{"url_path":"/sec/mrnow/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 KEY INFORMATION","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1988776/0001140361-26-021583-index.html","accession_number":"0001140361-26-021583","cik":"0001988776","ticker":"MRNO","issuer_name":"Murano Global Investments Plc","edgar_url":"https://www.sec.gov/Archives/edgar/data/1988776/0001140361-26-021583-index.html","primary_entity_key":"0001988776","primary_entity_name":"Murano Global Investments Plc"},"word_count":23728,"has_tables":true,"body_markdown":"ITEM 3.\n\nKEY INFORMATION\n\nA.\n\n[Reserved]\n\nB.\n\nCapitalization and Indebtedness\n\nNot applicable.\n\nC.\n\nReasons for the Offer and Use of Proceeds\n\nNot applicable.\n\nD.\n\nRisk Factors\n\nYou 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\nwe face. Additional risks and uncertainties that we are unaware of, or that we currently deem immaterial, also may become important factors that affect us.\n\nIf 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\nthe 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.\n\nThis Report also contains forward-looking statements that regard situations that may involve risks and uncertainties. Our actual results could differ materially from those\nanticipated 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\nregarding these forward-looking statements.\n\nRisks Related to Murano’s Business and Operating in the Hotel Industry\n\nOur total current liabilities exceed the amount of the total current assets, which has placed significant doubt on our ability to continue as a going\nconcern.\n\nThe Consolidated and Combined Financial Statements were prepared assuming that it will continue as a going concern. However, management has identified material uncertainties that cast\nsubstantial 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\ncourse of business.\n\nThe 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\n1(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\nfund 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\nbreached and defaults have occurred and continue with respect to certain financial indebtedness or leases of entities of the Murano Group, as follows:\n\n15\n\n[Table of Contents](#TABLEOFCONTENTS)\n\ni.\n\nThe 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\nbreached. 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\n2:1 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\nStatements, 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\n1.0x 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.\n\nAs of December 31, 2025, the outstanding amount of the Insurgentes Loan was U.S.$98.7 million ($1,772.6 million pesos).\n\nii.\n\nThe 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\nBeach 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\nclassified 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.\n\niii.\n\nThe 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\nAgreement 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\nobligor. 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\ndocuments thereunder.\n\niv.\n\nThe 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\nthe 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.\nHowever, 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\nthe 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\nthe 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.\n\nv.\n\nOn 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\nwere 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\nIndenture. 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\nCompany 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\nexecution 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\nagreed restructuring terms of the 2031 Notes.\n\n16\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nvi.\n\nThe 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\ncross-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\noutstanding amounts under the Coppel lease agreement.\n\nvii.\n\nSee Notes 10 and 20 of the Consolidated and Combined Financial Statements for additional details about defaults subsequent to December 31, 2025.\n\nIn 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\ndefault 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\nfollowing twelve months after the Consolidated and Combined Financial Statements are authorized to be issued.\n\nCertain 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\nare 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\nrestructuring 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\ncreditors. 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,\nincluding 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\nthe Group.\n\nManagement 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\nrestructuring 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\nthe 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\ndebt 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\nneeded or under acceptable terms, if at all.\n\n17\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThe 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\nbe 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.\n\nWe have substantial debt that may be called on demand of lender due to existing or future breach in covenants or defaults.\n\nInstruments governing our existing indebtedness contain, and the instruments governing indebtedness we may incur in the future may contain, certain affirmative and negative covenants and\nrequire 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\ncould 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,\non 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.\n\nAs 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\n421 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,\ninterest 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\nthe 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\ninterest 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\nmake the lease payments over the Coppel Lease Agreement.\n\nNone 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\nhave 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\nassets may be bound.\n\nIn 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\nour financial condition, liquidity and operations.\n\nOn October 13, 2025, Finamo and Arrendadora Finamo initiated a commercial enforcement proceeding (juicio oral mercantil) against Murano PV, Murano\nWorld, 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\nCity, 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.\n\nAs 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\nmeasures. 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\nresolution could result in additional liabilities, enforcement against assets, further constraints on liquidity and operations, and could adversely affect our ongoing debt restructuring efforts.\n\nThe 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\nongoing debt restructuring efforts. For further information, see “Item 8. Financial Information—A. Consolidated and Combined Statements and Other Financial\nInformation—Legal” and Arbitration Proceedings” and “Item 5. Operating and Financial Review and Prospects—B. Liquidity\nand Capital Resources—Commitments and Contingencies.”\n\n18\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nIn 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\nthe 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\nrestructuring 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\ndocuments 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.\n\nManagement continues engaging in constructive discussions with applicable creditors.\n\nWe 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\nrestructuring could materially and adversely affect our business, financial condition and results of operations.\n\nFollowing the Relevant 2031 Notes Defaults by the Issuer Trust, we engaged in discussions with the Ad Hoc Group representing more than 81% of the\naggregate 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\n2031 Notes, as set forth in the agreed Term Sheet.\n\nThe 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%\nconsent 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\ncovenants in respect of any 2031 Notes that remain outstanding.