10-Q

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             .

Commission file number: 001-32161

Entertainment Gaming Asia Inc.

(Exact name of registrant as specified in its charter)

Nevada	91-1696010
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification no.)

Unit C1, Ground Floor, Koon Wah Building

No. 2 Yuen Shun Circuit

Yuen Chau Kok, Shatin

New Territories, Hong Kong SAR

(Address of principal executive offices, including zip code)

+ 852-3147-6600

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   x   No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes   x   No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Act):

Large accelerated filer  ¨	Accelerated filer  ¨
Non-accelerated filer  ¨	Smaller reporting company  x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   ¨   No  x

As of August 1, 2014, 30,102,162 shares of common stock of Entertainment Gaming Asia Inc. were outstanding. 

		Page
	PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Overview	22
	Results of Operations	25
	Liquidity and Capital Resources	33
	Critical Accounting Policies and Estimates	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risks	36
Item 4.	Controls and Procedures	36
	PART II — OTHER INFORMATION
Item 6.	Exhibits	38

2

PART I — FINANCIAL INFORMATION

Item 1.        Financial Statements

ENTERTAINMENT GAMING ASIA INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(amounts in thousands, except per share data)

	June 30, 2014			December 31, 2013
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	4,664		$	5,301
Accounts receivable, net		906			922
Amount due from a related party		—			108
Other receivables		103			453
Inventories		3,057			1,663
Assets held for sale		273			—
Prepaid expenses and other current assets		723			443
Total current assets		9,726			8,890
Gaming equipment, net		6,872			8,171
Casino contracts		4,218			5,429
Property and equipment, net		9,068			7,857
Goodwill		358			353
Intangible assets, net		755			899
Contract amendment fees		180			234
Prepaids, deposits and other assets		1,849			1,797
Total assets	$	33,026		$	33,630
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	637		$	840
Amount due to a related party		20			19
Accrued expenses		1,431			2,366
Customer deposits and other current liabilities		1,863			457
Total current liabilities		3,951			3,682
Other liabilities		721			742
Deferred tax liability		199			199
Total liabilities		4,871			4,623
Stockholders’ equity:
Common stock, $.001 par value, 75,000,000 shares authorized; 30,102,162 and 30,024,662 shares issued and outstanding		30			30
Additional paid-in-capital		33,298			33,156
Accumulated other comprehensive income		800			742
Accumulated losses		(5,974	)		(4,922	)
Total EGT stockholders’ equity		28,154			29,006
Non-controlling interest		1			1
Total stockholders’ equity		28,155			29,007
Total liabilities and stockholders’ equity	$	33,026		$	33,630

The notes to consolidated financial statements are an integral part of these consolidated statements.

3

ENTERTAINMENT GAMING ASIA INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(amounts in thousands, except per share data)

(Unaudited)

	Three-Month Periods Ended June 30,						Six-Month Periods Ended June 30,
	2014			2013			2014			2013
Revenues:
Gaming operations	$	4,420		$	5,034		$	8,303		$	9,432
Gaming products		524			162			1,335			1,589
Total revenues		4,944			5,196			9,638			11,021
Operating costs and expenses:
Cost of gaming operations
Gaming property and equipment depreciation		908			1,153			1,789			2,185
Casino contract amortization		612			617			1,222			1,238
Other gaming related intangibles amortization		63			63			126			126
Other operating costs		895			869			1,740			1,670
Cost of gaming products		925			546			2,413			2,041
Selling, general and administrative expenses		1,167			1,526			2,720			3,268
Gain on dispositions		(8	)		—			(8	)		—
Impairment of assets		19			—			19			—
Product development expenses		101			35			156			155
Depreciation and amortization		50			47			99			75
Total operating costs and expenses		4,732			4,856			10,276			10,758
Income/(loss) from operations		212			340			(638	)		263
Other income/(expenses):
Interest expense and finance fees		—			(1	)		(2	)		(5	)
Interest income		—			—			—			4
Foreign currency gains/(losses)		16			(247	)		1			(172	)
Other		4			7			12			10
Total other income/(expenses)		20			(241	)		11			(163	)
Income/(loss) from continuing operations before income tax		232			99			(627	)		100
Income tax expenses		(15	)		(7	)		(30	)		(48	)
Net income/(loss) from continuing operations		217			92			(657	)		52
Net loss from discontinued operations, net of tax		(239	)		(378	)		(395	)		(2,846	)
Net loss attributable to EGT stockholders	$	(22	)	$	(286	)	$	(1,052	)	$	(2,794	)
Other comprehensive income/(loss), net of tax		99			(200	)		58			(217	)
Comprehensive income/(loss) to EGT stockholders	$	77		$	(486	)	$	(994	)	$	(3,011	)
Basic and diluted earnings/(loss) per share:
Loss	$	—		$	(0.01	)	$	(0.03	)	$	(0.09	)
Earnings/(loss) from continuing operations	$	0.01		$	—		$	(0.02	)	$	—
Loss from discontinued operations, net of tax	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.09	)
Weighted average common shares outstanding
Basic		30,013			29,975			30,016			29,975
Diluted		30,148			30,713			30,016			30,712

The notes to consolidated financial statements are an integral part of these consolidated statements.

4

ENTERTAINMENT GAMING ASIA INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(amounts in thousands)

(Unaudited)

	Six-Month Periods Ended June 30,
	2014			2013
Cash flows from operating activities:
Net loss	$	(1,052	)	$	(2,794	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Foreign currency gains		—			(3	)
Depreciation of gaming equipment and property and equipment		2,277			2,614
Amortization of casino contracts		1,222			1,238
Amortization of intangible assets		151			151
Amortization of contract amendment fees		54			54
Impairment of property and equipment		19			—
Stock-based compensation expense		141			445
Loss on disposition of subsidiary, including property and equipment		—			999
Gain on disposition of gaming equipment and property and equipment		(3	)		—
Changes in operating assets and liabilities:
Accounts receivable and other receivables		360			743
Inventories		(1,393	)		373
Prepaid expenses and other current assets		(270	)		(132	)
Prepaids, deposits and other assets		(46	)		104
Accounts payable		(349	)		(1,107	)
Amount due from/to related parties		109			21
Accrued expenses and other liabilities		(1,021	)		(1,054	)
Customer deposits and other current liabilities		1,502			(29	)
Net cash provided by operating activities		1,701			1,623
Cash flows from investing activities:
Construction/purchase of property and equipment		(2,027	)		(2,401	)
Purchase of gaming machines and systems		(359	)		(3,983	)
Addition of project costs		—			(1,155	)
Proceeds from sale of subsidiary related to discontinued operations		—			365
Proceeds from sale of gaming equipment and property and equipment		32			—
Net cash used in investing activities		(2,354	)		(7,174	)
Cash flows from financing activities:
Net cash used in financing activities		—			—
Effect of exchange rate changes on cash		16			(25	)
Decrease in cash and cash equivalents		(637	)		(5,576	)
Cash and cash equivalents at beginning of period		5,301			10,365
Cash and cash equivalents at end of period	$	4,664		$	4,789
Supplemental disclosure of cash flow information
Interest paid	$	—		$	—
Income tax paid	$	—		$	—
Non-cash investing/financing activities
Purchase of gaming machines and systems	$	—		$	659

The notes to consolidated financial statements are an integral part of these consolidated statements.

5

ENTERTAINMENT GAMING ASIA INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 1.   Description of Business and Significant Accounting Policies

The business activities of the Company entail the owning and leasing of electronic gaming machines (EGMs) placed in premier hotels and other venues in Cambodia and the Philippines, the development and operation of gaming establishments under the Dreamworld brand in select emerging markets in the Indo-China region and the design, manufacture and distribution of gaming chips and plaques under the Dolphin brand to major casinos primarily in Southeast Asia and Australia.

The Company owned and operated a casino under the Dreamworld name in the Pailin Province of Cambodia. On June 1, 2014, the Company ceased operations of the casino in Pailin and, on June 20, 2014, entered into an agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited, a wholly-owned Cambodian subsidiary of the Company established for the purpose of owning and operating the casino. In addition, the Company was engaged in the design, manufacture and distribution of other, non-gaming plastic products, primarily for the automotive industry. These operations were sold on March 28, 2013. All related historical revenues and expenses for the casino in Pailin and the non-gaming plastic products operations have been reclassified as discontinued operations. The accounting policies of these discontinued operations are consistent with the Company’s policies for the accompanying consolidated financial statements. 

Basis of Presentation

These consolidated financial statements are prepared pursuant to generally accepted accounting principles in the United States for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”) and reflect all adjustments, consisting of normal recurring adjustments and other adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company, for the respective periods presented. The results of operations for an interim period are not necessarily indicative of the results that may be expected for any other interim period or the year as a whole. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 31, 2014. Certain previously reported amounts have been reclassified to conform to the current period presentation.

Principles of Consolidation

These consolidated financial statements include the accounts of Entertainment Gaming Asia Inc. and all its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The Company is required to make estimates, judgments and assumptions that it believes are reasonable based on its historical experience, contract terms, observance of known trends in the Company and the industry as a whole, and information available from other outside sources. These estimates affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On a regular basis, the Company evaluates its estimates, including those related to revenue recognition, product returns, long-lived assets, inventory obsolescence, stock-based compensation, income taxes, bad debts, warranty obligations, long-term contracts, contingencies and litigation. Actual results may differ from those estimates.

Discontinued Operations

A discontinued operation is a component of an entity that either has been disposed of, or that is classified as held for sale, and (i) represents a separate major line of business or geographical area of operations; and (ii) is a part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or (iii) is a subsidiary acquired exclusively with a view to resale.

Non-current assets held for discontinued operations are carried at the lower of their carrying amount or fair value less costs to sell. Any gain or loss from disposal of a business, together with the results of its operations until the date of disposal, is reported separately as discontinued operations. The financial information of discontinued operations is excluded from the respective captions in the Company's consolidated statements of comprehensive income and related notes for all periods presented.

