’s properties is restricted to the use in accordance with the GIC I Hotel Management Agreement, which restricts it to activities typically conducted by a hotel such as
hospitality services, restaurant services, sale of alcoholic and non-alcoholic beverages, among others.
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The permits and licenses required to operate the GIC I Hotel must be obtained and maintained by the lessee or the Hotel Operator.
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The lessee may not assign its rights and obligations without the express, prior written consent of the lessor. However, with the instruction of the Trust Administrator (as defined in the GIC I Lease
Agreement), the lessor may assign its rights and obligations.
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The lessee is authorized to execute sub-leasing agreements for hotel spaces or rooms, as long as they are in compliance with the GIC I Hotel Management Agreement.
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The lessee shall indemnify the lessor, its employees, agents, contractors or consultants, from any claim arising from any harm, disease or death that take place in the GIC I Hotel, as long as not due to the
negligence or bad faith of the lessor; labor claims, payment of taxes due by the lessee, among others specified in the GIC I Lease Agreement.
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If there is an expropriation that makes it impossible to continue to use the GIC I Hotel, any of the parties may terminate the GIC I Lease Agreement.
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Termination Events
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The lessor may terminate the GIC I Lease Agreement at any time, prior instruction of the Trust Administrator (as defined in the GIC I Lease Agreement), with 30 business days’ notice to the lessee. In
addition, the lessor may terminate the GIC I Lease Agreement if the lessee defaults on any of its obligations under the GIC I Lease Agreement, uses GIC I Hotel’s property for a different purpose than allowed or assigns its rights and/or
obligations in favor of a third party, without prior written consent of the lessor, default in the payment of rent, if the lessee becomes insolvent or files for bankruptcy, if the lessee’s assets are frozen or seized pursuant to a
judicial procedure, a change of control in the lessee, or if the GIC I Hotel Management Agreement is terminated and the Hotel Operator is not substituted, among others.
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The Lessor may terminate the agreement by means of a termination notice delivered 30 business days in advance.
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Governing Law
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The GIC I Lease Agreement is governed by the laws of the State of Quintana Roo, Mexico and the parties are subject to the jurisdiction of the courts of Mexico City.
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Finamo Sale and Lease Back Agreements
On February 27, 2023, Murano World, as lessee, Arrendadora Finamo, as lessor, and Marcos Sacal Cohen, as depositary, and Edificaciones BVG as joint and several obligor, entered into a lease
agreement under which the parties establish the terms and conditions based on which the lessor will grant the lessee the temporary use and enjoyment of the goods, its accessories and spare parts for a specific period, as determined in the annexes
(“Finamo Sale and Lease Back Agreement I”).
On October 24, 2023, Murano World, as lessee, Arrendadora Finamo, as lessor, and Marcos Sacal Cohen, as depositary, and Edificaciones BVG as joint and several obligor, entered into a lease
agreement under which the parties establish the terms and conditions based on which the lessor will grant the lessee the temporary use and enjoyment of the goods, its accessories and spare parts for a specific period, as determined in the annexes
(“Finamo Sale and Lease Back Agreement II” and together with the Finamo Sale and Lease Back Agreement I, the “Finamo Sale and Lease Back Agreements”). As of
December 31, 2025, Ps.$318.7 million was outstanding under these agreements.
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Key Terms
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Each of the leases entered into under the Finamo Lease Agreements will be implemented through the execution of the annexes and shall additionally determine the specific elements that must govern each lease,
such as (i) the documentation and precise description of the assets subject to the lease (ii) the amount of the rents that Murano World shall pay to Arrendadora Finamo or its designee (iii) the fixed term and (iv) the breakdown of the
additional concepts that may be applicable to the transaction.
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Murano World must comply with the fixed term of each annex and therefore agrees to cover the rents due as they are generated duly contained in the table of payments in each annex, however, the early
termination of the agreed term or failure to pay the obligations acquired by Murano World shall constitute the payment of the conventional penalty established in each annex.
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The rental amount will be covered by the lessee through installments that will be covered monthly in arrears and will be payable as they accrue.
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Failure to timely pay any amount payable by Murano World or any other document executed in accordance therewith, Murano World shall pay Arrendadora Finamo a default interest of 3% (three percent) on the
amount corresponding to the overdue and unpaid obligations computed from the date on which the payment is due, until the date of effective payment for the number of days elapsed, without prejudice to the right of Arrendadora Finamo to
terminate the Agreement and Exhibits in advance.
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Murano World has, among others, the following obligations (i) obtain the permits, authorizations or licenses necessary for the proper use of the goods, as well as the payment of any taxes, license or permit
that may be applicable for the use and enjoyment of the goods during the validity of the Annexed Contract (as defined in the Finamo Sale and Lease Back Agreement), (ii) repair the damages and harm and hold the lessor harmless from the
possible execution of illegal acts in which the leased property is involved, (iii) obtain broad coverage insurance that covers any risk that the goods may suffer, before the date of delivery of the same and maintain said insurance in
force while the goods are in its possession, (iv) provide quarterly financial statements and annual audited financial statements, (v) inform the lessor of any event that may jeopardize its obligations under thereunder, (vi) refrain from
making any encumbrance, sublease and/or dispose of the goods in any way different from the agreement’s purpose, and (vii) hold the lessor safe and harmless from any liability it may be awarded with respect to damages and/or any loss that
may be caused by any third party from the execution of illegal acts in which the leased property is involved.
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The lessor may require Murano World and the depositary and the joint obligor to subscribe a promissory note in its favor for each executed annex.
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The lessor assign, transfer, discount or transmit by any legal figure each one of the rights and obligations contracted under the Finamo Sale and Lease Back Agreement I. The lessee may not assign or
transfer in any way its rights and obligations thereunder without the express written authorization of the lessor.
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As of the date of this Report, Murano World has failed to make certain lease payments due under the Finamo Sale and Lease Back Agreements. As disclosed above, on October 13, 2025, Finamo and
Arrendadora Finamo initiated a commercial enforcement proceeding (juicio oral mercantil) against Murano PV, Murano World, Edificaciones BVG, Elías Sacal Cababie, and other related parties (Case No.
1057/2025) before the Twentieth Civil Court for Oral Proceedings (Juzgado Vigésimo de lo Civil de Proceso Oral) of Mexico City, in connection with the alleged failure to make (i) principal and interest
payments under the Finamo Loans and (ii) lease payments under the Finamo Sale and Lease Back Agreements. As of the date of this Report, such proceedings are ongoing at the preliminary stage and no final judgment has been issued. On October 13,
2025, the court granted precautionary measures, as well as other interim measures. The Murano Group is contesting such proceedings and is also negotiating definitive settlement agreements Finamo and Arrendadora Finamo regarding a potential
negotiated settlement and resolution of these matters in connection with its ongoing debt restructuring efforts.
Termination Events
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Among others, the following will constitute an event of default by Murano World: (i) any non-compliance with its obligations, (ii) for delay and/or failure to timely pay any consideration or amount due and
payable thereunder, (iii) the seizure of the goods, (iii) bankruptcy, suspension of payment, dissolution or liquidation, (iv) increase the level of leverage shown in the credit risk analysis at the time of approving the transaction and/or
vary the cash coverage on the payment of rents
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Governing Law
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The Finamo Sale and Lease Back Agreement I is governed by the laws of Mexico and the parties are subject to the jurisdiction of the courts of Mexico City. The Finamo Sale and Lease Back Agreement II is
governed by the laws of Culiacán, Sinaloa, México and the parties are subject to the jurisdiction of the courts of Culiacán, Sinaloa, México.
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Coppel Lease Agreement
On November 8, 2023, Operadora GIC I, as lessee, Arrendadora Coppel, as lessor, and Murano World, Edificaciones BVG and Elías Sacal Cababie as joint and several obligors, entered into a lease
agreement under which the parties establish the terms and conditions based on which the lessor will grant the lessee the temporary use and enjoyment of the goods described in the specific contracts that are signed from time to time by the
parties, including of equipment, their accessories and spare parts, and under which, additionally, the lessee will have the obligation to pay to the lessor the rental amount. As of December 31, 2025, Ps.$151.3 million was outstanding under this
agreement.
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Key Terms
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Each of the leases that are formalized under the lease will be implemented through the execution of annexed contracts. The term of the annexed contracts will be of 60 months.
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As consideration for the use and enjoyment of the goods, the lessee will pay the lessor the amount of the Lease without considering the VAT. The amount of the Lease will be that established under the
corresponding item in the annexed contracts.
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The rental amount will be covered by the lessee through installments that will be covered monthly in arrears and will be payable as they accrue.
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In the event that the lessee does not make the corresponding payment, a daily default interest will be charged from the date of default and until full payment on the amounts owed at the monthly rate agreed
in each Annexed Contract.
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Operadora GIC I has, among others, the following obligations: (i) obtain the permits, authorizations or licenses necessary for the proper use of the goods, as well as the payment of any taxes, license or
permit that may be applicable for the use and enjoyment of the goods during the validity of the Annexed Contract, (ii) repair the damages and harm and hold the lessor harmless from the possible execution of illegal acts in which the
leased property is involved, (iii) obtain broad coverage insurance that covers any risk that the goods may suffer, before the date of delivery of the same and maintain said insurance in force while the goods are in its possession.
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As of the date of this Report, Operadora GIC I has failed to make certain lease payments due under the Coppel Lease Agreement. As disclosed above, such failure has not resulted in a formal
acceleration of the amounts outstanding thereunder by Arrendadora Coppel as of the date hereof. Currently, Operadora GIC I is in active negotiations with Coppel to restructure or settle the terms of the Coppel Lease Agreement.
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Termination Events
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The Coppel Lease Agreement shall terminate by express agreement by the parties or if there is theft or total loss of the leased goods.
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Among others, the following will constitute an event of default by Operadora GIC I: (i) any non-compliance with its obligations, (ii) the seizure of the goods, (iii) using the goods for a purpose other than
that agreed upon, (iv) subletting the goods, (v) bankruptcy, suspension of payment, dissolution or liquidation, (vi) failure to make repairs or maintenance services to the goods, (vii) loss or deterioration of goods, and (viii) failure to
comply with any other financing granted by Arrendadora Coppel or any other financial institution.
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Governing Law
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The Coppel Lease Agreement is governed by Mexican laws and the parties are subject to the jurisdiction of the courts of Mexico City.
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GIC I Supervision Agreement
On October 1, 2019, Ideurban entered into a services agreement with the GIC I Trust whereby the GIC I Trust retains the services of Ideurban who shall provide all services necessary for the
development of the GIC I Hotel.
The GIC I Supervision Agreement is no longer in effect. The services originally contemplated thereunder have been substantially completed, and the Company has subsequently entered into separate
guaranteed maximum price construction agreements in connection with the hotel and residential components of the reconfiguration of the GIC I Hotel as part of the contemplated 2031 Notes Restructuring and the Restructuring Project.
Guaranteed Maximum Price Construction Agreement (Hotel Component)
On January 1, 2026, GIC I Trust, as client, and Ideurban, as contractor, entered into a Guaranteed Maximum Price Construction Agreement (the “GIC GMP
Construction Agreement (Hotel)”), pursuant to which the parties agreed the terms and conditions under which the contractor will carry out the construction and reconversion works for a Mondrian-branded hotel, consisting of the conversion
of an existing property and the opening of 166 guest rooms, in accordance with the standards, guidelines, and technical, architectural and operational specifications designated or approved from time to time by the hotel operator. Such works
include the hotel’s common and service areas (such as the lobby, reception, restaurants, bars, meeting and event rooms, administrative areas, back-of-house areas, kitchens, personnel facilities and other complementary installations), together
with all works, adaptations, remodeling, installations, equipment and finishes necessary for the proper operation of the hotel.
Key Terms:
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The GIC GMP Construction Agreement (Hotel) will remain in effect from its execution date until the full performance of all obligations of the parties thereunder and under its annexes. The agreed execution
term runs from February 1, 2026 through February 1, 2027, subject to any extensions duly agreed by the parties in accordance with the agreement.
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The GIC GMP Construction Agreement (Hotel) is subject to a condition precedent (condición suspensiva) consisting of the execution, in definitive and binding terms,
of the applicable Hotel Management Agreement with Ennismore or with an entity designated by such operator as its authorized affiliate or assignee. In the event that the condition precedent is not satisfied within the period agreed by the
parties, or, in the absence of such agreement, within a reasonable period consistent with the nature of the project, the GIC GMP Construction Agreement (Hotel) shall become null and void by operation of law, without liability to either
party and without giving rise to any penalty, indemnification or claim of any nature.
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As consideration for the full completion of the works, GIC I Trust will pay the contractor a guaranteed maximum price of U.S.$15,000,004.16, inclusive of VAT. The contract price includes all direct and
indirect costs and general expenses budgeted to be incurred by the contractor in connection with the performance of the works, and may be modified only through a Change Order issued by GIC I Trust in accordance with the terms of the
agreement.
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The contract price will be paid by GIC I Trust through biweekly estimates, each representing no less than 5% of the total contract price, which will initially be financed by the contractor and become
payable following submission of the first two estimates, provided that (i) such estimates have been approved by GIC I Trust in accordance with the work schedule, and (ii) they are accompanied by the progress reports required under the
work logbook. From each estimate, GIC I Trust will deduct the proportional amount corresponding to the guarantee fund, equal to 5% of the amount otherwise payable, which will be released upon total completion of the works, technical
close-out and delivery of the documentary evidence of compliance with applicable law as set forth in the agreement.
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In the event of any delay in the commencement of the work schedule, in the progress of the work schedule or in the completion of the works, the contractor will pay GIC I Trust, or GIC I Trust may offset
against pending invoices, a delay penalty equal to 2% per week of the value of the delayed works for each week of non-compliance, until the relevant breach ceases. Aggregate contractual penalties may not exceed, jointly or severally, 20%
of the total contract value, upon reaching which threshold the agreement will be terminated. In the event of abandonment of the works or termination of the agreement attributable to the contractor, the contractor will pay GIC I Trust a
penalty equal to 20% of the contract price.
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The contractor will provide, through its subcontractors, the guarantees applicable to the performance of its obligations under the agreement, which must be delivered within ten (10) business days following
execution of the agreement, to the satisfaction of GIC I Trust.
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Ideurban has, among others, the following obligations: (i) to perform the construction works in strict compliance with applicable construction regulations and the standards, guidelines and specifications
designated by the hotel operator; (ii) to obtain, at its own responsibility and cost, all permits and licenses necessary for the execution of the works; (iii) to provide, at its sole cost and expense, all materials, labor, resources and
equipment required for the incorporation, performance, execution and installation of all elements of the works, whether expressly described or reasonably inferable from the contract documents; (iv) to maintain at the work site a project
manager and qualified supervisor during execution of the works; (v) to assume, at its sole cost and expense, all obligations for the payment of taxes, salaries, social security contributions, INFONAVIT, SAR, payroll tax and all labor
benefits and obligations owed to its personnel and the personnel of its subcontractors; (vi) to perform the works in accordance with applicable environmental legislation, including the handling of hazardous materials and waste in
compliance with applicable regulations; and (vii) to guarantee the quality and use of the works and remedy any defects, hidden defects and imperfections during a 12-month warranty period commencing on the date of total completion of the
works.
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Termination Events:
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The GIC GMP Construction Agreement (Hotel) will terminate upon the execution by the parties of the Acceptance Certificate of Totally Completed Works, upon termination by GIC I Trust for cause, upon early
termination by GIC I Trust upon five (5) calendar days’ prior notice, upon total or partial suspension ordered by GIC I Trust, or upon the occurrence of a force majeure event lasting more than 30 calendar days that prevents the
construction or development of the works.
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Among others, the following will constitute events of default by Ideurban: (i) failure to commence the construction works within fifteen (15) business days following the written notice to proceed issued by
GIC I Trust; (ii) failure to substantially complete the works within the term set forth in the agreement; (iii) unjustified delay exceeding fifty (50) calendar days in any milestone set forth in the Work Program; (iv) accrual of
contractual penalties equal to 20% of the contract price; (v) failure to timely comply with any obligation under the agreement or its annexes; (vi) subcontracting of the entirety of the works without the prior consent of GIC I Trust;
(vii) bankruptcy, insolvency, dissolution or liquidation; (viii) failure to obtain or maintain the required insurance policies; (ix) suspension of the execution of the works for reasons other than force majeure events or those
specifically provided in the agreement; (x) strike by the contractor’s workers or those of its subcontractors; (xi) failure to comply with social security, INFONAVIT and payroll tax obligations; (xii) violation of applicable laws; (xiii)
payment by the contractor of indemnification amounts equal to 100% of the contract price; and (xiv) failure to comply with the requirements and requests of the external advisor designated by GIC I Trust.
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Governing Law:
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The GIC GMP Construction Agreement (Hotel) is governed by the laws of Mexico. The parties are subject to the mediation procedure set forth in the agreement and, if the dispute remains unresolved, to the
applicable laws and jurisdiction of the federal courts of Mexico City, waiving any other jurisdiction that may otherwise correspond to them.
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Guaranteed Maximum Price Construction Agreement (Residential Condos Component)
On January 1, 2026, GIC I Trust, as client, and Ideurban, as contractor, entered into a Guaranteed Maximum Price Construction Agreement (the “GIC GMP
Construction Agreement (Residential)”), pursuant to which the parties agreed the terms and conditions under which the contractor will carry out the adaptation and rehabilitation works for the construction of a residential project
comprising 328 residential apartments in Cancún, Quintana Roo, including common areas and spaces (such as lobbies, amenity areas, multi-purpose rooms, gyms, recreational areas, green areas, swimming pools, terraces, service areas, storage areas
and other complementary facilities, including commercial or service areas as contemplated in the project).
Key Terms:
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The GIC GMP Construction Agreement (Residential) will remain in effect from its execution date until the full performance of all obligations of the parties thereunder and under its annexes. The agreed
execution term runs from January 1, 2026 through July 1, 2027, subject to any extensions duly agreed by the parties in accordance with the agreement.
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The GIC GMP Construction Agreement (Residential) is subject to a condition precedent (condición suspensiva) consisting of the execution, in definitive and binding
terms, of the applicable Hotel Management Agreement with Mondrian or with an entity designated by such operator as its authorized affiliate or assignee. In the event that the condition precedent is not satisfied within the period agreed
by the parties thereto, or, in the absence of such agreement, within a reasonable period consistent with the nature of the project, the GIC GMP Construction Agreement (Residential) shall become null and void by operation of law, without
liability to either party and without giving rise to any penalty, indemnification or claim of any nature.
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As consideration for the full completion of the works, GIC I Trust will pay the contractor a guaranteed maximum price of U.S.$42,700,238.00, inclusive of VAT. The contract price includes all direct and
indirect costs and general expenses budgeted to be incurred by the contractor in connection with the performance of the works, and may be modified only through a Change Order issued by GIC I Trust in accordance with the terms of the
agreement.
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The contract price will be paid by GIC I Trust through biweekly estimates, each representing no less than 5% of the total contract price, which will initially be financed by the contractor and become
payable following submission of the first two estimates, provided that (i) such estimates have been approved by GIC I Trust in accordance with the work schedule, and (ii) they are accompanied by the progress reports required under the
work logbook. From each estimate, GIC I Trust will deduct the proportional amount corresponding to the guarantee fund, equal to 5% of the amount otherwise payable, which will be released upon total completion of the works, technical
close-out and delivery of the documentary evidence of compliance with applicable law as set forth in the agreement.
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In the event of any delay in the commencement of the work schedule, in the progress of the work schedule or in the completion of the works, the contractor will pay GIC I Trust, or GIC I Trust may offset
against pending invoices, a delay penalty equal to 2% per week of the value of the delayed works for each week of non-compliance, until the relevant breach ceases. Aggregate contractual penalties may not exceed, jointly or severally, 20%
of the total contract value, upon reaching which threshold the agreement will be terminated. In the event of abandonment of the works or termination of the agreement attributable to the contractor, the contractor will pay GIC I Trust a
penalty equal to 20% of the contract price.
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The contractor will provide, through its subcontractors, the guarantees applicable to the performance of its obligations under the agreement, which must be delivered within ten (10) business days following
execution of the agreement, to the satisfaction of GIC I Trust.
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| • |
Ideurban has, among others, the following obligations: (i) to perform the construction works in strict compliance with applicable construction regulations; (ii) to obtain, at its own responsibility and
cost, all permits and licenses necessary for the execution of the works; (iii) to provide, at its sole cost and expense, all materials, labor, resources and equipment required for the incorporation, performance, execution and installation
of all elements of the works, whether expressly described or reasonably inferable from the contract documents; (iv) to maintain at the work site a project manager and qualified supervisor during execution of the works; (v) to assume, at
its sole cost and expense, all obligations for the payment of taxes, salaries, social security contributions, INFONAVIT, SAR, payroll tax and all labor benefits and obligations owed to its personnel and the personnel of its
subcontractors; (vi) to perform the works in accordance with applicable environmental legislation, including the handling of hazardous materials and waste in compliance with applicable regulations; and (vii) to guarantee the quality and
use of the works and remedy any defects, hidden defects and imperfections during a 12-month warranty period commencing on the date of total completion of the works.
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Termination Events:
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The GIC GMP Construction Agreement (Residential) will terminate upon the execution by the parties of the Acceptance Certificate of Totally Completed Works, upon termination by GIC I Trust for cause, upon
early termination by GIC I Trust upon five (5) calendar days’ prior notice, upon total or partial suspension ordered by GIC I Trust, or upon the occurrence of a force majeure event lasting more than 30 calendar days that prevents the
construction or development of the works.
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Among others, the following will constitute events of default by Ideurban: (i) failure to commence the construction works within fifteen (15) business days following the written notice to proceed issued by
GIC I Trust; (ii) failure to substantially complete the works within the term set forth in the agreement; (iii) unjustified delay exceeding fifty (50) calendar days in any milestone set forth in the Work Program; (iv) accrual of
contractual penalties equal to 20% of the contract price; (v) failure to timely comply with any obligation under the agreement or its annexes; (vi) assignment of its rights or obligations, or subcontracting of the entirety of the works,
without the prior consent of GIC I Trust; (vii) bankruptcy, insolvency, dissolution or liquidation; (viii) failure to obtain or maintain the required insurance policies; (ix) suspension of the execution of the works for reasons other than
force majeure events or those specifically provided in the agreement; (x) strike by the contractor’s workers or those of its subcontractors; (xi) failure to comply with social security, INFONAVIT and payroll tax obligations; (xii)
violation of applicable laws; (xiii) payment by the contractor of indemnification amounts equal to 100% of the contract price; and (xiv) failure to comply with the requirements and requests of the external advisor designated by GIC I
Trust.
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Governing Law:
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The GIC GMP Construction Agreement (Residential) is governed by the laws of Mexico. The parties are subject to the mediation procedure set forth in the agreement and, if the dispute remains unresolved, to
the applicable laws and jurisdiction of the federal courts of Mexico City, waiving any other jurisdiction that may otherwise correspond to them.
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GIC I Master Construction Agreement
On January 25, 2019, Edificaciones BVG entered into a construction agreement with the GIC I Trust (the “GIC I Master Construction Agreement”).
Arising from the Termination Agreement dated as of January 1, 2026, the GIC I Master Construction Agreement is no longer in effect. The construction works originally contemplated thereunder
have been substantially completed, and the Company has subsequently entered into separate guaranteed maximum price construction agreements in connection with the hotel and residential components of the reconfiguration of the GIC I Hotel as part
of the contemplated 2031 Notes Restructuring and the Restructuring Project.
GIC II
GIC II Hotel
Under the previous development plan, Murano intended to develop another hotel as part of phase two of the GIC Complex, the GIC II Hotel. Accordingly, Murano previously entered into the GIC II
Hotel Management Agreement for the operation of the GIC II Hotel; however, in light of recent market developments and the Company’s strategic focus on residential development and commercialization, Murano has halted the development of the GIC II
Hotel in order to prioritize the GIC Condominiums. The Company intends to terminate the GIC II Hotel Management Agreement in connection with the contemplated 2031 Notes Restructuring. As a result, the GIC II Hotel Management Agreement may be
amended or terminated in connection with the implementation of the 2031 Notes Restructuring.
GIC II Hotel Management Agreement
On August 23, 2021, Operadora GIC II entered into a hotel management agreement with AMR Operaciones MX, S. de R.L. de C.V. (Hyatt Inclusive Collection), as hotel manager, pursuant to which the
hotel manager will operate the GIC II Hotel for a period of 15 mandatory years starting on the date on which the hotel manager gives notice of receipt of the GIC II Hotel or February 1, 2024, whatever occurs later, with the possibility of a
subsequent five year extension (as amended, supplemented or otherwise modified from time to time). The effectiveness of the GIC II Hotel Management Agreement is subject to the satisfaction of certain conditions precedent, including obtaining the
financing for the development of the IGC II Hotel. Murano has not yet commenced the process of securing such financing.
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Key Terms
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| • |
Hyatt Inclusive Collection will have, in the name and on behalf of Operadora GIC II, the control and faculty to make decisions regarding the operation and commercialization, maintaining the control, as well
as the management, over such activities and over all the GIC II Hotel’s assets.
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| • |
The hotel will be designed to the Hyatt Inclusive Collection standards specified in the GIC II Hotel Management Agreement.
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Operadora GIC II will maintain operating capital equal to the amount agreed in the Approved Annual Budget and make the necessary equity contributions for the operation of the hotel and to cover all
applicable pre-operative costs.
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Hyatt Inclusive Collection will be entitled to an administrative fee equal to 3% of annual gross revenue and an incentive fee equal to 10% of gross profit.
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The employees of the GIC II Hotel will work under the supervision of Hyatt Inclusive Collection but shall be considered from a labor perspective to be under Operadora GIC II.
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Operadora GIC II must obtain insurance as specified in the GIC II Hotel Management Agreement, including for litigation and damages to the GIC II Hotel.
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Operadora GIC II will reimburse Hyatt Inclusive Collection for (i) commercialization and sales costs (up to 6.0% of annual gross revenues paid monthly), (ii) expenses related to sales generated through the
call center and website set up by Hyatt Inclusive Collection which will amount to 5% of sales generated through that conduit, and (iii) reimbursement for group services.
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Any late payments due to Hyatt Inclusive Collection will carry a 12% interest per year.
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Hyatt Inclusive Collection will have a right of first refusal if we decide to sell the hotel. Pursuant to this right, it will be entitled to a 60-day due diligence period.
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| • |
Hyatt Inclusive Collection will have the right to assign its rights and obligations under the GIC II Hotel Management Agreement to an affiliate, subsidiary or related party, without the need to obtain prior
consent from Operadora GIC II, as long as the assignee proves that it has control of Hyatt Inclusive Collection and the necessary experience to operate the hotel.
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Operadora GIC II has the right to assign our rights and obligations under the GIC II Hotel Management Agreement to an affiliate, subsidiary or related party, without the need to obtain prior consent from
Hyatt Inclusive Collection.
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| • |
Except for the rights and obligations under the financing documents, we may not sell, assign, transfer or in any other way alienate the rights that correspond to the hotel, either through sale or any other
form of disposition of the hotel, of the shares and/or any other similar corporate interest during the first 2 (two) years of the initial period.
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| • |
Termination Events
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Hyatt Inclusive Collection may terminate the GIC II Hotel Management Agreement under the following circumstances (each subject to a 30-day cure period, except for (i) non-payment of fees or reimbursements,
(ii) failure to maintain the required operating capital, (iii) insolvency or bankruptcy, (iv) loss of material permits affecting operations, (v) failure to obtain and/or maintain insurance coverage, (vi) failure to provide the amounts
required for the operation of the GIC II Hotel, (vii) interference with Hyatt Inclusive Collection’ operations, and (viii) interference with Hyatt Inclusive Collection’s activities under the GIC II Hotel Management Agreement; (xi) failure
to notify the payment priority under the GIC II Hotel Management Agreement (x) failure to meet construction milestones. In such events and if Hyatt Inclusive Collection terminates the GIC II Hotel Management Agreement, Operadora GIC II
shall pay to Hyatt Inclusive Collection, as determined by the latter, (a) damages; or (b) a penalty as described below:
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| • |
Before the first year following the execution: U.S.$10 million;
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Following the first year and before the fourth year following the execution: the result of multiplying by three the total sum of the Administration Fee and the incentive fee for the last 12 months; and
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After the fourth year following the execution: the sum of the Administration Fee and the incentive fee for the last 12 months.
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Operadora GIC II may terminate the GIC II Hotel Management Agreement under the following circumstances (each subject to a 30-day cure period): (i) Hyatt Inclusive Collection fails to make the guaranteed
payments, (ii) insolvency or bankruptcy of Hyatt Inclusive Collection, (iii) Hyatt Inclusive Collection abandons the hotel premises, (iv) Hyatt Inclusive Collection fails to renew any permits affecting operations; (v) Hyatt Inclusive
Collection fails to meet at least 85% of gross operating profit for two consecutive years and does not cover the shortfall.
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Governing Law
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| • |
The GIC II Hotel Management Agreement is governed by the laws of Mexico.
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GIC Complex’s Adjacent Amenities
GIC World Trade Center Sublicense Agreement
On January 15, 2020, the GIC I Trust entered into a sublicense agreement with Frana Management, S.A.P.I. de C.V. (“Frana”), pursuant to which Frana granted the GIC I Trust an exclusive
sublicense for the use and exploitation of the following trademarks: (i) World Trade Center Cancun, (ii) WTC Cancun, and (iii) the logo (the “Sublicensed Property”) for a period of 10 years starting on the
date on which the conditions precedent referred below are fulfilled (the “GIC World Trade Center Sublicense Agreement”).
The GIC World Trade Center Sublicense Agreement was early terminated after the conditions for termination were met, namely: (i) the Company failed to commence use of the sublicensed property
within four (4) years following the effective date of the agreement; and (ii) the Company failed to make the corresponding IP-related payments. Such termination was effected without liability to either party, and the parties remain open to
negotiating and entering into a new agreement in the future.
Description of Certain Financing Agreements
See “Item 5. –Operating and Financial Review and Prospects” for a discussion of the main provisions of our financing agreements relating to our
properties, including provisions whereby some of our properties are pledged as collateral under such financings.
| ITEM 4A. |
UNRESOLVED STAFF COMMENTS
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None / Not Applicable.
| ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
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| A. |
Operating Results
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You should read the following discussion in conjunction with the Consolidated and Combined Financial Statements, as well as the other parts of this Report: “Presentation of
Financial and Other Information” and “Item 5—Operating and Financial Review and Prospects” for information regarding our financial statements, exchange rates, definitions of technical terms and other introductory matters.
Certain information contained herein, including information with respect to our plans and expectations for our business and the Properties, are forward-looking statements
and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in such forward-looking statements. You should consider carefully the factors set forth
under “Cautionary Statement Concerning Forward Looking Statements” and “Risk Factors” for a discussion of important factors that could cause actual results to differ materially from any forward-looking statements contained in this Report.
Overview
On March 20, 2024, Murano PubCo, completed the Business Combination described in more detail under “Item 4. Information on the Company-A. History and
Development of the Company-Business Combination.” As a result, on March 21, 2024, Murano’s ordinary shares and warrants commenced trading on Nasdaq under the symbols, “MRNO” and “MRNOW,” respectively.
Murano Group is an international development corporate group with extensive experience in the structuring, development and assessment of industrial, residential, corporate office, and hotel
projects in Mexico with a vision to create competitive and leading investment vehicles for the acquisition, consolidation, operation, and development of real estate assets. We also provide comprehensive services, including the execution,
construction, management, and operation of a wide variety of industrial, business, tourism real estate projects, among others. We have a national footprint and international outreach aimed at institutional real estate investors.
We were formed primarily to develop and manage a portfolio of hotel and resort properties in Mexico City, Cancun, and Ensenada. We currently own (i) Operational Hotels in Mexico City and
Cancun, (ii) a Project Under Completion in Cancun and (iii) Projects to be Developed in Cancun and Ensenada.
As discussed under “Item 4.A—Recent Developments—Potential Corporate Reorganization,” following the completion of the contemplated debt restructuring,
management has considered a potential corporate reorganization, and any such reorganization may involve transactions between affiliated entities, subject to applicable approvals and definitive documentation. Any such corporate
reorganization has not been finalized and may not be pursued or consummated. Accordingly, the description of our current operations in this Item 4.B reflects the Group’s existing portfolio and business as of the date of this Report.
Operational Hotels
Our current portfolio of Operational Hotels consists of:
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Andaz Hotel: the Andaz Mexico City Condesa operated by Hyatt, is part of the Insurgentes 421 Hotel Complex in Mexico City. Completed in 2022 and has been operational
since the first quarter of 2023, the Andaz Hotel has 213 rooms and several amenities, including a sky bar “Cabuya Rooftop”, multiple restaurants, an auditorium, breakout rooms, a business center, a pet friendly area and restaurant
for pets, the “Wooftop”, a gym and a spa. It also has a 954.31 sqm ballroom with a crystal dome with a capacity for 49 tables and 588 guests.
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Mondrian Hotel: the Mondrian Mexico City Condesa operated by Accor, is part of the Insurgentes 421 Hotel Complex in Mexico City. Completed in 2022 and has been
operational since the first quarter of 2023, the Mondrian Hotel has 183 rooms and several amenities, including “Distrito Mondrian” meeting rooms, a “Terraza” bar and a “Flower Shop” coffee shop.
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Vivid Hotel: the Hyatt Vivid Grand Island operated by Hyatt is part of the GIC I Hotel in the GIC Complex in Cancun. Completed and operational since April 2024, the
Vivid Hotel is an adult-only brand all-inclusive hotel categorized as five-star upper scale with 400 rooms and several amenities, including one main buffet, one coffee shop, the vantage club for VIPs, seven specialty restaurants,
six bars, gym, spa, one retail shop, and 1,010 sqm space for events.
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The Grand Island Beach Club is part of the GIC Complex in Cancun and commenced operations in April 2024. The Beach Club provides services to the Vivid Hotel and will provide services to other
hotel and/or hospitality components within the GIC Complex from time to time, including any future hotels, Residential Condos or other components that may be developed or reconfigured as part of the contemplated 2031 Notes Restructuring.
Project Under Completion
The Murano Group is also developing the Project Under Completion. In light of recent market conditions and the evolving market outlook, the Murano Group’s management and board of directors
have revised the Group’s strategic development pipeline to prioritize the development and commercialization of condominiums (residential units), which we believe better serves the interests of the Group’s shareholders.
The GIC Complex has historically been described as being developed in two phases. Phase one was initially planned to include 1,016 hotel rooms under two brands: (i) 400 rooms, which are
operational under the “Vivid” brand, an adults-only concept, and (ii) 616 rooms, which were planned to operate under the “Dreams” brand, a family-friendly offering. The timing and scope of the Phase one buildout, including any opening
timeline for the Dreams component, have been subject to ongoing review and will be modified and terminated in connection with the contemplated 2031 Notes Restructuring and the related project reconfiguration described below.
The World Trade Center development project previously contemplated as part of the GIC Complex is no longer being pursued following the termination of the related sublicense agreement. See “Item 4.A—Recent Developments—World Trade Center Sublicense Agreement.”
The Group is currently conducting a strategic review of the GIC I Hotel and the broader GIC Complex. While prior plans contemplated the full buildout of 1,016 hotel rooms, the Term Sheet
contemplates the Restructuring Project as a reconfiguration of the GIC Complex (including a hotel with 566 guest rooms and up to 328 Residential Condos). In addition, in connection with the contemplated 2031 Notes Restructuring, we have
entered into the GIC I Hotel Management Agreement (Mondrian) with Ennismore for the operation of the GIC I Hotel, pursuant to which Hyatt is expected to be replaced as operator upon satisfaction of the applicable conditions precedent,
including the effectiveness of the 2031 Notes Restructuring and the termination of the existing GIC I Hotel Management Agreement with Hyatt.
Projects to be Developed
We currently own the following projects that we plan to develop (the “Projects to be Developed”):
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GIC Phase II: Phase two is planned to consist of approximately 1,254 condominiums, divided into four condominium towers with partial views of the ocean, lagoon
and/or adjacent golf course owned by Iberostar. The list of amenities includes pools, tennis court, volleyball court, snack bar, firepits, jungle gym, pet garden, spa, coworking rooms, among others. The Group’s management and board
of directors are continuously evaluating the plan for phase two of the GIC Complex. We expect the development of the first 466 condominiums to cost approximately U.S.$87.2 million.
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Baja Cruise Port: Development of a cruise port with a capacity of 2 million passengers per year. The Group is in early-stage discussions regarding financing terms
with a national bank and has signed an memorandum of understanding with a major global cruise line operator. We expect the development of the Baja Cruise Port to cost approximately U.S.$136 million.
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Baja Marina: Development of a marina consisting on approximately 15,000 linear ft slip spaces. We expect the development of the Baja Marina to cost approximately
U.S.$32 million.
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Baja Retail Village: Development of Baja Retail Village with a leasable area of approximately 45,000 sqm. We expect the development of the Retail Village to cost
approximately U.S.$55 million.
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Resort Property in Baja Development Project: this resort is expected to have two five-star upper-upscale resorts, one with 371 keys and a second one with 400 keys.
Based on preliminary estimates, we expect the development of the Resort Property in Baja Development Project to cost approximately U.S.$180 million. We have not yet begun the process of trying to secure financing for the development
of this project. Therefore, we do not know when and if we will be able to begin construction of this project.
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Baja Park Development Project: this industrial park project in Ensenada, will consist of 363,262 sqm of
leasable space. This project is currently under evaluation, and we have not yet begun the process of trying to secure financing for its development. Therefore, we do not know when and if we will be able to begin construction of this
project. We expect the development of the Baja Park to cost approximately U.S.$122 million.
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The GIC Phase II, the Resort Property in Baja Development Project, the Baja Park Development Project, the Baja Cruise Port, the Baja Marina and the Baja Retail Village are projects that we
plan to develop subject to planning and environmental approvals as well as Murano Group being able to secure financing on acceptable terms.
Our portfolio is expected to be comprised of all-inclusive resorts and residential condominiums, several of which will share the following characteristics: (i) prime beachfront locations; (ii)
convenient air access from a number of North American and other international gateway markets; (iii) strategic locations in popular vacation destinations in Mexico with strong government commitments to tourism; (iv) high quality physical
condition; and (v) capacity for further growth through incremental renovation or repositioning opportunities. We believe that the resorts of our portfolio will have a competitive advantage due to their location, amenities offering,
large-scale and guest-friendly design.
Business Combination
In connection with, and prior to, the Business Combination, on March 1, 2024, Murano converted from a private limited company operating under the name “Murano Global Investments Ltd” into a
public limited company operating under the name “Murano Global Investments PLC”.
Pursuant to the terms of the Business Combination Agreement, among other things, the following transactions occurred: (i) New CayCo merged with and into HCM, the separate corporate existence
of New CayCo ceasing with HCM being the surviving company and a wholly owned direct subsidiary of Murano and (ii) HCM changed its name to “Murano Global Hospitality Corp”. The surviving company is centrally managed and controlled from, and
resident for tax purposes in, the United Kingdom.
In addition, at the effective time of the Merger, (i) each issued and outstanding HCM ordinary share, par value $0.0001 per share was automatically canceled and extinguished, and each holder
of HCM Ordinary Shares received merger rights representing a corresponding number of Murano ordinary shares, no par value per share (the “Murano Ordinary Shares”), and (ii) each issued and
outstanding warrant to purchase one HCM Ordinary Share automatically ceased to represent a right to acquire an HCM Ordinary Share and converted into and represent a right to acquire Murano Ordinary Shares and each Murano Warrant (a) has an
exercise price of $11.50 per whole warrant required to purchase one Murano Ordinary Share, and (b) will expire on the five-year anniversary of the closing date of the Business Combination (i.e., March 20, 2029).
As a result of the foregoing transactions, there were 79,242,873 ordinary shares and 16,875,000 warrants outstanding as of March 20, 2024.
On March 21, 2024, Murano’s ordinary shares and warrants commenced trading on the Nasdaq Stock Market LLC under the symbols, “MRNO” and “MRNOW,” respectively.
The Business Combination was accounted for as a capital reorganization in accordance with IFRS 2 Share-based payment. Under this method of accounting, there is no acquisition accounting and no
recognition of goodwill or intangible assets, as HCM does not meet the definition of a “business” pursuant to IFRS 3 Business Combinations given it consisted predominantly of cash in a trust account.
HCM is treated as the accounting “acquired” company for financial reporting purposes, and Murano PubCo is the accounting “acquirer”. This determination was primarily based on (i) Murano
Group’s shareholders hold a majority of the voting power of Murano PubCo, (ii) Murano Group’s operations substantially comprise the ongoing operations of the combined company, (iii) Murano Group’s designees comprise a portion of the
governing body of Murano PubCo, and (iv) Murano Group’s senior management comprise the senior management of Murano PubCo.
Murano Group Reorganization Prior to Business Combination
Prior to and in connection with the Business Combination, the Murano Group implemented a corporate reorganization consisting of share transfers and assignments of trust rights with the purpose
of, among other aspects, Murano PubCo becoming the shareholder of 99.99% of the stock of Murano PV and Murano PV emerging as the holding company that consolidates all entities of the Murano Group. As a result of the Murano Group
Reorganization, Murano PV controls and consolidates all the Murano Group’s entities.
Pursuant to the Murano Group Reorganization, prior to and in preparation for the share transfers and assignments described below: (i) Murano World, as lender, and Murano PV, as borrower,
entered into a loan agreement for an amount of Ps.$34,419,809.11, to fund Murano PV’s share acquisitions; and (ii) Murano PV carried out a capital reduction in its variable capital stock in the amount of Ps.$16,363,928.
Then, the following share transfers and assignments of trust rights were completed as part of the Murano Group Reorganization:
Murano PV Capital Stock
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ESAGRUP transferred to Murano World 49,999 Series A shares, with a par value of Ps.$1.00 each, representing the fixed capital stock of Murano PV.
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Elías Sacal Cababie transferred to Murano Management one Series A share, with a par value of Ps.$1.00 representing the fixed capital stock of Murano PV.
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Murano World transferred to Murano 49,999 Series A shares, with a par value of Ps.$1.00 each, representing the fixed capital stock of Murano PV.
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ESAGRUP Capital Stock
| • |
Murano World transferred to BVG Infraestructura, S.A. de C.V. one Series A share, with a par value of Ps.$1.00, representing the fixed capital stock of ESAGRUP.
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Murano Management Capital Stock
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Marcos Sacal Cohen transferred to Inmobiliaria Insurgentes 421 one Series A share, with a par value of Ps.$1.00, representing the fixed capital stock of Murano Management.
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Operadora GIC I Capital Stock
| • |
Marcos Sacal Cohen transferred to Murano Management 49,999 Series A shares, with a par value of Ps.$1.00 each, representing the fixed capital stock of Operadora GIC I, as well as 210,001 Series B shares,
with a par value of Ps.$1.00 each, representing the variable capital stock of Operadora GIC I.
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Edgar Armando Padilla Pérez transferred to Murano PV one Series A share, with a par value of Ps.$1.00, representing fixed capital stock of Operadora GIC I.
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Operadora GIC II Capital Stock
| • |
Marcos Sacal Cohen transferred to Murano Management 49,000 Series A shares, with a par value of Ps.$1.00 each, representing the fixed capital stock of Operadora GIC II, as well as 50,000 Series B shares,
with a par value of Ps.$1.00 each, representing the variable capital stock of Operadora GIC II.
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Edgar Armando Padilla Pérez transferred to Murano PV 1,000 Series A shares, with a par value of Ps.$1.00 each, representing fixed capital stock of Operadora GIC II.
