SADDLEBROOK RESORTS INC - Quarter Report: 2017 June (Form 10-Q)

SADDLEBROOK RESORTS INC - Quarter Report: 2017 June (Form 10-Q)

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Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark one)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

COMMISSION FILE NUMBER: 2-65481

SADDLEBROOK RESORTS, INC.

(Exact name of registrant as specified in its charter)


Florida		59-1917822
(State of incorporation)		(IRS employer identification no.)

5700 Saddlebrook Way, Wesley Chapel, Florida 33543-4499

(Address of principal executive offices)

813-973-1111

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

Registrant has 100,000 shares of common stock outstanding, all of which are held by an affiliate of the Registrant.

INDEX


	Page

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Saddlebrook Resorts, Inc.
Balance Sheets at June 30, 2017 and December 31, 2016		3
Statements of Operations and Accumulated Earnings for the three months and six months ended June 30, 2017 and 2016		4
Statements of Cash Flows for the six months ended June 30, 2017 and 2016		5
Notes to Financial Statements		6

Saddlebrook Rental Pool Operation
Balance Sheets at June 30, 2017 and December 31, 2016		9
Statements of Operations for the three months and six months ended June 30, 2017 and 2016		10
Statements of Changes in Participants’ Fund Balance for the six months ended June 30, 2017 and 2016		11
Notes to Financial Statements		12

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13

Item 3. Quantitative and Qualitative Disclosures about Market Risk		14

Item 4. Controls and Procedures		15

PART II - OTHER INFORMATION

Item 1. Legal Proceedings		15

Item 6. Exhibits		16

Signature		17

- 2 -

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

SADDLEBROOK RESORTS, INC.

BALANCE SHEETS


	June 30, 2017 (Unaudited)		December 31, 2016
Assets
Current assets:
Cash and cash equivalents	$	825,923	$	834,371
Escrowed cash		328,020		409,680
Accounts receivable, net		1,608,593		1,810,865
Due from related parties		1,082,606		1,006,972
Inventory and supplies		1,144,646		1,185,033
Prepaid expenses and other current assets		1,004,772		1,073,590

Total current assets		5,994,560		6,320,511
Property, buildings and equipment, net		18,367,401		19,223,911

Total assets	$	24,361,961	$	25,544,422

Liabilities and Shareholder’s Equity
Current liabilities:
Current portion of long-term debt	$	352,560$	$	352,560
Current portion of capital lease obligation		94,054		128,376
Escrowed deposits		328,020		409,680
Accounts payable		500,472		756,199
Accrued rental distribution		677,096		586,761
Accrued expenses and other liabilities		965,584		1,434,814
Current portion of deferred income		695,341		764,660
Guest deposits		1,025,833		2,200,312
Due to related parties		11,334,188		10,889,134

Total current liabilities		15,973,148		17,522,496
Long-term debt, net of deferred issuance costs of $67,044 and $58,108 at June 30, 2017 and December 31, 2016, respectively		5,926,550		6,111,768
Long-term capital lease obligation		27,801		57,236
Deferred income		536,558		501,649

Total liabilities		22,464,057		24,193,149

Shareholder’s equity:
Common stock, $1.00 par value, 100,000 shares authorized and outstanding		100,000		100,000
Additional paid-in capital		1,013,127		1,013,127
Accumulated earnings		784,777		238,146

Total shareholder’s equity		1,897,904		1,351,273

	$	24,361,961	$	25,544,422

The accompanying notes are an integral part

of these financial statements

- 3 -

SADDLEBROOK RESORTS, INC.

STATEMENTS OF OPERATIONS

AND ACCUMULATED EARNINGS

(Unaudited)


	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Revenues	$	7,502,308		$	7,597,930		$	19,924,647		$	19,941,773

Costs and expenses:
Operating costs		6,589,291			5,944,298			15,102,135			14,347,655
Sales and marketing		778,053			657,626			1,452,588			1,196,050
General and administrative		822,014			728,468			1,672,257			1,616,956
Depreciation		494,984			481,367			986,988			949,873

Total costs and expenses		8,684,342			7,811,759			19,213,968			18,110,534

Net operating (loss) income before other income (expenses)		(1,182,034	)		(213,829	)		710,679			1,831,239