6

Cash and Cash Equivalents

All highly-liquid instruments with original maturities of three months or less are considered cash equivalents. The Company places its cash and temporary investments with financial institutions. As of June 30, 2014, the Company had deposits with financial institutions in excess of Federal Deposit Insurance Corporation (FDIC) insured limits by approximately $4.4 million.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at face value less any allowances for doubtful accounts. Allowances for doubtful accounts are maintained at levels determined by Company management to adequately provide for uncollectible amounts. In determining the estimated uncollectable amounts, the Company evaluates a combination of factors, including, but not limited to, activity in the related market, financial condition of customers, specific customer collection experience and history of write-offs and collections. Interest income is imposed on overdue accounts receivable after the Company evaluates a combination of factors, including but not limited to, customer collection experiences, customer relationships and contract terms. Accounts receivable balances are written off after all collection efforts have been exhausted.

Inventories

Inventories are stated at the lower of cost, determined using the first-in, first-out method, or market. Cost elements included in work-in-process and finished goods include raw materials, direct labor and manufacturing overheads.

Long-Lived Assets

The Company accounts for impairment of long-lived assets in accordance with Financial Accounting Standards Board (FASB) ASC 360, Property, Plant and Equipment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In such instances, the Company estimates the undiscounted future cash flows that result from the use of the asset and its ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the Company recognizes an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset, determined principally using discounted cash flows. Impairment charges of approximately $19,000 were recognized for long-lived assets for the three-month and six-month periods ended June 30, 2014. There were no impairment charges for long-lived assets for the three-month and six-month periods ended June 30, 2013.

Prepaids, Deposits and Other Assets

Prepaids, deposits and other assets consist primarily of prepaid leases, prepaid value-added taxes in foreign countries, prepayments to suppliers, rental and utilities and other deposits.

Gaming Equipment

Gaming equipment consists primarily of EGMs and systems. Gaming equipment is stated at cost. The Company depreciates new EGMs and systems over a five-year useful life and depreciates refurbished EGMs and systems over a three-year useful life once placed in service. Depreciation of gaming equipment of approximately $758,000 and $1.0 million and $1.5 million and $2.0 million was included in cost of gaming operations in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the useful lives of the assets currently estimated to be three to ten years, which in the case of leasehold improvements, is limited to the life of the lease and throughout the renewal period as long as renewal is reasonably assured.

Depreciation of property and equipment of approximately $150,000 and $138,000 and $297,000 and $174,000 was included in the cost of gaming operations in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Depreciation of property and equipment of approximately $185,000 and $67,000 and $321,000 and $108,000 was included in cost of gaming products in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

7

Goodwill and Intangible Assets, Including Casino Contracts

Intangible assets consist of patents, trademarks, technical know-how, gaming operation agreement, casino contracts and goodwill. Intangible assets other than goodwill are amortized on the straight-line basis over the period of time the asset is expected to contribute directly or indirectly to future cash flows, which ranges from four to ten years. The straight-line amortization method is utilized because the Company believes there is no more reliably determinable method of reflecting the pattern for which the economic benefits of the intangible assets are consumed or otherwise used.

Amortization expenses related to casino contracts were approximately $612,000 and $617,000 and $1.2 million and $1.2 million for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. Amortization expenses related to other gaming related intangibles were approximately $63,000 and $63,000 and $126,000 and $126,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. The amounts were accounted for as cost of gaming operations in the consolidated statements of comprehensive income. Amortization expenses related to technical know-how were approximately $7,000 and $7,000 and $13,000 and $13,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. The amounts were accounted for as cost of gaming products in the consolidated statements of comprehensive income. Amortization expenses related to patents and trademarks were approximately $6,000 and $6,000 and $12,000 and $12,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. The amounts were accounted for as selling, general and administrative expenses in the consolidated statements of comprehensive income.

The Company measures and tests finite-lived intangibles for impairment when there are indicators of impairment in accordance with ASC 360-10-05, Property, Plant and Equipment.

The Company measures and tests goodwill for impairment, at least annually in accordance with ASC 350-10-05, Intangibles — Goodwill and Other.

Impairment testing for goodwill and other intangibles requires judgment, including the identification of reporting units, allocation of related goodwill, assignment of corporate shared assets and liabilities to reporting units, estimated future cash flows and determinations of fair values. While the Company believes its estimates of future revenues and future cash flows are reasonable, different assumptions could materially affect the assessment of useful lives, recoverability and fair values. No impairment charges relating to intangible assets were recorded for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Litigation and Other Contingencies

In the performance of its ordinary course of business operations, the Company is subject to risks of various legal matters, litigation and claims of various types. The Company has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. See Note 16.

ASC 450, Contingencies, requires that liabilities for contingencies be recorded when it is probable that a liability has been incurred and that the amount can be reasonably estimated. Significant management judgment is required related to contingent liabilities and the outcome of litigation because both are difficult to predict. For a contingency for which an unfavorable outcome is reasonably possible and which is significant, the Company discloses the nature of the contingency and, when feasible, an estimate of the possible loss.

Revenue Recognition

The Company recognizes revenue when all of the following have been satisfied:

· Persuasive evidence of an arrangement exists;

· The price to the customer is fixed and determinable;

· Delivery has occurred and any acceptance terms have been fulfilled;

· No significant contractual obligations remain; and

· Collection is reasonably assured.

Gaming Revenue and Promotional Allowances

The Company earns recurring gaming revenue from its gaming operations.

For slot operations, the Company earns recurring gaming revenue by providing customers with EGMs and casino management systems which track game performance and provide statistics on installed EGMs owned by the Company and leased to venue owners. Revenues are recognized on the contractual terms of the slot agreements between the Company and the venue owners and are based on the Company’s share of net winnings and reimbursement of expenses, net of customer incentives and commitment fees.

8

Revenues are recognized as earned unless collection is not reasonably assured, in which case revenues are recognized when the payment for net winnings is received. All slot operations revenues were recognized as earned during the three-month and six-month periods ended June 30, 2014 and 2013.

Commitment fees paid to the venue operators relating to contract amendments which are not recoverable from daily net win are capitalized as assets and amortized as a reduction of revenue over the term of the amended contracts. The Company had commitment fee balances related to contract amendments of approximately $180,000 and $234,000 as of June 30, 2014 and December 31, 2013, respectively.

For the discontinued casino operations, the Company’s revenues are measured by the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs and for chips in the customers’ possession, if any. Cash discounts, other cash incentives related to casino play and commissions rebated through junkets or tour guides, if any, to customers are recorded as a reduction to casino revenue. Consequently, the Company’s casino revenues are reduced by discounts and commissions.

The Company does not accrue jackpot liabilities for its slot machine base and progressive jackpots as regulations do not prohibit removal of gaming machines from the gaming floor without payment of the jackpots.

Promotional allowances represent goods and services, which would be accounted for as revenue if sold, that a casino gives to customers as an inducement to gamble at that establishment. Such goods and services include food and beverages. The Company includes the retail value of promotional allowances in gross revenues and deducts it from gross revenues to reach net revenues on the face of the consolidated statements of comprehensive income.

The Company also earned recurring gaming revenue through leasing table game equipment and providing casino management services to gaming operators within its casino property. Revenues from gaming table leasing arrangements are recognized as earned over the contractual terms of the arrangement between the Company and the gaming promoters and are included in discontinued operations.

Gaming Products Sales

The Company recognizes revenue from the sale of its gaming products to end users upon shipment against customer contracts or purchase orders.

Stock-Based Compensation

Under the fair value recognition provisions of ASC 718, Compensation-Stock Compensation, the Company recognizes stock-based compensation expenses for all service-based awards to employees and non-employee directors with graded vesting schedules on the straight-line basis over the requisite service period for the entire award. Estimates are revised if subsequent information indicates that forfeitures will differ from previous estimates, and the cumulative effect on compensation cost of a change in the estimated forfeitures is recognized in the period of the change. For non-employee awards, the Company remeasures compensation cost each period until the service condition is complete and recognizes compensation cost on the straight-line basis over the requisite service period. Option valuation models require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the fair value estimates. Judgment is required in estimating stock price volatility, forfeiture rates, expected dividends, and expected terms that options remain outstanding. For restricted stock awards with performance conditions, the Company evaluates if performance conditions are probable in each reporting period. The compensation expense of restricted awards is recognized ratably over the implicit service period if achieving performance conditions is probable. Cumulative catch-up adjustments are required in the event of changes in assessment of probability. See Note 12 for additional information relating to stock-based compensation assumptions. Stock-based compensation expenses totaled approximately $69,000 and $198,000 and $141,000 and $445,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Product Development

Product development expenses are expensed as incurred. Employee related costs associated with product development are included in product development expenses. Product development expenses were approximately $101,000 and $35,000 and $156,000 and $155,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. Product development expenses increased in the three-month period ended June 30, 2014 due to increased efforts to develop new products and security features for the Company’s gaming products business in the three-month period ended June 30, 2014. Product development expenses were essentially unchanged for the six-month period ended June 30, 2014.

9

Leases

Leases are classified at the inception date as either a capital lease or an operating lease. A lease is a capital lease if any of the following conditions exists:

· Ownership is transferred to the lessee by the end of the lease term;

· There is a bargain purchase option;

· The lease term is at least 75% of the property’s estimated remaining economic life; or

· The present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date.

A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed as incurred. The Company had no capital leases as of June 30, 2014 and December 31, 2013.

Income Taxes

The Company is subject to income taxes in the United States (including federal and state) and several foreign jurisdictions in which it operates. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. ASC 740, Income Taxes, requires that deferred tax assets be evaluated for future realization and reduced by a valuation allowance to the extent the Company believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience and expectations of future taxable income by taxing jurisdiction, the carry-forward periods available to the Company for tax reporting purposes, and other relevant factors.

The Company accounts for uncertain tax positions in accordance with ASC 740, which contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely to be realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in the provision for income taxes in the statements of comprehensive income.

