NOTE

— REVENUE

January 1, 2018,

we adopted Topic

606

using the modified retrospective method. The adoption of this standard did

not

have an impact on our consolidated financial statements, thus

adjustments to opening retained earnings were made as of

January 1, 2018.

Results for reporting periods beginning after

January 1, 2018,

are presented under Topic

606,

while prior period amounts are

not

adjusted and continue to be reported in accordance with our historic accounting under ASC Topic

605

-Revenue Recognition.

Rooms revenue represents revenue from the occupancy of our hotel rooms and is driven by the occupancy and average daily rate charged. Rooms revenue includes revenue for guest

-shows, day use, and early/late departure fees. The contracts for room stays with customers are generally short in duration and revenues are recognized as services are provided over the course of the hotel stay.

Food & Beverage (“F&B”) revenue consists of revenue from the restaurants and lounges at our hotel properties, In-room dining and mini-bar revenue, and banquet/catering revenue from group and social functions. Other F&B revenue

may

include revenue from audio-visual equipment/services, rental of function rooms, and other F&B related revenue. Revenue is recognized as the services or products are provided. Our hotel properties

may

employ

third

parties to provide certain services at the property, for example, audio visual services. We evaluate each of these contracts to determine if the hotel is the principal or the agent in the transaction, and record the revenue as appropriate (i.e. gross vs. net).

Other revenue consists of ancillary revenue at the property, including attrition and cancellation fees, resort fees, spa and other guest services. Attrition and cancellation fees are recognized for non-cancellable deposits when the customer provides notification of cancellation within established management policy time frames. Taxes collected from customers and submitted to taxing authorities are

not

recorded in revenue. Interest income is recognized when earned.

The Company derives hotel revenues from our hotel in Sonoma, California.

Following is a breakdown of revenue by source (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2018		2017		2018		2017
Operating property revenue
Rooms	$	1,205	$	-	$	1,897	$	-
Golf range fees		-		245		-		820
Banquet		96		64		276		114
Food and beverage		523		132		1,008		352
Spa and fitness center		188		115		328		240
Other		93		98		159		156
Total operating property revenue		2,105		654		3,668		1,682
Mortgage loan income		641		44		1,266		52
Management fees, investment and other income		255		360		292		508
Total revenue	$	3,001	$	1,058	$	5,226	$	2,242