Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 10-Q

 

 

(Mark one)

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

For the quarterly period ended September 30, 2014

OR

 

¨	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  x    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  x    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company:

 

Large accelerated filer		¨		Accelerated Filer		¨
Non-accelerated filer		¨		Smaller reporting company		x

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

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

 

 

 

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INDEX

 

		Page
PART I - FINANCIAL INFORMATION (Unaudited)			3
Item 1. Financial Statements			3
Saddlebrook Resorts, Inc.
Balance Sheets at September 30, 2014 and December 31, 2013			3
Statements of Operations and Accumulated Earnings for the three months and nine months ended September  30, 2014 and 2013			4
Statements of Cash Flows for the nine months ended September 30, 2014 and 2013			5
Notes to Financial Statements			6
Saddlebrook Rental Pool Operation
Balance Sheets at September 30, 2014 and December 31, 2013			9
Statements of Operations for the three months and nine months ended September 30, 2014 and 2013			10
Statements of Changes in Participants’ Fund Balance for the nine months ended September  30, 2014 and 2013			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			15
Item 4. Controls and Procedures			15
PART II - OTHER INFORMATION			15
Item 1. Legal Proceedings			15
Item 6. Exhibits			16
Signature			16

 

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PART I - FINANCIAL INFORMATION

 

Item 1.

Financial Statements

SADDLEBROOK RESORTS, INC.

BALANCE SHEETS

 

		September 30, 2014 (Unaudited)				December 31, 2013
Assets
Current assets:
Cash and cash equivalents		$	512,772			$	667,190
Escrowed cash			223,304				242,046
Accounts receivable, net			506,705				1,022,961
Other receivable			—				650,000
Due from related parties			1,110,372				596,271
Inventory and supplies			1,284,777				1,324,306
Prepaid expenses and other current assets			922,151				713,144
Total current assets			4,560,081				5,215,918
Property, buildings and equipment, net			20,115,275				19,349,853
Deferred charges, net			63,772				2,793
Total assets		$	24,739,128			$	24,568,564
Liabilities and Shareholder’s Equity
Current liabilities:
Current portion of long-term debt		$	62,500			$	4,530,334
Current portion of capital lease obligations			110,929				63,540
Escrowed deposits			223,304				242,046
Accounts payable			539,885				820,187
Accrued rental distribution			241,441				397,460
Accrued expenses and other liabilities			1,445,116				1,487,993
Current portion of deferred income			735,804				766,502
Guest deposits			1,038,398				993,451
Due to related parties			10,159,095				8,405,804
Total current liabilities			14,556,472				17,707,317
Long-term debt			4,937,500				—
Long-term capital lease obligations			335,573				211,339
Deferred income			644,387				700,827
Total liabilities			20,473,932				18,619,483
Commitments and contingencies			—				—
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
Retained earnings			3,152,069				4,835,954
Total shareholder’s equity			4,265,196				5,949,081
Total liabilities and shareholder’s equity		$	24,739,128			$	24,568,564

The accompanying notes are an integral part of these financial statements

 

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SADDLEBROOK RESORTS, INC.

STATEMENTS OF OPERATIONS

AND ACCUMULATED EARNINGS

(Unaudited)

 

		Three months ended								Nine months ended
		September 30,								September 30,
		2014				2013				2014				2013
Revenues		$	3,496,539			$	3,601,561			$	20,818,961			$	19,790,093
Costs and expenses:
Operating costs			3,962,757				3,668,823				17,157,305				15,194,979
Sales and marketing			518,391				254,308				1,625,836				1,015,534
General and administrative			704,372				723,554				2,251,656				2,268,751
Depreciation			462,028				468,682				1,391,913				1,389,725
Total costs and expenses			5,647,548				5,115,367				22,426,710				19,868,989
Net operating loss before other income (expenses)			(2,151,009	)			(1,513,806	)			(1,607,749	)			(78,896	)
Other (expenses) income
Interest income			266				—				267				—
Other income			4,005				3,966				71,041				42,815
Interest expense			(56,680	)			(41,043	)			(147,444	)			(156,866	)
Total other (expenses) income			(52,409	)			(37,077	)			(76,136	)			(114,051	)
Net loss			(2,203,418	)			(1,550,883	)			(1,683,885	)			(192,947	)
Retained earnings at beginning of period			5,355,487				7,016,974				4,835,954				5,659,038
Retained earnings at end of period		$	3,152,069			$	5,466,091			$	3,152,069			$	5,466,091