On December 31, 2010, the Company effected a Quasi-Reorganization. As of that date, the Company’s deferred taxes were reported in conformity with applicable income tax accounting standards described above, net of applicable valuation allowances. Deferred tax assets and liabilities were recognized for differences between the assigned values and the tax basis of the recognized assets and liabilities with corresponding valuation allowances as appropriate. In accordance with the Quasi-Reorganization requirements, pre-existing tax benefits realized subsequent to the Quasi-Reorganization are recorded directly in equity.

Earnings/(Loss) per Share

Basic earnings/(loss) per share are computed by dividing the reported net earnings/(loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing the net income by the weighted average number of shares of common stock and shares issuable from stock options and restricted shares during the period. The computation of diluted earnings per share excludes the impact of stock options and restricted shares that are anti-dilutive. There is no difference in diluted loss per share from basic loss per share as the assumed exercise of common stock equivalents would have an anti-dilutive effect due to losses.

10

Foreign Currency Translations and Transactions

The functional currency of the Company’s international subsidiaries, except for its operations in Cambodia whose functional currency is also U.S. dollars ("US$"), is generally the local currency. For these subsidiaries, the Company translates the assets and liabilities at exchange rates in effect at the balance sheet date and income and expense accounts at average exchange rates during the year. Resulting currency translation adjustments are recorded directly to accumulated other comprehensive income within stockholders’ equity. Gains and losses resulting from transactions in non-functional currencies are recorded in the statements of comprehensive income.

Below is a summary of closing exchange rates as of June 30, 2014 and December 31, 2013, and average exchange rates for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

(US$1 to foreign currency)	June 30, 2014		December 31, 2013
Australian dollar		1.06		1.13
Hong Kong dollar		7.75		7.75
Philippine peso		43.77		44.45
Thai baht		32.52		32.92

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(US$1 to foreign currency)	2014		2013		2014		2013
Australian dollar		1.07		1.01		1.09		0.99
Hong Kong dollar		7.75		7.76		7.76		7.76
Philippine peso		44.18		41.90		44.56		41.37
Thai baht		32.51		29.95		32.61		29.93

Fair Value Measurements

Fair value is defined under ASC 820, Fair Value Measurements and Disclosures, as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard establishes a fair value hierarchy based on three levels of input, of which the first two are considered observable and the last unobservable.

· Level 1 — Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.

· Level 2 — Input, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments.

· Level 3 — Unobservable input, where there is little or no market activity for the asset or liability. This input reflects the reporting entity’s own assumptions of the data that participants would use in pricing the asset or liability, based on the best information available under the circumstances.

As of June 30, 2014, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying values due to the short maturity of these items.

Guarantees

The Company recognizes a guarantee at its inception which is the greater of (i) the fair value of the guarantee and (ii) the contingent liability amount. The fair value of a guarantee is determined by using expected present value measurement techniques. The initial liability recognized is amortized over the guarantee period.  The Company does not accrue any guarantee liabilities as of the balance sheet dates. 

Recent Accounting Pronouncements

In April 2014, the FASB issued Accounting Standards Update No. 2014-08 (ASU 2014-08) “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It is effective for annual periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. We do not expect the impact of the adoption of ASU 2014-08 to be material to our consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. We are currently in the process of evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements. 

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Note 2. Segments

The Company currently conducts business in two operating segments: (i) gaming operations, which include EGM participation operations; and (ii) gaming products, which consist of the design, manufacture and distribution of gaming chips and plaques. The Company owned and operated a casino in the Pailin Province of Cambodia. In June 2014, the Company ceased operations of the casino and entered into an agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited, a wholly-owned Cambodian subsidiary of the Company established for the purpose of owning and operating the casino. The Company was also engaged in the design, manufacture and distribution of other non-gaming plastic products, primarily for the automotive industry. These operations were sold on March 28, 2013. All the related historical revenues and expenses for the casino in Pailin and non-gaming plastic products operations have been reclassified as discontinued operations. The accounting policies of these discontinued operations are consistent with the Company’s policies for the accompanying consolidated financial statements.

	Three-Month Periods Ended June 30,						Six-Month Periods Ended June 30,
(amounts in thousands)	2014			2013			2014			2013
Revenues:
Gaming operations	$	4,420		$	5,034		$	8,303		$	9,432
Gaming products		524			162			1,335			1,589
Total revenues	$	4,944		$	5,196		$	9,638		$	11,021
Operating income/(loss):
Gaming operations gross margin	$	1,931		$	2,332		$	3,415		$	4,213
Gaming products gross margin		(401	)		(384	)		(1,078	)		(452	)
Corporate and other operating costs and expenses		(1,318	)		(1,608	)		(2,975	)		(3,498	)
Total operating income/(loss)	$	212		$	340		$	(638	)	$	263
Depreciation and amortization:
Gaming operations	$	1,597		$	1,851		$	3,165		$	3,583
Gaming products		219			93			386			147
Corporate		8			10			19			14
Total depreciation and amortization	$	1,824		$	1,954		$	3,570		$	3,744

Geographic segment revenues for the three-month and six-month periods ended June 30, 2014 and 2013 consisted of the following:

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Cambodia	$	3,752	$	4,264	$	6,895	$	7,726
Macau		137		34		497		700
Philippines		930		898		1,864		2,259
Australia		125		—		316		163
Other		—		—		66		173
	$	4,944	$	5,196	$	9,638	$	11,021

For the three-month and six-month periods ended June 30, 2014 and 2013, in the gaming operations segment, the largest customer represented 70% and 74% and 69% and 72%, respectively, of total gaming operations revenue. For the three-month and six-month periods ended June 30, 2014 and 2013, in the gaming products segment, the largest customer represented 27% and 59% and 24% and 37%, respectively, of total gaming products sales.

Note 3. Inventories

Inventories consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Raw materials (1)	$	1,717	$	809
Work-in-process (1)		1,182		342
Finished goods		31		367
Spare parts and supplies		127		145
	$	3,057	$	1,663

(1) Raw materials and work-in-process increased from December 31, 2013 to June 30, 2014 in preparation for gaming chip and plaque orders expected to be delivered in the second half of 2014.

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Note 4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Prepayments to suppliers	$	710	$	400
Prepaid leases		13		43
	$	723	$	443

Note 5. Receivables

Accounts and other receivables consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Trade accounts	$	906	$	922
Other		103		453
		1,009		1,375
Less: allowance for doubtful accounts		—		—
Net	$	1,009	$	1,375

Note 6. Gaming Equipment

Gaming equipment is stated at cost. The major categories of gaming equipment and accumulated depreciation consisted of the following:

	Useful Life
(amounts in thousands)	(years)	June 30, 2014			December 31, 2013
		(Unaudited)
EGMs	3-5	$	17,731		$	17,587
Systems	5		1,503			1,417
Other gaming equipment	3-5		—			42
			19,234			19,046
Less: accumulated depreciation			(12,362	)		(10,875	)
		$	6,872		$	8,171

Depreciation expense of gaming equipment of approximately $758,000 and $1.0 million and $1.5 million and $2.0 million was included in cost of gaming operations in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Note 7. Property and Equipment

Property and equipment are stated at cost and consisted of the following:

	Useful Life
(amounts in thousands)	(years)	June 30, 2014			December 31, 2013
		(Unaudited)
Equipment, vehicles, furniture and fixtures	3-10	$	6,174		$	4,109
Land and building	5		2,928			2,949
Leasehold improvements	1-5		1,188			1,029
Construction in progress	N/A		581			996
System development cost	N/A		201			116
			11,072			9,199
Less: accumulated depreciation			(2,004	)		(1,342	)
		$	9,068		$	7,857

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Depreciation expense of property and equipment of approximately $150,000 and $138,000 and $297,000 and $174,000 was included in cost of gaming operations in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Depreciation expense of property and equipment of approximately $185,000 and $67,000 and $321,000 and $108,000 was included in cost of gaming products in the consolidated statement of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Note 8. Goodwill and Intangible Assets, including Casino Contracts

Intangible assets are stated at cost and consisted of the following:

	Useful Life
(amounts in thousands)	(years)	June 30, 2014			December 31, 2013
		(Unaudited)
Gaming operation agreement	4-5	$	1,184		$	1,178
Less: accumulated amortization			(693	)		(567	)
			491			611
Goodwill	N/A		358			353
Patents	5-6		114			114
Less: accumulated amortization			(72	)		(62	)
			42			52
Trademarks	5-9		26			26
Less: accumulated amortization			(11	)		(10	)
			15			16
Technical know-how	10		261			261
Less: accumulated amortization			(54	)		(41	)
			207			220
Casino contracts	5-6		12,795			12,764
Less: accumulated amortization			(8,577	)		(7,335	)
			4,218			5,429
		$	5,331		$	6,681

Amortization expense for finite-lived intangible assets was approximately $687,000 and $693,000 and $1.4 million and $1.4 million for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Goodwill movements during the periods consisted of the following:

(amounts in thousands)	2014		2013
	(Unaudited)
Balance as of January 1	$	353	$	380
Foreign currency translation adjustment		5		(27	)
Balance as of June 30/December 31	$	358	$	353

Note 9. Prepaids, Deposits and Other Assets

Prepaids, deposits and other assets consisted of the following:

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(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Prepaid taxes	$	1,014	$	927
Prepaid leases		217		222
Prepayments to suppliers		235		279
Deposits on EGM and system orders		92		16
Rentals, utilities and other deposits		291		353
	$	1,849	$	1,797

As of June 30, 2014, prepaid leases consisted of land lease prepayments of approximately $217,000 for a potential gaming development project located in the Kampot Province of Cambodia.

Note 10. Accrued Expenses

Accrued expenses consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Payroll and related costs	$	252	$	601
Professional fees		388		312
Withholding tax expenses		553		551
Other tax expenses (1)		—		482
Others		238		420
	$	1,431	$	2,366

(1) Other tax expenses as of December 31, 2013 represented an accrued tax liability related to the Philippines operations resulting from the finalization of the Philippines income tax return for the 2010 year.  The accrual was reversed in the three-month period ended June 30, 2014.

