Salamander Innisbrook, LLC - FORM 10-K/A

Salamander Innisbrook, LLC - FORM 10-K/A - April 5, 2011

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EX-31.1 - CERT - Salamander Innisbrook, LLC	dex311.htm
EX-31.2 - CERT - Salamander Innisbrook, LLC	dex312.htm
EX-32.1 - CERT - Salamander Innisbrook, LLC	dex321.htm
EX-32.2 - CERT - Salamander Innisbrook, LLC	dex322.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

Commission File No. 333-147447

SALAMANDER INNISBROOK, LLC


State of Organization: Florida		IRS Employer Identification No. 26-0442888

36750 US 19 N., Innisbrook, FL 34684

Telephone Number: (727) 942-2000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

589 Condominium Rental Pool Units

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act

Yes ¨ No x

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 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. x

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ¨ No x

No established market exists for the Registrant’s membership interests, so there is no market value for such membership interests. There are no membership interests held by non-affiliates as of December 31, 2010.

Issuer has no common stock subject to this report.

Explanatory Note

This amendment is being filed due to a key punch error on page 26, Innisbrook Rental Pool Lease Operation, Balance Sheets – Distribution Fund. A digit was inadvertently omitted.

Salamander Innisbrook, LLC

Annual Report on Form 10-K for the Year Ended December 31, 2010

TABLE OF CONTENTS


PART I

	ITEM 1.	BUSINESS	4

	ITEM 1A.	RISK FACTORS	5

	ITEM 1B.	UNRESOLVED STAFF COMMENTS	5

	ITEM 2.	PROPERTIES	6

	ITEM 3.	LEGAL PROCEEDINGS	6

	ITEM 4.	REMOVED AND RESERVED

PART II

	ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	6

	ITEM 6.	SELECTED FINANCIAL DATA	6

	ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	6

	ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	9

	ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	9

	ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	9

	ITEM 9A.	CONTROLS AND PROCEDURES	9

	ITEM 9B.	OTHER INFORMATION	10

PART III

	ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	10

	ITEM 11.	EXECUTIVE COMPENSATION	11

	ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	11

	ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	11

	ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	11

PART IV

	ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	12

SIGNATURES			34

Cautionary Note Regarding Forward-Looking Statements

The following report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that predict or describe future events or trends and that do not relate solely to historical matters. All of our projections in this annual report are forward-looking statements. You can generally identify forward-looking statements as statements containing the words “appears,” “believe,” “expect,” “hope,” “may,” “will,” “anticipate,” “intend,” “estimate,” “project,” “assume” or other similar expressions. Certain factors that might cause such a difference include the following: changes in general economic conditions; including changes that may influence group conference and guests’ vacation plans; changes in travel patterns; changes in consumer tastes in destinations or accommodations for group conferences and vacations; changes in Rental Pool participation by the current condominium owners; our ability to continue to operate the Innisbrook Resort and Golf Club, or the “Resort” under our management contracts; and the resale of condominiums to owners who elect neither to participate in the Rental Pool nor to become members of the Resort. You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known (and unknown) risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the limited information currently available to us and speak only as of the date on which this report was filed with the Securities Exchange Commission. Our continued internet posting or subsequent distribution of this dated report does not imply continued affirmation of the forward-looking statements included in it. We undertake no obligation, and we expressly disclaim any obligation, to issue any updates to our forward-looking statements, even if subsequent events cause our expectations to change regarding the matters discussed in those statements. Future events are inherently uncertain. Moreover, it is particularly difficult to predict business activity levels at the Resort with any certainty. Accordingly, our projections in this annual report are subject to particularly high uncertainty. Our projections should not be regarded as legal promises, representations or warranties of any kind whatsoever. Over time, our actual results, performance or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such differences might be significant and harmful to your interests.

PART I

ITEM 1.

BUSINESS

Background

On June 14, 2007, Salamander Innisbrook, LLC (the “Company”, “we”, “us”, or “our”), was organized under the laws of the state of Florida. On July 16, 2007, Salamander Innisbrook, LLC, together with its affiliates, Salamander Innisbrook Securities, LLC and Salamander Innisbrook Condominium, LLC (collectively, the “Buyer”), completed the purchase of the Innisbrook Resort and Golf Club (the “Resort”) and all of the equity interest in Golf Host Securities, Inc. from Golf Trust of America, Inc. and its subsidiaries and affiliates. The Resort is a 72-hole destination golf and conference facility located near Tampa, Florida. The Resort features 1216 condominium rooms, all of which are owned by third parties or affiliates. Approximately 482 condominium owners (representing 589 units) participate in a rental pool (the “Rental Pool”) operated by the Company.

Rental Pool Condominiums

Condominium ownership is a realty subdivision in which the individual “lots” are deemed apartment units. Instead of owning a plot of ground, the condominium owners own the space where their condominium units are located. This leaves substantial properties in interest which are not individually owned, such as the underlying land, driveways, parking lots, building foundations, exterior walls and roofs, garden areas and utility lines. These areas are termed common property or common elements. Each condominium owner has an undivided fractional interest in the common property.

The condominium owners at the Resort have established an Association of Condominium Owners (the “Association”), to administer and maintain this common property and to conduct the business of the condominium owners. In particular, the Association is responsible for maintaining insurance on the real property, upkeep of the structures, maintenance of the grounds, electricity for the common areas, water/sewer and security services. The Association assesses fees to defray these expenses and to establish necessary reserves. An assessment, if not timely paid, may result in a lien being placed upon the unit of a delinquent condominium owner. Each condominium owner must pay ad valorem property taxes, contents insurance, interior maintenance and to such other matters independent of the other unit owners. These expenses are incurred by each owner of condominium units whether or not the unit participates in the Rental Pool at the Resort. With respect to governing the affairs of the Association, the participating condominium owners are accorded one vote per condominium unit owned. State statutes also impact the way in which the Association’s affairs are administered.

Markets and Marketing

The Resort is located in Innisbrook, Florida and is a destination golf resort that appeals to group convention business and leisure travelers within all market segments. The Resort caters to corporate meeting planners and sports enthusiasts within a variety of industries, the majority of which are located in the central and eastern United States. The Resort markets through most of the typical channels utilizing e-commerce, print media, 3^rd party representation firms, travel agents and wholesalers.

The Resort provides condominium accommodations, four dining locations, room service, over 65,000 square feet of banquet and catering space, 72 holes of golf, golf instruction, a full service spa and fitness center, tennis center and recreational entertainment to members, business meeting attendees, group meeting guests, leisure guests and their families. The Resort offers room-only rates, golf packages, and family vacation packages. Larger golf or conference groups typically involve contractual agreements. Accordingly, we do not expect that the loss of a single conference or even a few conferences of average size would have a significant adverse impact on our business taken as a whole.

The Resort’s accommodations are condominium units that are owned by third parties or affiliates of the Company. These units are sold by registered securities brokers, including Golf Host Securities, Inc., an affiliate of the Company.

Seasonality

The Florida resort industry is seasonal in nature and historically, the Resort’s business levels are stronger in the winter and spring months as guests come from the northeast and other colder regions to enjoy the warm weather. In contrast, there is a decline in business levels during the summer months as the hot summer weather makes Florida less appealing for group golf outings and vacation destination golfers. The Resort uses seasonal pricing (peak, shoulder and off-peak) to maximize revenues. The Resort may also experience reduced bookings as a result of hurricane-related concerns.

Intellectual Property

The Resort has registered service marks, and domain names that are necessary for the Resort to effectively conduct business. Service marks include: “Innisbrook” # 955489, registered March 13, 1973, and the Innisbrook shield logo #955488 registered March 13, 1973. The Company’s operation of the Resort is not considered to be dependent upon the availability of raw materials, nor the effect of the duration of patents, licenses, franchises or concessions held.