The accompanying notes are an integral part of these financial statements

 

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SADDLEBROOK RESORTS, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Nine months ended
		September 30,
		2014				2013
Operating activities:
Net loss		$	(1,683,885	)		$	(192,947	)
Non-cash items included in net loss
Depreciation			1,391,913				1,389,725
Amortization of debt financing costs			7,404				14,885
Loss on sale of assets			1,942				—
(Increase) decrease in:
Accounts receivable			1,166,256				431,760
Inventory and supplies			39,529				12,038
Prepaid expenses and other assets			(209,007	)			66,754
Increase (decrease) in:
Accounts payable			(280,302	)			(29,044	)
Accrued rental distribution			(156,019	)			(252,452	)
Guest deposits			44,947				113,507
Accrued expenses and other liabilities			(42,877	)			13,316
Deferred income			(87,138	)			(135,169	)
Cash flow provided by operating activities			192,763				1,432,373
Investing activities:
Capital expenditures			(1,907,277	)			(515,327	)
Cash flow used in investing activities			(1,907,277	)			(515,327	)
Financing activities:
Proceeds from long-term debt			5,000,000				—
Payments on long-term debt			(4,530,334	)			(432,998	)
Payments on capital lease obligations			(80,377	)			(53,380	)
Payments on line of credit			—				(1,500,000	)
Debt issuance costs			(68,383	)			(6,506	)
Net borrowings from (advances to) related parties			1,239,190				(324,515	)
Cash flow provided by (used in) financing activities			1,560,096				(2,317,399	)
Net decrease in cash			(154,418	)			(1,400,353	)
Cash and cash equivalents at beginning of period			667,190				2,098,331
Cash and cash equivalents at end of period		$	512,772			$	697,978
Supplemental disclosure of cash flow information:
Cash paid for interest		$	140,040			$	141,980

Non-cash investing activities

 

1.	In January 2014, the Company acquired equipment through capital lease obligations of approximately $252,000.

2.	As a result of a fire on the property that occurred in November 2013, the Company received insurance proceeds of $650,000 during 2014. Such amount was recorded in other receivables at December 31, 2013.

The accompanying notes are an integral part of these financial statements

 

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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 for September 30, 2014, and its statements of operations and accumulated earnings and cash flows for the periods ended September 30, 2014 and 2013, 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 at December 31, 2013 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 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, 2013.

Note 2. Accounts Receivable

 

		September 30, 2014 (Unaudited)				December 31, 2013
Trade accounts receivable		$	546,472			$	1,067,775
Less allowance for bad debts			(39,767	)			(44,814	)
		$	506,705			$	1,022,961

 

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Note 3. Property, Buildings and Equipment

 

		September 30,
		2014				December 31,
		(Unaudited)				2013
Land and land improvements		$	7,623,070			$	7,623,070
Buildings and recreational facilities			31,042,069				30,551,220
Machinery and equipment			18,035,233				17,368,327
Construction in progress			1,691,923				693,881
			58,392,295				56,236,498
Less accumulated depreciation			(38,277,020	)			(36,886,645	)
		$	20,115,275			$	19,349,853

The Company’s property, buildings and equipment are pledged as security for its long-term debt (see Note 5).