Note 11. Other Liabilities

Other liabilities consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Tax liabilities	$	689	$	659
Others		32		83
	$	721	$	742

Note 12. Stock-Based Compensation

Options

The Company effected a 1-for-4 reverse stock split of its common shares as of June 12, 2012. All historical share amounts and share price information presented in this Note have been proportionally adjusted to reflect the impact of this reverse stock split.

At the annual shareholders meeting held on September 8, 2008, a new stock option plan, the “2008 Stock Incentive Plan” (the “2008 Plan”), was voted on and became effective on January 1, 2009, which replaced two previous plans, the Amended and Restated 1999 Stock Option Plan and the Amended and Restated 1999 Directors’ Stock Option Plan (the “Stock Option Plans”), thereby terminating both of the Stock Option Plans on December 31, 2008.

The 2008 Plan allows for incentive awards to eligible recipients consisting of:

· Options to purchase shares of common stock that qualify as incentive stock options within the meaning of the Internal Revenue Code;

· Non-statutory stock options that do not qualify as incentive options;

· Restricted stock awards; and

15

· Performance stock awards which are subject to future achievement of performance criteria or free of any performance or vesting.

The maximum number of shares reserved for issuance under the 2008 Plan was originally 1,250,000 shares, and in July 2010 the Company’s shareholders approved an increase in the number of shares reserved for issuance to 2,500,000 shares. At the annual shareholders meeting held on July 13, 2012, the Company’s shareholders approved a further increase in the number of shares reserved for issuance to 3,750,000 shares. The exercise price shall not be less than 100% of the fair market value of one share of common stock on the date of grant, unless the participant owns more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company, in which case the exercise price shall then be 110% of the fair market value. The outstanding stock options generally vest from six-months and one-day to over three years and have ten-year contractual terms.

During the six-month period ended June 30, 2014, stock options for the purchase of 225,000 shares of common stock were granted with a weighted average exercise price of $1.21 and weighted average fair value of $0.67 (2013: $1.18) per share and will vest from six-month and one day to three-year periods. During the six-month period ended June 30, 2014, 95,000 shares of restricted stock awards with a weighted average fair value of $1.21 per share were issued. The shares of restricted stock shall vest, subject to and upon the recipient’s achievement of key operational and financial performance milestones or according to the vesting period. For restricted stock awards with performance conditions, the Company evaluates if performance conditions are probable in each reporting period. The compensation expense of restricted awards is recognized ratably over the implicit service period if achieving performance conditions is probable. Cumulative catch-up adjustments are required in the event of any changes in the assessment of probabilities.

During the six-month period ended June 30, 2014, there were no exercises of outstanding stock options.

Prior to January 1, 2009, the Company had two stock options plans, the Amended and Restated 1999 Stock Option Plan and the Amended and Restated 1999 Directors’ Stock Option Plan (the “Previous Stock Option Plans”), through which 3,750,000 shares and 75,000 shares were authorized, respectively. Both Previous Stock Option Plans expired on December 31, 2008; however, options granted under the Previous Stock Option Plans that were outstanding as of the date of termination remain outstanding and subject to termination according to their terms.

As of June 30, 2014, stock options for the purchase of 936,864 and 20,000 shares of common stock, respectively, were outstanding in relation to the Amended and Restated 1999 Stock Option Plan and the Amended and Restated 1999 Director’s Stock Option Plan.

As of June 30, 2014, there were no outstanding non-plan options to purchase common stock. All previously granted non-plan options had expired by December 31, 2012. The non-plan options were issued to certain employees and non-employees of EGT Entertainment Holding Limited as approved by the Company’s stockholders in September 2007 pursuant to the initial closing of the transactions under the Securities Purchase and Product Participation Agreement dated June 12, 2007 between the Company and EGT Entertainment Holding Limited.

As of June 30, 2014, stock options for the purchase of 2,399,038 shares of common stock were outstanding under the 2008 Plan.

As of June 30, 2014, 2,949,235 stock options were exercisable with a weighted average exercise price of $2.12, a weighted average fair value of $0.90 and an aggregate intrinsic value of approximately $169,000. The total fair value of shares vested during the six-month period ended June 30, 2014 was approximately $312,000. The total compensation cost related to unvested shares as of June 30, 2014 was approximately $176,000. The amount was expected to be recognized over 1.8 years.

A summary of all current and expired plans as of June 30, 2014 and changes during the period then ended are presented in the following table:

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Options

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2013		3,291,738		$	2.11		6.13	$	738
Granted		225,000			1.21		3.78		—
Exercised		—			—		—		—
Forfeited or expired		(160,836	)		2.04		—		—
Outstanding as of June 30, 2014		3,355,902			2.05		5.83		169
Exercisable as of June 30, 2014		2,949,235		$	2.12		5.38	$	169

Restricted Stock

	Number of shares			Weighted Average Fair Value at Grant Date		Weighted Average Remaining Contractual Life (in years)
Unvested balance as of December 31, 2013		—		$	—		—
Granted		95,000			1.21		1.33
Vested (1)		(40,000	)		1.21		0.31
Unvested balance as of June 30, 2014		55,000			1.21		1.33

(1) Vested shares included 25,000 shares of restricted common stock issued in 2014 for which final vesting is subject to the approval of Company’s compensation committee.

Recognition and Measurement

The fair value of each stock-based award to employees and non-employee directors is estimated on the measurement date which generally is the grant date while awards to non-employees and restricted common stock with performance criteria are measured at the earlier of the performance commitment date or the service completion date using the Black-Scholes-Merton option-pricing model. Option valuation models require the input of highly subjective assumptions, and changes in assumptions used can materially affect the fair value estimates. The Company estimates the expected life of the award by taking into consideration the vesting period, contractual term, historical exercise data, expected volatility, blackout periods and other relevant factors. Volatility is estimated by evaluating the Company’s historical volatility data. The risk-free interest rate on the measurement date is based on U.S. Treasury constant maturity rates for a period approximating the expected life of the award. The Company historically has not paid dividends, nor does it expect to pay dividends in the foreseeable future and, therefore, the expected dividend rate is zero.

The following table summarizes the range of assumptions utilized in the Black-Scholes-Merton option-pricing model for the valuation of stock options granted during the six-month periods ended June 30, 2014 and 2013.

	Six-Month Periods Ended June 30,
	2014						2013
Range of values:	Low			High			Low			High
Expected volatility		73.03	%		74.03	%		73.78	%		76.49	%
Expected dividends		—			—			—			—
Expected term (in years)		3.73			9.11			3.73			9.70	%
Risk free rate		1.16	%		2.52	%		0.55	%		2.45	%

For stock-based compensation accrued to employees and non-employee directors, the Company recognizes stock-based compensation expense for all service-based awards with graded vesting schedules on the straight-line basis over the requisite service period for the entire award. Initial accruals of compensation expense are based on the estimated number of shares for which requisite service is expected to be rendered. Estimates are revised if subsequent information indicates that forfeitures will differ from previous estimates, and the cumulative effect on compensation cost of a change in the estimated forfeitures is recognized in the period of the change.

For non-employee awards, the Company remeasures compensation cost each period until the service condition is complete and recognizes compensation cost on the straight-line basis over the requisite service period.

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The Company estimates forfeitures and recognizes compensation cost only for those awards expected to vest assuming all awards would vest and reverse recognized compensation cost for forfeited awards when the awards are actually forfeited.

For awards with service conditions and graded vesting that were granted prior to the adoption of ASC 718, the Company estimates the requisite service period and the number of shares expected to vest, and recognizes compensation expense for each tranche on the straight-line basis over the estimated requisite service period.

Note 13. Related Party Transactions

Effective January 1, 2010, the Company began sub-leasing office space from Melco Services Limited, a wholly-owned subsidiary of Melco International Development Limited, which is also the parent of the Company’s principal shareholder, EGT Entertainment Holding Limited. This sub-lease expired at the end of March 2013 and the Company moved its principal executive office to the premises of the new Hong Kong Dolphin facilities in April 2013. The relocation of the Company’s principal executive office serves to minimize costs and improve oversight of its Dolphin operations.

Significant revenues, purchases and expenses arising from transactions with related parties consisted of the following:

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Melco Crown (Macau) Limited
Sales of gaming products	$	—	$	—	$	135	$	630
MCE Leisure (Philippines) Corporation
Sales of gaming products	$	98	$	—	$	98	$	—
Melco Services Limited
Technical services	$	—	$	2	$	1	$	10
Office rental		—		8		1		48
Golden Future (Management Services) Ltd
Management services	$	90	$	21	$	148	$	21

Melco Services Limited is a wholly-owned subsidiary of Melco International Development Limited, which owns 38.0% of Entertainment Gaming Asia Inc.

Melco International Development Limited owns 33.6% of Melco Crown Entertainment Limited, which owns 90.0% of Melco Crown (Macau) Limited.

Melco Crown Entertainment Limited owns 68.8% of Melco Crown (Philippines) Resorts Corporation, which owns 100% of MCE Leisure (Philippines) Corporation.

Golden Future (Management Services) Limited is a wholly-owned subsidiary of Melco Crown (Macau) Limited.

Note 14. Income Taxes

The Company recorded income tax expenses of $15,000 and $7,000 and $30,000 and $48,000 for the three-month and six-month periods ended June 31, 2014 and 2013, respectively. The Company’s effective income tax rates were 6.4% and 7.6% and (4.7)% and 48.2% for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. EGT Cambodia entity and Dreamworld Casino (Pailin) are income tax exempt and only pay a fixed monthly tax rather than a tax on income.

The fixed obligation tax arrangement is subject to annual renewal and negotiation and the Company has renewed the fixed obligation tax arrangement for both EGT Cambodia and Dreamworld Casino (Pailin) for 2014.