Competition

Conveniently located near the Florida Gulf Coast and Tampa International Airport, this full-service Resort is located within 900 acres of a dramatically landscaped setting. The Resort competes using a unique price/value strategy through its offering of spacious accommodations, high levels of customer service, award-winning golf, and one of the largest conference facilities in the southeast. Competition within the conference-related group segment of the industry is also quite competitive and typically involves similar properties within the state of Florida and throughout the southeastern United States. The Resort’s major competitors, our competitive set, are other golf and conference-oriented resorts in the southeast.

Research and Development

We have no research and development expenses.

Environmental Matters

Operations of the golf courses at the Resort involve the use and storage of various hazardous materials such as herbicides, pesticides, fertilizers, motor oils and gasoline. Under various federal, state and local laws, ordinances and regulations, an owner or operator of real property may become liable for the costs of removal or remediation of certain hazardous substances released on or in its property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of hazardous substances. As of December 31, 2010, there were no violations imposed against the Company.

Government Regulation

The Resort, like most businesses, is subject to the Americans with Disabilities Act of 1990. The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires public facilities such as clubhouses and recreation areas to be accessible to people with disabilities. Noncompliance could result in imposition of fines or an award of damages to private litigants. We are responsible for compliance costs incurred at the Resort.

Employees

As of December 31, 2010, there were approximately 573 employees, with approximately 354 full time and approximately 219 part time or casual laborers who are engaged as needed.

Code of Ethics

See Part III, Item 10 for discussion of our Code of Business Conduct.

ITEM 1A.

RISK FACTORS

Not required for Smaller Reporting Company.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

The Resort is situated on approximately 900 acres of land located in the northern portion of Pinellas County, Florida, near the Gulf of Mexico. It is approximately 9 miles north of Clearwater and approximately 20 miles west of Tampa. There are 938 condominium units, 36 of which are strictly residential, with the balance eligible for Rental Pool participation. Of the 902 remaining eligible units, 470, on average, participate in the Rental Pool on a year-to-year basis. See additional discussion in Item 1 under the caption “Rental Pool Condominiums.” These condominium units are leased by us from the condominium owners and used as hotel accommodations for the Resort. Salamander Innisbrook Condominium, LLC, owns three condominium units, two of which participate in the rental pool in the same fashion as all other Rental Pool participants. Approximately 20% of the units have lockout master bedroom units, which allow the rental of the condominium unit as two hotel rooms. As a result of the potential use of lockout master bedroom units, the total number of rooms at the resort is 1216 and the average of 470 units participating in the Rental Pool at any one time is equivalent to approximately 589 hotel rooms. The Resort complex includes 72 holes of golf; practice ranges; three clubhouses with retail, golf, and food and beverage outlets; three conference and exhibit buildings; a full service spa and fitness center; six swimming pools including a themed water attraction; a recreation facility; a tennis facility and numerous administrative and support structures. These amenities are owned by the Company and have undergone substantial renovation and improvements during 2008 and 2009.

ITEM 3.

LEGAL PROCEEDINGS

In the normal course of our operations, we are subject to claims and lawsuits. We do not believe that the ultimate resolution of such matters will materially impair operations or have an adverse effect on our financial position and results of operations.

ITEM 4.

REMOVED AND RESERVED

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

We are a single member limited liability company and do not have any stock. Our membership interests are not publicly traded.

There are a total of 902 deeded condominium units allowing Rental Pool participation by their owners, of which three are owned by our affiliate, Salamander Innisbrook Condominium, LLC.

The condominium units sold by Golf Host Securities, Inc, which allow Rental Pool participation, are deemed to be securities because of the Rental Pool feature. These units are referenced in this report as Rental Pool securities. While the Rental Pool securities are deemed securities pursuant to the Securities Act of 1933, as amended, there is no market for such securities other than the normal real estate market.

Because the Rental Pool securities are real estate, no dividends have been paid or will be paid to their owners. However, the Rental Pool lease agreements provide that the Rental Pool participants are entitled to a contractual distribution paid quarterly in exchange for our right to use their condominium units in the Rental Pool.

ITEM 6.

SELECTED FINANCIAL DATA

Not required for Smaller Reporting Company.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Salamander Innisbrook, LLC (the “Company”, “we”, “us”, or “our”), was formed June 14, 2007 by Salamander Farms, LLC (the “Member”). The Company, together with its affiliates, Salamander Innisbrook Securities, LLC and Salamander Innisbrook Condominium, LLC, purchased the Innisbrook Resort and Golf Club (the “Resort”) in Innisbrook, Florida, on July 16, 2007. The Resort is a 72-hole destination golf and conference facilities, with a private club component.

Critical Accounting Policies and Estimates

The following accounting policies are considered critical by our management. These and other accounting policies require that estimates be made based on assumptions and judgment, which affect revenues, expenses, assets, liabilities and disclosure of contingencies in our financial statements. These estimates and assumptions are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. However, actual results may differ from these estimates under different and/or future circumstances

Revenue Recognition

Our revenue is derived from a variety of sources including, but not limited to, hotel operations, food and beverage operations, retail sales and golf course operations. With the exception of membership dues and initiation fees, all revenues are recognized as products are delivered or services are performed. The membership dues are recognized ratably over the applicable period (three months to a year depending on type of membership). The membership initiation fees at the Resort are nonrefundable and are initially recorded to deferred revenue and amortized over the average life of a membership which, based on historical information, is deemed to be ten years for full golf memberships and five years for resort and executive golf memberships.

Intangible Assets

We evaluate intangible assets for impairment annually or if a significant event occurs or circumstances indicate that the assets may not be recoverable. Factors we consider important, and which could indicate impairment, include the following: (i) significant underperformance relative to historical or projected future operating results; (ii) significant changes in the manner of our use of the acquired assets or the strategy for our overall business; and (iii) significant negative industry or economic trends.

We place our intangible assets in the following categories: (i) the water contract; (ii) club memberships; (iii) the trademark and the trade name; (iv) the Rental Pool; and (v) guest bookings. The valuation of the water contract is based on the projected annual savings associated with having this contract. The water contract has an indefinite life. The valuation of the trademark and trade name is derived from the residual revenue stream from the Resort revenues that is attributed to the Innisbrook trade name. We attribute an indefinite life to the trademark and trade name. The valuation of the Rental Pool is based on estimates of revenue derived by us from our Rental Pool operations. As of December 31, 2010, our guest bookings intangible asset is fully amortized.

During the fourth quarter of 2010, we reviewed our intangible assets, and based on the results, we determined that no impairment of intangible assets existed at December 31, 2010, and there has been no indication of impairment since that date.

Impairment of Other Long-Lived Assets

We review our other long-lived assets for impairment by comparing the carrying values of the assets with their estimated future undiscounted cash flows. In reviewing for impairment of our other long-lived assets, we review the financial performance of the Resort in the aggregate for material variances from our expectations of the Resort’s revenues. If it is determined that an impairment loss has occurred, the loss is recognized during that period. The impairment loss is calculated as the difference between asset carrying values and fair value as determined by discounted cash flow analysis, giving consideration to recent operating performance and pricing trends. At December 31, 2010, we believe the carrying values of our other long-lived assets are recoverable.

Loss Contingencies

We estimate loss contingencies in accordance with FASB ASC 450-20, Loss Contingencies, which states that a loss contingency shall be accrued by a charge to income if both of the following conditions are met: (a) information available before the financial statements are issued or are available to be issued indicates that it is probable that a liability had been incurred at the date of the financial statements and (b) the amount of loss can be reasonably estimated. There have been no adjustments for loss contingencies to the accompanying financial statements as of and for the year ended December 31, 2010.