Note 4. Deferred Charges

 

		September 30,
		2014				December 31,
		(Unaudited)				2013
Debt issue costs		$	68,383			$	62,402
Less accumulated amortization			(4,611	)			(59,609	)
		$	63,772			$	2,793

 

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Note 5. Long-term Debt and Capital Lease Obligation

On June 06, 2014 the Company entered into a new financing agreement with a third party lender for $5,000,000. The proceeds were used to retire the existing term note due June 12, 2014 of $4,386,000. The remaining proceeds were used to pay closing costs and provide additional working capital. The new term note expires June 1, 2019. Interest only payments at a rate of 3% over the one month Libor index (3.16% at September 30,2014) are required for the first twelve months. After year one, the term note requires monthly principal payments of $20,833 plus interest of 3% over the one month Libor index. The term note is collateralized by all current and subsequently acquired real and personal property. Subsequent to June 30, 2014, the loan agreement was modified to state that the measurement date for the fixed charge coverage ratio begins on December 31, 2014.

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

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 the equipment purchased, matures in December 2018 and requires monthly payments of $3,024, including interest at 7.75%. At September 30, 2014, the amount due on the capital lease obligation was $128,847.

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 the equipment purchased, matures in December 2018 and requires monthly payments of $2,233, including interest at 11.30%. At September 30, 2014, the amount due on the capital lease obligation was $90,108.

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 September 30, 2014, the amount due on the capital lease obligation was $52,095.

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%, beginning in January 2013. At September 30, 2014, the amount due on the capital lease obligation was $175,452.

Note 6. Related Party Receivables

Related party receivables and payables at September 30, 2014 and December 31, 2013 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 7. 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 its parent company.

Note 8. Insurance Claim

On November 2, 2013, the Company experienced damage to storage facilities and equipment due to a fire. As of September 30, 2014, the Company has incurred approximately $431,000 toward the repair of the facility and replacement of equipment. The Company filed an insurance claim and received $950,000 toward the settlement of the insurance claim of which $300,000 was received in 2013 and $650,000 was received in 2014 (recorded as other receivable at December 31, 2013). The Company estimates that all of the costs related to this event, net of a $100,000 insurance deductible, will be reimbursed by insurance. However, actual amounts reimbursed could differ from this estimate.

 

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SADDLEBROOK RENTAL POOL OPERATION

BALANCE SHEETS

DISTRIBUTION FUND

 

		September 30, 2014 (Unaudited)				December 31, 2013
Assets
Receivable from Saddlebrook Resorts, Inc.		$	241,440			$	397,460
Liabilities and Participants’ Fund Balance
Due to participants for rental pool distribution		$	242,149			$	391,667
Due to (from) maintenance escrow fund			(709	)			5,793
		$	241,440			$	397,460

MAINTENANCE ESCROW FUND

 

		September 30, 2014 (Unaudited)				December 31, 2013
Assets
Cash and cash equivalents		$	203,863			$	221,486
Receivables:
Distribution fund			(709	)			5,793
Owner payments			4,786				—
Linen inventory			35,392				76,644
Furniture inventory			158,925				92,397
Prepaid expenses and other assets			13,146				10,861
		$	415,673			$	407,541
Liabilities and Participants’ Fund Balance
Accounts payable		$	90,731			$	84,725
Participants’ fund balance			324,942				322,816
		$	415,673			$	407,541

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 September 30,								Nine months ended September 30,
		2014				2013				2014				2013
Rental pool revenues		$	745,831			$	751,050			$	5,950,327			$	5,281,364
Deductions:
Marketing fee			55,937				56,329				446,274				396,103
Management fee			93,229				93,881				743,791				660,171
Travel agent commissions			34,095				3,119				307,938				205,278
Credit card expense			24,461				21,523				155,882				139,030
			207,722				174,852				1,653,885				1,400,582
Net rental income			538,109				576,198				4,296,442				3,880,782
Less operator share of net rental income			(242,149	)			(259,289	)			(1,933,399	)			(1,746,351	)
Other revenues (expenses):
Complimentary room revenues			5,314				4,919				24,670				17,929
Minor repairs and replacements			(59,834	)			(47,046	)			(184,920	)			(138,437	)
Amount available for distribution		$	241,440			$	274,782			$	2,202,793			$	2,013,923

The accompanying notes are an integral part of these financial statements

 

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SADDLEBROOK RENTAL POOL OPERATION

STATEMENTS OF CHANGES IN PARTICIPANTS’ FUND BALANCES

(Unaudited)

DISTRIBUTION FUND

 