\n\n \n\nThe proposed transaction remains subject to a number of conditions and approvals, including the negotiation, execution and delivery of definitive\ndocumentation 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\nTerm 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\npotential enforcement actions, that could materially and adversely affect our ability to fund operations and service indebtedness, including the 2031 Notes.\n\n \n\nThe contemplated replacement of Hyatt as operator of the GIC I Hotel, and the implementation of the related new\noperator arrangements, may not be completed on the terms currently contemplated, or at all, and could adversely affect our operations and liquidity.\n\n \n\nIn connection with the contemplated 2031 Notes Restructuring, we have entered into the GIC I Hotel Management Agreement (Mondrian) for the operation of\nthe 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\nHyatt, 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,\ncommercial 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\nnew 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\nadversely affect our ability to fund operations and service indebtedness, including the 2031 Notes.\n\n \n\nThe GIC II Hotel Management Agreement may be amended, replaced or terminated in connection with the contemplated\n2031 Notes Restructuring, and any failure to successfully implement these changes could adversely affect our strategy, liquidity and financial condition.\n\n \n\n19\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nUnder our prior development plans, we entered into a hotel management agreement with respect to the planned GIC II Hotel. However, in light of recent\nmarket 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.\n\n \n\nIn connection with the contemplated 2031 Notes Restructuring, we are implementing changes to the existing management arrangements for the GIC II Hotel,\nwhich 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\nbe no assurance that they will be completed on acceptable terms or at all.\n\n \n\nThe replacement and termination of the GIC II Hotel Management Agreement could result in additional costs, disputes with the current or prospective\nhotel operators, delays in the implementation of our revised development strategy, or adverse impacts on our liquidity and financial condition.\n\n \n\nThe contemplated 2031 Notes Restructuring is dependent, in part, on the successful sale of residential\ncondominium 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.\n\n \n\nThe Term Sheet contemplates that proceeds from the sale of certain Residential Condos and certain other amounts would be deposited into an escrow\naccount 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\npricing, 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\ncontemplated, 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.\n\nSubsequent phases to our existing projects and potential enhancements at our hotel properties will likely require us to raise additional capital.\n\nWe 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\nobtain 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\nadditional 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\ncancel 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\nfinancing on unfavorable terms.\n\nIn 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\nAgreement, which could result in dilution to existing shareholders and downward pressure on the market price of our ordinary shares.\n\nWe 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\nsuch indebtedness, which may not be successful.\n\nOur 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\ncompetitive 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\nany, and interest on our indebtedness.\n\n20\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nIf 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\nand 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\nsuccessful, those alternatives may not allow us to meet our scheduled debt service obligations.\n\nOur 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\naffect our financial position and results of operations.\n\nIf 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\ncross-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.\n\nWe will be dependent on the operation and business of our hotel properties for substantially all of our revenue.\n\nWe 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\nto 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,\namong 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.\n\nWe 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\nadversely affect our business, financial condition, and results of operations.\n\nIf the hotel operators or third-party only travel agencies consolidate through merger and/or acquisition transactions, we may experience undefined and\nunknown costs related to integrating processes and systems, less negotiating power over contracts and/or higher costs of obtaining customers.\n\nThe 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\nintegration 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\nconsolidation. 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\nhotel 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.\n\nDelays in receiving refunds of value added tax paid in connection with our acquisition and construction of hotels could have a material adverse effect on\nour cash flow and results of operations.\n\nWe 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\n\ndel 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\nwithin 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).\n\nTo 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.\n\n21\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nWe may be subject to adverse legislative or regulatory tax changes that could affect our operations.\n\nAt 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\nor 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,\npromulgated, 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\nand 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\nor 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\neffect on our business, prospects, results of operations, and financial condition. The effects of such changes have not been, and cannot be quantified.\n\nWe and our hotel operators may be subject to audits by the tax authorities.\n\nPursuant 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\nthe 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\nin 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.\n\nWe may not be able to deliver projects on time and within our estimated budget.\n\nThe 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\nchange 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:\n\n•\n\nchanges to, or mistakes in, project plans and specifications, some of which may require the approval of state and local regulatory agencies;\n\n•\n\nchanges requested by or disputes with, hotel operators;\n\n•\n\nengineering problems, including defective plans and specifications;\n\n•\n\nshortages of, and price increases in, energy, materials, and skilled and unskilled labor, and inflation in key supply markets;\n\n•\n\ndelays in delivery of materials or furniture, fixtures or equipment;\n\n•\n\nchanges to, or mistakes in budgeting;\n\n•\n\nthe financial health of our contractor and subcontractors;\n\n•\n\nchanges in laws and regulations, or the interpretation and enforcement of laws and regulations, applicable to real estate development or construction projects;\n\n•\n\nthe financial health of our contractor and subcontractors;\n\n•\n\nlabor disputes or other work delays or stoppages, including needing to redo work;\n\n•\n\ndisputes with and defaults by contractors, subcontractors, consultants and suppliers;\n\n•\n\nsite conditions differing from those anticipated;\n\n•\n\nenvironmental issues, including the discovery of unknown environmental contamination;\n\n•\n\nhealth and safety incidents and site accidents;\n\n22\n\n[Table of Contents](#TABLEOFCONTENTS)\n\n•\n\nweather interferences or delays;\n\n•\n\nfires and other natural or human-made disasters; and\n\n•\n\nother unanticipated circumstances or cost increases.\n\nThe development costs of our future projects are estimates only, actual development costs may be higher than expected and we may not have access to\nadditional capital to fund our property development projects and/or otherwise fulfill our business strategy.