The Company has been subjected to income tax examinations by tax authorities in jurisdictions in which it operates. During the years ended December 31, 2011 and 2012, the United States Internal Revenue Service (the “IRS”) conducted an audit of the Company’s 2008 and 2009 tax returns in the United States. On January 23, 2013, the IRS formally notified the Company that it had completed the review of the examination of the above-mentioned years with no changes to the Company’s tax position.

18

The Company's 2009 to 2013 Australian income tax returns remain open to examination by the Australian Taxation Office. The Company's 2010 to 2013 Cambodian income tax returns remain open to examination by the General Department of Taxation. The Company's 2011 to 2013 Philippines income tax returns remain open to examination by the Philippines Bureau of Internal Revenue. The Company's 2007 to 2013 Hong Kong income tax returns remain open to examination by the Hong Kong Inland Revenue Department.

Note 15. Discontinued Operations

From July 2006 until March 2013, the Company’s operations included the development, manufacture and sale of gaming chips and plaques from its subsidiary, Dolphin Australia. It also conducted the development, manufacture and sale of non-gaming plastic products for a number of industries, including the automotive industry, from the Melbourne facility.

On February 22, 2013, the Company entered into a Share Sale Agreement with the then general manager of the Dolphin Australia operations, pursuant to which it agreed to sell him the portion of its business dedicated to the non-gaming plastic products, mainly automotive parts. The sale was completed on March 28, 2013. In connection with the sale of non-gaming operations, the Company relocated its gaming products operations, which included gaming chips and plaques, from Melbourne, Australia to Hong Kong. Commercial production in the new facility commenced in May 2013.

Prior to the completion of the sale, the Company transferred out of Dolphin Australia to Dolphin Hong Kong, both of which are subsidiaries wholly-owned by the Company, all inventory on hand and all assets and operations relating to the Company’s gaming chips and plaques operations, including all trademarks, patent rights and other intellectual property.

The purchase price received pursuant to the Share Sale Agreement was 350,000 Australian dollars (AUD). The Company also agreed to assume Dolphin Australia’s liabilities for (i) severance under Australian labor laws for those employees to be terminated by Dolphin Australia as part of the transactions, approximately $750,000, (ii) the lease for the Melbourne facility through the end of its present term expiring in January 2014, net of sub-lease income, approximately $350,000, and (iii) all Dolphin Australia payables, net of receivables, relating to both gaming and non-gaming operations up to March 28, 2013.

The buyer owed the Company $1.1 million for the settlement of working capital related to the sale of the non-gaming Dolphin assets. As of December 31, 2013, the outstanding balance had been fully settled.

As part of the sale transaction, the Company also agreed to grant Dolphin Australia a non-transferable, substantially royalty-free license to utilize certain trademarks and patent rights in connection with Dolphin Australia’s manufacture and sale of plastic products for the non-gaming industries.

From May 2012 until June 2014, the Company owned and operated a casino in the Pailin Province of Cambodia (“Dreamworld Casino (Pailin)”). Dreamworld Casino (Pailin) was constructed on land leased from a local land owner and, in consideration, the land owner was entitled to receive a monthly rental fee in the amount of $5,000 and 20% of the profit before depreciation (the total gross revenue of the casino less any payouts paid to customers, operating expenses, and gaming and non-gaming taxes on the casino’s revenue). The initial lease term was 20 years, commencing in September 2011, and was subject to renewal by the parties in writing.

On June 1, 2014, the Company ceased operations of Dreamworld Casino (Pailin). On June 20, 2014, the Company entered into an agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited (“DWP”), a wholly-owned Cambodian subsidiary of the Company established for the purposes of owning and operating Dreamworld Casino (Pailin), to a local Cambodian individual. In connection with the sale of the issued capital shares of DWP, on June 20, 2014 the Company and its partner in the operations entered into an agreement to terminate the undertaking agreement and lease agreements with the partner and all future obligations thereunder including future lease payments owed by the Company.

The sale includes all assets of DWP with the exception of all electronic gaming machines, certain surveillance equipment and other assets excluded in the agreement and prohibits any use of the Dreamworld brand name by the buyer. Total consideration paid to the Company by the buyer will be $500,000, of which $100,000 was paid at the time of entering the agreement and the balance is to be paid in sixteen $25,000 monthly installments commencing within one month of the signed agreement. The parties expect to complete the sale transaction subject to the buyer’s receipt of certain government approvals, which is expected within the next few months. The Company intends to recognize the anticipated gain on the disposal of the entity when the transaction is expected to close.

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In compliance with the annual valuation review of the Dreamworld Casino (Pailin) facility and gaming assets under U.S. Generally Accepted Accounting Principles (GAAP), the Company had recorded an impairment charge of approximately $2.5 million as of December 31, 2013 related to these operations. The impairment charge represented the entire capital expenditure incurred by the Company for the property as of December 31, 2013, with the exception of those assets that the Company believed could be redeployed to other existing properties.

The following table details the significant components of revenues and loss from discontinued operations, net of income taxes.

	Three-Month Periods Ended June 30,						Six-Month Periods Ended June 30,
(amounts in thousands)	2014			2013			2014			2013
Revenues from casino operations	$	12		$	907		$	228		$	2,001
Revenues from non-gaming products		—			—			—			2,043
Total revenues from discontinued operations	$	12			907		$	228			4,044
Pre-tax loss from casino operations	$	(239	)	$	(476	)	$	(395	)	$	(765	)
Pre-tax income/(loss) from non-gaming products		—			98			—			(2,109	)
Benefit for income taxes related to discontinued operations		—			—			—			28
Loss from discontinued operations, net of tax	$	(239	)	$	(378	)	$	(395	)	$	(2,846	)

The following table details selected financial information for the discontinued operations in the consolidated statements of comprehensive income.

	Three-Month Periods Ended June 30,						Six-Month Periods Ended June 30,
(amounts in thousands)	2014			2013			2014			2013
Loss from operations	$	(237	)	$	(432	)	$	(402	)	$	(561	)
Loss on disposal		—			—			—			(2,442	)
Other (1)		(2	)		54			7			129
Income tax benefit (2)		—			—			—			28
Loss from discontinued operations, net of tax	$	(239	)	$	(378	)	$	(395	)	$	(2,846	)

(1)	Other represented foreign currency exchange differentials from Dreamworld Casino (Pailin) discontinued operations and recognized government grant income from Dolphin Australia discontinued operations.
(2)	Income tax benefit represented a reversal of previously recognized uncertain tax benefits from Dolphin Australia discontinued operations.

Note 16. Commitments and Contingencies

Legal Matters

Prime Mover/Strata Litigation

On March 26, 2010, a complaint (as subsequently amended on May 28, 2010 and December 20, 2011) (the “Complaint”) was filed by certain of the Company's shareholders including Prime Mover Capital Partners L.P., Strata Fund L.P., Strata Fund Q.P. L.P., and Strata Offshore Fund, Ltd (collectively, the “Plaintiffs”) in the United States District Court for the Southern District of New York against certain defendants including the Company and certain other of current and former directors and officers. The case number is 12-4393.

On December 18, 2013, the Second Circuit affirmed by Summary Order the District Court’s September 28, 2012 judgment granting the dismissal of the Plaintiffs’ Complaint. Since the Plaintiffs did not request a rehearing of the Summary Order in the permitted time, the civil action was concluded with all claims dismissed against all parties.

Note 17. Earnings/(Loss) Per Share

Computation of the basic and diluted earnings/(loss) per share from continuing operations consisted of the following:

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	Three-Month Periods Ended June 30,
	2014						2013
(amounts in thousands, except per share data)	Income		Number of Shares		Per Share Amount		Income		Number of Shares		Per Share Amount
Basic
Net income attributable to equity shareholders	$	217		30,013		0.01	$	92		29,975	$	—
Effect of dilutive securities
Dilutive stock options/restricted shares				135						738
Diluted
Net income attributable to equity shareholders plus assumed conversion	$	217		30,148		0.01	$	92		30,713	$	—

	Six-Month Periods Ended June 30,
	2014								2013
(amounts in thousands, except per share data)	Loss			Number of Shares		Per Share Amount			Income		Number of Shares		Per Share Amount
Basic
Net (loss)/income attributable to equity shareholders	$	(657	)		30,016		(0.02	)	$	52		29,975	$	—
Effect of dilutive securities
Dilutive stock options/restricted shares (1)					—							737
Diluted
Net (loss)/income attributable to equity shareholders plus assumed conversion	$	(657	)		30,016		(0.02	)	$	52		30,712	$	—

(1) There was no difference in diluted loss per share from basic loss per share as the assumed exercise of common stock equivalents would have an anti-dilutive effect due to losses for the six-month period ended June 30, 2014.

For the three-month periods ended June 30, 2014 and 2013, outstanding stock options of 3,093,402 and 2,166,738 shares of common stock were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive. For the six-month periods ended June 30, 2014 and 2013, outstanding stock options of 3,093,402 and 2,166,738 shares of common stock were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive.

Note 18. Accumulated Other Comprehensive Income

The accumulated balances in respect of other comprehensive income consisted of the following:

(amounts in thousands)	Unrealized Actuarial Income		Foreign Currency Translation			Accumulated Other Comprehensive Income
Balances, January 1, 2013	$	62	$	867		$	929
Current period other comprehensive income/(loss)		37		(224	)		(187	)
Balances, December 31, 2013		99		643			742
Current period other comprehensive income		—		58			58
Balances, June 30, 2014	$	99		701			800

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the related notes thereto contained elsewhere in this report. The information contained in this quarterly report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission, or SEC, including our annual report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 31, 2014 and subsequent reports on Form 8-K, which discuss our business in greater detail.