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Insurgentes Security Trust Rights
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Assignment of the trust beneficiary rights of Marcos Sacal Cohen in favor of Murano Management with respect to the shares issued by OHI421, contributed by Marcos Sacal Cohen to the Insurgentes Security
Trust.
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Assignment of the trust beneficiary rights of Marcos Sacal Cohen in favor of Murano Management with respect to the shares issued by OHI421 Premium, contributed by Marcos Sacal Cohen to the Insurgentes
Security Trust.
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Assignment of the trust beneficiary rights of ESAGRUP in favor of Murano PV with respect to the shares issued by Inmobiliaria Insurgentes 421, contributed by ESAGRUP to the Insurgentes Security Trust. As
payment for the consideration of such assignment, Murano PV issued a promissory note for the amount of Ps.$542,500,000 in favor of ESAGRUP.
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Assignment of the trust beneficiary rights of Elías Sacal Cababie in favor of Murano PV with respect to the shares issued by Inmobiliaria Insurgentes 421, contributed by Elías Sacal Cababie to the
Insurgentes Security Trust. As payment for the consideration of such assignment, Murano PV issued a promissory note for the amount of Ps.$18,000,000 in favor of Elías Sacal Cababie.
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OHI421 Capital Stock
| • |
Edgar Armando Padilla Pérez transferred to Murano PV one Series A share, with a par value of Ps.$1.00, pledged in favor of Bancomext, representing fixed capital stock of OHI421.
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OHI421 Premium Capital Stock
| • |
Edgar Armando Padilla Pérez transferred to Murano PV one Series A share, with a par value of Ps.$1.00, pledged in favor of Bancomext, representing fixed capital stock of OHI421 Premium.
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Inmobiliaria Insurgentes 421 Capital Stock
| • |
Elías Sacal Cababie transferred to Murano Management one Series A share, with a par value of Ps.$1.00, pledged in favor of Bancomext, representing fixed capital stock of Inmobiliaria Insurgentes 421. As
payment for the consideration of such share transfer, Murano Management issued a promissory note for the amount of Ps.$1,000 in favor of Elías Sacal Cababie.
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Servicios Corporativos BVG, S.A. de C.V. Capital Stock
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ESAGRUP transferred to Murano PV 49,500 Series A shares, with a par value of Ps.$1.00 each, representing the fixed capital stock of Servicios Corporativos BVG, S.A. de C.V.
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Murano World transferred to Murano Management 500 Series A shares, with a par value of Ps.$1.00 each, representing the fixed capital stock of Servicios Corporativos BVG, S.A. de C.V., as well as 27,773,036
Series B shares, with a par value of Ps.$1.00 each, representing the variable capital stock of Servicios Corporativos BVG, S.A. de C.V.
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Edificaciones BVG
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Edgar Armando Padilla Pérez transferred to Murano PV, of one Series A share, with a par value of Ps.$1.00, representing the fixed capital stock of Edificaciones BVG.
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Edgar Armando Padilla Pérez transferred to Murano Management 24,999 Series A shares, with a par value of Ps.$1.00 each, representing the fixed capital stock of Edificaciones BVG.
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Rubén Félix Álvarez Laris transferred to Murano Management 25,000 Series A shares, with a par value of Ps.$1.00 each, representing the fixed capital stock of Edificaciones BVG.
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Murano World
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Elías Sacal Cababie transferred to Murano PV 500 Series A shares, with a par value of Ps.$1.00 each, representing the fixed capital stock of Murano World, as well as 103,267,241 Series B shares, with a par
value of Ps.$1.00 each, representing the variable capital stock of Murano World, and pledged in favor of Sabadell. As payment for the consideration of such share transfer, Murano PV issued a promissory note in the amount of
Ps.$73,000,000 in favor of Elías Sacal Cababie.
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ESAGRUP transferred to Murano PV 49,499 Series A shares, with a par value of Ps.$1.00 each, representing the fixed capital stock of Murano World, as well as 329,704,074 Series B shares, with a par value of
Ps.$1.00 representing the variable capital stock of Murano World. As payment for the consideration of such share transfer, Murano PV issued a promissory note for the amount of Ps.$266,500,000 in favor of ESAGRUP.
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ESAGRUP transferred to Murano Management one Series A share, with a par value of Ps.$1.00, representing the variable capital stock of Murano World. As payment for the consideration of such share transfer,
Murano Management issued a promissory note for the amount of Ps.$1,000 in favor of ESAGRUP.
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As a result of the share transfers and assignments of trust rights related to the Murano Group Reorganization, different entities of the Murano Group issued six promissory notes for a total
amount of Ps.$900,002,000 Three of such promissory notes, for a total amount of Ps.$809,001,000, were issued in favor of ESAGRUP and the remaining three promissory notes, for a total amount of Ps.$91,001,000, were issued in favor of Elías
Sacal Cababie. Consequently, ESAGRUP conducted a capital reduction of its variable capital stock by redeeming 809,001,000 Serie B shares, and reimbursing them to its shareholder, Elías Sacal Cababie. The payment of such reimbursement was
made by endorsing the promissory notes in favor of Elías Sacal Cababie. Subsequently, Elías Sacal Cababie became the sole owner and holder of all promissory notes and capitalized the amounts documented in such notes in Murano, and Murano
then capitalized such amounts in Murano PV, finalizing the Murano Group Reorganization.
Macroeconomic Scenario
For macroeconomic factors that may affect our results of operations and financial condition see “Item 4. Information on the Company-B. Business
Overview-Overview of Mexico and the Mexican Lodging Industry-Macroeconomic Overview.”
The following diagram sets forth our current corporate structure following the Business Combination and related corporate reorganization, including the subsidiaries of Murano PubCo:
Key Business and Financial Metrics Used by Management
Revenue
We derive our revenues from hotel operations. Management uses revenues to assess the overall performance of our business and analyze trends such as consumer demand, brand preference and
competition. For a detailed discussion of the factors that affect our revenues, see the section entitled “-Item 5. Operating and Financial Review and Prospects—A. Operating Results—Principal Components and
Key Factors Affecting Our Results of Operations.”
Net (loss) profit for the period
Net (loss) profit for the period represents the total earnings or income generated by our business. Management uses net income to analyze the performance of our business on a combined basis.
Occupancy
Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels. Occupancy measures the utilization of our hotels’
available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help us determine achievable ADR levels as demand for hotel rooms increases or decreases.
Average Daily Rate (“ADR”)
ADR represents hotel room revenue divided by the total number of room nights sold in a given period. ADR measures the average room price attained by a hotel and ADR trends provide useful
information concerning the pricing environment and the nature of a hotel’s customer base. ADR is a commonly used performance measure in the industry, and we use ADR to assess pricing levels that we are able to generate by type of customer,
as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described above.
Revenue per Available Room (“RevPAR”)
We calculate RevPAR by dividing hotel room revenue by room nights available to guests for a given period. We consider RevPAR to be a meaningful indicator of our performance as it provides a
metric correlated to two key, primary operational drivers at our hotels: Occupancy and ADR. RevPAR is also a useful indicator in measuring performance over comparable periods for comparable hotels.
References to Occupancy, ADR and RevPAR are presented on a comparable basis and references to RevPAR and ADR are presented on a currency-neutral basis (i.e., all periods use the same exchange
rates), unless otherwise noted.
EBITDA and Adjusted EBITDA
EBITDA, presented herein, is a financial measure that is not recognized under IFRS and reflects net (loss) profit for the period, excluding interest expense, income taxes and depreciation and
amortization. We consider EBITDA to be a useful measure of operating performance, due to the significance of our long-lived assets and level of indebtedness.
Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, adjusted to further exclude transaction-related expenses derived from the Business Combination.
EBITDA and Adjusted EBITDA are not recognized terms under IFRS and should not be considered as alternatives to combined net income (loss) or other measures of financial performance or
liquidity derived in accordance with IFRS. In addition, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
We believe EBITDA and Adjusted EBITDA provide useful information to investors about us and our financial condition and results of operations for the following reasons: (i) EBITDA and Adjusted
EBITDA are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions; and (ii) EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other
interested parties as a common performance measure to compare results or estimate valuations across companies in our industry.
EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss), cash flow, or other methods of
analyzing our results as reported under IFRS. Some of these limitations are:
| • |
EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
|
| • |
EBITDA and Adjusted EBITDA do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
|
| • |
EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes;
|
| • |
EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
|
| • |
EBITDA and Adjusted EBITDA do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations;
|
| • |
although depreciation is a non-cash charge, the assets being depreciated will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such
replacements; and
|
| • |
other companies in our industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative measures.
|
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash
available to us to meet our obligations.
Principal Components and Key Factors Affecting Our Results of Operations
Revenue
Principal Components
We primarily derive our revenues from contracts with customers. This represents revenues derived from hotel operations, including room rentals and
food and beverage sales, and other ancillary revenues at our owned properties. These revenues are primarily derived from two categories of customers: transient and group. Transient guests are individual travelers who are traveling for
business or leisure. Our group guests are traveling for group events that reserve rooms for meetings or conferences. Group business usually includes a block of room accommodations, as well as other ancillary services, such as catering and
banquet services. A majority of our food and beverage sales and other ancillary services are provided to customers also occupying rooms at our hotel properties. As a result, occupancy affects all components of our hotel revenues.
Key Factors affecting our Revenues
The following factors affect the revenues we derive from our operations:
Consumer demand for hotels and resorts and economic conditions. Consumer demand for hotels and resorts is closely linked to the performance of the
general economy and is sensitive to business and personal discretionary spending levels. Declines in consumer demand can be the result of a variety of factors, many of which are unpredictable and not under our control, including, but not
limited to:
| • |
changes in general economic conditions, including consumer confidence, income, and unemployment levels resulting from the severity and duration of any downturn in the Mexican, U.S., or global economy;
|
| • |
conditions that might negatively shape public perception of travel in general and particularly in Mexico, including travel-related accidents, outbreaks of a pandemic, or contagious diseases;
|
| • |
political conditions or social unrest, terrorist activities or threats, and heightened travel security measures instituted in response to these events;
|
| • |
other factors affecting or reducing travel patterns;
|
| • |
changes in desirability of the geographic regions of our resorts and/or the geographic concentration of our resorts;
|
| • |
changes in the perception or popularity of the brands associated with us and/or our operations;
|
| • |
other changes in consumer preferences;
|
| • |
security issues or warnings from foreign governments regarding traveling to certain destinations in Mexico; and
|
| • |
unseasonal weather conditions, including natural disasters (such as hurricanes, floods, earthquakes and other adverse weather and climate conditions).
|
Performance of management companies. We depend on management companies, including Accor and Hyatt, to generate revenue from the rent of rooms to
guests, including international guests. While Accor and Hyatt have a successful track record of attracting international guests to properties, declines in the number of international guests or the prices at which we are able to rent rooms
could materially and adversely affect our financial condition and ability to generate revenues.
Competition. Competition for resort guests and the supply of resorts in Mexico City, Cancun, and Ensenada will affect our ability to increase rates
charged to customers at the properties. As a result, changes in consumer demand and general business cycles can expose our revenues to significant volatility.
Seasonality. The hospitality industry is seasonal in nature, which can be expected to cause fluctuations in our room rental revenues, occupancy
levels, room rates, operating expenses, and cash flows. The periods during which the properties experience higher or lower levels of demand will vary from property to property and depend upon location, customer base, and competitive mix
within the specific location.
Direct and selling, general and administrative expenses
Principal Components
Direct and selling, general and administrative expenses. These reflect the operating expenses, including room expenses, food and beverage costs,
operators’ management fees, other support costs, and property expenses. Room expense includes employee benefits for housekeeping, laundry, front desk staff, and supply costs for guest room amenities and laundry. Food and beverage costs
include costs for inventory. Other support expenses consist of costs associated with fees, advertisement, insurance and others. Property expenses include property taxes, depreciation, maintenance and conservation.
Key Factors affecting our Expenses
The key factors that mainly affect the expenses we incur in the course of our operations are the following:
Fixed expenses. Some of the expenses associated with owning hotels are relatively fixed. These expenses include personnel costs, rent, property taxes,
management fees, insurance and utilities. If we are unable to decrease these costs significantly or rapidly when demand for our hotels and other properties decreases, the resulting decline in our revenues can have an adverse effect on our
net cash flow, margins and profits. This effect can be especially pronounced during periods of economic contraction or slow economic growth. The effectiveness of any cost-cutting efforts is limited by the fixed costs inherent in our
business. As a result, we may not be able to offset revenue reductions through cost cutting. In addition, any efforts to reduce costs, or to defer or cancel capital improvements, could adversely affect the economic value of our hotels. We
have taken steps to reduce our fixed costs to levels we feel are appropriate to maximize profitability and respond to market conditions without jeopardizing the overall customer experience or the value of our hotels.
Changes in depreciation expense. Changes in depreciation expense may be driven by renovations of existing hotels, acquisition or development of new
hotels, the disposition of existing hotels through sale or closure, or changes in estimates of the useful lives of our assets. As we place new assets into service, we will be required to record additional depreciation expenses on those
assets.
Other items
Foreign currency exchange rates. We expect that a portion of our revenues will be denominated in U.S. dollars or linked to the U.S. dollar, while most
of our operating expenses will be denominated in pesos. Changes in foreign currency exchange rates may become material to us in the future due to factors beyond our control.
Results of Operations
The discussion below relates to the results of the operations of Murano Group. Murano Group is not a single legal entity, but rather a combination of entities that are intended to reflect, for
the periods presented, the ownership and administration of the Properties that we own.
As of the date of this Report, we have operations in the Insurgentes 421 Hotel Complex and in the GIC I Hotel, which commenced operations with the opening of the Vivid Hotel on April 1, 2024.
Our operating results for the years ended December 31, 2025, 2024 and 2023 are not indicative of future operating results.
Year ended December 31, 2025 Compared to Year ended December 31, 2024
Consolidated and Combined statements of profit or loss and other comprehensive income data
|
For the year ended December 31
|
||||||||
| 2025 |
2024
|
|||||||
|
(In Mexican Pesos)
|
||||||||
|
Revenue
|
$
|
1,140,545,581
|
729,953,807
|
|||||
|
Direct and selling, general and administrative expenses:
|
||||||||
|
Employee Benefits
|
401,778,649
|
325,521,012
|
||||||
|
Food & Beverage and service cost
|
197,024,058
|
98,441,323
|
||||||
|
Sales commissions
|
33,768,039
|
37,592,689
|
||||||
|
Management fees operators
|
49,833,623
|
23,928,681
|
||||||
|
Depreciation and amortization
|
288,435,624
|
329,768,815
|
||||||
|
Property tax
|
10,142,579
|
12,444,214
|
||||||
|
Fees
|
141,418,293
|
151,697,897
|
||||||
|
Administrative fees
|
4,959,645
|
17,540,773
|
||||||
|
Maintenance and conservation
|
86,739,866
|
52,727,323
|
||||||
|
Utility expenses
|
65,615,925
|
67,542,771
|
||||||
|
Advertising
|
48,724,597
|
53,064,373
|
||||||
|
Donations
|
5,557,586
|
7,842,770
|
||||||
|
Insurance
|
46,691,939
|
35,771,206
|
||||||
|
Software
|
1,455,708
|
6,948,956
|
||||||
|
Cleaning and laundry
|
11,714,562
|
11,301,594
|
||||||
|
Bank commissions
|
36,171,936
|
31,109,553
|
||||||
|
Replacement reserve (FF&E & OS&E)
|
35,351,511
|
9,284,517
|
||||||
|
Operating supplies and equipment
|
467,571
|
21,804,534
|
||||||
|
Other costs
|
84,880,479
|
98,197,243
|
||||||
|
Total direct and selling, general and administrative expenses
|
1,550,732,190
|
1,382,530,244
|
||||||
|
Other income
|
83,781,863
|
190,235,287
|
||||||
|
Other expenses
|
(2,158,802
|
)
|
(5,474,442
|
)
|
||||
|
Listing expense
|
-
|
(917,366,970
|
)
|
|||||
|
Gain (loss) on revaluation of investment property
|
75,000,000
|
239,508,510
|
||||||
|
Change in fair value of financial derivative instruments
|
-
|
(43,348,480
|
)
|
|||||
|
Change of fair value of warrants
|
63,526,324
|
(51,946,426
|
)
|
|||||
|
Change in fair value of financial crypto assets
|
1,040,259
|
-
|
||||||
|
Exchange rate (loss) income, net
|
1,354,424,857
|
(1,492,245,569
|
)
|
|||||
|
Interest income
|
14,403,106
|
34,942,822
|
||||||
|
Interest expense
|
(1,465,110,800
|
)
|
(797,018,177
|
)
|
||||
|
Loss before income taxes
|
(285,279,802
|
)
|
(3,495,289,882
|
)
|
||||
|
Income taxes
|
2,899,267
|
(72,675,696
|
)
|
|||||
|
Net loss for the period
|
$
|
(282,380,535
|
)
|
(3,567,965,578
|
)
|
|||
Revenue: Revenue amounted to Ps.$1,140.5 million for the year ended December 31, 2025, an increase of Ps.$410.6 or 56.2% from Ps.$730.0 million from the year ended
December 31, 2024. The increase is mainly attributable to growth of operations of the Vivid Hotel, also known as the ramp-up period, which generated revenue of Ps.$561.5 million. The remaining increase is mainly related to the continuing
operations of the Andaz Hotel and the Mondrian Hotel, which amounted to Ps.$412.5 million for the year ended December 31, 2025, compared to Ps.$ 296.2 million for the year ended December 31, 2024, and Ps.$192.8 million for the year ended
December 31, 2025, compared to Ps.$ 168.1 million for the year ended December 31, 2024, respectively. The Vivid hotel’s revenue during 2025 was Ps.$561.5 million, comprising: (1) 81.3% package income, and (2) 18.7% non-package income. The
Andaz hotel’s revenue during 2025 was Ps.$412.5 million, comprising: (1) 66.2% room income, (2) 28.2% food and beverage income, and (3) 5.6% other income. The Mondrian Hotel´s revenue during 2025 was Ps.$192.8 million, comprising (1) 83.9%
room income, (2) 13.0% food & beverage income, and (3) 3.1% other income.
Employee Benefits: Employee benefits amounted to Ps.$401.8 million for the year ended December 31, 2025, an increase of Ps.$ 76.3 or 23.4% from the year ended
December 31, 2024. The increase is mainly attributable to increase in payroll related expenses since the commencement of hotel operations of the Vivid hotel in April 2024, now reflecting its natural ramp up period growth. Our employee
benefits cost of sales consisted of salaries of Ps.$357.0 million for the year ended December 31, 2025, an increase of Ps.$11.6 million compared to Ps.$345.4 million for the year ended December 31, 2024; social security and employee food
expenses represented the remaining Ps.$44.8 million for the year ended December 31, 2025, a decrease of Ps.$12.5 million compared to Ps.$57.3 million for the year ended December 31, 2024.
Food & Beverage and service cost: Food & beverage and service cost amounted to Ps.$ 197.0 million for the year ended December 31, 2025, an increase of Ps.$
98.6 million or 100.1% from Ps.$ 98.4 million for the year ended December 31, 2024. The increase is food & beverage and service cost is mainly attributable to the natural growth in operations of the Vivid hotel, following its ramp-up
period after its commencement of operations in April 2024. The Vivid hotel food & beverage and service cost for the year ended December 31, 2025 was of Ps.$95.4 million, an increase of Ps.$50.7 million compared to Ps.$62.8 million for
the year ended December 31, 2024. The Andaz Hotel food & beverage and service cost for the year ended December 31, 2025 was of Ps.$66.7 million, an increase of Ps.$41.1 million compared to Ps.$25.6 million for the year ended December
31, 2024. The Mondrian Hotel food & beverage and service cost for the year ended December 31, 2025 was of Ps.$16.2 million, an increase of Ps.$6.2 million compared to Ps.$10.0 million for the year ended December 31, 2024.
Sales commissions: Sales commissions amounted to Ps.$33.8 million for the year ended December 31, 2025 as compared to Ps.$37.6 million for the year ended December 31,
2024. The decrease corresponds mainly to better terms achieved in the commissions incurred for services provided by independent online travel agencies such as Expedia and Booking. The amounts attributable to the Vivid Hotel is Ps.$16.0
million; for the Andaz Hotel is Ps.$13.5 million; and for the Mondrian Hotel is Ps.$4.3 million.
Management fees operators: Management fees operators amounted to Ps.$49.8 million for the year ended December 31, 2025, which relates to management services provided
by Hyatt and Accor. Vivid Hotel incurred in Ps.$22.6 million, while Andaz Hotel incurred in Ps.$21.4 million, and Mondrian Hotel incurred Ps.$5.8 million.
Depreciation and amortization: Depreciation and amortization amounted to Ps.$288.4 for the year ended December 31, 2025, a decrease of Ps.$31.3 million from the year
ended December 31, 2024. The depreciation and amortization amounted to Ps.$237.2 million for property and equipment and Ps.$50.6 million for right of use assets, respectively. The decrease in depreciation and amortization is mainly due to
the Insurgentes 421 Hotel Complex having achieved full useful life for its OS&E assets during the twelve-month period ended December 31, 2024. Additionally, the Insurgentes 421 Hotel Complex did not experience any changes in value since
prior periods, thus downward pressuring its depreciation and amortization account.
Property tax: Property tax amounted to Ps.$10.1 for the year ended December 31, 2025, a decrease of Ps.$2.3 million or 18.5% from Ps.$ 12.4 million for the year ended
December 31, 2024. The decrease in the property tax is mainly attributable to the Insurgentes 421 Hotel Complex. The decrease relates to a one-time Ps.6.0 million property tax paid to the Mexico City Secretary of Administration and Finance,
during 2022, which in time reflected decreased property tax for the subsequent next periods.
Fees: Fees amounted to Ps.$141.4 for the year ended December 31, 2025, a decrease of Ps.$10.3 or 6.8% from Ps.$151.7 million for the year ended December 31, 2024. The
total fees amount is mainly related to the professional services in relation with the restructuring agreement for the Rated Notes (issued on September 12, 2024), for which an agreement was agreed in subsequent periods (announced March 10,
2026).
Administrative fees: Administrative fees amounted to Ps.$5.0 million for the year ended December 31, 2025, a decrease of Ps.$12.6 million or 71.7% from Ps.$ 17.5
million for the year ended December 31, 2024. The decrease is mainly related to cost efficiencies achieved by the Vivid hotel during the twelve-month period ended December 31, 2025, per economies of scale achieved by its expected course of
operations following its ramp up period after its commencement of operations on April 12, 2024.
Maintenance and conservation: Maintenance and conservation amounted to Ps.$86.7 million for the year ended December 31, 2025, an increase of Ps.$34.0 million or 64.5%
from Ps.$ 52.7 the year ended December 31, 2024. This expense increase is attributable mostly to maintenance and conservation expenses incurred by the Andaz and Mondrian hotel complex, mainly related to general maintenance totalling
Ps.$32.9 million, engineering services amounting to Ps.$8.1 million, and network related services for Ps.$3.9 million. Maintenance and conservation expense for Vivid Hotel Complex for the year ended December 31, 2025, is Ps$31.9 million.
Additional Andaz and Mondrian Hotel Complex´s maintenance and conservation expense amounted to Ps.$9.9 million.
Utility expenses: Utility expenses amounted to Ps.$65.6 million for the year ended December 31, 2025, a decrease of Ps.$1.9 or 2.9% from Ps.$67.5 million for the year
ended December 31, 2024. The decrease is mainly related to cost efficiencies achieved by the Andaz and Mondrian hotel complex.
Advertising: Advertising amounted to Ps.$48.7 million for the year ended December 31, 2025, a decrease of Ps.$4.3 or 8.2% from Ps.$53.1 million for the year ended
December 31, 2024. The decrease is mainly related to reduced advertising efforts for the Vivid Hotel, per its natural strategic course of operations, for which the twelve-month period ended December 31, 2024, saw an increased advertising
investment related to the commencement of operations of the Vivid Hotel in April 2024.
Donations: Donations amounted to Ps.$5.6 million for the year ended December 31, 2025, a decrease of Ps.$2.3 million or 29.1% from Ps.$7.8 million for the year ended
December 31, 2024. The decrease is mainly related to a special donation granted to the UNICEF International Council to support the transformation of education in Mexico that amounted for PS.$7.8 million during the twelve-month period ended
December 31, 2024.
Insurance: Insurance amounted to Ps.$46.7 million for the year ended December 31, 2025, an increase of Ps.$10.9 or 30.5% from Ps.$35.8 million for the year ended
December 31, 2024. The increase is mainly related to the increased operations of the Vivid Hotel per its ramp up period following its commencement of operations of the Vivid Hotel in April 2024; the Vivid Hotel Complex insurance expense
amounted to Ps.$33.2 million for the year ended December 31, 2025, an increase of Ps.$16.8 from Ps.$16.4 million for the year ended December 31, 2024.
Software: Software amounted to Ps.$1.5 million for the year ended December 31, 2025, a decrease of Ps.$5.5 million or 79.1% from the year ended December 31, 2024. The
decrease is mainly related to the Vivid Hotel’s structural preparations carried on during the twelve-month period ended December 31, 2024, for its commencement of operations of the Vivid Hotel in April 2024; the Vivid Hotel software expense
amounted to Ps.$0.0 million for the year ended December 31, 2025.
Cleaning and laundry: Cleaning and laundry amounted to Ps.$11.7 million for the year ended December 31, 2025, an increase of Ps.$0.4 million or 3.7% from the year
ended December 31, 2024. The increase is mainly related to the increased operations of the Vivid Hotel per its ramp up period following the commencement of operations of the Vivid Hotel in April 2024.
Bank commissions: Bank fees amounted to Ps.$36.2 million for the year ended December 31, 2025, an increase of Ps.$5.1 million or 16.3% from Ps.$31.1 million for the
year ended December 31, 2024. The increase is mainly related to the increased operations of the Vivid Hotel per its ramp up period following its commencement of operations of the Vivid Hotel in April 2024; the Vivid Hotel’s bank commissions
expense amounted to Ps.$10.6 million for the year ended December 31, 2025.
Replacement reserve (FF&E & OS&E): Replacement reserve (FF&E & OS&E) amounted to Ps.$35.4 million for the year ended December
31, 2025, as compared to Ps.$9.3 million for the year ended December 31, 2024. The increase corresponds mainly to the increased (ramp up) operations of the Andaz, Mondrian, and the Vivid hotel after its inaugural full year of operations.
The amounts attributable to the Vivid Hotel is Ps.$21.2 million; for the Andaz Hotel is Ps.$8.3 million; and for the Mondrian Hotel is Ps.$5.8 million.
Operating supplies and equipment: Operating supplies and equipment amounted to Ps.$0.5 million for the year ended December 31, 2025, a decrease of Ps.$21.3 million or
97.9% from Ps.$21.8 million for the year ended December 31, 2024. The decrease in operating supplies and equipment corresponds to expenses incurred in relation to the opening of the Vivid Hotel in 2024.
Other costs: Other costs amounted to Ps.$84.9 million for the year ended December 31, 2025, a decrease of Ps.$13.3 million or 13.6% from Ps.$98.2 million for the year
ended December 31, 2024. The other costs account is mainly comprised of the amortization of credit-related expenses amounting to Ps$30.3 million, and operations-related information systems expenses amounting to Ps.$9.4 million.
Other income: Other income amounted to Ps.$83.8 million for the year ended December 31, 2025, a decrease of Ps.$106.5 million or 56.0% from Ps.$190.2 million for the
year ended December 31, 2024. The decrease is mainly attributed to a gain in disposal of fixed assets during the twelve-month period ended December 31, 2024, and a cancellation of fees payable following a final settlement reached with a
service provider in December of 2025.
Gain (loss) on revaluation of investment property: The gain on revaluation of investment property amounted to Ps.$75.0 million for the year ended December 31, 2025.
The result of the twelve-month period ended December 31, 2025, is mainly related to an increase in the value determined by the external appraisers in U.S. dollars, and the currency conversion effect resulting from the appreciation of the
Mexican peso against the U.S. dollar during for the year ended December 31, 2025.
Changes in fair value of warrants: Changes in fair value of warrants amounted to a gain of Ps.$63.5 million for the year ended December 31, 2025, an increase of Ps.$115.5 million or -222.3% from a
loss of Ps.$51.9 million for the year ended December 31, 2024. due to favorable movements in the share price during the twelve-month period ended December 31, 2025.
Changes in fair value of crypto assets: Changes in fair value of crypto assets amounted to a gain of Ps.$1.0 million for the year ended December 31, 2025, due to
favorable movements in the underlying bitcoin investment assets held during the period. Prior to the year period ended December 31, 2025, the Company did not possess nor managed any type of crypto asset.
Exchange rate (loss) income, net: Exchange (loss) income, net, amounted to a gain of Ps.$1,354.4 million for the year ended December 31, 2025, an increase of
Ps.$2,846.6 million or -190.8% from the year ended December 31, 2024. The increase in Exchange rate (loss) income, net, was attributable to the appreciation of the Mexican peso against the U.S. dollar for the year ended December 31, 2025,
compared to the year ended December 31, 2024
Interest income: Interest income amounted to Ps.$14.4 million for the year ended December 31, 2025, a decrease of Ps.$20.5 million or -58.8% from Ps.$34.9 million from
the year ended December 31, 2024. The decrease in interest income was attributable mainly to the decrease in interest bearing assets, in addition to lower reference interest rates during the twelve-month period ended December 31, 2025,
compared to the twelve-month period ended December 31, 2024.
Interest expense: Interest expense amounted to Ps.$1,434.8 million for the year ended December 31, 2025, an increase of Ps.$637.8 million or 80.0% from the year ended
December 31, 2024. The increase is mainly related to the Senior Notes issued September 2024, for which two semi-annual coupon payments were executed during the twelve-month period ended December 31, 2025.
Income taxes: Income tax benefit amounted to Ps.$2.9 million for the year ended December 31, 2025, a change of Ps.$75.6 million or -103.9% from an income tax expense
of Ps.$72.7 million for the year ended December 31, 2024. This increase is mainly attributable to the utilization of tax losses carryforward generated in prior years.
Net (loss) profit for the period: For the reasons outlined above, the Murano Group recorded a net loss of Ps.$282.4 million for the year ended December 31, 2025, an
increase of Ps.$3,285.6 million, as compared to a net loss of Ps.$3,568.0 million for the year ended December 31, 2024.
Year ended December 31, 2024 Compared to Year ended December 31, 2023
Combined statements of profit or loss and other comprehensive income data
|
For the year ended December
31
|
||||||||
|
2024
|
2023
|
|||||||
|
(In Mexican Pesos)
|
||||||||
|
Revenue
|
$
|
729,953,807
|
$
|
286,651,914
|
||||
|
Direct and selling, general and administrative expenses:
|
||||||||
|
Employee Benefits
|
325,521,012
|
158,777,211
|
||||||
|
Food & Beverage and service cost
|
98,441,323
|
50,548,808
|
||||||
|
Sales commissions
|
37,592,689
|
12,047,140
|
||||||
|
Management fees operators
|
23,928,681
|
6,031,578
|
||||||
|
Depreciation and amortization
|
319,768,815
|
135,498,890
|
||||||
|
Development contributions to the local area
|
—
|
—
|
||||||
|
Property tax
|
12,444,214
|
10,062,451
|
||||||
|
Fees
|
151,697,897
|
81,161,295
|
||||||
|
Administrative fees
|
17,540,773
|
16,148,254
|
||||||
|
Maintenance and conservation
|
52,727,323
|
9,676,728
|
||||||
|
Utility expenses
|
67,542,771
|
11,806,600
|
||||||
|
Advertising
|
53,064,373
|
7,326,696
|
||||||
|
Donations
|
7,842,770
|
7,676,660
|
||||||
|
Insurance
|
35,771,206
|
14,820,097
|
||||||
|
Software
|
6,948,956
|
6,744,506
|
||||||
|
Cleaning and laundry
|
11,301,594
|
9,197,151
|
||||||
|
Bank commissions
|
31,109,553
|
8,317,475
|
||||||
|
Operating supplies and equipment
|
21,804,534
|
-
|
||||||
|
Other costs
|
107,481,760
|
62,238,994
|
||||||
|
Total direct and selling, general and administrative expenses
|
1,382,530,244
|
608,080,534
|
||||||
|
Other income
|
190,235,287
|
25,560,552
|
||||||
|
Other expenses
|
(5,474,442
|
)
|
(9,801,077
|
)
|
||||
|
Listing expense
|
(917,366,970
|
)
|
-
|
|||||
|
Gain (loss) on revaluation of investment property
|
239,508,510
|
(86,598,436
|
)
|
|||||
|
Change in fair value of financial derivative instruments
|
(43,348,480
|
)
|
(75,868,263
|
)
|
||||
|
Change of fair value of warrants
|
(51,946,426
|
)
|
-
|
|||||
|
Exchange rate (loss) income, net
|
(1,492,245,569
|
)
|
768,699,652
|
|||||
|
Interest income
|
34,942,822
|
8,845,532
|
||||||
|
Interest expense
|
(797,018,177
|
)
|
(303,746,643
|
)
|
||||
|
(Loss) profit before income taxes
|
(3,495,289,882
|
)
|
5,662,697
|
|||||
|
Income taxes
|
(72,675,696
|
)
|
52,130,224
|
|||||
|
Net (loss) profit for the period
|
$
|
(3,567,965,578
|
)
|
$
|
57,792,921
|
|||
Revenue: Revenue amounted to Ps.$730.0 million for the year ended December 31, 2024, an increase of Ps.$443.3 million or 154.6% from Ps.$286.7 million
from the year ended December 31, 2023. The increase is mainly attributable to the opening of the Vivid Hotel, which generated revenue of Ps.$265.7 million. The remaining increase is mainly related to the continuing operations of the Andaz
Hotel and the Mondrian Hotel, which amounted to Ps.$296.0 million for the year ended December 31, 2024, compared to Ps.$187.0 million for the year ended December 31, 2023, and Ps.$168.1 million for the year ended December 31, 2024, compared
to Ps.$114.6 million for the year ended December 31, 2023, respectively. The Vivid Hotel’s revenue during 2024 was Ps.$265.7 million, comprising: (1) 88.3% package income, and (2) 11.7% non-package income. The Andaz Hotel’s revenue during
2024 was Ps.$296.2 million, comprising: (1) 63.0% room income, (2) 31.0% food and beverage income, and (3) 6.0% other income. The Mondrian Hotel´s revenue during 2024 was Ps.$168.1 million, comprising (1) 77.0% room income, (2) 17.9% food
& beverage income, and (3) 5.0% other income.
Employee Benefits: Employee benefits amounted to Ps.$325.5 million for the year ended December 31, 2024, an
increase of Ps.$166.7 million or 105% from the year ended December 31, 2023. The increase is mainly attributable to increase in payroll related expenses since the commencement of hotel operations of the Vivid hotel in April 2024. Our employee benefits cost of sales consisted of salaries of Ps.$289.8 million for the year ended December 31, 2024, an increase of Ps.$147.5 million compared to Ps.$142.3 million for the year ended
December 31, 2023; social security and employee food expenses represented the remaining Ps.$35.7 million for the year ended December 31, 2024, an increase of Ps.$19.1 million compared to Ps.$16.6 million for the year ended December 31,
2023.
Food & Beverage and service cost: Food & beverage and service cost amounted to Ps.$98.4 million for the year ended December 31, 2024, an
increase of Ps.$47.9 million or 94.7% from Ps.$50.5 million for the year ended December 31, 2023. The increase in food & beverage and service cost is mainly attributable to the commencement of operations of the Vivid Hotel in April
2024. The Vivid hotel food & beverage and service cost for the year ended December 31, 2024 was Ps.$62.8 million. The Andaz Hotel food & beverage and service cost for the year ended December 31, 2024 was Ps.$25.6 million, an
increase of Ps.$11.8 million compared to Ps.$13.8 million for the year ended December 31, 2023. The Mondrian Hotel food & beverage and service cost for the year ended December 31, 2024 was of Ps.$10.0 million, a decrease of Ps.$3.8
million compared to Ps.$13.8 million for the year ended December 31, 2023.
Sales commissions: Sales commissions amounted to Ps.$37.6 million for the year ended December 31, 2024 as compared to Ps.$12.0 million for the year
ended December 31, 2023. The amount corresponds mainly to the commissions incurred for services provided by independent online travel agencies such as Expedia and Booking. The amounts attributable to the Vivid Hotel is Ps.$5.7 million; for
the Andaz Hotel is Ps.$29.2 million; and for the Mondrian Hotel is Ps.$2.7 million.
Management fees operators: Management fees operators amounted to Ps.$23.9 million for the year ended December 31, 2024 as compared to Ps.$6.0 million
for the year ended December 31, 2023. The amount corresponds mainly to management services provided by Hyatt and Accor. Vivid Hotel incurred in Ps. $7.9 million, while Andaz Hotel incurred in Ps.$11.9 million, and Mondrian Hotel incurred
Ps.$4.2 million.
Depreciation and amortization: Depreciation and amortization amounted to Ps.$319.8 million for the year ended December 31, 2024, an increase of
Ps.$184.3 million from the year ended December 31, 2023. The increase corresponds mainly to the placement into operations of the Vivid Hotel Complex’s assets which were transferred from construction in process to fixed assets. The
depreciation and amortization for the Vivid Hotel Complex amounted to Ps.$113.6 million for property and equipment and Ps.$43.9 million for right of use assets, respectively.
Property tax: Property tax amounted to Ps.$12.4 million for the year ended December 31, 2024, an increase of Ps.$2.4 million or 23.7% from Ps.$10.1
million for the year ended December 31, 2023. The increase in the property tax is mainly attributable to the Insurgentes 421 Hotel Complex.
Fees: Fees amounted to Ps.$151.7 million for the year ended December 31, 2024, an increase of Ps.$70.5 million or 86.9% from Ps.$81.2 million for the
year ended December 31, 2023. The increase is mainly related to the professional services in preparation for the Rated Notes issuance in September 12, 2024.
Administrative fees: Administrative fees amounted to Ps.$17.5 million for the year ended December 31, 2024, an increase of Ps.$1.4 million or 8.6% from
Ps.$16.1 million for the year ended December 31, 2023. The increase is mainly related to the commencement of operations of the Vivid Hotel in April, 2024; Administrative fees for the Vivid Hotel for the year ended December 31, 2024 amounted
to Ps.$1.6 million, compared to Ps.$0.0 million for the year ended December 31, 2023.Maintenance and conservation: Maintenance and conservation amounted to
Ps.$52.7 million for the year ended December 31, 2024, an increase of Ps.$43.1 million or 444.9% from Ps.$9.7 million the year ended December 31, 2023. This expense increase is attributable mostly to the commencement of operations of the
Vivid Hotel in April 2024. Prior to its opening, the Vivid Hotel incurred in maintenance and conservation expenses mostly related to minor fixes of installations and equipment. Maintenance and conservation expense for Vivid Hotel Complex
for the year ended December 31, 2024 is Ps.$18.8 million. Additionally, the Andaz and Mondrian Hotel Complex´s maintenance and conservation expense amounted to Ps.$28.2 million, mostly attributable to engineering services and
water-and-sewage related maintenance and conservation, which amounted to Ps.$16.0 million and Ps.$2.3 million respectively. Utility expenses: Utility expenses amounted to Ps.$67.5 million for the
year ended December 31, 2024, an increase of Ps.$55.7 million or 472.1% from Ps.$11.8 million for the year ended December 31, 2023. This expense increase is mainly attributable to the commencement of operations of the Vivid Hotel in April
2024. Utility expenses for the Vivid Hotel for the year ended December 31, 2024 amounted to Ps.$30.6 million.
Advertising: Advertising amounted to Ps.$53.1 million for the year ended December 31, 2024, an increase of Ps.$45.7 million or 624.3% from Ps.$7.3
million for the year ended December 31, 2023. This expense increase is mainly attributable to the advertising efforts related to the commencement of operations of the Vivid Hotel in April 2024. Advertising for the Vivid Hotel for the year
ended December 31, 2024 amounted to Ps.$37.8 million, compared to Ps.$0.2 million for the year ended December 31, 2023.
Donations: Donations amounted to Ps.$7.8 million for the year ended December 31, 2024, an increase of Ps.$0.2 million or 2.2% from Ps.$7.7 million for
the year ended December 31, 2023. The donation expense is mostly attributable to a donation granted to the UNICEF International Council to support the transformation of education in Mexico that amounted for PS.$7.8 million.
Insurance: Insurance amounted to Ps.$35.8 million for the year ended December 31, 2024, an increase of Ps.$21.0 million or 141.4% from Ps.$14.8 million
for the year ended December 31, 2023. The increase is mainly related to the commencement of operations of the Vivid Hotel in April 2024; the Vivid Hotel Complex insurance expense amounted to Ps.$16.4 million for the year ended December 31,
2024.
Software: Software amounted to Ps.$6.9 million for the year ended December 31, 2024, an increase of Ps.$0.2 million or 3.0% from the year ended
December 31, 2023. The increase is mainly related to the structural preparations for the commencement of operations of the Vivid Hotel in April 2024; the Vivid Hotel software expense amounted to Ps.$3.1 million for the year ended December
31, 2024.
Cleaning and laundry: Cleaning and laundry amounted to Ps.$11.3 million for the year ended December 31, 2024, an increase of Ps.$2.1 million or 22.9%
from the year ended December 31, 2023. The increase is mainly related to the commencement of operations of the Vivid Hotel in April 2024.
Bank commissions: Bank fees amounted to Ps.$31.1 million for the year ended December 31, 2024, an increase of Ps.$22.8 million or 274.0% from Ps.$8.3
million for the year ended December 31, 2023, which corresponds to the increase in the interest income accrued by short-term investments.
Other costs: Other costs amounted to Ps.$107.5 million for the year ended December 31, 2024, an increase of Ps.$45.2 million or 72.7% from Ps.$62.2
million for the year ended December 31, 2023. The increase is mainly related to ramp up expenses mainly attributable to the commencement of operations of the Vivid Hotel in April 2024 as well as the additional expenses derived from the
growing operations from the Andaz and Mondrian Hotels.
Gain (loss) on revaluation of investment property: The gain on revaluation of investment property amounted to Ps.$239.5 million for the year ended
December 31, 2024, an increase of Ps.$326.1 million or (376.6)% from the Loss of Ps.$86.6 million during the year ended December 31, 2023. The increase is mainly related to an increase in the value determined by the external appraisers in
U.S. dollars, and the currency conversion effect resulting from the depreciation of the Mexican peso against the U.S. dollar during for the year ended December 31, 2024.
Interest income: Interest income amounted to Ps.$34.9 million for the year ended December 31, 2024, an increase of Ps.$26.1 million or 295.0% from
Ps.$8.8million from the year ended December 31, 2023. The increase in interest income was attributable mainly to the increase in interest bearing assets during 2024, including Ps.$8.7 million accrued on amounts due from related parties and
Ps.$22.6 million from favorable interest received from financial institutions.
Interest expense: Interest expense amounted to Ps.$797.0 million for the year ended December 31, 2024, an increase of Ps.$493.3 million or 162.4% from
the year ended December 31, 2023. The increase is mainly related the interest of Insurgentes 421 Bancomext loan and GIC I interest of Vivid Hotel as there are no longer capitalized in the asset value and were booked directly to the profit
and loss statement in 2024 compared to the year ended December 31, 2023.