Other income (expenses)
Other income		5,599			5,906			10,575			13,921
Interest expense		(92,688	)		(80,464	)		(174,623	)		(159,349	)

Total other expenses, net		(87,089	)		(74,558	)		(164,048	)		(145,428	)
Net (loss) income		(1,269,123	)		(288,387	)		546,631			1,685,811
Accumulated earnings at beginning of period		2,053,900			3,447,778			238,146			1,473,580

Accumulated earnings at end of period	$	784,777		$	3,159,391		$	784,777		$	3,159,391

The accompanying notes are an integral part

of these financial statements

- 4 -

SADDLEBROOK RESORTS, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)


	Six months ended June 30,
	2017			2016
Operating activities:
Net income	$	546,631		$	1,685,811
Non-cash items included in net income:
Depreciation		986,988			949,873
Loss on the disposal of assets		581			—
Amortization of debt financing costs		15,311			10,033
Decrease (increase) in:
Accounts receivable		202,272			(627,223	)
Inventory and supplies		40,387			78,442
Prepaid expenses and other assets		68,818			(19,485	)
(Decrease) increase in:
Accounts payable		(255,727	)		(53,956	)
Accrued rental distribution		90,335			250,491
Guest deposits		(1,174,479	)		(566,871	)
Accrued expenses and other liabilities		(469,229	)		(147,046	)
Deferred income		(34,410	)		70,726

Cash flow provided by operating activities		17,478			1,630,795

Investing activities:
Capital expenditures		(131,060	)		(629,651	)

Cash flow used in investing activities		(131,060	)		(629,651	)

Financing activities:
Payments on long-term debt		(176,282	)		(176,282	)
Payments on capital lease obligations		(63,757	)		(59,446	)
Financing costs		(24,247	)		—
Net proceeds from (repayments to) related parties		369,420			(93,511	)

Cash flow provided by (used in) financing activities		105,134			(329,239	)

Net change in cash and cash equivalents		(8,448	)		671,905
Cash and cash equivalents at beginning of period		834,371			375,912

Cash and cash equivalents at end of period	$	825,923		$	1,047,817

Supplemental disclosure of cash flow information:
Cash paid for interest	$	159,312		$	149,316

The accompanying notes are an integral part

of these financial statements

- 5 -

SADDLEBROOK RESORTS, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

Saddlebrook Resorts, Inc. (the “Company”) developed and operates Saddlebrook Resort, which is a condominium hotel and resort located in Wesley Chapel, Florida.

The Company’s accompanying balance sheet as of June 30, 2017, and its statements of operations and accumulated earnings and cash flows for the three and six month periods ended June 30, 2017 and 2016, are unaudited but reflect all adjustments which are, in the opinion of management, necessary for the fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature. The balance sheet as of December 31, 2016 has been derived from the audited financial statements as of that date.

The Company’s business is seasonal. Therefore, the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for future interim periods or the full fiscal year.

These financial statements and related notes are presented for interim periods in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X, and, consequently, do not include all disclosures normally required by accounting principles generally accepted in the United States. Accordingly, these financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Note 2. Accounts Receivable


	June 30, 2017 (Unaudited)			December 31, 2016
Trade accounts receivable	$	1,693,540		$	1,828,542
Less allowance for bad debts		(84,947	)		(17,677	)

	$	1,608,593		$	1,810,865

Note 3. Property, Buildings and Equipment


	June 30, 2017 (Unaudited)			December 31, 2016
Land and land improvements	$	8,458,554		$	8,458,554
Buildings and recreational facilities		31,948,823			31,942,695
Machinery and equipment		20,958,549			20,836,945
Construction in progress		483,968			481,816

		61,849,894			61,720,010
Less accumulated depreciation		(43,482,493	)		(42,496,099	)

	$	18,367,401		$	19,223,911

The Company’s property, buildings and equipment are pledged as security for its long-term debt (see Note 4).