\n\nOur 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\nchange. 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\nreasonable, 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\nour 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\nin 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\nthe 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\nbe 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.\n\nWe execute transactions with related parties that third parties could deem not to be arms’ length.\n\nIn 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\nwe 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\narm’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\ncounterparty. 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\nguarantee 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\nadversely affect our business, financial condition and results of operations.\n\nContractual and other disagreements with or involving our current and future third-party hotel managers could make us liable to them or result in\nlitigation costs or other expenses.\n\nWe 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\ndecisions 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\nunder 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\nresult 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\nagreements, 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\nhave 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\nproceedings could materially and adversely affect our revenues and profitability.\n\n23\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThus, 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\nsufficient 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,\nand 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\ndo 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.\n\nIn 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,\nsuch 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\ntransition 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\nrisk 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\ntransition, could materially and adversely affect our business, liquidity and results of operations.\n\nWe are dependent on the performance of our hotel managers.\n\nOur 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\nmanaged 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\nthese 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\nto 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\nsome 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\nmake decisions regarding competing lodging facilities that are not in our best interests.\n\nWe 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,\nsuch 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\nwill 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\nthe 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.\n\nThe 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\nour 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\naffected. 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\nreplacement 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.\n\nCyber threats and the risk of data breaches or disruptions of our hotel managers’ or our own information technology systems could materially adversely\naffect our business.\n\nOur hotel managers are dependent on information technology networks and systems, including the internet, to access, process, transmit and store proprietary and customer information, including\npersonally identifiable information of hotel guests, including credit card numbers.\n\n24\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThese 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\nemail-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\ncyber-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\nhave 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\noperations, 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\nhotel 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\nof 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\ntechnology 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\nas 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.\n\nIn 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,\ntransmit, 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\nphysical 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\nassurance 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,\nphysical 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,\nlitigation, 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\nbe significant.\n\nLike 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\nthat 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\nus in the future.\n\nWhile 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\nincrease in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as adequate for our operations.\n\nIn 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\nlaws 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.\n\nIn 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\ntechnologies 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\nlimited 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.\n\nCosts associated with, or failure to maintain, brand operating standards may materially and adversely affect our results of operations and profitability.\n\nThe 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\nus, 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\nan 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\noperations and profitability.\n\nIf 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\nprograms, 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\nwith 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\nagreements, it could materially and adversely affect our results of operations and profitability as well as limit or slow our future growth.\n\n25\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nOur efforts to develop, redevelop or renovate our properties, in connection with our active asset management strategy, could be delayed or become more\nexpensive, which could reduce revenues or impair our ability to compete effectively.\n\nIf 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\nrevenues 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,\nincluding 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\neconomic 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\nor 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\nrenovation investments adversely affect or fail to improve performance, our operations and financial results could be negatively affected.\n\nWe are subject to risks associated with the concentration of our Hotels in the Hyatt and Accor family of brands.\n\nOur 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,\ncertain 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\nassociated 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\nthese 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\ntime 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\noperations. 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.\n\nOur properties are geographically concentrated in Mexico City, Cancun and Ensenada and, accordingly, we could be disproportionately harmed by adverse\nchanges to these markets, natural disasters, climate change and related regulations.\n\nOur 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\nsupply 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\nannounced 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\nHotels & 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\nComplex in Cancun.\n\nAn 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\ndisruptions), 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\nof operations, which could be material, and could significantly increase our costs.\n\n26\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nOver 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\ncausing 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\nhotels, 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\nunavailable) 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.\n\nIf the insurance that we carry does not sufficiently cover damage or other potential losses or liabilities involving our properties, including as a result\nof terrorism and climate change, our profits could be reduced.