Exchange rate loss, net: Foreign exchange income, net, amounted to a loss of Ps.$1,492.2 million for the year ended December 31, 2024, a decrease of
Ps.$2,260.9 million or 294.1% from the year ended December 31, 2023. The decrease in foreign exchange income, net transactions was attributable to the depreciation of the Mexican peso against the U.S. dollar for the year ended December 31,
2024, compared to the year ended December 31, 2023 as well as the increase in loans denominated in U.S. dollars.
Valuation of financial derivative instruments: Valuation of financial derivative instruments amounted to a loss of Ps.$43.3 million for the year ended
December 31, 2024, a decrease of Ps.$32.5 million or 42.9% from a loss of Ps.$75.9 million for the year ended December 31, 2023 due to unfavorable movements in the yield curve.
Other income: Other income amounted to Ps.$190.2 million for the year ended December 31, 2024, an increase of Ps.$164.7 million or 644.3% from Ps.$25.6
million for the year ended December 31, 2023. The increase is mainly related to a gain in sale of equipment due to a discount from a vendor on purchase of furniture and fixtures granted subsequent to purchase, and also subsequent to the
sale and leaseback of said furniture and fixtures to an unrelated third party.
Other expenses: Other expenses amounted to Ps.$5.5 million for the year ended December 31, 2024, a decrease of Ps.$4.3 million or 44.1% from Ps.$9.8
million for the year ended December 31, 2023.
Income taxes: Income taxes amounted to Ps.$72.7 million for the year ended December 31, 2024, a change of Ps.$124.8 million or 239.4% from an income
tax benefit of Ps.$52.1 million for the year ended December 31, 2023. The decrease is mainly related to the increase in the allowance of NOLs as result of losses in exchange rates in 2024.
Net profit (loss) for the period: For the reasons outlined above, the Murano Group recorded a net loss of Ps.$3,568.0 million for the year ended
December 31, 2024, a decrease of Ps.$3,625.8 million, as compared to a net profit of Ps.$57.8 million for the year ended December 31, 2023.
Other Financial Data
|
For the year ended December 31
|
||||||||||||
|
2025
|
2024
|
Ps. Change
|
||||||||||
|
(in Mexican pesos)
|
||||||||||||
|
EBITDA(1)
|
1,468,266,622
|
(2,378,502,890
|
)
|
3,846,769,512
|
||||||||
|
Adjusted EBITDA(2)
|
1,468,266,622
|
(2,313,741,968
|
)
|
3,782,008,590
|
||||||||
| (1) |
We define EBITDA as a measure that reflects net (loss) profit for the period, excluding interest expense, income taxes, depreciation and amortization. The following table reconciles our net (loss) profit
for the period for the period, our most directly comparable measure under IFRS, to EBITDA:
|
|
For the Year Ended December 31
|
Variance
|
|||||||||||||||
|
2025
|
2024
|
Ps. Change
|
% Change
|
|||||||||||||
|
(in Mexican pesos)
|
||||||||||||||||
|
Net (loss) for the period
|
(282,380,535
|
)
|
(3,567,965,578
|
)
|
3,285,585,043
|
(92.1
|
)%
|
|||||||||
|
Add (deduct):
|
||||||||||||||||
|
Income taxes
|
(2,899,267
|
)
|
72,675,696
|
(75,574,963
|
)
|
(103.9
|
)%
|
|||||||||
|
Interest expenses
|
1,465,110,800
|
797,018,177
|
668,092,623
|
83.8
|
%
|
|||||||||||
|
Depreciation and amortization
|
288,435,624
|
319,768,815
|
(31,333,191
|
)
|
(9.8
|
)%
|
||||||||||
|
EBITDA
|
1,468,266,622
|
(2,378,502,890
|
)
|
3,846,769,512
|
(161.7
|
)%
|
||||||||||
|
Transaction related expenses
|
-
|
64,760,922
|
(64,760,922
|
)
|
(100.0
|
)%
|
||||||||||
|
Adjusted EBITDA
|
1,468,266,622
|
(2,313,741,968
|
3,782,008,590
|
(163.5
|
)%
|
|||||||||||
| (2) |
We defined Adjusted EBITDA as EBITDA further adjusted to exclude transaction-related expenses derived from the Business Combination. The following table reconciles Adjusted EBITDA to EBITDA:
|
|
For the Year Ended December 31
|
Variance
|
|||||||||||||||
|
2024
|
2023
|
Ps. Change
|
% Change
|
|||||||||||||
|
(in Mexican pesos)
|
||||||||||||||||
|
Net profit (loss) for the period
|
(3,567,965,578
|
)
|
57,792,921
|
(3,625,758,499
|
)
|
(6237.7
|
)%
|
|||||||||
|
Add (deduct):
|
||||||||||||||||
|
Income taxes
|
72,675,696
|
(52,130,224
|
)
|
124,805,920
|
(239.4
|
)%
|
||||||||||
|
Interest expense
|
797,018,177
|
303,746,643
|
493,271,534
|
162.4
|
%
|
|||||||||||
|
Depreciation and amortization
|
319,768,815
|
135,498,890
|
184,269,925
|
136.0
|
%
|
|||||||||||
|
EBITDA
|
(2,378,502,890
|
)
|
444,908,230
|
(2,823,411,120
|
)
|
(634.6
|
)%
|
|||||||||
|
For the year ended December 31
|
Variance
|
|||||||||||||||
|
2024
|
2023
|
Ps. Change
|
% Change
|
|||||||||||||
|
(in Mexican pesos)
|
||||||||||||||||
|
EBITDA
|
(2,378,502,890
|
)
|
444,908,230
|
(2,823,411,120
|
)
|
(634.6
|
)%
|
|||||||||
|
Transaction related expenses
|
64,760,922
|
56,005,510
|
8,755,412
|
15.6
|
%
|
|||||||||||
|
Adjusted EBITDA
|
(2,313,741,968
|
)
|
500,913,740
|
(2,814,655,708
|
)
|
(561.9
|
)%
|
|||||||||
|
Operating Data
|
||||||||||||
|
For the Year Ended December 31,
2025
|
||||||||||||
|
RevPAR(1)
|
ADR(2)
|
Occupancy(3)
|
||||||||||
|
(in Mexican Pesos)
|
%
|
|||||||||||
|
Andaz Hotel
|
$
|
3,514
|
$
|
4,614
|
76.2
|
|||||||
|
Mondrian Hotel
|
$
|
2,425
|
$
|
3,710
|
52.5
|
|||||||
|
Vivid Hotel
|
$
|
3,120
|
$
|
4,540
|
68.7
|
|||||||
|
Operating Data
|
||||||||||||
|
For the Year Ended December 31,
2024
|
||||||||||||
|
RevPAR(1)
|
ADR(2)
|
Occupancy(3)
|
||||||||||
|
(in Mexican Pesos)
|
%
|
|||||||||||
|
Andaz Hotel
|
$
|
2,393
|
$
|
4,085
|
58.6
|
|||||||
|
Mondrian Hotel
|
$
|
2,511
|
$
|
3,710
|
52.2
|
|||||||
|
Vivid Hotel
|
$
|
2,053
|
$
|
3,834
|
53.6
|
|||||||
| (1) |
We calculate RevPAR by dividing hotel room revenue by room nights available to guests for a given period.
|
| (2) |
ADR represents hotel room revenue divided by the total number of room nights sold in a given period.
|
| (3) |
Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels.
|
|
For the Year Ended December 31,
2023
|
||||||||||||
|
RevPAR
|
ADR
|
Occupancy
|
||||||||||
|
(in Mexican Pesos)
|
%
|
|||||||||||
|
Mondrian Hotel(1)
|
$
|
2,511
|
$
|
3,710
|
52.2
|
|||||||
| (1) |
The revenue metrics are presented only for the Mondrian Hotel as it was the only hotel in operation as of December 31, 2023.
|
| B. |
Liquidity and Capital Resources
|
Overview
Since our inception, we have financed our development projects and operations primarily from capital contributions from our shareholders and borrowings under different financing arrangements.
As of December 31, 2025, our total debt was Ps.$10,719.6 million (US$597.1 million). Since then, we have not incurred in additional indebtedness.
We currently estimate the total remaining development and construction costs of the Projects to be completed to be approximately U.S.$670 million. These are preliminary estimates and while we
believe that our overall budget for the construction costs for these properties is reasonable as of the date of this Report, these costs are only estimates, and the actual final costs to develop may be significantly higher than expected.
We currently expect that the Business Combination, together with borrowings under our existing financings and issuance of the 2031 Notes, will not be sufficient to fund the currently
foreseeable budget of our property development projects and/or otherwise be sufficient to fulfill our business strategy. Therefore, we will need additional capital in the future. Our ability to obtain bank financing or to access the capital
markets for future debt or equity offerings may be limited by our financial condition, results of operations or other factors, such as our credit rating or outlook at the time of any such financing or offering and the covenants in our
existing debt agreements, as well as by general economic conditions and contingencies and uncertainties that are beyond our control. Therefore, we cannot assure you that we will be able to obtain additional capital and/or that we will be
able to obtain bank financing or access the capital markets on commercially reasonable terms or at all; for further details, see “Note 2c—Basis of preparation in the Murano Group Combined Financial
Statements.”
In addition, as discussed under “Item 4.A—Recent Developments—Potential Corporate Reorganization,” following the completion of the contemplated debt
restructuring, management has considered a potential corporate reorganization, and any such reorganization may involve transactions between affiliated entities, subject to applicable approvals and definitive documentation. Any such
corporate reorganization has not been finalized and may not be pursued or consummated, and there can be no assurance that it would achieve the intended objectives. See “Item 3.D. Risk Factors—We have
considered, and may in the future pursue, a corporate reorganization that could materially and adversely affect holders of our ordinary share.”
Following the failure by the Issuer Trust to make scheduled interest payments under the 2031 Notes, we engaged in discussions with the Ad Hoc Group of holders of the 2031 Notes representing
more than 81% of the aggregate principal amount outstanding. On March 10, 2026, we entered into the Lock-Up agreement with such noteholders reflecting an agreement on the key terms of a proposed consensual restructuring transaction relating
to the 2031 Notes, as set forth in the agreed Term Sheet. The proposed 2031 Notes Restructuring remains subject to the negotiation, execution and delivery of definitive documentation and the satisfaction of other conditions, and there can
be no assurance that it will be consummated on the terms described in the Term Sheet. See “Item 3.D. Risk Factors” and “Debt” below.
Recent Transactions Affecting our Liquidity and Capital Resources
Restructuring Discussions and Lock-Up Agreement Relating to the 2031 Notes
On March 10, 2026, we entered the Lock-Up Agreement reflecting an agreement on the key terms of the 2031 Notes Restructuring, as set forth in the agreed Term Sheet. The proposed transaction
remains subject to the negotiation, execution and delivery of definitive documentation and the satisfaction of other conditions, and there can be no assurance that it will be consummated on the terms described in the Term Sheet. We expect
this process to remain a significant factor affecting our liquidity, capital resources and going concern assessment.
Year ended December 31, 2025 compared to year ended December 31, 2024
The following table from the Combined Statement of Cash Flows summarizes Murano Group’s cash flows for the years ended December 31, 2025 and 2024:
|
For the Year Ended December
31
|
||||||||||||||||
|
2025
|
2024
|
Variance
|
||||||||||||||
|
Ps.
|
Ps.
|
Ps.
|
%
|
|||||||||||||
|
(in Mexican pesos)
|
||||||||||||||||
|
Net cash flows (used in) from operating activities
|
$
|
92,845,698
|
$
|
(94,808,362
|
)
|
187,654,060
|
(197.9
|
)%
|
||||||||
|
Net cash flows used in investing activities
|
(267,195,220
|
)
|
(1,079,765,332
|
)
|
812,570,112
|
(75.3
|
)%
|
|||||||||
|
Net cash flows (used in) from financing
activities
|
(522,325,821
|
)
|
1,998,618,817
|
(2,520,944,638
|
)
|
(126.1
|
)%
|
|||||||||
|
Net (decrease) increase in cash and cash equivalents and restricted cash
|
$
|
(696,675,343
|
)
|
$
|
824,045,123
|
(1,520,720,466
|
)
|
(184.5
|
)%
|
|||||||
Cash flows from operating activities
Net cash from operating activities was Ps.$92.8 million for the year ended December 31, 2025, while for the year ended December 31, 2024, there was net cash used in operating activities of
Ps.$94.8 million. The increase is mainly attributed to the growth in operations of the Company’s operating assets (Vivid, Andaz, and Mondrian hotels) per their natural ramp up period, particularly for the Vivid Hotel following its
commencement of operations in April 2024.
Net cash from operating activities consisted of a loss before income tax of Ps.$285.3 million for the year ended December 31, 2025, adjusted for non-cash and non-operating cash flow items and
the effect of changes in working capital. Non-operating cash flow adjustments principally included Ps.$1,444.8 million derived from interest expense, and Ps.$20.3 million derived from interest expense from lease liabilities, while non-cash
items included Ps.$1,388.7 million from Net foreign exchange gain (loss) unrealized, Ps.$237.7 million from the depreciation of property, construction in process and equipment, and Ps.$75.0 million from (gain) loss on revaluation of
investment property.
Cash flows from investing activities
Net cash used in investing activities was Ps.$267.2 million for the year ended December 31, 2025, a decrease of Ps.$812.6 million or (75.3)% from the year ended December 31, 2024, primarily
due to the Vivid Hotel commencing operations in April 2024, thus ceasing its capex investing requirements thereon.
Cash flows from financing activities
Net cash provided by financing activities was Ps.$(522.3) million for the year ended December 31, 2025, a decrease of Ps.$2,520.9 or (126.1)% from the year ended December 31, 2024. Overall,
proceeds from new borrowings provided to Murano Group decreased by Ps.$8,405.4 million and interest paid increased Ps.$164.1 million.
Year ended December 31, 2024 compared to year ended December 31, 2023
The following table from the Combined Statement of Cash Flows summarizes Murano Group’s cash flows for the years ended December 31, 2024 and 2023:
|
For the Year Ended December 31
|
||||||||||||||||
|
2024
|
2023
|
Variance
|
||||||||||||||
|
Ps.
|
Ps.
|
Ps.
|
%
|
|||||||||||||
|
(in Mexican pesos)
|
||||||||||||||||
|
Net cash flows (used in) from operating activities
|
$
|
(94,808,362
|
)
|
$
|
165,206,337
|
$
|
(260,014,699
|
)
|
(157.4
|
)%
|
||||||
|
Net cash flows used in investing activities
|
(1,079,765,332
|
)
|
(1,697,602,022
|
)
|
617,836,690
|
(36.4
|
)%
|
|||||||||
|
Net cash flows from financing
activities
|
1,998,618,817
|
1,438,010,614
|
560,608,203
|
39.0
|
%
|
|||||||||||
|
Net (decrease) increase in cash and cash equivalents and restricted cash
|
$
|
824,045,123
|
$
|
(94,385,071
|
)
|
918,430,194
|
(973.1
|
)%
|
||||||||
Cash flows from operating activities
Net cash from operating activities was Ps.$94.8 million for the year ended December 31, 2024, while for the year ended December 31, 2023 there was net cash from operating activities of
Ps.$165.2 million.
Net cash from operating activities consisted of a loss before income tax of Ps.$3,495.3 million for the year ended December 31, 2024, adjusted for non-cash and non-operating cash flow items
and the effect of changes in working capital. Non-operating cash flow adjustments principally included Ps.$917.4 million derived from listing expense of the Rated Notes listed September 12, 2024, and Ps.$775.7 million derived from interest
expense, while non-cash items included Ps.$271.5 million from the depreciation of property, plant and equipment, which was mainly attributable to the commencement of operations of the Vivid Hotel and its corresponding placement into
operations of the Vivid Hotel Complex’s assets which were transferred from construction in process to fixed assets. The depreciation and amortization for the Vivid Hotel Complex amounted to Ps.$113.6 million for property and equipment.
Additional non-cash items included Ps.$66.4 million from the amortization of costs to obtain loans and commissions, and Ps.$1,514.4 million of effect in foreign exchange rates. Net changes in working capital, which amounted to Ps.$67.9
million, were mainly attributable to an increase in trade payables for Ps.$266.8 million, a decrease mainly by Ps.$125.7 million related to the obtainment of a Value Added Tax reimbursement, from an outstanding balance of Value Added Tax
pending to be collected from GIC Complex, which increased Ps.$112.4 million or 844.5% from the year ended December 31, 2023, and an increase in trade receivables for Ps.$47.7 million.
Cash flows from investing activities
Net cash used in investing activities was Ps.$1,079.8 million for the year ended December 31, 2024, a decrease of Ps.$617.8 million or 36.4% from the year ended December 31, 2023 primarily due
to the Vivid Hotel commencing operations in April 2024, thus ceasing its capex investing requirements.
Cash flows from financing activities
Net cash provided by financing activities was Ps.$1,998.6 million for the year ended December 31, 2024, an increase of Ps.$560.6 or 39.0% from the year ended December 31, 2023. Overall,
proceeds from new borrowings provided to Murano Group amounted to Ps.$8,964 million, increasing by Ps.$6,848 million and interest paid increased Ps.$308.0 million compared to the twelve-month period ended December 31, 2023. Offsetting cash
flows from financing principally included Ps.$6,020 million derived from loan payments to third parties, interest paid amounting to Ps.$565.8 million, and Ps.$476.2 million derived from loan payments to related parties.
Capital Expenditures
For the years ended December 31, 2025 and 2024 and 2023, our capital expenditures amounted to Ps.$282.6 million, Ps.$1,331.8 million, and Ps.$1,719.3 million, respectively. This decrease was
mainly driven by the expenditures related to the construction of GIC I Hotel, part of the GIC Complex, materially reducing after the Vivid Hotel’s commencement of operations in April 2024.
Standby Equity Purchase Agreement
On June 11, 2025, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, LTD., a Cayman Islands exempt limited partnership (“YA”). Pursuant to the SEPA, we have the
right, but not the obligation, to sell to YA, from time to time and at our discretion, up to $500.0 million (the “Commitment Amount”) of our ordinary shares, during the 36-month period following the execution of the SEPA, subject to the
terms, conditions and limitations set forth therein.
During January and February 2026, we issued ordinary shares to YA pursuant to the SEPA, generating aggregate gross proceeds of approximately U.S.$4.4 million. As of the date of this Report, we
have issued 2,601,570 ordinary shares to YA as consideration for YA’s irrevocable commitment to purchase our ordinary shares up to the Commitment Amount.
The SEPA provides us with an additional potential source of liquidity and flexibility to raise equity capital to support our operations, ongoing projects and general corporate purposes. The
timing and amount of any future issuances under the SEPA will be determined at our discretion, and there can be no assurance that we will sell any additional shares under the SEPA.
Registration Statement on Form F-1
In June 2025, the Company filed a registration statement on Form F‑1 (Registration No. 333‑288232) with the SEC, which was declared effective on the same month. The registration statement
registers (i) the offer and resale, from time to time, of ordinary shares of the Company by certain selling securityholders, and (ii) an aggregate of 51,852,657 ordinary shares that the Company may issue from time to time, in one or more
transactions, in amounts, at prices, and on terms to be determined at the time of sale, pursuant to the SEPA. As of the date of this Report, we have issued 2,601,570 ordinary shares to YA as consideration for YA’s irrevocable commitment to
purchase our ordinary shares up to the Commitment Amount, under the SEPA.
The Company will not receive any proceeds from the sale of ordinary shares by the selling securityholders pursuant to the registration statement. However, the Company may receive proceeds from
the issuance and sale of ordinary shares to YA under the SEPA, subject to the terms and conditions thereof.
The registration statement does not obligate the Company to issue or sell any securities. The timing and amount of any issuances or resales of ordinary shares pursuant to the registration
statement will depend on market conditions and other factors, and there can be no assurance as to the timing or volume of any such transactions.
Debt
As of December 31, 2025, our debt with third parties amounted to Ps.$10,719.6 million (U.S.$597.1 million) and our debt with related parties amounted to Ps.$198.1 million (U.S.$11.0 million),
including accrued interest and the exchange difference generated from the U.S. dollar-denominated loans.
For the year ended December 31, 2025, interest expense on our borrowings amounted to Ps.$1,465.1 million directly recognized in the Consolidated Statement of Profit or Loss.
The agreements referred to below include covenants and restrictions that require, among other things, to provide the lenders, quarterly and annually, with Murano’s internal financial statements and compliance
with certain ratios and reserve funds. Non-compliance with such requirements constitutes an event of default under which the respective loan may become immediately due and payable. For discussions of certain defaults that are outstanding
and that have been waived, and potential consequences, with respect to our debt, see “Item 3.D—Risk Factors - “We may not be able to generate sufficient cash to
service all our indebtedness and may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful” and “We have substantial debt that may be
called on demand of lender due to breach in covenants that may happen in the future”.
Also refer to Note 10 of the Consolidated and Combined Financial Statements for more information about defaults that are all outstanding.
11% Senior Secured Notes due 2031
In September 2024, we completed the issuance of an aggregate principal amount of US$300.0 million of our 11% senior secured notes pursuant to the Indenture. The following description reflects
the terms of the 2031 Notes under the Indenture as currently in effect, prior to giving effect to any contemplated restructuring transaction. The 2031 Notes will mature on September 2031 and bear interest rate of (a) 11.00% per annum
payable in cash, and (b) from the issuance date to September 2027, 2.00% per annum payable in kind (the “PIK Interest”) at a total rate of 13.00% by capitalizing such PIK Interest (and increasing the principal amount of the outstanding
Notes in an amount equal to such PIK Interest) or by issuing PIK Notes (as such term is defined in the Indenture), payable on a semi-annual basis. The 2031 Notes were issued by the Issuer Trust and guaranteed by Operadora GIC I, CIB/3224
Trust, GIC I Trust and Murano PV, and backed primarily by cash flows from the GIC I Hotel. The Indenture governing these notes imposes certain conditions upon a consolidation or merger by us and restricts the incurrence of liens and the
entering into sale and leaseback transactions by us and our significant subsidiaries, among other restrictive covenants.
Proceeds from the 2031 Notes were used to refinance existing debt facilities of the Murano Group (including the GIC I Loan), fund a debt service reserve, cover transaction fees, fund working
capital and finance the completion of the GIC I Hotel. This was Murano’s first major debt capital markets transaction as a public firm, and it was oversubscribed. This financing improved Murano’s capital structure and liquidity, reducing
refinancing risk. The 2031 Notes received credit ratings (Ba1/BB) and were placed with institutional investors under Rule 144A/Reg S.
Payment Default; Discussions with Noteholders
On September 12, 2025, and March 12, 2026, the Issuer Trust did not make the scheduled interest payments due on such dates in respect of the 2031 Notes under the Indenture. The Relevant 2031
Notes Defaults resulted in payment defaults under the 2031 Notes and, following the expiration of the applicable grace period(s), Events of Default occurred under the Indenture. On October 15, 2025, the Company reported that a default had
occurred with respect to the interest payment due on September 12, 2025 in connection with the 2031 Notes. Since that time, the Company has been engaged in discussions with holders of the 2031 Notes and their advisors regarding a potential
consensual restructuring of the 2031 Notes.
Proposed consensual restructuring; Lock-Up Agreement and Term Sheet
On March 10, 2026, the Company announced that it had reached an agreement with the Ad Hoc Group representing more than 81% of the aggregate principal amount of the 2031 Notes outstanding on
the key terms of a proposed restructuring transaction relating to the 2031 Notes, as set forth in the Term Sheet. On the same date, the Company and certain of its subsidiaries entered into the Lock-Up Agreement to support the implementation
of the proposed transaction.
The Term Sheet contemplates that the proposed transaction may be implemented either (i) through amendments to the documentation governing the 2031 Notes if the consent of 100% of holders is
obtained, or (ii) if such 100% consent is not obtained, through a voluntary out-of-court exchange of the 2031 Notes for New Notes on a dollar-for-dollar basis coupled with a related consent solicitation. The Term Sheet further contemplates,
among other things, an extension of maturity to September 2032, modified interest mechanics (including specified PIK interest periods and cash interest periods thereafter, subject to conditions), and project-related arrangements in the GIC
I Complex, including an escrow structure linked to proceeds from the sale of contemplated Residential Condos and a contemplated change of hotel operator. In particular, the 2031 Notes Restructuring contemplates the replacement of Hyatt as
operator of the GIC I Hotel with Ennismore and the restructuring of the existing Beach Club Loan. In connection therewith, we have entered into the GIC I Hotel Management Agreement (Mondrian) with Ennismore for the operation of the GIC I
Hotel, which remains subject to the satisfaction of certain conditions precedent and has not yet become operative as of the date of this Report.
Insurgentes Loan
The construction, development and start of operations of the Insurgentes 421 Hotel Complex have been financed through a loan facility entered into on
September 29, 2022, by and among Inmobiliaria Insurgentes 421, as borrower, OHI421 and OHI421 Premium, as joint obligors, and Bancomext, as lender, as amended and restated from time to time. The principal amount of the facility was U.S.$75
million, with a variable interest rate, divided into two tranches, tranche A for an amount of U.S.$49.5 million and tranche B for an amount of U.S.$25.5 million. The use of proceeds for tranche A was for the payment and refinancing of a
prior loan; tranche B use of proceeds was for the financing of the renovation of the Insurgentes 421 Hotel Complex. On May 25, 2023, the parties amended and restated such loan agreement to increase the credit line with Bancomext from
U.S.$75 million to U.S.$100 million pursuant to a new tranche of credit (tranche C).
The quarterly interest payable under the Insurgentes Loan is equal to term SOFR plus a 3.5% margin and the maturity is October 7, 2037. The proceeds from the Insurgentes Loan were used to
refinance certain indebtedness related to the development of the Insurgentes 421 Hotel Complex and pay capital expenditures related to the development and start of operations of the Insurgentes 421 Hotel Complex.
As of December 31, 2025, the outstanding principal amount under the Insurgentes Loan was Ps.$1,772.6 million (U.S.$98.7 million).
As part of the collateral to secure the Insurgentes Loan, the following rights and assets were contributed to the Insurgentes Security Trust:
| • |
Inmobiliaria Insurgentes 421 contributed (i) the property of the Insurgentes 421 Hotel Complex, (ii) its collection rights under and in respect of each of the Insurgentes Lease Agreements, and (iii) its
collection rights in regard to any potential sale of the Insurgentes 421 Hotel Complex, among other rights set forth in the Insurgentes Security Trust;
|
| • |
OHI421 contributed (i) its collection rights under the Andaz Hotel Management Agreement and related net cash flows and (ii) its collection rights in regard to any sublease agreement;
|
| • |
OHI421 Premium contributed (i) its collection rights under the Mondrian Hotel Management Agreement and related net cash flows and (ii) its collection rights in regard to any sublease agreement;
|
| • |
Murano PV contributed (i) 500 Series A shares of fixed capital stock and (ii) 434,361,112 Series B shares of variable capital stock of Inmobiliaria Insurgentes 421;
|
| • |
Murano PV contributed (i) 49,499 Series A shares of fixed capital stock and (ii) 10,771,066 Series B shares of variable capital stock of Inmobiliaria Insurgentes 421, which together with the ESAGRUP
contribution represent approximately 99.99% of the capital stock of Inmobiliaria Insurgentes 421;
|
| • |
Murano Management contributed 49,999 shares of fixed capital stock representative of the capital stock of OHI421, which represent 99.99% of the capital stock of OHI421; and
|
| • |
Murano Management contributed 49,999 shares of fixed capital stock representative of the capital stock of OHI421 Premium, which represent 99.99% of the capital stock of OHI421 Premium.
|
The Insurgentes Loan is governed by Mexican laws and the parties are subject to the jurisdiction of the courts of Mexico City.
GIC I Loan
The construction, development, equipment and start of operations of the GIC I Hotel was initially financed through a mortgage loan facility provided by a syndicate of banks including
Sabcapital, CaixaBank, Bancomext, Nafin and Avantta Sentir Común, S. A. de C.V., SOFOM, E.N.R, as lenders (the “GIC I Senior Lenders”), pursuant to the terms and conditions of the syndicated senior secured loan agreement dated October 4,
2019 (as amended and restated from time to time, including on July 11, 2022, August 24, 2023 and December 20, 2023), entered into among the GIC I Trust, as borrower, Operadora GIC I, Operadora GIC II, and Murano World, as joint obligors,
the GIC I Senior Lenders, as lenders, and Sabadell, as administrative agent and collateral agent, under which the GIC I Senior Lenders granted a loan subject to the terms and conditions set forth therein in an aggregate amount of
U.S.$239,811,149.50 at an interest rate of term SOFR +4.0116%. The amounts borrowed under the GIC I Loan were used to partially finance the construction and development of the GIC Complex, among other uses.
The balance of the GIC I Loan was repaid in full.
GIC I VAT Loan
In order to finance up to 80% of the value added tax payable during the construction of the GIC I Hotel, the GIC I Trust as borrower and Operadora GIC I as joint obligor, entered into a loan
agreement dated as of October 16, 2019, with Bancomext, as lender, pursuant to which Bancomext provided a 12-year loan on the aggregate amount of U.S.$31,480,000.00 at an interest rate of TIIE 91 days + 2.75% (with borrowings as of 2024
bearing an interest rate of TIIE 28 days + 2.75%), and maturing on June 30, 2034 (as amended, supplemented and/or restated from time to time, the “GIC I VAT Loan”).
As part of the collateral to secure the GIC I VAT Loan, the GIC I Trust granted a second ranking mortgage over GIC Private Unit 1, GIC Private Unit 4 and GIC Private Unit 5.
The GIC I VAT Loan was governed by Mexican laws and the parties are subject to the jurisdiction of the courts of Mexico City.
The balance of the GIC I VAT Loan was repaid in full.
Beach Club Loan
The acquisition and development of the beach club property related to the GIC Complex has been financed through the Beach Club Loan. The annual interest payable under the Beach Club Loan is
equal to 10% and the loan matures on December 1, 2030. As of December 31, 2025, the outstanding principal amount of the Beach Club Loan was Ps.$359.1 million (U.S.$20 million).
As part of the collateral to secure the Beach Club Loan, Murano World granted a first ranking mortgage in favor of ALG with respect to the Playa Delfines Property where the beach club is
located.
The Beach Club Loan is governed by Mexican laws and the parties are subject to the jurisdiction of the courts of Mexico City.
As stated in this Report, the 2031 Notes Restructuring contemplates the replacement of Hyatt as operator of the GIC I Hotel with Ennismore and the restructuring of the Beach Club Loan. In
connection therewith, we have entered into the GIC I Hotel Management Agreement (Mondrian) with Ennismore for the operation of the GIC I Hotel, which remains subject to the satisfaction of certain conditions precedent and has not yet become
operative as of the date of this Report.
Finamo Loans
On January 5, 2024, Murano PV, as borrower, and Elías Sacal Cababie, as joint obligor, entered into a secured term loan with Finamo, as lender, in an aggregate amount of up to U.S.$26.0
million at a fixed interest rate of 15%, and maturing on January 1, 2030 (as amended, supplemented and/or restated from time to time, the “Finamo Loan I”). The amounts borrowed under the Finamo Loan
were used to partially finance the completion and start of operations of the GIC I Hotel, among other uses. As of December 31, 2025, the outstanding principal amount of the Finamo Loan I was Ps.$401.0 million (U.S.$22.3 million).
On April 9, 2024, Murano PV, as borrower, and Elías Sacal Cababie, as joint obligor, entered into a secured term loan with Finamo, as lender, in an aggregate amount of up to Ps.$100 million at
a fixed interest rate of 22%, and maturing on November 15, 2025 (the “Finamo Loan II”). As of December 31, 2025, the outstanding principal amount of the Finamo Loan II was Ps.$100 million. The
amounts borrowed under the Finamo Loan II were used to partially finance the start of operations of the GIC I Hotel, among other uses.
Additionally, on December 3, 2024, Murano World, as borrower, Elías Sacal Cababie and Murano PV, as joint obligors, entered into a secured term loan with Finamo, as lender, in an aggregate
amount of up to Ps.$144.5 million at a fixed interest rate of 22%, and maturing on December 3, 2025 (the “Finamo Loan III”, and together with the Finamo Loan I and Finamo Loan II, the “Finamo Loans”). The amounts borrowed under the Finamo Loan III were used to paid rents of hotel equipment. As of December 31, 2025, the outstanding principal amount of the Finamo Loan II and III were
Ps.$100 million and Ps.$144.5 million, respectively.
The Finamo Loans are secured by GIC Private Unit 3, which is owned by the GIC II Trust.
The Finamo Loans are governed by Mexican laws and the parties are subject to the jurisdiction of the courts of Mexico City.
NAFIN Loan
In order to finalize the construction and initiate operations of the GIC I Hotel, among other uses, Murano PV, as borrower, and Elías Sacal Cababie and Marcos Sacal Cohen, as joint obligors,
entered into a loan agreement dated October 17, 2024 with Nafin, as lender, pursuant to which Nafin provided a two year loan on the aggregate amount of U.S.$70,378,283.27 at an interest rate of SOFR three months + 3.75% to 4.25% (based on
the interest period), and maturing on October 17, 2027. As of December 31, 2025, the outstanding principal amount of the Nafin Loan was Ps.$1,044.4 (U.S.$58.2 million).
As part of the collateral to secure the Nafin Loan, Murano PV caused to grant a first ranking mortgage over GIC Private Unit 4 and GIC Private Unit 5, which should be substituted for the GIC
Private Unit 3 (the land of the GIC II Hotel) and, therefore, the mortgages over GIC Private Unit 4 and GIC Private Unit 5 should be terminated. Additionally, Murano PV, as settlor and second beneficiary, Nafin, as first beneficiary, and
CIBanco (with Multiva acting as successor trustee), solely in its capacity as trustee (fiduciario), entered into an irrevocable management trust agreement No. CIB/4470 (Contrato de Fideicomiso Irrevocable de Administración No. CIB/4470), dated November 11, 2024, to establish and manage a debt service reserve account for the Nafin Loan, the amounts of which are used to comply with the
obligations under the Nafin Loan.
The Group is currently negotiating definitive documents with NAFIN regarding a consensual settlement of the Nafin Loan, which as approved by the committees of Nafin will involve the transfer
in lieu of payment (payment in kind) of the GIC Private Unit 5 (currently subject to a mortgage in favor of Nafin) and the restructuring of the payment terms of the then outstanding amount (after giving effects to the payment in kind of the
GIC Private Unit 5) which will continue to be secured with a mortgage over the GIC Private Unit 4 in favor of Nafin. However, as of the date of the issuance of the Consolidated and Combined Financial Statements, no final agreement has been
executed.
The Nafin Loan is governed by Mexican laws and the parties are subject to the jurisdiction of the courts of Mexico City.
Exitus Loan
In order to refinance the Exitus Original Loans, on June 30, 2025, Murano World, as borrower, Exitus Capital, S.A.P.I. de C.V., SOFOM, E.N.R., as lender, and ESAGRUP, Elías Sacal Cababie and
Marcos Sacal Cohen, as joint obligors, entered into a secured term loan in an aggregate amount of U.S.$20.4 million at a fixed interest rate of 15%, and maturing on June 30, 2029 (as amended, supplemented and/or restated from time to time,
the “Exitus Loan”). As of December 31, 2025, the outstanding principal amount of the Exitus Loan is U.S.$20.4 million.
The collateral to secure the Exitus Loan consists of the Exitus Trust which estate consists of (a) real estate property known as “La Costa Bajamar” lot identified as MP-1 consisting of five
fractions of land located in Ensenada, Baja California, (b) real estate property known as “Club de Playa” consisting of lots seven to thirteen located in Fraccionamiento Brisas del Márquez, Mz., E, S/N in Acapulco de Juárez, Guerrero, and
(c) real estate property consisting of private units eight and nine located in different lots and superblocks within the GIC Complex.
Murano World is currently negotiating with Exitus regarding a potential restructuring and settlement of the Exitus Loan. However, as of the date of the issuance of the Consolidated and
Combined Financial Statements, no final agreement has been reached nor approved.
The Exitus Loan is governed by Mexican laws and the parties are subject to the jurisdiction of the courts of Mexico City.
Sofoplus Loan
In order to repay the Sofoplus Original Loan, among other uses, on September 30, 2024, Murano World, as borrower, and Elías Sacal Cababie and Marcos Sacal Cohen, as joint and several obligors,
entered into a secured term loan with Sofoplus, as lender, in an aggregate amount of U.S.$3.6 million at a fixed interest rate of 16%, and maturing on October 1, 2026 (as amended, supplemented and/or restated from time to time, the “Sofoplus Loan I”). As of December 31, 2025, the outstanding principal amount of the Sofoplus Loan I was Ps.$64.6 million (U.S.$3.6 million).
Additionally, on January 30, 2025, Murano World, as borrower, and Elías Sacal Cababie and Marcos Sacal Cohen, as joint and several obligors, entered into an unsecured term loan with Sofoplus,
as lender, in an aggregate amount of up to U.S.$6.0 million at a fixed interest rate of 16%, and maturing on February 1, 2028 (the “Sofoplus Loan II”, and together with the Sofoplus Loan I, the “Sofoplus Loans”). The amounts borrowed under the Sofoplus Loan II were used to repay the Sofoplus Original Loan. As of December 31, 2025, the outstanding principal amount of the Sofoplus Loan II was
Ps.$107.7 million (U.S.$6.0 million).
The collateral to secure the Sofoplus Loans consists of the Exitus Trust which estate consists of (a) real estate property known as “La Costa Bajamar” lot identified as MP-1 consisting of five
fractions of land located in Ensenada, Baja California, (b) real estate property known as “Club de Playa” consisting of lots seven to thirteen located in Fraccionamiento Brisas del Márquez, Mz., E, S/N in Acapulco de Juárez, Guerrero, and
(c) real estate property consisting of private units eight and nine located in different lots and superblocks within the GIC Complex.
The Sofoplus Loans are governed by the laws of Mexico City, and the parties are subject to the jurisdiction of the courts of Mexico City.
Harry Sacal (Elías Sacal’s brother), owns 32% of Pluscorp S.A.P.I de C.V., which, in turn, owns 99% of Sofoplus. For more information about Harry Sacal’s participation in Pluscorp S.A.P.I. de
C.V., see “Item 7—Major Shareholders and Related Party Transactions—B. Related Party Transactions.”
Santander Revolving Credit Facility
On March 3, 2023, Murano World, as borrower, Santander International, as lender and Harry Sacal Cababie as pledgor, entered into an uncommitted line of credit agreement in an aggregate amount
of U.S.$1.5 million for the use and payment of the credit granted at an ordinary interest of the amount equivalent to the rate of interest that reflects the all-inclusive cost of funding to Santander plus 0.8%. The Santander Revolving
Credit Facility was extended on March 27, 2024, pursuant to which Murano World obtained an additional U.S.$500k (five hundred thousand dollars) to its existing revolving line of credit, converting the principal amount of credit to U.S.$2
million. On March 7, 2025, the maturity of this loan was extended for two years to March 7, 2027.
On March 27, 2026, the Group repaid in full the Santander Revolving Credit Facility, which had an outstanding balance of U.S.$1,498,204.
Finamo Sale and Lease Back Agreements
Based on their characteristics, the Finamo Sale and Lease Back Agreements were classified as sale and lease back agreements for accounting purposes and recognized as debt. As of December 31,
2025, Ps.$318.7 million was outstanding under these agreements. See “Item 4. Information on the Company—D. Property, Plant and Equipment—Description of Certain Project Agreements” and Note 10 to the
Murano Group Combined Financial Statements for more information about these agreements and our indebtedness.
Lease Liabilities
Coppel Lease Agreement
On November 8, 2023, Operadora GIC I, as lessee, Arrendadora Coppel, as lessor, and Murano World, Edificaciones BVG and Elías Sacal Cababie as joint and several obligors, entered into a lease
agreement under which, the parties establish the terms and conditions based on which the lessor will grant the lessee the temporary use and enjoyment of the goods described in the specific contracts that are signed from time to time by the
parties, in which, additionally, the lessee will have the obligation to pay to the lessor the rental amount. As of December 31, 2025, Ps.$151.3 million was outstanding under this agreement.
We had $161.2 million of lease liabilities as of December 31, 2025. For further information on our leases, see “Note 9 to the Murano Group Combined Financial
Statements.”
Commitments and Contingencies
We are subject to litigation, claims, and other commitments and contingencies arising in the ordinary course of business.
Finamo Proceeding.
On October 13, 2025, Finamo and Arrendadora Finamo initiated a commercial enforcement proceeding (juicio oral mercantil) against Murano PV, Murano
World, Edificaciones BVG, Elías Sacal Cababie, and other related parties (Case No. 1057/2025) before the Twentieth Civil Court for Oral Proceedings (Juzgado Vigésimo de lo Civil de Proceso Oral) of
Mexico City, in connection with the alleged failure to make (i) principal and interest payments under the Finamo Loans and (ii) lease payments under the Finamo Sale and Lease Back Agreements. As of the date of this Report, such proceedings
are ongoing at the preliminary stage and no final judgment has been issued. On October 13, 2025, the court granted precautionary measures, as well as other interim measures. The Murano Group is contesting such proceedings and is also
negotiating definitive settlement agreements Finamo and Arrendadora Finamo regarding a potential negotiated settlement and resolution of these matters in connection with its ongoing debt restructuring efforts. For further information, see "Item 8. Financial Information—A. Consolidated and Combined Statements and Other Financial Information—Legal and Arbitration Proceedings" and "Item 5. Operating and
Financial Review and Prospects—B. Liquidity and Capital Resources—Commitments and Contingencies."
While no assurance can be given as to the ultimate outcome of the proceeding described above, based on information currently available, in the absence of implementing the proposed terms of a
potential settlement with Finamo and Arrendadora Finamo, the Murano Group is unable at this stage to estimate the amount of any potential loss in connection with such proceeding, and does not currently expect the ultimate resolution of
these matters to have a material adverse effect on its financial position or results of operations. However, given the early stage of these proceedings and the inherent uncertainty of litigation, the outcomes may differ from the Murano
Group's current assessment. For further details regarding the underlying payment defaults, see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Indebtedness"
and "Item 3. Key Information—D. Risk Factors."
Off-Balance Sheet Arrangements
As of December 31, 2025, we did not have any off-balance sheet arrangements.
| C. |
Research and development, patents and licenses, etc.
|
None.
| D. |
Trend Information
|
Other than as disclosed elsewhere in this Report, we are not aware of any other trends, uncertainties, demands, commitments or events for the fiscal year ended December 31, 2025 that are
reasonably likely to have a material and adverse effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of
operations or financial conditions.
| E. |
Critical Accounting Estimates
|
Our Consolidated and Combined Financial Statements are prepared in accordance with the IFRS as issued by the IASB. In connection with the preparation of its Combined Financial Statements, we
are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. We base our assumptions, estimates, and
judgments on historical experience, current trends and other factors that management believes to be relevant at the time its Combined Financial Statements are prepared. On a regular basis, we review the accounting policies, assumptions,
estimates, and judgments to ensure that its financial statements are presented fairly and in accordance with IFRS. However, because future events and their effects cannot be determined with certainty, actual results could differ from its
assumptions and estimates, and such differences could be material. We have identified several policies as being critical because they require management to make particularly difficult, subjective and complex judgments about matters that are
inherently uncertain, and there is a likelihood that materially different amounts would be reported under different conditions or using different assumptions.
All of our significant accounting policies are discussed in Note 3 to our Consolidated and Combined Financial Statements included elsewhere in this Report.
Information about assumptions and estimation uncertainties as of December 31, 2025, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and
liabilities within the next financial year is included in the following notes to our Consolidated and Combined Financial Statements included elsewhere in this Report: Note 7; Note 8; Note 11; Note 12; and Note 13.
