2022_SVB_Tennis_and_Wellness_Center_Audit.pdf

Tennis Pro Florida LLC dba Sarah Vande Berg Tennis and Wellness Center

Financial Statements Year Ended December 31, 2022

Table of Contents

Independent Accountants’ Review Report………………………………………………….…………………………………….….………………………………….1

Financial Statements Balance Sheet…….................................................................................……………………………………………………………………. 3

Statement of Income and Members’ Equity……………………………………………………………………………………………………………………….…4

Statement of Cash Flows……………………………………………………………………………………………….……………………………………………………………. 5

Notes to Financial Statements……………….................................................…………………………………………………………….……..6

Independent Accountants’ Review Report

To the Members Tennis Pro Florida LLC dba Sarah Vande Berg Tennis and Wellness Center Zephyrhills, Florida

We have reviewed the accompanying financial statements of Tennis Pro Florida LLC dba Sarah Vande Berg Tennis and Wellness Center (a partnership), which comprise the balance sheet as of December 31, 2022, and the related statements of income and members’ equity and cash flows for the year then ended, and the related notes to the financial statements. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of partnership management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error.

Accountants’ Responsibility

Our responsibility is to conduct the review engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion.

We are required to be independent of Tennis Pro Florida LLC dba Sarah Vande Berg Tennis and Wellness Center and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our review.

Accountants’ Conclusion on the Financial Statements

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America.

Bodine Perry PLLC Zephyrhills, Florida May 12, 2023

Tennis Pro Florida LLC (Sarah Vande Berg Tennis and Wellness Center)

Balance Sheet

See accompanying notes to financial statements and independent accountants’ review report.

Current Assets Cash and cash equivalents 12,562$ Accounts receivable 9,195 Inventory 16,118

Total Current Assets 37,875

Fixed Assets Fixed assets 265,570 Less: accumulated depreciation (53,812)

Net Fixed Assets 211,758

Other Assets Organization costs 49,304 Less: accumulated amortization (7,670)

Total Other Assets 41,634

Total Assets 291,267$

Liabilities and Members' Equity

Current Liabilities Accounts payable/accrued expenses 37,852$ Line of credit - San Antonio Citizens Federal Credit Union 14,000 Line of credit -Wells Fargo 45,146 Current portion of long-term debt and leases 57,624 Contract liabilities 32,905

Total Current Liabilities 187,527

Long-Term Liabilities Promissory notes (Note E), net of current portion 58,000 Leases payable, net of current portion 11,314

Net Long-Term Liabilities 69,314

Total Liabilities 256,841

Members' Equity Members' capital and retained equity 34,426

Total Members' Equity 34,426

Total Liabilities And Members' Equity 291,267$

Assets

Statement of Income and Members’ Equity

Revenues Academy 919,896$ Junior tennis clinics 291,453 Guest fees 25,601 Membership 109,180 Pro Shop sales 46,876 Sponsorship 77,822 Tournament fees 63,422 Special programs/events 62,209 Miscellaneous income 165,391

Total Revenues 1,761,850

Cost of Goods Sold Pro Shop store 57,378

Total Cost of Goods Sold 57,378 Gross Profit 1,704,472

Operating Expenses Advertising and marketing 19,558 Amortization expense 3,287 Bank service charges 2,204 Contract services 1,996 Depreciation 24,048 Insurance 39,051 Guaranteed payments 242,900 Landscaping 24,418 Legal and professional fees 47,303 Maintenance and repairs 13,911 Meals and entertainment 6,005 Office expense 26,174 Penalties 461 Postage 1,261 Salaries 991,111 Supplies 19,799 Partner services 45,201 Miscellaneous 114,130 Tournament expenses 46,546 Utilities 79,212 Travel 18,189

Total Operating Expenses 1,766,765 Operating Income (Loss) (62,293)

Interest expense (4,305) Total Other Income (Expense) (4,305)

Excess of revenue over expenses (66,598) Members' equity, beginning of year 101,024

Dsitributions -

Members' equity, end of year 34,426$

Other Income (Expense)

Statement of Cash Flows

Cash Flows from Operating Activities Net income (loss) (66,598)$ Adjustments to reconcile net income to cash provided (used) by operating activities:

Depreciation and amortization 27,335 Increase (decrease) in operating assets:

Accounts receivable (8,695) Inventory 151 Other assets -

Increase (decrease) in operating liabilities:

Accounts payable - Deferred revenue 32,905 Accrued Expenses 32,521

Net Cash Provided (Used) by Operating Activities 17,619

Cash Flows from Investing Activities Proceeds from property and equipment - Purchase of property, plant, equipment and improvements (41,634)

