Saddlebrook Rental Pool Operation

3 Months Ended

Mar. 31, 2020

Saddlebrook Rental Pool Operation

SADDLEBROOK RENTAL POOL OPERATION

BALANCE SHEETS

DISTRIBUTION FUND

	March 31,
	2020		December 31,
	(Unaudited)		2019
Assets
Receivable from Saddlebrook Resorts, Inc.	$	772,757	$	503,066
Liabilities and Participants’ Fund Balance
Due to participants for rental pool distribution	$	653,884	$	299,020
Due to maintenance escrow fund		118,883		45,346
	$	772,757	$	344,366

MAINTENANCE ESCROW FUND

	March 31,
	2020		December 31,
	(Unaudited)		2019
Assets
Cash and cash equivalents	$	961,306	$	1,108,892
Receivables:
Distribution fund		118,873		45,346
Prepaid expenses and other assets		14,606		14,605
Linen Inventory		45,953		—
Furniture Inventory		39,650		39,651
	$	1,180,388	$	1,208,494
Liabilities and Participants’ Fund Balance
Due to Saddlebrook Resorts, Inc.	$	70,769	$	127,354
Participants’ fund balance		1,109,619		1,081,140
	$	1,180,388	$	1,208,494

SADDLEBROOK RENTAL POOL OPERATION

STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended March 31,
	2020			2019
Rental pool revenues	$	1,975,818		$	3,617,250
Deductions:
Marketing fee		148,186			271,394
Management fee		246,977			452,156
Travel agent commissions		69,230			176,921
Credit card expense		58,349			86,488
		522,742			986,859
Net rental income		1,453,076			2,630,391
Less operator share of net rental income		(653,884	)		(1,183,676	)
Other revenues (expenses):
Complimentary room revenues		6,251			12,853
Minor repairs and replacements		(32,686	)		(29,975	)
Amount available for distribution	$	772,757		$	1,429,593

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

	Three months ended March 31,
	2020			2019
Balance at beginning of period	$	—		$	—
Additions:
Amount available for distribution		772,757			1,429,593
Reductions:
Amount withheld for maintenance escrow fund		(118,873	)		(245,917	)
Amount accrued or paid to participants		(653,884	)		(1,183,676	)
Balance at end of period	$	—		$	—

MAINTENANCE ESCROW FUND

	Three months ended March 31,
	2020			2019
Balance at beginning of period	$	1,081,140			2,135,913
Additions:
Amount withheld from distribution fund		118,873			245,917
Unit owner payments		120,777			88,966
Interest earned		2,617			123
Reductions:
Escrow account refunds		(94,419	)		(75,612	)
Maintenance charges		(80,974	)		(47,969	)
Unit renovations		(8,393	)		(212,975	)
Linen replacement		(30,002	)		(233,614	)
Balance at end of period	$	1,109,619		$	1,900,749

The accompanying notes are an integral part of these financial statements

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.