Significant Factors, Assumptions, and Methodologies Used in Determining Fair Value
The Company has certain assets measured and recognized at fair value; therefore, we evaluate the significant observable inputs and valuation adjustments annually. If third-party information,
such as broker quotes or pricing services, is used to measure fair values, Murano Group evaluates the evidence obtained from third parties to support the conclusion that these valuations meet the requirements of IFRS, including the level in
the fair value hierarchy in which the valuations should be classified.
When measuring the fair value of an asset or a liability, Murano Group uses observable market data whenever possible. Fair values are categorized into different levels in a fair value
hierarchy based on the inputs used in the valuation techniques as follows:
| • |
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
| • |
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
|
| • |
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety
at the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
Long-lived assets
We evaluate the carrying value of our long-lived assets for impairment by comparing the expected undiscounted future cash flows of the assets to the net book value of the assets when certain
triggering events occur. If the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value is charged to earnings. When determining fair value, we
use internally developed discounted future cash flow models, third-party appraisals and, if appropriate, current estimated net sales proceeds from pending offers. Under the discounted cash flow approach we use various assumptions, including
projections of revenues based on assumed long-term growth rates, estimated costs, terminal value growth rate and appropriate pre-tax discount rates based on the weighted-average cost of capital.
As part of the process, we use judgment to:
| • |
determine whether or not a triggering event has occurred. The final determination of the occurrence of a triggering event is based on our knowledge of the hospitality industry, historical experience,
location of the property, market conditions and property-specific information available at the time of the assessment. We realize, however, that the results of our analysis could vary from period to period depending on how our
judgment is applied and the facts and circumstances available at the time of the analysis; and
|
| • |
determine the projected undiscounted future operating cash flows when necessary. The principal factor used in the undiscounted cash flow analysis requiring judgment is our estimates regarding long-term
growth and costs which are based on historical data, various internal estimates, and a variety of external sources and are developed as part of our routine, long-term planning process; and determine the estimated fair value of the
respective long-lived asset when necessary. In determining the fair value of a long-lived asset, we typically use internally developed discounted cash flow models. The principal factors used in the discounted cash flow analysis
requiring judgment are the projected future operating cash flows, the weighted-average cost of capital and the terminal value growth rate assumptions. The weighted-average cost of capital takes into account the relative weights of
each component of our capital structure (equity and long-term debt). Our estimates of long-term growth and costs are based on historical data, various internal estimates and a variety of external sources and are developed as part of
our routine, long-range planning process.
|
Changes in economic and operating conditions impacting these judgments could result in impairments to our long-lived assets in future periods, which could be material to our results of
operation. We had Ps.$17,894.4 million and Ps.$20,155.1 million of long-lived assets as of December 31, 2025 and December 31, 2024, respectively.
Going Concern
With respect to the Consolidated and Combined Financial Statements, the independent auditor’s separate report relating thereto contains an explanatory paragraph that states that certain
circumstances raise substantial doubt about our ability to continue as a going concern and draws attention to notes 2c., 10 and 20 of the Consolidated and Combined Financial Statements and indicates that management has identified material
uncertainties that cast substantial doubt on the ability of the Murano Group to continue as a going concern. As indicated in note 2c., as of December 31, 2025, the total current liabilities exceed the amount of total current assets, and
based upon the Murano Group’s current plans, management believes that financial resources to fund its operations for the twelve months subsequent to the authorization and issuance of the Consolidated and Combined Financial Statements may be
insufficient. These events or conditions, along with other matters as set forth in note 19 to the Consolidated and Combined Financial Statements indicate that a material uncertainty exists that casts substantial doubt on our ability to
continue as a going concern. Management’s plans regarding these matters are also described in note 2c. to the Consolidated and Combined Financial Statements.
Management continues evaluating strategies to obtain the additional funding necessary for future operations and project redesign or completion, to comply with all covenants as required by the
debt instruments to which entities of the Murano Group are parties to, and to be able to discharge the outstanding debt and other liabilities as they become due. Furthermore, the Murano Group has a plan to execute a debt restructuring.
In addition, the Murano Group’s ability to access the equity capital markets may be affected by its continued compliance with Nasdaq listing requirements. As described under “Recent Developments” and “Item 3.D—Risk Factors - If we fail to regain compliance with Nasdaq’s minimum bid price requirement, our ordinary shares could be delisted from
Nasdaq, which would materially adversely affect liquidity, trading price and our ability to raise capital,” on April 13, 2026, the Company received a notification letter from Nasdaq indicating that it is no longer in compliance
with Nasdaq’s minimum bid price requirement. While the Company has been provided with a compliance period to regain compliance, there can be no assurance that such compliance will be achieved.
A failure to regain compliance with Nasdaq listing requirements could adversely impact the liquidity of the Company’s ordinary shares, reduce market visibility, and limit the Company’s ability
to raise equity or equity-linked financings on acceptable terms. Any such limitations could negatively affect the Murano Group’s liquidity position and its ability to fund operations, service indebtedness and execute its business and
restructuring plans.
The Murano Group has also considered alternative strategies with respect to the hotel operations in Cancun (including changes to the hotel management agreement and operational partners as
described in this Report), which could generate additional cash flows compared to the current commercial arrangements. In assessing these strategies, management has considered the available cash resources, inflows from the hotels that are
already in operation, and future financing options that may be available to the Murano Group such as new or restructured loan agreements and the possible financial support of the major shareholder of the Murano Group. However, the Murano
Group may be unable to access further equity or debt financing when needed or may not be successful in implementing its business continuity strategy.
Our Consolidated and Combined Financial Statements were prepared assuming we will continue operating on a going concern basis (which contemplates we will be able to meet our
obligations as they become due within one year after the date these financial statements are issued). Our ability to continue as a going concern is dependent on many factors, including, among other things, improvements in our operating
results necessary to comply with our financial covenant requirements, and if necessary, refinancing of existing debt, amending or modifying our existing or future financial covenants or obtaining waivers in events of breach of covenants.
As of April 30, 2025, the following amounts are owed of principal, interest or lease payments in accordance with the maturity of the loans and lease agreements, as
applicable:
|
Loan/Lease Agreements
|
Principal in default
|
Penalty for late payment on principal
|
Ordinary interest in default
|
Penalty for late payment on interest
|
Lease in default
|
Penalty for late payment on lease
|
|||||||
|
Ps.
|
USD
|
Ps.
|
USD
|
Ps.
|
USD
|
Ps.
|
USD
|
Ps.
|
USD
|
Ps.
|
USD
|
||
|
Beach Club Loan
|
- |
- | - | - |
-
|
U.S.$ 4,675,799
|
- |
U.S.$ 767,405
|
- | - | - | - | |
|
Finamo Loan I
|
- |
- | - | - |
-
|
U.S.$ 4,523,459
|
- |
U.S.$ 1,161,608
|
- | - | - | - | |
|
Finamo Loan II
|
Ps.$100,000,000
|
- |
Ps.$17,600,000
|
- |
Ps.$21,816,667
|
- |
Ps.$7,083,267
|
- | - | - | - | - | |
|
Finamo Loan III
|
Ps.$144,493,360
|
- |
Ps.$25,430,831
|
- |
Ps.$29,757,605
|
- |
Ps.$9,387,156
|
- | - | - | - | - | |
|
Exitus Loan 1
|
- | - | - | - | - |
U.S.$ 2,584,401
|
- |
U.S.$ 176,636
|
- | - | - | - | |
|
Sofoplus Loan I
|
- | - | - | - |
Ps.$593,333
|
- | - | - | - | - | - | - | |
|
Sofoplus Loan II
|
- | - | - | - | - |
U.S.$ 486,400
|
- | - | - | - | - | - | |
|
Sofoplus Loan III
|
U.S.$254,497
|
U.S.$ 808,360
|
|||||||||||
|
Finamo Sale and Lease Back Agreements
|
Ps.$221,549,489
|
- |
Ps.$62,056,307
|
- | - | - | - | - | - | - | - | - | |
|
Coppel Lease Agreement
|
- | - | - | - | - | - | - | - |
Ps.$44,240,467
|
- |
Ps.$6,195,669
|
- | |
|
NAFIN
|
- | - | - | - | - |
U.S.$ 2,305,038
|
- | - | - | - | - | - | |
|
TOTAL
|
Ps.$466,042,849
|
U.S.$254,497
|
Ps.$105,087,138
|
-
|
Ps.$52,167,605
|
U.S.$ 13,078,419
|
Ps.$16,470,423
|
U.S.$ 2,105,649
|
Ps.$44,240,467
|
-
|
Ps.$6,195,669
|
-
|
|
See “Recent Developments” and “Risk Factors—Risks Related to Murano’s Business and Operating in the Hotel Industry—Our total current liabilities exceed the amount of the total current assets,
which has placed significant doubt on our ability to continue as going concern.”
| ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|
| A. |
Directors and Senior Management
|
The table below sets forth our executive officers and directors. Our board of directors (“Board”) is comprised of three directors: Elías Sacal Cababie, Marcos Sacal Cohen, and Julio Arias
García.
|
Name
|
Position
|
Age
|
Expiration
|
|
Elías Sacal Cababie
|
Member of the Board
|
60
|
2026
|
|
Marcos Sacal Cohen
|
Member of the Board
|
33
|
2027
|
|
Julio Arias García
|
Independent Member of the Board
|
56
|
2026
|
|
Oscar Jazmani Mendoza Escobar
|
CFO
|
44
|
2026
|
Biographical Information
Elías Sacal Cababie, 60, founded BVG World, S.A. de C.V. (“Bay View Grand,” currently Murano World, S. A. de
C.V) in 1996 and has served as chairman of the board of directors of GIC I Trust since 2018. Additionally, Mr. Sacal is the Chief Executive Officer of Grupo Murano. Since 2009. Mr. Sacal is a leader within Mexico’s tourism and lodging
industry with over 20 years of experience developing, acquiring and financing real estate. Between 1998 and 2008, Mr. Sacal developed the “Second Home Living” business focused on international buyers interested in owning a vacation home in
Mexico. Previously, Mr. Sacal was a director on the board of Archiao Limited, a New York City and Dublin software company, from 2014 to 2018. Mr. Sacal has developed multiple residential real estate projects in beach cities including Puerto
Vallarta, Mexico City, and Cancún. Mr. Sacal is a member of the boards of trustees of the Mexico’s National Museum of Anthropology, the Mexican Federation of Associations of Friends of Museums, and is an adviser to the Princess Grace
Foundation (Monaco). We believe that Mr. Sacal is qualified to serve as a member of our board of directors because of his extensive business, real estate, and leadership experience, including leadership of Bay View Grand and Grupo Murano.
Marcos Sacal Cohen, 33, is the Chief Operating Officer of Murano Group, where he oversees various high-value projects. Notably, he has managed the
construction and sale of Residencial Marina BVG Ixtapa for over U.S.$89 million, facilitated the sale of Residencial Villa Alejandra BVG for U.S.$48 million, and contributed to the successful sale of Grand Venetian BVG Vallarta for U.S.$300
million. Sacal Cohen holds a bachelor’s degree in business administration from Universidad Anahuac in Mexico City, and he has furthered his education with a specialization in corporate finance from ITAM and a diploma with certification in
Project Evaluation from Harvard University. With his extensive expertise, he has secured financing exceeding $400 million and successfully concluded the construction of over 1,400 rooms. Moreover, he has adeptly secured management
agreements with top-tier companies. His leadership was instrumental in navigating the process of a public listing on Nasdaq.
Julio Arias García, 56, is a Certified Public Accountant by the Instituto Mexicano de Contadores Públicos A.C. Previously, he attended the faculty of
public accountants at the Universidad Nacional Autónoma de Mexico (UNAM). Mr. Arias has more than 34 years of experience in external audit, finance and taxes areas in private and public companies among different industries such as real
estate, hospitality, automotive, service sector as well as financial business working with insurance companies. He has been an independent consultant and serves as a member of the board in private companies. In the last few years, he has
been involved in developing complex tax structures to help companies improve their tax benefits. Finally, due to his deep experience in external audit where he was a director in small firms, he has also been a trusted advisor in the
implementation of internal control environments including COSO methodology and SOX controls.
Oscar Jazmani Mendoza Escobar, 44, is the Interim Global Chief Financial Officer. Mr. Mendoza has served as the Chief Financial Officer for Murano
Mexico, where he has played a pivotal role over the past two years. He is a Certified Public Accountant accredited by the Instituto Mexicano de Contadores Públicos, A.C. and holds a Master’s degree in Finance. With more than 20 years of
experience in accounting, audit, and finance, Mr. Mendoza brings a wealth of expertise across a broad range of industries, including hospitality, real estate, manufacturing/maquila, automotive, retail and wholesale, consumer,
entertainment/media, and oil & gas. Prior to joining Murano, he was an Assurance Director at PwC Mexico, advising both public and private clients on reporting compliance in Mexico, the United States, Spain, Brazil, Sweden, Italy, and
Australia. His extensive background enables him to provide strategic financial leadership and ensure robust compliance and reporting standards across the organization.
Family Relationships
Elías Sacal Cababie and Marcos Sacal Cohen are related as father and son.
Share Ownership
The shares and any outstanding beneficially owned by our directors and officers and/or entities affiliated with these individuals are disclosed in “Item 7.
Major Shareholders and Related Party Transactions-A. Major Shareholders.”
| B. |
Compensation
|
Compensation of Directors and Officers
For the year ended December 31, 2025, the aggregate amount of compensation we paid to all members of Murano’s management was Ps.$33.3 million, which amount includes compensation paid to the
members of our Board of Directors for attending meetings of the Board of Directors and its Committees, the salaries of our senior management, including of our Chief Operating Officer, and the salary of the Chairman of our Board of
Directors. Of the Ps.$33.3 million that we paid to members of Murano’s management, $7.7 million was paid as base compensation and cash-based performance bonuses, including pension and post-employment benefits.
Elías Sacal Cababie’s employment agreement provides for an indefinite period. He serves as Chief Executive Officer of Murano Group and does not receive a base salary for his functions as he is
the main shareholder of Murano Group.
The following table discloses the amount of compensation paid to our senior management for the years ended December 31, 2025, 2024, and 2023:
Our “senior management” includes the Board of Directors Chief Executive Officer, the Chief Operating Officer and Chief Financial Officer.
|
Year
|
Salary (Ps.$)
|
Bonus
(Ps.$)
|
Option
Awards
(Ps.$)
|
All Other
Compensation
(Ps.$)
|
Total
(Ps.$)
|
|||||||||||||||
|
2025
|
25,607,851
|
6,990,269
|
-
|
662,270
|
33,260,390
|
|||||||||||||||
|
2024
|
28,470,801
|
2,927,735
|
-
|
702,656
|
32,101,19
|
|||||||||||||||
|
2023
|
28,065,770
|
-
|
28,065,770
|
|||||||||||||||||
All non-executive directors are subject to a director compensation policy applying a uniform amount of cash compensation and Murano Group equity on an annual basis. Directors appointed to
committees receive an additional per committee stipend. Directors performing the duty of Committee Chair or Lead Independent Director receive an additional stipend. External advice will be taken when reviewing director compensation.
Indemnification of Officers and Auditors
The Company has also entered into Agreements of Insurance with each Director or officer. Such agreements contain a right of access to the Company’s books and records for a purpose reasonably
related to the Director’s or officer’s position as a current or former director or officer, to the extent such documents would be made available to a Director under applicable law.
The Company has not otherwise, during or since the period of this Report, except to the extent permitted by law, indemnified or agreed to indemnify an auditor of the Company or of any related
body corporate against a liability incurred as an auditor.
| C. |
Board Practices
|
Foreign Private Issuer Exemption
Under Nasdaq rules, a “foreign private issuer,” as defined by the SEC, such as Murano generally is permitted to follow home country rules with regard to corporate governance practices, instead
of the comparable requirements of the applicable Nasdaq rules, other than with respect to certain matters including, among others, the requirement that the issuer have a majority of independent directors, the audit committee, compensation
committee, and nominating and corporate governance committee requirements, the requirement to disclose third-party director and nominee compensation, and the requirement to distribute annual and interim reports.
In the interest of transparency, as a foreign private issuer, Murano will not follow the requirement applicable for U.S. listed companies to disclose third-party director and nominee
compensation, and the requirement to distribute annual and interim reports. Notwithstanding, Murano will comply with the independent audit committee requirement, the notification of non-compliance and voting rights, required by Nasdaq 5600
Series rules.
We also inform you of the following nuances with respect to certain of our other corporate governance practices as of the date of this Report, subject to future changes or additions from time
to time (that would be publicly disclosed):
| • |
our Board of Directors and Audit Committee (“AC”) will hold fiduciary duties and liability for our accounts and annual filings, as opposed to them being signed off by our Chief Executive Officer and Chief
Financial Officer with oversight by the AC;
|
| • |
our shareholders are required by home country law to appoint our auditor, which therefore goes into the general shareholders meeting circular each year. Our AC does not itself appoint the auditor, they
only recommend them for appointment; and
|
| • |
our shareholders are not required to vote to issue shares, which is delegated directly to our Board of Directors under our Articles and in our Compensation & Governance Committee charter.
|
| • |
Our audit committee is comprised by a single member, who is deemed to be “independent” as defined in NASDAQ Marketplace Rule 4200.
|
Murano intends to take all actions necessary for it to maintain compliance as a foreign private issuer under the applicable corporate governance requirements of the Sarbanes-Oxley Act of 2002,
the rules adopted by the SEC and Nasdaq corporate governance rules and listing standards.
Because Murano is a foreign private issuer, its directors and senior management are not subject to short-swing profit and insider trading reporting obligations under Section 16 of the Exchange
Act. They will, however, be subject to the obligations to report changes in share ownership under Section 13 of the Exchange Act and related SEC rules.
Controlled Company
For purposes of the rules of the Nasdaq, Murano is a “controlled company.” Under the Nasdaq rules, controlled companies are companies of which more than 50% of the voting power for the
election of directors is held by an individual, a group, or another company. Upon completion of the Business Combination, Elías Sacal Cababie owned more than 50% of the outstanding Murano Ordinary Shares. Accordingly, Murano may be eligible
to take advantage of certain exemptions from certain Nasdaq corporate governance standards.
Corporate Governance
We have structured our corporate governance in a manner that we believe closely aligns our interests with those of our shareholders following the Business Combination. Notable features of our
corporate governance include:
| • |
we have independent director representation on our Audit, Compensation & Governance, and Nominations committees, and our independent directors meet with sufficient frequency to allow our Board to
manage and control our business in executive sessions without the presence of our corporate officers or non-independent directors;
|
| • |
at least one of our directors qualifies as an “audit committee financial expert” as defined by the SEC; and
|
| • |
we implement a range of other corporate governance practices, including implementing a robust director education program.
|
Our Board has adopted Corporate Governance Guidelines, which are available on our website. The reference to our website address in this Report does not include or incorporate by reference the
information on our website into this Report.
Independence of our Board of Directors
Audit Committee
Our Audit Committee will be responsible for, among other things:
| • |
appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm;
|
| • |
discussing with our independent registered public accounting firm their independence from management;
|
| • |
reviewing, with our independent registered public accounting firm, the scope and results of their audit;
|
| • |
approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm;
|
| • |
overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the annual financial statements that we file with the SEC;
|
| • |
overseeing our financial and accounting controls and compliance with legal and regulatory requirements;
|
| • |
reviewing our policies on risk assessment and risk management;
|
| • |
reviewing related person transactions; and
|
| • |
establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters.
|
Pursuant to NASDAQ Marketplace Rule 4350(a), a foreign private issuer may follow its home country practice in lieu of Rule 4350, which sets forth the qualitative Listing Requirements for
NASDAQ listed companies. Rule 4350 requires, among other things, that a listed company have at least three members on its audit committee. The Company currently has an audit committee consisting of a single member, who is deemed to be
“independent” as defined in NASDAQ Marketplace Rule 4200. Under Jersey law, audit committees are not required to be composed of more than one member.
As a result, effective September 4, 2025, Mr. Julio Arias García was appointed as the sole member of the Audit Committee. Mr. Arias qualifies as an independent director under the applicable
rules and regulations of the SEC and Nasdaq with respect to audit committee membership. In addition, Mr. Arias meets the requirements for financial literacy under applicable SEC and Nasdaq rules and qualifies as an “audit committee
financial expert,” as such term is defined in Item 407(d)(5) of Regulation S‑K. The written charter for the Audit Committee is available on our website. The reference to our website address in this Report does not include or incorporate by
reference the information on our website into this Report.
Compensation & Governance Committee
Our Compensation and Governance committee will be responsible for, among other things:
| • |
reviewing and approving the corporate goals and objectives, evaluating the performance of and reviewing and approving, (either alone or, if directed by the board of directors, in conjunction with a
majority of the independent members of the board of directors) the compensation of our Chief Executive Officer;
|
| • |
overseeing an evaluation of the performance of and reviewing and setting or making recommendations to our board of directors regarding the compensation of our other executive officers;
|
| • |
reviewing and approving or making recommendations to our board of directors regarding our incentive compensation and equity-based plans, policies and programs;
|
| • |
reviewing and approving all employment agreement and severance arrangements for our executive officers;
|
| • |
making recommendations to our board of directors regarding the compensation of our directors; and
|
| • |
retaining and overseeing any compensation consultants.
|
The sole member of our Compensation and Governance committee, Mr. Julio Arias García, was designated by our Board and qualifies as independent director according to the rules and regulations
of the SEC and Nasdaq with respect to compensation committee membership, including the heightened independence standards for members of a compensation committee. Our Board has adopted a new written charter for the compensation and
governance committee, which is available on our website. The reference to our website address in this Report does not include or incorporate by reference the information on our website into this Report.
As a foreign private issuer, we are permitted to follow our home country practice in lieu of certain Nasdaq corporate governance requirements, including with respect to the composition of our
board committees. We have elected to follow Jersey law in this respect, pursuant to which there is no requirement for our Compensation and Governance Committee to be composed of more than one member.
Nominations Committee
Our nominations committee will be responsible for, among other things:
| • |
identifying individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors;
|
| • |
overseeing succession planning for our Chief Executive Officer and other executive officers;
|
| • |
periodically reviewing our board of directors’ leadership structure and recommending any proposed changes to our board of directors;
|
| • |
reviews developments in corporate governance practices;
|
| • |
overseeing an annual evaluation of the effectiveness of our board of directors and its committees; and
|
| • |
developing and recommending to our board of directors a set of corporate governance guidelines.
|
The sole member of our Nominations Committee, Mr. Julio Arias García, was designated by our Board and qualifies as independent director according to the rules and regulations of the SEC and
Nasdaq with respect to nominations committee membership. Our Board has adopted a new written charter for the Nomination Committee, which is available on our website. The reference to our website address in this Report does not include or
incorporate by reference the information on our website into this Report.
As a foreign private issuer, we are permitted to follow our home country practice in lieu of certain Nasdaq corporate governance requirements, including with respect to the composition of our
board committees. We have elected to follow Jersey law in this respect, pursuant to which there is no requirement for our Nominations Committee to be composed of more than one member.
Risk Oversight
Our board of directors is responsible for overseeing our risk management process. Our board of directors focuses on our general risk management strategy, the most significant risks facing us,
and oversees the implementation of risk mitigation strategies by management. Our audit committee is also responsible for discussing our policies with respect to risk assessment and risk management. Our board of directors believes its
administration of its risk oversight function has not negatively affected our board of directors’ leadership structure.
Code of Ethics
Information regarding our Code of Business Conduct and Ethics is set forth in Item 16B of this Report.
| D. |
Employees
|
As of December 31, 2025, Murano directly and indirectly employed approximately 1,016 employees worldwide at its corporate offices and on-site at its resorts. Murano believes relations with its
employees are good. Murano estimates that 522 of these employees are represented by labor unions. Third-party service providers hire a significant number of employees to perform services for Murano and its affiliates, as is customary in the
industry.
| E. |
Share Ownership
|
Information regarding the ownership of Murano’s ordinary shares by Murano’s directors and executive officers is set forth in “Item 7. Major Shareholders and
Related Party Transactions—A. Major Shareholders” of this Report.
| F. |
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
|
Not applicable.
| ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
|
A.
|
Major Shareholders
|
The following table sets forth information relating to the beneficial ownership of Murano’s ordinary shares as of December 31, 2025 by:
| • |
each person, or group of affiliated persons, known by us to beneficially own more than 5% of outstanding ordinary shares;
|
| • |
each of our directors;
|
| • |
each of our senior management; and
|
| • |
all of our directors and executive officers as a group.
|
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to, or the power to receive the economic benefit of ownership
of, the securities. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares that the person has the right to acquire within 60 days are included, including through the exercise of
any option or other right or the conversion of any other security. However, these shares are not included in the computation of the percentage ownership of any other person.
As of March 21, 2024 Murano’s ordinary shares issued after giving effect to the Business Combination were 79,242,873.
As of December 31, 2025 the percentage of Murano’s ordinary shares beneficially owned is computed on the basis of 79,718,832 ordinary shares issued and outstanding.
|
Beneficial Owners(1)
|
Number of
Ordinary
Shares
|
Percentage of
all
Ordinary
Shares
|
||||||
|
5% shareholders:
|
||||||||
|
Elías Sacal Cababie
|
69,152,609
|
86.75
|
%
|
|||||
|
Shawn Matthews(2)
|
8,812,500
|
11.05
|
%
|
|||||
|
Directors and Executive Officers
|
||||||||
|
Elías Sacal Cababie
|
69,152,609
|
86.75
|
%
|
|||||
|
Marcos Sacal Cohen
|
—
|
*
|
||||||
|
Julio Arias García
|
—
|
*
|
||||||
|
Oscar Jazmani Mendoza Escobar
|
—
|
*
|
||||||
|
All directors and executive officers as a group
|
69,152,509
|
86.75
|
%
|
|||||
| (*) |
Less than 1% individually.
|
| (1) |
Unless otherwise noted, the business address of each of our shareholders is 25 Berkeley Square, London W1J 6HN.
|
| (2) |
HCM Investor Holdings, LLC is the record holder of such shares. Mr. Matthews is the managing member of HCM Holdings. As such, each of HCM Holdings and Mr. Matthews may be deemed to share beneficial
ownership of the ordinary shares held directly by HCM Holdings. Mr. Matthews disclaims any beneficial ownership of the ordinary shares held directly by HCM Holdings, and disclaims any beneficial ownership of such shares other than
to the extent of any pecuniary interest he may have therein, directly or indirectly.
|
As described under “Item 4.A—Recent Developments—Potential Corporate Reorganization” and “Item 3.D. Risk Factors— We
have considered, and may in the future pursue, a corporate reorganization that could materially and adversely affect holders of our ordinary share,” following the completion of the contemplated debt restructuring, management has
considered a potential corporate reorganization, and any such reorganization may involve transactions between affiliated entities, subject to applicable approvals and definitive documentation. Any such corporate reorganization has not been
finalized and may not be pursued or consummated, and there can be no assurance that it would achieve the intended objectives.
For more information regarding the share ownership of Murano before, and after the Business Combination, see “Item 4. Information on the
Company—A. History and Development of the Company—Business Combination.”
| B. |
Related Party Transactions
|
The table below sets forth the entities the Murano Group has engaged in related party transactions with and their relationship to the Murano Group:
|
Related Party
|
Relationship to Murano Group
|
||
|
Impulsora Turistica de Vallarta, S. A. de C. V. (ITV)
|
A Mexican corporation (sociedad anónima) owned 0.000001% by ESAGRUP (Company in which Elías Sacal Cababie holds 99.99% of its equity)
|
||
|
Puerto Varas, S. A. de C. V. (Puerto Varas)
|
A Mexican corporation (sociedad anónima) owned 50.00% by ESAGRUP (Company in which Elías Sacal Cababie holds 99.99% of its equity)
|
||
|
Elías Sacal Cababie
|
Founder and Chief Executive Officer of Murano.
|
||
|
Marcos Sacal Cohen
|
Chief Operating Officer of Murano and son of Elías Sacal Cababie.
|
||
|
E.S. Agrupación, S.A. de C.V.
|
A Mexican corporation (sociedad anónima) in which Elías Sacal Cababie holds 99.99% and BVG Infraestructura holds 0.01% of its equity.
|
||
|
Sofoplus, S. A. P. I. de C. V., SOFOM, ER (Sofoplus)
|
A Mexican Stock Market Promotion Company (S. A. P. I. by its acronym in Spanish) in which Harry Sacal Cababie holds 0.1% of its equity and 99.99% indirectly.
|
||
|
Inmobiliaria Insurgentes 421, S.A. de C.V.
|
A Mexican corporation (sociedad anónima) in which the Insurgentes Security Trust holds 99.99% of its equity.
|
||
|
Murano World, S.A. de C.V.
|
A Mexican corporation (sociedad anónima) in which Murano PV, S.A. de C.V. holds 99.9999% and Murano Management, S.A. de C.V. holds 0.0001% of its equity.
|
||
|
BVG Infraestructura, S.A. de C.V.
|
A Mexican corporation (sociedad anónima) in which Elías Sacal Cababie holds 99.9999992% of its equity.
|
Provision of Administrative Services
ITV
During 2025 and for the year ended December 31, 2024, there were no services provided to ITV. As of December 31, 2025, 2024 and 2023 there were no remaining balances to collect under the
services agreement.
Puerto Varas
For the years ended December 31, 2025 and 2024, there were no services provided to Puerto Varas. For the year ended December 2023, the services consisted primarily of administrative services
in the amount of Ps.$1,761,896 (U.S.$85,903). As of December 31, 2025, 2024 and 2023, there was no balance pending to collect under the services agreement.
Related Party Loans
ITV
On May 2, 2021, ITV made a 36-month loan (subsequently amended to 48-months on May 3, 2021) to Murano World, S. A. de C. V., for a total amount of Ps.$97,500,000 (U.S.$4,753,709) at an annual
rate of 17.75%. As of December 31, 2023 and 2022, the outstanding balance of this loan, including interest was Ps.$39,121,151 (U.S.$1,907,390) and Ps.$58,078,077 (U.S.$2,831,654), respectively. On May 2, 2024, the maturity of this loan was
extended for one additional year. On October 31, 2024, the outstanding balance of this loan was repaid in full.
On April 30, 2024, ITV granted a 36-month loan to Murano World in the amount of Ps.$17,200,000 (U.S.$838,603) with an interest rate of 17.75% and payments of principal after 12 months of the
signing date. On October 31, 2024, the outstanding balance of this loan was repaid in full. No additional transactions were carried out during 2025.
For the years ended December 31, 2024 and 2023, the Murano Group paid interest in the amount of Ps.$2,368,211(U.S.$115,464) and Ps.$7,608,336 (U.S.$370,952), respectively.
Elías Sacal Cababié
On February 9, 2023, Murano World, S.A. de C.V. granted a 12-month loan to Elías Sacal Cababie on commercially reasonable arm’s length terms for a total amount of Ps.$7,900,000 (U.S.$385,172)
at a monthly variable rate of TIIE 28 plus a spread of 3%. The outstanding balance of this loan was paid during December 2023.
On February 10, 2023, Murano World, S.A. de C.V. granted a 12-month loan to Elías Sacal Cababie on commercially reasonable arm’s length terms for a total amount of U.S.$2,865,000 at a monthly
variable rate of 3M SOFR plus a spread of 3%. On April 30, 2024, the principal amount was repaid in full.
On September 26, 2023, Murano World, S.A. de C.V. granted a 12-month loan to Elías Sacal Cababie on commercially reasonable arm’s length terms for a total amount of U.S.$3,200,000 at a monthly
variable rate of 3M SOFR plus a spread of 3%. On April 30, 2024, the principal amount was repaid in full.
On April 14, 2023, Murano PV, S.A. de C.V. granted a 12-month loan to Elías Sacal Cababie. on commercially reasonable arm’s length terms for a total amount of Ps.$2,000,000 (U.S.$97,512) at a
monthly variable rate of TIIE 28 plus a spread of 3%. As of December 31, 2024, the outstanding balance of this loan was repaid on March 8, 2024, as part of the capital restructuring as described in Note 2.c of the Consolidated and Combined
Financial Statements.
On April 14, 2023, Murano PV, S.A. de C.V. granted a 12-month loan to Elías Sacal Cababie. on commercially reasonable arm’s length terms for a total amount of U.S.$438,611 at a monthly
variable rate of 3M SOFR plus a spread of 3%. The principal amount was paid on March 8, 2024, as part of the capital restructuring as described in Note 2.c of the Consolidated and Combined Financial Statements. During 2025 no additional
transactions were carried out.
ESAGRUP
On February 10, 2023, Murano World granted a 12-month loan to ESAGRUP on commercially reasonable arm’s length terms for a total amount of Ps.$9,620,660 (U.S.$469,065) at a monthly variable
rate of TIIE 28 plus a spread of 3%. On October 31, 2024, this loan was repaid in full.
On March 31, 2023, Murano World granted a 12-month loan to ESAGRUP on commercially reasonable arm’s length terms for a total amount of U.S.$453,000 at a monthly variable rate of 3M SOFR plus a
spread of 3%. On October 31, 2024, this loan was repaid in full.
On April 14, 2023, Murano PV granted a 12-month loan to ESAGRUP on commercially reasonable arm’s length terms for a total amount of U.S.$359,368 at a monthly variable rate of 3M SOFR plus a
spread of 3%. The principal amount was paid on March 8, 2024, as part of the capital restructuring as described in Note 2.c. of the Consolidated and Combined Financial Statements.
On May 5, 2023, Murano PV granted a short-term loan to ESAGRUP of Ps.$30,000 with a maturity of a year and accrues interest at a rate of TIIE 28 days plus a spread of 3%. The principal amount
was repaid on March 8, 2024.
On November 9, 2023, Murano World granted a 12-month loan to ESAGRUP on commercially reasonable arm’s length terms for a total amount of Ps.$10,000,000 (U.S.$571,373) at a monthly variable
rate of TIIE 28 plus a spread of 3%. On October 31, 2024, this loan was repaid in full.
On May 2, 2024, ES Agrupación, S. A. de C. V. granted a loan of $317,000,000 to Murano World. The lender had agreed to convert the loan balance into a small minority equity interest in the
Cancun II project, however, the Group analyzed the merits of this transaction in line with the pipeline development plan and management decided to repay the balance in full on October 31, 2024.
On May 2, 2024, Murano World granted a loan of up to $14,750,000 to ES Agrupación, S. A. de C. V., which matures in a year and accrues interest at a rate of TIIE 28 days plus a spread of 3%.
On October 31, 2024, this loan was repaid in full.
On May 20, 2024, Murano World granted a loan of up to U.S.$1,850,000 to ES Agrupación, S. A. de C. V., which matures in one year that accrues interest at a rate of SOFR plus a spread of 3%. As of September 30,
2024, the borrower paid U.S.$647,000. On October 31, 2024, this loan was repaid in full. During 2025 no additional transactions were carried out.
Sofoplus
On June 24, 2022, Sofoplus granted a loan agreement to Murano World S. A. de C.V. of up to U.S.$15,000,000, on commercially reasonable arm’s length terms, with a three-year maturity and an
annual interest rate of 15%. Elías Sacal Cababie, Marcos Sacal Cohen and ES Agrupación signed as joint obligors for this loan. As of December 31, 2025 the balance of this loan was re-paid in full with the proceeds of the Sofoplus Loan I and
the Sofoplus Loan II. As of December 31, 2024 and 2023, the outstanding balance of this loan, including interest Ps.$110,642,225 (U.S. $5,394,471) and Ps.$171,153,445 (U.S.$8,344,756), respectively.
On October 2023 and April 2024 SGGYP Sureste, S. A. de C. V. transferred its collection rights of its outstanding invoices with the GIC I Trust to Sofoplus in the amount of Ps.$7,500,000
(U.S.$365,670) and Ps.$3,499,325 (U.S.$170,613), respectively. On November 29,2024 the Group paid Ps.$1,000,000 (U.S.$48,756) to the principal balance of the discounted invoices described above. As of December 31, 2025 the outstanding
balance of this discounted invoices was Ps.$10,202,658.
On September 30, 2024, Murano World entered into a loan agreement with Sofoplus for an aggregate principal amount of up to U.S.$3,600,000, with disbursements of U.S.$700,000, U.S.$100,000,
U.S.$800,000, U.S.$1,000,000 and U.S.$1,000,000 made on September 30, 2024, October 3, 2024, October 31, 2024, November 29, 2024 and December 13, 2024, respectively. The Group used the proceeds of this loan to repay the outstanding balance
of the Sofoplus Original Loan, a secured mortgage loan in the amount of U.S.$15,000,000. Under this Sofoplus Loan I, we are required to pay monthly interest at a fixed annual interest rate of 16%, commencing on October 1, 2024, with a
maturity date of October 1, 2026. As of December 31, 2025 and 2024, the outstanding principal balance under this loan was U.S.$3,600,000 (Ps.$64,630,080) and U.S.$3,600,000 (Ps.$73,837,080), respectively, and accrued interest amounted to
U.S.$294,400 (Ps.$5,285,304) and U.S.$8,000 (Ps.$164,082), respectively.
On January 30, 2025, Murano World entered into a second loan agreement with Sofoplus for an aggregate principal amount of up to U.S.$6,000,000, with disbursements of U.S.$870,772 and
U.S.$5,129,228 made on January 31, 2025 and February 13, 2025, respectively. Under this loan, we are required to pay monthly interest at a fixed annual interest rate of 16%, with a maturity date of February 1, 2028. As of December 31, 2025,
the outstanding principal balance under this loan was U.S.$6,000,000 (Ps.$107,716,800), and accrued interest amounted to U.S.$570,666 (Ps.$10,245,064).
Inmobiliaria Insurgentes
On July 1, 2023, the lease agreements between (i) Inmobiliaria Insurgentes 421 (as lessor) and OHI421 (as lessee) and (ii) Inmobiliaria Insurgentes 421 (as lessor) OHI421 Premium (as lessee)
became effective. These lease agreements were executed for a 20-year term and their purpose is to lease the property of the Insurgentes 421 Hotel Complex.
These agreements were negotiated and entered into between related parties. Therefore, the terms of the Insurgentes Loan Agreements, including consideration payable thereunder, may be less
favorable to us than terms negotiated with unaffiliated and third-party lessees. Under both lease agreements, the lessees must pay a monthly base rent of U.S.$50,000 and an annual variable rent payment based on 95% of the lessees’ annual
operating income.
As of December 31, 2025, Inmobiliaria Insurgentes 421 has received from the lessees, the monthly amount of U.S.$1,200,000 for base rent concept, which means that the cumulative base rent paid
by each lessee was U.S.$600,000. Payments for concept of variable rent under the lease agreements amounted during 2025 Ps.$174,693,766 (U.S.$9,414,373).
BVG Infraestructura
On March 1, 2023, BVG Infraestructura, S.A. de C.V. granted a 12-month loan to Inmobiliaria Insurgentes 421 for a total amount of U.S.$955,011 at a monthly variable rate of SOFR plus a spread
of 3%. As of December 31, 2023, the outstanding balance of this loan was U.S. $709,494. On October 31, 2024, these loan was repaid in full.
Promissory Notes
Certain Group Companies issued the following promissory notes as part of the Murano Group Reorganization in order to capitalize Murano Global Investments Limited:
In January 2024, Murano PV, S.A. de C.V. issued a promissory note in favor of Elías Sacal Cababie for the total amount of Ps.$73,000,000 (U.S.$4,321,189) as a result of the purchase of
103,267,741 shares of Murano World, S. A. de C. V. previously owned by Elías Sacal.
In January 2024, Murano PV, S.A. de C.V. issued a promissory note in favor of Elías Sacal Cababie for the total amount of Ps.$18,000,000 (U.S.$1,065,499) as a result of a transfer of the
trustee rights of 16,915,151 shares of Inmobiliaria Insurgentes 421, S.A. de C.V. previously owned by Elías Sacal.
In January 2024, Murano PV, S.A. de C.V. issued a promissory note in favor of ESAGRUP for the total amount of Ps.$266,500,000 (U.S.$15,775,298) as a result of the purchase of 329,753,574
shares of Murano World, S. A. de C. V. previously owned by ESAGRUP.
In January 2024, Murano PV, S.A. de C.V. issued a promissory note in favor of ESAGRUP for the total amount of Ps.$542,500,000 (U.S.$32,112,943) as a result of the transfer of the trustee
rights of 434,361,612 shares from Inmobiliaria Insurgentes 421, S.A. de C.V. previously owned by ESAGRUP.
All the promissory notes described above were issued as part of the Murano Group Reorganization and used by Elías Sacal Cababie to capitalize Murano Global Investments PLC On March 8, 2024
Murano Global Investments PLC utilized the promissory notes to complete the Murano Group Reorganization by capitalizing Murano PV and the notes were canceled as a final step in the reorganization.
For more information about Murano Group’s transactions with related parties please see Note 6 to the Consolidated and Combined Financial Statements included elsewhere in this Report.
Certain Agreements Related to the Business Combination
In connection with the Business Combination, we entered into the following agreements:
| • |
Sponsor Support Agreement with HCM and HCM Holdings, concurrently with the execution and delivery of the Business Combination Agreement, pursuant to which HCM Holdings has agreed, among other things, to
vote (or execute and return an action by written consent), or cause to be voted at the Extraordinary Meeting (or validly execute and return and cause such consent to be granted with respect to), all of its HCM Class B Ordinary
Shares in favor of (A) the approval and adoption of the Business Combination Agreement and approval of the Merger and all other transactions contemplated by the Business Combination Agreement, (B) against any action, agreement or
transaction or proposal that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of HCM under the Business Combination Agreement or that would reasonably be expected to result in
the failure of the Merger from being consummated and (C) each of the proposals and any other matters necessary or reasonably requested by HCM for consummation of the Merger and the other transactions contemplated by the Business
Combination Agreement.
|
| • |
Assignment, Assumption and Amendment to HCM Warrant Agreement with HCM and Continental, as warrant agent, pursuant to which, as of the Effective Time (as defined in the agreement), (i) each SPAC Warrant
(as defined in the agreement) that is outstanding immediately prior to the Effective Time will no longer represent a right to acquire one HCM Ordinary Share and will instead represent the right to acquire the same number of PubCo
Ordinary Shares under substantially the same terms as set forth in the HCM Warrant Agreement entered into in connection with HCM’s IPO and (ii) HCM will assign to PubCo all of HCM’s right, title and interest in and to the existing
HCM Warrant Agreement and PubCo will assume, and agree to pay, perform, satisfy and discharge in full, all of HCM’s liabilities and obligations under the existing HCM Warrant Agreement arising from and after the Effective Time.
|
| • |
Registration Rights Agreement with HCM Holdings and certain equityholders, containing customary registration rights for HCM Holdings and the equityholders who are parties thereto.
|
| • |
Lock-Up Agreement with HCM Holdings, which was subsequently amended on December 31, 2023, pursuant to which the sponsor has agreed not to transfer any PubCo Lock-Up Shares held by it during the Lock-Up
Period (in each case as defined in the agreement).
|
| • |
Vendor Participation Agreement with HCM and HCM Holdings and certain vendors of Murano, pursuant to which such vendors were entitled to purchase at cost an aggregate of 1,250,000 additional Founder Shares
(as defined in the agreement) from sponsor, immediately prior to the consummation of the Business Combination, contingent upon the satisfaction and cancellation of an aggregate principal amount of $12,500,000 due from Murano.
|
| • |
Indemnification agreement granted by Elías Sacal Cababie in favor of HCM Acquisition Corp executed as of March 20, 2024, pursuant to which, among others, Elías Sacal Cababie shall indemnify and hold HCM
and its successors harmless from tax contingencies resulting from (i) the inclusion of BVG Infraestructura, S.A. de C.V. as settlor and beneficiary of F/0455 Trust and (ii) the segregation of real estate property from the F/0455
Trust, Exitus Trust and GIC II Trust.
|
| C. |
Interests of Experts and Counsel
|
None / Not applicable.
| ITEM 8. |
FINANCIAL INFORMATION
|
| A. |
Consolidated and Combined Statements and Other Financial Information
|
Consolidated and Combined Financial Statements
See “Item 18. Financial Statements” of this Report for our consolidated and combined financial statements and other financial information.