Results of Operations


	Year Ended December 31,
	2010					2009
Resort revenues	$	32,140,525		100.0	%	$	33,110,664		100.0	%
Costs and Expenses :
Operating costs and expenses		14,520,185		45.2	%		15,893,778		48.0	%
General and administrative		17,786,049		55.3	%		20,060,488		60.6	%
Depreciation and amortization		4,090,334		12.7	%		5,161,280		15.6	%

Total costs and expenses		36,396,568		113.2	%		41,115,546		124.2	%
Loss before Interest		(4,256,043	)	-13.2	%		(8,004,882	)	-24.2	%
Interest expense, net		(36,140	)	-0.1	%		(100,866	)	-0.3	%

Net loss	$	(4,292,183	)	-13.4	%	$	(8,105,748	)	-24.5	%

Resort revenues totaled $32,140,525 for the year ended December 31, 2010, a decline of 3% from the prior year. Expenses were well controlled throughout 2010; operating costs and expenses fell 9% while general and administrative expenses dropped 11% when compared to 2009. Costs and expenses, which include depreciation and amortization, were $36,396,568 during 2010 as compared to $41,115,546 in 2009. Amortization expense of intangibles decreased more than $1,229,000 as compared to 2009 as a result of the extension of the term of the Rental Pool MLA, which extended the life of this intangible asset and which will be beneficial to the on-going, effective operation of the Resort. The costs and expense savings of $4,718,978 or 11.5%, was a direct result of focused profit retention efforts and improved operating efficiencies coupled with a decline in the intangible amortization. The Resort experienced a 47% positive change in the bottom line as the net loss (including depreciation, amortization and interest) was $4,292,183 in 2010 versus the net loss of $8,105,748 in 2009.

Legal Entity Structure

Salamander Innisbrook, LLC is a single member limited liability company with Salamander Farms, LLC as the sole member.

Income Tax Status

We have not elected to be taxed as a corporation. As a result, the single member is responsible for income taxes on our operating income/losses. Therefore, no provision or liability for federal or state income taxes has been included in our financial statements presented in this report.

We have adopted the provisions of FASB ASC 740-10, Accounting for Uncertainty in Income Taxes . Under this topic, we are required to evaluate each of our tax positions to determine if they are more likely than not to be sustained if the taxing authority examines the respective position. A tax position includes an entity’s tax status, including its status as a pass through entity, and the decision not to file a tax return. We have evaluated each of our tax positions and have determined that no provision or liability for income taxes is necessary.

We evaluate the validity of our conclusions regarding uncertain income tax positions on an annual basis to determine if facts or circumstances have arisen that might cause us to change our judgment regarding the likelihood of a tax position’s sustainability under examination. We file income tax returns in the U.S. federal jurisdiction and the State of Virginia. We remain subject to examination by tax authorities for all years since our inception on June 14, 2007.

Liquidity and Capital Resources

Operating losses in 2010 and 2009 were funded by contributions from our sole member. Future operating costs and planned expenditures for capital additions and improvements are expected to be adequately funded by cash generated by the Resort’s operations, funding from our sole member or affiliates’ current cash reserves.

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

Environmental Matters

None

Off Balance Sheet Arrangements

As of December 31, 2010, we have no unconsolidated subsidiaries.

We do not have any relationships with unconsolidated entities or unconsolidated financial partnerships of the type often referenced as structured finance or special purpose entities, i.e., unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, we have not guaranteed any obligations of unconsolidated entities nor do we have any commitment or intent to provide additional funding to any such entities. Accordingly, we believe we are not materially exposed to any market, credit, liquidity or financing risk that could arise if we had engaged in such relationships.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not have significant market risk with respect to foreign currency exchanges or other market rates.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Financial Statements and Supplementary Data starting on page 13.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A

(T) CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 15d—15 under the Securities Exchange Act of 1934, as amended) that are designed to provide reasonable assurance that information required to be reported in the Company’s SEC filings is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of December 31, 2010, under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures and concluded that our disclosure controls and procedures were effective.

Management’s Report Internal Controls Over Financial Reporting

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2010 based on the framework stated by the Committee of Sponsoring Organizations of the Treadway Commission.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on the assessment, management concluded that, as of December 31, 2010, the Company’s internal controls over financial reporting were effective.

This annual report does not include an attestation report of the Company’s registered certified public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered certified public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the quarter ended December 31, 2010, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION

None.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Set forth below is information about our executive officers:


Name	Age	Position
Prem Devadas	53	Manager
Dale Pelletier	51	CFO, Salamander Hospitality LLC

Biographical Information

Prem Devadas, Manager, is a 27-year veteran of the hospitality industry. After ten years with The Potomac Hotel Group in Washington, DC, he left the Regional Director of Operations position to manage the lodging portfolio for CCA Industries whose holdings include The Jefferson Hotel in Richmond, VA, The Hermitage Hotel in Nashville, TN and Kiawah Island Resort near Charleston, SC. As Managing Director, he re-positioned the Jefferson Hotel and the Hermitage Hotel through extensive renovations and achieved Mobil 5-Star and AAA Five-Diamond awards for the respective properties. At Kiawah Island he directed the development and successful opening of the Sanctuary at Kiawah Island, the new 255 room ultra luxury hotel opened in August, 2004.

Dale Pelletier, Chief Financial Officer, is a thirty-two year veteran of the hospitality industry. Mr. Pelletier oversees the company’s financial, accounting, tax, information systems, treasury, planning and reporting activities. His extensive experience with over seventy hotels includes full service, limited service, all suites, resorts and condominium hotels both at the property and corporate levels. He also served as Chief Financial Officer for MEI Hotels, a hotel development, ownership, management and investment group. He was responsible for all financial activities for the company’s managed and asset managed hotels, construction and development projects and three private equity funds. Prior to MEI, Mr. Pelletier was Chief Financial Officer for the US operations of City Hotels, an international hotel and airline company listed on the Brussels stock exchange, with hotels in the US and Europe.

Directors and Officers Insurance

Salamander Innisbrook, LLC maintains directors and officers liability insurance that insures our officers, managers and committee members from claims arising out of an alleged wrongful act by such persons while acting as executive officers, managers or committee members of our company, and it insures our company to the extent that we have indemnified our officers, managers and committee members for such loss.

Indemnification

Our organizational documents provide that we shall indemnify our officers, committee members and managers against certain liabilities to the fullest extent permitted under applicable law. Our organizational documents also provide that our officers, committee members and managers shall be exculpated from monetary damages to us to the fullest extent permitted under applicable law.

Code of Ethics

The Code of Business Conduct applies to all of our officers and other employees. Salamander Innisbrook, LLC’s Code of Business conduct is filed as Exhibit 14.1 to its Annual Report on Form 10-K. You may also obtain a free copy of our Code of Ethics by writing to our attention at 36750 US Highway 19 North, Innisbrook, FL 34684.

ITEM 11.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following tables set forth the remuneration paid, distributed or accrued by us during the year ended December 31, 2010 to our executive officers.


Name and Principal Position		Salary and Commission		Bonus		Other Annual Compensation		All Other Compensation
Prem Devadas	2010	$	—	$	—	$	—	$	—
Manager (1)	2009	$	—	$	—	$	—	$	—
Dale Pelletier	2010	$	—	$	—	$	—	$	—
Chief Financial Officer (1)	2009	$	—	$	—	$	—	$	—

Messrs. Devadas and Pelletier are not compensated directly by us for services as our executive officers; however, they receive compensation from an affiliate of the single member, to whom we pay management fees, for service as its executive officers.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

We are wholly owned by Salamander Farms, LLC which has sole voting and dispositive power over our interests.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

(a)	Transactions with Management and Others

None.

(b)	Certain Business Relationships

Pursuant to the terms of the Master Lease Agreement, the Rental Pool paid us approximately $500,000 and $488,000 as reimbursement for maintenance and housekeeping labor, use of telephone lines, and other supplies during the years ended December 31, 2010 and 2009, respectively.