- 6 -

Note 4. Long-term debt and Capital Lease Obligation

On December 6, 2015 the Company’s financing agreement with a third party lender was modified to include renewal for the existing principal balance of $4,875,000, along with an advance of an additional $2,000,000. The new term note expires December 6, 2020. At June 30, 2017 $6,346,154 was outstanding under the note. The term note requires monthly principle payments of $29,380 plus interest of 3% over the one month Libor index (4.23% at June 30, 2017). The term note is collateralized by all current and subsequently acquired real and personal property. The term note requires the Company to maintain a Debt Service Ratio, as defined, of 1.25%. The Company was in default of this covenant as of December 31, 2016; however, the Company received a waiver for this default from its lender. Under the terms of its agreement, the debt service covenant will be re-measured at December 31, 2017. Management believes, based on its expectations, that it will be in compliance with the debt service covenant at that date; however, there can be no assurances that it will be in compliance. Should the Company not be in compliance at December 31, 2017, it will seek a waiver or modification of the covenant. In addition, under the terms of the loan agreement, the Company has certain remedies available to it by which it can cure the default, and it is management’s intent to do so if necessary.

On April 24, 2017, the Company entered in to a revolving line of credit agreement with the same third party lender with maximum borrowings of $1,500,000 to be used as working capital as needed. The agreement is cross collateralized with the existing term note under the same terms and conditions. Amounts borrowed under the revolving line of credit will bear interest at 3% over the one month LIBOR index. The line of credit will terminate on December 6, 2020. As of the date of this filing, the Company has not made any draw on this agreement.

On December 13, 2012, the Company entered into a capital lease obligation for equipment in the amount of $80,479. The capital lease is secured by the equipment purchased, matures in November 2017 and requires monthly payments of $1,426, including interest at 2.44%. At June 30, 2017, the amount due on this capital lease obligation was $7,086.

On December 2, 2012, the Company entered into a capital lease obligation for equipment in the amount of $255,874. The assets associated with this lease cost $294,724, of which $38,850 was reduced through the Company’s trade-in of existing equipment. This capital lease is secured by the equipment purchased, matures in December 2017 and requires monthly payments of $4,995, including interest at 6.41%. At June 30, 2017, the amount due on this capital lease obligation was $29,419.

On January 15, 2014, the Company entered into a capital lease obligation for equipment in the amount of $150,000. The capital lease is secured by equipment purchased, matures in December 2018 and requires monthly payments of $3,024 including interest of 7.75%. At June 30, 2017, the amount due on this capital lease obligation was $48,532.

On January 15, 2014, the Company entered into a capital lease obligation for equipment in the amount of $102,000. The capital lease is secured by equipment purchased, matures in December 2018 and requires monthly payments of $2,233, including interest an 11.30%. At June 30, 2017, the amount due on this capital lease obligation was $36,818.

- 7 -

Note 5. Related Party Receivables and Payables

Related party receivables and payables at June 30, 2017 and December 31, 2016 are the result of net intercompany transactions and cash transfers between the Company and its shareholder and affiliated companies. Related party receivables and payables are unsecured and non-interest bearing.

Note 6. Income Taxes

The Company is currently a member of a Qualified Subchapter S Subsidiary Group. Accordingly, no income tax expense was reflected in the Company’s operating results as the tax is assessed to the shareholders of the Company’s parent company.

- 8 -

SADDLEBROOK RENTAL POOL OPERATION

BALANCE SHEETS

DISTRIBUTION FUND


	June 30, 2017 (Unaudited)		December 31, 2016
Assets
Receivable from Saddlebrook Resorts, Inc.	$	677,096	$	586,761

Liabilities and Participants’ Fund Balance
Due to participants for rental pool distribution	$	569,894	$	536,148
Due to maintenance escrow fund		107,202		50,613

	$	677,096	$	586,761

MAINTENANCE ESCROW FUND


	June 30, 2017 (Unaudited)			December 31, 2016
Assets
Cash and cash equivalents	$	306,826		$	385,931
Receivables:
Distribution fund		107,202			50,613
Interest accrued		(97	)		(71	)
Linen inventory		74,637			68,190
Furniture inventory		49,747			54,112
Prepaid expenses and other assets		14,780			14,589

	$	553,095		$	573,364

Liabilities and Participants’ Fund Balance
Accounts payable	$	111,618		$	202,117
Participants’ fund balance		441,477			371,247