Legal and Arbitration Proceedings
Murano is currently subject to the following legal proceedings:
Finamo Proceeding
On October 13, 2025, Finamo and Arrendadora Finamo initiated a commercial enforcement proceeding (juicio oral mercantil) against Murano PV, Murano
World, Edificaciones BVG, Elías Sacal Cababie,and other related parties (Case No. 1057/2025) before the Twentieth Civil Court for Oral Proceedings (Juzgado Vigésimo de lo Civil de Proceso Oral) of
Mexico City, in connection with the alleged failure to make (i) principal and interest payments under the Finamo Loans and (ii) lease payments under the Finamo Sale and Lease Back Agreements. As of the date of this Report, such proceedings
are ongoing at the preliminary stage and no final judgment has been issued. On October 13, 2025, the court granted precautionary measures, as well as other interim measures. The Murano Group is contesting such proceedings and is also
negotiating definitive settlement agreements Finamo and Arrendadora Finamo regarding a potential negotiated settlement and resolution of these matters in connection with its ongoing debt restructuring efforts. For further information, see "Item 8. Financial Information—A. Consolidated and Combined Statements and Other Financial Information—Legal and Arbitration Proceedings" and "Item 5. Operating and
Financial Review and Prospects—B. Liquidity and Capital Resources—Commitments and Contingencies."
Other than as set forth above, to the knowledge of the Murano Group, there are no material legal or regulatory proceedings pending or, to the knowledge of the Murano Group, threatened against
the Murano Group or its affiliates as of the date of this Report.
Dividend Policy
We have never declared or paid any cash dividend on our Murano Ordinary Shares. The payment of cash dividends in the future will depend upon our revenues and earnings, if any, capital
requirements and general financial condition. Any further determination to pay dividends on our Murano Ordinary Shares would be at the discretion of our board of directors.
| B. |
Significant Changes
|
After December 31, 2025, and except as disclosed elsewhere in this Report, we have not experienced any significant changes since the date of our audited consolidated and combined financial
statements included in this Report.
| ITEM 9. |
THE OFFER AND LISTING
|
| A. |
Offer and Listing Details
|
Nasdaq Listing of Murano ordinary shares and Murano warrants
Murano Ordinary Shares and Murano Warrants are listed on Nasdaq under the symbols “MRNO” and “MRNOW”, respectively. Holders of these ordinary shares and/or warrants should obtain current
market quotations for their securities. There can be no assurance that the Murano Ordinary Shares and/or Murano Warrants will remain listed on Nasdaq. If Murano fails to comply with the Nasdaq listing requirements, Murano Ordinary Shares
and Murano Warrants could be delisted from Nasdaq. A delisting of Murano Ordinary Shares and/or Murano Warrants will likely affect their liquidity and could inhibit or restrict the ability of Murano to raise additional financing.
As described under “Recent Developments,” on April 13, 2026, Murano received a notification letter from the Listing Qualifications Department of Nasdaq indicating that, based on the closing
bid price of its ordinary shares for the prior 30 consecutive business days, Murano is no longer in compliance with Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of $1.00 per share. Murano
has been provided with a compliance period of 180 calendar days, or until October 5, 2026, to regain compliance with this requirement. If Murano does not regain compliance within the applicable compliance period, and if it is not eligible
for or does not obtain any additional compliance period, Murano Ordinary Shares and Murano Warrants may be subject to delisting from Nasdaq. See “Item 3.D—Risk Factors-If we fail to regain compliance with Nasdaq’s minimum bid price requirement, our ordinary shares could be delisted from Nasdaq, which would materially adversely affect liquidity, trading price and our ability to raise capital.”
Potential Corporate Reorganization
As described under “Item 4.A—Recent Developments—Potential Corporate Reorganization” and “Item 3.D. Risk Factors— We
have considered, and may in the future pursue, a corporate reorganization that could materially and adversely affect holders of our ordinary share,” following the completion of the contemplated debt restructuring, management has
considered a potential corporate reorganization, and any such reorganization may involve transactions between affiliated entities, subject to applicable approvals and definitive documentation.
Lock-up Agreements
Information regarding the lock-up restrictions applicable to the Murano Ordinary Shares and Murano Warrants held by certain shareholders and executives of Murano, including its principal
shareholders and key executives, is included in “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Certain Agreements Related to the Business Combination”.
| B. |
Plan of Distribution
|
Not applicable.
| C. |
Markets
|
See “Item 9. The Offer and Listing—A. Offer and Listing Details”.
| D. |
Selling Shareholders
|
Not Applicable.
| E. |
Dilution
|
Not applicable.
| F. |
Expenses of the Issue
|
Not applicable.
| ITEM 10. |
ADDITIONAL INFORMATION
|
| A. |
Share Capital
|
The authorized share capital of Murano is unlimited.
During January and February 2026, the Company issued additional ordinary shares pursuant to its Standby Equity Purchase Agreement, as described under “Recent
Developments.” As of the date of this Report, there were 82,082,332 Murano Ordinary Shares outstanding.
Information regarding our share capital is included in the Registration Statement on Form F-4 (File No. 333-273849), which was filed with the SEC on February 15, 2024, as supplemented by
Prospectus Supplement No. 1 dated March 20, 2024 (as subsequently amended, the “Registration Statement”) under the section titled “Description of PubCo’s Securities” and is incorporated herein by
reference.
| B. |
Memorandum and Articles of Association
|
Information regarding certain material provisions of the constitution of Murano is included in the Registration Statement under the section titled “Description of PubCo Securities” and is
incorporated herein by reference.
| C. |
Material Contracts
|
Information regarding certain material contracts among entities in Murano Group may be found in “Item 4. Information on the Company—A. History and Development of the
Company—Business Combination” and “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.”
As described under “Item 4.A—Recent Developments—Potential Corporate Reorganization” and “Item 3.D. Risk Factors— We have considered, and may in the future
pursue, a corporate reorganization that could materially and adversely affect holders of our ordinary share,” following the completion of the contemplated debt restructuring, management has considered a potential corporate
reorganization. In connection with the contemplated debt restructuring, we expect that the definitive restructuring documentation will include provisions intended to permit, subject to specified conditions and limitations, certain corporate
reorganization transactions. Any such corporate reorganization would be subject to definitive documentation and may require additional material agreements and third‑party consents.
| D. |
Exchange Controls
|
There are no governmental laws, decrees, regulations or other legislation in the Bailiwick of Jersey that may affect the import or export of capital, including the availability of cash and
cash equivalents for use by Murano, or that may affect the remittance of dividends, interest, or other payments by Murano to non-resident holders of its ordinary shares. There is no limitation imposed by the laws of the Bailiwick of Jersey
or in Murano’s constitution on the right of non-residents to hold or vote shares.
| E. |
Taxation
|
Certain Material Jersey Tax Considerations
The following summary of the anticipated tax treatment in Jersey of PubCo and holders of PubCo Ordinary Shares is based on Jersey taxation law and practice as they are understood to apply at
the date of this proxy statement/prospectus. It does not constitute, nor should it be considered to be, legal or tax advice and does not address all aspects of Jersey tax law and practice (including, without limitation, such tax law and
practice as they apply to any land or building situated in Jersey, or as they apply to certain types of persons, such as persons holding or acquiring shares in the course of trade, collective investment schemes or insurance companies).
Holders of PubCo Ordinary Shares should consult their professional advisors on the implications of acquiring, buying, holding, selling or otherwise disposing of PubCo Ordinary Shares under the laws of any jurisdictions in which they may be
liable to taxation. Holders of PubCo Ordinary Shares should be aware that tax rules and practice and their interpretation may change.
Taxation of PubCo and of Non-Jersey Residents
On the basis that PubCo is incorporated in Jersey, but is centrally managed and controlled, and is solely resident for tax purposes, in the United Kingdom, a jurisdiction where the
highest rate of corporate tax is at least 10%, PubCo will not be liable to pay Jersey income tax other than on certain Jersey source income (except where such income is exempted from income tax pursuant to the Income Tax (Jersey) Law
1961, as amended). On the basis that PubCo is not a financial services company, a utility company, large retailer or involved in the importation or distribution of hydrocarbon oils and does not hold Jersey real estate, it is subject to
income tax in Jersey at a rate of zero per cent on any such income.
Dividends on PubCo Ordinary Shares may be paid by PubCo without withholding or deduction for or on account of Jersey income tax and holders of PubCo Ordinary Shares (other than
residents of Jersey) will not be subject to any tax in Jersey in respect of the holding, sale or other disposition of such shares. It is possible that the current tax regime applicable in Jersey may be amended and PubCo could become
subject to taxation in Jersey. See “Item 10. Additional Information—E. Taxation—Certain Material Jersey Tax Considerations—Shareholders of a Jersey Company” in relation to the status of Jersey
resident holders of PubCo Ordinary Shares.
Goods and Services Tax
The States of Jersey introduced a Goods and Services Tax, which we refer to as GST, with effect from May 6, 2008. A company may opt out of the GST regime by applying to become an
international services entity (“ISE”), as provided by the Goods and Services Tax (Jersey) Law 2007. ISE status is obtained upon meeting certain requirements and paying a prescribed annual fee. As
an ISE, a company is exempted both from registering for GST and from accounting for GST on supplies made and received in Jersey solely for the purpose of its business. It is anticipated that PubCo will maintain ISE status and the PubCo
Board intends to conduct the business of the combined company such that no GST will be incurred by PubCo.
Shareholders of a Jersey Company
Any shareholders of a Jersey company who are resident for tax purposes in Jersey will incur income tax on any dividends paid on the shares held by them.
No stamp duty is levied on the transfer inter vivos, exchange, issue or repurchase of shares (unless the articles of association of the company
convey the right to occupy property in Jersey), but there is a stamp duty payable when Jersey grants of probate and letters of administration are required. In the case of a grant of probate or letters of administration, stamp duty is
levied according to the size of the estate (wherever situated in respect of a holder of shares who is domiciled in Jersey, or situated in Jersey in respect of a holder of shares domiciled outside Jersey) and is payable on a sliding scale
at a rate of up to 0.75% of such estate and such duty is capped at £100,000.
Jersey does not otherwise levy taxes upon capital, inheritances, capital gains, transactions or gifts nor are there other estate duties.
Certain Material United Kingdom Tax Considerations
Tax Residence
Murano is incorporated in Jersey, but it is intended that it will be resident for UK tax purposes in the UK by virtue of its central management and control being exercised in the United
Kingdom.
Dividends and Disposals
As a matter of current United Kingdom tax law, Murano is not required to withhold any amounts on account of United Kingdom tax at source from dividend payments it makes in respect of
the Murano Ordinary Shares.
A holder of the Murano Ordinary Shares who is not resident in the United Kingdom for United Kingdom tax purposes and does not carry on a trade, profession or vocation in the United
Kingdom through a permanent establishment, branch, agency or otherwise in the United Kingdom should not generally be liable to United Kingdom tax on the receipt of dividends paid in respect of the Murano Ordinary Shares or on the disposal
of Murano Ordinary Shares.
Stamp Duty and Stamp Duty Reserve Tax
No United Kingdom stamp duty reserve tax will be payable on the issue of the Murano Ordinary Shares or any agreement to transfer the Murano Ordinary Shares.
No United Kingdom stamp duty will be payable on the issue of the Murano Ordinary Shares or any transfer of the Murano Ordinary Shares effected by electronic means. A documentary
transfer of any Murano Ordinary Shares or documentary agreement to transfer any interest in any Murano Ordinary Shares (where such interest falls short of full legal and beneficial ownership) may give rise to United Kingdom stamp duty and
advice should be taken in this regard.
Material U.S. Federal Income Tax Considerations
This section describes material U.S. federal income tax consequences to a U.S. holder (as defined below) with respect to the ownership and disposition of Murano Ordinary Shares and
Murano Warrants (collectively, the “Murano Securities”). This discussion deals only with U.S. holders that hold their Murano Securities as capital assets. It does not cover all
aspects of U.S. federal income taxation that may be relevant to the U.S. holders (including consequences under any alternative minimum tax or net investment income tax), and does not address state, local, non-U.S. or other tax laws (such
as estate or gift tax laws). This discussion also does not address tax considerations applicable to U.S. holders that own (directly, indirectly or by attribution) 5% or more of the Murano Securities by vote or value, nor does this section
discuss all of the tax considerations that may be relevant to certain types of investors subject to special treatment under the U.S. federal income tax laws (such as financial institutions, insurance companies, individual retirement
accounts and other tax-deferred accounts, tax-exempt organizations, dealers in securities or currencies, traders in securities that elect to mark their securities to market for U.S. federal income tax purposes, investors that hold Murano
Securities as part of straddles, hedging transactions or conversion transactions for U.S. federal income tax purposes, persons that received Murano Securities as compensation for services, persons that have ceased to be U.S. citizens or
lawful permanent residents of the United States, investors holding the Murano Securities in connection with a trade or business conducted outside of the United States, S corporations, partnerships or other entities or arrangements treated
as partnerships or other flow-through entities for U.S. federal income tax purposes (and investors therein), U.S. citizens or lawful permanent residents living abroad, passive investors that are required to include amounts in their
taxable income in advance of receipt under rules regarding applicable financial statements or U.S. holders whose functional currency is not the U.S. dollar).
As used herein, the term “U.S. holder” means a beneficial owner of Murano Securities that is, for U.S. federal income tax
purposes, (i) an individual citizen or resident of the United States, (ii) a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is
subject to U.S. federal income tax without regard to its source or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the
authority to control all substantial decisions of the trust, or the trust has validly elected to be treated as a domestic trust for U.S. federal income tax purposes.
The U.S. federal income tax treatment of a partner in an entity or arrangement treated as a partnership for U.S. federal income tax purposes that holds Murano Securities will depend on
the status of the partner and the activities of the partnership. Entities or arrangements treated as partnerships for U.S. federal income tax purposes should consult their tax advisers concerning the U.S. federal income tax consequences
to them and their partners of owning of Murano Securities.
This discussion is based on the tax laws of the United States, including the Code, its legislative history, existing and proposed regulations thereunder, published rulings of the IRS
and court decisions, all as of the date hereof and all subject to change at any time, possibly with retroactive effect. Any such change or differing interpretation could affect the accuracy of the statements and conclusions set forth in
this discussion. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax considerations described in this discussion. No ruling has been or will be sought from the
IRS regarding any matter discussed below.
ALL HOLDERS OF MURANO SECURITIES SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM RELATING TO THE OWNERSHIP OF MURANO SECURITIES, INCLUDING THE
APPLICABILITY AND EFFECT OF STATE, LOCAL, NON-U.S. AND OTHER TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.
Ownership of Murano Ordinary Shares and Murano Warrants
This discussion is subject to the discussion in “- Application of the PFIC Rules to Murano Ordinary Shares and Murano Warrants” below.
Distributions on Murano Ordinary Shares
The gross amount of any distribution on Murano Ordinary Shares that is made out of Murano’s current or accumulated earnings and profits (as determined for U.S. federal income tax
purposes) generally will be taxable to a U.S. holder as ordinary dividend income on the date such distribution is actually or constructively received. Any such dividends generally will not be eligible for the dividends received deduction
generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations. To the extent that the amount of the distribution exceeds Murano’s current and accumulated earnings and profits (as determined under
U.S. federal income tax principles), such excess amount will be treated first as a non-taxable return of capital to the extent of the U.S. holder’s adjusted tax basis in its Murano Ordinary Shares, and thereafter as capital gain
recognized on a sale or exchange.
Dividends paid by Murano generally will be taxable to a non-corporate U.S. holder at the reduced rate normally applicable to long-term capital gains, provided that Murano is considered
a “qualified foreign corporation” and certain other requirements are met. A qualified foreign corporation includes a foreign corporation that is eligible for the benefits of the income tax treaty between the United Kingdom and the United
States (the “Treaty”). A foreign corporation is also treated as a “qualified foreign corporation” with respect to dividends paid by that corporation on shares that are readily
tradable on an established securities market in the United States. U.S. Treasury Department guidance indicates that shares listed on the Nasdaq, such as the Murano Ordinary Shares, will be readily tradable on an established securities
market in the United States. There can be no assurance, however, that Murano Ordinary Shares will be considered readily tradable on an established securities market in later years or that Murano will be eligible for the benefits of the
Treaty. A U.S. holder will not be able to claim the reduced rate on dividends received from Murano if Murano is treated as a PFIC (as defined below) in the taxable year in which the dividends are received or in the preceding taxable year
(or if any shares of Murano that they own are treated as stock in a PFIC). See the section entitled “-Application of the PFIC Rules to Murano Ordinary Shares and Murano Warrants” below.
Subject to certain conditions and limitations, withholding taxes, if any, on dividends paid by Murano may be treated as foreign taxes eligible for credit against a U.S. holder’s U.S.
federal income tax liability under the U.S. foreign tax credit rules. For purposes of calculating the U.S. foreign tax credit, dividends paid on Murano Ordinary Shares will generally be treated as income from sources outside the United
States and will generally constitute passive category income. The rules governing the U.S. foreign tax credit are complex. U.S. holders should consult their tax advisors regarding the availability of the U.S. foreign tax credit under
particular circumstances.
Sale, Exchange, Redemption or Other Taxable Disposition of Murano Ordinary Shares and Murano Warrants
A U.S. holder generally will recognize gain or loss on any sale, exchange, redemption or other taxable disposition of Murano Ordinary Shares or Murano Warrants in an amount equal to the
difference between (i) the amount realized on the disposition and (ii) such U.S. holder’s adjusted tax basis in such shares and/or warrants. Any gain or loss recognized by a U.S. holder on a taxable disposition of Murano Ordinary Shares
or Murano Warrants generally will be capital gain or loss and will be long-term capital gain or loss if the holder’s holding period in such shares and/or warrants exceeds one year at the time of the disposition. Preferential tax rates may
apply to long-term capital gains of non-corporate U.S. holders (including individuals). The deductibility of capital losses is subject to limitations. Any gain or loss recognized by a U.S. holder on the sale or exchange of Murano Ordinary
Shares or Murano Warrants generally will be treated as U.S.-source gain or loss. Therefore, a U.S. holder may have insufficient foreign-source income to utilize foreign tax credits attributable to any non-U.S. withholding tax (if any)
imposed on a sale, exchange, redemption or other taxable disposition. U.S. holders should consult their tax advisors as to the availability of and limitations on any foreign tax credit attributable to non-U.S. withholding taxes (if any
such taxes are imposed).
Exercise or Lapse of a Murano Warrant
Except as discussed below with respect to the cashless exercise of a Murano Warrant, a U.S. holder generally will not recognize gain or loss upon the acquisition of a Murano Ordinary
Share on the exercise of a Murano Warrant for cash. A U.S. holder’s tax basis in a Murano Ordinary Shares received upon exercise of the Murano Warrant generally should be an amount equal to the sum of the U.S. holder’s tax basis in the
Murano Warrant exchanged therefor and the exercise price. The U.S. holder’s holding period for a Murano Ordinary Share received upon exercise of the Murano Warrant will begin on the date following the date of exercise (or possibly the
date of exercise) of the Murano Warrant and will not include the period during which the U.S. holder held the Murano Warrant. If a Murano Warrant is allowed to lapse unexercised, a U.S. holder generally will recognize a capital loss equal
to such holder’s tax basis in the Murano Warrant.
The tax consequences of a cashless exercise of a Murano Warrant are not clear under current tax law. A cashless exercise may be tax-deferred, either because the exercise is not a gain
realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either tax-deferred situation, a U.S. holder’s basis in the Murano Ordinary Shares received would equal the holder’s basis
in the Murano Warrants exercised therefor. If the cashless exercise were treated as not being a gain realization event, a U.S. holder’s holding period in the Murano Ordinary Shares would be treated as commencing on the date following the
date of exercise (or possibly the date of exercise) of the Murano Warrants. If the cashless exercise were treated as a recapitalization, the holding period of the Murano Ordinary Shares generally would include the holding period of the
Murano Warrants exercised therefor.
It is also possible that a cashless exercise of a Murano Warrant could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. holder
would recognize gain or loss with respect to the portion of the exercised Murano Warrants treated as surrendered to pay the exercise price of the Murano Warrants (the “surrendered warrants”). The U.S. holder would recognize capital gain
or loss with respect to the surrendered warrants in an amount generally equal to the difference between (i) the fair market value of the Murano Ordinary Shares that would have been received with respect to the surrendered warrants in a
regular exercise of the Murano Warrants and (ii) the sum of the U.S. holder’s tax basis in the surrendered warrants and the aggregate cash exercise price of such warrants (if they had been exercised in a regular exercise). In this case, a
U.S. holder’s tax basis in the Murano Ordinary Shares received would equal the U.S. holder’s tax basis in the Murano Warrants exercised plus (or minus) the gain (or loss) recognized with respect to the surrendered warrants. A U.S.
holder’s holding period for the Murano Ordinary Shares generally would commence on the date following the date of exercise (or possibly the date of exercise) of the Murano Warrants.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise of warrants, there can be no assurance which, if any, of the alternative tax consequences
and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax advisors regarding the tax consequences of a cashless exercise of Murano Warrants.
Possible Constructive Distributions
The terms of each Murano Warrant provide for an adjustment to the number of Murano Ordinary Shares for which the Murano Warrant may be exercised or to the exercise price of the Murano
Warrant in certain events, as discussed above in the section captioned “Item 10. Additional Information—B. Memorandum and Articles of Association”. An adjustment which has the effect of preventing
dilution generally is not taxable. A U.S. holder of a Murano Warrant generally would, however, be treated as receiving a constructive distribution from Murano if, for example, the adjustment increases the holder’s proportionate interest
in Murano’s assets or earnings and profits (e.g., through an increase in the number of Murano Ordinary Shares that would be obtained upon exercise of such warrant) as a result of a distribution of cash to the holders of the Murano
Ordinary Shares which is taxable to the U.S. holders of such shares as described in the section entitled “- Distributions on Murano Ordinary Shares” above. Such constructive distribution generally
would be subject to tax as described in the section entitled that section in the same manner as if the U.S. holder of such warrant received a cash distribution from Murano equal to the fair market value of such increased interest.
Application of the PFIC Rules to Murano Ordinary Shares and Murano Warrants
A non-U.S. corporation, such as Murano, will be a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying relevant look-through rules with respect to the
income and assets of its subsidiaries, (i) 75% or more of its gross income is passive income, and/or (ii) 50% or more of the value of its assets (generally based on the quarterly average of the value of its assets during such year) is
attributable to assets, including cash, that produce passive income or are held for the production of passive income. Passive income generally includes dividends, interest, certain royalties and rents, annuities, net gains from the sale
or exchange of property producing such income and net foreign currency gains. Based on the expected composition of Murano’s gross assets and income and the manner in which Murano expects to operate its business in 2024 and future years,
Murano does not expect to be classified as a PFIC for U.S. federal income tax purposes for Murano’s 2024 taxable year or in the foreseeable future. Whether Murano is a PFIC is a factual determination made annually, and Murano’s status
could change depending, among other things, upon changes in the composition and relative value of its gross receipts and assets.
If Murano were a PFIC in any year during which a U.S. holder owns Murano Ordinary Shares, subject to the discussion below regarding the mark-to-market (“MTM”) or qualified electing fund (“QEF”) elections, a U.S. holder generally will be subject to special rules (regardless of whether Murano continues
to be a PFIC) with respect to (i) any “excess distribution” (generally, any distributions received by a U.S. holder on its Murano Ordinary Shares in a taxable year that are greater than 125% of the average annual distributions received by
the U.S. holder in the three preceding taxable years or, if shorter, the U.S. holder’s holding period for the Murano Ordinary Shares) and (ii) any gain realized on the sale or other disposition of Murano Ordinary Shares. Under these rules
(a) the excess distribution or gain will be allocated ratably over the U.S. holder’s holding period, (b) the amount allocated to the current taxable year and any taxable year prior to the first taxable year in which Murano is a PFIC will
be taxed as ordinary income, and (c) the amount allocated to each of the other taxable years will be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year and an interest charge for the
deemed deferral benefit will be imposed with respect to the resulting tax attributable to each such other taxable year.
A U.S. holder may be able to avoid some of the adverse impacts of the PFIC rules described in the preceding paragraph by making an MTM election with respect to its Murano Ordinary
Shares. The election is available only if the Murano Ordinary Shares are considered “marketable stock,” which generally includes stock that is regularly traded in more than de minimis quantities on a qualifying exchange. If a U.S. Holder
makes the MTM election, it generally will not be subject to the excess distribution regime discussed in the preceding paragraph and the tax consequences should be as set forth above under this paragraph. Any gain from marking the Murano
Ordinary Shares to market or from disposing of them would be ordinary income. Any loss from marking the Murano Ordinary Shares to market would be recognized only to the extent of unreversed gains previously included in income. Loss from
marking the Murano Ordinary Shares to market would be ordinary, but loss on disposing of them would be capital loss except to the extent of unreversed inclusions with respect to such stock. It is expected that Murano Ordinary Shares,
which are expected to be listed on Nasdaq, will qualify as marketable shares for the PFIC rules purposes. No assurance can be given that the Murano Ordinary Shares will be traded in sufficient frequency and quantity to be considered
“marketable stock.” A valid MTM election cannot be revoked without the consent of the IRS unless the Murano Ordinary Shares cease to be marketable stock. In addition, it is anticipated that U.S. holders of Murano Warrants will not be able
to make an MTM election with respect to such warrants.
A U.S. holder would not be able to avoid the tax consequences described above by electing to treat Murano as a QEF because Murano does not intend to provide U.S. holders with the
information that would be necessary to make a QEF election with respect to the Murano Ordinary Shares. In any event, U.S. holders of Murano Warrants will not be able to make a QEF election with respect to their warrants.
U.S. holders should consult their own tax advisors concerning Murano’s possible PFIC status and the consequences to them, including potential reporting requirements, if Murano were
classified as a PFIC for any taxable year.
Information Reporting and Backup Withholding
Information reporting requirements may apply to distributions on and proceeds from a disposition of the Murano Securities. Backup withholding may apply to such amounts if the U.S.
holder fails to provide an accurate taxpayer identification number (generally on an IRS Form W-9 provided to the paying agent of the U.S. holder’s broker) or is otherwise subject to backup withholding.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against the U.S. holder’s U.S. federal income tax liability, and a U.S. holder may
obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for a refund with the IRS and furnishing any required information. U.S. holders should consult their tax advisors
regarding these rules and any other reporting obligations that may apply to the ownership or disposition of Murano Ordinary Shares or Murano Warrants, including reporting obligations related to the holding of certain foreign financial
assets.
| F. |
Dividends and Paying Agents
|
See “Item 8. Financial Information—A. Consolidated and Combined Statements and Other Financial Information—Combined Financial Statements” and “Item 10. Additional Information—B. Memorandum and Articles of Association” for a discussion of whether, how and when we may declare and pay dividends.
| G. |
Statement by Experts
|
Not applicable.
| H. |
Documents on Display
|
Murano is subject to certain of the informational filing requirements of the Exchange Act. Since Murano is a “foreign private issuer,” it is exempt from the rules and regulations under
the Exchange Act prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of Murano are exempt from the reporting and “short-swing” profit recovery provisions contained in Section
16 of the Exchange Act with respect to their purchase and sale of Murano ordinary shares. In addition, Murano is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies
whose securities are registered under the Exchange Act. However, Murano is required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent accounting firm. The SEC also maintains a
website at www.sec.gov that contains reports and other information that Murano files with or furnishes electronically to the SEC. You may read and copy any report or document we file, including the exhibits, at the SEC’s public reference
room located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room.
Murano’s ordinary shares and Murano Warrants are quoted on Nasdaq. Information about Murano is also available on our website at https://www.murano.com.mx/en/. This URL is intended to be
an inactive textual reference only. It is not intended to be an active hyperlink to our website. The information on our website, even if it might be accessible through a hyperlink resulting from this URL, is not and shall not be deemed to
be incorporated into this Report and you should not rely on any such information in making your decision whether to purchase our ordinary shares.
| I. |
Subsidiary Information
|
Not applicable.
| J. |
Annual Report to Security Holders
|
Not applicable.
We are exposed to a variety of market and other risks, including credit risk, liquidity risk, market risk, operating risk, and legal risk. For quantitative and qualitative disclosures
about these risks, see Note 13 to the Consolidated and Combined Financial Statements.
| A. |
Debt Securities
|
Not applicable.
| B. |
Warrants and Rights
|
Not applicable.
| C. |
Other Securities
|
Not applicable.
| D. |
American Depositary Shares
|
Not applicable.
|
ITEM 13.
|
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|
On September 12, 2025 and March 12, 2026, the Issuer Trust did not make the scheduled interest payments due on such dates in respect of the 2031 Notes, which resulted in payment
defaults under the Indenture governing the 2031 Notes.
For additional information regarding these defaults and related going concern and liquidity considerations, see the Consolidated and Combined Financial Statements for the year ended December 31, 2025, including the relevant notes
thereto included in this Report, and “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” and “Item 3.D. Risk Factors” of this Report.
|
ITEM 14.
|
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
None.
|
ITEM 15.
|
CONTROLS AND PROCEDURES
|
(a) Disclosure Controls and Procedures
We have evaluated, with the participation of our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, the effectiveness of our internal controls and procedures
as of December 31, 2025 and the disclosures required in rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, Items 308(a) and (b) of Regulations S-K and S-B and the corresponding provisions in Forms 20-F.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of
the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
Based upon our evaluation, our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of
December 31, 2025, due to the material weaknesses mentioned below.
Notwithstanding such material weaknesses, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s consolidated and combined financial statements as of
December 31, 2025, were fairly stated in all material respects in accordance with IFRS for each of the years presented.
(b) Management’s Annual Report on Internal Control over Financial Reporting
Murano Global Investments PLC senior management including our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, are responsible to establish, maintain and
monitor our internal control over financial reporting.
Due to inherent limitations, our internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Senior management including our
Chief Executive Officer, Chief Operating Officer and Chief Financial Officer used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013) to
evaluate the effectiveness of the Group’s internal control over financial reporting as of December 31, 2025. Based on our assessments, senior management determined that we did not maintain effective internal control over financial
reporting as of December 31, 2025, due to the following material weaknesses:
| • |
Lack of management review regarding the identification and assessment of the proper accounting of unusual significant transactions.
|
| • |
Failure of design and implementation controls to properly evaluate the appropriateness of consolidated financial statements and disclosures in accordance with the applicable framework.
|
| • |
The Group does not have sufficient technical personnel with an appropriate level of technical experience required for timely and accurate financial accounting in accordance with IFRS and reporting
requirements, and
|
| • |
Lack of sufficient technological infrastructure.
|
The control deficiencies described above created a reasonable possibility that a material misstatement to the consolidated and combined financial statements would not be prevented or
detected on a timely basis. Therefore, we concluded that the deficiencies represent material weaknesses in the Group’s internal control over financial reporting and our internal control over financial reporting was not effective as of
December 31, 2025.
The Murano Group is continuously enhancing the financial reporting infrastructure and internal control environment for the newly combined business, including the incorporation in the
near future of qualified personnel with appropriate technical accounting knowledge and experience with respect to the design and implementation of a robust system of internal controls, the application of IFRS, and the implementation of a
reporting structure to deliver internal and external reporting befitting a Nasdaq listed company. Currently, the Murano Group finalized the migration of the accounting system to Oracle Net Suite starting January 2026, a robust ERP that
will help the Murano Group to reduce manual processes and enhance the control environment. We cannot assure you these actions will be effective to address any material weaknesses and if unable to successfully address them, we could be
unable to report financial results accurately on a timely basis. Any failure to timely provide required financial information could materially and adversely impact us, including a potential loss of investor confidence or delisting.
(c) Attestation Report of the Registered Public Accounting Firm
This annual report does not include an attestation report of our company’s registered public accounting firm under Sarbanes-Oxley Act Section 404(b) as we are an emerging growth company
as defined by the U.S. Securities and Exchange Commission (SEC).
https://www.sec.gov/resources-small-businesses/going-public/emerging-growth-companies
(d) Changes in Internal Control over Financial Reporting
Except as described in “Item 3. Key Information—D. Risk Factors-Risks Related to Murano Following the Consummation of the Business Combination—Murano
Group’s financial reporting infrastructure requires enhancement to meet the requirements of a public company,” there were no
changes in our internal controls over financial reporting that occurred during the period covered by this Report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
|
ITEM 16.
|
RESERVED
|
|
ITEM 16A.
|
AUDIT COMMITTEE FINANCIAL EXPERT
|
Our audit committee consists of Mr. Julio Arias García serving as sole member. Our board of directors has determined that Mr. Arias qualifies as an independent director according to the
rules and regulations of the SEC and Nasdaq with respect to audit committee membership. In addition, Mr. Arias meets the requirements for financial literacy under applicable SEC and Nasdaq rules and qualifies as an “audit committee
financial expert,” as such term is defined in Item 407(d) of Regulation S-K. The written charter for the audit committee is available on our website. The reference to our website address in this Report does not include or incorporate by
reference the information on our website into this Report. For more information, see “Item 6. Directors, Senior Management and Employees—C. Board Practices—Independence of our Board Directors—Audit
Committee.”
|
ITEM 16B.
|
CODE OF ETHICS
|
Our Board has adopted a Code of Business Conduct and Ethics applicable to our directors, executive officers and team members that complies with the rules and regulations of Nasdaq and
the SEC. The Code of Business Conduct and Ethics is available on our website. In addition, we intend to post on the Corporate Governance section of our website all disclosures that are required by law or Nasdaq listing standards
concerning any amendments to, or waivers from, any provision of the Code of Business Conduct and Ethics. The reference to our website address in this Report does not include or incorporate by reference the information on our website into
this Report. A copy of the Code of Business Conduct and Ethics is filed as Exhibit 11.1 to this Report.
|
ITEM 16C.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
The following table describes the total amount billed to us by KPMG Cárdenas Dosal, S.C. for services performed during the fiscal years ended December 31, 2025, and 2024:
|
December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
(in Mexican pesos)
|
||||||||
|
Audit fees
|
$
|
13,050,000
|
$
|
21,168,000
|
||||
|
Audit-related fees
|
-
|
-
|
||||||
|
Tax fees
|
-
|
-
|
||||||
|
All other fees
|
-
|
-
|
||||||
|
Total consolidated audit fees
|
$
|
13,050,000
|
$
|
21,168,000
|
||||
Audit fees are fees billed for the audit of our annual financial statements, audit of statutory financial statements of certain companies with Murano Group, review of SEC filings, and
the requested review of our interim consolidated and combined financial statements as of June 30 and March 31, 2024. Audit related fees correspond to services provided in connection with assistance related to review of documents to be
filed with local and foreign regulatory bodies, including documents regarding compliance with legislation and regulations, audit of specific financial statements and annual report review, due diligence activities, assurance of special
purpose reports, and other previously agreed-upon procedures. Tax fees correspond for the aggregate fees billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. “All other
fees” comprises the aggregate fees billed for products and services provided by the principal accountant, other than the services reported in the previous items.
Management approved all audit, audit-related services, tax services and other services provided by our auditor. Further, our auditor committee will approve all audit, audit-related
services, tax services and other services provided by our auditor. Any services provided by our auditor that are not specifically included within the scope of the audit must be pre-approved by the board of directors in advance of any
engagement.
|
ITEM 16D.
|
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|
See “Item 6. Directors, Senior Management and Employees—C. Board practices-Foreign Private Issuer Exemption.”
|
ITEM 16E.
|
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
We have conducted the following repurchases of our shares:
|
Date
|
Number of
shares
|
Price per
share $
|
Total $
|
|
April 9th 2024
|
907
|
11.2
|
10,158.40
|
|
April 9th 2024
|
2,500
|
11.2
|
28,000.00
|
|
April 10th 2024
|
5,400
|
11
|
59,400.00
|
|
April 18th 2024
|
300
|
9.9
|
2,970.00
|
|
April 18th 2024
|
500
|
10.16
|
5,080.00
|
|
April 18th 2024
|
750
|
10.05
|
7,537.50
|
|
April 18th 2024
|
1,000
|
10.1
|
10,100.00
|
|
April 19th 2024
|
2,000
|
8.2
|
16,400.00
|
|
April 19th 2024
|
2,000
|
8.2
|
16,400.00
|
|
April 22nd 2024
|
2,000
|
8.55
|
17,100.00
|
|
April 23rd 2024
|
500
|
8.3
|
4,150.00
|
|
April 23rd 2024
|
2,500
|
8.41
|
21,025.00
|
|
April 24th 2024
|
610
|
8.49
|
5,178.90
|
|
April 24th 2024
|
1,000
|
8.8
|
8,800.00
|
|
April 24th 2024
|
1,500
|
8.41
|
12,615.00
|
|
April 24th 2024
|
2,500
|
8.8
|
22,000.00
|
|
April 24th 2024
|
2,500
|
8.66
|
21,650.00
|
|
TOTAL
|
28,467
|
268,564.80
|
|
ITEM 16F.
|
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
|
Not applicable.
|
ITEM 16G.
|
CORPORATE GOVERNANCE
|
For a discussion of how our corporate governance practices differ from those followed by domestic companies, see “Item 6. Directors, Senior Management
and Employees-C. Board practices—Foreign Private Issuer Exemption.”
|
ITEM 16H.
|
MINE SAFETY DISCLOSURE
|
Not applicable.
|
ITEM 16I.
|
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
|
Not applicable.
We have adopted an Insider Trading Policy that
encourages our team members to act with integrity and uphold our values in all that they do and that enforces these values with the objective of preventing insider trading. The policy applies to all directors, officers, employees, staff,
temporary or short-term workers, exclusive contractors and contractors, regardless of their operating location, the duration of their service or role within the Company. Each such team member is responsible for making sure they comply with
the policy, and that any family member, household member or entity whose transactions are subject to the policy also comply with it. The policy may be reviewed and updated from time-to-time as appropriate or as required by applicable law. A
copy of the policy is filed as Exhibit 11.2 to this Report.
|
ITEM 16K.
|
CYBERSECURITY
|
We have structured and implemented a set of security policies and procedures to reduce the vulnerability of our systems and protect the confidentiality and availability of our critical systems.
|
ITEM 17.
|
FINANCIAL STATEMENTS
|
See Item 18.
|
ITEM 18.
|
FINANCIAL STATEMENTS
|
See our Murano Group’s consolidated and combined financial statements beginning on page F-1.
Going Concern
With respect to the Consolidated and Combined Financial Statements, the independent auditor’s separate report relating thereto contains an explanatory paragraph that states that certain
circumstances raise substantial doubt about our ability to continue as a going concern and draws attention to notes 2c., 10 and 20 of the Consolidated and Combined Financial Statements and indicates that management has identified material
uncertainties that cast substantial doubt on the ability of the Murano Group to continue as a going concern. As indicated in note 2c., as of December 31, 2025, the total current liabilities exceed the amount of total current assets, and
based upon the Murano Group’s current plans, management believes that financial resources to fund its operations for the twelve months subsequent to the authorization and issuance of the Consolidated and Combined Financial Statements may
be insufficient. These events or conditions, along with other matters as set forth in note 2c. to the Murano Group Combined Financial Statements indicate that a material uncertainty exists that casts substantial doubt on our ability to
continue as a going concern. Management’s plans regarding these matters are also described in note 2c. to the Consolidated and Combined Financial Statements. Management continues evaluating strategies to obtain the additional funding
necessary for future operations and project redesign or completion, to comply with all covenants as required by the debt instruments to which entities of the Murano Group are parties to, and to be able to discharge the outstanding debt
and other liabilities as they become due. Furthermore, the Murano Group has a plan to execute a debt restructuring. The Murano Group has also considered alternative strategies with respect to the hotel operations in Cancun (including
changes to the hotel management agreement and operational partners as described in this Report), which could generate additional cash flows compared to the current commercial arrangements. In assessing these strategies, management has
considered the available cash resources, inflows from the hotels that are already in operation, and future financing options available to the Murano Group such as new or restructured loan agreements and the possible financial support of
the major shareholder of the Murano Group. However, the Murano Group may be unable to access further equity or debt financing when needed or may not be successful in implementing its business continuity strategy. See “Recent Developments”
and “Risk Factors—Risks Related to Murano’s Business and Operating in the Hotel Industry—Our total current liabilities exceed the amount of the total current assets, which has placed significant doubt on our ability to continue as a going
concern.”
|
ITEM 19.
|
EXHIBITS
|
|
No.
|
Description
|
|
1.1
|
|
|
2.1
|
|
|
2.2
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
4.6
|
|
|
4.7
|
|
|
4.8
|
|
|
4.9
|
|
|
4.10
|
|
|
4.11
|
|
|
4.12
|
|
|
4.13
|
|
|
4.14
|
|
|
4.15
|
|
No.
|
Description
|
|
4.16
|
|
|
4.17
|
|
|
4.18
|
|
|
4.19
|
|
|
4.20
|
|
|
4.21
|
|
|
4.22
|
|
|
4.23
|
|
|
4.24
|
|
|
4.25
|
|
|
4.26
|
|
|
4.27
|
|
|
4.28
|
|
|
4.29
|
|
|
4.30
|
|
|
4.31
|
|
|
4.32
|
|
|
4.33
|
|
|
4.34
|
|
|
4.35
|
|
4.36
|
|
|
4.37
|
|
|
4.38
|
|
|
4.39
|
|
|
4.40
|
|
|
4.41
|
|
|
4.42
|
|
|
4.43
|
|
|
4.44
|
|
|
4.45
|
|
|
4.46
|
|
|
4.47
|
|
|
8.1
|
|
|
11.1
|
|
|
11.2
|
|
|
12.1
|
|
|
12.2
|
|
|
13.1
|
|
|
97.1
|
| † |
Filed herewith
|
| # |
Certain schedules, annexes and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K, but will be furnished supplementally to the SEC upon request.
|
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this report on its
behalf.
|
Date: May 15, 2026
|
||
|
MURANO GLOBAL INVESTMENTS PLC
|
||
|
By:
|
/s/ Oscar Jazmani Mendoza Escobar
|
|
|
Name:
|
Oscar Jazmani Mendoza Escobar
|
|
|
Title:
|
Chief Financial Officer
|
|
Murano Global
Investments PLC and
Subsidiaries
Consolidated and Combined Financial Statements as of December 31, 2025 and 2024 and for the three years ended December 31, 2025, 2024 and 2023 and Independent Auditor’s
Report May 15, 2026.