\n\nBecause 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\nare 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\ninsurance 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\ninvestment 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\nproperties 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.\n\nWe are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor.\n\nWhile 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\nhotel 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\ncosts, 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.\n\nFrom 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\nthe 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\nresolution 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\nlimit 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\nemployees at our hotels, we do not have the ability to control the outcome of these negotiations.\n\nTerrorist acts, armed conflict, civil unrest, criminal activity, and threats thereof, and other events impacting the security of travel or of our\ncontractors or the perception of security of travel or that of our contractors could adversely affect the demand for travel and lodgings.\n\nActs 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\nterrorist 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\nthe 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\nglobal 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\npackages. 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\nregions 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\nprofitability.\n\n27\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nAll 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.\nThere 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\nfood 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\nfear 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\nin 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.\n\nWe face significant competition in the lodging industry in Mexico.\n\nThe 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\ncompetition 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\ninflation may not be offset by increased room rates. We also face competition from recognized lodging brands with which we are not associated.\n\nWe 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\nrentals, apartment rentals, homestays, hostel beds, or hotel rooms to its customers.\n\nSome 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’\nmarketing strategies are effective, our business, financial condition and results of operations may be adversely affected.\n\nThe increasing use of internet travel intermediaries by consumers could have a material adverse effect on us.\n\nSome 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\nbookings 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\nsystem 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.\n\nThere is increased competition from global hospitality branded companies in the all-inclusive market segment.\n\nAs 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\nbranded 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\nmarkets, 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\nhospitality 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.\n\nWe have significant exposure to currency exchange rate risk.\n\nRevenue 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\noutstanding 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\nwhich 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\nin 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\nadjust our pricing accordingly.\n\n28\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nFurthermore, 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\neffect on us, including our business, financial condition, liquidity, results of operations and prospects.\n\nOur projects, and any future acquisition, expansion, repositioning, redesigning, and rebranding projects will be subject to timing, budgeting, and other\nrisks, which could have a material adverse effect on us.\n\nWe 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\nPort, 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\nto develop, acquire, expand, reposition, redesign or rebrand resorts or convert resorts to condominiums, we could be subject to risks associated with, among others:\n\n•\n\nconstruction delays or cost overruns that may increase project costs;\n\n•\n\nreceipt of zoning, occupancy and other required governmental permits and authorizations;\n\n•\n\nadditional works or project changes requested by hotel operators;\n\n•\n\nstrikes or other labor issues;\n\n•\n\ndevelopment costs incurred for projects that are not pursued to completion;\n\n•\n\ninvestment of substantial capital without, in the case of developed or repositioned resorts, immediate corresponding income;\n\n•\n\nresults that may not achieve our desired revenue or profit goals;\n\n•\n\nacts of nature such as earthquakes, hurricanes, floods or fires that could adversely impact a resort;\n\n•\n\nability to raise capital, including construction or acquisition financing; and\n\n•\n\ngovernmental restrictions on the nature or size of a project.\n\nWe 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\nthese 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\nComplex, 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\nreturn 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\nmaterial adverse effect on us, including our business, financial condition, liquidity, results of operations and prospects.\n\nGiven the beachfront locations of the GIC Complex, we are particularly vulnerable to extreme weather events, such as hurricanes, which may increase in\nfrequency and severity as a result of climate change.\n\nWe 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\nprecipitation 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\ndamage 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\nobtain 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.\n\n29\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nIn 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\nimprove 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\nshortages, 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,\ntransportation, and utilities, any of which could increase our operating costs, and necessitate future investments in facilities and equipment.\n\nClimate 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,\nGIC 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\nregions 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\nresorts.\n\nWe also face investor-related climate risks. Investors are increasingly taking into account environmental, social, and governance factors, including climate risks, in determining whether to\ninvest 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\nmeet them, which could expose us to market, operational, execution and reputational costs or risks.\n\nConsequences of climate change, such as the appearance of large masses of sargassum seaweed in the Yucatán Peninsula and beach erosion effects, could\nresult in decreased tourism appetite in Cancun.\n\nCancun 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\nimpact 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\nis expected to continue.\n\nIn 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\nbeach, 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\nproblem.\n\nSince 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.\nSeaweed 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.\nSince 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\nMinistry of Navy was established. The existence of large masses of sargassum seaweed in the Yucatán Peninsula could materially and adversely affect our operating results.\n\nAlthough 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\ncould have a material adverse effect on our business.\n\nWe cannot predict the impact that changing climate conditions, as well as legal, regulatory, and social responses thereto, may have on our business.\n\nVarious scientists, environmentalists, international organizations, regulators, and other commentators believe that global climate change has added, and will continue to add, to the\nunpredictability, 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\ninitiatives 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,\nwill 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.