		Nine months ended September 30,
		2014				2013
Balance at beginning of period		$	—			$	—
Additions:
Amount available for distribution			2,202,793				2,013,923
Reductions:
Amount withheld for maintenance escrow fund			(269,394	)			(267,572	)
Amount accrued or paid to participants			(1,933,399	)			(1,746,351	)
Balance at end of period		$	—			$	—

MAINTENANCE ESCROW FUND

 

		Nine months ended September 30,
		2014				2013
Balance at beginning of period		$	322,816			$	329,567
Additions:
Amount withheld from distribution fund			269,394				267,572
Unit owner payments			106,546				38,720
Interest earned			17				32
Reductions:
Escrow account refunds			(14,392	)			(2,966	)
Maintenance charges			(206,497	)			(196,656	)
Unit renovations			(1,280	)			(5,692	)
Linen replacement			(151,662	)			(173,547	)
Balance at end of period		$	324,942			$	257,030

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 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.

 

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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

Third quarter 2014 compared to third quarter 2013

The Company’s total revenues decreased $105,022, or 3%, for the three months ended September 30, 2014 compared to the same period in the prior year. Total revenues for the Rental Pool decreased $5,219, or 1%. These changes are directly related to a decrease in occupancy of 2% over the prior period.

Total costs and expenses increased $532,181, or 10%, for the Company, and $32,870, or 19%, for the Rental Pool Operation. These increases in costs and expenses are related to increasing our sales and marketing department. In addition, the Company experienced increase costs of maintaining the golf courses due to excessive rain and other abnormal conditions.

The Company experienced a net loss for the quarter in the amount of $2,203,418, compared to the net loss of the prior comparable quarter of $1,550,883. Amounts available for distribution for the Rental Pool Operation decreased $33,342, or 12%, from the comparable period last year.

 

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First nine months 2014 compared to first nine months 2013

The Company’s total revenues increased $1,028,868, or 5%, for the nine months ended September 30, 2014 compared to the same period in the prior year. The total revenues for the Rental Pool increased $668,963, or 13%. Both of these increases are directly related to the increase in occupancy of 2.3% when comparing the two periods.

Total costs and expenses for the Company increased $2,557,721, or 13%. Total costs and expenses for the Rental Pool Operation increased by $253,303, or 18%.

The Company experienced a net loss for the period of $1,683,885, compared with a net loss of $192,947 in the comparable period. Amounts available for distribution for the Rental Pool Operation increased $188,870 over the same period in the prior year.

Impact of Current Economic Conditions

The Company believes that while occupancy rates are increasing, when compared to prior periods, ancillary service revenue has not increased. The Company believes that businesses have altered their spending patterns after 2008 due to the economy.

In response to this trend, the Company has increased 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. The Company has also expanded the Sales and Marketing department which has greatly impacted sales in 2014 and is expected to continue to positively impact sales as future reserved group room nights are approximately 13,000 more as of September 30, 2014 compared to the same period ended 2013.

Liquidity and Capital Resources

Net loss for the nine month period ended September 30, 2014 was $1,683,885. Excluding non-cash expenses such as depreciation and amortization of $1,399,317, the Company’s actual operating cash loss was $284,568.

The Company’s term note from a third party lender bears interest at 3.0% over the one month Libor index (3.16% at September 30, 2014) and matures in June 2019.

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. During 2014, the Company received approximately $650,000 in loans from these affiliated companies. In addition to the shareholder’s financial ability, these affiliated companies are expected to continue to generate positive cash flows during fiscal 2014 should additional funding be required to support the Company’s operations.

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.

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

 

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Seasonality

The Company’s operations are seasonal with the highest volume of revenues 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 periods 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 loan bears interest at 3.0% over the one month LIBOR index and matures on June 2019.

 

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 September 30, 2014, 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 September 30, 2014 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 three months ended September 30, 2014 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.

 

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Table of Contents

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		-		Interactive Data Files

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: November 14, 2014						/s/ Donald L. Allen
						Donald L. Allen
						Vice President and Treasurer
						(Principal Financial and
						Accounting Officer)

 

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