Report of Independent Registered Public Accounting Firm and Financial Statements
|
Table of contents
|
Page
|
|
|
|
|
F-2
|
|
|
|
|
|
F-3
|
|
|
|
|
|
F-4
|
|
|
|
|
|
F-5
|
|
|
|
|
|
F-6
|
|
|
|
|
|
F-7 - F-61
|
To the Stockholders and Board of Directors
Murano Global Investments PLC
Opinion on the Consolidated and Combined Financial Statements
We have audited the accompanying consolidated statements of financial position of Murano Global Investments PLC and its subsidiaries (the
Company) as of December 31, 2025 and 2024, the related consolidated and combined statements of profit or loss and other comprehensive income, change in stockholders’ equity, and cash flows for each of the years in the three-year period ended
December 31, 2025, and the related notes (collectively, the consolidated and combined financial statements). In our opinion, the consolidated and combined financial statements present fairly, in all material respects, the financial position
of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with IFRS Accounting Standards as issued by the
International Accounting Standards Board.
Going Concern
The accompanying consolidated and combined financial statements have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 2c. to the consolidated and combined financial statements, at December 31, 2025 total current liabilities exceed the amount of the total current assets on the consolidated statement of financial position and
management believes that financial resources to fund the operations of the Company for the twelve months subsequent to the authorization and issuance of these consolidated and combined financial statements will not be sufficient. Furthermore,
as described in Notes 2c., 10, 19 and 20 to the consolidated and combined financial statements, the Company was not in compliance with certain debt covenants as of and subsequent to December 31, 2025 and is likely to continue to be
noncompliant of such debt covenants for the next twelve months subsequent to the authorization and issuance of these consolidated and combined financial statements. As a result of these conditions, substantial doubt exists about the ability
of the Company to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2c. The consolidated and combined financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
Basis for Opinion
These consolidated and combined financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated and combined financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated and combined financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated and combined financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated and combined financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated and combined financial statements. We believe that
our audits provide a reasonable basis for our opinion.
We have served as the Company’s auditor since 2019.
May 15, 2026
Murano Global Investments PLC and Subsidiaries
As of December 31, 2025 and 2024
(Mexican pesos)
|
Notes
|
December 31,
|
December 31,
|
||||||||||
|
2025
|
2024
|
|||||||||||
|
Assets
|
||||||||||||
|
Current Assets:
|
||||||||||||
|
Cash and cash equivalents and restricted cash
|
5
|
$
|
|
$
|
|
|||||||
|
Trade receivables
|
|
|
||||||||||
|
VAT receivable
|
|
|
||||||||||
|
Other receivables
|
|
|
||||||||||
|
Prepayments
|
|
|
||||||||||
|
Assets held for sale
|
7 | |||||||||||
|
Inventories
|
|
|
||||||||||
|
Total current assets
|
|
|
||||||||||
|
Property, construction in process and equipment, net
|
7
|
|
|
|||||||||
|
Investment property
|
8
|
|
|
|||||||||
|
Right of use assets, net
|
9
|
|
|
|||||||||
|
Guarantee deposits
|
9, 10
|
|
|
|||||||||
|
Other assets
|
|
|
||||||||||
|
Total non-current assets
|
|
|
||||||||||
|
Total assets
|
$
|
|
$
|
|
||||||||
|
Liabilities, Stockholders’ Equity and Net Assets
|
||||||||||||
|
Current Liabilities:
|
||||||||||||
|
Current installments of long-term debt
|
10
|
$
|
|
$
|
|
|||||||
|
Trade accounts payable and accumulated expenses
|
|
|
||||||||||
| Deferred underwriting fee payable |
||||||||||||
|
Advance from customers
|
15 |
|
|
|||||||||
|
Due to related parties
|
6
|
|
|
|||||||||
|
Lease liabilities
|
9
|
|
|
|||||||||
|
Income tax payable
|
|
|
||||||||||
|
Employees’ statutory profit sharing
|
|
|
||||||||||
|
Total current liabilities
|
|
|
||||||||||
|
Non-current Liabilities:
|
||||||||||||
|
Long-term debt, excluding current installments
|
10
|
|
|
|||||||||
|
Due to related parties, excluding current portion
|
6
|
|
|
|||||||||
|
Lease liabilities, excluding current portion
|
9
|
|
|
|||||||||
|
Employee benefits
|
11
|
|
|
|||||||||
|
Other liabilities
|
3(r)
|
|
|
|
||||||||
| Warrants liability |
12 | |||||||||||
|
Deferred tax liabilities
|
13
|
|
|
|||||||||
|
Total non-current liabilities
|
|
|
||||||||||
|
Total liabilities
|
|
|
||||||||||
|
Stockholders’ Equity
|
||||||||||||
| Common stock |
17 | |||||||||||
| Additional paid in capital |
2b. and 17 |
|||||||||||
|
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||||||
|
Other comprehensive income
|
|
|
||||||||||
|
Total Stockholders’ Equity
|
|
|
||||||||||
|
Total liabilities and Stockholders’ Equity
|
$
|
|
$
|
|
||||||||
The accompanying notes are an integral part of these consolidated and combined financial statements.
Murano Global Investments PLC and Subsidiaries
For the years ended December 31, 2025, 2024 and 2023
(Mexican pesos)
|
Notes
|
2025
|
2024
|
2023 | |||||||||||||
|
Revenue
|
15
|
$
|
|
$
|
|
$ | ||||||||||
|
Direct and selling, general and administrative expenses:
|
||||||||||||||||
|
Employee Benefits
|
|
|
||||||||||||||
|
Food & Beverage and service cost
|
|
|
||||||||||||||
|
Sales commissions
|
|
|
||||||||||||||
|
Management fees operators
|
|
|
||||||||||||||
|
Depreciation and amortization
|
7 & 9 |
|
|
|||||||||||||
|
Property tax
|
|
|
||||||||||||||
|
Fees
|
|
|
||||||||||||||
|
Administrative fees
|
|
|
||||||||||||||
|
Maintenance and conservation
|
|
|
||||||||||||||
|
Utility expenses
|
|
|
||||||||||||||
|
Advertising
|
|
|
||||||||||||||
|
Donations
|
|
|
||||||||||||||
|
Insurance
|
|
|
||||||||||||||
|
Software
|
|
|
||||||||||||||
|
Cleaning and laundry
|
|
|
||||||||||||||
|
Replacement reserve (FF&E & OS&E)
|
||||||||||||||||
|
Bank commissions
|
|
|
||||||||||||||
| Operating supplies and equipment |
||||||||||||||||
|
Other costs
|
|
|
||||||||||||||
|
Total direct and selling, general and administrative expenses
|
|
|
||||||||||||||
| Other income |
16 |
|||||||||||||||
| Other expense |
16 | ( |
) | ( |
) | ( |
) | |||||||||
| Listing expense |
2b. | ( |
) | |||||||||||||
|
Gain (loss) on revaluation of investment property
|
8 |
|
|
( |
) | |||||||||||
| Changes in fair value of financial derivative instruments |
14 | ( |
) | ( |
) | |||||||||||
| Changes in fair value of warrants |
12 | ( |
) | |||||||||||||
| Changes in fair value of crypto assets | ||||||||||||||||
|
Exchange rate income (loss), net
|
|
(
|
)
|
|||||||||||||
| Interest income |
||||||||||||||||
| Interest expenses |
( |
) | ( |
) | ( |
) | ||||||||||
|
(Loss) profit before income taxes
|
(
|
)
|
(
|
)
|
||||||||||||
|
Income tax (benefit) expense
|
13
|
(
|
)
|
|
( |
) | ||||||||||
|
Net (loss) profit for the period
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | |||||||||
|
Other comprehensive income:
|
||||||||||||||||
|
Items that will not be reclassified subsequently to profit or loss:
|
||||||||||||||||
|
Revaluation of property, construction in process and equipment net of deferred income tax
|
7 & 13
|
(
|
)
|
|
( |
) | ||||||||||
|
Remeasurement of net defined benefit liability net of deferred income tax
|
13
|
|
|
|||||||||||||
| Cumulative translation adjustment |
( |
) | ( |
) | ||||||||||||
|
Other comprehensive income (loss) for the period
|
(
|
)
|
|
( |
) | |||||||||||
|
Total comprehensive (loss) income
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | |||||||
The accompanying notes are an integral part of these consolidated and combined financial statements.
Murano Global Investments PLC and Subsidiaries
For the years ended December 31, 2025, 2024 and 2023
(Mexican pesos)
|
Other Comprehensive Income
|
||||||||||||||||||||||||||||||||||||
|
Notes
|
Net Parent
Investment
|
Common Stock |
Additional paid
in capital
|
Accumulated
Deficit
|
Revaluation of
property, construction
in process and
equipment net of
deferred income tax
(Note 7)
|
Remeasurement of
net defined benefit
liability net of
deferred income
tax
(Note 13)
|
Cumulative
translation
adjustment
|
Total
|
||||||||||||||||||||||||||||
|
Balances as of December 31,
2022
|
$
|
|
$ | $ |
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$ |
$
|
|
|||||||||||||||||||||
|
Profit for the period
|
|
|
||||||||||||||||||||||||||||||||||
|
Other comprehensive (loss)
for the period
|
|
( |
) |
(
|
)
|
|||||||||||||||||||||||||||||||
|
Balances as of December 31,
2023
|
$ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||||||
|
Impact of Capital
restructuring
|
2b. | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
|
Impact of business
combination
|
||||||||||||||||||||||||||||||||||||
|
Effect on share repurchase
program
|
17 | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
| Loss for the period |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
|
Other comprehensive income
for the period
|
( |
) |
||||||||||||||||||||||||||||||||||
|
Balances as of December 31,
2024
|
$ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) |
$ | ||||||||||||||||||||||
|
Capital increase by ordinary shares issued
|
17 |
|||||||||||||||||||||||||||||||||||
|
Additional paid in capital per warrants exercised
|
17 | |||||||||||||||||||||||||||||||||||
|
Loss for the period
|
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
|
Other comprehensive income for the period
|
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Balances as of December 31, 2025 | $ |
$ |
$ |
$ |
( |
) | $ |
$ |
( |
) | $ |
( |
) | $ |
||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated and combined financial statements.
.Murano Global Investments PLC and Subsidiaries
For the years ended December 31, 2025, 2024 and 2023
(Mexican pesos)
|
Notes
|
2025
|
2024
|
2023 | |||||||||||||
|
Cash flows from operating activities:
|
||||||||||||||||
|
(Loss) profit before income taxes
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | |||||||||
|
Adjustments for:
|
||||||||||||||||
|
Depreciation of property, construction in process and equipment
|
7
|
|
|
|||||||||||||
|
Depreciation of right of use assets
|
9
|
|
|
|||||||||||||
|
Disposals of furniture
|
||||||||||||||||
| Gain in sale of equipment |
( |
) | ||||||||||||||
|
Amortization of costs to obtain loans and commissions
|
10
|
|
|
|||||||||||||
|
Listing expense
|
2b. |
|||||||||||||||
|
Valuation of financial derivative instruments
|
14
|
|
|
|||||||||||||
|
Valuation of warrants
|
12 | ( |
) | |||||||||||||
|
Gain in valuation of crypto assets
|
( |
) | ||||||||||||||
|
(Gain) loss on revaluation of investment property
|
8
|
(
|
)
|
(
|
)
|
|||||||||||
|
Interest expense
|
10, 6 |
|
|
|||||||||||||
|
Interest expense from lease liabilities
|
9
|
|
|
|||||||||||||
|
Interest income
|
(
|
)
|
(
|
)
|
( |
) | ||||||||||
|
Net foreign exchange gain (loss) unrealized
|
(
|
)
|
|
( |
) | |||||||||||
|
(
|
)
|
(
|
)
|
( |
) | |||||||||||
|
Changes in:
|
||||||||||||||||
|
Increase in receivable VAT
|
(
|
)
|
(
|
)
|
( |
) | ||||||||||
|
Increase in trade receivable
|
(
|
)
|
(
|
)
|
( |
) | ||||||||||
|
Decrease (increase) in other receivables
|
|
(
|
)
|
( |
) | |||||||||||
|
Decrease (increase) in prepayments
|
|
(
|
)
|
|||||||||||||
|
(Increase) decrease in inventory
|
(
|
)
|
(
|
)
|
||||||||||||
|
Increase in guarantee deposits
|
( |
) | ( |
) | ( |
) | ||||||||||
|
Increase in trade payables and advance from customers
|
||||||||||||||||
|
(Decrease) increase in other liabilities
|
(
|
)
|
|
|||||||||||||
|
Increase in employee benefits
|
|
|
||||||||||||||
|
(Decrease) increase in employees’ statutory profit sharing
|
(
|
)
|
|
|||||||||||||
|
Income taxes paid
|
(
|
)
|
(
|
)
|
( |
) | ||||||||||
|
Net cash flows from (used in) operating activities
|
|
(
|
)
|
|||||||||||||
|
Cash flows used in investing activities
|
||||||||||||||||
|
Interest received and cash settlement of derivatives
|
|
|
||||||||||||||
|
Disposal of property, construction in process and equipment
|
7
|
|
|
|||||||||||||
|
Loans collected from (granted to) related parties
|
6
|
|
|
( |
) | |||||||||||
|
Investment in crypto assets
|
( |
) | ||||||||||||||
|
Disposal of Crypto assets
|
||||||||||||||||
|
Acquisition of property, construction in process and equipment
|
7
|
(
|
)
|
(
|
)
|
( |
) | |||||||||
|
Net cash flows used in investing activities
|
(
|
)
|
(
|
)
|
( |
) | ||||||||||
|
Cash flows from financing activities:
|
||||||||||||||||
|
Capital increase
|
17
|
|
||||||||||||||
|
Additional paid in capital – warrants exercised
|
17
|
|||||||||||||||
|
Withdrawals for future net assets increase
|
|
|
( |
) | ||||||||||||
|
Impact of corporate restructuring
|
||||||||||||||||
|
Impact of business combination
|
||||||||||||||||
|
Treasury shares
|
( |
) | ||||||||||||||
|
Proceeds from loans
|
10
|
|
|
|||||||||||||
|
Loan payments to third parties
|
10 |
( |
) | ( |
) | ( |
) | |||||||||
|
Loans received from related parties
|
6 |
|
|
|||||||||||||
|
Loan payments to related parties
|
6 |
(
|
)
|
(
|
)
|
( |
) | |||||||||
|
Costs to obtain loans and commissions
|
10 |
|
(
|
)
|
( |
) | ||||||||||
|
Payments of leasing liabilities
|
9
|
(
|
)
|
(
|
)
|
( |
) | |||||||||
|
Interest paid
|
(
|
)
|
(
|
)
|
( |
) | ||||||||||
|
Net cash flows (used in) from financing activities
|
(
|
)
|
|
|||||||||||||
|
Net (decrease) increase in cash and cash equivalents and restricted cash
|
(
|
)
|
|
( |
) | |||||||||||
|
Cash and cash equivalents and restricted cash at the beginning of the year
|
|
|
||||||||||||||
|
Cash and cash equivalents and restricted cash at the end of the year
|
$
|
|
$
|
|
$ | |||||||||||
The accompanying notes are an integral part of these consolidated and combined financial statements.
Murano Global Investments PLC and Subsidiaries
As of December 31, 2025 and 2024
And for the Years Ended December 31, 2025, 2024 and 2023
(Mexican pesos)
| 1. |
Reporting Entity and description of business
|
|
a.
|
Corporate information
|
On May 15, 2026, Elias Sacal Cababie, Chief Executive Officer, Marcos Sacal Cohen, Chief Operating Officer and Oscar Jazmani Mendoza Escobar, Interim Global Chief Financial Officer authorized the issue of these
consolidated and combined financial statements.
Murano Global Investments PLC (“Murano” and together with its subsidiaries, the “Company” is a public limited company (formerly incorporated on July 27, 2023 as Murano Global
Investments Limited), existing under the laws of the Bailiwick of Jersey with its corporate office at 25 Berkeley Square, London W1J 6HN United Kingdom and its tax residence in the United Kingdom. Its main subsidiary Murano PV, S. A. de C. V.
holds the operational business in Mexico and is headquartered at F. C. de Cuernavaca 20, 12th floor, Lomas – Virreyes, Lomas de Chapultepec III Secc., Miguel Hidalgo, 11000 Mexico City. The Company has prepared its financial statements on a
consolidated and combined basis, for further information refer to note 3 (a).
The Company is a Mexican real estate development group with extensive experience in the structuring, development and
assessment of industrial, residential, corporate office, and hotel projects in Mexico. The Company also provides comprehensive services, including the execution, construction, management, and operation of a wide variety of industrial, business
and tourism focused on real estate projects, among others. The Company is primarily involved in developing and managing luxury hotels in urban and beach resort destinations.
The Andaz and Mondrian Hotels, located in Mexico City, have been fully operational with a combined capacity of 396 rooms since early 2023.
The Company is also developing a leisure and residential
complex in Grand Island, Cancun, Quintana Roo (the “GIC Complex”) which include GIC I (formerly Hyatt Vivid Grand Island and ((former Dreams Hotel)). The GIC Complex (divided into 12 private units) is ultimately expected to incorporate around
616 rooms and approximately 1582
residential apartments units/ condominiums, and a beach club. The Company’s management and board of directors, following recent negotiations with the Senior Notes 2031 ad hoc group of holders, market developments and market outlook, have
updated the Company’s strategic development pipeline as shown on the next page.
|
I.
|
On
March 10, 2026 the Company signed a term sheet agreement that included the Senior Notes 2031 restructuring phases as described in note 20 (b) Subsequent Events. The term sheet agreement stipulates the following: regarding phase one
of the Cancun complex: (i)
|
|
|
Phase
one also includes the conversion of up to
|
|
|
Phase two
consists of a total of approximately
|
The Company has also re-evaluated the Bajamar project. The initial plan for developing a 5-star upper-upscale resort and an industrial park has been modified as follows:
| - |
Development of a cruise port with a capacity of
|
| - |
Development of Baja Marina,
|
| - |
Development of an industrial park for leasing purposes.
|
| - |
Development of Baja Retail Village for leasing purposes
|
| - |
Development of two 5-star upper-upscale resorts, one with
|
Construction is expected to begin once financing has been secured. Accurate completion dates are therefore not possible to estimate at the time of
preparation of these financial statements.
|
b.
|
Significant transactions
|
2025
| i. |
On September 12, 2025, the Company announced that the Company’s trust vehicle, CIBanco, S.A., Institución de Banca Múltiple (succeeded by Banco Multiva, S.A.,
Institución de Banca Múltiple, Grupo Financiero Multiva, as trustee), in its capacity as fiduciario (trustee) under the trust agreement CIB/4323 (FID/4323) (as amended, the “Issuer Trust”) was not able to make the second interest
coupon payment due on that date in respect to the U.S.$
|
| ii. |
During Q2 2025, the Company initiated an enhancement to its corporate strategy focused on building a Bitcoin (BTC) Treasury while continuing to concentrate on
its core operations, real estate development and the management of its hotel and resort business in Mexico. However, as announced on September 4, 2025, and in conjunction with the corporate governance changes the Company decided to
pause its BTC treasury initiative. This decision reflects management’s focus on supporting the optimization of its Mexican real estate assets and the restructuring of its debt obligations. The Board believes that this approach will
enhance operational efficiency and better align with the Company’s long-term objectives. As part of this strategy on June 25, 2025 the Company acquired
|
| iii. |
During August 2025, Murano World entered into a new loan agreement with Exitus for US$
|
| iv. |
On June 26, 2025, NAFIN waived the covenant breaches that the Company has to that date, refer to note 10 (8) for additional description of this waiver and
current covenant breaches status.
|
| v. |
On June 18, 2025, Bancomext approved the restructuring of the Insurgentes 421 Loan as described in note 10 (1).
|
| vi. |
On April 22, 2025, Operadora Hotelera GI, S. A. de C. V. on behalf of the Company and the Issuer Trust, gave notice of the occurrence of a Rapid Amortization
Event due to the failure by the Issuer Trust to maintain a debt service coverage ratio of at least 1.0:1.0 as of the calculation date falling on March 31, 2025. Such Rapid Amortization Event did not result in the debt being callable
under the terms of the Senior Secured Notes, but rather that the failure was required to be communicated to the bond holders.
|
| vii. |
On April 4, 2025 Murano World repaid in full the outstanding balance of the sale and lease back agreement with Exitus at that date in the amount of US $
|
| viii. |
On March 7, 2025, Murano World extended the maturity of the Santander loan in the amount of US. $
|
|
ix.
|
On January 30, 2025, Murano World signed a loan agreement with Sofoplus up to US. $
|
2024
| i. |
On October 17, 2024, Murano PV and NAFIN signed a secured loan agreement up to U.S.$
|
| ii. |
On September 12, 2024, the Company closed a 144A bond financing, issuing secured senior notes for U.S.$
|
| iii. |
On July 30, 2024, Operadora Hotelera GI, S. A. de C. V. signed a
|
| iv. |
On April 9, 2024, Murano PV, S. A. de C. V. signed a loan agreement with Fínamo for $
|
| v. |
On April 9, 2024, an assignment and adhesion to the syndicated secured
mortgage loan of Fideicomiso Murano 2000 (GIC I Trust) was executed by and between Avantta Sentir Común, S. A. de C.V., SOFOM, E.N.R., as adherent creditor
and assignee, Sabcapital, S.A. de C.V., SOFOM, E.R., as the assignor, with the appearance of Sabadell in its capacity as administrative and collateral agent and the GIC I Trust (the “GIC Loan Assignment”) whereby the assignor assigned and transferred to the assignee its rights
and obligations owned as a Tranche C creditor representing
|
| vi. |
On April 4, 2024, the Group amended the loan agreement signed between Inmobiliaria Insurgentes 421 and Bancomext. The main change included postponing the capital
payments scheduled from April 2024 to April 2025, as well as obtaining an event of default waiver from Bancomext, as lender, in connection with the funding obligations of the debt service reserve accounts. As a result of such waiver,
the parties thereto executed an amendment and waiver agreement to provide for the new terms and conditions with respect to the funding obligations of the debt service reserve accounts. Therefore, as of this date such events of default
under this loan have been waived by the lender. Refer to additional breaches for this loan in Notes 2c. and 10.
|
| vii. |
The first phase of the GIC Complex commenced operations with the opening of the Vivid Hotel on April 1, 2024.
|
| viii. |
On March 27, 2024, Murano World, S. A. de C. V. increased its credit line with Santander from U.S.$
|
|
ix.
|
Business combination:
|
|
a)
|
On March 21, 2024 the Company’s common stock and warrants began trading on the Nasdaq Capital Market under the ticker symbols “MRNO” and “MRNOW”, respectively.
|
|
b)
|
On March 20, 2024, Murano Global Investments Limited PLC and HCM Acquisition Corp (HCM) completed the Amended and Restated Business Combination Agreement (A&R BCA) and as a result there were
|
HCM does not meet the definition of a “business” under IFRS 3 Business Combinations given it
consisted predominantly of cash in trust account and liabilities, therefore the transaction was not recognized using the acquisition method and no goodwill or intangible assets were recognized.
Instead, the merger as defined in the A&R BCA is accounted for as a capital reorganization for which the Company applied IFRS 2 Share-based payment. As such, the difference in the fair value of the shares issued by the Company over the identifiable net assets of HCM at historical cost was accounted for as share-based compensation.
The business combination in the consolidated financial statements was recorded as follows: (i) a listing expense of $917,366,970 ; (ii) net liabilities from HCM in the amount of $139,024,296 ; (iii) transaction cost of $64,760,922 incurred during this
period and (iv) additional paid in capital in the amount of $713,581,752 .
|
c)
|
On March 8, 2024, the Company conducted a capital restructuring that resulted in Murano Global Investments PLC becoming the ultimate parent company of the Company and Murano PV, S. A. de C. V. as an
intermediate holding company of the Group in Mexico.
|
|
d)
|
On March 1, 2024, Murano Global Investments Limited converted from a private limited company to a public limited company operating under the name Murano Global Investments PLC.
|
| x. | On February 23, 2024 the Securities and Exchange Commission gave notice of effectiveness of the Registration Statement on Form F-4 related to the A&R BCA described in Note 1.b.ix. |
| xi. | On February 1, 2024, the Company received U.S.$ |
| xii. | On January 26, 2024, February 26, 2024 and March 26, 2024, the Company received U.S.$ |
| xiii. | On January 5, 2024, the Company signed a loan agreement with Fínamo for $ |
2023
| i. |
The Exitus and Sofoplus loans in Mexican pesos described in note 6, came to an end through the early payment made by the Company, aiming to release the collateral associated with these financing
arrangements. The amount paid to Sofoplus was $
|
| ii. |
On August 24, 2023, Fideicomiso Murano 2000, as borrower, Banco Sabadell, S.A., I.B.M., as administrative and collateral agent, Banco Nacional de Comercio Exterior, S.N.C Institución de Banca de
Desarrollo, Caixabank, S.A., SabCapital, S.A. de C.V., S.O.F.O.M., E.R., and Nacional Financiera, S.N.C., Institución de Banca de Desarrollo, as lenders, Operadora Hotelera GI, S.A. de C.V., Operadora Hotelera Grand Island II, S. A. de
C. V., and Murano World, S.A. de C.V., as joint and several obligors, and with the appearance of Murano PV, S.A. de C.V., Murano AT GV, S.A. de C.V. and Elías Sacal Cababie executed an amendment to the syndicated secured mortgage loan
agreement and its subsequent amendments for purposes of restructuring such loan.
|
The restructuring consists of an increase of the current syndicated credit facility by U.S. $45,000,000 ,
with a variable interest rate based on the quarterly SOFR rate with a fixed spread of 4.0116 %. The credit extension was documented
through two tranches of debt: Tranche B for U.S.$35,000,000 which was used to finalize the construction of phase I of the GIC Complex and Tranche C for U.S.$10,000,000 which was used to cover additional project costs and capital requirements for the development of the GIC Complex. The loan maturity date is February 5, 2033 . The agreement is subject to the Mexican laws and jurisdiction of the courts of Mexico City. The loan agreement included as additional guarantees the
plot of land number 2 and the beach club – Playa Delfines of the Cancun complex. This amount was repaid in full as part of the payment made to the Fideicomiso Murano 2000 syndicated loan on September 12, 2024 and was part of the uses of the
U.S.$300 million senior notes received on the same date.
| iii. |
In May 2023, the Company restructured the credit line with Bancomext to increase from U.S.$
|
| iv. |
In March 2023, the Company acquired a beach club in Cancun for an amount of $
|
|
v.
|
On March 13, 2023, the Company signed a Business Combination Agreement (“BCA”) with HCM Acquisition Corp (“HCM”) to carry out a de-SPAC transaction. On August 2, 2023, the Company
signed an amended and restated Business Combination Agreement which contains customary representations and warranties, covenants, closing conditions and other terms relating to the business combination and the replacement of
Murano Global B.V., which was intended to be a tax resident of the Netherlands, with Murano Global Investments Limited (“Murano Global”), a tax resident of the United Kingdom.
|
|
vi.
|
In February 2023, the Company signed a lease agreement as lessee for an amount of $
|
The list of the plots of land granted is as follows: (1) Lote 1, Manzana S/M, Sup. 4,117.88 M2; (2) Lote 2, Manzana
S/M, Sup. 6,294.08 M2; (3) Lote 3 (VIALIDAD), Manzana S/M, Sup. 4,117.88 M2; (4) Lote 4, Manzana S/M, Sup. 10,015.68 M2; (5)
Lote 5, Manzana S/M, Sup. 11,986.53 M2; (6) Lote 6, Manzana S/M, Sup. 2,912.02 M2; (7) Lote 7, Manzana S/M, Sup. 568.51
M2 and (8) Lote 8, Manzana S/M, Sup. 635.25 M2.
| 2. |
Basis of preparation
|
These consolidated and combined financial statements have been prepared on a consolidated basis at the Murano Global
Investments PLC level as of and for the years ended December 31, 2025 and 2024 and on a combined basis as of December 31, 2023 for Murano PV, S. A. de C. V. and the combined entities described in b. Capital restructuring below prior to the
capital restructuring which occurred on March 8, 2024.Since the entities included in these financial statements were under common control both prior to and after the capital restructuring, it had no material impact on the financial position,
results or operations, or cash flows presented.
|
a.
|
Statement of compliance
|
The Company has prepared these consolidated and combined financial statements in accordance with IFRS Accounting Standards as issued by the
International Accounting Standards Board (IASB).
Basis of measurement
The consolidated and combined financial statements
have been prepared on the historical cost basis, except for derivative financial instruments, net defined benefit liability and certain items of property, construction in process and equipment such as land, buildings and construction in
process, which are measured at fair value at the end of each reporting period.
| b. | Capital restructuring |
On March 8, 2024, the Company underwent a
restructuring to establish Murano Global Investments PLC as the parent Company of the Company and Murano PV, S. A. de C. V. as the intermediate holding entity of the Mexican structure: Murano World, Edificaciones BVG, the Insurgentes
Security Trust, Inmobiliaria Insurgentes 421, OHI421, OHI421 Premium Operadora Hotelera GI (GIC I), Operadora Hotelera Grand
Island (GIC II), Fideicomiso Murano 2000 (the GIC I Trust), Fideicomiso Murano 4000 (the GIC II Trust), Fideicomiso Murano 1000,
Servicios BVG, and Murano Management.
The capital restructuring involved a series of transactions between the entities and their shareholders, whereby some of
the existing shareholders sold their shares and transferred their beneficiary rights to other entities within the Company in exchange for cash and promissory notes.
Since the entities within the Company were under common control prior to and after the capital restructuring, the
capital restructuring does not qualify as a business combination under IFRS 3 Business Combinations. Management deems it appropriate to account for the capital restructuring at the carrying amount for
presentation purposes of the financial statements and related notes after the business combination held on March 20, 2024, mainly because prior to and after the
capital restructuring, the entities within the Company are controlled by the same group of shareholders.
The capital restructuring was measured at the previous carrying amounts of assets and liabilities.
| c. |
Going concern basis
|
These consolidated and combined financial statements have been prepared assuming the Company will continue as a going concern. However, management has identified
material uncertainties that may cast substantial doubt on the ability of the Company to continue as a going concern. As a result, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.
The Company is an early-stage and emerging growth company. The Company has incurred significant debt primarily to fund operating expenses and finance the
construction projects and to start up the hotel operations mentioned in note 1 (a). As of December 31, 2025, total current
liabilities exceed the amount of total current assets, and management believes that financial resources to fund its operations for the twelve months subsequent to the authorization and issuance of these
consolidated and combined financial statements may be insufficient.
In addition, as of December 31, 2025, certain covenants have been breached as follows:
|
i.
|
The debt service reserves related to the Insurgentes 421 loan with Bancomext have not
been fully funded as of December 31, 2025 in accordance with the last amendment to this loan dated July 4, 2025 (amended from time to time); also the valuation report that should be delivered to comply with the loan to value ratio
of 2 to 1 has not been delivered on April 2025 that is the second anniversary of this loan. As of the date of the issuance of these financial statements, the Company is in breach of this loan as described above and is planning to
start discussions with the lender to potentially obtain a waiver from these breaches in the short term. As of the date of issuance of these financial statements such waiver has not been granted.
|
As of December 31, 2025, the
outstanding principal amount of this loan was U.S.$98.7 million ($1,772.6 million pesos), and as a result of the covenant breach described above, the loan was classified as a current liability.
|
ii.
|
The loan obtained with ALG described in Note 10 (5)., is in breach as the Company did not pay the
annual interest due in December 2025 and 2024. The loan has not been accelerated and ALG has not notified any intention to accelerate the loan, however pursuant to IAS 1 “Presentation of Financial Statements”, the
principal amount of this loan U.S.$
|
|
iii.
|
The Company did not make the second coupon interest payment due on September
12, 2025 with respect to the US$
|
Due to the breaches described above the 2031 Notes are classified as
current liability as of December 31, 2025 in the amount of U.S.$306 million ($5,494.1 million pesos).
The Company continued with formal discussion with the ad hoc group of the 2031 Note holders after December 31, 2025, and, as described, in note 20 (b) a term sheet agreement for the restructuring of the 2031 Notes was reached on March 10, 2026. See note 20 (b) for additional information.
|
iv.
|
As of December 31, 2025 the Company did not make the 2025 fourth quarter interest payment as per the amortization table of the NAFIN loan described in note 10 (8). The Company also breached the
following covenants included in the waiver obtained last June 26, 2025 for this loan: (i) As mentioned in note 1 a) the construction of the
|
As result of the covenant breach described above, the NAFIN loan is classified as current liability as of December 31, 2025 in the amount of U.S.$58.2 million ($1,044.4 million
pesos).
The Company maintained active discussions with NAFIN to make the payment of the balance of this loan by executing the mortgage guarantee and is
revisiting if the private unit 5 of the Cancun Complex will be sufficient to cover the debt balance.
|
v.
|
The Company did not make the interest payment for the four-month period of the Exitus Loan V described in note 10 (2)., as of December 31, 2025. The Company also breached a covenant of this
agreement that requires the Company to pay an equity kicker in the amount of U.S.
|
The Company maintained
active discussion with Exitus to make the payment of this loan with a payment in kind.
|
vi.
|
The Company did not make interest or principal, as applicable, under the instruments signed with Finamo as described in notes 10 (3)., (4)., (9) and (10)., from January 1st to December 31,
2025. Management is discussing a potential restructuring of these debts, including a payment in kind with the collateral that guaranteed such debts. As of December 31, 2025 the Company is committed to reach an agreement
with its lenders in order to finalize the restructuring process of these debts.
|
As
result of the covenant breach described above, the Finamo loans are classified as current liability as of December 31, 2025 in the amount of approximately U.S.$53.7 million ($964.2 million pesos).
|
vii.
|
The Company did not make lease payments under the Coppel lease agreement from September to December 2025. The Company maintained active discussion with Coppel to restructure the lease while
continuing to evaluate potential payment in kind to the lessor.
|
As of the date of the issuance of these financial statements the
negotiations described above are in process of formalization.
See notes 10 and 20 for additional details about defaults subsequent to December 31, 2025.
Certain covenant tests will arise, under the terms of the various Company loans, during the following twelve months after the financial statements are authorized to be issued, which Management does not expect will
be met. In order to address and mitigate the risks of such possible covenant breaches in the future, the Company is in communications with each lender to execute a debt restructuring as described above. The plan is that the debt
restructuring will address and resolve the risks of such future possible covenant breaches through negotiating different terms with the various lenders. Whilst the terms of such a debt restructuring have not yet been agreed with all
the Company’s various lenders, Management believes that such a restructuring plan will mitigate the risk over the Company’s ability to continue as a going concern. The Company has also considered alternative strategies with respect to
the hotel operations in Cancun, including changes to the hotel management agreement and operational partners, which could generate additional cash flows compared to the current commercial arrangements as well as a payment in kind with
the assets of the Company.
As a result of these conditions, substantial doubt exists about the ability of the Company to continue as a going concern following twelve months after the
financial statements are authorized to be issued.
Management continues evaluating
strategies to obtain the required additional funding necessary for future operations, to comply with all covenants as required by the loan agreements or to execute a debt restructuring plan which would result in favorable modifications
or removal of certain covenants, and to be able to discharge the outstanding debt and other liabilities as they become due. In assessing these strategies, management has considered the available cash resources, inflows from the hotels
that are already in operation, and future financing options available to the Company such as new or restructured loan agreements. However, the Company may be unable to access further equity or debt financing when needed. As such, there
can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.
These consolidated and combined financial statements do not include any
adjustments to the carrying amounts and classifications of assets and liabilities and reported expenses that may otherwise be required if the going concern basis for the Company as of December 31, 2025, and for the year then ended, and for
entities comprising the Company, were not appropriate.
|
d.
|
Functional and presentation currency
|
These consolidated and combined financial statements are presented in Mexican pesos. All amounts have been rounded, unless otherwise indicated.
For each entity, the Company determines the functional currency and items included in the financial statements of each entity are
measured using that functional currency.
For purposes of disclosure in the notes to these consolidated and combined financial statements, “pesos” or “$”, means Mexican pesos and “dollars”
or “U.S.$” means United States of America dollars.
| e. |
Segments
|
Operations are managed and the financial performance is evaluated on a company-wide basis. Accordingly, all of the Company’s hotels, construction
and service operations are considered by management in one reportable operating segment; therefore, no separate segment disclosures
are presented.
| f. |
Use of judgments and estimates
|
In preparing these consolidated and combined financial statements, management has made judgments and estimates that affect the application of the
Company’s accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.
|
A.
|
Judgments
|
Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the combined
financial statements is included in the following notes:
Note 3(g) - Construction in process, land and buildings: Subsequent measurement of construction in process is at fair value based on periodic, at
least annual valuations performed by external independent appraisers.
| B. |
Assumptions and estimation uncertainties
|
Information about assumptions and estimation uncertainties as of December 31, 2025, that have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the following notes:
Note 2c – assumptions about going concern matters.
Note 7 - determining the fair value of construction in process, land and building on the basis of significant unobservable inputs;
Note 8 - determining the fair value of the investment property on the basis of significant unobservable inputs;
Note 9 – determining the valuation of leases;
Note 11 - measurement of defined benefit obligations: key actuarial assumptions;
Note 13 - recognition of deferred tax assets: availability of the future taxable profit against which deductible temporary differences and tax losses carried forward can be utilized;
Note 14 - determining the fair value of financial derivative instruments; and
Note 19 - recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources.
| C. |
Measurement of fair value
|
A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets
and liabilities.
The Company reviews the significant observable inputs and valuation adjustments.
If third-party information, such as broker quotes or pricing services, is used to measure fair values, the Company evaluates the evidence obtained
from third parties to support the conclusion that these valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which the valuations should be classified.
When measuring the fair value of an asset or a liability, the Company uses observable market data whenever possible. Fair values are categorized
into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
|
•
|
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
|
•
|
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
|
|
•
|
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair
value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has
occurred.
Further information about the assumptions made in measuring fair values is included in the following notes:
|
-
|
Note 7 - Property, construction in process and equipment.
|
| - |
Note 8 - Investment Property.
|
| - |
Note 12 - Warrants
|
| - |
Note 14 - Financial
instruments - Fair value and risk management.
|
| 3. |
Material accounting policies
|
The Company has consistently applied the following material accounting policies to all the periods presented in these
combined financial statements.
|
a.
|
Basis of consolidation and combination
|
Consolidation of subsidiaries
The subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to or has rights
to variable returns from its involvement with the entity and has the ability to affect those returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until
the date on which control ceases.
Intra-group balances and transactions are eliminated in the consolidation process.
The Company’s subsidiaries as of December 31, 2025, are set out below:
|
Entity
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Ownership interest
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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Combination of entities under common control (prior to capital restructuring as described in note 2b.)
Before the capital restructuring described in note 2b. above, the Company was directly or indirectly controlled by Elias Sacal Cababie, therefore the Company has been combined under
the common control approach. The combination includes the following entities: Murano PV, S. A. de C. V., Murano World, S. A. de C. V., Edificaciones BVG, S. A. de C. V., Fideicomiso Murano 6000 CIB/3109, Inmobiliaria Insurgentes 421, S. A. de
C.V., Operadora Hotelera GI, S. A. de C. V., Operadora Hotelera Grand Island II, S. A. de C. V., Operadora Hotelera I421, S. A. de C. V., Operadora Hotelera I421 Premium, S. A. de C. V., Fideicomiso Murano 2000 CIB /3001, Fideicomiso Murano
4000 CIB/3288, Fideicomiso Murano 1000 CIB /3000, Servicios Corporativos BVG, S. A. de C.V., and Murano Management, S. A. de C. V.
The Company conducted the combination of the entities under common control as follows: Transactions, balances and
unrealized gains or losses on transactions arising from intragroup transactions are eliminated on the combination following the guidance defined by IFRS 10.
|
b.
|
Foreign currency transactions
|
Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rates at the dates
of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the
reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured
based on the historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognized in profit or loss and presented within finance costs.
However, foreign currency differences arising from the translation of the following items are recognized in OCI:
|
•
|
An investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognized in OCI are reclassified to profit or loss);
|
| • |
A financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective (see (P)(v)); and
|
| • |
Qualifying cash flow hedges to the extent that the hedges are effective.
|
|
c.
|
Revenue from contracts with customers
|
The Company acts as a principal in the activities from which it generates its revenue. Our revenues are primarily derived from the products and
services provided to our customers in our owned hotels and are generally recognized when control of the product or service has transferred to the customer. A summary of our sources of revenue is as follows:
|
•
|
Room rentals.
|
| • |
Food and beverage.
|
| • |
All-inclusive.
|
| • |
Private events.
|
| • |
Spa services.
|
| • |
Other services.
|
We provide room rentals and other services to our guests, including, but not limited to, food and beverage, all-inclusive, spa, laundry, and
parking. These products and services each represent individual performance obligations, and in exchange for these services, we receive fixed amounts based on published rates or negotiated contracts. Payment is due in full at the time the services
are rendered or the goods are provided.
Room rental revenues are recognized over time on a daily basis as the guest occupies the room, and revenues related to the other products and
services are recognized at a point in time when the product or service is provided to the guest.
As of December 31, 2025 and 2024, the Company did not capitalize costs to obtain contracts with customers because there are no long-term contracts
with the customers, due to the operations of the hotel, the incremental costs are recognized in profit or loss as incurred. If long-term contracts were obtained, the Company will capitalize the cost of those contracts.
Advance from customers (Deferred revenue and down payments)
Deferred revenue represents the Company´s obligation to provide a service to a customer for which the Company has received cash from the customer.
Down payments are partial cash payments received by a potential customer in advance of a residential acquisition of a residential
unit. As of December 31, 2025, these payments are contingent to initiate the development of the 384 residential units as described
in note 1.
| d. |
Cash and cash equivalents and restricted cash
|
Cash and cash equivalents and restricted cash of the Company are represented primarily by cash (cash on
hand and demand deposits), restricted cash and cash equivalents. Cash equivalents are short-term highly liquid investments with maturities no longer than 90 days, which are subject to an insignificant risk of changes in value. Cash is stated at
nominal value and cash equivalents are measured at fair value. For further information, please refer to note 5.
| e. |
Financial instruments
|
|
(i)
|
Recognition and initial measurement
|
Trade receivables and debt securities are initially recognized when they are originated. All other financial assets and financial liabilities are
initially recognized when the Company becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair
value plus or minus, for an item not at Fair Value Through Profit or Loss (“FVTPL”), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured
at the transaction price.
|
(ii)
|
Classification and subsequent measurement
|
Financial assets -
On initial recognition, a financial asset is classified as measured at amortized cost or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial
assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
|
-
|
It is held within a business model whose objective is to hold assets to collect contractual cash flows; and
|
| - |
Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
|
A debt investment is measured at Fair Value Through Other Comprehensive Income (“FVOCI”) if it meets both of the following conditions and is not
designated as at FVTPL:
|
-
|
It is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
|
|
-
|
Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
|
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in
the investment’s fair value in Other Comprehensive Income (“OCI”). This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative
financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise.
Financial assets - Business model assessment:
The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best
reflects the way the business is managed, and information is provided to investors. The information considered includes.
|
-
|
The stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest
rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
|
| - |
How the performance of the portfolio is evaluated and reported to the Company’s management;
|
| - |
The risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
|
| - |
How managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flow collected; and
|
| - |
The frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
|
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose,
consistent with the Company’s continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.
Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest.
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined
as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs),
as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.
In making this assessment, the Company considers:
|
-
|
Contingent events that would change the amount or timing of cash flows;
|
|
-
|
Terms that may adjust the contractual coupon rate, including variable-rate features;
|
|
-
|
Prepayment and extension features; and
|
|
-
|
Terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features).
|
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents
unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its
contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation
for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.