\n\n30\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nFurthermore, we anticipate that pending regulations under the General Law on Climate Change (Ley General de Cambio Climático) in Mexico, which are\nexpected 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.\n\nOur hotels will require ongoing and often costly maintenance, renovations, and capital improvements.\n\nOur 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,\nHyatt 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\nand 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\nrisks. 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.\n\nOur business is susceptible to reductions in discretionary consumer and corporate spending due to global economic conditions.\n\nConsumer 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\ndiscretionary 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\noil 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\nand 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\nresults. 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.\n\nThe seasonality of the lodging industry could have a material adverse effect on us.\n\nThe 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\nMexico 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\npredictable 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\nthe 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.\n\nThe cyclical nature of the lodging industry may cause fluctuations in our operating performance.\n\nThe 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\nbusiness 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\nnegative 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\nexpectations, 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\nvariable. 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.\n\n31\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nIf the hotel operators are unable to recruit, train and retain qualified management and employees, our business could be significantly harmed.\n\nIn 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\nsufficient 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.\n\nWe 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\nthat, 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\nsuitable and qualified employees, our business may be significantly impaired.\n\nOur 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\nproperty damage, or cost for remediation.\n\nWhen 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\ntime. 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\nbacteria. 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\ncontaminants 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\ninjury occurs.\n\nThe departure of any key personnel with significant experience and relationships in the lodging industry from any of our hotels could materially and\nadversely impede or impair our ability to compete effectively and limit future growth prospects.\n\nWe 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\nhas 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\nof 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.\n\nFrom time to time, we and/or our affiliates may be involved in legal and other proceedings.\n\nFrom 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\ndisputes 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\ncosts, 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\nclaims 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\nbe 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\nother 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\nmaterial adverse effect on our properties and operations and/or may negatively impact our reputation.\n\n32\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nWe and our hotel operators are subject to the risk of increased lodging operating expenses.\n\nTogether with the hotel operators, we are subject to the risk of increased lodging operating expenses, including, but not limited to, the following cost elements:\n\n•\n\nwage and benefit costs;\n\n•\n\nrepair and maintenance expenses;\n\n•\n\nemployee liabilities;\n\n•\n\nenergy costs;\n\n•\n\nproperty and other taxes;\n\n•\n\ninsurance costs; and\n\n•\n\nother operating expenses.\n\nThe need for business-related travel and, thus, demand for rooms in our hotels may be materially and adversely affected by the increased use of\nbusiness-related technology.\n\nThe 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\nparties 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\nbusiness-related travel decreases, demand for our hotel rooms may decrease, and we could be materially and adversely affected.\n\nLack of sufficient air service to Mexico City, Cancun or Ensenada could adversely affect our business.\n\nNearly 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\nEnsenada 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\ncommercial 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\neffect on our business, financial condition, and results of operations.\n\nMany of our guests depend on a combination of scheduled commercial airline services and tour operator services to transport them to airports near our\nresorts.\n\nIncreases 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\nin 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\nand, therefore, have a material adverse effect on our business, financial condition and results of operations.\n\nIlliquidity of real estate investments could significantly impede our ability to sell our Hotels or otherwise respond to adverse changes in our Hotels\nperformance.\n\nBecause 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\nlimited. 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\nand cost and other terms of debt financing, and changes in governmental laws and regulations.\n\n33\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nIn 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\navailable, 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\nproperty 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\nperformance of our resorts or a need for liquidity could materially and adversely affect us, including our financial results.\n\nIncreases in property taxes would increase our operating costs.\n\nThe 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\ndevelopment, 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\nincrease in our operating expenses, which could have a material adverse effect on us, including our business, financial condition, liquidity, results of operations and prospects.\n\nOur properties and operations are subject to extensive environmental, health and safety laws and regulations.\n\nOur 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\nrelated 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.\n\nThese 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\nsometimes 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\npreparation 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\nincur 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\nand 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.\n\nWe 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\nmigrating 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\nthe 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.\n\nIn 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\nassets 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\nalcohol 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\nthereof or of any liabilities under or potential violations of environmental, health and safety laws and regulations.\n\nWe 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\ncannot 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.\n\n34\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nWe will require additional capital to meet our financial obligations and support business growth, and this capital might not be available on acceptable\nterms or at all.\n\nWe 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\nin 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\nissue 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\nfinancial 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\nto 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\nsignificantly impaired, and our business may be harmed.