The San Francisco Exchange Company (SFX) Audit & Disclosure Statement

THE SAN FRANCISCO EXCHANGE COMPANY REPORT OF KEY OPERATING STATISTICS December 31, 2019 THE SAN FRANCISCO EXCHANGE COMPANY C O N T E N T S Page Report of Independent Accountants 1 Report of Key Operating Statistics 2 Notes to Report of Key Operating Statistics 3-4 REPORT OF INDEPENDENT ACCOUNTANTS Board of Directors The San Francisco Exchange Company San Francisco, California We have examined the accompanying report of key operating statistics of the San Francisco Exchange Company, as of and for the year ended December 31, 2019. The Company’s management is responsible for the report of key operating statistics. Our responsibility is to express an opinion based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the report of key operating statistics is in accordance with the criteria, in all material respects. An examination involves performing procedures to obtain evidence about the report of key operating statistics. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material misstatement in the report of key operating statistics, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. In our opinion, the report referred to above presents, in all material respects, the key operating statistics of the San Francisco Exchange Company as of and for the year ended December 31, 2019, in conformity with the timeshare exchange regulations for the states of Florida and Hawaii. May 20, 2019 San Bernardino, California -1- KENNEDY & KENNEDY Certified Public Accountants Members of the American Institute of Certified Public Accountants and of the California Society of Certified Public Accountants 1700 North E Street, Suite 201 • San Bernardino, CA 92405 • (909) 886-5048 • (909) 882-3852 15476 West Sand Street • Victorville, CA 92392 • (760) 951-2570 THE SAN FRANCISCO EXCHANGE COMPANY REPORT OF KEY OPERATING STATISTICS December 31, 2019 The number of purchasers or owners currently enrolled and eligible to participate in the exchange program 321,355 The number of accommodations and facilities or properties that have current affiliation agreements with The San Francisco Exchange Co. None The percentage of exchanges properly applied for that were confirmed 93% The number of exchanges confirmed by the exchange program 10,367 The number of timeshare periods for which The San Francisco Exchange Co. has an outstanding obligation to provide an exchange in the future 2,421 The above listed percentage of confirmed exchanges is a summary of the exchange requests entered with the exchange program between January 1, 2019 and December 31, 2019. This does not represent a purchaser's probability of being confirmed to any specific choice or range of choices, since availability at individual locations may vary. See Accompanying Notes to Report of Key Operating Statistics. -2- THE SAN FRANCISCO EXCHANGE COMPANY NOTES TO REPORT OF KEY OPERATING STATISTICS December 31, 2019.



NOTE 1 – DESCRIPTION OF COMPANY: The San Francisco Exchange Company (SFX) is a California corporation. SFX offers reciprocal exchange services for owners of resort timeshare or other vacation ownership interests throughout the world. SFX headquarters are located in Alameda, California.

NOTE 2 – ENROLLMENT POLICY: Owners of any qualified timeshare interest receive complimentary Gold memberships in SFX, or they may choose Diamond membership which requires an annual fee.

NOTE 3 – PROPERLY APPLIED FOR EXCHANGE REQUEST: A properly applied for exchange request occurs when the requirements listed below have been satisfied. The exchange is not considered to be properly applied for as long as any of these criteria have not been met. • An exchange request is received by SFX. • The exchange request is from a member of SFX. • The member must have a current membership in SFX and be in compliance with all terms and conditions governing SFX membership. • The member must be current with all financial obligations (maintenance fees and assessments, special assessments, property taxes, note payments, etc.) to their home resort through the week being relinquished to SFX in conjunction with either an exchange request or the deposit of a week in SFX exchange system. • The member must have a confirmed reservation for a specific interval at the home resort prior to requesting an exchange or depositing a week. • A properly submitted request must have a choice of three alternative locations and travel dates.

NOTE 4 – ACCOMMODATIONS AND FACILITIES: Accommodations and facilities at the reporting date include exchange service organizations which SFX may use to complete an exchange for a member.

NOTE 5 – EXCHANGE FEES: SFX members are charged a fee for each exchange confirmed by the company. The fee for domestic or international exchanges is $209 for Gold members and $149 for Diamond members.

NOTE 6 – OUTSTANDING EXCHANGE OBLIGATION: Diamond members may deposit a timeshare period without requesting an exchange at the time of deposit. Gold members are required to deposit a timeshare period at the time they request an exchange. All members have 24 months from the date of the timeshare period deposit to complete the exchange. After the 24-month period, the member's request expires, and no exchange can then be completed.

NOTE 7 – UNCERTAINTIES: In 2020, domestic and international economies face uncertainty related to the impact of the COVID-19 disease. The Organization may be adversely affected by the economic results of this uncertainty. Management is currently evaluating these impacts and considering their effects on future operations.

NOTE 8 – SUBSEQUENT EVENTS: Management has evaluated subsequent events through June 1, 2020, the date when the Report of Key Operating Statistics was available for issuance.