Salamander Innisbrook Condominium, LLC, a wholly owned subsidiary of Salamander Farms, LLC, owns three condominiums. Two of the condominiums participate in the Rental Pool under the MLA in the same manner as all other Rental Pool participants.

At December 31, 2010 and 2009, the Company had amounts due from affiliates of $80,507 and $65,939 respectively, which are due on demand.

Golf Host Securities, Inc., an on-site real estate broker/dealer for the resale of the Resort’s condominium units owned by Salamander Farms, LLC, paid us approximately $31,000 in each of the years ended December 31, 2010 and 2009 for rent and related accounting services.

(c)	Indebtedness of Management

None.

(d)	Transactions with Promoters

Not applicable.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Kingery & Crouse, PA served as our independent registered accounting firm for the years ended December 31, 2010 and 2009. The following fees were incurred for Kingery & Crouse, PA services related to our years ended December 31, 2010 and 2009.

Audit Fees: $67,601 and $68,250 for the fiscal years ended December 31, 2010 and 2009 for professional services rendered for the audit of our annual financial statements, review of the financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the auditors in connection with statutory filings or engagements for those fiscal years.

Audit-Related Fees: None.

Tax Fees: None.

All other fees: None.

PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Financial Statements and Schedules

The financial statements and exhibits filed as part of this annual report on Form 10-K are listed on pages 13 and 35, and are incorporated herein by reference.

INDEX TO FINANCIAL STATEMENTS


	Page
Financial Statements of Salamander Innisbrook, LLC
Report of Independent Registered Certified Public Accounting Firm		14
Balance Sheets as of December 31, 2010 and 2009		15
Statements of Operations and Changes in Member’s Equity for the years ended December 31, 2010 and 2009		16
Statements of Cash Flows for the years ended December 31, 2010 and 2009		17
Notes to Financial Statements		18

Introduction to Financial Statements of the Rental Pool Lease Operation—Historical Summary		24
Financial Statements of the Rental Pool Lease Operation
Report of Independent Registered Certified Public Accounting Firm		25
Balance Sheets—Distribution Fund as of December 31, 2010 and 2009		26
Balance Sheets—Maintenance Escrow Fund as of December 31, 2010 and 2009		27
Statements of Operations—Distribution Fund for the years ended December 31, 2010 and 2009		28
Statements of Changes in Participants’ Fund Balances—Distribution Fund for the years ended December 31, 2010 and 2009		29
Statements of Changes in Participants’ Fund Balances—Maintenance Escrow Fund for the years ended December 31, 2010 and 2009		30
Notes to Financial Statements		31

REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

To the Sole Member and Manager of Salamander Innisbrook, LLC:

We have audited the accompanying balance sheets of Salamander Innisbrook, LLC (the “Company”) as of December 31, 2010 and 2009, and the related statements of operations and changes in member’s equity, and of cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Kingery & Crouse, P.A.

Certified Public Accountants

Tampa, FL

April 5, 2011

SALAMANDER INNISBROOK, LLC

BALANCE SHEETS

December 31, 2010 and 2009


	2010		2009
Assets
Current assets:
Cash	$	1,168,250	$	997,652
Accounts receivable, net		1,812,522		2,015,986
Inventories and supplies		850,562		1,003,806
Prepaid expenses and other		806,701		731,193
Due from affiliates		80,507		65,939

Total current assets		4,718,542		4,814,576

Property, buildings and equipment, net		42,627,245		44,882,478
Intangibles, net		7,547,292		9,235,086
Deposits and other assets		270,115		317,240

Total assets	$	55,163,194	$	59,249,380

Liabilities and Member’s Equity
Current liabilities:
Accounts payable	$	947,478	$	942,938
Accrued liabilities		1,862,232		1,852,263
Deferred revenue		2,579,403		2,299,725
Current portion of refurbishment obligation		27,761		22,885
Current portion of capital lease obligations		116,387		108,137

Total current liabilities		5,533,261		5,225,948

Deferred revenue		1,170,612		1,062,543
Refurbishment obligation, net of current portion		35,365		62,935
Capital lease obligations, net of current portion		20,431		136,818

Total liabilities		6,759,669		6,488,244

Member’s equity		48,403,525		52,761,136

Total liabilities and member’s equity	$	55,163,194	$	59,249,380

See notes to financial statements.

SALAMANDER INNISBROOK, LLC

STATEMENTS OF OPERATIONS AND CHANGES IN MEMBER’S EQUITY

For the Years Ended December 31, 2010 and 2009


`	2010			2009
Resort revenues	$	32,140,525		$	33,110,664

Costs and expenses:
Hotel		3,262,313			3,849,824
Food and beverage		7,015,007			7,190,936
Golf		2,533,361			2,981,312
Other		1,709,504			1,871,706
General and administrative		17,786,049			20,060,488
Depreciation and amortization		4,090,334			5,161,280

Total costs and expenses		36,396,568			41,115,546

Loss before interest		(4,256,043	)		(8,004,882	)

Interest expense, net		(36,140	)		(100,866	)

Net loss		(4,292,183	)		(8,105,748	)
Member’s equity, beginning of year		52,761,136			49,156,244
Member contributions (distributions)		(65,428	)		11,710,640

Member’s equity, end of year	$	48,403,525		$	52,761,136

See notes to financial statements.

SALAMANDER INNISBROOK, LLC

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2010 and 2009


	2010			2009
Cash flows from operating activities:
Net loss	$	(4,292,183	)	$	(8,105,748	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Provision for bad debt		9,000			113,850
Depreciation and amortization		4,090,334			5,161,004
Loss on disposal of assets		13,068			974,276
Net increase (decrease) in cash flows from changes in:
Accounts receivable		194,464			864,720
Inventories and supplies		153,244			58,171
Prepaid expenses and other		(75,508	)		(646,013	)
Due (to) from affiliates		114,097			(154,454	)
Deposits and other assets		47,125			105,661
Accounts payable		4,540			(1,262,544	)
Accrued liabilities		9,969			39,822
Deferred revenue		387,747			(659,253	)

Net cash provided by (used in) operating activities		655,897			(3,510,508	)

Cash flows from investing activities:
Purchases of property and equipment		(294,290	)		(5,840,941	)
Proceeds from sale of property and equipment		5,250			—

Net cash used in investing activities		(289,040	)		(5,840,941	)

Cash flows from financing activities:
Member contributions (distributions)		(65,428	)		11,710,640
Repayment of capital lease obligations		(108,137	)		(204,507	)
Repayment of refurbishment obligation		(22,694	)		(2,238,128	)

Net cash provided by (used in) financing activities		(196,259	)		9,268,005

Net increase (decrease) in cash		170,598			(83,444	)
Cash, beginning of year		997,652			1,081,096

Cash, end of year	$	1,168,250		$	997,652

Supplemental disclosure of cash flow information:
Cash paid for interest	$	36,140		$	122,535

Supplemental disclosure of non cash investing and financing activities:

Property and equipment of approximately $128,600 was transferred to an affiliated entity during 2010, resulting in an increase in amounts due from affiliates.

See notes to financial statements.

SALAMANDER INNISBROOK, LLC

NOTES TO FINANCIAL STATEMENTS

1. Nature of Business

On July 16, 2007, Salamander Innisbrook, LLC (the “Company”, “we”, “us”, or “our”), together with its affiliates, Salamander Innisbrook Securities, LLC, and Salamander Innisbrook Condominium, LLC (collectively, the “Buyer”) completed the purchase of the Innisbrook Resort and Golf Club (the “Resort”) and all of the equity interest in Golf Host Securities, Inc.

