UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended March 31, 2017

OR

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

For the transition period from                      to

COMMISSION FILE NUMBER: 333-147447

SALAMANDER INNISBROOK, LLC

(Exact name of registrant as specified in its charter)

Florida	26-0442888
(State of incorporation)	(IRS employer identification no.)

36750 US Highway 19 North, Palm Harbor, FL 34684

(Address of principal executive offices)

727-942-2000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES x   NO ¨    

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of the Regulation S-T (229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ¨    NO 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 definition of “large accelerated filer” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨      Accelerated filer ¨    Non-accelerated filer ¨    Smaller reporting company þ Emerging growth company ¨

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

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

No established markets exist for the Registrant’s membership interests, and there is no common stock issued or outstanding subject to this report.

INDEX 

	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Salamander Innisbrook, LLC
Condensed Balance Sheets (Unaudited) as of  March 31, 2017 and December 31, 2016	4
Condensed Statements of Operations and Changes in Member’s Equity (Unaudited) for the three months ended March 31, 2017 and 2016	5
Condensed Statements of Cash Flows (Unaudited) for the three months ended March 31, 2017 and 2016	6
Notes to Condensed Financial Statements (Unaudited)	7
Innisbrook  Rental Pool Lease Operation
Condensed Balance Sheets (Unaudited) as of March 31, 2017 and December 31, 2016	10
Condensed Statements of Operations (Unaudited) for the three months ended March 31, 2017 and  2016	11
Condensed Statements of Changes in Participants’ Fund Balances (Unaudited) for the three ended March 31, 2017 and 2016	12
Notes to Condensed Financial Statements (Unaudited)	13
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3. Quantitative and Qualitative Disclosures about Market Risk	15
Item 4. Controls and Procedures	16
PART II — OTHER INFORMATION
Item 1.    Legal Proceedings	16
Item 1A. Risk Factors	16
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.    Defaults Upon Senior Securities	16
Item 4.    Mine Safety Disclosures	16
Item 5.    Other Information	17
Item 6.    Exhibits	17
Signatures	18
EX-31.1
EX-31.2
EX-32.1
EX-32.2

2

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.

3

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

SALAMANDER INNISBROOK, LLC

CONDENSED BALANCE SHEETS

(UNAUDITED)

	March 31,		December 31,
	2017		2016
Assets
Current assets:
Cash	$	2,743,240	$	1,141,869
Accounts receivable, net		2,934,417		1,714,624
Inventories and supplies		978,816		909,599
Prepaid expenses and other		838,864		803,480
Total current assets		7,495,337		4,569,572
Property, buildings and equipment, net		37,598,517		38,106,125
Intangibles		4,330,001		4,330,001
Due from affiliates		311,532		120,104
Deposits and other assets		263,449		267,054
Restricted cash		1,500,000		-
Total assets	$	51,498,836	$	47,392,856
Liabilities and Member's Equity
Current liabilities:
Accounts payable	$	1,581,355	$	1,541,263
Accrued liabilities		4,218,612		2,491,209
Deferred revenue		2,959,891		3,310,280
Current portion - capital leases		427,440		425,837
Current portion - note payable		755,564		-
Total current liabilities		9,942,862		7,768,589
Deferred revenue		984,767		918,020
Capital leases net of current portion		831,186		934,198
Note payable net of current portion and deferred financing costs		13,926,157		-
Total liabilities		25,684,972		9,620,807
Commitments and Contingencies (Note 4)
Member's equity		25,813,864		37,772,049
Total liabilities and member’s equity	$	51,498,836	$	47,392,856

See accompanying notes to unaudited condensed financial statements.