Net Cash Provided (Used) by Investing Activities (41,634)

Cash Flows from Financing Activities Net proceeds (reduction) on notes/leases payable 52,048 Net advances from (to) shareholder and officer - Payments of long-term debt, including capital leases (40,608)

Net Cash Provided (Used) by Financing Activities 11,440

Net Increase (Decrease) in Cash (12,575)

Cash at Beginning of Year 25,137

Cash at End of Year 12,562$

Supplemental Disclosures of Cash Flow Information and Non-Cash Investing and Financing Activities:

Cash paid during period for interest 4,305$

Notes to Financial Statements For the Year Ended December 31, 2022

Note A - Summary of Significant Accounting Policies

Organization and Business Activity

Tennis Pro Florida, LLC (the “Company”), was formed on June 12, 2017, under the laws of the state of Florida and is engaged in operating and managing all variations of tennis, Padel and other racket sports by providing lessons and athletic and wellness services. Prior to October 17, 2020 the Company had no activity. Tennis Pro Florida LLC collaborated with the City of Zephyrhills on October 11, 2017 and established Sarah Vande Berg Tennis and Wellness Center, a world class tennis and wellness facility currently located in the heart of Zephyrhills, Florida.

Basis of Accounting

The financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Accrual basis accounting allows for revenue to be recognized when earned and expenses to be recognized when goods or services are received, without regard to the receipt or payment of cash.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recently Adopted Accounting Standards

Leases

In February 2016, the Financial Accounting Standards Board (FASB) issued guidance (Accounting Standard Codification (ASC) 842, Leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (ROU) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

The Company adopted the standard effective January 1, 2022 and recognized and measured leases existing at, or entered into after, January 1, 2022 (the beginning of the period of adoption). For the year ended December 31, 2022, it was determined the adoption of this standard had no impact to the financial statements of the Partnership. Lease disclosures, if any, for the year ended December 31, 2021 are made under prior lease guidance in FASB ASC 840.

The Company elected the available practical expedients to account for our existing capital leases and operating leases as finance leases and operating leases, respectively, under the new guidance, without reassessing (a) whether the contracts contain leases under the new standard, (b) whether classification of capital leases or operating leases would be different in accordance with the new guidance, or (c) whether the unamortized initial direct costs before transition adjustments would have met the definition of initial direct costs in the new guidance at lease commencement.

Note A - Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company considers all demand deposit accounts, money market accounts, certificates of deposit, U.S. Treasury investments, and money market mutual funds purchased to be cash equivalents. Certificates of deposit often are not subject to withdrawal limitations although withdrawal before maturity may result in a loss of a portion of the interest earned. Money market funds may have withdrawal restrictions that if implemented would impact the amount reported as cash equivalents.

Accounts Receivable

Accounts receivable consist of amounts due from players for training programs or private lessons and other usage fees. The balance accrued for an allowance for doubtful accounts in 2022 was $0.

Inventory

Inventory consists of apparel, equipment, accessories, and more, including branded tennis gear, rackets, bags, and shoes. Inventory was recorded at cost of $16,118, which was determined by the purchase price as of December 31, 2022.

Fair Values of Financial Instruments

The Fair Value Measurements Topic of the FASB Accounting Standards Codification defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements for fair value measurements.

The Company measures the fair value of assets and liabilities as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between independent observable inputs and unobservable inputs used to measure fair value as follows:

Level 1 Fair Value Measurements

Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Fair Value Measurements

Inputs other than quoted market prices included within Level 1 that are observable for an asset or liability, either directly or indirectly.

Note A - Summary of Significant Accounting Policies

Fair Values of Financial Instruments (continued)

Level 3 Fair Value Measurements

Unobservable inputs for an asset or liability. Level 3 inputs should be used to measure fair value to the extent that observable level 1 or 2 inputs are not available.

Generally accepted accounting principles require disclosure of an estimate of fair value of certain financial instruments. The Corporation’s significant financial instruments are cash, accounts receivable, accounts payable, short-term borrowings, and other short-term assets and liabilities. For these financial instruments (level 1), carrying values approximate fair value because of the short maturity of these instruments.

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets, ranging between 5 and 40 years. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) issued substantially converged final standards on revenue recognition. These final standards were the culmination of a joint project between the boards that spanned many years. FASB Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), provides a robust framework for addressing revenue recognition issues and replaces almost all pre-existing revenue recognition guidance in current U.S. generally accepted accounting principles (GAAP) (i.e., legacy GAAP).

The Company enters into agreements to provide services which are recognized over the life of the agreement. The fees vary depending on the type of service provided and are due based on the contract.