The Company assumed control and operation of the Rental Pool Lease Operations (the “Rental Pool”) which is a securitized pool of condominiums owned by participating condominium owners (the “Participating Owners”) and rented as hotel rooms to guests of the Resort; an average of 470 units or 589 hotel rooms participate at any given time. The Rental Pool obligated the Company to make quarterly distributions of a percentage of room revenues under the Amended and Restated Innisbrook Rental Pool Master Lease Agreement, dated January 1, 2004 (the “Master Lease” or “MLA”). As described in Note 7, the MLA also entitled Participating Owners to 50% reimbursement of the refurbishment costs of their units during Phase I through IV and 25% for Phase V refurbishments (the “Refurbishment Program”). Other resort facilities include four 18-hole golf courses, four restaurants, three convention facilities, a health spa, fitness center, tennis and recreation facilities, themed waterpark and five swimming pools.

2. Summary of Significant Accounting Policies

FASB Accounting Standards Codification – In June 2009, the Financial Accounting Standards Board (“FASB”) issued the FASB Accounting Standards Codification (the “Codification”), which replaced all existing FASB accounting and reporting standards. Effective for financial statements for interim and annual periods ending after September 15, 2009, the Codification is the single source of authoritative U.S. generally accepted accounting principles (GAAP) for non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants and are referenced in the Codification. References to the Codification are identified by their Accounting Standards Codification (“ASC”) Topic number and, as appropriate, the Subtopic, Section and Subsection number. Effective July 1, 2009, changes to authoritative U.S. GAAP are communicated through Accounting Standards Updates (“ASU”). Implementation of the Codification had no effect on the Company’s financial statements, except for changes in the manner in which authoritative guidance is now referenced.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates that are critical to the accompanying financial statements include our belief that long-lived assets, including intangibles, are recoverable, our estimates of the average lives of memberships from which we base our revenue recognition are reasonable, and our belief that the matter discussed in Note 9 will not result in a significant loss to us. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period they are determined to be necessary. It is at least reasonably possible that our estimates could change in the near term. Future results could be materially affected if actual results differ from these estimates and assumptions.

Financial Instruments and Concentrations of Credit Risk – We believe the carrying values of cash, accounts receivable, amounts due from affiliates, accounts payable and accrued liabilities approximate their fair values given their short term nature. The carrying amount of our long-term obligations, including our refurbishment and capital lease obligations, approximate their fair value because they have been recorded at their net present values considering relevant risk factors.

Financial instruments which potentially subject us to significant concentrations of credit risk consist primarily of cash and accounts receivable. We continually monitor our positions with, and the credit quality of, the financial institutions in which we do business. As of December 31, 2010 and 2009, and periodically throughout such years, balances in various operating bank accounts may at times have exceeded federally insured limits. We have not experienced any losses in such accounts.

In addition, we frequently perform periodic credit evaluations of our customers’ financial condition and generally do not require collateral. Although due dates of receivables vary based on contract terms, credit losses have been within management’s estimates in determining the level of allowance for doubtful accounts. Overall financial strategies are reviewed periodically.

Liquidity – We believe that our cash on hand, cash available from operations and funding from our sole member or affiliates’ current cash reserves will be sufficient to fund our operations for the foreseeable future.

Cash and Cash Equivalents – For purposes of the Statement of Cash Flows, all short-term highly liquid instruments purchased with an original maturity of three months or less are considered to be cash equivalents.

Revenue Recognition and Deferred Revenue – Revenue from rooms, green fees, food and beverage sales and other merchandise sales are generally recognized as products are delivered or services are performed. Membership dues and annual fees are recognized ratably over the applicable period, The following table sets forth the percentage of the Resort’s total revenues attributable to the categories listed for the years ended December 31, 2010 and 2009.


	2010			2009
Revenues
Rental pool revenues		24.5	%		25.1	%
Resort facilities and other resort revenue		75.5	%		74.9	%

Total		100.0	%		100.0	%

The membership initiation fees at the Resort are nonrefundable and are initially recorded when received as deferred revenue and amortized over the average life of a membership which, based on historical information, is deemed to be ten years for full golf members and five years for resort and executive memberships.

Accounts Receivable, net – Accounts receivable represent amounts due from our membership, Resort guests and companies or individuals that held conferences or group stays at the Resort, net of the allowance for doubtful accounts. The Company performs credit evaluations of its membership’s financial condition. Companies with a recent prior direct billing positive history with the Resort are granted credit for billing. If companies have not been to the Resort within the past two years, an updated credit evaluation is conducted. Terms are negotiable by group contract, but invoices are typically due 30 days from the receipt of invoice.

We review accounts receivable monthly to determine if any receivables are uncollectible. Any receivable considered to be doubtful is included in the allowance for doubtful accounts. The balance in the allowance for doubtful accounts was $91,519 and $84,936 as of December 31, 2010 and 2009, respectively. After all attempts to collect the receivable have failed, it is our policy to write-off the receivable against the allowance.

Inventories and Supplies – Inventories and supplies are recorded at the lower of cost, on a first-in, first-out basis, or market.

Property, Buildings and Equipment, net – Property, buildings and equipment are stated at cost less accumulated depreciation. It is our policy to capitalize an asset purchase of $1,000 or more with an estimated useful life of at least three years. Depreciation is recorded using the straight line basis over the estimated useful lives of the assets. For capital lease assets, depreciation is recorded over the lesser of the lease term or estimated useful life. Estimated useful lives are presented in the following table:


Category		Average Lives (in Years)
Buildings		40
Land improvements		20
Furniture, fixtures and equipment		3 to 10
Assets recorded under capital leases		3 to 4

Costs of maintenance and repairs of property and equipment used in operations are charged to expense as incurred, while renewals and betterments are capitalized. When property and equipment are replaced, retired or otherwise disposed of, the costs are deducted from the asset and accumulated depreciation accounts. Gains or losses on sales or retirements of equipment are recorded in operating income.

Impairment of Long-Lived Assets – The Company annually reviews its long-lived assets for impairment by comparing the carrying values of the assets with their estimated future undiscounted cash flows. If it is determined that an impairment loss has occurred, the loss is recognized during that period. The impairment loss is calculated as the difference between asset carrying values and fair value as determined by prices of similar items and other valuation techniques, giving consideration to recent operating performance and pricing trends. There were no impairment losses related to long-lived assets for the periods included herein.

Intangibles – We evaluate intangible assets for impairment annually or earlier if a significant event occurs or circumstances indicate that the assets may not be recoverable. Factors the Company considers important, which could indicate impairment, include the following: (1) significant under-performance relative to historical or projected future operating results; (2) significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business; and (3) significant negative industry or economic trends. During the fourth quarter of 2010, we completed our annual intangible impairment assessment, and based on the results, we determined that no impairment of intangible assets existed at December 31, 2010.

Impairment of Other Long-Lived Assets – We review our other long-lived assets for impairment by comparing the carrying values of the assets with their estimated future undiscounted cash flows. In reviewing for impairment of our other long lived assets, we review the financial performance of the Resort in the aggregate for material variances from our expectations of the Resort’s revenues. If it is determined that an impairment loss has occurred, the loss is recognized during that period. The impairment loss is calculated as the difference between asset carrying values and fair value as determined by discounted cash flow analysis, giving consideration to recent operating performance and pricing trends. At December 31, 2010, we believe the carrying values of our other long lived assets are recoverable.

Advertising – Advertising costs are expensed as incurred and amounted to $389,536 and $575,396 for the years ended December 31, 2010 and 2009, respectively.

Leases – Leases, which transfer substantially all of the benefits and risks of ownership of property, are classified as capital leases. Assets and liabilities are recorded at amounts equal to the present value of the minimum lease payments at the beginning of the lease term. Interest expense relating to the lease liabilities is recorded to affect constant rates of interest over the terms of the leases.

Leases, which do not transfer substantially all of the benefits and risks of ownership of property, are classified as operating leases, and the related rentals are charged to expense as incurred.