4

SALAMANDER INNISBROOK, LLC

CONDENSED STATEMENTS OF OPERATIONS AND CHANGES IN MEMBER’S EQUITY

(Unaudited)

	Three months ended March 31,
	2017			2016
Resort revenues	$	15,520,306		$	14,332,175
Costs and expenses:
Operating costs and expenses		5,796,530			5,155,825
General and administrative		6,683,343			6,376,860
Depreciation		648,566			604,489
Total costs and expenses		13,128,439			12,137,174
Operating income		2,391,867			2,195,001
Interest expense		(10,437	)		(17,736	)
Net income		2,381,430			2,177,265
Member's equity, beginning of period		37,772,049			38,883,918
Member's distributions		(14,339,615	)		-
Member's equity, end of period	$	25,813,864		$	41,061,183

See accompanying notes to unaudited condensed financial statements.

5

SALAMANDER INNISBROOK, LLC

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three months ended March 31,
	2017			2016
Cash flows from operating activities:
Net income	$	2,381,430		$	2,177,265
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for bad debts		3,000			6,385
Depreciation		648,566			604,489
Deposits and other assets		3,605			(3,673	)
Other changes in operating assets and liabilities		(34,969	)		(1,452,667	)
Net cash provided by operating activities		3,001,632			1,331,789
Cash flows from investing activities:
Purchases of property and equipment		(140,958	)		(222,222	)
Net cash used in investing activities		(140,958	)		(222,222	)
Cash flows from financing activities:
Proceeds from note payable		15,000,000			-
Payment to cash reserve account		(1,500,000	)		-
Payment of loan costs		(318,279	)		-
Repayment of capital lease obligations		(101,409	)		(131,761	)
Member distributions		(14,339,615	)		-
Net cash used in financing activities		(1,259,303	)		(131,761	)
Net change in cash		1,601,371			977,806
Cash, beginning of period		1,141,869			1,429,716
Cash, end of period	$	2,743,240		$	2,407,522
Supplemental disclosure of cash flow information:
Cash paid for interest	$	10,437		$	17,736

See accompanying notes to unaudited condensed financial statements.

6

SALAMANDER INNISBROOK, LLC

NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)

Note 1. Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies

Nature of business

Salamander Innisbrook, LLC (the “Company”, “we”, “us”, or “our”), together with our affiliates, Salamander Innisbrook Securities, LLC, and Salamander Innisbrook Condominium, LLC own and operate the Innisbrook Resort and Golf Club (the “Resort”). The Company is owned by a sole member who does not have any personal liability for any of the Company’s obligations except as expressly provided by law and/or contractual obligation.

The Company controls and operates the Rental Pool Lease Operations (the “Rental Pool”); 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 390 units or 489 hotel rooms participate at any given time). Pursuant to the Innisbrook Rental Pool Master Lease Agreement, dated January 1, 2014 (the “Master Lease” or “MLA”), the Company is obligated to make quarterly distributions of a percentage of room revenues. Other resort facilities include four 18-hole golf courses, four restaurants, three convention facilities, a health spa, fitness center, tennis and recreation facilities, themed water park and five swimming pools.

Basis of presentation

The accompanying interim condensed financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Quarterly Report on Form 10-Q. Consequently, they do not include all disclosures normally provided in the audited financial statements included in our Company’s Annual Report on Form 10-K.  Accordingly, these condensed financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. 

In the opinion of management, the condensed financial statements reflect all adjustments which are necessary for a fair presentation of the financial information. All such adjustments are of a normal recurring nature.  

As a destination golf resort, open year round, the Resort’s performance is sensitive to weather conditions and seasonality as well as general trends in the economy, with economic downturns adversely affecting our operating results. Our operations are seasonal with the highest volume of revenue generated in the first two quarters of each calendar year. Due to the seasonal business of the Company, the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the full fiscal year.

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, and our estimates of the average lives of memberships from which we base our revenue recognition are reasonable. 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.

Note 2. Accounts Receivable

Accounts receivable consist of the following as of March 31, 2017 and December 31, 2016:

	March 31, 2017			December 31, 2016
Trade accounts receivable	$	2,735,398		$	1,477,231
Other receivables		219,657			252,534
Less allowance for bad debts		(20,638	)		(15,141	)
	$	2,934,417		$	1,714,624

7

Note 3. Property, Buildings and Equipment

Property, buildings and equipment consist of the following as of March 31, 2017 and December 31, 2016:

	March 31, 2017			December 31, 2016
Land and land improvements	$	21,422,543		$	21,422,543
Buildings		25,460,387			25,460,387
Furniture, fixtures and equipment		11,920,329			11,758,250
Construction in progress		-			21,121
		58,803,259			58,662,301
Less accumulated depreciation		(21,204,742	)		(20,556,176	)
	$	37,598,517		$	38,106,125

Note 4. Commitments and Contingencies

In the normal course of our operations, we are periodically subject to claims and lawsuits. However, no such matters existed at March 31, 2017 or December 31, 2016.

Note 5. Related Party Transactions

We incurred management fees to an affiliate of $463,242 and $429,764 for the three month periods ended March 31, 2017 and 2016, respectively. These fees are included in general and administrative expenses in the Condensed Statements of Operations and Changes in Member’s Equity.

At March 31, 2017 and December 31, 2016, amounts due from affiliates were $311,532 and $120,104, respectively, which balances are non-interest bearing, unsecured and due on demand.

The Innisbrook Rental Pool Lease Operation paid us $88,182 and $92,678 for the three month periods ended March 31, 2017 and 2016, respectively, as reimbursement for maintenance and housekeeping labor, use of the telephone lines and other supplies. These reimbursements are included in general and administrative expenses in the Condensed Statements of Operations and Changes in Member’s Equity.

Note 6. Note Payable

On March 28, 2017, the Company and Salamander Innisbrook Condominium, LLC, a related party, obtained a loan in the amount of fifteen million dollars ($15,000,000) from Branch Banking and Trust Company (BB&T). The loan is to be repaid over a five (5) year period in monthly installments of principal plus interest based on a 15 year amortization schedule commencing on May 5, 2017 with the remaining unpaid balance due in full on May 5, 2022. The interest for the loan is the One Month LIBOR Rate plus two and one quarter percent (2.25%) per annum adjusted monthly on the first day of each LIBOR interest period (3.23% as of March 31, 2017). The loan is collateralized by the real and personal property of the Company and Salamander Innisbrook Condominium, LLC, the assignment and/or subordination of leases and our management agreement with an affiliate and guarantees by certain affiliates. We have distributed these funds to our Member as a partial return of the capital it has invested.

The loan agreement contains customary financial covenants, including a covenant to maintain a debt service coverage ratio of at least 1.10 to 1.00, measured annually at the end of each fiscal year and a covenant to maintain a tangible net worth of not less than $15,000,000 at all times.

As part of our loan agreement we were required to deposit $1,500,000 into a cash reserve account. No later than February 28, 2018, we are required to deposit an additional $1,000,000 into such account. The cash reserve account is restricted and may only be used to service the loan.

We incurred financing costs of $318,279, which are deferred and are being amortized over the term of the loan. These costs have been reflected as a reduction of the note payable.

Below is a table of scheduled maturities of our note payable for the years ending March 31:

2018	$	755,564
2019		784,915
2020		815,405
2021		847,081
2022		879,986
Thereafter		10,917,049
		15,000,000
Less deferred financing costs		(318,279	)
	$	14,681,721

8

RENTAL POOL LEASE OPERATION

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.

9

INNISBROOK RENTAL POOL LEASE OPERATION

CONDENSED BALANCE SHEETS

(unaudited)

DISTRIBUTION FUND

	March 31,		December 31,
	2017		2016
ASSETS
RECEIVABLE FROM SALAMANDER INNSIBROOK, LLC FOR DISTRIBUTION	$	1,692,264	$	849,189
INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND		576		607
	$	1,692,840	$	849,796
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION	$	1,692,840	$	849,796
	$	1,692,840	$	849,796

MAINTENANCE ESCROW FUND

	March 31,		December 31,
	2017		2016
ASSETS
CASH	$	134,471	$	124,885
INVESTMENTS		450,000		500,000
INTEREST RECEIVABLE		5,002		5,243
	$	589,473	$	630,128
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE	$	30,896	$	66,663
INTEREST PAYABLE TO DISTRIBUTION FUND		576		607
TOTAL LIABILITIES		31,472		67,270
CARPET CARE RESERVE		21,485		26,641
PARTICIPANTS' FUND BALANCES		536,516		536,217
	$	589,473	$	630,128

See accompanying notes to unaudited condensed financial statements.

10

INNISBROOK RENTAL POOL LEASE OPERATION

CONDENSED STATEMENTS OF OPERATIONS

DISTRIBUTION FUND

(unaudited)

	Three months ended March 31,
	2017			2016
GROSS REVENUES	$	4,706,356		$	4,198,740
DEDUCTIONS:
Agents' commissions		188,718			123,172
Credit card fees		132,012			117,526
Audit fees		18,501			18,000
Linen replacements		53,650			15,985
Rental pool complimentary fees		6,797			7,817
		399,678			282,500
ADJUSTED GROSS REVENUES		4,306,678			3,916,240
AMOUNT RETAINED BY LESSEE		(2,584,007	)		(2,349,744	)
GROSS INCOME DISTRIBUTION		1,722,671			1,566,496
ADJUSTMENTS TO GROSS INCOME DISTRIBUTION:
General pooled expense		(2,209	)		(2,243	)
Miscellaneous pool adjustments		378			(244	)
Corporate complimentary occupancy fees		2,901			3,574
Occupancy fees		(471,736	)		(433,061	)
Advisory Committee expenses		(39,595	)		(30,408	)
NET INCOME DISTRIBUTION		1,212,410			1,104,114
ADJUSTMENTS TO NET INCOME DISTRIBUTION:
Occupancy fees		471,736			433,061
Hospitality suite fees		3,298			1,046
Associate room fees		4,820			3,582
AVAILABLE FOR DISTRIBUTION TO PARTICIPANTS	$	1,692,264		$	1,541,803

See accompanying notes to unaudited condensed financial statements.

11

INNISBROOK RENTAL POOL LEASE OPERATION

CONDENSED STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES

(unaudited)

DISTRIBUTION FUND

	For the three months ended March 31,
	2017			2016
BALANCE, beginning of period	$	-		$	-
ADDITIONS:
Amounts available for distribution		1,692,264			1,541,803
Interest received or receivable from Maintenance Escrow Fund		576			570
REDUCTIONS:
Amounts accrued or paid to participants		(1,692,840	)		(1,542,373	)
BALANCE, end of period	$	-		$	-

MAINTENANCE ESCROW FUND

	For the three months ended March 31,
	2017			2016
BALANCE, beginning of period	$	536,217		$	620,809
ADDITIONS:
Charges to participants to establish or restore escrow balances		168,935			134,786
REDUCTIONS:
Maintenance charges		(145,179	)		(110,849	)
Member accounts & miscellaneous		30			(492	)
Refunds to participants as prescribed by the master lease agreements		(23,487	)		(22,805	)
BALANCE, end of period	$	536,516		$	621,449

See accompanying notes to unaudited condensed financial statements.

12

INNISBROOK RENTAL POOL LEASE OPERATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. Rental Pool Lease Operation

Basis of Accounting

The Rental Pool funds are accounted for using the accrual method of accounting.

Organization and Operations

Salamander Innisbrook, LLC (the “Company”, “the “Resort”, ”we”, “us”, or “our”) follows accounting policies that require estimates that are based on assumptions and judgments, which affect revenues, expenses, assets, liabilities and disclosure of contingencies in our 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 these estimates due to different conditions.

The Rental Pool is highly dependent upon the operations of the 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.