	$	553,095		$	573,364

The accompanying notes are an integral part

of these financial statements

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SADDLEBROOK RENTAL POOL OPERATION

STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Rental pool revenues	$	2,057,196		$	2,071,871		$	5,862,814		$	5,708,644

Deductions:
Marketing fee		154,290			155,390			439,711			428,148
Management fee		257,150			258,984			732,852			713,581
Travel agent commissions		288,156			156,531			401,731			245,066
Credit card expense		76,170			61,349			156,705			132,857
Bad debt expense		15,000			—			40,000			—

		790,766			632,254			1,770,999			1,519,652

Net rental income		1,266,430			1,439,617			4,091,815			4,188,992
Less operator share of net rental income		(569,893	)		(647,828	)		(1,841,316	)		(1,885,047	)
Other revenues (expenses):
Complimentary room revenues		10,317			11,821			19,807			28,720
Minor repairs and replacements		(29,758	)		(65,098	)		(62,177	)		(138,053	)

Amount available for distribution	$	677,096		$	738,512		$	2,208,129		$	2,194,612

The accompanying notes are an integral part

of these financial statements

- 10 -

SADDLEBROOK RENTAL POOL OPERATION

STATEMENTS OF CHANGES IN PARTICIPANTS’ FUND BALANCES

(Unaudited)

DISTRIBUTION FUND


	Six months ended June 30,
	2017			2016
Balance at beginning of period	$	—		$	—
Additions:
Amount available for distribution		2,208,129			2,194,612
Reductions:
Amount withheld for maintenance escrow fund		(366,812	)		(309,565	)
Amount accrued or paid to participants		(1,841,317	)		(1,885,047	)

Balance at end of period	$	—		$	—

MAINTENANCE ESCROW FUND


	Six months ended June 30,
	2017			2016
Balance at beginning of period	$	371,247			295,708
Additions:
Amount withheld from distribution fund		366,812			309,565
Unit owner payments		91,769			67,974
Interest earned		—			—
Reductions:
Escrow account refunds		(15,271	)		(1,647	)
Maintenance charges		(210,883	)		(171,320	)
Unit renovations		(8,223	)		—
Linen replacement		(153,974	)		—

Balance at end of period	$	441,477		$	500,280

The accompanying notes are an integral part

of these financial statements

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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 and linens as it becomes necessary.

Rental pool participants and Saddlebrook share net rental income 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.

- 12 -

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The Company operates Saddlebrook Resort (the “Resort”) in Wesley Chapel, Florida, which contains condominium units that have been sold to third parties or to affiliates of the Company. The majority of the condominium units are hotel accommodations that participate in a rental-pooling program that provides its owners with a percentage distribution of related room revenues minus certain fees and expenses. The remainder of the condominium units participate in a non-pooling rental program, are owner-occupied or are designated as hospitality suites or housing for young athletes independent of the rental programs. Other resort property owned by the Company and its affiliates include golf courses, tennis courts, a spa, restaurants and conference center facilities.

Results of Operations

Second quarter 2017 compared to second quarter 2016

The Company’s total revenues decreased approximately $96,000, or about 1%, for the three months ended June 30, 2017 compared to the same period in the prior year. Total revenues for the Rental Pool decreased about $15,000, less than 1%.

Total costs and expenses increased approximately $873,000, or about 11%, for the Company, and approximately $159,000, or about 25%, for the Rental Pool Operation.

The Company experienced a net loss for the quarter in the amount of approximately $1,269,000, compared to the net loss of the prior comparable quarter of approximately $288,000. Amounts available for distribution for the Rental Pool Operation decreased approximately $61,000, or about 8%, from the comparable period last year.

First six months 2017 compared to first six months 2016

The Company’s total revenues decreased approximately $17,000, less than 1%, for the six months ended June 30, 2017 compared to the same period in the prior year. The total revenues for the Rental Pool increased approximately $154,000, or about 3%.

Total costs and expenses for the Company increased approximately $1,103,000 or about 6%. Total costs and expenses for the Rental Pool Operation increased by about $251,000, about 17%.

The Company’s net income for the period of decreased approximately $1,139,000 compared to the same period in the prior year. Amounts available for distribution for the Rental Pool Operation increased approximately $14,000 over the same period in the prior year.