Reclassifications – Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

Income Taxes – The Company is a single-member limited liability company. We have not elected to be taxed as a corporation; therefore, no provision or liability for federal or state income taxes has been included in the accompanying financial statements.

We have adopted the provisions of FASB ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this Topic, we are required to evaluate each of our tax positions to determine if they are more likely than not to be sustained if the taxing authority examines the respective position. A tax position includes an entity’s tax status, including its status as a pass through entity, and the decision not to file a tax return. We have evaluated each of our tax positions and have determined that no provision or liability for income taxes is necessary.

Recently Issued Accounting Pronouncements – We have determined that all recently issued accounting standards will not have a material impact on its financial statements, or do not apply to its operations.

3. Accounts Receivable

Accounts receivable consist of the following as of December 31, 2010 and 2009:


	December 31, 2010			December 31, 2009
Trade accounts receivable	$	1,576,821		$	1,703,753
Other receivables		327,220			397,169
Less allowance for bad debts		(91,519	)		(84,936	)

	$	1,812,522		$	2,015,986

Other receivables include related party receivables of $176,630 and $174,722 due from Innisbrook Condominium Association and $32,428 and $36,322 due from Innisbrook Rental Pool Lease Operation at December 31, 2010 and 2009, respectively.

4. Property, Buildings and Equipment

Property, buildings, and equipment consist of the following as of December 31, 2010 and 2009:


	December 31, 2010			December 31, 2009
Land and land improvements	$	16,555,593		$	16,513,191
Buildings		24,948,272			24,956,595
Furniture, fixtures and equipment		7,754,059			7,686,888
Contruction in progress		20,421			—

		49,278,345			49,156,674
Less accumulated depreciation		(6,651,100	)		(4,274,196	)

	$	42,627,245		$	44,882,478

All scheduled major renovations and expansions to the Resort were completed in 2009. Included in furniture, fixtures and equipment is certain equipment, including golf course maintenance equipment and computer equipment, that are recorded under capital leases and that have a net book value at December 31, 2010 and 2009 of $134,674 and $244,973, respectively. The Company disposed of assets having a net book value of $130,161 which were no longer in service. Depreciation expense of $2,402,539 and $2,244,429 was recorded for the years ended December 31, 2010 and 2009, respectively.

Subsequent to the acquisition of the Resort, we entered into various construction contracts in connection with a substantial renovation of the Resort property. The renovations were completed in 2009 and resulted in additional improvements of property, buildings and equipment, all funded through contributions made by the sole member.

5. Intangibles

Intangible assets represent the value of the following contractual relationships acquired in connection with the acquisition of the Resort, which was effective on July 16, 2007 as described in Note 1 and include the following: the trademark and trade name of “Innisbrook”; the Rental Pool; the guest room bookings; the club memberships; and the water contract that provides irrigation water for the golf courses at no charge up to certain specified levels. The intangible assets are being amortized over the specific term or benefit period of each related contract.

As discussed in Note 10, a letter of agreement was entered into on September 10, 2009 extending the term of the Rental Pool MLA an additional two years through December 31, 2013. As a result, we determined that the remaining useful life of the intangible asset derived from the Rental Pool MLA was also extended an additional two years, and effective September 10, 2009, the remaining carrying amount of this intangible asset is being amortized over the extended term and will be fully amortized in December 2013.


		December 31,			December 31,
Intangible Assets	Amortization Period	2010			2009
Water Contract	None since renewable in perpetuity	$	2,030,000		$	2,030,000
Rental Pool	77.5 months		9,481,717			9,481,717
Guest Bookings	36 months		1,378,000			1,378,000
Club Memberships	41.5 months		1,268,000			1,268,000
Trade Name	None since renewable in perpetuity		2,300,000			2,300,000

			16,457,717			16,457,717
Less accumulated amortization			(8,910,425	)		(7,222,631	)

		$	7,547,292		$	9,235,086

Amortization expense amounted to $1,687,795 and $2,916,851 for the years ended December 31, 2010 and 2009, respectively.

Anticipated future amortization expense is summarized in the table below:


Year	Amount
2011	$	1,072,430
2012		1,072,430
2013		1,072,430

	$	3,217,290

6. Accrued Liabilities

Accrued liabilities consist of the following at December 31, 2010 and 2009:


	2010		2009
Rental pool lease distribution payable	$	507,813	$	478,807
Accrued payroll costs		920,676		1,023,840
Other		433,743		349,616

	$	1,862,232	$	1,852,263

7. Other Long-Term Liabilities

Master Lease Refurbishment Obligation

On July 16, 2007, we recorded a liability of $4,734,135 for the refurbishment program pursuant to the Master Lease Agreement, or MLA, of the Rental Pool. This liability represented our obligation to pay to the various participants in the Rental Pool an amount equal to 50% of the cost to refurbish their respective units, and was recorded at the then net present value. As of December 31, 2010, the Master Lease Refurbishment Obligation for units placed into the Rental Pool prior to 2005 was paid in full.

In addition, we agreed to provide a refurbishment reimbursement to the respective condominium owners for units placed into the Rental Pool during 2005. The owners of these units will be paid 25% of their refurbishment investment, with interest at 2.5% per annum. The owners of these units currently receive interest and will receive principal payments beginning in 2008 and ending in 2012 for total principal payments of approximately $89,300.

The corresponding benefit to the Resort from the MLA refurbishment program was included in the valuation of the rental pool intangible asset (see Note 5).

Future payments on the MLA refurbishment program are as follows:


Year	Amount
2011	$	27,761
2012		35,365

	$	63,126

Our obligation to reimburse the Rental Pool Participants for their refurbishment expenses is contingent on the units remaining in the Rental Pool from the time of their refurbishment through the payout period. If the unit does not remain in the Rental Pool during the reimbursement periods discussed above, the owner or successor owner will forfeit any unpaid installments at the time the unit is removed from the Rental Pool.

8. Leases

We lease equipment under capital and operating leases. Lease expense amounted to $442,172 and $362,382 for the years ended December 31, 2010 and 2009, respectively. Future minimum lease payments under leases in excess of one year are as follows:


	Capital			Operating
2011	$	123,963		$	334,344
2012		20,660			—

Subtotal		144,623		$	334,344

Less amount representing interest		(7,805	)

Total	$	136,818

9. Commitments and Contingencies

Contingency

In the normal course of our operations, we are subject to claims and lawsuits. Our former insurance carrier has requested reimbursement of monies from us that they paid in 2010 to settle certain claims asserted against us. We believe the request for reimbursement has no basis and, through our legal counsel, have denied the insurance carrier’s request for reimbursement and we intend to fully defend our position. The outcome of this matter cannot be determined at this time. We believe this matter will not have a material effect on our financial condition and results of operations, and accordingly, there have been no adjustments to the accompanying financial statements as of December 31, 2010 for the effects of this matter.

Employee Benefit Plan

We sponsor a defined contribution retirement plan, which provides retirement benefits for all eligible employees. Employees must fulfill a 90-day service requirement to be eligible to participate in this plan. We currently match one half of the first 6% of the contributions of each employee. We made matching contributions of approximately $165,000 and $146,000 for the years ended December 31, 2010 and 2009, respectively.

10. Rental Pool Operations

Historically, there had been several different Rental pool programs offered to the condominium owners. Effective January 1, 2002, a new Master Lease Agreement (“NMLA”) was offered to all condominium owners. Each condominium owner may elect to participate in the NMLA. If an owner elected to participate in the NMLA, the owner was prohibited from returning to any previous agreement. As of January 1, 2004, all condominium owners participating in the rental pool are participating pursuant to the NMLA. The NMLA provides for Adjusted Gross Revenues, as defined, to be divided 40% to the Innisbrook Rental Pool participants and 60% to us. In addition, we have agreed, as part of the NMLA, to reimburse Rental Pool participants in the NMLA for certain refurbishment costs as described in Note 7. The NMLA was scheduled to expire in 2011, however, on September 10, 2009, a letter of agreement was signed extending the agreement two additional years, expiring December 31, 2013.