The Rental Pool consists of condominiums at the Resort which are leased by the Company from their owners and used as hotel accommodations for the resort. The Master Lease Agreement (“MLA”) provides that on an annual basis each owner (the “Participant”) may elect to participate in the Rental Pool for the following year by signing an Annual Lease Agreement (“ALA”). Any condominium unit owner who does not sign the ALA is not permitted to participate in the Rental Pool for the following year. Under the new Agreement, the Resort pays the participant a quarterly distribution equal to 40% of the Adjusted Gross Revenues on the first $10 million; 45% between $10 million and $11 million and 50% above $11 million. Adjusted Gross Revenues are defined as Gross Revenues less agents’ 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 the 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.

The Lessors’ Advisory Committee (“LAC”) consists of nine Participants who are elected by the Participants to advise the Company of Rental Pool Matters and to negotiate amendments to the ALA and MLA.

The Rental Pool consists of the Distribution Fund and the Maintenance Escrow Fund. The Distribution Fund’s balance sheet primarily reflects amounts receivable from the Company for the Rental Pool distribution payable to Participants and amounts due to Participants for such distribution. The operations of the Distribution Fund reflect Participants’ earnings in the Rental Pool. The Maintenance Escrow Fund 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 due from the Distribution Fund to meet minimum escrow requirements, fund the carpet care reserve and maintain the interior of the units.

The LAC, subject to the restriction in the MLA, invests the Maintenance Escrow Fund on behalf of the Participants. Income earned on the investments of the Maintenance Escrow Funds is allocated proportionately to the respective Maintenance Escrow Fund accounts and paid quarterly through the Distribution Fund. The funds are generally held in certificates of deposit.

13

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

General

We operate Innisbrook Resort and Golf Club (the “Resort” or the “Company”) in Palm Harbor, Florida, containing 1,216 condominium units; all of which have been sold to third parties or to affiliates of the Company. 405 of the condominium units are hotel accommodations that participate in a rental-pooling program (the “Rental Pool”) that provides owners with a percentage distribution of related room revenues minus certain fees and expenses. The remainders of the condominium units are owner-occupied. Other resort property owned by the Company and its affiliates include golf courses, restaurants, tennis courts, a spa and fitness center, swimming pools, conference center facilities and administrative offices.

Results of Operations

The Resort is a destination golf resort that appeals to group and transient guests within all market segments. The Resort provides condominium accommodations, food and beverage dining locations (three restaurants, room service, banquet and/or catering options) and recreational entertainment to members, business meetings, group guests, leisure guests and their families. The Resort offers room-only rates, golf packages, and family vacation packages.

As a destination golf resort, open year round, the Resort’s performance is sensitive to weather conditions and seasonality as well as general trends in the economy, with economic downturns adversely affecting our operating results. The Company’s operations are seasonal with the highest volume of revenue generated in the first two quarters of each calendar year. Due to the seasonal business of the Company, the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the full fiscal year.

Results of operations for the three months ended March 31, 2017 and 2016 (unaudited) were as follows:

	Three months ended March 31,
	2017			%			2016			%			Inc/(dec)		% Chg
Resort Revenues	$	15,520,306			100.0	%	$	14,332,175			100.0	%	$	1,188,131		8.3	%
Costs and Expenses:
Operating costs and expenses		5,796,530			37.3	%		5,155,825			36.0	%		640,705		12.4	%
General and administrative		6,683,343			43.1	%		6,376,860			44.5	%		306,483		4.8	%
Depreciation and amortization		648,566			4.2	%		604,489			4.2	%		44,077		7.3	%
Total costs and expenses		13,128,439			84.6	%		12,137,174			84.7	%		991,265		8.2	%
Operating income		2,391,867			15.4	%		2,195,001			15.3	%		196,866		9.0	%
Interest expense		(10,437	)		-0.1	%		(17,736	)		-0.1	%		7,299		-41.2	%
Net income	$	2,381,430			15.3	%	$	2,177,265			15.2	%	$	204,165		9.4	%

For the first quarter 2017, resort revenues increased by $1,188,131 or 8.3% as compared to the same period last year due to increased occupancy and rates.  Room revenues were up $507,432 (+11.95%) over last year.  Package Rooms were down, due to the good weather experienced in the northern states; however the Group segment generated approximately $469,000 (+23.4%) over last year, and the Transient segment increased approximately $85,000 (+ 6.5%) over last year.  Our Food & Beverage operations increased $502,924 (+49.6%) over 2016 with a Banquets increase of approximately $390,000 and Restaurants up approximately $113,000 over prior year.   Golf revenues were up by approximately $179,000 (4.8%) over last year. 