Financial assets - Subsequent measurement and gains and losses:
|
Financial assets at FVTPL
|
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
|
||
|
|
|
||
|
Financial assets at amortized cost
|
These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income,
foreign exchange gain or losses and impairment are capitalized. Any gain or loss on derecognition is recognized in profit or loss.
|
Financial liabilities - Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified
as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.
Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also
recognized in profit or loss.
| (iii) |
Derecognition
|
Financial assets
The Company derecognizes a financial asset when:
|
-
|
The contractual rights to the cash flows from the financial asset expire; or
|
|
-
|
It transfers the rights to receive the contractual cash flows in a transaction in which either:
|
|
i.
|
Substantially all the risks and rewards of ownership of the financial asset are transferred; or
|
|
ii.
|
The Company neither transfers nor retains substantially all the risks and rewards of ownership and it does not retain control of the financial asset.
|
The Company enters into transactions whereby it transfers assets recognized in its consolidated statement of financial position but retains either
all or substantially all of the risk and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.
Financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged or canceled or expire. The Company also
derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any
non-cash assets transferred or liabilities assumed) is recognized in profit or loss.
Interest rate benchmark reform
When the basis for determining the contractual cash flows of a financial asset or financial liability measured at amortized cost changed as a
result of interest rate benchmark reform, the Company updated the effective interest rate of the financial asset or financial liability to reflect the change that is required by the reform. A change in the basis for determining the contractual
cash flows is required by interest rate benchmark reform if the following conditions are met:
|
•
|
The change is necessary as a direct consequence of the reform; and
|
|
•
|
The new basis for determining the contractual cash flows is economically equivalent to the previous basis - i.e. the basis immediately before the change.
|
When changes were made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows
required by interest rate benchmark reform, the Company first updated the effective interest rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Company
applied the policies on accounting for modifications to the additional changes.
| (iv) |
Offsetting
|
Financial assets and financial liabilities are offset and the net amount presented in the combined statement of financial position when, and only
when, the Company currently has a legally enforceable right to offset the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
| (v) |
Derivative financial instruments
|
The Company holds derivative financial instruments with the intention to hedge interest rate risk exposures.
Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein
are recognized in profit or loss.
| (vi) |
Impairment
|
|
i.
|
Non-derivative financial assets
|
Financial instruments
The Company recognizes loss allowances for Expected Credit Losses (“ECLs”) on:
|
-
|
Financial assets measured at amortized cost.
|
The Company measures loss allowances at an amount equal to lifetime ECLs, except for the following which are measured at twelve-month ECLs:
|
-
|
Debt securities that are determined to have low credit risk at the reporting date; and
|
| - |
Other debt securities and bank balances where credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
|
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the
Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and
informed credit assessment, that includes forward-looking information.
The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Company considers a financial asset to be in default when:
|
-
|
The debtor is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realizing security (if any is held); or
|
| - |
The financial asset is more than 90 days past due.
|
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a
shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
Presentation of allowance for ECL in the consolidated and combined statement of financial position
Allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.
As of December 31, 2025 and 2024, the Company did not recognize ECL since it has determined that the ECL related to its trade receivables would
not be material in the context of these financial statements taken as a whole.
|
ii.
|
Non-financial assets
|
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than investment property and deferred tax
assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are
largely independent of the cash inflows of other assets.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the
estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognized if the carrying amount of an asset exceeds its recoverable amount.
Impairment losses are recognized in profit or loss.
For assets, other than goodwill, it is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
| f. |
Prepayments
|
Prepaid expenses are initially recognized as assets as of the date the payment is made, provided that it is probable that the future economic
benefits associated with the asset will flow to the Company. At the time the goods or services are received, prepaid expenses are either capitalized or recognized in profit or loss as an expense, depending on whether there is certainty that the
acquired goods or services will generate future economic benefits. The Company periodically evaluates its prepaid expenses to determine the likelihood that they will cease to generate future economic benefits and to assess their recoverability.
The Company classifies its prepayments as current or non-current assets, depending on the period when the Company expects to exercise them. Unrecoverable prepaid expenses are recognized as impairment losses in profit or loss.
| g. |
Property, construction in process and equipment
|
The Company’s Property, construction in process and equipment includes the following:
land, buildings, construction in process, computer equipment, transportation equipment, furniture, and other equipment.
|
i.
|
Recognition and measurement
|
Items of property, construction in process and equipment are initially measured at cost, which includes capitalized borrowing
costs, less accumulated depreciation and any accumulated impairment losses.
Subsequent measurement of land, buildings and construction in process is at fair value based on periodic, at least annual,
valuations performed by external independent appraisers, less subsequent depreciation for buildings; land is not depreciated. The carrying amount of the revaluated assets is adjusted to the revalued amount. If the carrying amount increases as a
result of the revaluation, the increase is recognized in other comprehensive income and accumulated as a revaluation surplus, except if it reverses a revaluation decrease of the same assets previously recognized in profit or loss. If the carrying
amount is decreased as a result of the revaluation, the decrease is recognized in profit or loss, or against the revaluation surplus in comprehensive income to the extent of any existing balance with respect to the same asset.
All other property and equipment are recognized at historical cost less depreciation.
If significant parts of an item of property, construction in process and equipment have different useful lives, then they are
accounted for as separate items (major components) or property, construction in process and equipment.
Any gain or loss on disposal of an item of property, construction in process and equipment is recognized in profit or loss.
|
ii.
|
Subsequent expenditure
|
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the
expenditure will flow to the Company.
|
iii.
|
Depreciation
|
Depreciation is calculated to write off the cost of property, construction in process and equipment less their estimated
residual values using the straight-line method over their estimated useful lives, and is recognized in profit or loss. As of December 31, 2025 and 2024 items in construction in process recognized at fair value were not subject to depreciation.
During 2023 and 2024, several assets recognized as construction in process were capitalized as property, building and hotel
furniture due to the assets having reached the necessary conditions to operate as Management intended.
Company’s Management estimates the following useful life for the major assets.
|
Years
|
|
|
Buildings and beach club
|
|
|
Elevators
|
|
|
Furniture, fixtures, and equipment (“FF&E”)
|
|
|
Operating, supplies and equipment (“OS&E”)
|
|
|
Computer equipment
|
|
|
Transportation Equipment
|
|
|
Furniture
|
|
|
Equipment and other assets
|
|
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
| iv. |
Reclassification to investment property
|
When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified
accordingly. Any gain arising on this remeasurement is recognized in profit or loss to the extent that it reverses a previous impairment loss on the specific property, with any gain recognized in OCI and presented in the revaluation reserve. Any
loss is recognized in profit or loss. However, to the extent that an amount is included in the revaluation surplus for that property, the loss is recognized in OCI and reduces the revaluation surplus within equity.
| h. |
Investment property
|
Investment property is initially measured at cost and subsequently at fair value with any change therein recognized in profit and loss.
Any gain or loss on disposal of the investment property (calculated as the difference between the net proceeds from disposal and the carrying
amount of the item) is recognized in profit or loss. When investment property that was previously classified as property, construction in process and equipment is sold, any related amount included in the revaluation reserve is transferred to
retained earnings.
As of December 31, 2025 and 2024, the Company has a plot of land located in, Baja California, Mexico, that qualifies as an investment property in
accordance with the requirements established by IAS 40, since the Company foresees to use this land for the construction of an industrial park, where the Company will act as a lessor and it will obtain income from rentals.
| i. |
Employee benefits
|
|
i.
|
Short-term employee benefits
|
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the
Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
|
ii.
|
Other long-term employee benefits
|
The Company’s net obligation in respect of long-term employee benefits is the amount of future benefits that employees have earned in return for
their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in which they arise.
| iii. |
Termination benefits
|
Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company
recognizes costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.
| iv. |
Defined employee benefit
|
In accordance with Mexican Labor Law, the Company provides seniority premium benefits to its employees under certain circumstances, which is
recognized as a defined benefit plan. The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods,
discounting that amount and deducting the fair value of any plan assets.
The calculation of the defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the
calculation results in a potential asset for the Company, the recognized asset is limited to the present value of the economic benefits available in the form of future refunds from the plan or reductions in future contributions to the plan. To
calculate the present value of the economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, return on plan assets (excluding interest), and
the effect of the asset ceiling (if any, excluding interest), are recognized immediately in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate
used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability (asset), taking into account any change in the net defined benefit liability (asset) during the period as a result of
contributions and benefit payments.
Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or curtailment
gain or loss is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
| j. |
Borrowing costs
|
Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognized in profit or loss in the period in which they are incurred.
| k. |
Income tax
|
Income tax expense comprises current and deferred tax and it is recognized in profit or loss. As mentioned in Note 1(a) the Company participates
in certain trusts as a Trustor, these trusts are not subject to income taxes.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or
receivable in respect of previous years. The amount of current tax payable or receivables is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax
rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes.
Temporary differences in relation to a right-of-use asset and a lease liability for a specific lease are regarded as a net package (the lease) for
the purpose of recognizing deferred tax.
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is
probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is
insufficient to recognize a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences are considered, based on the business plans for individual subsidiaries in the Company. Deferred tax
assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting
date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of investment property measured at fair value is presumed to be recovered through sale.
Deferred tax assets and liabilities are offset only if certain criteria are met.
|
l.
|
Finance income and finance cost
|
The Company’s finance income and finance cost include:
|
-
|
Interest income,
|
| - |
Interest expense,
|
| - |
The net gain or loss on financial assets at FVTPL,
|
| - |
The foreign currency gain or loss on financial assets and financial liabilities.
|
Interest income or expense is recognized using the ‘effective interest rate’ method.
The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the
financial instrument to:
|
•
|
The gross carrying amount of the financial asset; or
|
|
•
|
The amortized cost of the financial liability.
|
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the assets (when the asset is
not credit-impaired) or to the amortized cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the
amortized cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
| m. |
Leases
|
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
As a lessee
At the commencement or on modification of a contract that contains a lease component, the Company allocates the contract consideration to each
lease component on the basis of its relative stand-alone prices. However, for leases of property the Company has elected not to separate the non-lease components and account for the lease and non-lease components as a single lease component.
The Company recognizes a right-of-use asset and a lease liability on the lease commencement date. The right-of-use asset is initially measured at
cost, which comprises the initial amount of the lease liability adjusted for any lease payments made on or before the commencement date, plus any initial direct costs incurred and an estimate of the costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end date of the lease term,
unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of right-of-use asset reflects that the Company will exercise a purchase option. In that case, the right-of-use asset will be
depreciated over the useful life of the underlying asset, which is determined on the same basis as property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using
the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain
adjustments to reflect the terms of the lease and the type of asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
|
•
|
Fixed payments; including in-substance fixed payment:
|
| • |
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
|
| • |
Amounts expected to be payable under a residual value guarantee, and
|
| • |
The exercise price under purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early
termination of a lease unless the Company is reasonably certain not to terminate early.
|
The lease liability is measured at reinforced cost using the effective interest method and data measured when there is a change in future lease
payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a
purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use assets, or is
recorded in profit or loss in the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including
IT equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
| n. |
Contingencies
|
Liabilities for loss contingencies are recorded when it is probable that a liability has been incurred and the amount thereof can be reasonably
estimated. When a reasonable estimation cannot be made, disclosure is provided in the notes to the combined financial statements. Contingent revenues, earnings or assets are not recognized until realization is assured.
| o. |
Provisions
|
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The unwinding of the discount is recognized as a finance cost.
| p. |
Contributions for future net assets
|
Contributions for future net assets are contributions granted by the shareholders of the Company that will become part of the net parent
investment on a certain date or when certain conditions are met, these contributions are recognized at the transaction price as a liability since there is no present value interest component to recognize.
| q. |
Fair value measurement
|
‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date in the principal or, in its absence, the most advantageous market in which the Company has access at that date. The fair value of a liability reflects its non-performance risk.
A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets
and liabilities (see note 14).
When one is available, the Company measures the fair value of an instrument using the quoted price in an active market for that instrument. A
market is considered ‘active’ if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
If there is no quoted price in an active market, then the Company uses valuation techniques that maximize the use of relevant observable inputs
and minimize the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.
If an asset or a liability measured at fair value has a bid price and an ask price, then the Company measures assets and long positions at a bid
price and liabilities and short positions at an ask price.
The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction price, i.e., the fair value of
the consideration given or received.
If the Company determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by
a quoted price in an active market for an identical asset or liability nor based on a valuation technique for which unobservable inputs are judged to be insignificant in relation to the measurement, then the financial instrument is initially
measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price.
Subsequently, that difference is recognized in profit or loss on an appropriate basis over the life of the instrument, but no later than when the
valuation is wholly supported by observable market data or the transaction is closed out.
| r. |
Other liabilities
|
Other liabilities mainly consists of contributions granted by Hyatt and Accor under the concept of ‘key money’ per the Hotel Services Agreement and the Hotel Management Agreement, respectively. The ‘key money’ was granted as an inducement to the Company to enter into such agreements. The Company recognizes these contributions in other liabilities against cash, and the Company subsequently amortizes
the total amount on a monthly, straight-line basis from the first month the ‘key money’ is received and continuing during the term of the agreement. If the agreements are canceled or terminated before the agreed term, the Company shall repay
to the operators the remaining unamortized amount.
| s. |
Consolidated and Combined Statements of cash flows
|
The consolidated and combined statement of cash flows detail the cash inflows and outflows that occurred during the period. In addition, the
combined statement of cash flows starts with the profit before income taxes and other comprehensive income, presenting first cash flows from operating activities, then investment activities and finally, financing activities.
The consolidated and combined statement of cash flows for the years ended December 31, 2025, 2024 and 2023 were prepared using the indirect
method.
| 4. |
New accounting standards or amendments for 2025 and forthcoming requirements
|
|
a.
|
New currently effective requirements
|
The following standards required to be applied by an entity with an annual reporting period beginning on 1 January 2025., and have been adopted by the Company. Their adoption has not any material impact on the disclosures or the
amounts reported in these financial statements.
Amendments to IAS 21 – Lack of Exchangeability. Under IAS 21 The Effects of Changes in Foreign Exchange Rates, a company uses a spot exchange rate when
translating a foreign currency transaction. The amendment is effective for annual reporting periods beginning on or after January 1, 2025. The Company did not have a significant impact from the adoption of this standard.
| b. |
Forthcoming requirements
|
As of December 31, 2025, the following standards and interpretations had been issued but were not mandatory for annual reporting periods
ending on December 31, 2025.
|
•
|
Amendments to IFRS 9 and IFRS 7 – Contracts Referencing Nature-dependent Electricity |
Issued in December 2024, these amendments change the ‘own use’ and hedge accounting requirements of IFRS 9 and include targeted disclosure
requirements to IFRS 7. These amendments apply only to contracts that expose an entity to variability in the underlying amount of electricity because the source of its generation depends on uncontrollable natural conditions (such as the
weather). These new requirements will apply for annual reporting periods beginning on or after January 1, 2026. Early application is permitted (subject to any endorsement process). Effective date: January 1, 2026 (early adoption is
available).
|
•
|
Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7 |
On May 30, 2024, the IASB issued targeted amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures to
respond to recent questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities. These amendments:
a. clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial
liabilities settled through an electronic cash transfer system;
b. clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI)
criterion;
c. add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments with
features linked to the achievement of environmental, social and governance targets); and
d. update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI).
The amendments in (b) are most relevant to financial institutions, but the amendments in (a), (c) and (d) are relevant to all entities.
The amendments to IFRS 9 and IFRS 7 will be effective for annual reporting periods beginning on or after January 1, 2026, with early
application permitted subject to any endorsement process. Effective date: January 1, 2026.
|
•
|
Annual Improvements to IFRS Accounting Standards – Volume 11 |
Annual improvements are limited to changes that either clarify the wording in an Accounting Standard or correct relatively minor unintended
consequences, oversights or conflicts between the requirements in the Accounting Standards. These amendments are to the following standards:
IFRS 1 First-time Adoption of International Financial Reporting Standards
IFRS 7 Financial Instruments: Disclosures and its accompanying Guidance on implementing IFRS 7
IFRS 9 Financial Instruments
IFRS 10 Consolidated Financial Statements; and
IAS 7 Statement of Cash Flows.
Effective date: January 1, 2026
|
•
|
Amendments to IAS 21 – Translation to a Hyperinflationary Presentation Currency |
In November 2025, the IASB amended IAS 21 to specify the translation procedures for an entity whose presentation currency is that of a
hyperinflationary economy. The entity applies the amendments if:
| o | it is functional currency is that of a non-hyperinflationary economy and it is translating its results and financial position into the currency of a hyperinflationary
economy; or |
| o | it is translating into the currency of a hyperinflationary economy the results and financial position of a foreign operation whose functional currency is that of a
non-hyperinflationary economy. |
Effective date: January 1, 2027 (early adoption is permitted subject to endorsement process).
|
•
|
IFRS 18 – Presentation and Disclosure in Financial Statements |
This is the new standard on presentation and disclosure in financial statements, which replaces IAS 1, with a focus on updates to the statement of profit or loss. The key
new concepts introduced in IFRS 18 relate to:
| o | the structure of the statement of profit or loss with defined subtotals; |
| o | requirement to determine the most useful structure summary for presenting expenses in the statement of profit or loss; |
| o | required disclosures in a single note within the financial statements for certain profit or loss performance measures that are reported outside an entity’s
financial statements (that is, management-defined performance measures); and |
| o | enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general. |
Effective date: January 1, 2027 (early adoption is permitted).
|
•
|
IFRS 19 – Subsidiaries without Public Accountability: Disclosures |
This new standard works
alongside other IFRS Accounting Standards. An eligible subsidiary applies the requirements in other IFRS Accounting Standards except for the disclosure requirements; and it applies instead the reduced disclosure requirements in IFRS 19.
IFRS 19’s reduced disclosure requirements balance the information needs of the users of eligible subsidiaries’ financial statements with cost savings for preparers. IFRS 19 is a voluntary standard for eligible subsidiaries. A subsidiary is eligible if:
IFRS 19’s reduced disclosure requirements balance the information needs of the users of eligible subsidiaries’ financial statements with cost savings for preparers. IFRS 19 is a voluntary standard for eligible subsidiaries. A subsidiary is eligible if:
| o | it does not have public accountability; and |
| o | it has an ultimate or intermediate parent that produces consolidated financial statements available for public use that comply with IFRS Accounting Standards. |
Effective date: January 1,
2027
The Company is still in process of assessing the impact of the new accounting standards, particularly with the IFRS 18 respect to the
structure of the Company´s statement of profit or loss, the statement of cashflows and the additional disclosures required for the MPMs (Management defined Performance Measures). The Company is also assessing the impact on how information
is grouped in the financial statements including for items currently labelled as “other”.
| 5. |
Cash and cash equivalents and restricted cash
|
As of December 31, 2025 and 2024, cash and cash equivalents and restricted cash is as follows:
| As of December 31, |
||||||||
|
2025
|
2024 |
|||||||
|
Cash
|
$
|
|
$
|
|
||||
|
Bank deposits and restricted cash (1) (2)
|
|
|
||||||
|
Total cash and cash equivalents and restricted cash
|
$
|
|
$
|
|
||||
| (1) |
|
| (2) |
|
| 6. |
Related-party transactions and balances
|
Transactions with key management personnel
|
i.
|
Key management personnel compensation
|
Compensation of the Company’s key management personnel includes only short-term employee benefits in the amount of $12,192,207 , $14,066,344 and $13,185,131 during 2025, 2024 and 2023, respectively.
|
ii.
|
Outstanding balances with related parties as of December 31, 2025 and 2024 are shown as follows:
|
| As of December 31, |
||||||||
|
Payable:
|
2025 | 2024 | ||||||
|
Affiliate:
|
||||||||
|
Sofoplus S.A.P.I de C. V., SOFOM ER (1)
|
$
|
|
$
|
|
||||
|
Total related parties payable
|
|
|
||||||
|
Current portion
|
|
|
||||||
|
Long term portion
|
$
|
|
$
|
|
||||
| (1) |
|
On September 30, 2025, the Company signed a promissory note with Sofoplus to defer the interest payment from June 1, 2025 to January 1, 2026 of the Sofoplus Loan II. On January 2, 2026 the
maturity of this promissory note was extended to December 28, 2026.
On December 1, 2025 the Company signed a promissory note with Sofoplus to defer the interest payment from December 1, 2025 to February 28, 2026 of the Sofoplus Loan III in the amount of
U.S.$392,522 On February 28, 2026 the maturity of this promissory note was extended to February 23,2027.
Reconciliation of movements of liabilities to cash flows arising from related party financing activities
|
Long-term debt
|
||||
|
Balances as of January 1, 2025
|
$
|
|
||
|
Payments
|
(
|
)
|
||
|
Interest paid
|
(
|
)
|
||
|
Proceeds from loans
|
|
|||
|
Accrued interest
|
|
|||
|
Total changes from financing cash flows
|
|
|||
|
Effect on changes in foreign exchange rates
|
(
|
)
|
||
| Balances as of December 31, 2025 | $ | |||
|
Long-term debt
|
||||
|
Balances as of January 1, 2024
|
$
|
|
||
|
Payments
|
(
|
)
|
||
|
Interest paid
|
(
|
)
|
||
|
Proceeds from loans
|
|
|||
|
Accrued interest
|
|
|||
|
Total changes from financing cash flows
|
|
|||
|
Effect on changes in foreign exchange rates
|
|
|||
|
Balances as of December 31, 2024
|
$
|
|
||
| 7. |
Property, construction in process and equipment
|
Reconciliation of carrying amount
|
Construction in
|
Computer
|
Transportation
|
Equipment and
|
|||||||||||||||||||||||||||||||||
|
Land
|
process
|
Buildings
|
Elevators
|
equipment
|
Equipment
|
Furniture(1)
|
other assets
|
Total
|
||||||||||||||||||||||||||||
|
Cost:
|
||||||||||||||||||||||||||||||||||||
|
Balances as of January 1, 2023
|
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Additions
|
||||||||||||||||||||||||||||||||||||
|
Disposals
|
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
|
Capitalization of FF&E and OS&E, buildings
and elevators
|
( |
) | ||||||||||||||||||||||||||||||||||
|
Revaluation
|
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
|
Balances as of December 31, 2023
|
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Additions
|
||||||||||||||||||||||||||||||||||||
|
Capitalization of FF&E and OS&E, buildings
and elevators
|
( |
) | ||||||||||||||||||||||||||||||||||
|
Revaluation
|
( |
) | ||||||||||||||||||||||||||||||||||
|
Balances as of December 31, 2024
|
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Additions
|
||||||||||||||||||||||||||||||||||||
|
Disposals (2)
|
|
|
|
|
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
|
Assets held for sale (3)
|
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
|
Revaluation
|
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
|
Balances as of December 31, 2025
|
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Construction in
|
Computer
|
Transportation
|
Equipment and
|
|||||||||||||||||||||||||||||||||
|
|
Land
|
process
|
Buildings
|
Elevators
|
equipment
|
Equipment
|
Furniture(1)
|
other assets
|
Total
|
|||||||||||||||||||||||||||
|
Accumulated depreciation:
|
||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Balances as of December 31, 2022
|
$ | $ | $ | $ |
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Depreciation
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Balances as of December 31, 2023
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Depreciation
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Balances as of December 31, 2024
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Depreciation
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Disposals (2)
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
| Balances as of December 31, 2025 |
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
|
Carrying amounts as of:
|
||||||||||||||||||||||||||||||||||||
|
December 31, 2023
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
December 31, 2024
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
December 31, 2025
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
|
(1)
|
|
|
(2)
|
|
|
(3)
|
|
Construction in process
GIC I (is a hotel project in Cancun which
when complete will have 616 rooms and approximately 324 condominiums. Construction is nearing completion and operations commenced during 2024 with the first 400 keys of the formerly Hyatt Vivid Hotel already open and the remaining 166 keys are expected to open in the third quarter of 2026. All hotel rooms will be now under the Mondrian brand, as the new operator
(refer to Note 1 for additional information). As of December 31, 2025 and 2024, amounts incurred in the construction in process during the calendar year are $259,991,882 and $1,296,109,229 , respectively.
GIC II is a plot of land located in Cancun, Quintana Roo, where the Company plans to develop approximately 1,254
condominiums, a convention center (under the World Trade Center brand),
a water park and a beach club. For the years ended December 31, 2025 and 2024, construction costs incurred were $4,662,698 and $6,014,159 , respectively. See Notes 1 a. and 19 for additional details about the GIC Complex (GIC I y GIC II).
Insurgentes Hotel is a hotel complex comprising two individual hotels with
a combined capacity of 396 rooms, located in Mexico City. This hotel commenced operations in early 2023. For the year ended December 31, 2025, construction costs incurred for the construction of the
Mondrian offices as well as the construction of the meeting rooms space in the Mondrian hotel were $16,320,098 . As of
December 31, 2024 there were no additional capitalized costs incurred for the property.
Capitalization of borrowing cost included in the incurred cost of the construction of the GIC I for the year ended December 31, 2024 was $303,443,168 , were calculated using a capitalization rate of 100 % since all the loans held by the Company
are specific and directable attributable to the construction in process up to April 1, 2024, after which the Company has no t
capitalized additional borrowing cost.
Non-cash and cash transactions in Property, construction in process and equipment
|
As of December 31,
|
||||||||||||
|
2025
|
2024
|
2023 | ||||||||||
|
Balances as of January 1
|
$
|
|
$
|
|
$
|
|
||||||
|
Non-cash transactions:
|
||||||||||||
|
Revaluation of land and construction in process
|
(
|
)
|
( |
) | ||||||||
|
Reclassification to
assets held for sale
|
(
|
)
|
||||||||||
|
Disposal of assets
|
(
|
)
|
|
|
||||||||
|
Total non-cash transactions
|
( |
) | ( |
) | ||||||||
|
Cash transactions:
|
||||||||||||
|
Construction in process and equipment
|
|
|
|
|||||||||
|
Capitalized borrowing costs
|
|
|
||||||||||
|
Total cash transactions
|
|
|
|
|||||||||
|
Balances as of December 31
|
$
|
|
$
|
|
$
|
|
||||||
Measurement of fair value
Land, construction in process and
buildings
Fair value hierarchy
The Company engages third-party qualified appraisers to perform the valuation of the land, construction in process and buildings annually. The technical committee works closely with qualified external
appraisers to establish the appropriate valuation techniques and inputs to the model. The fair value measurement for the land, construction in process and buildings has been categorized as a Level 3 fair value based on the inputs to the
valuation technique used. Changes in fair value are recognized in Other Comprehensive Income (OCI) or profit or loss to the extent losses exceed any revaluation gains.
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of
the land, construction in process and buildings, as well as the significant unobservable inputs used. The revaluation (loss) surplus for the years ended December 31, 2025, 2024 and 2023 were $(2,380,702,844 ), $334,809,588 and $(889,982,346 ), respectively.
|
Valuation technique
|
|
Significant unobservable inputs
|
|
Inter-relationship between
significant unobservable
inputs and fair value
measurement
|
|
|
Land
|
|
The appraiser compared the comps to the Subject Assets using comparison elements that include market conditions, location, and physical characteristics. |
|
The estimated fair value would increase if the adjustments applied were higher.
|
|
|
Company directors use the market-based approach to determine the value of the land as described in the valuation reports prepared by the appraisers
|
|||||
|
|
|||||
| In estimating the fair value of the subject assets, the appraiser performed the following: |
• Location (0.80 - 1).
• Size (1.08 - 1.20).
• Market conditions (0.8 - 1).
|
||||
| |
|||||
| • |
Researched market data to obtain information pertaining to sales and listings (comps) that are similar to the Subject Asset.
|
||||
| • | Selected relevant units of comparison (e.g., price per square meter), and developed a comparative analysis for each. | ||||
| • | Compared the comps to the Subject Asset using elements of comparison that may include, but are not limited to, market conditions, location, and physical characteristics; and adjusted the comps as appropriate. | ||||
| • | Reconciled the multiple value indications that resulted from the adjustment of the comps into a single value indication. | ||||
| • | The selected price per square meter is consistent with market prices rates paid by market participants and/or current asking market prices rates for comparable properties. | ||||
|
Valuation technique
|
Significant unobservable inputs
|
Inter-relationship between
significant unobservable
inputs and fair value
measurement
|
|||
|
Construction in process
Company directors use the cost approach to determine the value of construction in process as described in the valuation reports prepared by the
appraisers.
In estimating the fair value of building and site improvements, the appraiser performed the following:
|
The appraiser used an adjustment factor regarding the status of the construction in process.
Work in progress adjustment (0.6 – 0.98).
|
The estimated fair value would decrease if the adjustments applied were higher.
|
|||
| • | Estimated replacement cost of the building and site improvements, as though new, considering items such as indirect costs. | ||||
| • | Estimated and applied deductions related to accrued depreciation, resulting from physical deterioration, and work in progress. | ||||
|
Building
Company directors use the fair market value based on the discounted cashflow approach to determine the value buildings in current operation that
Management considers are in the final stage of ramp up as described in the valuation reports prepared by the appraisers (Insurgentes 421 complex), as well as use the cost approach to determine the value of buildings in current
operation that has beginning their ramp up period (Cancun Complex/Hotel Vivid portion).
In estimating the fair value of building and site improvements, the appraiser performed the following:
|
The appraiser used the discounted cashflow approach to determine the value of the buildings:
Expected market rental growth 2025 – 8.9% and 4.6% long term.
Discount rate – 12.5%
Occupancy rate – 2025 68% and once stabilized 70.0% and 72.5% after 2029
|
The estimated fair value would increase if the adjustments applied were higher.
|
|||
| • | Estimated and applied deductions related to accrued depreciation, resulting from physical deterioration. | ||||
| • | Estimated incomes based in the trends of historical operations | ||||
| • |
Estimated replacement cost of the building and site improvements, as though new, considering items such as indirect costs.
|
||||
| • |
Estimated and applied deductions related to accrued depreciation, resulting from physical deterioration, and work in progress. | ||||
Carrying amount
If the Company’s land, construction in process
and buildings had been measured on a historical cost basis, the carrying amounts would have been as shown in the next page.
|
As of December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Land
|
$
|
|
$
|
|
||||
|
Construction in process
|
|
|
||||||
| Buildings |
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
Security
As of December 31, 2025 and 2024, properties with carrying amount of $15,065,644,136 ,
and $18,817,329,303 , respectively, were subject to mortgages or security trusts that form part of the security for certain bank
loans. A list of the properties granted and the related loans is as follows:
2025
|
Property
|
Associated Credit Reference
|
|
|
Units 1, 2 / Grand Island
|
See Note 10 Terms and repayment schedule (11)
|
|
|
Unit 3 / Grand Island II
|
See Note 10 Terms and repayment schedule (3), (4), (9) &(10)
See Note 10 Terms and repayment schedule (8)
See Note 10 Terms and repayment schedule (2) and Note 6 reference (1)
|
|
|
Units 4 & 5
|
||
|
Unit 8, No. 56-A-1, Supermanzana A2, Sup. 824.20 M2
|
||
|
Unit 9, No. 56-A-1, Supermanzana A2, Sup. 832.94 M2
|
||
|
Insurgentes Sur 421 Complex
|
See Note 10 Terms and repayment schedule (1)
|
|
|
Beach Club – Playa Delfines
|
See Note 10 Terms and repayment schedule (5)
|
|
|
Plot of land: La Punta Bajamar / Lote 1, Manzana S/M, Sup. 4,117.88 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
|
Plot of land: La Punta Bajamar / Lote 2, Manzana S/M, Sup. 6,294.08 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
|
Plot of land: La Punta Bajamar / Lote 3 (Vialidad), Manzana S/M, Sup. 4,117.88 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
|
Plot of land: La Punta Bajamar / Lote 4, Manzana S/M, Sup. 10,015.68 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
|
Plot of land: La Punta Bajamar / Lote 5, Manzana S/M, Sup. 11,986.53 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
|
Plot of land: La Punta Bajamar / Lote 6, Manzana S/M, Sup. 2,912.02 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
|
Plot of land: La Punta Bajamar / Lote 7, Manzana S/M, Sup. 568.51 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
|
Plot of land: La Punta Bajamar / Lote 8, Manzana S/M, Sup. 635.25 M2
|
See Note 10 Terms and repayment schedule (2)
|
2024
|
Property
|
Associated Credit Reference
|
|
Units 1, 2 / Grand Island
|
See Note 10 Terms and repayment schedule (11)
|
|
Unit 3 / Grand Island II
|
See Note 10 Terms and repayment schedule (3), (4), (9) &(10)
|
|
See Note 10 Terms and repayment schedule (13)
|
|
|
Units 4 & 5
|
|
|
Unit 8, No. 56-A-1, Supermanzana A2, Sup. 824.20 M2
|
See Note 10 Terms and repayment schedule (2) and Note 6 reference (1)
|
|
Unit 9, No. 56-A-1, Supermanzana A2, Sup. 832.94 M2
|
|
|
Insurgentes Sur 421 Complex
|
See Note 10 Terms and repayment schedule (1)
|
|
Beach Club – Playa Delfines
|
See Note 10 Terms and repayment schedule (5)
|
|
Plot of land: La Punta Bajamar / Lote 1, Manzana S/M, Sup. 4,117.88 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
Plot of land: La Punta Bajamar / Lote 2, Manzana S/M, Sup. 6,294.08 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
Plot of land: La Punta Bajamar / Lote 3 (Vialidad), Manzana S/M, Sup. 4,117.88 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
Plot of land: La Punta Bajamar / Lote 4, Manzana S/M, Sup. 10,015.68 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
Plot of land: La Punta Bajamar / Lote 5, Manzana S/M, Sup. 11,986.53 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
Plot of land: La Punta Bajamar / Lote 6, Manzana S/M, Sup. 2,912.02 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
Plot of land: La Punta Bajamar / Lote 7, Manzana S/M, Sup. 568.51 M2
|
See Note 10 Terms and repayment schedule (2)
|
|
Plot of land: La Punta Bajamar / Lote 8, Manzana S/M, Sup. 635.25 M2
|
See Note 10 Terms and repayment schedule (2)
|
Assets held for sale
In September 2025, Management committed to a plan to make a payment in kind to NAFIN in order to reduce the balance of the NAFIN
Loan. Accordingly, the plan is transfer to sell to NAFIN the private unit 5 of the Cancun Complex. The Company expects that this transaction will be concluded in the second quarter of 2026. As result of the above, the Company
reclassified the private unit 5 from property, plant and equipment financial statements line to assets held for sale.
In Octuber 2025, as described in note 19g., Finamo initiated a commercial enforcement
proceeding (juicio oral mercantil) against some subsidiaries of the Company, in connection with the alleged failure to make
(i) principal and interest payments under the Finamo Loans (note 10) and (ii) sale and lease back payments under the Finamo Sale and Lease Back Agreements. Management plans include a potential payment in kind to Finamo
in order to pay in full the remaining debt balance in the next few months after the issuance of these consolidated and combined financial statements.
As of December 31, 2025 the assets held for sale were at fair value less cost of disposition and comprised the following assets:
|
December 31, 2025
|
||||
|
Land – Private unit 3 of the Cancun Complex
|
$
|
|
||
|
Land – Private unit 5 of the Cancun Complex
|
|
|||
|
Assets held for sale
|
$
|
|
||
Cumulative income or expense including in OCI
There is a cumulative surplus included in OCI as part of the valuation of the private units 3 and 5 described above in the
amount of $2,050,842,184 , this amount is presented net of the deferred income tax in the amount of $615,252,655 .
Measurement of fair value
The Company engages third-party qualified appraisers to perform the valuation of the land, annually. The technical committee
works closely with qualified external appraisers to establish the appropriate valuation techniques and inputs to the model. The fair value measurement for the land has been categorized as a Level 3 fair value based on the inputs
to the valuation technique used. Changes in fair value are recognized in Other Comprehensive Income (OCI) or profit or loss to the extent losses exceed any revaluation gains.
|
Valuation technique
|
|
Significant unobservable inputs
|
|
Inter-relationship between
significant unobservable
inputs and fair value
measurement
|
|
|
Land of assets held for sale
Company directors use the market-based approach to determine the value of the land as described in the valuation reports prepared by
the appraisers.
In estimating the fair value of the subject assets, the appraiser performed the following:
|
|
The appraiser compared the comps to the Subject Assets using comparison elements that include market conditions, location, and physical
characteristics.
• Location (0.80 - 1).
• Size (1.08 - 1.20).
• Market conditions (0.8 - 1).
|
|
The estimated fair value would increase if the adjustments applied were higher.
|
|
|
•
|
Researched market data to obtain information pertaining to sales and listings (comps) that are similar to the Subject Asset.
|
||||
|
•
|
Selected relevant units of comparison (e.g., price per square meter), and developed a comparative analysis for each.
|
||||
|
•
|
Compared the comps to the Subject Asset using elements of comparison that may include, but are not limited to, market conditions, location, and physical characteristics; and adjusted the comps as
appropriate.
|
|
|
|
|
|
•
|
Reconciled the multiple value indications that resulted from the adjustment of the comps into a single value indication.
|
|
|
|
|
|
•
|
The selected price per square meter is consistent with market prices, rates paid by market participants and/or current asking market prices rates for comparable properties.
|
|
|
|
|
| 8. |
Investment property
|
Reconciliation of carrying amount
|
As of December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Balances as of January 1,
|
$
|
|
$
|
|
||||
|
Changes in fair value
|
|
|
||||||
|
Balances as of December 31,
|
$
|
|
$
|
|
||||
Investment property is initially measured at cost and subsequently at fair value, changes in fair value are recognized as a gain (loss)
in profit or loss. All such gains (losses) are unrealized.
The investment property is planned for the development of an industrial park, this project is expected to include approximately a
leasable area of 363,262 sqm as described in Note 1.
Measurement of fair value
Fair value hierarchy
The Company engages third-party qualified appraisers to perform the valuation of the investment properties annually. The technical
committee works closely with qualified external appraisers to establish the appropriate valuation techniques and inputs to the model.
The fair value measurement for all of the investment properties has been categorized as a Level 3 fair value based on the inputs to the
valuation technique used.
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of the investment property, as well as the significant
unobservable inputs used.
|
Valuation technique
|
Significant unobservable inputs
|
Inter-relationship between significant unobservable inputs and fair value measurement
|
|||
|
Company directors use the market-based approach to determine the value of the subject assets as described in the valuation reports prepared by the appraisers.
In estimating the fair value of the subject assets, the appraiser performed the following:
• Researched market data to obtain information pertaining to sales and listings (comps) that are similar to the Subject Asset.
• Selected relevant units of comparison (e.g., price per square meter), and developed a comparative analysis for each.
• Compared the comps to the Subject Asset using elements of comparison that may include, but are not limited to, market conditions, location, and physical
characteristics; and adjusted the comps as appropriate.
• Reconciled the multiple value indications that resulted from the adjustment of the comps into a single value indication.
• The selected price per square meter is consistent with market price rates paid by market participants and/or current asking market prices rates for
comparable properties.
|
The appraiser compared the comps to the Subject Assets using comparison elements that include market conditions, location, and physical characteristics.
• Location (0.80 – 1).
• Size (1.08 – 1.20).
• Market conditions (0.8 – 1).
|
The estimated fair value would increase if adjustments applied were higher.
|
Security
As of December 31, 2025 and 2024, properties with a carrying amount of $1,415,000,000 and $1,340,000,000 were subject to a registered debenture
that forms security for certain loans. A list of the properties granted and the related loans is as shown in the next page.
|
Property
|
Associated Credit Reference
|
||
|
Plot of land: La Costa Bajamar / Lote MP1, Fracc. A, Manzana S/M, Sup. 271,042.763 M2
|
See Note 10 Terms and repayment schedule
(2) and Note 6 references (1).
|
||
|
Plot of land: La Costa Bajamar: Lote MP1, Fracc. B, Manzana S/M, Sup. 304,851.487 M2
|
|||
|
Plot of land: La Costa Bajamar: Lote MP1, Fracc. C, Manzana S/M, Sup. 353,797.091 M2
|
|||
|
Plot of land: La Costa Bajamar: Fracc. Servidumbre de Paso, Manzana S/M, Sup. 41,084.499 M2
|
| 9. |
Leases
|
The Company leases equipment, office space and vehicles. Lease terms vary from contract to contract. Information on
leases in which the Company is a lessee is presented below.
Right-of-use assets
Right-of-use assets related to leased properties that do not meet the definition of investment property.
|
2025
|
Hotel Equipment
|
Offices
|
Vehicles
|
Total
|
||||||||||||
|
Balance as of January 1,
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Depreciation charge for the year
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Balance as of December 31,
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
2024
|
Hotel Equipment
|
Offices
|
Vehicles
|
Total
|
||||||||||||
|
Balance as of January 1,
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Additions
|
|
|
|
|
||||||||||||
|
Depreciation charge for the year
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Balance as of December 31,
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
2023
|
Hotel Equipment(1)
|
Offices
|
Vehicles
|
Total
|
||||||||||||
|
Balance as of January 1,
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Additions
|
|
|
|
|
||||||||||||
|
Depreciation charge for the year
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
|
Balance as of December 31,
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
| (1) |
|
Amounts recognized in profit or loss
|
For the Years Ended December 31,
|
||||||||||||
|
2025
|
2024
|
2023 | ||||||||||
|
Amounts recognized in profit and loss
|
||||||||||||
|
Interest on lease liabilities
|
$
|
|
$
|
|
$ | |||||||
|
Expenses related to short-term leases
|
|
|||||||||||
|
$
|
|
$
|
|
$ | ||||||||
|
Amounts recognized in the consolidated and combined statement of cash flow
|
||||||||||||
|
Total cash outflow
|
$
|
|
$
|
|
$ | |||||||
Guarantee deposits
As part of the hotel equipment leasing, the Company provided a guarantee deposit of $4,870,138 ,
from December 31, 2023.
| 10. |
Long-term debt
|
|
As of December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Current liabilities:
|
||||||||
|
Current portion of secured bank loans
|
$
|
|
$
|
|
||||
|
Unsecured bank loans
|
|
|
||||||
|
Interest
|
|
|
||||||
|
Total current liabilities
|
$
|
|
$
|
|
||||
|
Non-current liabilities:
|
||||||||
|
Secured bank loans
|
$
|
|
$
|
|
||||
|
Unsecured bank loans
|
|
|
||||||
|
Total non-current liabilities
|
$
|
|
$
|
|
||||
The secured bank loans are secured over land and construction in process and assets held for sale with a carrying amount of $16,480,644,136 , and $20,157,329,304
as of December 31, 2025 and 2024, respectively (see Note 7 and Note 8 Security).