11. Related Party Transactions

We paid management fees to an affiliate of approximately $964,100 and $993,400 for the years ended December 31, 2010 and 2009, respectively.

At December 31, 2010 and 2009, the amounts due from affiliates amounted to $80,507 and 65,939 respectively, which are due on demand.

The Innisbrook Rental Pool Lease Operation paid us $500,000 and $488,000 as reimbursement for maintenance and housekeeping labor, use of telephone line and other supplies during the years ended December 31, 2010 and 2009, respectively.

RENTAL POOL LEASE OPERATION—HISTORICAL SUMMARY

The following financial statements of the Innisbrook Rental Pool Lease Operation (the “Rental Pool”) are for the years ended December 31, 2010 and 2009.

The operation of the Rental Pool is tied closely to the Resort operations. The Rental Pool Master Lease Agreements provide for a quarterly distribution of a percentage of the Company’s room revenues to participating condominium owners (“Participants”), as defined in the agreements (see Note 1 of the Rental Pool Lease Operation financial statements). Because the Rental Pool participants share in a percentage of the Company’s room revenues, the condominium units allowing Rental Pool participation are deemed to be securities. However, there is no market for such securities other than the normal real estate market. Since the security is real estate, no dividends have been paid or will be paid.

The Company is a single-member limited liability company, wholly owned by Salamander Farms, LLC. There is no established market for the Company’s membership interests.

REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

To the Member of Salamander Innisbrook, LLC and

the Lessors of the Innisbrook Rental Pool Lease Operation:

We have audited the balance sheets (comprised of the Distribution Fund and the Maintenance Escrow Fund) of the Innisbrook Rental Pool Lease Operation (“Rental Pool”) as of December 31, 2010 and 2009, and the related statements of operations and changes in participants’ fund balances for the years then ended. These financial statements are the responsibility of the Rental Pool’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Rental Pool is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Rental Pool’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, financial statements referred to above present fairly, in all material respects, the financial position of the Innisbrook Rental Pool Lease Operation at December 31, 2010 and 2009, and the results of its operations and changes in the participants’ fund balance for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/Kingery & Crouse, P.A.

Certified Public Accountants

Tampa, FL

April 5, 2011

Innisbrook Rental Pool Lease Operation

Balance Sheets—Distribution Fund


	December 31, 2010		December 31, 2009
ASSETS
Receivable from Salamander Innisbrook, LLC for distribution	$	489,077	$	464,002
Interest receivable from Rental Pool Escrow Fund		2,462		1,933

	$	491,539	$	465,935

LIABILITIES AND PARTICIPANTS’ FUND BALANCES
Due to Participants for distribution	$	313,617	$	281,828
Due to Maintenance Escrow fund		177,922		184,107

	$	491,539	$	465,935

See notes to financial statements.

Innisbrook Rental Pool Lease Operation

Balance Sheets—Maintenance Escrow Fund


	December 31, 2010		December 31, 2009
ASSETS
Cash	$	185,231	$	210,783
Cash equivalents		2,035,000		1,715,000
Receivable from Distribution fund		177,922		184,107
Receivable from Salmander Innisbook, LLC		6,227		1,568
Interest receivable		3,432		5,437

	$	2,407,812	$	2,116,895

LIABILITIES AND PARTICIPANTS’ FUND BALANCES
Accounts payable	$	87,805	$	55,574
Interest payable to Distribution fund		2,462		1,933

Total liabilities		90,267		57,507

Carpet care reserve		87,914		103,919
Participants’ fund balances		2,229,631		1,955,469

	$	2,407,812	$	2,116,895

See notes to financial statements.

Innisbrook Rental Pool Lease Operation

Statements of Operations—Distribution Fund


	For the year ended December 31,
	2010			2009

GROSS REVENUES	$	7,772,460		$	8,300,086

DEDUCTIONS:
Agents’ commissions		206,456			214,754
Credit card fees		219,340			257,292
Audit fees		89,003			118,970
Uncollectible room rents		11,773			12,928
Linen replacements		55,876			106,365
Rental pool complimentary fees		29,073			21,663

		611,521			731,972


ADJUSTED GROSS REVENUES		7,160,939			7,568,114

AMOUNT RETAINED BY LESSEE		(4,289,408	)		(4,540,868	)


GROSS INCOME DISTRIBUTION		2,871,531			3,027,246

ADJUSTMENTS TO GROSS INCOME DISTRIBUTION:
General pooled expense		48,986			(7,204	)
Miscellaneous pooling adjustments		1,399			2,514
Corporate complimentary occupancy fees		9,730			26,204
Interest		—			(4,871	)
Occupancy fees		(1,029,770	)		(984,960	)
Advisory Committee expenses		(121,850	)		(125,497	)


NET INCOME DISTRIBUTION		1,780,026			1,933,432

ADJUSTMENTS TO NET INCOME DISTRIBUTION:
Occupancy fees		1,029,770			984,960
Hospitality suite fees		3,060			3,451
Associate room fees		46,697			55,909

AVAILABLE FOR DISTRIBUTION TO PARTICIPANTS	$	2,859,553		$	2,977,752

See notes to financial statements.

Innisbrook Rental Pool Lease Operation

Statement of Changes in Participants’ Fund Balances—Distribution Fund


	For the year ended December 31,
	2010			2009
BALANCE, beginning of year	$	—		$	—

ADDITIONS:
Amounts available for distribution		2,859,553			2,977,752
Interest received or receivable from Maintenance Escrow Fund		11,478			34,601

REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund		(929,714	)		(913,153	)
Amounts accrued or paid to participants		(1,941,317	)		(2,099,200	)

BALANCE, end of year	$	—		$	—

See notes to financial statements.

Innisbrook Rental Pool Lease Operation

Statements of Changes in Participants’ Fund Balances—Maintenance Escrow Fund


	For the year ended December 31,
	2010			2009
BALANCE, beginning of year	$	1,955,469		$	1,639,345

ADDITIONS:
Amounts withheld from occupancy fees		929,714			913,138
Interest earned		11,478			34,696
Charges to participants to establish or restore escrow balances		187,326			385,103

REDUCTIONS:
Maintenance charges		(761,692	)		(839,859	)
Carpet care reserve deposit		(15,450	)		(35,391	)
Interest accrued or paid to Distribution Fund		(11,478	)		(34,696	)
Refunds to participants as prescribed by the master lease agreements		(65,736	)		(106,867	)

BALANCE, end of year	$	2,229,631		$	1,955,469

See notes to financial statements.

Innisbrook Rental Pool Lease Operation

Notes to Financial Statements

NOTE 1—NATURE OF THE RENTAL POOL LEASE OPERATION AND AGREEMENTS

Overview – The Innisbrook Rental Pool Lease Operation (the “Rental Pool”) consists of condominiums located on the premises of the Innisbrook Resort and Golf Club (the “Company”, “Resort” or “Innisbrook”), which are leased by their owners (the “participants”) to Innisbrook for the purpose of making such units available for resort accommodations. Salamander Innisbrook, LLC, as owner and operator of the Resort, administers the Rental Pool.

The Rental Pool operation is highly dependent upon the operations of the Innisbrook Resort, and likewise, the Resort is also dependent upon the continued participation of condominium owners in the Rental Pool. Additionally, the Rental Pool and Resort are both impacted by the general economic conditions related to the destination resort industry.

Rental Pool Agreements – The Rental Pool operates under the provisions of a Master Lease Agreement (the “MLA” or “Agreement”), which commenced on January 1, 2002 and expires December 31, 2011, replacing all lease agreements previously in existence. On September 10, 2009, a letter of agreement was signed extending the MLA two additional years, expiring December 31, 2013.

