6. Rental Pool Operations

Under the Master Lease Agreement currently in effect (the “Agreement” or “New MLA”), with Rental Pool participants (which was effective January 1, 2024 and expires on December 31, 2030) the Resort pays participants a quarterly distribution equal to 42% of the Adjusted Gross Revenues (as defined above) on the first $8.7 million, 45% between $8.7 million and $9.7 million, and 50% above $9.7 million. Adjusted Gross Revenues are defined as Gross Revenues less agent’s commissions, audit fees, and occupancy fees and when the unit is used for Rental Pool Comps or as a model, linen replacements and credit card fees. Each participant receives a fixed occupancy fee, based upon apartment size for each day the unit is occupied. After allocation of occupancy fees and the payment of general Rental Pool expenses, the balance is allocated proportionally to the participants, based on the Participation Factor as defined in the Agreement.

Additionally, the New MLA requires Participants to maintain an escrow balance equal to $1,000 plus an amount equal to an Aging Factor, which represents fifty percent (50%) of the estimated costs of future renovation to the Units in order to maintain the Standard established under the New MLA. Additionally, occupancy fees are paid by the Resort to participants as rental fees for complimentary rooms unrelated to the Rental Pool operations. Associate room fees are also paid by the Resort to Participants for total room revenues earned from the rental of condominiums by our employees. In 2025 and 2024, amounts available to Participants under the Agreement approximated $3,127,000 and $3,437,000, respectively, of which approximately $760,000 and $829,000 was owed as of December 31, 2025 and 2024, respectively. The balances owed, which are reflected as Rental Pool liabilities in our consolidated balance sheets, were paid subsequent to the respective year ends.