10-K/A: Biglari Holdings Files Amendment to 10-K to Include Audited Financials for The Lion Fund II, L.P.

Biglari Holdings files an amendment to its annual report on Form 10-K to include the audited financial statements of The Lion Fund II, L.P. for the years 2022-2024.

Summary

• Biglari Holdings Inc. has filed an amendment to its annual report on Form 10-K for the fiscal year ended December 31, 2024.
• The amendment includes the audited financial statements of The Lion Fund II, L.P. as required by Rule 3-09 of Regulation S-X.
• The audited financial statements for The Lion Fund II were not available at the time of the original filing.
• The amendment also includes currently dated certifications as required by the SEC.
• The filing does not modify or update any other disclosures from the original filing, except to reflect the additional information included in Part IV, Item 15.
• The financial statements of The Lion Fund II, L.P. include the statement of assets and liabilities as of December 31, 2024 and 2023, and the related statements of operations, changes in partners' capital, and cash flows for each of the three years in the period ended December 31, 2024.
• The Lion Fund II, L.P.'s assets were $367,629,898 as of December 31, 2024, compared to $373,302,411 as of December 31, 2023.
• The Fund's liabilities were $188,202,412 as of December 31, 2024, compared to $185,024,256 as of December 31, 2023.
• Partners' capital was $179,427,486 as of December 31, 2024, compared to $188,278,155 as of December 31, 2023.
• The net decrease in partners' capital resulting from operations was $(25,778,772) for 2024, $21,135,260 for 2023, and $(82,534,045) for 2022.
• The Fund's investment income was $8,001,436 in 2024, $12,279,938 in 2023 and $11,928,503 in 2022.
• The Fund's largest holdings include Ferrari N.V., Cracker Barrel Old Country Store, Inc., El Pollo Loco, and Jack in the Box Inc.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the inclusion of audited financials is positive for transparency, the fund experienced a net decrease in partners' capital and negative net investment income for the year.

Positives

• The inclusion of audited financial statements for The Lion Fund II, L.P. provides greater transparency to investors.
• The Fund's investment in Ferrari N.V. represents a significant portion of its portfolio, with a fair value of $171,135,702 as of December 31, 2024.

Negatives

• The Lion Fund II, L.P. experienced a net decrease in partners' capital resulting from operations of $(25,778,772) for 2024.
• The Fund's net investment income was negative in 2024, at $(3,356,596).

Risks

• The Fund's performance is subject to market fluctuations and investment risks.
• The Fund's concentration of credit risk with financial institutions could pose a risk if those institutions fail.
• The Fund's use of margin debt could amplify both gains and losses.

Future Outlook

The document does not contain specific forward-looking statements or guidance for Biglari Holdings or The Lion Fund II, L.P.

Industry Context

The Lion Fund II, L.P. operates as an investment fund, making investments in various sectors, including consumer products and restaurants. Its performance is influenced by broader market trends and the performance of its specific holdings.

Comparison to Industry Standards

• The Lion Fund II, L.P.'s performance can be compared to other investment funds with similar investment strategies and holdings.
• For example, its investments in companies like Ferrari N.V., Cracker Barrel Old Country Store, Inc., El Pollo Loco, and Jack in the Box Inc. can be benchmarked against the performance of these companies and their respective industries.
• The fund's expense ratio of 5.94% in 2024 is relatively high compared to passively managed index funds, but may be typical for actively managed hedge funds.

Related Party Transactions

• The General Partner is entitled to receive a performance reallocation of 25% of the increase in net assets annually, subject to a 6% performance hurdle rate and a high-water mark provision.
• The General Partner did not earn a performance reallocation during 2024, 2023 or 2022.
• Sardar Biglari is the Chairman, Chief Executive Officer and sole owner of the General Partner and is also the Chairman and Chief Executive Officer of Biglari Holdings Inc.
• Biglari Holdings is a limited partner in the Fund and is subject to a performance reallocation.
• The General Partner of the Fund also serves as the General Partner of The Lion Fund, L.P., which is a limited partner in the Fund and is not subject to a performance reallocation.
• During 2022, the Fund distributed 83,465 shares of Biglari Holdings Class A common stock and 890,272 shares of Biglari Holdings Class B common stock to The Lion Fund, L.P.

Stakeholder Impact

• The financial performance of The Lion Fund II, L.P. directly impacts its partners, including Biglari Holdings Inc.
• The inclusion of audited financial statements enhances transparency for all stakeholders.
• The fund's investment decisions can affect the companies in which it invests, such as Ferrari N.V., Cracker Barrel Old Country Store, Inc., El Pollo Loco, and Jack in the Box Inc.

Key Dates

Keywords

Biglari Holdings, The Lion Fund II L.P., Financial Statements, Audited Financials, Form 10-K/A, Investments