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In this report we make, and from time to time we otherwise make, written and oral statements regarding our business and prospects, such as projections of future performance, statements of management’s plans and objectives, forecasts of market trends, and other matters that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements containing the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimates,” “projects,” “believes,” “expects,” “anticipates,” “intends,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions identify forward-looking statements, which may appear in documents, reports, filings with the Securities and Exchange Commission, news releases, written or oral presentations made by officers or other representatives made by us to analysts, stockholders, investors, news organizations and others, and discussions with management and other of our representatives. For such statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Our future results, including results related to forward-looking statements, involve a number of risks and uncertainties. No assurance can be given that the results reflected in any forward-looking statements will be achieved. Any forward-looking statement speaks only as of the date on which such statement is made. Our forward-looking statements are based upon assumptions that are sometimes based upon estimates, data, communications and other information from suppliers, government agencies and other sources that may be subject to revision. Except as required by law, we do not undertake any obligation to update or keep current either (i) any forward-looking statement to reflect events or circumstances arising after the date of such statement, or (ii) the important factors that could cause our future results to differ materially from historical results or trends, results anticipated or planned by us, or which are reflected from time to time in any forward-looking statement.

There are several important factors that could cause our future results to differ materially from historical results or trends, results anticipated or planned by us, or results that are reflected from time to time in any forward-looking statement. Some of these important factors, but not necessarily all important factors, are included in this Management's Discussion and Analysis of Financial Condition and Results of Operations and in the section “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 31, 2014.

We own or have rights to certain trademarks that we used in connection with our business or products, including, but not limited to, Dolphin™. Other than this trademark, this report also makes reference to trademarks and trade names of other companies.

Overview

This discussion is intended to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from year to year, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. The discussion also provides information about the financial results of the various segments of our business to provide a better understanding of how those segments and their results affect our financial condition and results of operations as a whole. This discussion should be read in conjunction with our consolidated financial statements and accompanying notes as of and for the three-month and six-month periods ended June 30, 2014 and 2013 included elsewhere in this report.

We are a gaming company focused on capitalizing on the growth opportunities in emerging gaming markets of Asia. We generate revenue in two principal ways: gaming operations and gaming product sales. Our gaming operations comprise slot participation operations in Cambodia and the Philippines through contracts with venue owners or the development and operations of our own venues under our Dreamworld brand. Our gaming products comprise the manufacture and sale of gaming chips and plaques under our Dolphin brand and the distribution of gaming products in select markets for third-party suppliers.

Our consolidated revenue for the three-month and six-month periods ended June 30, 2014 was approximately $4.9 million and $9.6 million, of which revenue from the gaming operations and gaming products segments comprised 89% and 11% and 86% and 14%, respectively. This compares to consolidated revenue of approximately $5.2 million and $11.0 million for the three-month and six-month periods ended June 30, 2013, of which revenue from the gaming operations and gaming products segments comprised 97% and 3% and 86% and 14%, respectively.

We have developed our business model with the goal of creating growth potential and the ability to generate quality recurring cash flow. We believe that this model combined with our established presence and relationships in our markets provide us the potential to capitalize on the growth opportunities in our target markets in Asia. We seek to improve revenue by making our gaming properties quality leaders in their markets by providing our customers with their favorite games, superior customer service and attractive and comfortable surroundings. We seek to increase and expand our diversified revenue streams through our gaming products division. We seek to improve margins by focusing on operational efficiencies and cost controls. Our long-term strategy includes responsible investment in improving and maintaining our existing operations and selectively securing new projects that will serve to enhance our presence and build deeper brand equity for the Dreamworld name in our markets and drive long-term growth for the Company. We intend to implement these strategies in ways that we believe will benefit our shareholders.

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Gaming Operations

Our gaming operations involve the leasing of EGMs on a revenue sharing basis to gaming establishments. We utilize our operational experience, established market presence and key relationships to identify and develop new gaming venues, acquire EGMs, casino management systems and other gaming peripherals directly from manufacturers, dealers and suppliers and install the same in our contracted venues. In addition, we assist the venue owners in brand-building and marketing promotions.

For certain of our contracts, such as with NagaWorld Resorts, Sokha Hotels and Resorts (“Sokha”) and Dreamworld Club (Poipet) in Cambodia, we also function as a manager of the EGM operations. In these venues, we either jointly manage with the relevant casino owner, as is the case with NagaWorld Resorts and Sokha, or exclusively manage, as is the case with Dreamworld Club (Poipet), the slot floor operations and design marketing programs and slot promotions for our designated gaming spaces. We also hire, train and manage the floor staff and set high expectations on the level of customer service.

Total company-wide EGM placements can fluctuate due to our strategic efforts to optimize average daily net wins. In the event that the EGM performance at a contracted venue does not meet our original expectations, and to the extent permitted under the terms of the relevant contracts, we may discuss with the venue owner withdrawing all or a portion of our EGMs from such venue for future redeployment in new or existing venues with better performance prospects.

As of June 30, 2014, our gaming operations were located in two countries, Cambodia and the Philippines, and totaled 1,694 EGM seats in operation in six venues. In Cambodia, we had a total of 1,126 EGM seats in operation in three venues. In the Philippines, we had a total of 568 EGM seats in operation in three venues.

In Cambodia, our gaming operations largely focus on operating a substantial portion of the gaming machine area in prime casino floor locations at NagaWorld, a wholly-owned subsidiary of Hong Kong listed NagaCorp Ltd. (HKSE: 3918). NagaWorld is a premier luxury destination gaming resort and the only licensed full service casino in a designated area around the capital city of Phnom Penh. In December 2008, we established a relationship with NagaCorp to place EGMs on a revenue sharing or participation basis at NagaWorld and jointly operate those EGMs with them. Due to our successful performance, we subsequently amended our contract and expanded our relationship with NagaWorld to 670 EGM seats under contract. Our slot operations in NagaWorld are a primary contributor to our slot revenue and cash flow.

Our current operations in NagaWorld are governed under the Machines Operation and Participation Consolidation Agreement dated December 31, 2009, which was subsequently amended on May 25, 2010. Under the terms of these agreements, we and NagaWorld control the operation of a total of 670 of our EGMs, including floor staff and respective audit rights. We and NagaWorld split the win per unit per day from all the 670 EGMs and certain operating costs related to marketing and floor staff on a respective basis of 25%/75%. Win per unit per day from all the 670 EGMs are settled and our share is distributed daily to us. The contract term is six years commencing from March 1, 2010.

Our gaming operations in Cambodia also include Thansur Bokor Highland Resort, a casino resort developed by leading Cambodian hotelier, Sokha, in a tourist area of the Kampot Province. The resort officially opened in May 2012 but portions of the initial phase of the property including the entertainment complex were not completed until early 2013. To-date, we have placed approximately 180 EGMs in this venue. Under the terms of the agreement, we have the ability to place up to 250 EGM seats and jointly manage these slot operations in the resort. We and Sokha split the gross win and certain operating expenses for the placed EGMs on a respective basis of 27%/73%. The contract duration is five years commencing from May 2012. This project expanded our gaming operations in the Indo-China region with a prominent partner who has multiple hotel and resort properties in Cambodia.

Our most recent project in Cambodia is Dreamworld Club (Poipet). Unlike our other slot operations, we solely developed and operate this property. Dreamworld Club (Poipet) is a standalone slot hall with approximately 300 EGM seats. It is prominently located in the established gaming market of Poipet in the Banteay Meanchey Province of Northwestern Cambodia near the Thailand border. Dreamworld Club (Poipet) soft opened in March 2013 and the official grand opening was held in May 2013.

Dreamworld Club (Poipet) operates under a machine operation and participation agreement with a local partner that owns and operates an existing casino in Poipet. Under the terms of the agreement, the local partner allocated part of its land with an area of approximately 16,000 square feet to us to develop and construct, at our own design, budget and cost, the slot venue. We and the local partner split the win per unit per day from all the EGMs placed by us at Dreamworld Club (Poipet) and certain operating costs related to marketing and floor staff on a respective basis of 40%/60%. The initial project term is five years beginning from the commercial launch of the slot hall in 2013 with an option to renew for an additional five years subject to the achievement of certain financial milestones during the initial five-year period.

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Total capital expenditures for Dreamworld Club (Poipet), which principally included the development and construction of the facility and gaming equipment, were approximately $7.5 million, including approximately $5.0 million to source top-of-the-line EGMs. We are responsible for all capital expenditures for Dreamworld Club (Poipet) and those expenditures have been funded through our internal cash resources.

In the Philippines, our gaming operations comprise three venues in the greater Manila area. For these three venues, our share of the net win per unit per day ranges from 15% to 35%. The typical initial term for these contracts is five years with renewal options. The strong Philippine economy, the interest of the government to expand gaming in the country and close geographic proximity to major markets in Asia, among other reasons, has led to increased development of major casinos in the market. While this results in increasing competition for our venues in this market, we remain focused on enhancing returns on assets in the Philippines through targeted marketing programs and strategic management of the machine mix.

During the reporting periods, we operated one casino property, Dreamworld Casino (Pailin), which opened in May 2012 and closed in June 2014. Dreamworld Casino (Pailin) measured approximately 16,000 square feet and was located in the Pailin Province of Northwestern Cambodia next to the Thailand border.

Dreamworld Casino (Pailin) was constructed on land leased from a local land owner and, in consideration, the land owner was entitled to receive monthly a rental fee in the amount of $5,000 and 20% of the profit before depreciation (the total gross revenue of the casino less any payouts paid to customers, operating expenses, and gaming and non-gaming taxes on the casino’s revenue). The initial lease term was 20 years, commencing in September 2011 and was subject to renewal by the parties in writing. Total capital expenditures for Dreamworld Casino (Pailin) were approximately $2.5 million, which was paid solely by us from internal cash resources.

The performance of Dreamworld Casino (Pailin) did not meet our expectations primarily due to an insufficient level of natural player traffic and the high costs associated with acquiring a quality player base in this market. After exploring all avenues to improve performance, we determined to seek strategic alternatives for the property. After careful evaluation of all other options, on June 20, 2014 we entered into an agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited (“DWP”), a wholly-owned Cambodian subsidiary of the Company established for the purposes of owning and operating Dreamworld Casino (Pailin) (“Dreamworld Pailin”), to a local Cambodian individual. In connection with the sale of the issued capital shares of DWP, on June 20, 2014 we and our partner in the operations entered into an agreement to terminate the undertaking agreement and lease agreements with our partner and all future obligations thereunder including future lease payments owed by us.