\n\nWe have incurred significant additional indebtedness, which may impair our ability to raise further capital or impact our ability to service our debt.\n\nWe 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\nstrategic investments, and take advantage of financing or other opportunities that we believe to be in the best interests of Murano and our shareholders.\n\nOur 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,\ncompetitive 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\nrequired 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\ndepend 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\nwhich case our lenders might pursue available remedies up to and including terminating our credit arrangements and foreclosing on available collateral.\n\nWhile 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\navailable cash.\n\nOur recurring losses and negative cash flow from operations, as well as current cash and liquidity projections, raise substantial doubt about our ability\nto continue as a going concern.\n\nBased 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\nthere 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\nreflect 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\nsheet 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.\n\n35\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nRisks Related to Doing Business in Mexico\n\nAll of Murano’s assets are located in Mexico. Therefore, we are subject to political, economic, legal, and regulatory risks specific to Mexico and the\nMexican 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.\n\nOur 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\nspecific 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,\nconfiscatory taxation and regulation, expropriation, social instability, and political, social, and economic developments in Mexico.\n\nOur 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\ndevelopments 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\ncondition, and results of operations will be affected. In addition, high-interest rates and economic instability could increase our costs of financing.\n\nIn 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\nLong-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\nnot 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.\n\nPolitical instability in Mexico could negatively affect our operating results.\n\nIn 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\neconomic situation, which could, in turn, adversely affect our business.\n\nMexican 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\nsubstantial 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\ncondition, 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\npolitical 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\ninstitutions, 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.\n\nSocial 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\nsecurities. 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.\n\nOur assets are located in Mexico and are therefore subject to the provisions of the National Law of Domain Extinction (Ley Nacional de Extinción de\nDominio).\n\nThe 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\nhydrocarbons, 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\nextinction 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.\n\n36\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThe 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\nreasonable 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\nrecover the proceeds from the monetization of the asset.\n\nLegal 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\ninnocence. 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\nproceedings. All of the foregoing could adversely affect our business, financial condition and results of operations.\n\nFluctuations in the U.S. economy or the global economy, in general, may adversely affect Mexico’s economy and our business.\n\nMexico’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\nresult 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\ncan also directly and indirectly affect our business, financial condition, and results of operations.\n\nThe 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\nactivity, 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\nmacroeconomic 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\nStates economies are significant and could have a material adverse effect on our business, financial condition, and results of operations.\n\nDevelopments in other countries, particularly the United States, could materially affect the Mexican economy and, in turn, our business, financial\ncondition and results of operations.\n\nThe 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\nof 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\nand 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\nbillion 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\nwill 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\nconsequences could adversely affect our business, financial condition, and results of operations.\n\nLikewise, 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\nor 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\nbilateral 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\ninvestment 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.\n\nWe cannot make assurances that any events in the United States or elsewhere will not materially and adversely affect us.\n\n37\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nTariffs and trade restrictions could increase our costs and delay our projects.\n\nThe 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\n25% (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\nas 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,\nwhich 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\nadversely affect our profitability.\n\nTrade 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\nimplement, 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\nfood 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\npressures 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\nimportant to our operations.\n\nMoreover, 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\nNorth 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\nrequirements, 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\npredict 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.\n\nGeneral economic uncertainty and weak demand in the lodging industry could have a material adverse effect on us.\n\nOur 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\nbeyond 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\nwhich 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\nis 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\nour 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,\nwe 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,\nresults of operations and prospects.\n\nIf the Mexican government imposes exchange controls and/or other similar restrictions, the Mexican economy and our operations may be negatively affected.\n\nIn 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\ninstitute 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.\n\n38\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nSecurity risks in Mexico could increase, and this could adversely affect the Mexican economy and our business, financial condition, and results of\noperations.\n\nIn 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\ncartels, 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.\n\nThe 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\nconnection 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\nhigher-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\nU.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,\noperational 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\nresults of operations.\n\nWe are subject to anti-corruption, anti-bribery, anti-money laundering, and antitrust laws and regulations in Mexico.\n\nWe 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\nregulations 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\nwill 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\nviolation 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.\n\nWe are subject to laws applicable to the development of our properties, including stricter environmental laws and regulations.