Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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

Critical Accounting Policies and Estimates

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

Revenue Recognition

Revenues are derived from a variety of sources including, but not limited to, hotel, food and beverage operations, retail sales, golf course operations and commissions on real estate transactions. With the exception of initiation fees and membership dues, all revenues net of any sales and other taxes collected are recognized upon fulfillment of performance obligations (delivery of products or performance of services).

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under the new revenue recognition standard. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our revenue is transactional, and the contracts performance obligation is generally satisfied at the time of the transaction.

Revenues from performance obligations satisfied over time include membership dues, annual fees and initiation fees. The membership initiation fees at the Resort are non-refundable 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. Membership dues and annual fees are recognized over the applicable membership period (three months to one year depending on type of membership).

Intangible Assets

We evaluate indefinite lived intangible assets for impairment annually or at an interim date 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.

Our intangible assets consist of: (i) a water contract; and (ii) our trademark and trade name. The valuation of the water contract was based on the projected annual savings associated with having this contract. The valuation of the trademark and trade name was derived from the residual revenue streams from Resort revenues that is attributed to the Innisbrook trade name.

During the years ended December 31, 2025 and 2024, there were no impairment charges related to intangible assets.

Impairment of Other Long-Lived Assets

We review other long-lived assets for impairment if a significant event occurs or circumstances arise that indicate the assets may not be recoverable by comparing the carrying values of the assets with their estimated future undiscounted cash flows. In reviewing impairment of our long-lived assets, we review the recent operating and pricing trends with the financial performance of the Resort in the aggregate for material variances from our expectations of the Resort's revenues. During the years ended December 31, 2025 and 2024, there were no impairments charges related to other long lived assets.

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 operations if both of the following conditions are met: (a) information available before the consolidated 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 consolidated financial statements and (b) the amount of loss can be reasonably estimated.

Results of Operations

During 2025 overall resort revenues decreased by $(732,174) or -1.6% compared with the prior year. The decrease was primarily driven by reductions in rooms and food and beverage resulting from the aftermath of Hurricanes Helene and Milton in late 2024. Despite the decline in revenues, operating, and general and administrative expenses remained relatively stable between the years because a significant portion of the costs are fixed in nature and/or because we chose to keep our labor force at pre hurricane levels. Depreciation and amortization increased primarily because of additions to property and equipment in the latter portion of 2024 and throughout 2025.

Interest income decreased in 2025 due to a decrease in the cash balance held in bank accounts.

In the last week of September and the second week of October 2024, Hurricanes Helene and Milton made landfall on the central west coast of Florida, causing widespread damage across the greater Tampa Bay area. The impacts included property damage to the Resort, the closing and disruption of the Company's operations, and damage to the community infrastructure. As a result of the hurricanes, we incurred approximately $816,000 of repairs and maintenance costs arising from damage to our golf courses and other property. During 2025, we settled with our insurance company for a total of $1,561,000. The final settlement represents recovery for approximately $1,039,000 of casualty losses and $522,000 of lost business and profits. The company recorded a gain on insurance recovery in the Statement of Operations of $745,000 which represents the total insurance claim amount reduced by the insurance policy deductible and costs incurred by the Company.

Liquidity and Capital Resources

Cash generated from operating activities was $1,953,174 and $79,708 in 2025 and 2024, respectively, an increase of $1,873,466. the change resulted primarily because we received approximately $1,561,000 from our insurance company for the damages sustained during the 2024 hurricane season.

We used cash of approximately $(1,364,000) and $(3,662,000) in 2025 and 2024, respectively, for the purchase of property and equipment.

We believe our cash on hand is adequate to support our capital and operating expenditures in 2026 and beyond.

Legal Entity Structure

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

Income Tax Status

With the exception of an entity owned by Salamander Innisbrook Securities, LLC the Company and its subsidiaries are single member limited liability companies and therefore the majority of the results of our operations flow through to our member for inclusion in its income tax returns. We provided for income taxes of approximately $26,000 and $23,000 in 2025 and 2024, respectively, related to our tax paying subsidiary. No provision and/or benefit for deferred income taxes has been recorded as there are no significant differences between financial statement and tax reporting.

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, 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.

Environmental Matters

None.

Off Balance Sheet Arrangements

None.

Contractual Commitments

The following is a summary of our contractual obligations as of December 31, 2025: