**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

**FORM 10-Q**

**(Mark One)**
| **x**                                                                                                                                                                                                    | **Quarterly report pursuant to section 13 or  15(d) of the Securities Exchange Act of 1934**  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|
| ** **                                                                                                                                                                                               | ** **                                                                                         |
| **for the  quarterly period ended: June 30, 2007**                                                                                                                                                       |
| ** **                                                                                                                                                                                               |                                                                                               |   |
| **o**                                                                                                                                                                                                    | **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 333-120538**

**GTA-IB, LLC**

(Exact name of registrant as specified in its charter)

| **Florida**                      |   | **05-0546226**          |
|----------------------------------|--------|-------------------------|
| (State or other  jurisdiction of |   | (I.R.S. Employer        |
| incorporation or  organization)  |   | Identification  Number) |

 

**36750 US 19 N., Palm Harbor, Florida 34684**

(Address of principal executive offices) (ZipCode)

**(727) 942-2000**

(Registrant’s telephone number, including areacode)

Indicate by check mark whetherthe registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such report(s), and (2) has been subject to such filingrequirements for the past 90 days.

Yes x  No o

Indicate by check mark whetherthe registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer.  See definition of“accelerated filer and large accelerated filer” in Rule 12b-2 of the ExchangeAct.
| Large Accelerated Filer   o | Accelerated  Filer  o | Non-Accelerated Filer x |
|----------------------------------|----------------------------|------------------------------|

 

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

Yes o No x

One hundred percent of the membership interests of the issuer are ownedindirectly by Golf Trust of America, Inc.

 

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**GTA-IB, LLC**

**FORM 10-Q**

**FOR THE THREE MONTHS ENDED JUNE30, 2007**

**INDEX**
| PART I. FINANCIAL INFORMATION |                                                                                                                                                 |
|------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| Item 1.                       | Financial Statements                                                                                                                                 |   |
|                               | Condensed  Combined Balance Sheets as of June 30, 2007 (unaudited) and December 31,  2006                                                       |   |
|                               | Condensed  Combined Statements of Operations and Member’s Deficit (unaudited) for the  Three Months and Six Months Ended June 30, 2007 and 2006 |   |
|                               | Condensed  Combined Statements of Cash Flows (unaudited) for the Six Months Ended June  30, 2007 and 2006                                            |   |
|                               | Notes to  Condensed Combined Financial Statements (unaudited)                                                                                        |   |
|                               | Rental Pool  Lease Operation Condensed Financial Statements and Note                                                                                 |   |
| Item 2.                       | Management’s  Discussion and Analysis of Financial Condition and Results of Operations                                                          |   |
| Item 3.                       | Quantitative  and Qualitative Disclosures About Market Risk                                                                                          |   |
| Item 4.                       | Controls and  Procedures                                                                                                                             |   |
| PART II.  OTHER INFORMATION   |                                                                                                                                                 |
| Item 1.                       | Legal Proceedings                                                                                                                                    |   |
| Item 1A.                      | Risk  Factors                                                                                                                                        |   |
| Item 2.                       | Unregistered  Sales of Equity Securities and Use of Proceeds                                                                                         |   |
| Item 3.                       | Defaults Upon  Senior Securities                                                                                                                     |   |
| Item 4.                       | Submission of  Matters to a Vote of Security Holders                                                                                                 |   |
| Item 5.                       | Other Information                                                                                                                                    |   |
| Item 6.                       | Exhibits                                                                                                                                             |   |
| Signatures                         |                                                                                                                                                 |

 

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**Cautionary Note RegardingForward-Looking Statements**

Thefollowing report contains forward-looking statements within the meaning ofSection 27A of the Securities Act of 1933, as amended (the “Securities Act”),and Section 21E of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”).  Forward-looking statements arestatements that predict or describe future events or trends and that do notrelate solely to historical matters.  Allof our projections in this Quarterly Report on Form 10-Q are forward-lookingstatements.  You can generally identifyforward-looking statements as statements containing the words “believe”, “expect”,“will”, “anticipate”, “intend”, “estimate”, “project”, “assume” or othersimilar expressions.  You should notplace undue reliance on our forward-looking statements because the matters theydescribe are subject to known (and unknown) risks, uncertainties and otherunpredictable factors, many of which are beyond our control.  Our forward-looking statements are based onthe limited information currently available to us and speak only as of the dateon which this Quarterly Report on Form 10-Q was filed with the Securities andExchange Commission (the “SEC”).  Ourcontinued internet posting or subsequent distribution of this dated report doesnot imply continued affirmation of the forward-looking statements included init.  We undertake no obligation, and weexpressly disclaim any obligation, to issue any updates to our forward-lookingstatements, even if subsequent events cause our expectations to changeregarding the matters discussed in those statements.  Future events are inherently uncertain.  Accordingly, our projections in thisQuarterly Report on Form 10-Q are subject to particularly highuncertainty.  Our projections should notbe regarded as legal promises, representations or warranties of any kindwhatsoever.  Over time, our actualresults, performance or achievements will likely differ from the anticipatedresults, performance or achievements that are expressed or implied by ourforward-looking statements, and such differences might be significant andharmful to your interests.  Certainfactors that could cause such a difference are described under the caption “RiskFactors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, eachof which you should review carefully.

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**GTA-IB, LLCCONDENSED COMBINED BALANCE SHEETSAS OF JUNE 30, 2007 AND DECEMBER 31, 2006(in thousands)**
| ** **                                      | ** ** | **June 30,  2007** | ** ** | **December  31,  2006*** | ** ** |
|-------------------------------------------------|------------|-------------------------|------------|------------------------------------|------------|
| ** **                                      | ** ** | **(unaudited)**         | ** ** | ** **                         | ** ** |
|                                            |       |                    |       |                               |       |
| **Assets**                                      |       |                    |       |                               |       |
| Current assets                                  |       | $                       | 6,143      |                               | $          | 5,296 |   |
| Property and  equipment, net                    |       | 27,077                  |       | 27,280                             |       |
| Intangibles, net                                |       | 14,062                  |       | 14,906                             |       |
| Other assets                                    |       | 1,889                   |       | 1,892                              |       |
| **Total Assets**                                |       | $                       | 49,171     |                               | $          | 49,374 |   |
| **Liabilities**                                 |       |                    |       |                               |       |
| Current  liabilities                            |       | $                       | 9,628      |                               | $          | 9,509 |   |
| Westin  termination fee, short-term             |       | 5,403                   |       | 5,594                              |       |
| Troon  supplemental fee, short-term             |       | 800                     |       | 800                                |       |
| Long-term  debt, less current maturities        |       | 42,676                  |       | 42,771                             |       |
| Other long term  liabilities                    |       | 3,658                   |       | 4,051                              |       |
| **Total Liabilities**                           |       | 62,165                  |       | 62,725                             |       |
| **Member’s Deficit**                       |       | (12,994                 | )          | (13,351                            | )          |
| **Total Liabilities and Member’s Deficit** |       | $                       | 49,171     |                               | $          | 49,374 |   |

 

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***Derivedfrom audited combined financial statements.**

*See accompanying notes tocondensed combined financial statements.*

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**GTA-IB, LLCCONDENSED COMBINED STATEMENTS OF OPERATIONS AND MEMBER’S DEFICITFOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006(in thousands) (unaudited)**
| ** **                                  | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|---------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                  | ** ** | **2007**                                        | ** ** | **2006**                                      | ** ** | **2007** | ** ** | **2006** | ** ** |
| **Revenues**                                |       |                                            |       |                                          |       |   |   |   |   |
| Hotel                                       |       | $                                               | 2,354      |                                          | $          | 3,444 |   | $ | 6,955 |   | $ | 9,289 |   |
| Food and beverage                           |       | 2,205                                           |       | 2,686                                         |       | 6,192 |   | 7,818 |   |
| Golf                                        |       | 3,468                                           |       | 3,527                                         |       | 8,502 |   | 8,616 |   |
| Other                                       |       | 628                                             |       | 602                                           |       | 1,372 |   | 1,549 |   |
| Total revenues                              |       | 8,655                                           |       | 10,259                                        |       | 23,021 |   | 27,272 |   |
| **Expenses**                                |       |                                            |       |                                          |       |   |   |   |   |
| Hotel                                       |       | 2,215                                           |       | 2,843                                         |       | 5,578 |   | 6,950 |   |
| Food and beverage                           |       | 1,868                                           |       | 1,878                                         |       | 4,500 |   | 5,011 |   |
| Golf                                        |       | 1,908                                           |       | 1,911                                         |       | 3,921 |   | 3,767 |   |
| Other                                       |       | 2,609                                           |       | 2,540                                         |       | 5,241 |   | 5,377 |   |
| General and administrative                  |       | 840                                             |       | 1,410                                         |       | 1,960 |   | 3,152 |   |
| Depreciation and amortization               |       | 566                                             |       | 533                                           |       | 1,102 |   | 1,024 |   |
| Total expenses                              |       | 10,006                                          |       | 11,115                                        |       | 22,302 |   | 25,281 |   |
| Operating  income(loss)                     |       | (1,351                                          | )          | (856                                          | )          | 719 |   | 1,991 |   |
| Interest  expense, net                      |       | 234                                             |       | 370                                           |       | 494 |   | 743 |   |
| Other (income)  expense                     |       | (191                                            | )          | —                                        |       | (132 | ) | — |   |
| Net income  (loss)                          |       | (1,394                                          | )          | (1,226                                        | )          | 357 |   | 1,248 |   |
| Member’s  deficit, beginning of period |       | (11,600                                         | )          | (6,015                                        | )          | (13,351 | ) | (8,489 | ) |
|                                        |       |                                            |       |                                          |       |   |   |   |   |
| Member’s deficit, end  of period       |       | $                                               | (12,994    | )                                             | $          | (7,241 | ) | $ | (12,994 | ) | $ | (7,241 | ) |

 

*See accompanying notes tocondensed combined financial statements.*

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### **GTA-IB,LLCCONDENSED COMBINED STATEMENTS OF CASH FLOWS FOR THESIX MONTHS ENDED JUNE 30, 2007 AND 2006(in thousands) (unaudited)**

|                                                                                    | ** ** | **Six months ended  June 30,** | ** ** |
|------------------------------------------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                                         | ** ** | **2007**                                      | ** ** | **2006** | ** ** |
| **Cash  flows from operating activities:**                                         | ** ** | ** **                                    | ** ** | ** ** | ** ** |
| Net income                                                                         |       | $                                             | 357        |   | $ | 1,248 |   |
| Adjustments to  reconcile net income to net cash provided by operating activities: |       |                                          |       |   |   |
| Depreciation and amortization                                                      |       | 1,762                                         |       | 1,685 |   |
| Provision for bad debts                                                            |       | (55                                           | )          | 279 |   |
| Non-cash interest                                                                  |       | 314                                           |       | 558 |   |
| Other changes in operating assets and liabilities                                  |       | (390                                          | )          | 215 |   |
| Net cash provided by operating activities                                          |       | 1,988                                         |       | 3,985 |   |
| **Cash  flows used in investing activities:**                                      | ** ** | ** **                                    | ** ** | ** ** | ** ** |
| Purchases of property and equipment                                                |       | (214                                          | )          | (97 | ) |
| **Cash  flows from financing activities:**                                         | ** ** | ** **                                    | ** ** | ** ** | ** ** |
| Repayment of long-term debt and capital lease  obligations                         |       | (908                                          | )          | (701 | ) |
| Proceeds from debt                                                                 |       | 320                                           |       | — |   |
| Net cash used in financing activities                                              |       | (588                                          | )          | (701 | ) |
| Net increase in  cash                                                              |       | 1,186                                         |       | 3,187 |   |
| **Cash  and cash equivalents, beginning of period**                                |       | 932                                           |       | 1,519 |   |
| **Cash  and cash equivalents, end of period**                                      |       | $                                             | 2,118      |   | $ | 4,706 |   |
| ** **                                                                         | ** ** | ** **                                    | ** ** | ** ** | ** ** |
| **Supplemental  Cash Flow Information:**                                           | ** ** | ** **                                    | ** ** | ** ** | ** ** |
| Cash paid for  interest                                                            |       | $                                             | 180        |   | $ | 192 |   |
| **Non-cash  financing and investing activities:**                                  | ** ** | ** **                                    | ** ** | ** ** | ** ** |
| Assets acquired through  capital leases                                            |       | $                                             | 498        |   | $ | 181 |   |

 

*See accompanying notes tocondensed combined financial statements.*

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**GTA-IB, LLC**

**FORM 10-Q**

**NOTES TO CONDENSED COMBINEDFINANCIAL STATEMENTS**

**FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006**

**(in thousands) (unaudited)**

**1.   Innisbrook Resort Ownership and Operations**

GTA-IB, LLC (the “Company”) is a single member limited liability companyowned by GTA-IB Golf Resort, LLC, which in turn is 100 percent owned by GolfTrust of America, L.P. (the “Operating Partnership”). There is no establishedmarket for the Company’s membership interests. Golf Trust of America, Inc.(“GTA”) holds a 100 percent interest in the Operating Partnership.GTA GP, Inc. is the sole general partner of the Operating Partnership and ownsa 0.2 percent interest therein. GTA LP, Inc. is a limited partner in theOperating Partnership and owns a 99.8 percent interest therein.  Golf Host Resorts, Inc. (“GHR”), an entity affiliated with Starwood CapitalGroup LLC, is the former owner of the Innisbrook Resort and Golf Club (the “Resort”)and the former borrower under a $79,000 participating mortgage loan funded bythe Operating Partnership. This participating mortgage loan was secured by theResort, cash, undeveloped land at the Resort and 368,365 shares of GTA’s commonstock. The Resort is a 72-hole destination golf and conference facility locatednear Tampa, Florida.

The Company entered into aSettlement Agreement dated July 15, 2004 (the “Settlement Agreement”) withthe Operating Partnership and GHR, Golf Hosts, Inc., Golf HostManagement, Inc., Golf Host Condominium, Inc. and Golf HostCondominium, LLC. The Settlement Agreement resolved a number of issues betweenthe parties, including GHR’s default under the participating mortgage loan madeby the Operating Partnership to GHR in June 1997. As part of theSettlement Agreement, the Company took ownership of the Resort on July 15,2004. In connection with the Settlement Agreement, the Company entered into amanagement agreement (the “Westin Management Agreement”) with Westin ManagementCompany South (“Westin”), which provided for Westin’s management of the Resort,and Westin and Troon Golf L.L.C. (“Troon”) entered into a facility managementagreement (the “Troon Management Agreement”) providing for Troon’s managementof the golf facilities at the Resort. The current status of the Westin Management Agreement with Westin andthe Troon Management Agreement with Troon are discussed below in Notes 5 and 9.

In connection with the SettlementAgreement, the Company assumed control and operation of the rental pool leaseoperations at the Resort (the “Rental Pool”). The Rental Pool was operated and controlled by GHR prior to that time.On a year-to-year basis, approximately 500 of the 938 condominium units at theResort were leased by the Company from the condominium owners and used as hotelaccommodations for the Resort pursuant to rental pool lease arrangements. TheCompany was the lessee under these rental pool lease operation agreements.  Those agreements provided that the Companywould distribute a percentage of room revenues to participating condominiumowners who permitted the Company to lease their units as hotel accommodations.

The Operating Partnership hadpreviously entered into an agreement with GHR and the prospective purchaser ofa parcel of undeveloped land within the Resort, referred to herein as “Parcel F”.This agreement, referred to herein as the “Parcel F Development Agreement”,was executed on March 29, 2004 and amended on August 10, 2005 to add theCompany as a party. The Parcel F Development Agreement includes the termsand conditions pursuant to which Parcel F may be developed, and includesrestrictions on GHR, the owner of Parcel F, which are designed to avoidinterference with the ongoing operations of the Resort.  The Parcel F Development Agreement alsocontains provisions which the Company believes will increase the OperatingPartnership’s ability to better manage the location of the access road forParcel F.  Our interests in Parcel F werenot transferred with the sale of the Resort as described in Note 9, *Subsequent Events.*

#### *Going Concern*

As of June 30, 2007, the Resort had a working capitaldeficit of approximately $9,688.  Due tothe Company’s limited cash resources, the Company was viewed as havingsubstantial doubt as to the Company’s ability to continue as a goingconcern.  However, since the sale of theResort was concluded on July 16, 2007, the liquidity and going concern issueswere resolved.  See Note 9, *Subsequent Events,* for further discussion.

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**2.   Basis of Presentation**

The settlement described inNote 1 above, pursuant to which the Company took title to the Resort, wasaccounted for using methods consistent with purchase accounting in accordancewith Statement of Financial Accounting Standards (“SFAS”) No. 141,Business Combinations. Accordingly, the Company, with the assistance of itsthen independent financial advisor, recorded the tangible and identifiedintangible assets of the Resort at their respective fair values. The long-termliabilities of the Resort were stated at their fair value based on net presentvalue calculations.

*Principles of Combination*

The financial statements andfootnotes reflect the combined financial results of the Company, GTA-IBCondominium, LLC and GTA-IB Management, LLC. These legal entities are allwholly owned subsidiaries of the Operating Partnership. GTA-IB Condominium, LLCheld the title to three condominium units at the Resort that participate in theRental Pool.  GTA-IB Management, LLC isthe entity that employed substantially all of the employees working at theResort. There are no other operations of GTA-IB Condominium, LLC and GTA-IBManagement, LLC. The Company held title to the Resort and is the entity inwhich all of the Resort operations were recorded. All intercompany transactionsand account balances have been eliminated in combination.

*Interim Statements*

The accompanying condensedcombined financial statements have been prepared in accordance with(a) accounting principles generally accepted in the United States ofAmerica (“GAAP”), and (b) the instructions to Form 10-Q andArticle 10 of Regulation S-X. These financial statements have notbeen audited by an independent registered accounting firm; however, theyinclude adjustments (consisting of normal recurring adjustments) which are, inthe judgment of management, necessary for a fair presentation of financialcondition, results of operations and cash flows for the interim periodspresented. However, these results are not necessarily indicative of results forany other interim period or for the full year. In particular, it is important tonote that the Company’s business is seasonal.

Certain information and footnotedisclosures normally included in financial statements in accordance with GAAPhave been omitted as allowed in quarterly reports by the rules of the SEC.Management believes that the disclosures included in the accompanying interimfinancial statements and footnotes are adequate to make the information notmisleading, but also believes that these statements should be read inconjunction with the summary of significant accounting policies and notes tothe combined financial statements included in our Form 10-K for the fiscalyear ended December 31, 2006, filed on April 2, 2007.

**3.   Property and Equipment**

Property and equipment consistsof the following:
| ** **                    | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|-------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| ** **                    | ** ** | **(unaudited)**         | ** ** | ** **                  | ** ** |
| ** **                    | ** ** | **(in thousands)** | ** ** |
|                          |       |                    |       |                        |       |
| Land                          |       | $                       | 1,968      |                        | $          | 1,968 |   |
| Buildings                     |       | 14,734                  |       | 14,734                      |       |
| Golf course improvements      |       | 7,583                   |       | 7,552                       |       |
| Machinery and equipment       |       | 7,365                   |       | 6,761                       |       |
| Construction in process       |       | 77                      |       | —                      |       |
|                          |       | 31,727                  |       | 31,015                      |       |
| Less accumulated depreciation |       | (4,650                  | )          | (3,735                      | )          |
|                          |       | $                       | 27,077     |                        | $          | 27,280 |   |

 

At June 30, 2007, machinery andequipment includes certain equipment with a net book value of $1,090 recordedunder capital leases. Depreciation expense amounted to approximately $474 and$400 for the three months ended June 30, 2007 

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and 2006, respectively. Depreciation expense amounted to $918 and $792 for the six months endedJune 30, 2007 and 2006, respectively.

**4.   Intangibles and Other Assets**

Intangible assets represent thevalue of the following as of July 15, 2004: (a) the water contract thatprovides irrigation water for the golf courses at no charge (up to certainspecified limits), (b) the Rental Pool, (c) the guest room bookings, (d) theclub memberships, and (e) the trademark and tradename of “Innisbrook”.  The intangible assets are being amortizedover the specific term or benefit period of each related contract.
| **Intangible Assets**    | ** ** | **Amortization Period**                               | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|-------------------------------|------------|------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| ** **                    | ** ** | ** **                                                 | ** ** | **(unaudited)**         | ** ** | ** **                  | ** ** |
| ** **                    | ** ** | ** **                                                 | ** ** | **(in thousands)** | ** ** |
| ** **                    | ** ** | ** **                                                 | ** ** | ** **              | ** ** | ** **                  | ** ** |
| Rental Pool                   |       | 89.5  months (through December 31, 2011)                   |       | $                       | 9,870      |                        | $          | 9,870 |   |
| Guest Bookings                |       | Less  than 24 months (fully amortized as of June 30, 2007) |       | 1,100                   |       | 1,100                       |       |
| Club Memberships              |       | 144  months                                                |       | 4,400                   |       | 4,400                       |       |
| Water Contract                |       | None  since renewable in perpetuity                        |       | 2,300                   |       | 2,300                       |       |
| Trade Name                    |       | None  since renewable in perpetuity                        |       | 2,500                   |       | 2,500                       |       |
|                          |       |                                                       |       | 20,170                  |       | 20,170                      |       |
| Less accumulated amortization |       |                                                       |       | (6,108                  | )          | (5,264                      | )          |
|                          |       |                                                       |       | $                       | 14,062     |                        | $          | 14,906 |   |

 

Amortization expense amounted toapproximately $422 and $464 for the three months ended June, 2007 and 2006,respectively. ** **Amortizationexpense amounted to approximately $844 and $893 for the six months ended June,2007 and 2006, respectively.  Of theseamounts, approximately $330 for both the three months ended June 30, 2007 and2006, respectively, and $660 for both the six months ended June 30, 2007 andJune 30, 2006, respectively, are included in hotel expenses and are notincluded in depreciation and amortization in the Condensed Combined Statementsof Operations. Anticipated amortization expense for the next five years andthereafter is set forth in the table below:
| Year                              | ** ** | **Principal**                        | ** ** |
|-----------------------------------|------------|--------------------------------------|------------|
| ** **                        | ** ** | **(in thousands)  (unaudited)** | ** ** |
| July 1 through  December 31, 2007 |       | $                                    | 844        |   |
| 2008                              |       | 1,688                                |       |
| 2009                              |       | 1,688                                |       |
| 2010                              |       | 1,688                                |       |
| 2011                              |       | 1,688                                |       |
| Thereafter                        |       | 1,666                                |       |
| Total                             |       | $                                    | 9,262      |   |

 

Other assets include the Company’s interest in the netproceeds from the sale of Parcel F. The value of our primary other asset, Parcel F, was reduced from $2,200,which was the derived value at July 15, 2004, to $1,490 due to the fact that$710 of this value was transferred to GTA pursuant to the terms of the amendedagreement with the owner of Parcel F. Also included in other assets are certain design fees for the refurbishmentprogram, utility deposits and club member initiation fees. The Company had acontractual right to be reimbursed for these design fees by the Rental Poolparticipants in the form of a deduction from the quarterly Rental Poolrefurbishment payments.  Utility depositsremained on account and were refundable to the Company upon the sale of theResort.  The club initiation fees arepaid by the club members quarterly, but in no event greater that two years fromthe date of membership activation.  Theamount of initiation fees listed below represent the payments due greater thanone year from the respective balance sheet dates.

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|                                | ** ** | **(in thousands)** | ** ** |
|--------------------------------|------------|-------------------------|------------|
| **Other Assets**          | ** ** | **June 30,  2007** | ** ** | **December  31, 2006** | ** ** |
| ** **                     | ** ** | **(unaudited)**         | ** ** | ** ** | ** ** |
|                           |       |                    |       |   |   |
| Parcel F  proceeds (estimated) |       | $                       | 1,490      |   | $ | 1,490 |   |
| Deferred  interest costs, net  |       | 20                      |       | — |   |
| Refurbishment  design fees     |       | 175                     |       | 201 |   |
| Utility deposits               |       | 128                     |       | 155 |   |
| Club initiation  fess          |       | 76                      |       | 44 |   |
| Other                          |       | —                  |       | 2 |   |
| Total                          |       | $                       | 1,889      |   | $ | 1,892 |   |

 

**5.   Current Liabilities**

Current liabilities consist ofthe following:
| ** **                                  | ** ** | **June 30,  2007** | ** ** | **December  31,  2006** | ** ** |
|---------------------------------------------|------------|-------------------------|------------|-----------------------------------|------------|
| ** **                                  | ** ** | **(unaudited)**         | ** ** | ** **                        | ** ** |
| ** **                                  | ** ** | **(in thousands)** | ** ** |
|                                        |       |                    |       |                              |       |
| Accounts payable                            |       | $                       | 2,427      |                              | $          | 2,584 |   |
| Accrued payroll  costs                      |       | 1,303                   |       | 1,182                             |       |
| Other payables  and accrued expenses        |       | 1,503                   |       | 1,763                             |       |
| Deposits and  deferred revenue              |       | 1,994                   |       | 2,212                             |       |
| Patriot Bank  debt                          |       | 320                     |       | —                            |       |
| Current portion  of capital leases          |       | 445                     |       | 344                               |       |
| Current portion  of refurbishment liability |       | 1,636                   |       | 1,424                             |       |
| Subtotal current liabilities                |       | 9,628                   |       | 9,509                             |       |
| Troon  supplemental fee                     |       | 800                     |       | 800                               |       |
| Westin  termination fee                     |       | 5,403                   |       | 5,594                             |       |
| Total current  liabilities                  |       | $                       | 15,831     |                              | $          | 15,903 |   |

 

On April 10, 2007, the Company and certain of itsaffiliates entered into a Business Loan Agreement (the “Loan Agreement”) withPatriot Bank, a community bank, to borrow, on a non-revolving basis, up to aprincipal amount of $1,200 (the “Loan”). The Loan was secured by a first priority mortgage on three wholly-ownedcondominium units located at the Resort. On April 12, 2007, the Companyborrowed, pursuant to the Loan Agreement, approximately $20 to pay the closingcosts related to the Loan.  Subject to compliance with the Loan Agreement,the Company had the right to draw down the remainder of the principal amountavailable under the Loan Agreement over time to finance renovations of theCompany’s restaurants, information technology infrastructure upgrades at theResort, other property improvements at the Resort and short-term workingcapital shortfalls of the Company or the Resort.

The Loan bore interest at thefloating Wall Street Journal Prime rate and provided for interest only paymentsthrough December 31, 2007.  Beginning with the monthly payment due onJanuary 31, 2008, the Loan Agreement required principal and interest paymentsbased on a twenty year amortization schedule.  There was no prepayment penaltyfor early repayment.

Among other terms, the LoanAgreement contained representations, warranties and covenants of the Companywith respect to matters such as ownership of the condominium units serving ascollateral, the future delivery of reports to the lender, the absence ofdefaults by the Company under other agreements and compliance with applicablelaws and government regulations.

As of June 30, 2007, the amount outstanding againstthis Loan was approximately $320.  SeeNote 9, *Subsequent Events*, for further discussion.

10

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*Westin Management Company Southand Troon Golf L.L.C.*

The WestinManagement Agreement between the Company and Westin provided that Westin wouldmanage the Resort for a fee equal to 2.2% of the Resort’s gross revenue.Contemporaneously with the signing of the Westin Management Agreement in July2004, Westin entered into a management contract with Troon pursuant to whichTroon was to manage the golf facilities of the Resort for a fee payable by theCompany equal to 2% of the Resort’s gross golf revenue.  The Company paid monthly management fees toWestin and Troon. By mutual agreement, on September 28, 2006, the Company,Westin and GTA, as guarantor, entered into a Termination and Release Agreement(the “Westin Termination Agreement”), pursuant to which the Company, GTA andWestin agreed to terminate the Westin Management Agreement as of October 31,2006.  In addition to the termination of the Westin Management Agreement,the Westin Termination Agreement provided that (a) on or prior to October 3, 2006,the Company or GTA would deposit $600 in the Resort’s operating account (whichGTA did) to be used in part to pay to Westin certain unpaid fees and chargeswhich have accrued under the Westin Management Agreement, (b) on or prior tothe earlier of March 31, 2008, or any sale of the Resort by the Company andGTA, the Company would pay to Westin the termination fee of approximately$5,594, and (c) Westin would permit the Company and GTA to continue to accessWestin’s “SAP” accounting system for the operation of the Resort until March31, 2007 (which they did) for a total charge of $6.  The Company and Westin agreed to reduce thetermination fee to approximately $5,403, contingent upon the closing of thesale of the Resort, as described in the Company’s Form 8-K filing dated June29, 2007.  Subsequent to the terminationof the Westin Management Agreement, the Company and GTA had been managing theResort operations internally.    See Note9, *Subsequent Events*, for furtherdiscussion.

*TroonSupplemental Fee*

TheJuly 15, 2004 Troon Management Agreement between Westin and Troon, whichthe Company assumed as a result of the Westin termination, provided for thepayment of a supplemental fee to Troon, subject to the terms and conditions setforth in that agreement, of $800.  TheCompany had until November 30, 2006 to decide whether to assume or terminatethe management agreement with Troon for Troon to continue to manage the golffacilities of the Resort.   The Companyand Troon agreed to extend the Troon Management Agreement for ten-dayincremental periods subsequent to November 30, 2006.  On February 22, 2007, the Company sent Troona notice of termination regarding the Troon Management Agreement.   See Note 8, *Commitmentsand Contingencies,*and Note 9*, Subsequent Events,*forfurther discussion.

**6.  Long-Term Debt**

The Company’s long-term debtconsists of the following:
| ** **                                                                                        | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|---------------------------------------------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| ** **                                                                                        | ** ** | **(unaudited)**         | ** ** | ** **                  | ** ** |
| ** **                                                                                        | ** ** | **(in thousands)** | ** ** |
|                                                                                              |       |                    |       |                        |       |
| Non-interest  bearing mortgage note due to the Operating Partnership, maturing in  June 2027 |       | $                       | 39,240     |                        | $          | 39,240 |   |
| Advances from  the operating partnership, net                                                     |       | 2,806                   |       | 3,103                       |       |
| Long-term  portion of capital leases                                                              |       | 630                     |       | 428                         |       |
|                                                                                              |       | $                       | 42,676     |                        | $          | 42,771 |   |

 

*Leases*

The Company leases equipment under capital andoperating leases.  Future minimum leasepayments under leases in excess of one year are as follows:

11

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| ** **                         | ** ** | **Capital** | ** ** | **Operating** | ** ** |
|------------------------------------|------------|-------------|------------|---------------|------------|
| July 1 through  December 31, 2007  |       | $           | 262        |          | $          | 126 |   |
| 2008                               |       | 459         |       | 195           |       |
| 2009                               |       | 238         |       | —        |       |
| 2010                               |       | 126         |       | —        |       |
| Thereafter                         |       | 155         |       | —        |       |
| Total                              |       | 1,240       |       | $             | 321        |   |
| Less amount representing  interest |       | (165        | )          |          |       |
| Total                              |       | 1,075       |       |          |       |
| Less current  portion              |       | (445        | )          |          |       |
| Long-term portion                  |       | $           | 630        |          |       |   |

 

**7.****              OtherLong-Term Liabilities**

The Company’s Other Long-TermLiabilities consist of the following:
| ** **                                                      | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|-----------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| ** **                                                      | ** ** | **(unaudited)**         | ** ** | ** **                  | ** ** |
| ** **                                                      | ** ** | **(in thousands)** | ** ** |
|                                                            |       |                    |       |                        |       |
| Master lease  refurbishment obligation – long term portion |       | $                       | 2,218      |                        | $          | 2,830 |   |
| Deferred  membership initiation fees and dues                   |       | 1,440                   |       | 1,221                       |       |
|                                                            |       | $                       | 3,658      |                        | $          | 4,051 |   |

 

*Master Lease RefurbishmentObligation*

On July 16, 2004, the Company recorded a liabilityof $4,532 for the refurbishment program (the “Refurbishment Program”) pursuantto the master lease agreement (“MLA”) of the Rental Pool.  This liability represented the Company’sobligation to pay to the various participants in the Rental Pool an amountequal to 50% of the cost to refurbish their respective units, and was recordedat the then net present value (calculated at a discount rate of 15%) of thetotal principal payments of $7,273. Principal and interest payments were due quarterly over the repaymentperiod of the program, beginning with the first quarter of 2005 and ending withthe fourth quarter of 2009. Interest on this liability accrued at a rate of 5%and was paid quarterly. Amortization of the discount was to be charged tointerest expense ratably over the period from January 1, 2005 through December31, 2009.

In addition, the Company agreedto provide a refurbishment reimbursement to the respective condominium ownersfor units placed into the Rental Pool during 2005.  The owners of these units were to be paid 25%of their refurbishment investment, with interest at 2.5% per annum.  The owners of these units received interestand would have received principal payments beginning in 2008 and ending in 2012for total principal payments of approximately $108.

The amortization charged tointerest expense was $153 and $180 for the three months ended June 30, 2007 and2006, respectively.  Amortization expensecharged to interest expense was $314 and $357 for the six months ended June 30,2007 and 2006.** **Thenet present value of this liability is $3,854 and $4,254 as of June 30, 2007and December 31, 2006, respectively, of which $1,636 and $1,424,respectively, is included in current liabilities (see Note 5, *Current Liabilities*, for further discussion).

The corresponding benefit to theResort from the Refurbishment Program was included in the valuation of theRental Pool intangible asset, which was being amortized over the term of theMLA that expires in 2011. Minimum undiscounted unpaid principal payments on theRefurbishment Program at June 30, 2007 are as follows:

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| Year                                   | ** ** | **Amount**              | ** ** |
|----------------------------------------|------------|-------------------------|------------|
| ** **                             | ** ** | **(in thousands)** | ** ** |
| July 1 through  December 31, 2007      |       | $                       | 712        |   |
| 2008                                   |       | 1,790                   |       |
| 2009                                   |       | 2,151                   |       |
| 2010                                   |       | 22                      |       |
| Thereafter                             |       | 59                      |       |
| Total undiscounted  principal payments |       | 4,734                   |       |
| Less: net  present value discount      |       | (880                    | )          |
| Total                                  |       | $                       | 3,854      |   |

 

The Company’sobligation to reimburse the Rental Pool participants for their refurbishmentexpenses was contingent on the units remaining in the Rental Pool from the timeof their refurbishment through 2009. If the unit did not remain in the RentalPool during the reimbursement periods discussed above, the owner or successorowner would forfeit any unpaid installments at the time the unit was removedfrom the Rental Pool.

See Note 9*, Subsequent Events,*for further discussion.

**8.  Commitments and Contingencies**

*Employee Benefit Plans*

The Company maintains a definedcontribution Employee Thrift and Investment Plan, which provides retirementbenefits for all eligible employees, including employees of GTA-IB Operations,LLC, who have elected to participate. Employees must fulfill a 90-day servicerequirement to be eligible to participate in this plan. The Company currentlymatches one half of the first 6% of the contributions of each employee TheCompany made contributions of approximately $42 and $43 for the three monthsended June 30, 2007 and 2006, respectively. For the six months ended June 30, 2007 and 2006, the Company madecontributions of $91 and $106, respectively.

*Westin Management Company Southand Troon Golf L.L.C.*

See Note 5 for discussion of the Westin termination feeobligation and the Troon supplemental fee obligation.

For the three and six monthsended June 30, 2007 and 2006, the management fees incurred under the Westin andTroon Management Agreements are reflected in the table below:
|            | ** ** | **Three months ended June 30,** | ** ** | **Six months ended June 30,** | ** ** |
|------------|------------|-----------------------------------------------------|------------|---------------------------------------------------|------------|
| ** ** | ** ** | **2007**                                            | ** ** | **2006**                                          | ** ** | **2007** | ** ** | **2006** | ** ** |
| ** ** | ** ** | ** **                                          | ** ** | ** **                                        | ** ** | **(in thousands) (unaudited)** | ** ** |
| Westin     |       | $                                                   | —     |                                              | $          | 231 |   | $ | — |   | $ | 595 |   |
| Troon      |       | —                                              |       | 70                                                |       | 101 |   | 172 |   |
| Total      |       | $                                                   | —     |                                              | $          | 301 |   | $ | 101 |   | $ | 767 |   |

 

*Property Tax Lawsuit*

The Company hasfiled lawsuits against the property appraiser of Pinellas County, Florida tochallenge the 2004, 2005 and 2006 real estate assessment on the Resort property.Pinellas County filed a motion to dismiss, which was denied by the court.Discovery is in process and no trial date has been set. If Pinellas County wereto prevail, management believes that there would be no material adverse effectupon our financial statements, as the entire Pinellas County assessment isfully accrued and accounted for at June 30, 2007.  See Note 9, *SubsequentEvents*, for further discussion.

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*Wall Springs Conservatory, Inc.Complaint*

On July 13, 2006, Wall Springs Conservatory, Inc. (“WallSprings”) filed suit against the Company, as successor in interest to GHR, inthe circuit court of Pinellas County for declaratory relief regardinginterpretation of certain contractual language defining which party has theauthority to assign and allocate club memberships.  Wall Springs is the developer of theHighlands of Innisbrook, a single family residential community adjacent to theResort.  The agreement with GHR includeda provision for the sale of up to 52 discounted full golf memberships of theResort.  The Company and the developerare in disagreement as to which party has the right to control the ultimateassignment of the 52 memberships.  OnJuly 14, 2006, Wall Springs also filed suit against us in the small claimsdivision of the Pinellas County Court in connection with an easementagreement.  The Company answered bothclaims, also asserting affirmative defenses and counterclaims in eachaction.  The Company then filed a motionto transfer the small claims matter to Circuit Court, which was granted onSeptember 27, 2006.  The Company thenmoved to consolidate these two cases. Our motion to consolidate was granted by the Circuit Court on March 1,2007.  At this time, the Company isunable to assess the likely outcome of this litigation.  The parties have begun the discovery process,but no trial date has been set by the Court.

*Environmental Remediation*

The FloridaDepartment of Environmental Protection (“DEP”) conducted a site inspection atthe Resort on June 24, 2003. The Resort was found to have improperly disposedof waste paint and solvents and failed to properly store waste lamps and usedoil and oil filters in properly labeled containers. The predecessor ownerentered into a Consent Order wherein the DEP agreed to a reduced civil penaltyof $22, and allowed the predecessor owner to offset 80% of this reduced civilpenalty with credits obtained through the implementation of a pollution controlproject and a process of ongoing self-monitoring and reporting of environmentalconditions to the DEP. The DEP determined that an above ground self-containedstorage tank system at the Resort qualifies for this credit. The Resortinstalled the system and, on an ongoing basis, continues to monitor theenvironmental conditions at the Resort and to report these conditions to theDEP. As part of the ongoing self-monitoring and reporting process, the Resortengaged a third party, URS Corporation, to develop a Site AssessmentReport and monitor the environmental conditions noted in the DEP ConsentOrder.  The final formal proposal from URS Corporation was received onApril 6, 2007 and was subsequently approved by the DEP.  The actual cost for the remediation wasapproximately $59.  URS Corporationcompleted the work in May 2007.  Thisamount is accrued as of June 30, 2007. Additional testing will be completed. If tests remain favorable, thisshould conclude the process. Obligations with respect to this matter wereassumed by Salamander in connection with the sale of the Resort.

**9.  Subsequent Events**

GTA announced onJune 25, 2007, that the Company and certain of its affiliated entities enteredinto an Asset Purchase Agreement (the “Asset Purchase Agreement”) withSalamander Innisbrook Securities, LLC, Salamander Innisbrook Condominium, LLC ,and Salamander Innisbrook, LLC (collectively, “Salamander”) providing for theacquisition by Salamander of the business (the “Business”) of the Resort,certain related assets and liabilities and the Company’s equity interest inGolf Host Securities, Inc.  The sale of the Resort was completed onJuly 16, 2007 and, in addition to the assumption of certain liabilitiesrelating to the Resort and the Business, Salamander paid to GTA $35,000 in cashplus $4,000 to be used to settle certain obligations, subject to certain adjustments.

On July 16, 2007, GTA, the Company, the OperatingPartnership, GTA-IB Golf Resort, LLC, GTA-IB Condominium, LLC and GTA-IBManagement, LLC completed the sale of the Business of the Resort and all ofGTA-IB Golf Resort, LLC’s equity interest in Golf Host Securities, Inc. toSalamander pursuant to the Asset Purchase Agreement dated June 25, 2007.  The purchase price received by the Companyfrom Salamander was approximately $35,000 in cash, plus (a) $4,000 to be usedto settle certain obligations, and (b) the assumption of certainliabilities.  The purchase price is subject to certain post-closingworking capital adjustments, as set forth in the Asset Purchase Agreement.  The Asset Purchase Agreement also providedfor a holdback for accounts receivable and a $2,000 escrow for GTA’s and theCompany’s indemnification liabilities.

As part of the sale of the Business, Salamander hasassumed operation and control of the Rental Pool.  The Rental Poolobligated the Company to make quarterly distributions of a percentage of roomrevenues to participating owners under MLA.  The MLA also entitledparticipating owners to 50% reimbursement of the refurbishment costs of theirunits.  In addition to reimbursement by Salamander of such obligationssince January 1, 2007 in the amount of $844,498, obligations in connection withthe Refurbishment Program, along with all other obligations under the MLA, wereassumed 

14

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by Salamander upon the closing of the Asset PurchaseAgreement.  Also, all capital andoperating lease obligations of the Resort were assumed by Salamander upon theclosing of the Asset Purchase Agreement.

On July 13, 2007, the Company and Troon entered into aFacilities Management Agreement Termination Agreement (the “Troon TerminationAgreement”) pursuant to which the Troon Management Agreement wasterminated.  The Troon TerminationAgreement also provided for the payment to Troon of $177 in accrued and unpaidfees and reimbursable expenses and the supplemental fee of $800 contemporaneouswith the sale of the Resort.

Alsocontemporaneously with the closing of the sale of the Resort, (a) alloutstanding accrued and unpaid amounts were paid to Pinellas County forproperty taxes, in the approximate amount of $343, (b) the renegotiated Westintermination fee of $5,403, as described in Note 5 above, was paid to Westin,(c) the supplemental fee of $800 was paid to Troon, and (d) the Patriot Bankloan was repaid and cancelled.  Withregard to the property taxes, the Company intends to continue to pursue therespective lawsuits to recover these amounts from the Pinellas County.  See Notes 5, *CurrentLiabilities*, and 8, *Commitments andContingencies*, for further discussion.

Parcel F, which isowned by GHR, remains under contract for sale. Pursuant to the sale agreement, the sale is expected to close on orabout August 31, 2007.

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**INNISBROOK RENTAL POOLLEASE OPERATIONCONDENSED BALANCE SHEETSAS OF JUNE 30, 2007 AND DECEMBER 31, 2006(in thousands)**
| ** **                                                              | ** ** | **June 30,  2007** | ** ** | **December 31,  2006*** | ** ** |
|-------------------------------------------------------------------------|------------|-------------------------|------------|------------------------------|------------|
| ** **                                                              | ** ** | **(unaudited)**         | ** ** | ** **                   | ** ** |
|                                                                    |       |                    |       |                         |       |
| **DISTRIBUTION  FUND**                                                  | ** ** | ** **              | ** ** | ** **                   | ** ** |
| **Assets**                                                              |       |                    |       |                         |       |
| Receivable from  GTA–IB, LLC for distribution                      |       | $                       | 850        |                         | $          | 845 |   |
| Interest  receivable from maintenance escrow fund                       |       | 27                      |       | 27                           |       |
| **Total  assets**                                                       |       | $                       | 877        |                         | $          | 872 |   |
| **Liabilities**                                                         |       |                    |       |                         |       |
| Due to Rental  Pool participants for distribution                       |       | $                       | 670        |                         | $          | 660 |   |
| Due to  maintenance escrow fund                                         |       | 207                     |       | 212                          |       |
| **Total  liabilities**                                                  |       | $                       | 877        |                         | $          | 872 |   |
| **MAINTENANCE  ESCROW FUND**                                            | ** ** | ** **              | ** ** | ** **                   | ** ** |
| **Assets**                                                              |       |                    |       |                         |       |
| Cash and cash  equivalents                                              |       | $                       | 309        |                         | $          | 234 |   |
| Short-term  investments                                                 |       | 1,900                   |       | 1,900                        |       |
| Receivable from  distribution fund                                      |       | 207                     |       | 211                          |       |
| Inventory                                                               |       | —                  |       | 25                           |       |
| Interest  receivable                                                    |       | 29                      |       | 35                           |       |
| **Total  assets**                                                       |       | $                       | 2,445      |                         | $          | 2,405 |   |
| **Liabilities and participants’  fund balances**                   |       |                    |       |                         |       |
| Accounts payable                                                        |       | $                       | 15         |                         | $          | 21 |   |
| Interest payable  to distribution fund                                  |       | 27                      |       | 26                           |       |
| Carpet care  reserve                                                    |       | 84                      |       | 75                           |       |
| Rental Pool  participants’ fund balances                           |       | 2,319                   |       | 2,283                        |       |
| **Total liabilities and Rental  Pool participants’ fund balances** |       | $                       | 2,445      |                         | $          | 2,405 |   |

 

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***Derived from audited combined financialstatements.**

*See accompanying notes to thesecondensed financial statements.*

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**INNISBROOK RENTAL POOLLEASE OPERATIONCONDENSED STATEMENTS OF CHANGES IN PARTICIPANTS’ DISTRIBUTION FUND BALANCESFOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006(in thousands) (unaudited)**
| ** **                                                    | ** ** | **Three months  ended June 30,** | ** ** | **Six months  ended June 30,** | ** ** |
|---------------------------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                    | ** ** | **2007**                                        | ** ** | **2006**                                      | ** ** | **2007** | ** ** | **2006** | ** ** |
| **DISTRIBUTION FUND**                                         | ** ** | ** **                                      | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** ** | ** ** |
| Balance,  beginning of period                                 |       | $                                               | —     |                                          | $          | — |   | $ | — |   | $ | — |   |
| Additions:                                                    |       |                                            |       |                                          |       |   |   |   |   |
| Amounts available for distribution                            |       | 850                                             |       | 1,203                                         |       | 2,487 |   | 3,247 |   |
| Interest received or receivable from Maintenance  Escrow Fund |       | 27                                              |       | 23                                            |       | 54 |   | 41 |   |
| Reductions:                                                   |       |                                            |       |                                          |       |   |   |   |   |
| Amounts withheld for Maintenance Escrow Fund                  |       | (207                                            | )          | (304                                          | )          | (510 | ) | (706 | ) |
| Distribution accrued or paid to Rental Pool  participants     |       | (670                                            | )          | (922                                          | )          | (2,031 | ) | (2,582 | ) |
| Balance, end of period                                        |       | $                                               | —     |                                          | $          | — |   | $ | — |   | $ | — |   |

 

*See accompanying notes to thesecondensed financial statements.*

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**INNISBROOK RENTAL POOLLEASE OPERATIONCONDENSED STATEMENTS OF CHANGES IN PARTICIPANTS’ MAINTENANCE ESCROW FUNDBALANCESFOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006(in thousands) (unaudited)**
| ** **                                                                   | ** ** | **Three months  Ended June 30,** | ** ** | **Six months  ended June 30,** | ** ** |
|------------------------------------------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                                   | ** ** | **2007**                                        | ** ** | **2006**                                      | ** ** | **2007** | ** ** | **2006** | ** ** |
| **MAINTENANCE ESCROW FUND**                                                  | ** ** | ** **                                      | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** ** | ** ** |
| Balance,  beginning of period                                                |       | $                                               | 2,300      |                                          | $          | 2,222 |   | $ | 2,283 |   | $ | 1,975 |   |
| Additions:                                                                   |       |                                            |       |                                          |       |   |   |   |   |
| Amounts withheld from occupancy fees                                         |       | 207                                             |       | 304                                           |       | 510 |   | 706 |   |
| Interest earned                                                              |       | 27                                              |       | 23                                            |       | 54 |   | 41 |   |
| Charges to Rental Pool participants to establish or  restore escrow balances |       | 34                                              |       | 135                                           |       | 79 |   | 310 |   |
| Reductions:                                                                  |       |                                            |       |                                          |       |   |   |   |   |
| Maintenance charges                                                          |       | (208                                            | )          | (303                                          | )          | (504 | ) | (518 | ) |
| Carpet care reserve deposit                                                  |       | (9                                              | )          | (15                                           | )          | (24 | ) | (35 | ) |
| Interest accrued or paid to Distribution Fund                                |       | (27                                             | )          | (23                                           | )          | (54 | ) | (41 | ) |
| Refunds to Rental Pool participants pursuant to the  Master Lease Agreements |       | (5                                              | )          | (63                                           | )          | (25 | ) | (158 | ) |
| Balance, end of period                                                       |       | $                                               | 2,319      |                                          | $          | 2,280 |   | $ | 2,319 |   | $ | 2,280 |   |

 

*See accompanying notes to thesecondensed financial statements.*

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**INNISBROOK RENTAL POOLLEASE OPERATIONCONDENSED STATEMENTS OF OPERATIONSFOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006(in thousands) (unaudited)**
| ** **                                  | ** ** | **Three months  Ended June 30,** | ** ** | **Six months  ended June 30,** | ** ** |
|---------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                  | ** ** | **2007**                                        | ** ** | **2006**                                      | ** ** | **2007** | ** ** | **2006** | ** ** |
| **DISTRIBUTION FUND**                       | ** ** | ** **                                      | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** ** | ** ** |
| Gross revenue                               |       | $                                               | 2,318      |                                          | $          | 3,372 |   | $ | 6,868 |   | $ | 9,127 |   |
| Deductions:                                 |       |                                            |       |                                          |       |   |   |   |   |
| Agents’ commissions                    |       | 42                                              |       | 132                                           |       | 245 |   | 427 |   |
| Resort fees                                 |       | —                                          |       | 120                                           |       | — |   | 231 |   |
| Credit card fees                            |       | 53                                              |       | 78                                            |       | 157 |   | 210 |   |
| Professional fees                           |       | 6                                               |       | 6                                             |       | 12 |   | 12 |   |
| Uncollectible room rents                    |       | 1                                               |       | 36                                            |       | 2 |   | 36 |   |
| Linen replacements                          |       | 12                                              |       | 15                                            |       | 46 |   | 90 |   |
| Rental pool complimentary fees              |       | 1                                               |       | 1                                             |       | 1 |   | 1 |   |
|                                        |       | 115                                             |       | 388                                           |       | 463 |   | 1,007 |   |
| Adjusted gross  revenue                     |       | 2,203                                           |       | 2,984                                         |       | 6,405 |   | 8,120 |   |
| Amount retained  by lessee                  |       | (1,322)                                         |       | (1,790)                                       |       | (3,843) |   | (4,872) |   |
| Gross income  distribution                  |       | 881                                             |       | 1,194                                         |       | 2,562 |   | 3,248 |   |
| Adjustments to  gross income distribution:  |       |                                            |       |                                          |       |   |   |   |   |
| General pooled expense                      |       | —                                          |       | (4)                                           |       | (1) |   | (6) |   |
| Corporate complimentary occupancy fees      |       | 3                                               |       | 7                                             |       | 9 |   | 13 |   |
| Interest                                    |       | (3)                                             |       | (3)                                           |       | (6) |   | (6) |   |
| Occupancy fees                              |       | (230)                                           |       | (338)                                         |       | (566) |   | (785) |   |
| Advisory committee expenses                 |       | (48)                                            |       | (44)                                          |       | (105) |   | (97) |   |
| Net income  distribution                    |       | 603                                             |       | 812                                           |       | 1,893 |   | 2,367 |   |
| Adjustments to  net income distribution:    |       |                                            |       |                                          |       |   |   |   |   |
| Occupancy fees                              |       | 230                                             |       | 338                                           |       | 566 |   | 785 |   |
| Hospitality suite fees                      |       | 1                                               |       | 1                                             |       | 3 |   | 1 |   |
| Associate room fees                         |       | 15                                              |       | 52                                            |       | 26 |   | 94 |   |
| Available for  distribution to participants |       | $                                               | 849        |                                          | $          | 1,203 |   | $ | 2,488 |   | $ | 3,247 |   |

 

*See accompanying notes to thesecondensed financial statements.*

19

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**INNISBROOK RENTAL POOL LEASEOPERATION**

**NOTES TO CONDENSED FINANCIALSTATEMENTS**

**FOR THE THREE AND SIX MONTHSENDED JUNE 30, 2007 AND 2006**

**(in thousands)(unaudited)**

**1.****             RentalPool Lease Operations**

**Organizationand Operations**

The Company is a single member limitedliability company, wholly owned by GTA-IB Golf Resort, LLC. GTA-IB Golf Resort,LLC is itself a wholly owned subsidiary of the Operating Partnership. There isno established market for the Company’s membership interests. The precedingcondensed financial statements of the Rental Pool and the Resort are for theperiods ended June 30, 2007 and 2006. The Rental Pool consists of condominiums at the Resort which are leasedby the Company from their owners and used as hotel accommodations for theResort.

Historically,the predecessor owner, GHR, and the Company have offered several differentprograms to the condominium owners who are eligible to participate in theRental Pool (the “Rental Pool Participants”). Effective January 1, 2002, GHRoffered a new Master Lease Agreement (“NMLA”) which permitted all Rental PoolParticipants the opportunity to convert to the NMLA from any prior agreementthey were participating in at that time. In addition, the NMLA provides that on an annual basis each Rental PoolParticipant may elect to participate in the Rental Pool for the following yearby signing an Annual Lease Agreement (“ALA”). Any Rental Pool Participant whodoes not sign the ALA is not permitted to participate in the Rental Pool forthe following year.  Under the NMLA, 40%of the Adjusted Gross Revenues, as defined in the NMLA, are distributed to theRental Pool Participants and the remaining 60% is retained by the Company.

TheRental Pool condensed financial statements consist of the Distribution Fund andthe Maintenance Escrow Fund as defined in the NMLA.

TheDistribution Fund accounts for the sharing of the Rental Pool Participants’portion of Adjusted Gross Revenues in accordance with the NMLA.

TheMaintenance Escrow Fund accounts for amounts set aside in accordance with theNMLA for the ongoing maintenance of the condominium units participating in theRental Pool.

TheCondensed Statements of Operations reflects the aggregate Rental PoolParticipants’ earnings as a result of participating in the Rental Pool. Inaccordance with the NMLA, the Company and the Rental Pool Participants shareAdjusted Gross Revenues.  Adjusted GrossRevenues are defined in the NMLA as gross room revenues from the unitsparticipating in the Rental Pool, less certain defined costs.

Inaddition, GHR agreed in the NMLA to reimburse the Rental Pool Participants whowere originally participating in the NMLA an amount up to 50% of the actualunit refurbishment costs, plus interest at a rate of 5% per annum on suchamounts, beginning in 2002.  For newlyrefurbished units entering the Rental Pool during 2005, the Company agreed toreimburse the Rental Pool Participants who entered the rental pool pursuant tothe NMLA an amount up to 25% of the actual unit refurbishment costs, plusinterest at a rate of 2.5% per annum, beginning in 2005.  The obligation to reimburse the refurbishmentcosts and pay interest thereon applies only if certain minimum participationthresholds are maintained. The Company assumed the obligations of GHR under theNMLA and subsequent ALA’s, or, collectively, the Agreements.

**MaintenanceEscrow Fund Accounts**

The NMLA generallyprovides that 90% of the occupancy fees earned by each Rental Pool Participantare ultimately deposited in that Rental Pool Participant’s Maintenance EscrowFund account. This account provides funds for payment of amounts that are duefrom Rental Pool Participants under the Agreements for maintenance andrefurbishment services for or related to their condominium units. In the eventthat a Rental Pool Participant’s balance falls below the amount necessary toprovide adequate funds for maintenance and replacements, the Rental PoolParticipant is required to restore the escrow 

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balance to adefined minimum level. The NMLA requires that specific fund balances must bemaintained, by unit type, size and age of refurbishment, as defined in theapplicable Agreement. Under the NMLA, a percentage of the occupancy fees aredeposited into the carpet care reserve in the Maintenance Escrow Fund.  The portion of the Maintenance Escrow Fundrepresenting the carpet care reserve is expected to be used to pay the expenseof carpet cleaning for all Rental Pool Participants. This percentage isestimated to provide the amount necessary to fund carpet cleaning expenses andmay be adjusted annually through mutual agreement of the Company and theparticipants. The amounts expended for carpet care were approximately $7, $5,$14 and $12 for the three months and six months ended June 30, 2007 and 2006,respectively.

The Lessors’ Advisory Committee (“LAC”), subject tothe restrictions contained in the Agreements, invests the Maintenance EscrowFund on behalf of the Rental Pool Participants. The LAC consists of nine RentalPool Participants who are elected to advise the Company on Rental Pool mattersand to negotiate amendments to the lease agreement, the ALA’s, and the NMLA.Income earned on the investments of the Maintenance Escrow Fund is allocatedproportionately to the respective Maintenance Escrow Fund accounts of theRental Pool Participants and paid quarterly through the Distribution Fund.   At June 30, 2007 and December 31, 2006, theMaintenance Escrow Fund held certificates of deposit of $1,900 and $1,900,respectively, with maturity terms ranging from six months to twelve months andbearing interest at rates from 5.0% to 5.2% at June 30, 2007.  At June 30, 2007 and December 31, 2006, thecarrying value of these investments approximates fair value.

**Going Concern**

#### Thecontinuation and success of the Rental Pool is contingent upon the continuationof the operations of the Resort. In turn, the success of the Resort’soperations is contingent upon the continued participation of condominium ownersin the Rental Pool. The Company reported a loss from operations ofapproximately $1,394 and net income of approximately $357 for the three and sixmonths ended June 30, 2007, respectively; however, the impact of seasonality onthe Resort’s operations and the projections of the Resort’s cash flow throughthe end of 2007 raised substantial doubt about the Company’s ability tocontinue as a going concern.  However,since the sale of the Resort was concluded on July 16, 2007, the liquidity andgoing concern issues related to the Company were resolved, as more fullydescribed in Note 9, *Subsequent Events*,to the Condensed Combined Financial Statements of the Company above.

#### **ITEM 2.Management’s Discussion and Analysis of Financial Condition and Results ofOperations**

We were formed onDecember 30, 2002 as a wholly-owned subsidiary of GTA-IB Golf Resort,LLC, which in turn is a wholly-owned subsidiary of the OperatingPartnership.  The Operating Partnershipis the operating partnership of GTA. GHR is the former unaffiliated owner ofthe Resort and the former borrower who defaulted under a $79,000 participatingmortgage loan funded by the Operating Partnership in June 1997.

We and the Operating Partnershipentered into a Settlement Agreement, dated July 15, 2004, with GHR, GolfHosts, Inc., Golf Host Management, Inc., Golf HostCondominium, Inc. and Golf Host Condominium, LLC. The Settlement Agreementresolved a number of issues between the parties, including GHR’s default underthe $79,000 loan made by the Operating Partnership to GHR inJune 1997. As part of the Settlement Agreement, we took ownership of theResort effective at the close of business on July 15, 2004. Also, inconnection with the Settlement Agreement, we entered into the Westin ManagementAgreement providing for Westin’s management of the Resort, which was terminatedon October 31, 2006.  In addition, Westinand Troon entered into the Troon Management Agreement setting forth the termsof Troon’s management of the golf facilities at the Resort.  See further discussion in Note 5 tothe Condensed Combined Financial Statements in Item 1 of this Quarterly Reporton Form 10-Q.

The Operating Partnership hadpreviously entered into an agreement with GHR and the prospective purchaser ofParcel F. The Parcel F Development Agreement was executed onMarch 29, 2004 and amended on August 10, 2005 to add us as a party.  The Parcel F Development Agreement setsforth the terms and conditions pursuant to which Parcel F may be developedand includes restrictions on GHR, as the owner of Parcel F, which are designedto avoid interference with the operations of the Resort.  The Parcel F Development Agreement alsocontains provisions which we believe will increase the Operating Partnership’sability to better manage the location of the access road for Parcel F.  See Part II, Item 1. Legal Proceedings,below, for more information.  Ourinterests in Parcel F were not transferred with the sale of the Resortdescribed below.

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On July 16, 2007, GTA, the Company, the OperatingPartnership, GTA-IB Golf Resort, LLC, GTA-IB Condominium, LLC and GTA-IBManagement, LLC completed the sale of the Business of the Resort and all ofGTA-IB Golf Resort, LLC’s equity interest in Golf Host Securities, Inc. toSalamander pursuant to the Asset Purchase Agreement dated June 25, 2007.  The purchase price received by the Companyfrom Salamander was approximately $35,000 in cash, plus (a) $4,000 to be usedto settle certain obligations, and (b) the assumption of certainliabilities.  The purchase price is subject to certain post-closingworking capital adjustments, as set forth in the Asset Purchase Agreement.  The Asset Purchase Agreement also providedfor a holdback for accounts receivable and a $2,000 escrow for GTA’s and theCompany’s indemnification liabilities.

See further discussion in Note 9 to the CondensedCombined Financial Statements referred to in Item 1 of this Quarterly Report onForm 10-Q.

**Results of Operations**

Because the Resort is adestination golf resort, we believe it appeals to a different market than themarket to which stand-alone hotels located in downtown metropolitan areaswould appeal. The Resort provides recreation, condominium accommodations andfood and beverage dining and catering options to business meeting or grouptravelers, transient guests who play golf, guests who purchase golf packagesand guests who bring their families to the Resort. As a destination golfresort, the Resort’s performance is sensitive to weather conditions andseasonality.

The Resort had lower realizedrevenue, fewer room nights and fewer golf rounds during the three months andsix months ended June 30, 2007 than during the corresponding periods in 2006.The decrease in realized revenue is directly attributable to the reduction inaggregate room nights, described below, for both the group and transient marketsectors.  The decrease in aggregate roomnights in the group sector was primarily due to 3,000 room nights that bookedin the first quarter of 2006 that the Resort chose to decline for the firstquarter of 2007 because it was not profitable business for the Resort.  The balance of the variance was due to groupsthat are on a regional rotation for their respective meetings.  The Resort was not able to replace these roomnights with other group bookings.  Underthe Westin Management Agreement, which terminated on October 31, 2006, theResort had access to the Westin Global Sales Office (the “GSO”), which providedgroup booking leads to the Resort.  Sincethe group booking window is typically six to eighteen months out, the Resortwas negatively impacted by the loss of the leads historically provided by theGSO, which were not able to be replicated by other lead sources in the shortwindow of time between the termination of the Westin Management Agreement onOctober 31, 2006 and the peak season of 2007, January through April. Since thetermination of the Westin Management Agreement, the Resort management teams hadmade efforts to replicate the GSO lead source with other independent leadsources but the impact of these efforts was not realized in the short-term.

Transient room nights were alsodown due to the loss of the Westin central reservations services and othertransient booking sources and the benefit of an international marketingcampaign that was available when the Resort was under the Westin internationalhotel chain flag.  As we continued toestablish Innisbrook as an independent brand and gain exposure in the internetbooking arena, we believed we would realize less of a variance in the roomnights in the transient sector.  TheResort did realize an increase in the overall average daily room rate ofapproximately $8.37, for the six months ended June 30, 2007 as compared to thesix months ended June 30, 2006, from targeting a more profitable type of guest,which helped mitigate some of the revenue lost due to the reduction in bothroom nights and golf rounds.

During the six months ended June30, 2007, each of the market segments at the Resort discussed below produced agreater aggregate spending level per room night as compared to the six monthsended June 30, 2006.  While overall roomnights, meals served and golf rounds played decreased 28.7%, 30.9% and 5.8%,respectively, during the first six months of 2007 as compared to the sameperiod in 2006, overall gross revenue per room night increased by $90.66 to$584.77 from $494.11 while per meal revenue increased by $4.47 to $35.10 from$30.63 and gross golf revenue per round played increased by $6.23 to $138.22from $131.99.  The fluctuation in grossrevenue is discussed in further detail below.

Thefollowing table shows utilization of the Resort facilities broken down bydepartment, results of operations and selected Rental Pool statistical dataduring the three month and six month periods ended June 30, 2007 and June 30,2006.  This information is shown inthousands, except for statistical data such as the utilization data in thetable below:

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| ** **                            | ** ** | **Three months ended June 30,** | ** ** | **Six months ended June 30,** | ** ** |
|---------------------------------------|------------|-----------------------------------------------------|------------|---------------------------------------------------|------------|
| ** **                            | ** ** | **2007**                                            | ** ** | **2006**                                          | ** ** | **Increase  (Decrease)** | ** ** | **Percentage  Change** | ** ** | **2007** | ** ** | **2006** | ** ** | **Increase  (Decrease)** | ** ** | **Percentage  Change** | ** ** |
| **Utilization of Resort facilities:** | ** ** | ** **                                          | ** ** | ** **                                        | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Available room nights                 |       | 53,423                                              |       | 53,108                                            |       | 315 |   | 0.6 | % | 104,530 |   | 104,175 |   | 355 |   | 0.3 | % |
| Actual room nights                    |       |                                                |       |                                              |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Group                                 |       | 9,207                                               |       | 14,768                                            |       | (5,561 | ) | (37.7 | )% | 25,491 |   | 37,861 |   | (12,370 | ) | (32.7 | )% |
| Transient                             |       | 6,824                                               |       | 8,650                                             |       | (1,826 | ) | (21.1 | )% | 13,876 |   | 17,333 |   | (3,457 | ) | (19.9 | )% |
| Total room nights                     |       | 16,031                                              |       | 23,418                                            |       | (7,387 | ) | (31.5 | )% | 39,367 |   | 55,194 |   | (15,827 | ) | (28.7 | )% |
| Food and beverage meals               |       | 71,058                                              |       | 96,548                                            |       | (25,490 | ) | (26.4 | )% | 176,391 |   | 255,257 |   | (78,866 | ) | (30.9 | )% |
| Golf rounds                           |       |                                                |       |                                              |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Resort guests                         |       | 18,936                                              |       | 20,290                                            |       | (1,354 | ) | (06.7 | )% | 39,775 |   | 43,711 |   | (3,936 | ) | (9.0 | )% |
| Member/guests                         |       | 9,013                                               |       | 8,711                                             |       | 302 |   | 03.5 | % | 21,735 |   | 21,569 |   | 166 |   | 0.8 | % |
| Total golf rounds                     |       | 27,949                                              |       | 29,001                                            |       | (1,052 | ) | (03.6 | )% | 61,510 |   | 65,280 |   | (3,770 | ) | (5.8 | )% |
| Gross revenue  per room night         |       | $                                                   | 539.89     |                                              | $          | 438.08 |   | $ | 101.81 |   | 23.2 | % | $ | 584.77 |   | $ | 494.11 |   | $ | 90.66 |   | 18.3 | % |
|                                       |            |                                                     |            |                                                   |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 
| ** **                                  | ** ** | **Three Months Ended June 30, ,** | ** ** | **Six Months Ended June 30** | ** ** |
|---------------------------------------------|------------|------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                  | ** ** | **2007**                                                   | ** ** | **2006**                                         | ** ** | **Increase  (decrease)** | ** ** | **Percentage  Change** | ** ** | **2007** | ** ** | **2006** | ** ** | **Increase  (decrease)** | ** ** | **Percentage  Change** | ** ** |
| **Results  of operations:**                 | ** ** | ** **                                                 | ** ** | ** **                                       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Revenues                                    |       |                                                       |       |                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Hotel                                       |       | $                                                          | 2,354      |                                             | $          | 3,444 |   | $ | (1,090 | ) | (31.6 | )% | $ | 6,955 |   | $ | 9,289 |   | $ | (2,334 | ) | (25.1 | )% |
| Food and beverage                           |       | 2,205                                                      |       | 2,686                                            |       | (481 | ) | (17.9 | )% | 6,192 |   | 7,818 |   | (1,626 | ) | (20.8 | )% |
| Golf                                        |       | 3,468                                                      |       | 3,527                                            |       | (59 | ) | (1.7 | )% | 8,502 |   | 8,616 |   | (114 | ) | (1.3 | )% |
| Other                                       |       | 628                                                        |       | 602                                              |       | 26 |   | 4.3 | % | 1,372 |   | 1,549 |   | (177 | ) | (11.4 | )% |
| Total revenues                              |       | 8,655                                                      |       | 10,259                                           |       | (1,604 | ) | (15.6 | )% | 23,021 |   | 27,272 |   | (4,251 | ) | (15.6 | )% |
| Expenses                                    |       |                                                       |       |                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Hotel                                       |       | 2,215                                                      |       | 2,843                                            |       | (628 | ) | (22.1 | )% | 5,578 |   | 6,950 |   | (1,372 | ) | (19.7 | )% |
| Food and beverage                           |       | 1,868                                                      |       | 1,878                                            |       | (10 | ) | (0.5 | )% | 4,500 |   | 5,011 |   | (511 | ) | (10.2 | )% |
| Golf                                        |       | 1,908                                                      |       | 1,911                                            |       | (3 | ) | (0.2 | )% | 3,921 |   | 3,767 |   | 154 |   | 4.1 | % |
| Other                                       |       | 2,609                                                      |       | 2,540                                            |       | 69 |   | 2.7 | % | 5,241 |   | 5,377 |   | (136 | ) | (2.5 | )% |
| General and administrative                  |       | 840                                                        |       | 1,410                                            |       | (570 | ) | (40.4 | )% | 1,960 |   | 3,152 |   | (1,192 | ) | (37.8 | )% |
| Depreciation and amortization               |       | 566                                                        |       | 533                                              |       | 33 |   | 06.2 | % | 1,102 |   | 1,024 |   | 78 |   | 7.6 | % |
| Total expenses                              |       | 10,006                                                     |       | 11,115                                           |       | (1,109 | ) | (10.0 | )% | 22,302 |   | 25,281 |   | (2,979 | ) | (11.8 | )% |
| Operating  income(loss)                     |       | (1,351                                                     | )          | (856                                             | )          | (495 | ) | (57.8 | )% | 719 |   | 1,991 |   | (1,272 | ) | (63.9 | )% |
| Other income                                |       | (191                                                       | )          | —                                           |       | (191 | ) | (100.0 | )% | (132 | ) | — |   | (132 | ) | (100.0 | )% |
| Interest  expense, net                      |       | 234                                                        |       | 370                                              |       | (136 | ) | (36.8 | )% | 494 |   | 743 |   | (249 | ) | (33.5 | )% |
| Net income(loss)                            |       | $                                                          | (1,394     | )                                                | $          | (1,226 | ) | $ | (168 | ) | (13.7 | )% | $ | 357 |   | $ | 1,248 |   | $ | (891 | ) | (71.4 | )% |
| ** **                                  | ** ** | ** **                                                 | ** ** | ** **                                       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Selected  Rental Pool statistical data:** | ** ** | ** **                                                 | ** ** | ** **                                       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Average daily  distribution                 |       | $                                                          | 15.91      |                                             | $          | 22.65 |   | $ | (6.74 | ) | (29.8 | )% | $ | 23.79 |   | $ | 31.17 |   | $ | (7.38 | ) | (23.7 | )% |
| Average room  rate                          |       | 146.83                                                     |       | $                                                | 147.04     |   | $ | 0.21 |   | 0.1 | % | $ | 176.66 |   | $ | 168.29 |   | $ | 8.37 |   | 5.0 | % |
| Occupancy  percentage                       |       | 30.0                                                       | %          | 44.1                                             | %          | (14.1 | ) | (31.9 | )% | 37.7 | % | 53.0 | % | (15.3 | ) | (28.9 | )% |
| Average number of  available units          |       | 587                                                        |       | 584                                              |       | 3 |   | 0.5 | % | 578 |   | 576 |   | 2 |   | 0.3 | % |

 

***Three Months ended June 30, 2007 and 2006***

During the three months endedJune 30, 2007, there were 7,387, or 31.5%, fewer occupied room nights ascompared to the three months ended June 30, 2006.  There were 1,826 fewer transient room nightsand 5,561 less group room nights during the three months ended June 30, 2007 ascompared to the three months ended June 30, 2006.  Group room nights consist of conference roomnights, or room nights which are booked and correlate to a meeting orconvention at the Resort, and transient room nights are room nights which are bookedand do not correlate to a meeting or convention at the Resort.  Transient room nights are often booked within30 days or less from the date of the visit, while group room nights aretypically booked no less 

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than 120 days in advance of the date of avisit.  Larger groups typically book 16to 18 months in advance of a stay. Transient room nights are often booked as part of golf packages andInternet bookings, among others. Management believes that the decrease in the room nights, as describedin the introductory paragraph above, is attributable to the change in lead andreservation channels from the Westin central reservation system and theirinternational marketing programs and other sources available through Westin toindependent lead and reservation channels. This type of change takes time to re-establish the Innisbrook name as anindependent brand and gain appropriate exposure in the Internet and Mediamarket separate from the Westin identity. In addition, the Resort staff continued to learn how to maximize thereservation channels available to it as an independent property.

Total revenue for the Resort was$1,604 less during the three months ended June 30, 2007 than in the same periodof 2006. An overall increase in spending by the Resort’s guests helped tomitigate the reduction in gross revenue that resulted from the lower number ofroom nights and decreases in banquet and catering sales in three months endedJune 30, 2007 as compared to same period of 2006.  During the same periods, the average roomrate decreased by $0.21 per room night from $147.04 in 2006 to $146.83 in2007.  Gross revenue per room nightduring the three months ended June 30, 2007 was $539.89, as compared to $438.08for the same period in 2006.

The most significant decrease inrevenues at the Resort during the three months ended June 30, 2007 occurred inthe Hotel department. Revenues attributable to that category for the threemonths ended June 30, 2007 decreased by approximately $1,090, or 31.6%, ascompared to the same period in 2006. Hotel revenue decreased primarily becauseof the decrease in aggregate room nights noted above.  Food and Beverage revenues decreased byapproximately $481, or 17.9%, as a result of 25,490, or 26.4%, fewer mealsbeing served, also referred to as covers, as compared to the three months endedJune 30, 2006.   This aggregate decreasein covers served was primarily attributable to the Resort’s banquets, cateringand outlets, with a combined decrease of approximately 22,830 covers. Coversattributed to the Resort’s room and pool service decreased by approximately2,660. While the aggregate number of covers decreased, revenue per coverincreased from $27.82 to $31.03.  Thecombination of decreased number of covers and increased revenue per cover producedthe $481 negative variance for the three months ended June 30, 2007 as comparedto the three months ended June 30, 2006.

Golf revenue decreased byapproximately $59, primarily as a result of 1,052 fewer rounds of golf playedduring the three months ended June 30, 2007 as compared to the same period in2006.  Gross golf revenue for the quarterended June 30, 2007 averaged $124.08 per round, as compared to $121.62 perround for the same period in 2006.  Thenet decrease in aggregate rounds played was attributed to 1,354 fewer roundsplayed by the Resort’s transient guests, including packages, offset by anaggregate increase of 302 rounds played by Resort members.  The number of total golf rounds played in thethree months ended June 30, 2007 was 27,949, compared to 29,001 rounds playedin the same period of 2006. Golf revenue does not necessarily increase ordecrease exactly in proportion to occupied room nights because golf revenuealso includes member dues and fees and day golf group fees, neither of which isdirectly related or dependent upon occupied room nights.

Consistent with past periods, we continued to monitortotal operating expenses in an attempt to ensure that we controlled expensesand that the expenses bore a direct correlation to the room nights, food andbeverage covers and golf round demand. Aggregate total operating expenses donot generally increase or decrease on a one-to-one basis with total operatingrevenue because the Resort must carry a minimum fixed operating staff and othersupport expenses at all times. In those operating departments where thevariable costs can best be managed, we manage these costs consistent with room,food and beverage and golf demand. Total Resort operating expenses, beforedepreciation and amortization and excluding the Rental Pool amortization inhotel operations, decreased by approximately $1,142, or 10.8%, for the threemonths ended June 30, 2007 as compared to the same period in 2006.  This decrease is primarily attributable tothe decrease in room nights and food and beverage covers discussed above.

Depreciation and amortization expense, excluding theRental Pool amortization included in hotel expenses, was approximately $566 and$533 for the three months ended June 30, 2007 and 2006, respectively.

Interest expense, net of interestincome, was approximately $234 and $370 for the three months ended June 30,2007 and 2006, respectively, and reflects amortization of the discount of ourRental Pool refurbishment liability in the amount of $153 and the interest portionof lease payments amounting to approximately $29.  The defaulted participating mortgage loanthat was assumed by us from GHR, our unaffiliated borrower, has an outstandingbalance at June 30, 2007 of $39,240 and became non-interest bearing upon ourassumption on July 15, 2004.

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Other income of $191 in the threemonths ended June 30, 2007 represents the recognition of the discount in thetermination fee negotiated with Westin in connection with the sale of theResort, as described above.

The net loss for the three monthsended June 30, 2007 was approximately $1,394, compared to a net loss for thethree months ended June 30, 2006 of approximately $1,226.

During the three months endedJune 30, 2007, approximately $259 was disbursed for capital projects. Of thosedisbursed funds, $247 was used to pay lease payments on existing and additionalequipment consisting of bellman vehicles, golf cart leases, golf courseequipment leases, telephone equipment leases and cable leases and the balancewas for various capital improvement projects and replacements throughout theResort.

***Six Months ended June 30, 2007 and 2006***

During the six months ended June30, 2007, there were 15,827, or 28.7%, fewer occupied room nights as comparedto the six months ended June 30, 2006. There were 3,457 fewer transient room nights and 12,370 less group roomnights during the six months ended June 30, 2007 as compared to the six monthsended June 30, 2006.

Total revenue for the Resort was$4,251 less during the six months ended June 30, 2007 than in the same periodof 2006. An overall increase in spending by the Resort’s guests, both for rooms(improved average room rates) and by package guests for food and beverages,helped to mitigate the reduction in gross revenue that resulted from the lowernumber of room nights and decreases in banquet and catering sales in during sixmonths ended June 30, 2007 as compared to same period of 2006.  During the same periods, the average roomrate increased by $8.37 per room night from $168.29 in 2006 to $176.66 in2007.  Gross revenue per room nightduring the six months ended June 30, 2007 was $584.77, as compared to $494.11for the same period in 2006.

The most significant decrease inrevenues at the Resort during the six months ended June 30, 2007 occurred inthe Hotel department. Revenues attributable to that category for the six monthsended June 30, 2007 decreased by approximately $2,334, or 25.1%, as compared tothe same period in 2006. Hotel revenue decreased primarily because of thedecrease in aggregate room nights noted above. Food and Beverage revenues decreased by approximately $1,626, or 20.8%,as a result of 78,866, or 30.9%, fewer covers, as compared to the six monthsended June 30, 2006.   This aggregatedecrease in covers served was primarily attributable to the Resort’s banquets,catering and restaurant outlets, with a combined decrease of approximately72,214 covers. Covers attributed to the Resort’s room and pool servicedecreased by approximately 6,652. While the aggregate number of coversdecreased, revenue per cover increased from $30.63 to $35.10.  The combination of decreased number of coversand increased revenue per cover produced the $1,626 negative variance for thesix months ended June 30, 2007 as compared to the six months ended June 30,2006.

Golf revenue decreased byapproximately $114, primarily as a result of 3,770 fewer rounds of golf playedduring the six months ended June 30, 2007 as compared to the same period in2006.  Management believes that approximately1,200 or 31.8% of that reduction in rounds for the six months period resultedfrom the fact that the PGA tournament was moved from October, during which ithas been held annually since 2001, to March beginning in 2007.  As a consequence of the Copperhead course beingused by the PGA for the tournament, the Resort was unable to sell its golfpackages during the week of the March tournament. March is historically one ofits most successful months during the year. Gross golf revenue for the six months ended June 30, 2007 averaged$138.22 per round, as compared to $131.99 per round for the same period in2006.  The net decrease in aggregaterounds played was attributed to 3,936 fewer rounds played by the Resort’stransient guests, including packages, offset by an aggregate increase of 166rounds played by Resort members.  Thenumber of total golf rounds played in the six months ended June 30, 2007 was61,510, compared to 65,280 rounds played in the same period of 2006. Golfrevenue does not necessarily increase or decrease exactly in proportion tooccupied room nights because golf revenue also includes member dues and feesand day golf group fees, neither of which is directly related or dependent uponoccupied room nights.

Total Resort operating expenses, before depreciationand amortization and excluding the Rental Pool amortization in hoteloperations, decreased by approximately $3,057, or 12.6%, for the six monthsended June 30, 2007 as compared to the same period in 2006.  This decrease is primarily attributable to thedecrease in room nights and food and beverage covers discussed above.

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Depreciation and amortization expense, excluding theRental Pool amortization included in hotel expenses, was approximately $1,102and $1,024 for the six months ended June 30, 2007 and 2006, respectively.

Interest expense, net of interestincome, was approximately $494 and $743 for the six months ended June 30, 2007and 2006, respectively, and reflects amortization of the discount of our RentalPool refurbishment liability in the amount of $314 and the interest portion oflease payments amounting to approximately $49.

Other income of $132 in the sixmonths ended June 30, 2007 represents the accrual of the environmentalremediation expense of $59 as more fully discussed in Note 8 to the CondensedCombined Financial Statements in Item 1 of the Quarterly Report on Form 10-Qfiled May 15, 2007, offset by the favorable negotiated reduction in the Westintermination fee of approximately $191.

The net income for the six monthsended June 30, 2007 was approximately $357, compared to a net income for thesix months ended June 30, 2006 of approximately $1,248.

During the six months ended June30, 2007, approximately $617 was disbursed for capital projects. Of thosedisbursed funds, $469 was used to pay lease payments on existing and additionalequipment consisting of bellman vehicles, golf cart leases, golf courseequipment leases, telephone equipment leases and cable leases and the balancewas for various capital improvement projects and replacements throughout theResort.

**OtherMatters**

On April 25, 2006, we entered into an agreementwith Suncoast Charities, Inc. (“Suncoast”), which provides that Suncoastwill lease the Copperhead golf course at the Resort for seven and one half daysduring the month of March for a PGA TOUR event known as the PODSChampionship. The agreement with Suncoast provides that the tournament willoccur each year in March beginning in March 2007 and ending inMarch 2012. The agreement also provides, among other things, that we willreceive a base fee and that we may receive a participation fee in the event ifthe aggregate ticket sales during any tournament year exceed 115% of thegreater of the 2005 tournament ticket sales or the 2006 tournament ticketsales.  We do not at this time have afinal accounting of the ticket override amount from Suncoast Charities for the2007 event.

**Contractual Obligations, Contingent Liabilities and Commitments**

The following table summarizesour contractual obligations at June 30, 2007, and the effect such obligationsare expected to have on our liquidity and cash flow (or upon our successors ininterest under the applicable contracts, if the contracts are not terminated)in future periods:
| ** **                                                                              | ** ** | **Payments Due by Period (in thousands)(1)** | ** ** |
|-----------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------|------------|
| **Contractual Obligations**                                                        | ** ** | **Total**                                                             | ** ** | **Less than  1 year** | ** ** | **1-3 years** | ** ** | **4-5 years** | ** ** | **More than 5  years** | ** ** |
| Master lease  agreement with the condominium owners participating in the Rental Pool(2) |       | $                                                                     | 4,734      |   | $ | 1,607 |   | $ | 3,057 |   | $ | 54 |   | $ | 16 |   |
| Westin  termination fee(2)                                                              |       | 5,403                                                                 |       | 5,403 |   | — |   | — |   | — |   |
| Troon  supplemental fee (2)                                                             |       | 977                                                                   |       | 977 |   | — |   | — |   | — |   |
| Mortgage Note  payable to the Operating Partnership                                     |       | 39,240                                                                |       | — |   | — |   | — |   | 39,240 |   |
| Operating and  capital leases(2)                                                        |       | 1,561                                                                 |       | 750 |   | 593 |   | 124 |   | 94 |   |
| Service  agreements and other(2)                                                        |       | 6,350                                                                 |       | 2,796 |   | 2,799 |   | 738 |   | 17 |   |
| Working capital  advances from the Operating Partnership, net                           |       | 2,806                                                                 |       | — |   | 2,806 |   | — |   | — |   |
| Total of the Resort’s  obligations                                                 |       | $                                                                     | 61,071     |   | $ | 11,533 |   | $ | 9,255 |   | $ | 916 |   | $ | 39,367 |   |

 

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(1)             Interestis reflected, as applicable, in the commitments and obligations listed above.

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(2)             These items were paidor assumed by Salamander upon the closing of the sale of the Resort.

Please refer to “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations—Contractual Obligations,Contingent Liabilities and Commitments” in our Form 10-K for the fiscalyear ended December 31, 2006, filed on April 2, 2007, for a description ofour contractual obligations.

**Liquidity and Capital Resources**

The accompanying financialstatements have been prepared based on the assumption that we will continue asa going concern.  As of June 30, 2007,the Resort had a working capital deficit of approximately $9,688 primarily dueto the fact that the renegotiated Westin termination fee of $5,403 and theTroon supplemental fee of $800 were classified as current liabilities. Seefurther discussion in Note 5, *Current Liabilities*,to the Condensed Combined Financial Statements in Part I, Item 1 of thisQuarterly Report on Form 10-Q.  Beforethis reclassification, the Resort had a working capital deficit ofapproximately $3,491.  The Resort’smember deficit at June 30, 2007 is $12,994. The Resort reported net income ofapproximately $357 for the six months ended June 30, 2007.  Since the first six months of the year is theResort’s highest season, there was substantial doubt about our ability tocontinue as a going concern. However, since the sale of the Resort was concluded on July 16, 2007,the liquidity and going concern issue is no longer relevant.  See Note 9, *SubsequentEvents*, to the Condensed Combined Financial Statements of theCompany above for further discussion

**ITEM 3. Quantitative AndQualitative Disclosures About Market Risk**

We do not have significant market risk with respect toforeign currency exchanges or other market rates. Our debt to the OperatingPartnership is non-interest bearing and, accordingly, fluctuations in interestrates are not expected to affect financial results.  Since our debt to Patriot Bank was paid offcontemporaneous with the closing of the sale of the Resort, we no longer haveany interest rate risk related to this loan.

**ITEM 4. Controls And Procedures**

We maintain disclosure controls and procedures thatare designed to ensure that information required to be disclosed in ourExchange Act reports is recorded, processed, summarized and reported within thetime periods specified in the SEC’s rules and forms, and that suchinformation is accumulated and communicated to our management, including ourChief Executive Officer and our Principal Accounting Officer, as appropriate,to allow timely decisions regarding required disclosure. Our managementassesses the costs and benefits of such controls and procedures based upon theprevailing facts and circumstances, including management’s reasonable judgmentof such facts.  Our amended managementagreement with Westin provided us with heightened control and access toinformation; however, prior to October 31, 2006 when we terminated the WestinManagement Agreement, we did not directly assemble the financial informationfor the Resort (although we have taken steps that we deem to be reasonableunder the circumstances to seek to verify such financial information) andconsequently, our disclosure controls and procedures with respect to theResort, while strengthened, were necessarily more limited than those wemaintain with respect to our own corporate operations. Since July 15,2004, we have focused upon integrating operations at the Resort into ourdisclosure controls and procedures and internal control procedures. In particular,those controls and procedures have been updated to account for the challengespresented by the increased size and scope of our operations once we owned theResort.  Effective January 1, 2007, weimplemented a new general ledger accounting software package (the “GL Software”)at the Resort to replace the former GL Software of which the majority of thefinancial reports were proprietary to Westin. Our new GL Software, know as Aptech, was used at the Resort prior toJuly 15, 2004 when Westin required that the Resort adopt their GLSoftware.   As a result, the accountingstaff was generally familiar with the process and procedures in operating thenew GL Software.  We do not currentlybelieve that the change in the GL Software has materially changed or willmaterially change our internal control over financial reporting or ourdisclosure controls and procedures.

We have implemented some and continue to work towardsimplementing various initiatives intended to continue to improve our internalcontrols and procedures and disclosure controls and procedures.

As of June 30, 2007, we carried out an evaluation,under the supervision and with the participation of our management, includingour Chief Executive Officer and Principal Accounting Officer, of the effectivenessof the design and 

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operationof our disclosure controls and procedures (as defined in Exchange ActRule 13a-15(e)). Management concluded that as of June 30, 2007, ourdisclosure controls and procedures are effective in timely alerting them tomaterial information relating to us (including our consolidated subsidiaries)required to be included in our Exchange Act reports.

There has been no change in our internal control overfinancial reporting during our most recent fiscal quarter that has materially affected,or is reasonably likely to materially affect, our internal control overfinancial reporting.

**PART II—OTHERINFORMATION**

**ITEM 1. Legal Proceedings**

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

*Land UseLawsuit*

On March 29,2005, the Company filed a Motion to Intervene in the suit titled *Innisbrook Condominium Association, Inc., C. Frank Wreath,Meredith P. Sauer, and Mark Banning, Plaintiffs vs. Pinellas County, Florida,Golf Host Resorts, Inc. and Innisbrook F LLC, Defendants*, CaseNo. 043388CI-15. This motion was filed in the Circuit Court of the SixthJudicial Circuit, in and for Pinellas County, Florida, Civil Division and wasgranted by the Circuit Court.  In thisreport, the Company refers to this matter as the “Initial Land Use Lawsuit”.   The plaintiffs in the Initial Land UseLawsuit have filed a multi-count complaint seeking injunctive and declaratoryrelief with respect to the land use and development rights of Parcel F,which is owned by GHR. The Company filed the Motion to Intervene as a defendantin the Initial Land Use Lawsuit in order to protect its property and its landuse and development rights with respect to Parcel F.  On April 26, 2005, Joseph E.Colwell, Marcia G. Colwell, Kirk E. Covert, Deborah A. Covert andthe Autumn Woods Homeowner’s Association, Inc. moved to intervene in theInitial Land Use Lawsuit, which the Court subsequently allowed.  On April 8, 2005, a separate suit wasfiled by James M. and Mary H. Luckey, and Andrew J. andAphrodite B. McAdams, against Pinellas County, GHR and Bayfair Innisbrook,LLC seeking injunctive and declaratory relief relating to the land use anddevelopment rights of Parcel F. This suit was consolidated with the Initial Land Use Lawsuit.  In this report, the Company refers to thismatter as the “Subsequent Land Use Lawsuit” and to the Initial Land Use Lawsuitand the Subsequent Land Use Lawsuit as the “Land Use Lawsuits”.

FromDecember 19 through December 23, 2005, the Court tried theseconsolidated cases in a non-jury trial. On March 8, 2006, the Court ruled infavor of the defendants on all counts and denied all claims asserted by theplaintiffs in both Land Use Lawsuits. On March 31, 2006, the plaintiffs in theconsolidated cases filed a notice of appeal to the Second District Court ofAppeal.  The Appeal Court affirmed percurium the Circuit Court judgment in favor of the defendants on February 28,2007 and denied the plaintiffs-appellants’ motion for attorney fees.   On March 13, 2007, the plaintiffs filed amotion for the Appeal Court to rehear their claims.   On June 12, 2007 the Second District Courtof Appeal denied the plaintiffs motion for rehearing.  No further avenues of appeal are available tothe plaintiffs.

*Wall Springs Conservatory, Inc.Complaint*

On July 13, 2006, Wall Springs filed suit against theCompany, as successor in interest to GHR, in the circuit court of PinellasCounty for declaratory relief regarding the allocation of certain full golfmemberships at the Resort On July 14, 2006, Wall Springs also filed suitagainst us in the small claims division of the Pinellas County Court inconnection with an easement agreement. We answered both claims, also asserting affirmative defenses andcounterclaims in each action.  We thenfiled a motion to transfer the small claims matter to Circuit Court, which wasgranted on September 27, 2006.  We thenmoved to consolidate these two cases. Our motion to consolidate was granted by the Circuit Court on March 1,2007.  At this time, the Company isunable to assess the likely outcome of this litigation.

*PropertyTax Lawsuit*

We filed lawsuits against the property appraiser ofPinellas County, Florida to challenge the 2004, 2005 and 2006 

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realestate assessment on the Resort property. Pinellas County filed a motion todismiss, which was denied by the court. No trial date has been set. If PinellasCounty were to prevail, management believes that there would be no materialadverse effect upon our financial statements, as the entire Pinellas Countyassessment is fully accrued at June 30, 2007.  See Note 9, *Subsequent Events*,to the Condensed Combined Financial Statements of the Company above for furtherdiscussion.

**Item 1A. Risk Factors**

Due to the sale of the Resort, including the transferof the operation, control and financial obligations of the Rental Pool, and thecontemporaneous payment of (a) all outstanding property tax amounts to PinellasCounty, Florida, (b) the Westin termination fee, (c) the Troon supplementalfee, and (d) all outstanding debt under the Patriot Bank loan, the risk factors previously disclosed in ourForm 10-K for the fiscal year ended December 31, 2006, filed on April2, 2007, are no longer applicable to our current circumstances.  As a wholly owned subsidiary with limitedassets and operations, our remaining risks primarily relate to our outstandingcontractual obligations, mainly in connection with the sale of the Resort, andliability in the event of any claims or lawsuits (see Part II, Item 1, Legal Proceedings, of this QuarterlyReport on Form 10-Q).

**Item 2. Unregistered Salesof Equity Securities and Use of Proceeds**

Not applicable.

**Item 3. Defaults Upon SeniorSecurities**

Not applicable.

**Item 4. Submission ofMatters to a Vote of Security Holders**

Not applicable.

**Item 5. Other Information**

Not applicable.

**Item 6. Exhibits**

**EXHIBIT INDEX**
| Exhibit No. | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1        |       | Business Loan Agreement, dated as of April 10, 2007,  by and among the Company, GTA-IB Golf Resort, LLC and GTA-IB Condominium, LLC  and Patriot Bank.                                                                                                                                                                                                                                                                                                                    |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.2        |       | Commercial Security Agreement, dated as of April 10,  2007, between the Company, GTA-IB Golf Resort, LLC and GTA-IB Condominium,  LLC and Patriot Bank.                                                                                                                                                                                                                                                                                                                   |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3        |       | Promissory Note, dated as of April 10, 2007, between  the Company, GTA-IB Golf Resort, LLC and GTA-IB Condominium, LLC and Patriot  Bank.                                                                                                                                                                                                                                                                                                                                 |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.4        |       | Mortgage, dated as of April 10, 2007, between the  Company, GTA-IB Golf Resort, LLC and GTA-IB Condominium, LLC and Patriot  Bank.                                                                                                                                                                                                                                                                                                                                        |
|        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.5        |       | Asset Purchase Agreement, dated as of June 25, 2007,  by and among the Company, GTA, the Operating Partnership, GTA-IB Golf Resort,  LLC, GTA-IB Condominium, LLC and GTA-IB Management, LLC and Salamander  Innisbrook Securities, LLC, Salamander Innisbrook Condominium, LLC and  Salamander Innisbrook, LLC (previously filed as Exhibit 10.1 to the  Company’s Current Report on Form 8-K filed June 26, 2007 and  incorporated herein by reference). |

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| 31.1   |   | Certification of the registrant’s Chief Executive  Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                   |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                              |
| 31.2   |   | Certification of the registrant’s Principal Accounting  Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                              |
|   |   |                                                                                                                                                              |
| 32.1   |   | Certification of the registrant’s Chief Executive  Officer and Principal Accounting Officer pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |

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**SIGNATURES**

Pursuant to the requirements ofthe Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned thereunto duly authorized.
|                        | ** ** | **GTA-IB, LLC**                            |
|------------------------|------------|--------------------------------------------|
|                   |       |                                       |
|                   |       |                                       |
| Date: August 16,  2007 |       | /s/ W. Bradley Blair, II                   |
|                   |       | W. Bradley Blair, II                  |
|                   |       | Chief Executive Officer and President      |
|                   |       |                                       |
| Date: August 16,  2007 |       | /s/ Tracy S. Clifford                      |
|                   |       | Tracy S. Clifford                          |
|                   |       | Principal Accounting Officer and Secretary |

 

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