The sale includes all assets of DWP with the exception of all electronic gaming machines, certain surveillance equipment and other assets excluded in the agreement and prohibits any use of the Dreamworld brand name by the buyer. Total consideration paid to us by the buyer will be $500,000, of which $100,000 was paid at the time of entering the agreement and the balance is to be paid in sixteen $25,000 monthly installments commencing within one month of the signed agreement. The parties expect to complete the sale transaction subject to the buyer’s receipt of certain government approvals, which is expected within the next few months.

In compliance with the annual valuation review of the Dreamworld Casino (Pailin) facility and gaming assets under U.S. Generally Accepted Accounting Principles (GAAP), we had previously recorded an impairment charge of approximately $2.5 million as of December 31, 2013 related to these operations.

We continue to selectively pursue gaming projects for both slot participation and casino development. For slot operations, we intend to pursue additional opportunities in certain markets in Indo-China and place our EGMs in prime locations on the gaming floors of major casinos and/or hotels in our target markets. For casino development, we intend to pursue projects in Indo-China and other growing gaming markets in Asia that will enable us to expand our market presence and increase brand equity in our Dreamworld name. We intend to pursue projects that are relatively larger in size and investment than our existing Dreamworld projects and in more established markets with a strong level of existing natural player traffic. There is no assurance we will be successful in establishing new projects or that any such projects will be successful.

Gaming Products

As part of our efforts to complete the restructuring of our legacy operations, on March 28, 2013, we sold the non-gaming manufacturing portion of the operations in a management-led buyout for total consideration of AUD350,000. In connection with the sale, in March 2013, we commenced the relocation of our manufacturing facilities for the gaming products portion of the business, namely gaming chips and plaques, to Hong Kong from Australia. Commercial operation of the new Hong Kong facilities, which is also our corporate headquarters, began in May 2013.

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We recorded one-time cash costs associated with the above sale and relocation, which included severance and relocation charges, of approximately $1.3 million. These costs were all incurred during the three-month period ended March 31, 2013 and were funded from our available working capital.

We believe these actions not only enabled us to exit a non-core, low-margin business but also better position us to secure large new orders in the growing Asian gaming markets as well as provide for increased production capacity and economies of scale and improved R&D capabilities. In addition, it improves our ability to expand our product mix to include other gaming products, which could add incremental revenue streams and further enhance our competitive positioning. We have two distribution agreements with third-party suppliers for gaming accessories and gaming systems and terminals. None of our distribution agreements require purchase commitments from us.

Discontinued Operations

On June 1, 2014, we ceased operations of Dreamworld Casino (Pailin), a casino it developed, owned and operated in the Pailin Province of Cambodia. On June 20, 2014, we entered into an agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited, a wholly-owned Cambodian subsidiary established for the purpose of owning and operating the casino. The sale is expected to close in the next few months, at which time we intend to recognize the anticipated gain on the disposal of the entity.

On March 28, 2013, we sold a portion of our subsidiary, Dolphin Products Pty Limited, business dedicated to the manufacture and sale of non-gaming plastic products, mainly automotive parts. Revenues of these non-gaming products and our gaming chips and plaques were previously consolidated under the reporting segment “Other Products.” After the sale, we renamed “Other Products” as “Gaming Products” and this segment now comprises our gaming chips and plaques operations and, beginning in October 2013, the distribution of third-party gaming products to select locations in Indo-China and the Philippines.

All related historical revenues and expenses from Dreamworld Casino (Pailin) and the non-gaming plastic products operations have been reclassified as discontinued operations.

Results of Operations for the Three-Month and Six-Month Periods Ended June 30, 2014 and 2013

The following is a schedule summarizing operating results on a consolidated basis and separately by each of our two operating segments, gaming operations and gaming products, for the three-month and six-month periods ended June 30, 2014 and 2013.

On February 22, 2013, we entered into a share sale agreement pursuant to which we agreed to sell the portion of our subsidiary Dolphin Products Pty Limited (“Dolphin Australia”) business dedicated to the manufacture and sale of non-gaming plastic products, mainly automotive parts. As part of the sale transaction, we also agreed to grant Dolphin Australia a non-transferable, royalty-free license to utilize certain trademarks and patent rights in connection with its manufacture and sale of plastic products for the non-gaming industries. The sale closed on March 28, 2013.

On June 1, 2014, we ceased the operations of Dreamworld Casino (Pailin), a casino we developed, owned and operated in the Pailin Province of Cambodia. On June 20, 2014, we entered into an agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited, a wholly-owned Cambodian subsidiary established for the purposes of owning and operating the casino. The sale is expected to close in the next few months.

All historical revenues and expenses associated with Dreamworld Casino (Pailin) and the non-gaming plastic products operations for the three-month and six-month periods ended June 30, 2014 and 2013 have been reclassified as discontinued operations.

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	Three-Month Periods Ended June 30,						Six-Month Periods Ended June 30,
(amounts in thousands, except per share data)	2014			2013			2014			2013
Total:
Revenues	$	4,944		$	5,196		$	9,638		$	11,021
Gross margin	$	1,541		$	1,948		$	2,348		$	3,761
Gross margin percentage		31	%		37	%		24	%		34	%
Adjusted EBITDA from continuing operations (1)	$	2,136		$	2,252		$	3,097		$	4,290
Operating income/(loss) from continuing operations	$	212		$	340		$	(638	)	$	263
Net income/(loss) from continuing operations	$	217		$	92		$	(657	)	$	52
Net loss	$	(22	)	$	(286	)	$	(1,052	)	$	(2,794	)
Basic and diluted earnings/(loss) per share from continuing operations	$	0.01		$	—		$	(0.02	)	$	—
Weighted average common shares outstanding
Basic		30,013			29,975			30,016			29,975
Diluted		30,148			30,713			30,016			30,712
Gaming operations:
Revenues	$	4,420		$	5,034		$	8,303		$	9,432
Gross margin	$	1,942		$	2,332		$	3,426		$	4,213
Gross margin percentage		44	%		46	%		41	%		45	%
Gaming products:
Revenues	$	524		$	162		$	1,335		$	1,589
Gross margin	$	(401	)	$	(384	)	$	(1,078	)	$	(452	)
Gross margin percentage		(77	)%		NM			(81	)%		(28	)%

(1) We define “Adjusted EBITDA" as earnings from continuing operations before interest, taxes, depreciation, amortization, stock-based compensation, and other non-cash operating income and expenses. Adjusted EBITDA is presented exclusively as a supplemental disclosure because our management believes that it is widely used to measure the performance, and as a basis for valuation, of gaming companies. Our management uses Adjusted EBITDA as a measure of the operating performance of its segments and to compare the operating performance of its operations with those of its competitors. We also present Adjusted EBITDA because it is used by some investors as a way to measure a company’s ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to financial measures in accordance with generally accepted accounting principles in the United States (“GAAP”). Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of our performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income, Adjusted EBITDA does not include depreciation or interest expense and, therefore, does not reflect current or future capital expenditures or the cost of capital. We compensate for these limitations by using Adjusted EBITDA as only one of several comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include operating income, net income, cash flows from operations and cash flow data. We have significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in Adjusted EBITDA. Our calculation of Adjusted EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.

A reconciliation of Adjusted EBITDA from continuing operations to the net income/(loss) from continuing operations is provided below.

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	Three-Month Periods Ended June 30,					Six-Month Periods Ended June 30,
(amounts in thousands)	2014			2013		2014			2013
Net income/(loss) from continuing operations— GAAP	$	217		$	92	$	(657	)	$	52
Interest expense		—			1		2			5
Interest income		—			—		—			(4	)
Income tax expenses		15			7		30			48
Depreciation and amortization		1,824			1,954		3,570			3,744
Stock-based compensation expenses		69			198		141			445
Impairment of assets		19			—		19			—
Gain on dispositions		(8	)		—		(8	)		—
Adjusted EBITDA from continuing operations	$	2,136		$	2,252	$	3,097		$	4,290

Total revenues decreased approximately $252,000 to $4.9 million for the three-month period ended June 30, 2014 compared to approximately $5.2 million in the same period of the prior year as lower gaming operations revenue was partially offset by higher gaming products sales. Revenue from gaming operations decreased primarily as a result of lower average daily net win per unit from NagaWorld, as described in greater detail below. Revenue from the gaming products division increased as a result of higher sales of gaming chips and plaques to existing customers compared to the prior year period when the production period was shortened due to the relocation of our manufacturing facilities from Australia to Hong Kong.

Gross profit decreased approximately $407,000 to $1.5 million for the three-month period ended June 30, 2014 compared to approximately $1.9 million in the same period of the prior year. The decrease was primarily a result of lower gaming operations revenue from NagaWorld partially offset by a higher gross profit for the Philippines gaming operations primarily due to lower depreciation expense as a result of the increase in fully depreciated gaming assets for the three-month period ended June 30, 2014.

Operating income from continuing operations decreased approximately $128,000 to $212,000 for the three-month period ended June 30, 2014 compared to approximately $340,000 in the same period of the prior year. The decrease in operating income from continuing operations was primarily a result of the lower gross profit partially offset by lower operating expenses largely due to a benefit of approximately $448,000 related to the reversal of a previous accrual for a Philippines tax assessment in the second quarter of 2014.

