11. Acquisition of Gold Hill Hotel

On May 1, 2011, we acquired 100% of the equity interests of the historic Gold Hill Hotel and five related cottages on or near the hotel property for $840,000 consisting of a $500,000 cash payment and the issuance of a $340,000 note. We accounted for the acquisition as a business combination. The strategic purpose of purchasing the hotel was to participate in the on-going economic development of Gold Hill and Virginia City. The purchase price was allocated based on fair values as follows:

Goodwill arising from the acquisition was not significant. We have included the Gold Hill Hotel's results of operations in both our hospitality segment and our consolidated results of operations from the date of acquisition. Our condensed consolidated financial statements for the nine months ended September 30, 2012, reflect revenue and operating losses of $477,037 and $156,668, respectively, related to the Gold Hill Hotel acquisition. Our condensed consolidated financial statements for the nine months ended September 30, 2011 reflect revenues and operating losses of $299,246 and $19,908, respectively, related to the Gold Hill Hotel acquisition. Pro forma disclosures of Gold Hill Hotel's results of operations for periods prior to the date of acquisition are not presented herein as they were not material when compared with our condensed consolidated statements of operations.