Information about the Company’s exposure to interest rate, foreign currency and liquidity risks is included in Note 13.
|
As of
|
|||||||||||||||||||||
|
Currency
|
Nominal interest rate 2025
|
Nominal interest rate 2024
|
Maturity
|
December 31, 2025
|
December 31, 2024
|
||||||||||||||||
|
Inmobiliaria Insurgentes 421:
|
|||||||||||||||||||||
|
Bancomext
(1)
|
|
SOFR + |
SOFR +
|
|
$
|
|
$
|
|
|||||||||||||
|
Cost
to obtain loans and commissions
|
(
|
)
|
(
|
)
|
|||||||||||||||||
|
Total
Inmobiliaria Insurgentes 421
|
|
|
|||||||||||||||||||
|
Murano World:
|
|||||||||||||||||||||
|
Exitus
Capital S.A.P.I de C. V. ENR (“Exitus Capital”) (2)
|
|
% | % |
|
|
|
|||||||||||||||
|
Arrendadora
Fínamo,S.A. de C.V. (“Finamo”) (3)
|
|
|
%
|
|
%
|
|
|
|
|||||||||||||
|
Administradora de Soluciones de Capital, S.A. de C.V. SOFOM ENR (Finamo) (4)
|
% | % | |||||||||||||||||||
|
ALG (5)
|
|
% |
|
%
|
|
|
|
||||||||||||||
|
Santander
International (6)
|
|
Best Rate+ |
Best Rate+
|
|
|
|
|||||||||||||||
|
Cost
to obtain loans and commissions
|
(
|
)
|
(
|
)
|
|||||||||||||||||
|
Total
Murano World
|
|
|
|||||||||||||||||||
|
Edificaciones BVG:
|
|||||||||||||||||||||
|
Exitus
Capital (7)
|
|
|
|||||||||||||||||||
|
Total
Edificaciones BVG
|
|
|
|||||||||||||||||||
| Murano PV: | |||||||||||||||||||||
| NAFIN (8) |
SOFR +
year SOFR +
SOFR +
|
SOFR +
second year SOFR +
and third year SOFR +
|
|||||||||||||||||||
|
Administradora de Soluciones de Capital, S.A. de C.V. SOFOM NR (ASC Finamo) (9)
|
% | % |
|||||||||||||||||||
|
ASC Finamo (10)
|
% | % |
|||||||||||||||||||
|
Cost to obtain loans and commissions
|
( |
) | ( |
) | |||||||||||||||||
|
Total Murano PV
|
|||||||||||||||||||||
| Fideicomiso 4323 (issuer trust): | |||||||||||||||||||||
| Senior Notes(11) |
first three years
|
first three years
|
|||||||||||||||||||
| Cost to obtain loans and commissions | ( |
) | ( |
) | |||||||||||||||||
|
Total Fideicomiso 4323
|
|||||||||||||||||||||
|
Accrued interest payable
|
|
|
|||||||||||||||||||
|
Total debt
|
|
|
|||||||||||||||||||
|
Current instalments
|
|
|
|||||||||||||||||||
|
Long-term debt, excluding current instalments
|
$
|
|
$
|
|
|||||||||||||||||
The Company had a syndicated secured mortgage loan of up to U.S.$239,811,150
with Banco Nacional de Comercio Exterior S.N.C. Institución de Banca de Desarrollo (“Bancomext”), Caixabank, S. A. Institución de Banca Multiple (“Caixabank”), Sabadell, S. A. Institución de Banca Multiple (“Sabadell”), Nacional
Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo (NAFIN) and Avantta Sentir Común, S. A. de C. V. SOFOM, E.N.R. (Avantta). Operadora GIC I was jointly liable for this loan as well as Operadora GIC II and
Murano World.
The Company also had a Secured loan under a credit line of up to U.S. $31,480,000 to finance VAT receivable with a 36-month maturity or
earlier on collection of such VAT receivables from Mexican authorities. On December 2023, the maturity was extended until December 31, 2024.
On September 12, 2024, balance of both loans described above were repaid in full in connection with the issuance of the Senior Notes described in section
(11) described below.
| (1) |
|
| (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3) |
|
| (4) |
|
| (5) |
|
| (6) |
|
| (7) |
|
| (8) |
|
| (9) |
|
| (10) |
|
| (11) |
|
As of December 31, 2024, the Company complied with all terms and covenants included in the loan agreements, except for the
following:
Inmobiliaria Insurgentes I421
As of December 31, 2024, the reserve account under the Bancomext loan was not funded causing a covenant breach of this loan, the lender has the ability to call the loan and as a result the loan was classified in current liabilities.
Murano World
Murano World did not comply with the interest payment under the ALG loan with respect to the coupon due in December 2024 causing a covenant breach of this loan, the lender has the ability to call the loan and as a result the loan was classified in current liabilities. See note 20 for additional reference.
See Notes 2c. for the impact on the Company´s ability to continue as a going concern due to breaches in covenants at December 31, 2024. See note 19 Commitments and Contingencies for discussion of the possible impact of potential future covenant breaches. See note 20 for subsequent events regarding covenants breaches after December 31, 2024.
Reconciliation of movements of liabilities to cash flows
arising from financing activities
|
Long-term debt
|
||||
|
Balances as of January 1, 2025
|
$
|
|
||
|
Payments
|
(
|
)
|
||
|
Interest paid
|
(
|
)
|
||
| Interest paid and capitalized (Note 7) |
||||
|
Proceeds from loans
|
|
|||
|
Accrued interest
|
|
|||
|
Amortization of cost to obtain loans and commissions
|
|
|||
|
Total changes from financing cash flows
|
|
|||
|
Effect on changes in foreign exchange rates
|
(
|
)
|
||
|
Balances as of December 31, 2025
|
$
|
|
||
|
Long-term debt
|
||||
|
Balances as of January 1, 2024
|
$
|
|
||
|
Payments
|
(
|
)
|
||
|
Interest paid
|
( |
) | ||
| Interest paid and capitalized (Note 7) |
( |
) | ||
|
Proceeds from loans
|
|
|||
|
Accrued interest
|
|
|||
|
Amortization of cost to obtain loans and commissions
|
|
|||
|
Costs to obtain loans and commissions
|
(
|
)
|
||
|
Total changes from financing cash flows
|
|
|||
|
Effect on changes in foreign exchange rates
|
|
|||
|
Balances as of December 31, 2024
|
$
|
|
||
| 11. |
Employee benefits
|
|
As of December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Net defined benefit liability:
|
||||||||
|
Liability for social security contributions
|
$
|
|
$
|
|
||||
|
Liability for long-service leave
|
|
|
||||||
|
Total employee benefit liability
|
|
|
||||||
|
Non-current
|
$
|
|
$
|
|
||||
|
Current
|
$
|
|
$
|
|
||||
In accordance with Mexican Labor Law, the Group provides seniority premium benefits, which consist of a single payment of 12 days for
each year worked based on the last salary, limited to twice the minimum salary established by law. The relative liability and the annual cost of benefits are calculated by independent actuaries in accordance with the bases defined in the
plans, using the projected unit credit method.
Movement in net defined benefit liability
|
As of December 31,
|
||||||||||||
|
2025
|
2024
|
2023 |
||||||||||
|
Balance as of January 1,
|
$
|
|
$
|
|
$ | |||||||
|
Included in profit and loss:
|
||||||||||||
|
Current service cost
|
|
|
||||||||||
|
Interest cost
|
|
|
||||||||||
|
|
|
|||||||||||
|
Included in OCI
|
||||||||||||
|
Remeasurement in loss (gain)
|
(
|
)
|
(
|
)
|
( |
) | ||||||
|
Payments
|
||||||||||||
|
Benefits paid
|
(
|
)
|
(
|
)
|
( |
) | ||||||
|
Balance as of December 31,
|
$
|
|
$
|
|
$ | |||||||
Actuarial assumptions
The following were the principal actuarial assumption at the reporting date (expressed as weighted averages):
|
2025
|
2024
|
|||||||
|
Discount rate
|
|
%
|
|
%
|
||||
|
Salary growth
|
|
%
|
|
%
|
||||
|
Future salary growth
|
|
%
|
|
%
|
||||
As of December 31, 2025 and 2024, the weighted -average duration of the defined benefit obligation was 15 years
Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would
have affected the defined benefit obligation by the amounts shown below:
|
As of December 31, 2025
|
As of December 31, 2024
|
|||||||||||||||
|
Increase
|
Decrease
|
Increase
|
Decrease
|
|||||||||||||
|
Discount rate (1% variance)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
| 12. |
Warrants liability
|
In connection with the completion of the business combination on March 20, 2024, each of 16,875,000 HCM’s outstanding warrants were converted into the Company’s warrants at 1 :1 ratio. The
warrants allow the holder to subscribe for ordinary shares of the Company at an exercise price of U.S.$11.50 per whole warrant. The
warrants shall expire on the five year anniversary of the closing date.
Changes in warrant liabilities
The financial liabilities for the warrants are accounted for at fair value through profit or loss, and are measured with reference to its market
price.
Changes in the warrant liabilities for the years ended December 31, 2025 and 2024 are summarized as follows:
|
Public warrants
|
||||||||
|
Number of warrants
|
Value
|
|||||||
|
Warrants as of January 1, 2025
|
$ |
$
|
|
|||||
|
Change in fair value of warrant liabilities
|
(
|
)
|
||||||
|
Warrants exercised
|
( |
) |
(
|
)
|
||||
|
Exchange rate effect
|
-
|
(
|
)
|
|||||
|
As of December 31 , 2025
|
$
|
|
$
|
|
||||
|
Public warrants
|
||||||||
|
Number of warrants
|
Value
|
|||||||
|
Warrants assumed in connection with the business combination held on March 20, 2024
|
$ |
$
|
|
|||||
|
Change in fair value of warrant liabilities
|
|
|||||||
|
Warrants exercised
|
( |
) |
(
|
)
|
||||
|
Exchange rate effect
|
-
|
|
||||||
|
As of December 31 , 2024
|
$ |
$
|
|
|||||
Each warrant exercised is paid to the company in U.S.11.5 . During 2025 and 2024 the gain obtained by the Company for the
exercise of warrants was $2,332,619 (U.S.115,299 )
and $ 12,327,209 (U.S.$722,924 ).
| 13. |
Income tax
|
|
For the Year Ended December 31,
|
||||||||||||
|
2025
|
2024
|
2023
|
||||||||||
|
Current tax (benefit) expense
|
||||||||||||
|
Current income tax
|
$
|
|
$
|
|
$
|
|
||||||
|
Deferred income tax
|
(
|
)
|
|
(
|
)
|
|||||||
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
|||||
The Mexican Tax Law effective as of January 1, 2014 is applicable to the Company, which imposes an income tax rate of 30 %.
The UK entities are subject to UK corporation tax with an applicable rate
of 25 %.
Amounts recognized in profit or loss
Management has determined that the recoverability of cumulative tax losses, which expire in 2028 - 2035, is not feasible based on
estimated breakeven of hotel operations. Therefore, the Company has not recognized certain expected income tax losses in the determination of deferred income tax, except for those companies that have taxable profit to offset the
income tax losses.
Amounts recognized in OCI
|
As of December 31, 2025
|
As of December 31, 2024
|
As of December 31, 2023
|
||||||||||||||||||||||||||||||||||
|
Before
|
Tax (expense)
|
Net of
|
Before
|
Tax (expense)
|
Net of
|
Before
|
Tax (expense)
|
Net of
|
||||||||||||||||||||||||||||
|
tax
|
benefit
|
tax
|
tax
|
benefit
|
tax
|
tax
|
benefit
|
tax
|
||||||||||||||||||||||||||||
|
Items that will not be reclassified to profit and loss
|
||||||||||||||||||||||||||||||||||||
|
Remeasurements of defined benefit liability
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||
|
Revaluation of property, construction in process and equipment
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||||||||
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||||||||||||
Reconciliation of effective tax rate
|
For the Year Ended December 31,
|
||||||||||||
|
2025
|
2024
|
2023
|
||||||||||
|
(Loss) profit before income tax
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||
|
Tax using the Company´s domestic tax rate
|
|
%
|
|
%
|
|
%
|
||||||
|
Income tax at legal tax rate
|
(
|
)
|
(
|
)
|
|
|||||||
|
Tax effect of:
|
||||||||||||
|
Annual adjustment inflation
|
|
|
|
|||||||||
|
Non-deductible expenses
|
|
|
|
|||||||||
|
Mainly change in allowance for NOL’s and other permanent differences
|
|
|
(
|
)
|
||||||||
|
Total tax expense
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Movement in deferred tax balances
|
2025
|
Net balance
as of January 1,
|
Recognized in profit and loss
|
Recognized in OCI
|
Final balance
|
||||||||||||
|
Prepayments
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
||||||
|
Property, plant and equipment
|
(
|
)
|
|
|
(
|
)
|
||||||||||
|
PP&E Surplus
|
(
|
)
|
|
|
(
|
)
|
||||||||||
|
PP&E (capitalized foreign exchange rate and interest expense)
|
(
|
)
|
|
|
(
|
)
|
||||||||||
|
Investment properties
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
|
Right of use of assets
|
(
|
)
|
|
|
(
|
)
|
||||||||||
|
Derivatives
|
|
|
|
|
||||||||||||
|
Accruals
|
|
|
|
|
||||||||||||
|
Debt cost to be amortized
|
(
|
)
|
|
|
(
|
)
|
||||||||||
|
Advance customers
|
|
|
|
|
||||||||||||
|
Lease liabilities
|
|
(
|
)
|
|
|
|||||||||||
|
Equipment rent
|
|
(
|
)
|
|
|
|||||||||||
|
Employees’ benefits
|
|
|
(
|
)
|
|
|||||||||||
|
Employees’ statutory profit sharing
|
|
(
|
)
|
|
|
|||||||||||
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||||
|
2024
|
Net balance
as of January 1,
|
Recognized in
profit and loss
|
Recognized in OCI
|
Final balance
|
||||||||||||
|
Prepayments
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
|||||
|
Property, plant and equipment
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
|
PP&E Surplus
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
|
PP&E (capitalized foreign exchange rate and interest expense)
|
(
|
)
|
|
|
(
|
)
|
||||||||||
|
Investment properties
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
|
Right of use of assets
|
(
|
)
|
|
|
(
|
)
|
||||||||||
| Derivatives |
( |
) | ||||||||||||||
|
Accruals
|
|
|
|
|
||||||||||||
| Debt cost to be amortized |
( |
) | ( |
) | ||||||||||||
|
Advance customers
|
|
(
|
)
|
|
|
|||||||||||
|
Lease liabilities
|
|
(
|
)
|
|
|
|||||||||||
| Equipment rent |
||||||||||||||||
|
Employees’ benefits
|
|
|
(
|
)
|
|
|||||||||||
|
Employees’ statutory profit sharing
|
|
|
|
|
||||||||||||
|
|
||||||||||||||||
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||
|
2023
|
Net balance
as of January 1,
|
Recognized in
profit and loss
|
Recognized in OCI
|
Final balance
|
||||||||||||
|
Prepayments
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
|||||
|
Property, plant and equipment
|
|
(
|
)
|
|
(
|
)
|
||||||||||
|
PP&E Surplus
|
(
|
)
|
|
|
(
|
)
|
||||||||||
|
PP&E (capitalized foreign exchange rate and interest expense)
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
|
Investment properties
|
(
|
)
|
|
|
(
|
)
|
||||||||||
|
Right of use of assets
|
|
(
|
)
|
|
(
|
)
|
||||||||||
| Derivatives |
( |
) | ( |
) | ||||||||||||
|
Accruals and borrowing cost
|
|
|
|
|
||||||||||||
|
Advance customers
|
|
|
|
|
||||||||||||
|
Lease liabilities
|
|
|
|
|
||||||||||||
|
Employees’ benefits
|
|
|
(
|
)
|
|
|||||||||||
|
Employees’ statutory profit sharing
|
|
|
|
|
||||||||||||
|
|
||||||||||||||||
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||||
Unrecognized deferred tax assets
Deferred tax assets have not been recognized in respect of the following items, because it is not probable that future taxable profit
will be available against which the Company can use the benefits therefrom.
|
As of December 31, 2025
|
As of December 31, 2024
|
|||||||||||||||
|
Gross amount
|
Tax effect
|
Gross amount
|
Tax effect
|
|||||||||||||
|
Income tax losses
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Interest to be deducted
|
|
|
|
|
||||||||||||
|
Other assets
|
|
|
|
|
||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
Tax losses carried forward
Tax losses for which no deferred tax asset was recognized expire as follows:
|
Gross
|
Expire
|
|||||||
|
Year
|
amount
|
rate
|
||||||
|
2018
|
$
|
|
|
|||||
|
2020
|
|
|
||||||
|
2021
|
|
|
||||||
|
2022
|
|
|
||||||
|
2023
|
|
|
||||||
|
2024
|
|
|
||||||
|
2025
|
|
|
||||||
|
Total income tax losses
|
$
|
|
||||||
The Company has NOLs in the trusts that only can be used by them up to the reverse of the NOLs in future periods. These NOLs can not
be used by other entities within the Company.
| 14. |
Financial instruments - Fair value and risk management
|
Accounting classification
The following table shows the carrying amounts of financial assets and financial liabilities. It does not include fair value information
for financial assets and financial liabilities not measured at fair value since the carrying amount is a reasonable approximation of fair value.
|
As of December 31, 2025
|
||||||||||||||||
| Mandatory at FVTPL |
Financial assets at
amortized cost
|
Other financial
assets (liabilities)
|
Total |
|||||||||||||
|
Financial assets not measured at fair value
|
||||||||||||||||
|
Cash and cash equivalents and restricted cash (Level 1)
|
|
$ |
|
|
$ |
|
||||||||||
| Financial liability measured at fair value |
||||||||||||||||
|
Warrants liability (Level 2)
|
$ |
( |
) | ( |
) | |||||||||||
|
|
||||||||||||||||
|
Financial liabilities not measured at fair value
|
||||||||||||||||
|
Secured bank loans
|
|
(
|
)
|
|
(
|
)
|
||||||||||
|
Unsecured bank loans
|
|
(
|
)
|
|
(
|
)
|
||||||||||
| As of December 31, 2024 | ||||||||||||||||
|
Mandatory at
FVTPL
|
Financial assets at
amortized cost
|
Other financial
assets (liabilities) |
Total
|
|||||||||||||
|
Financial assets not measured at fair value
|
||||||||||||||||
|
Cash and cash equivalents and restricted cash (Level 1)
|
|
$
|
|
|
$
|
|
||||||||||
|
|
||||||||||||||||
|
Financial liability measured at fair value
|
||||||||||||||||
|
Warrants liability (Level 2)
|
$ |
(
|
)
|
|
(
|
)
|
||||||||||
|
|
||||||||||||||||
|
Financial liabilities not measured at fair value
|
||||||||||||||||
|
Secured bank loans
|
|
(
|
)
|
|
(
|
)
|
||||||||||
|
Unsecured bank loans
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Measurement of fair values
| i. |
Valuation techniques and significant unobservable inputs
|
The following table shows the valuation technique used in measuring Level 2 fair value of financial instruments in the statements of
financial position.
Financial instruments measured at fair value
|
Type
|
Valuation technique
|
|
|
Interest rate swaps
|
FV is determined using market participant assumptions to measure these derivatives. Market participants’ assumptions include the risk inherent in the inputs to the valuation technique. These inputs
can be readily observable, market corroborated, or generally unobservable.
|
| ii. |
Transfers between levels
|
There were no no
Financial risk managements
The Company has exposure to the following risks arising from financial instruments:
| - |
Liquidity risk
|
| - |
Market risk
|
| i. |
Risk management framework
|
Management of the Company has overall responsibility for the establishment and oversight of the Company’s risk management framework.
Management is responsible for developing and monitoring the Company’s risk management policies and reports regularly to the board of directors on its activities.
The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk
limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and
management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Company´s objective when managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company´s reputation.
The Company uses the activity-based costing to cost its products and services, which assists in monitoring cash flow
requirements and optimizing its cash return on investment.
The Company aims to maintain the level of its cash and cash equivalents at an amount in excess of expected cash
outflows on financial liabilities (other than trade payables) over the next 60 days.
The Company also monitors the level of expected cash inflows on trade and other receivables together with expected
cash outflows on trade and other payables.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts
are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements:
|
Contractual cash flows
|
||||||||||||||||||||||||
|
As of December 31, 2025
|
Carrying
amount
|
1 Month |
2-12 Months
|
1-5 Years
|
More than
5 Years
|
Total | ||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Derivative financial liabilities
|
||||||||||||||||||||||||
|
Warrants liability
|
$
|
|
|
|
$
|
|
|
|
$ | |||||||||||||||
|
|
||||||||||||||||||||||||
|
Total derivative financial liabilities
|
||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Non-derivative financial liabilities
|
||||||||||||||||||||||||
|
Secured bank loans
|
$
|
|
$ |
$
|
|
$
|
|
|
|
$ |
||||||||||||||
|
Unsecured bank loans
|
|
|
||||||||||||||||||||||
|
Lease liabilities
|
|
|
|
|
||||||||||||||||||||
|
Trade accounts payable and accumulated expenses and advance from customers
|
|
|
|
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Total non-derivative financial liabilities
|
$
|
|
$ |
$
|
|
$
|
|
|
|
$ |
||||||||||||||
|
Contractual cash flows
|
||||||||||||||||||||||||
|
As of December 31, 2024
|
Carrying
amount
|
1 Month
|
2-12 Months
|
1-5 Years
|
More than
5 Years
|
Total | ||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Derivative financial liabilities
|
||||||||||||||||||||||||
|
Warrants liability
|
$
|
|
$ |
$
|
|
$
|
|
$
|
|
$ | ||||||||||||||
|
|
||||||||||||||||||||||||
|
Total derivative financial liabilities
|
$
|
|
$ |
$
|
|
$
|
|
$
|
|
$ | ||||||||||||||
|
|
||||||||||||||||||||||||
|
Non-derivative financial liabilities
|
||||||||||||||||||||||||
|
Secured bank loans
|
$
|
|
$ |
$
|
|
$
|
|
$
|
|
$ | ||||||||||||||
|
Unsecured bank loans
|
|
|
|
|
||||||||||||||||||||
|
Lease liabilities
|
|
|
|
|
||||||||||||||||||||
|
Trade accounts payable and accumulated expenses and advance from customers
|
|
|
|
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Total non-derivative financial liabilities
|
$
|
|
$ |
$
|
|
$
|
|
$
|
|
$ | ||||||||||||||
As disclosed in Note 10, the Company has secured bank loans that contain certain covenants. A breach of covenant may require the Company
to repay the loan earlier than indicated in the above table.
The interest payments on variable interest rate loans in the table above reflect market forward interest rates at the reporting date and
these amounts may change as market interest rate change. The future cash flows on derivative instruments may be different from the amount in the above table as interest rates and exchange rates or the relevant conditions underlying the
contingency change. Except for these financial liabilities, it is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.
For further information regarding our liquidity risk, please see note 2(c).
Market risk
Market risk is the risk that changes in market prices - e.g. foreign exchange rates, interest rates and equity prices - will affect the
Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
The Company uses derivatives to manage market risks. All such transactions are carried out within the guidelines set by the risk
management committee.
Derivatives
The Company holds interest rate swaps for risk management purposes. The interest rate swaps have floating legs that are indexed to SOFR.
The Company’s derivative instruments are governed by contracts based on the International Swaps and Derivatives Association (ISDA)’s master agreements.
Currency risk
The Company is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which
sales, purchases, receivables and borrowings are denominated and the respective functional currencies of Company companies. The functional currency of the Company companies is MXN. The currencies in which these transactions are primarily
USD.
Exposure to currency risk
The summary quantitative data about the Company’s exposure to currency risk as reported to the management of the Company is shown in the
next page.
|
Amounts held in US Dollars
|
||||||||
|
As of December 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Assets:
|
||||||||
|
Cash and cash equivalents and restricted cash
|
$
|
|
$
|
|
||||
|
Trade receivables
|
|
|||||||
|
Other receivables
|
|
|||||||
|
Prepayments
|
|
|||||||
|
Liabilities:
|
||||||||
|
Current installments of long-term debt
|
(
|
)
|
(
|
)
|
||||
|
Long-term debt
|
(
|
)
|
(
|
)
|
||||
|
Trade accounts payable excluding current installments
|
(
|
)
|
(
|
)
|
||||
| Advance from customers and accumulated expenses |
( |
) | ||||||
|
Due to related parties
|
(
|
)
|
( |
) | ||||
|
Other liabilities
|
(
|
)
|
(
|
)
|
||||
|
Net position
|
$
|
(
|
)
|
$
|
(
|
)
|
||
The exchange rates of MXN/USD as of the date of the consolidated and combined financial statements and their issuance date are as
follows:
|
As of December 31,
|
As of May 15,
|
|||||||||||
|
2025
|
2024
|
2026
|
||||||||||
|
One U. S. dollar
|
$
|
$
|
|
$
|
|
|||||||
Sensitivity analysis
The strengthening or weakening of the U.S. dollar, with respect to the Mexican peso as of December 31, 2025 and 2024, would have affected
the gains or losses capitalized in construction in progress for the amounts shown below. This analysis is based on changes in the exchange rate that the Company considered reasonably possible at the end of the reporting period. This
analysis assumes that the rest of the variables remain constant.
The analysis is performed on the same basis for 2025 and 2024, although the reasonably possible variations in the exchange rate were
different, as indicated below:
|
Capitalized in construction in process
|
Profit and loss
|
|||||||||||||||
|
Strengthening
|
Weakening
|
Strengthening
|
Weakening
|
|||||||||||||
|
December 31, 2025 USD (5% movement)
|
|
|
|
|
$
|
|
$
|
(
|
)
|
|||||||
|
|
||||||||||||||||
|
December 31, 2024 USD (5% movement)
|
$ | ( |
) | $ | $ | $ | ( |
) | ||||||||
Interest rate risks
The Company adopts a policy of ensuring that 70 % of its interest rate risk exposure with Banco Sabadell, S. A. Institución de Banca Multiple and Caixabank, S. A. Institución de Banca Multiple is at fixed rate. This is achieved partly by entering into
interest rate swaps. The Company applies a hedge ratio of 1 :1. As mentioned in Note 10, on September 12, 2024 the loans described above were repaid in full and the related interest rate swaps were cancelled.
Exposure to interest rate risk
The interest rate profile of the Company’s interest-bearing financial instruments as reported to the management of the Company is as
follows:
|
|
As of December 31, 2025
|
||||||||
|
FV hierarchy
|
Carrying
amount
|
Effects recognized in P&L
|
|||||||
|
Financial liabilities measured at fair value
|
|
||||||||
|
Warrants liability
|
Level 2
|
$
|
|
$
|
(
|
)
|
|||
|
Total
|
|
||||||||
|
As of December 31, 2024
|
|||||||||||||
|
FV hierarchy
|
Nominal
amount USD
|
Carrying
amount
|
Effects
recognized in
P&L
|
||||||||||
|
Financial assets measured at fair value
|
|||||||||||||
|
Interest rate swap - Sabadell
|
Level 2
|
|
$
|
|
$
|
(
|
)
|
||||||
|
Interest rate swap - Caixabank
|
Level 2
|
|
|
(
|
)
|
||||||||
| Total |
$
|
|
$
|
(
|
)
|
||||||||
|
|
As of December 31, 2024
|
||||||||
|
FV hierarchy
|
Carrying
amount
|
Effects recognized in P&L
|
|||||||
|
Financial liability’s measured at fair value
|
|
||||||||
|
Warrants liability
|
Level 2
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Total
|
|
$ | ( |
) | $ | ( |
) | ||
|
As of December 31, 2023
|
|||||||||||||
|
FV hierarchy
|
Nominal
amount USD
|
Carrying
amount
|
Effects
recognized in
P&L
|
||||||||||
|
Financial assets measured at fair value
|
|||||||||||||
|
Interest rate swap - Sabadell
|
Level 2
|
|
$
|
|
$
|
(
|
)
|
||||||
|
Interest rate swap - Caixabank
|
Level 2
|
|
|
(
|
)
|
||||||||
|
Total
|
$
|
|
$
|
(
|
)
|
||||||||
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate financial assets or financial liabilities, at FVPL, and the Company does not designate
derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and
borrowings affected. With all other variables held constant, the Company’s combined income before income taxes is affected through the impact of floating rate borrowings (debt) as follows:
|
Effect on
|
||||||||
|
Increase/decrease in
%
|
combined income
before income taxes
|
|||||||
|
As of December 31, 2025
|
||||||||
|
US dollar
|
1
|
%
|
$
|
|
||||
|
US dollar
|
(1
|
)%
|
(
|
)
|
||||
|
|
||||||||
|
As of December 31, 2024
|
||||||||
|
US dollar
|
1
|
%
|
$
|
|
||||
|
US dollar
|
(1
|
)%
|
(
|
)
|
||||
Master netting or similar agreements
The Company enters into derivative transactions under ISDA master agreements. The ISDA agreement do not meet the criteria for offsetting
in the combined statement of financial position. This is because the Company does not have any currently legally enforceable right to offset recognized amounts.
| 15. |
Revenue
|
|
For the Year Ended December 31,
|
||||||||||||
|
2025
|
2024
|
2023 | ||||||||||
|
Revenue from contracts with customers
|
$
|
|
$
|
|
$
|
|
||||||
|
Revenue for administrative services with related parties
|
|
|
|
|||||||||
|
Total revenue
|
$ |
$
|
|
$
|
|
|||||||
Revenue Streams
The Company generates revenue primarily from its owned hotels. Other minor sources of revenue include administrative services that the
Company provides to related parties.
| a. |
Disaggregation of revenue from contracts with customers
|
In the following table, revenue from contracts with customers is disaggregated by primary major products and service lines and timing of
revenue recognition.
|
For the year ended
|
||||||||||||
|
December 31,
|
||||||||||||
|
2025
|
2024
|
2023 | ||||||||||
|
Major products/service lines
|
||||||||||||
|
Room rentals
|
$
|
|
$
|
|
$ | |||||||
|
Food and beverage
|
|
|
||||||||||
|
All-inclusive
|
||||||||||||
|
Spa services
|
||||||||||||
|
Guess dry, cleaning & laundry
|
|
|
||||||||||
|
Other services
|
|
|
||||||||||
|
Total revenue from contracts with customers
|
|
|
||||||||||
|
|
||||||||||||
|
Administrative services to related parties
|
|
|
||||||||||
|
|
||||||||||||
|
Total revenue
|
|
|
||||||||||
|
|
||||||||||||
|
Timing of revenue recognition
|
||||||||||||
|
Services and products transferred at a point in time
|
|
|
||||||||||
|
Services transferred over time
|
|
|
||||||||||
|
Total revenue from contracts with customers
|
$
|
|
$
|
|
$ | |||||||
Advance from customers (Deferred revenue and down payments)
As of December 31, 2025 and 2024, contract liabilities primarily represent consideration received in advance from customers in relation
to contracts with customers. These amounts are comprised of deferred revenue and down payments.
Deferred revenue balances amounted to $89,730,633
and $23,459,478 as of December 31, 2025 and 2024, respectively, while down payments totaled $105,418,209 for year ended 2025.
In accordance with IFRS 15, revenue associated with these contract liabilities is recognized as the Group satisfies its performance
obligations.
An amount of $23,459,478
included in advance from customers related to deferred revenue as of December 31, 2024 was recognized as revenue during 2025 (2024: $8,263,469 ),
consistent with the satisfaction of performance obligations in the current period.
The Group applies an appropriate method for measuring progress toward complete satisfaction of its performance obligations, consistent
with IFRS 15 requirements for over-time revenue recognition.
| 16. |
Other income
|
|
For the Year Ended December 31,
|
||||||||||||
|
2025
|
2024 | 2023 | ||||||||||
|
Other income
|
||||||||||||
|
Cancellation of legal fees payable (1)
|
$ |
$ |
$ |
|||||||||
|
Gain on sale of property, plant and equipment
|
|
|||||||||||
|
VAT revaluation
|
|
|
||||||||||
|
Insurance recovery
|
|
|
||||||||||
|
Key Money Amortization
|
|
|
||||||||||
|
Gain in sale of equipment
|
||||||||||||
|
Others
|
|
|
||||||||||
|
Total other income
|
$
|
|
$
|
|
$ | |||||||
| (1) |
Cancelation of legal fees payable includes the balance that was cancelled as a result of final negotiation with
one service supplier during December 2025.
|
| 17. |
Stockholders’ Equity
|
As of December 31, 2025
Equity
On June 11, 2025, the Murano Global Investments signed a Standby Equity Purchase
Agreement (“SEPA”) with YA II PN, LTD (“Yorkville” or “Investor”). Under this agreement the Company has the right to issue and sell to Yorkville up to U.S.$500 million of the Company ordinary shares, no par value (the
“ordinary shares”). As stated in this agreement the Company issued to Yorkville 253,070 ordinary shares in respect of the
fees due.
On June 13, 2025 the Company sent a prospectus to the SEC related to the offer and
sale, from time to time, of 129,765,157 ordinary shares under the SEPA agreement described above. This prospectus was
declared effective on June 26, 2025 . The Company may issue an aggregate of 51,852,657 ordinary shares to Yorkville from time to time during the three-year period following the execution date of the SEPA agreement.
As of December 31, 2025 the Company has issued 403,070 ordinary shares to Yorkville including the 253,070 as respect of fees and as stated in the SEPA agreement. The cashflows generated by this transactions as of December 31, 2025 were U.S.$1,381,777 ( approximately $25,969,485 ).
As described in note 12 Warrants, during 2025 the number of warrants exercised and
converted to ordinary shares was 10,026 in the amount of $2,332,619 (U.S.115,299 ). In 2024 the number of warrants exercised
was 62,877 in the amount of $12,327,209
(U.S.$722,924 ), this gain was recognized in the stockholder’s equity during 2025.
After the transactions described above Murano Global Investments has 79,718,832 ordinary shares in issue as of December 31, 2025 broken down as follows:
|
|
Number of shares
|
% of all ordinary
shares
|
||||||
|
Beneficiary owner
|
||||||||
|
Elias Sacal Cababie
|
|
|
%
|
|||||
|
HCM Investor Holdings, LLC
and former HCM directors (Shawn Matthews and other
directors)
|
|
|
%
|
|||||
|
Beneficiary owners below
|
||||||||
|
Others
|
|
|
%
|
|||||
|
Total shares December 31, 2025
|
|
|
%
|
|||||
As of December 31, 2024
Equity
As
described in Note 2b., on March 8, 2024, the Company underwent a restructuring to establish Murano Global Investments as the parent company of the Company. On March 20, 2024 the Company announced the completion of its business
combination with HCM Acquisition Corp., marking the entity’s official transition into a publicly traded entity Consequently, on March 21, 2024, Murano’s ordinary shares and warrants began trading on Nasdaq under the symbols “MRNO” and
“MRNOW”, respectively.
As of December 31, 2024, Murano Global Investments has 79,305,736 ordinary shares as follows:
|
|
Number of shares
|
% of all ordinary
shares
|
||||||
|
Beneficiary owner
|
||||||||
|
Elias Sacal Cababie
|
|
|
|
|||||
|
HCM
Investor Holdings, LLC
and
former HCM directors (Shawn Matthews and other directors)
|
|
|
|
|||||
|
Beneficiary owner below
|
||||||||
|
Others
|
|
|
|
|||||
|
Total shares December 31, 2024
|
|
|
|
|||||
As part of the business combination Elias Sacal Cababie contributed $25,793,890 (U.S.$1,500,000 ) in
order to issue 6,910,000 ordinary shares from Murano Global Investments, plc.
In January 2024, Murano PV, S.A. de C.V. issued a promissory note in favor of Elías
Sacal Cababie for the total amount of Ps.$73,000,000 as a result of the purchase of 103,267,741 shares of Murano World, S. A. de C. V. previously owned by Elías Sacal.
In January 2024, Murano PV, S.A. de C.V. issued a promissory note in favor of Elías
Sacal Cababie for the total amount of Ps.$18,000,000 as a result of a transfer of the trustee rights of 16,915,151 shares of Inmobiliaria Insurgentes 421, S.A. de C.V. previously owned by Elías Sacal.
In January 2024, Murano PV, S.A. de C.V. issued a promissory note in favor of ES
Agrupación for the total amount of Ps.$266,500,000 as a result of the purchase of 329,753,574 shares of Murano World, S. A. de C. V. previously owned by ES Agrupación.
In January 2024, Murano PV, S.A. de C.V. issued a promissory note in favor of ES
Agrupación for the total amount of Ps.$542,500,000 as a result of the transfer of the trustee rights of 434,361,612 shares from Inmobiliaria Insurgentes 421, S.A. de C.V. previously owned by ES Agrupación.
All the promissory notes in the amount $900,000,000 described above were issued as part of the Company Reorganization and used by Elias Sacal Cababie to capitalize Murano Global Investments PLC. On March 8,
2024 Murano Global Investments PLC utilized the promissory notes to complete the Company Reorganization by capitalizing Murano P.V and the notes were cancelled as a final step in the reorganization.
Treasury shares
On April 3, 2024, the Company announced that its board of directors had authorized a
new share repurchase program under which the Company may repurchase up to US$2 million of its ordinary shares until the end of
the last business day of the third quarter in 2024, U.S. Eastern Time. The Company adopted and implemented this share repurchase program in accordance with applicable rules and the Company’s insider trading policies.
The Company’s proposed repurchases were made from time to time in the open market at
prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The timing and dollar
amount of repurchase transactions was subject to the Securities and Exchange Commission Rule 10b-18 and Rule 10b-5 requirements.
The shares acquired through the share repurchase program are held in treasury by the
Company and the effects are recognized in additional paid in capital.
Net Assets for the period from January 1 to March 20, 2024 and the year ended
December 31, 2023
| a. |
Issued equity:
|
During 2023, there were no
contributions in cash by the Company’s shareholders to the net assets of the Company’s Companies.
| b. |
Capital Reimbursement
|
On March 8, 2024, Murano PV made a capital reimbursement of $16,363,928 as part of the Company Reorganization.
During 2023, there wereno reimbursements in cash by the Company’s shareholders of the Companies.
During 2023, there were
| 18. |
Loss per share
|
The amount of basic earnings per share (EPS) is calculated by dividing the net income for the year attributable to shareholders of the Company’s
ordinary shares by the weighted average of the ordinary shares outstanding during the year.
The following table shows the (loss) profit attributable to ordinary equity holders of the Company.
|
|
a) |
Basic EPS
|
|
For the Year Ended December 31,
|
||||||||||||
|
2025
|
2024
|
2023
|
||||||||||
|
(Loss) profit attributable to ordinary equity holders of the parent entity
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||
|
Weighted average number of ordinary shares outstanding during the period
|
|
|
|
(1)
|
||||||||
|
Basic EPS
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|||
|
|
b) |
Diluted EPS
|
|
For the Year Ended December 31,
|
||||||||||||
|
2025
|
2024
|
2023
|
||||||||||
|
(Loss) profit per basic EPS adjusted
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||
|
Number of shares per basic EPS adjusted for dilutive potential ordinary shared
|
|
|
|
(1)
|
||||||||
|
Diluted EPS
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|||
|
|
(1) |
|
| 19. |
Commitments and contingencies
|
| a. |
In accordance with Mexican tax law, the tax authorities are empowered to examine transactions carried out during the
|
| b. |
In accordance with the Mexican tax Law, companies carrying out transactions with related parties are subject to certain requirements as to the determination of prices, which should be like those used
in arm’s-length transactions. Should the tax authorities examine the transactions and reject the related-party prices, they could assess additional taxes plus the related inflation adjustment and interest, in addition to penalties
of up to
|
| c. |
On September 10, 2019, and as amended on March 28, 2021, July 11, 2023 and the extension on January 19, 2024, the Company signed a Hotel Management Agreement with AMR Operaciones MX, S. de R L.
de C. V. (AMR). Under this contract, AMR is solely engaged as an exclusive managing agent of the
|
| d. |
On May 11, 2022, the Company signed a Hotel Services Agreement with Hyatt of Mexico, S.A. de C.V. (“Hyatt”). Under this contract, Hyatt is solely engaged as an exclusive managing agent of the
Andaz Hotel on behalf of the Company, in exchange of certain fees for the services provided. The period commencing from the opening date and ending on December 31 of the 20th full Fiscal Year following the opening date.
|
| e. |
On May 11, 2022, the Company signed a Hotel Management Agreement with Ennismore Holdings US Inc. (“Accor”). Under this contract, Accor is solely engaged as an exclusive managing agent of the Mondrian Hotel on behalf of the
Company, in exchange of certain fees for the services provided. The period commencing from the opening date and ending on December 31 of the 20th full Fiscal Year following the opening date.
|
| f. |
In March 2024, in connection with the A&R BCA aforementioned, the shareholders transferred
|
| g. |
On October 13, 2025, Finamo and Arrendadora Finamo initiated a commercial enforcement proceeding (juicio oral mercantil) against Murano PV, Murano World, Edificaciones BVG,
Elías Sacal Cababie, and other related parties (Case No. 1057/2025) before the Twentieth Civil Court for Oral Proceedings (Juzgado Vigésimo de lo Civil de Proceso Oral) of Mexico City, in connection with the alleged failure to
make (i) principal and interest payments under the Finamo Loans and (ii) lease payments under the Finamo Sale and Lease Back Agreements.
|
| h. |
The Company has analyzed the risk of future covenant breaches in the following
|
| i. |
In addition to defaults existing as of December 31, 2025, the payment defaults described in note 20f., also trigger cross defaults under other debt and lease
instruments in respect of which the Company is an obligor.
|
| 20. |
Subsequent events
|
| a. |
In connection with the SEPA agreement, on January 28, 2026 the Company issued
|
| b. |
As mentioned in note 10(11). and 2ec. on March 10, 2026, the Company reached an agreement with an ad hoc group of holders of Notes representing more than
The Restructuring is part of Companie’s ongoing efforts to preserve liquidity amid continued financial and operational challenges at its Grand Island Cancun hotel, and is expected to (i) strengthen Murano’s current capital structure, (ii) assist Murano in its ongoing efforts to regain financial stability, and (iii) ensure the sustainability of the Grand Island Cancun hotel operations. The Company remains committed to meeting its obligations to key suppliers, clients and commercial partners both current and future while it moves to the implementation phase of the Restructuring, as part of an agreed amicable and out-of-court solution. The Lock Up Agreement with a substantial group of the holders of Notes represents a key milestone and is the result of a constructive negotiation process between Murano and the Ad Hoc Group over the last several months. The Company is working on meeting the various conditions to the effectiveness of the Lock-Up Agreement and aims at announcing its effectiveness shortly. As part of the steps required to complete the restructuring of the 2031 Notes, the Company signed on April 6, 2026 the Hotel Management Agreement (HMA) with Ennismore Mexico to manage the In addition, the Company has not yet delivered the audited financial statements as of December 31, 2025 required under the Indenture governing the 2031 Notes. The Company expects to deliver those financial statements in the short term. |
| c. |
On March 20, 2026, the
|
| d. |
On March 27, 2026, the Company paid the Santander Loan described in note 10 (6)., with a balance as of this date of U.S.$
|
| e. |
On April 13, 2026, the Company announced that it has received a letter (the “Notification Letter”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the
Company that based on the closing bid price of the Company’s ordinary shares for the last 30 consecutive business days, the Company no longer meets the continued listing requirements of Nasdaq under Nasdaq Listing Rule
5550(a)(2), to maintain a minimum bid price of $1 per share.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided a compliance period of one hundred eighty (180) calendar days, or until October 5, 2026, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company’s ordinary shares must meet or exceed $1.00 per share for a minimum often (10) consecutive business days during the compliance period. If the Company does not regain compliance within the initial compliance period, the Company may be eligible for an additional one hundred eighty (180)-day compliance period. To qualify, the Company will be required to meet the continued listing requirements for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency. The Company intends to monitor the closing bid price of its ordinary shares and may, if appropriate, consider available options to regain compliance with the Nasdaq minimum bid price requirement. |
| f. |
As of the date of the issuance of these financial statements the Company did not make interest, principal or lease payments, as applicable, under the instruments described in note 10 (2)., (3)., (4).,
(5)., (8)., (9). and (10) from January 1st to April 30, 2026 and will deliver audited financial information after the 120 days post 2025 year closing required under the 2031 Notes. Management is reviewing potential defaults and
expects to proactively engage in constructive discussions that: 1) waives the defaults to the date with as part of the debt restructuring or 2) Finalize the Negotiation to settle the debts with a potential payment in kind that
includes the assets in mortgage guarantee for each of loan with the different creditors.
|