Revenues from fees are recognized when the initial obligations required by the company and enumerated in the agreements are met. These obligations consist of signed agreements to provide services as outlined in the contract. Provided services consists of completed tennis training and lessons. Other revenues such as membership fees, wellness services, tournament fees, and Pro Shop sales are recognized at point of sale or when services have been provided. The deferred revenue as of December 31, 2022 is $32,905 which consists of prepaid fees for services.

Advertising

Advertising expenses consist of media, production, and other costs related to digital advertising, catalog mailings and other direct marketing activities which is generally on a short-term basis. All advertising costs are expensed as incurred, or upon the release of the initial advertisement.

Total advertising expenses for the year then ended December 31, 2022 was $19,558.

Note A - Summary of Significant Accounting Policies (continued)

Income Taxes

The Company, with the consent of its members, has elected under the Internal Revenue Code to be taxed as a Partnership. In lieu of corporation income taxes, the members of the Partnership are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal income taxes has been included in the financial statements.

Note B - Property and Equipment

Property and equipment are recorded at cost and consist of the following:

Office furniture and fixtures 107,419$ Machinery and equipment 67,263 Fitness equipment 77,817 Signage 13,071 Total property and equipment 265,570

Less: accumulated depreciation (53,812) Net property and equipment 211,758$

The Partnership recorded $24,048 of depreciation expense during the year ended December 31, 2022.

Note C – Line of Credit

The Company has a Business Line of Credit with San Antonio Citizens Federal Credit Union with a balance of $14,000 and Wells Fargo with a balance of $45,146 of which $4,854 was unused at December 31, 2022.

Note D – Finance Lease Payable

The company entered into leasing arrangements for various fitness equipment with Macrolease Corporation which expires on September 2024 with an option to purchase as a whole for a total of $101.

The economic substance of the leases is that the company is financing the acquisition of the assets through the lease and has recorded them in the partnership’s assets and liabilities.

The following is a schedule of future minimum lease payments under the leases together with their present value as of December 31, 2022:

Year Ending, December 31, Amount 2023 17,076$ 2024 11,675

Total minimum lease payments 28,751 Less: amount representing interest (1,813) Present value of minimum lease payments 26,938 Less: current portion (15,624) Long-term portion 11,314$

Note E – Long-Term Debt

Long-term debt at December 31 consists of the following:

Non-interest bearing promissory note to Pascal Collard, monthly payment of $2,500 beginning 02/01/22. 75,000$

Non-interest bearing loan from Negative Zero LLC secured by cyro sauna equipment, monthly payment of $1,000 beginning 04/01/23 until paid in full. 25,000

Total 100,000 Less current maturities (42,000)

Net Long-term Debt 58,000$

Principal payments on long-term debt are due as follows:

Year Ending December 31, 2023 42,000$ 2024 42,000 2025 16,000

100,000$

Note F – Commitments and Contingencies

The Company entered into a management agreement with the City of Zephyrhills on October 11, 2017, which hereby hires the Company to manage, supervise and operate the tennis center and allow use of the building and the land during the term of the agreement. During the first three (3) years of this agreement, from the date of opening the tennis center, there will be no revenues due to the City of Zephyrhills;

however, subsequent to the third year, the Company is required to pay the City of Zephyrhills 15% of the Company’s first $100,00 net income; for net income of $100,000 through $200,000 the Company is required to pay 12% of the Company’s net income; for net income of $200,000 and above the Company is required to pay 8% of the Company’s net income which will be paid quarterly. The management agreement begins on October 1, 2020 and expires on September 30, 2040 with two subsequent ten year renewal option unless terminated.

Note G - Concentrations

The Company maintains cash deposits in various financial institutions which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation up to $250,000. As of December 31, 2022, the Company's deposits did not exceed the federal depository insurance coverage.

Note H – Related Party Transactions

Pursuant to the non-interest-bearing promissory note between the Company and member, Pascal Collard, the member loaned to the Company a total of $100,000 on October 1, 2020. Payments on the promissory note started on February 1, 2022 and will continue on the same day of each month that follows, with note maturing on December 31, 2025.

Note I -Coronavirus Pandemic

In 2022, the continued spread of the COVID-19 pandemic is affecting the United States and may affect the Company’s operations and those of third parties on which the Company relies. While the Company does not expect to see a material COVID-19 impact on the results of operations, given the uncertainties surrounding the duration of the outbreak, it is not currently possible to ascertain the overall impact of COVID-19 on the business. Management is monitoring the situation in order to mitigate any potential impact on the Company’s operations and financial performance.

Note J - Subsequent Events

Subsequent events have been evaluated through May 12, 2023, the date the financial statements were available to be issued.