Under the terms of the Agreement, each owner may elect to participate in the Rental Pool for the following year by signing and executing an Annual Lease Agreement (the “ALA”).

Under the Agreement, the Resort pays the owner a fee equal to 40% of the Adjusted Gross Revenues. Adjusted Gross Revenues are defined as Gross Revenues less agent’s commissions, audit fees, occupancy fees when the unit is used for Rental Pool Comps or as a model, linen replacements and credit card fees. Each participant receives a fixed occupancy fee, based upon apartment size, for each day unit is occupied. After allocation of occupancy fees and the payment of general Rental Pool expenses, the balance is allocated proportionally to the Participants, based on the Participation Factor as defined in the Agreement. Additionally, occupancy fees are paid by the Resort to Participants as rental fees for complimentary rooms unrelated to the Rental Pool operations. Associate room fees are also paid by the Resort to Participants for total room revenues earned from the rental of condominiums by Company employees.

As part of the Master Lease Agreement, the former Resort owner, GTA-IB, LLC, had agreed to reimburse Rental Pool participants in the MLA for up to 50% of the actual unit refurbishment costs, plus interest at a rate of 5% per annum on such amount, beginning in 2002, so long as the minimum participation threshold as defined, is maintained. Salamander Innisbrook, LLC assumed the refurbishment obligations under the Agreement when it acquired the Resort on July 16, 2007.

In addition, the Company agreed to provide a refurbishment reimbursement to the respective condominium owners for units placed into the Rental Pool during 2005. The owners of these units are reimbursed for up to 25% of their refurbishment costs, plus interest at 2.5% per annum.

Nature of Accounts and Fund Balances – The Rental Pool consists of the Distribution Fund and the Maintenance Escrow Fund. The Distribution Fund’s balance sheet primarily reflect amounts receivable from the Company for the Rental Pool distribution payable to Participants and amounts due to the Maintenance Escrow Fund. The operations of the Distribution Fund reflect the calculation of pooled earnings, management fees and adjustments, as defined.

The Maintenance Escrow Fund, which is managed by the Lessors’ Advisory Committee (“LAC”), reflects the accounting for certain escrowed assets of the Participants and, therefore, has no operations. It consists primarily of amounts escrowed on behalf of Participants or amounts due from the Distribution Fund to meet minimum escrow requirements, fund the carpet care reserve and maintain the interior of the units. The Innisbrook Rental Pool Trust was established on February 1, 2002 to create a Trust, which holds certain assets maintained in such escrow accounts.

Maintenance Escrow Fund Accounts – The MLA provides that 90% of the Occupancy Fees earned by each Participant are deposited in the Participant’s Maintenance Escrow Fund account. By mutual agreement between the LAC and the Resort, for the calendar year of 2011, both the occupancy fee (Paragraph 7.3 of the MLA) and the carpet care reserve (Paragraph 1.6 of the MLA) deposit amounts will be 0%. This account provides funds for payment of amounts that are due from Participants under the Agreements for maintenance and refurbishment services. Should a Participant’s balance fall below that necessary to provide adequate funds for maintenance and replacements, the Participant is required to restore the escrow balance to a defined minimum level. The MLA provides for specific fund balances to be maintained, by unit type, size and age of refurbishment, as defined in the Agreement. Under the MLA, a percentage of the Occupancy Fees are deposited into the carpet care reserve in the Maintenance Escrow Fund, which bears the expenses of carpet cleaning for all Participants. This percentage is estimated to provide the amount necessary to fund carpet cleaning expenses and may be adjusted annually. The amounts expended for carpet care were approximately $31,455 and $14,200 for the years ended December 31, 2010 and 2009, respectively.

The LAC invests the maintenance escrow funds on behalf of the Participants and in compliance with restrictions in the Agreements. The Lessors’ Advisory Committee consists of nine Participants elected to advise the Resort owner in Rental Pool matters and negotiate amendments to the lease agreement. Income earned on these investments is allocated proportionately to Participants’ Maintenance Escrow Fund accounts and paid quarterly.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Cash and Cash Equivalents – Cash consists of bank deposits which may, at times, exceed federally insured limits. No losses have been experienced in such accounts. The Rental Pool considers all short-term highly liquid investments with a maturity of less than a year to be cash equivalents.

Certificates of Deposit – The LAC invests amounts maintained in the maintenance escrow fund primarily in certificates of deposit held with various financial institutions. As of December 31, 2010, the certificates earned interest at rates ranging from .20% to 1.45% and have maturities ranging from four to twelve months. As of December 31, 2010 and 2009, accrued interest earned amounted to $3,432 and $5,437 and is included in the accompanying financial statements of the maintenance escrow fund. At December 31, 2010 and 2009, the cost of these investments approximates fair value.

Revenue Recognition – Revenue from Resort operations is recognized as the related service is performed.

Accounts Receivable – Receivables are presented net of any allowances for uncollectible amounts. All receivable balances reflected in the accompanying financial statements as of December 31, 2010 and 2009 were collected in subsequent periods. As such, an allowance for doubtful accounts is not considered necessary as of December 31, 2010 and 2009.

Use of Estimates – The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, judgments and assumptions which affect the reported amounts of assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting period. Actual results could differ from those estimates.

Income Taxes – No federal or state taxes have been reflected in the accompanying financial statements as the tax effect of fund activities accrue to the participants. The Innisbrook Rental Pool Trust files an annual tax return, which remains subject to examination by taxing authorities for years on or after 2006. Effective, January 1, 2009, the Rental Pool and related Trust adopted FASB Accounting Standards Codification Topic 740-10, “Accounting for Uncertainty in Income Taxes”. This topic requires the Rental Pool and the related Trust to evaluate each of its tax positions and the information reported in the Trust’s tax return to determine if such information and positions are more likely than not to be sustained under examination by a taxing authority. A tax position includes an entity’s tax status, which includes considerations as to the qualifications of the Trust and the decision that all fund activities pass through to the participants of the Rental Pool.

The Rental Pool and trustees of the Trust have evaluated its tax positions and have determined that no provision or liability for income taxes is necessary. Conclusions regarding uncertain tax positions are evaluated on an annual basis to determine if facts or circumstances have arisen that might cause a change in judgment regarding the likelihood of a tax position’s sustainability under examination.

NOTE 3—RELATED PARTY TRANSACTIONS

Pursuant to the terms of the Master Lease Agreement, the Rental Pool paid Innisbrook approximately $500,000 and $488,000 as reimbursement for maintenance and housekeeping labor, use of telephone lines, and other supplies during the years ended December 31, 2010 and 2009, respectively. At December 31, 2010 and 2009, accounts payable included in the accompanying balance sheets of the Maintenance Escrow Fund include approximately $59,200 and $36,700 respectively, payable to Innisbrook for such items.

Salamander Innisbrook Condominium, LLC, a wholly owned subsidiary of Salamander Farms, LLC, owns three condominiums. Two of the three condominiums participated in the Rental Pool under the MLA in the same manner as all other Rental Pool participants.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signatures	Title(s)	Date

/s/ Prem Devadas	Manager (Principal Executive Officer)	April 5, 2011

/s/ Dale Pelletier	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	April 5, 2011

EXHIBIT INDEX


Exhibit No.		Description

3.1*		Articles of Organization of Salamander Innisbrook LLC

10.1*		Letter of Agreement, By and Between Innisbrook Lessor’s Advisory Committee and Salamander Innisbrook, LLC dated September 10, 2009.

14.1*		Code of Business conduct

31.1		Certification of the Registrant’s Principal Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002

31.2		Certification of the Registrant’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Principal Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Previously filed on Form 10-K April 4, 2011

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller Reporting Company