Operating costs and expenses were kept proportionate during the quarter as a percentage of revenue.  Administrative expenses continue higher when compared to last year, due to a credit in legal fees given against the 2016 expense of approximately $(37,000), which was not duplicated in 2017.  Other areas in G&A such as employee recognition, golf course maintenance, credit card commissions, sales-marketing expenses all increased over the 2016 quarter. 

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Liquidity and Capital Resources

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 and 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; accordingly the loss of any such individual or group would not have a material adverse effect on the Company’s business or financial condition.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions and to select accounting policies that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These accounting policies have been described in our Annual Report on Form 10-K for the year ended December 31,2016, and there have been no material changes during the three months ended March 31, 2017.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, "Revenue from Contracts with Customers (Topic 606)", which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. ASU No. 2014-09 supersedes most existing revenue recognition guidance in U.S. GAAP, and it permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date", which delayed the effective date of ASU No. 2014-09 by one year. As a result, ASU No. 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2016, including interim periods within those annual periods. In the first six months of fiscal 2016, the FASB issued guidance clarifying the interpretation of certain principles of ASU No. 2014-09. The Company is evaluating the effect that this revenue recognition guidance will have on its financial statements and related disclosures.

In February 2016, the FASB issued ASU No. 2016 – 02, “Leases (Topic 842).” This standard establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. Upon implementation, lessees will need to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. It will be critical to identify leases embedded in a contract to avoid misstating the lessee’s balance sheet. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance, including guidance for real estate, is replaced with a new model applicable to both lessees and lessors. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact ofadopting the new standard, but have not yet determined the impact of adoption on our financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange rates, interest rates and other relevant market rate or price changes. The Company is exposed to market risk associated with changes in the LIBOR interest rate on our variable rate debt.  The Company regularly evaluates its exposure to such changes and may elect to minimize this risk through the use of interest rate swap agreements. If a 10% change in interest rates were to have occurred on March 31, 2017, this change would not have had a material effect on our results of operations.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act (defined below)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures, or our internal controls, will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. However, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control over Financial Reporting

In addition, our management with the participation of our Principal Executive Officer and Principal Financial Officer, have determined that no change in our internal control over financial reporting occurred during or subsequent to the quarter ended March 31, 2017, that has materially affected, or is (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities Exchange Act of 1934) reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The Company is periodically involved in litigation in the normal course of operations. In the opinion of the Company’s management, the effect of these claims, if any, is not material to the Company’s financial condition and results of operations.

On January 16, 2015, we entered into a settlement agreement and release with our former insurance carrier whereby the parties mutually released and resolved all disputes. We agreed to provide a credit towards future resort usage to be used over a three-year period that commenced on March 1, 2015. The credit, which approximated $350,000, is divided equally among the three-year period with no rollover of unused amounts from one year to another. At March 31, 2017, our remaining liability under this arrangement is approximately $119,127.

Item 1A. Risk Factors

Not required

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable

Item 3. Defaults upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosures

Not applicable

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Item 5. Other information

Not applicable

Item 6. Exhibits

(a). Exhibits

Exhibit	Item
31.1	Certification of Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of  2002
101	Interactive Data Files

* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

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SIGNATURES

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

	SALAMANDER INNISBROOK, LLC (Registrant)
Date:  May 23, 2017	/s/ Prem Devedas
	Prem Devedas
	Manager (Chief Executive Officer)

Date:  May 23, 2017	/s/ Dale Pelletier
	Dale Pelletier
	Chief Financial Officer (Principal Financial and Accounting Officer)

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