\n\nThe 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\nto 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.\n\nIn 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\nfail 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.\n\nThe 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.\nMexican 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\nproceedings 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.\n\n39\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nWe 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\nfailure 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\noperations 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\nhazardous 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\nsubstances 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\nresult 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\ngovernment 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\nability 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\nhave 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\nbecome, 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\nproperties, or result in significant additional expense and operating restrictions on us or our hotel managers.\n\nThe 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\nmatters, 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\nthe 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.\nAdditionally, 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\nSEMARNAT’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.\n\nAdditionally, 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\nenvironmental laws.\n\nIt 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\nsubject to applicable environmental laws, we could incur delays in development and additional expenses for cleaning and remediation.\n\nOur 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\ncondition, and results of operations.\n\nGovernmental regulation may adversely affect the operation of our properties and our business as a whole.\n\nThe 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,\nbuilding 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,\nand 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\nand customer expectations or may require significant additional investments or time to do so.\n\nRisks Related to Murano Being a Public-Company\n\nMurano 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\ncompliance initiatives and corporate governance practices.\n\nAs 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\nto 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.\nSecurities and Exchange Commission (“SEC”) and Nasdaq.\n\n40\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nWe 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\nand 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\nsubstantial 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\nStartups 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\naudit function.\n\nMurano is an “emerging growth company”, and the reduced disclosure requirements applicable to emerging growth companies may make our securities less\nattractive to investors.\n\nMurano 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\nother 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\nattestation 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\nimportant. 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\nthree-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).\n\nWe 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\nactive trading market for our securities and our share price may be more volatile.\n\nMurano 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.\nGAAP reporting requirements which may be difficult for us to comply with.\n\nAs 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.\nUnder 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\non June 30, 2026.\n\nIn 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\n“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\nmandatory. 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\nprospectuses 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\npreventing 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\nmodifications 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\ngovernance 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\nalso 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\ncurrently 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\nmajority 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\ncorporate 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\nstatus 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\nconsequences.\n\n41\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nMurano Group’s financial reporting infrastructure requires enhancement to meet the requirements of a public company.\n\nWe 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\nand 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\nfamily 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\ncontrol deficiencies may have been identified, and those control deficiencies could have also represented one or more material weaknesses.\n\nMurano Group has identified material weaknesses in its internal control over financial reporting.\n\nIn 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\nthat 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\nmaterial weaknesses in the control framework were identified and include the following:\n\n•\n\nLack of management review regarding the identification and assessment of the proper accounting of non-routine transactions.\n\n•\n\nFailure of design and implementation controls to properly evaluate the appropriateness of consolidated financial statements and disclosures in accordance with the applicable framework.\n\n•\n\nThe 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\nrequirements, and\n\n•\n\nLack of sufficient technological infrastructure.\n\nThis 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\ntiming 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\naffected.\n\nThe Murano Group is continuously enhancing the financial reporting infrastructure and internal control environment for the newly combined business, including the incorporation in the near\nfuture 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\nstructure 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\nGroup 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\nresults 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.\n\nWe may not be able to satisfy the listing requirements of Nasdaq or maintain a listing of our common stock on Nasdaq.\n\nWe 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\ncommon 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\nmaterially 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\nsignificantly impair our ability to raise capital and the value of your investment.\n\n42\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nIf we fail to regain compliance with Nasdaq’s minimum bid price requirement, our ordinary shares could be delisted from Nasdaq, which would materially\nadversely affect liquidity, trading price and our ability to raise capital.\n\nOn 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\nconsecutive 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.\n\nIn 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\nprice 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\nwithin 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.\n\nIf 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\ncould 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\ninvestor confidence and limit the ability of our shareholders to buy and sell our ordinary shares in an efficient manner.\n\n We have considered, and may in the future pursue, a corporate reorganization that could materially and adversely affect holders of our\nordinary shares.\n\nFollowing the completion of the contemplated debt restructuring, management has considered a potential corporate reorganization designed to improve operational, administrative and ownership\nefficiency 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\ndifferent stakeholder groups.\n\nThe 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\nsuccessful 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\nreorganization 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.