Impact of Current Economic Conditions

The Company experienced a minor decrease in revenue for the 6 months ending 6/30/2017 compared to the same period in the previous year. The Company believes this trend will improve during the remaining months of 2017. The increase in expenses for the period ended 6/30/2017 as compared to the same period in the prior year is a result of increased efforts in its sales programs and upgrades of its golf training program and its two 18 hole golf courses. The investment in these areas will position the Company as one of the top training facilities and golf courses.

The Company continues its marketing efforts toward the social clientele by developing packages designed to target more social guests, including families. These social packages are being promoted through the Company’s website as well as through travel wholesalers and with emphasis on e-commerce sites. Management has implemented programs and measures to help the Company get back to positive operating income. These programs and measures include cost control programs, consolidation of restaurant operations and efforts to increase brand awareness and recognition of the Resort.

- 13 -

Liquidity and Capital Resources

Net income for the six month period ended June 30, 2017 was $546,631. Excluding non-cash expenses such as depreciation and amortization of $1,002,880, the Company’s actual operating cash flow was $1,549,511.

Future operating costs and planned expenditures for minor capital additions and improvements are expected to be adequately funded by the Company and its affiliates’ current cash reserves and cash generated by the Resort’s operations.

The Company’s ultimate shareholder has the financial ability and intent to continue to fund operations through affiliated companies that are 100% owned by the Company’s ultimate shareholder to the extent required to support the Company’s operations. The Company has loans outstanding to the affiliated companies of approximately $11.3 million and $10.9 million as of June 30, 2017 and December 31, 2016, respectively. In addition to the shareholders’ financial ability, these affiliated Companies are expected to continue to generate positive cash flows during fiscal year 2017 should additional funding be required to support the Company’s operations.

- 14 -

The Company’s operation of the Resort is not considered to be dependent on any individual or small group of customers, the loss of which would have a material adverse effect on the Company’s business or financial condition.

Seasonality

The Company’s operations are seasonal with the highest volume of revenue generally occurring in the first quarter of each calendar year.

Due to the seasonal business of the Company, the results of operations for the interim period shown in this report are not necessarily indicative of results to be expected for the full fiscal year.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company’s invested cash is subject to changes in market interest rates. Otherwise, the Company does not have significant market risk with respect to foreign currency exchanges or other market rates.

The Company’s term note and revolving line of credit bear interest at 3.0% over the one month LIBOR index and mature in December 2020.

Item 4. Controls and Procedures

The Company’s management, including the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures as of June 30, 2017, pursuant to Exchange Act Rule 15d-15. Based upon that evaluation, the Company’s Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2017 in timely alerting them to material information required to be included in the Company’s periodic SEC filings.

The Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and procedures over internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must be considered relative to their costs. Because of the inherent limitation in all control systems, no evaluation of controls can provide absolute assurance that all control issues within the Company have been detected.

There were no changes in the Company’s internal controls over financial reporting during the six months ended June 30, 2017 that materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is from time to time involved in litigation in the ordinary course of business. In the opinion of the Company’s management, insurance or indemnification from other third parties adequately covers these matters. Accordingly, the effect, if any, of these claims is considered immaterial to the Company’s financial condition and results of operations.

- 15 -

Item 6. Exhibits

The following exhibits are included in this Form 10-Q:



	31.1			- Chief Executive Officer Rule 15d-14(a) Certification

	31.2			- Chief Financial Officer Rule 15d-14(a) Certification

	32.1			- Chief Executive Officer Section 1350 Certification

	32.2			- Chief Financial Officer Section 1350 Certification

	101.INS			XBRL Instance Document

	101.SCH			XBRL Taxonomy Extension Schema Document

	101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document

	101.DEF			XBRL Taxonomy Extension Definition Linkbase Document

	101.LAB			BRL Taxonomy Extension Label Linkbase Document

	101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document

- 16 -

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	SADDLEBROOK RESORTS, INC.
	(Registrant)

Date: August 10, 2017	By:	/s/ Donald L. Allen
		Donald L. Allen
		Vice President and Treasurer (Principal Financial and Accounting Officer)

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Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company