SADDLEBROOK RENTAL POOL OPERATION

BALANCE SHEETS

DISTRIBUTION FUND


	June 30, 2016 (Unaudited)		December 31, 2015
Assets
Receivable from Saddlebrook Resorts, Inc.	$	738,512	$	488,021

Liabilities and Participants’ Fund Balance
Due to participants for rental pool distribution	$	647,828	$	439,589
Due to maintenance escrow fund		90,684		48,432

	$	738,512	$	488,021

MAINTENANCE ESCROW FUND


	June 30, 2016 (Unaudited)			December 31, 2015
Assets
Cash and cash equivalents	$	322,966		$	372,021
Receivables:
Distribution fund		90,684			48,432
Interest accrued		(42	)		(16	)
Owner payments		—			—
Linen inventory		123,202			17,925
Furniture inventory		54,679			43,421
Prepaid expenses and other assets		227			34

	$	591,716		$	481,817

Liabilities and Participants’ Fund Balance
Accounts payable	$	91,436		$	186,109
Participants’ fund balance		500,280			295,708

	$	591,716		$	481,817

The accompanying notes are an integral part

of these financial statements

SADDLEBROOK RENTAL POOL OPERATION

STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Rental pool revenues	$	2,071,871		$	2,765,127		$	5,708,644		$	6,263,314

Deductions:
Marketing fee		155,390			207,384			428,148			469,748
Management fee		258,984			345,641			713,581			782,914
Travel agent commissions		156,531			118,033			245,066			300,271
Credit card expense		61,349			73,546			132,857			155,239

		632,254			744,604			1,519,652			1,708,172

Net rental income		1,439,617			2,020,523			4,188,992			4,555,142
Less operator share of net rental income		(647,828	)		(909,235	)		(1,885,047	)		(2,049,814	)
Other revenues (expenses):
Complimentary room revenues		11,821			7,381			28,720			13,821
Minor repairs and replacements		(65,098	)		(64,135	)		(138,053	)		(131,631	)

Amount available for distribution	$	738,512		$	1,054,534		$	2,194,612		$	2,387,518

The accompanying notes are an integral part

of these financial statements

SADDLEBROOK RENTAL POOL OPERATION

STATEMENTS OF CHANGES IN PARTICIPANTS’ FUND BALANCES

(Unaudited)

DISTRIBUTION FUND


	Six months ended June 30,
	2016			2015
Balance at beginning of period	$	—		$	—
Additions:
Amount available for distribution		2,194,612			2,387,518
Reductions:
Amount withheld for maintenance escrow fund		(309,565	)		(337,704	)
Amount accrued or paid to participants		(1,885,047	)		(2,049,814	)

Balance at end of period	$	—		$	—

MAINTENANCE ESCROW FUND


	Six months ended June 30,
	2016			2015
Balance at beginning of period	$	295,708			236,911
Additions:
Amount withheld from distribution fund		309,565			337,704
Unit owner payments		67,974			95,342
Interest earned		—			10
Reductions:
Escrow account refunds		(1,647	)		(9,045	)
Maintenance charges		(171,320	)		(93,761	)
Unit renovations		—			(81,379	)
Linen replacement		—			(63,491	)

Balance at end of period	$	500,280		$	422,291

The accompanying notes are an integral part

of these financial statements

SADDLEBROOK RENTAL POOL OPERATION

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Note 1. Rental Pool Operations and Rental Pool Agreement

Condominium units are provided as rental (hotel) accommodations by their owners under the Rental Pool and Agency Appointment Agreement (the “Agreement”) with Saddlebrook Resorts, Inc. (collectively, the “Rental Pool”). Saddlebrook Resorts, Inc. (“Saddlebrook”) acts as operator of the Rental Pool which provides for the distribution of a percentage of net rental income, as defined, to the owners.

The Saddlebrook Rental Pool Operation consists of two funds: the Rental Pool Income Distribution Fund (“Distribution Fund”) and the Maintenance and Furniture Replacement Escrow Fund (“Maintenance Escrow Fund”). The operations of the Distribution Fund reflect the earnings of the Rental Pool. The Distribution Fund balance sheets reflect amounts due from Saddlebrook for the rental pool distribution payable to participants and amounts due to the Maintenance Escrow fund. The amounts due from Saddlebrook are required to be distributed no later than forty-five days following the end of each calendar quarter. The Maintenance Escrow Fund reflects the accounting for escrowed assets used to maintain unit interiors and replace furniture as it becomes necessary.

Rental pool participants and Saddlebrook share rental revenues according to the provisions of the Agreement. Net Rental Income shared consists of rentals received less a marketing surcharge of 7.5%, a 12.5% management fee, travel agent commissions, credit card expenses and provision for bad debts, if warranted. Saddlebrook receives 45% of Net Rental Income as operator of the Rental Pool. The remaining 55% of Net Rental Income, after adjustments for complimentary room revenues (ten percent of the normal unit rental price paid by Saddlebrook for promotional use of the unit) and certain minor repair and maintenance charges, is available for distribution to the participants and Maintenance Escrow Fund based upon each participant’s respective participation factor (computed using the value of a furnished unit and the number of days it was available to the pool). Quarterly, 45% of Net Rental Income is distributed to participants and 10%, as adjusted for complimentary room revenues and minor interior maintenance and replacement charges, is deposited in an escrow account until a maximum of 20% of the set value of the individual owner’s furniture package has been accumulated. Excess escrow balances are refunded to participants.

Note 2. Summary of Significant Accounting Policies

Basis of Accounting

The accounting records of the funds are maintained on the accrual basis of accounting.

Income Taxes

No federal or state taxes have been reflected in the accompanying financial statements as the tax effect of fund activities accrues to the rental pool participants and Saddlebrook.