\n\nIf 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,\nliabilities 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,\ncash 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\nmay result in tax or regulatory consequences, any of which could adversely affect us and our stakeholders.\n\n43\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThe fair value of our fixed assets requires subjective judgment and may be subject to volatility, which could significantly affect our financial\ncondition.\n\nThe 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\nresult, 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\nbest reflects the nature of our business. We determine the fair value of our assets using accredited independent appraisers.\n\nObservable 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\nour 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.\n\nOur results of operations include gain on revaluation adjustments on investment properties, which may fluctuate significantly over financial periods.\n\nFor 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\nor 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,\nsignificantly affected by the prevailing property markets and will be subject to market fluctuations.\n\nWe 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\nfair 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\nif 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.\n\nThe fair value of our fixed assets (including construction in process and land) may be harmed by certain factors that may entail impairment losses not\npreviously recorded.\n\nCertain 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\noccupancy 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\npermits 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\nnot 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\nantiquities 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\nfrequent 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\nwithout compensation, may significantly affect the value of such real estate asset.\n\nIn 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\nreal 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:\n\n•\n\nchanges in global and national economic conditions, including global or national recession;\n\n•\n\na general or local slowdown in the real property market, such as the recent global slowdown;\n\n44\n\n[Table of Contents](#TABLEOFCONTENTS)\n\n•\n\npolitical events that may have a material adverse effect on the hotel industry;\n\n•\n\ncompetition from other lodging facilities, and oversupply of hotel rooms in Mexico City and Cancun;\n\n•\n\nmaterial changes in operating expenses, including as a result of changes in real property tax systems or rates or labor laws;\n\n•\n\nchanges in the availability, cost and terms of financing;\n\n•\n\nthe effect of present or future environmental laws;\n\n•\n\nour ongoing need for capital improvements and refurbishments; and\n\n•\n\nmaterial changes in governmental rules and policies.\n\nMurano 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\nWarrants.\n\nIn 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\nrelevant 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\nvalue 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,\nannuities, net gains from the sale or exchange of property producing such income and net foreign currency gains.\n\nBased 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\nclassified 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\nother 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.\n\nIf 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\nadditional 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\n“Material U.S. Federal Income Tax Considerations-Application of the PFIC Rules to Murano Ordinary Shares and Murano Warrants.”\n\nRisk Related to the Ownership of Murano Ordinary Shares\n\nMurano’s board of directors and management have significant control over Murano’s business.\n\nMurano’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\napproximately 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,\nMurano’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\nrequiring shareholder approval.\n\n45\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nIf securities analysts do not publish research or reports about our business or if they publish negative evaluations of our securities, the price of our\nsecurities could decline.\n\nThe 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.\nSecurities 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\nof 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\nany 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.\n\nThere are no current plans to pay cash dividends on Murano Ordinary Shares for the foreseeable future.\n\nMurano 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\ndeclare 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\nrestrictions, 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\nsubsidiaries 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.\n\nIf Murano were to pay dividends, holders of Murano Ordinary Shares could be subject to withholding taxes on those dividends.\n\nAs 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\nOrdinary Shares. However, there is no guarantee that the United Kingdom will not change its laws in the future to impose withholding tax on dividends.\n\nAn active trading market for Murano Ordinary Shares may not develop.\n\nPrior 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\nmarket 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\nselling 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.\n\nFuture resales of the Murano Ordinary Shares issued in connection with the Business Combination may cause the market price of Murano Ordinary Shares to\ndrop significantly.\n\nMurano’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\nCombination. 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.\nOn 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\nregistration 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\nsignificant 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\nowned 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\nhave a tendency to depress the price of the Murano Ordinary Shares, which could further increase the potential for short sales.\n\n46\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nMurano 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\nprice 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\naffect prevailing market prices of Murano Ordinary Shares.\n\nThe 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\nvolumes, prices and times desired.\n\nThe 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\nsignificant effect on the market price of Murano Ordinary Shares include:\n\n•\n\nactual or anticipated fluctuations in our operating results or those of our competitors;\n\n•\n\nchanges in economic or business conditions;\n\n•\n\nchanges in governmental regulation; and\n\n•\n\npublication 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\nperformance, or lack of research reports by industry analysts or ceasing of analyst coverage.\n\nMurano’s issuance of additional securities in connection with financings, acquisitions, investments, equity incentive plans or otherwise would dilute all\nother shareholders.\n\nMurano 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\ngrant 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\nsecurities 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.\n\nMurano’s board of directors will have the ability to issue blank check preferred securities, which may discourage or impede acquisition efforts or other\ntransactions.\n\nMurano’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\nmerger, 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\nto 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,\ncould 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\nreceived a premium for their securities over the then-prevailing market price of the securities.\n\n47\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nJersey company law will require that Murano meet certain additional financial requirements before it can declare dividends, make distributions or\nrepurchase shares.\n\nUnder 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\nits 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."}