Net income from continuing operations increased approximately $125,000 to $217,000 for the three-month period ended June 30, 2014 compared to approximately $92,000 in the same period of the prior year. The increase in net income from continuing operations was primarily a result of a slight foreign currency gains compared to losses in the prior year period. This positive differential of approximately $263,000 was primarily due to the decrease in the value of U.S. dollar denominated payables for the Philippines operations as a result of favorable changes in the peso to dollar exchange rate. The increase in net income from continuing operations was partially offset by the lower operating income as explained above. Net loss decreased approximately $264,000 to $22,000 for the three-month period ended June 30, 2014 compared to approximately $286,000 in the same period of the prior year. The net loss for the three-month period ended June 30, 2014 included a net loss from discontinued operations of approximately $239,000 compared to a net loss from discontinued operations of approximately $378,000 in the prior year period.

Total revenues decreased approximately $1.4 million to $9.6 million for the six-month period ended June 30, 2014 compared to approximately $11.0 million in the same period of the prior year due to decreases in both business divisions. Revenue from gaming operations decreased primarily as a result of lower average daily net win per unit from NagaWorld and the Philippines, as described in greater detail below. Revenue from the gaming products division decreased as a result of lower sales of gaming chips and plaques to existing customers compared to the prior year period.

Gross profit decreased approximately $1.4 million to $2.4 million for the six-month period ended June 30, 2014 compared to approximately $3.8 million in the same period of the prior year. The decrease was a result of lower gaming operations revenue from NagaWorld and a higher gross margin loss for the gaming products division due to lower production volumes, certain production inefficiencies and under absorption of fixed costs compared to the prior year period. This was partially offset by higher gross profit from the Philippines operations primarily due to lower depreciation expense as a result of the increase in fully depreciated gaming assets for the six-month period ended June 30, 2014.

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Operating loss from continuing operations increased approximately $901,000 to a loss of $638,000 for the six-month period ended June 30, 2014 compared to operating income from continuing operations of approximately $263,000 in the same period of the prior year. The increase in operating loss from continuing operations was primarily a result of the lower gross profit partially offset by lower operating expenses primarily due to the reversal of a prior tax accrual as mentioned above and lower stock-based compensation expense.

Net loss from continuing operations increased approximately $709,000 to a loss of $657,000 for the six-month period ended June 30, 2014 compared to net income from continuing operations of approximately $52,000 in the same period of the prior year. The increase in net loss from continuing operations was primarily a result of a higher operating loss partially offset by a positive foreign currency differential of approximately $173,000 for the same reasons as stated above. Net loss decreased approximately $1.7 million to $1.1 million for the six-month period ended June 30, 2014 compared to approximately $2.8 million in the same period of the prior year. The net loss for the six-month period ended June 30, 2014 included a net loss from discontinued operations of approximately $395,000 compared to a net loss from discontinued operations of approximately $2.8 million in the prior year period.

Gaming Operations

Revenues from gaming operations consisted of our slot operations.

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands, except per unit data)	2014		2013		2014		2013
Net revenue to the Company
Cambodia operations	$	3,350	$	3,975	$	6,280	$	7,218
Philippines operations		787		803		1,515		1,740
Service revenue(1)		283		256		508		474
Consolidated total	$	4,420	$	5,034	$	8,303	$	9,432
Average daily net win per unit(2)
Cambodia operations	$	130	$	169	$	124	$	172
Philippines operations	$	76	$	74	$	73	$	80
Consolidated total	$	112	$	135	$	107	$	137

	June 30,
	2014		2013
EGM seats in operation
Cambodia operations		1,126		1,062
Philippines operations		568		570
Consolidated total		1,694		1,632

(1)

Service revenue represents reimbursements of certain expenses, which for accounting purposes, are included in the revenue and grossed up in the cost of gaming operations.

(2)

Average daily net win per unit figures exclude EGM seats in operation during venue soft opening periods, if applicable, and apply revenue recognized on a cash basis in the calculation for venues for which revenues are recognized on a cash basis. During the three-month and six-month periods ended June 30, 2014, no venues operated during a soft opening. During the three-month and six-month period ended June 30, 2013, one venue in Cambodia operated during a soft opening. Had these seats been included in the calculations, average net win per unit for the above-mentioned 2013 periods would have been $157 and $165 for Cambodia and $129 and $133, respectively, on a consolidated basis.

Revenue from gaming operations decreased approximately $614,000 to $4.4 million for the three-month period ended June 30, 2014 compared to approximately $5.0 million in the same period of the prior year. The decrease was primarily due to lower average daily net win per unit from NagaWorld partially offset by higher revenue from Dreamworld Club (Poipet), which operated under a soft opening from March 2013 until its grand opening in May 2013.

Gaming operations revenue for the three-month periods ended June 30, 2014 and 2013 included approximately $283,000 and $256,000, respectively, in service revenue related to the reimbursement of net shared costs from casino operators.

Consolidated average daily net win per machine decreased $23 to $112 for the three-month period ended June 30, 2014 compared to $135 in the prior year period due to a decline in the average daily net win per unit in NagaWorld.

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Revenue from Cambodia decreased approximately $625,000 to $3.4 million for the three-month period ended June 30, 2014 compared to approximately $4.0 million in the prior year period primarily as a result of a decrease in average daily net win per unit from NagaWorld. This was partially offset by increased revenue from Dreamworld Club (Poipet).

NagaWorld contributed approximately $2.9 million in revenue for the three-month period ended June 30, 2014, a decrease of approximately $759,000 compared to $3.7 million in the prior year period. The decrease was primarily due to higher jackpot payouts in the three-month period ended June 30, 2014.

Cambodia average daily net win per unit decreased $39 to $130 for the three-month period ended June 30, 2014 compared to $169 for the prior year period. The decline was primarily due to lower average daily net win per unit in NagaWorld for the three-month period ended June 30, 2014.

Revenue from the Philippines decreased approximately $16,000 to $787,000 for the three-month period ended June 30, 2014 compared to approximately $803,000 in the prior year period. Philippines average daily net win per machine increased $2 to $76 for the three-month period ended June 30, 2014 compared to $74 in the prior year period. The Philippines performance was relatively stable as we continue our efforts to improve overall returns for these operations. These efforts include implementing, with the support of our venue owner partners, targeted marketing programs and proactive machine mix management. With increasing competition from the development of major integrated casino resorts in Manila, we are focused on improving player loyalty through marketing programs and providing a wide range of preferred gaming machines and superior services to the local customer bases.

Gross profit from gaming operations decreased approximately $390,000 to $1.9 million for the three-month period ended June 30, 2014 compared to approximately $2.3 million in the prior year period primarily due to lower revenue from NagaWorld. This was partially offset by higher gross profit for the Philippines due to lower depreciation expense as a result of an increase in fully depreciated gaming assets. Cost of gaming operations for the three-month period ended June 30, 2014 included approximately $908,000 in depreciation of gaming property and equipment, $612,000 of amortization of casino contracts, $63,000 of amortization of other gaming related intangibles and $895,000 of other operating costs. Cost of gaming operations for the three-month period ended June 30, 2013 included approximately $1.2 million of depreciation of gaming property and equipment, $617,000 of amortization of casino contracts, $63,000 of amortization of other gaming related intangibles and $869,000 of other operating costs.

Revenue from gaming operations decreased approximately $1.1 million to $8.3 million for the six-month period ended June 30, 2014 compared to approximately $9.4 million in the same period of the prior year. The decrease was primarily due to lower revenue from NagaWorld and the Philippines partially offset by incremental revenue from Dreamworld Club (Poipet).

Gaming operations revenue for the six-month periods ended June 30, 2014 and 2013 included approximately $508,000 and $474,000, respectively, in service revenue related to the reimbursement of net shared costs from casino operators.

Consolidated average daily net win per machine decreased $30 to $107 for the six-month period ended June 30, 2014 compared to $137 in the prior year period due to declines from both the Cambodia and Philippines operations.

Revenue from Cambodia decreased approximately $938,000 to $6.3 million for the six-month period ended June 30, 2014 compared to approximately $7.2 million in the prior year period primarily as a result of a decrease in average daily net win per unit from NagaWorld. This was partially offset by incremental revenue from Dreamworld Club (Poipet) and an improvement in average daily net win per unit from Thansur Bokor.

NagaWorld contributed approximately $5.5 million in revenue for the six-month period ended June 30, 2014, a decrease of approximately $1.3 million compared to $6.8 million in the prior year period. The decrease was primarily due to lower player traffic as a result of political and labor strikes in Phnom Penh early in the 2014 year and higher jackpot payouts during the three-month period ended June 30, 2014.

Cambodia average daily net win per unit decreased $48 to $124 for the six-month period ended June 30, 2014 compared to $172 for the prior year period. The decline was primarily due to lower average daily net win per unit in Nagaworld for the six-month period ended June 30, 2014 and the inclusion of Dreamworld Club (Poipet), which has lower average daily net win per unit, in the calculation for the full six-month period ended June 30, 2014.

Revenue from the Philippines decreased approximately $225,000 to $1.5 million for the six-month period ended June 30, 2014 compared to approximately $1.7 million in the prior year period. Philippines average daily net win per unit decreased $7 to $73 for the six-month period ended June 30, 2014 compared to $80 in the prior year period. The decreases in revenue and average daily net win per unit were primarily due to lower player traffic resulting from increased competition from a new integrated casino resort in Manila as well as renovation and outside construction activity, which limited player traffic for one of our venues in the six-month period ended June 30, 2014.

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Gross profit from gaming operations decreased approximately $787,000 to $3.4 million for the six-month period ended June 30, 2014 compared to approximately $4.2 million in the prior year period primarily due to lower revenue. This was partially offset by higher gross profit for the Philippines slot operations due to lower depreciation expense as a result of the increase in fully depreciated gaming assets in the six-month period ended June 30, 2014. Cost of gaming operations for the six-month period ended June 30, 2014 included approximately $1.8 million in depreciation of gaming property and equipment, $1.2 million of amortization of casino contracts, $126,000 of amortization of other gaming related intangibles and $1.7 million of other operating costs. Cost of gaming operations for the six-month period ended June 30, 2013 included approximately $2.2 million of depreciation of gaming property and equipment, $1.2 million of amortization of casino contracts, $126,000 of amortization of other gaming related intangibles and $1.7 million of other operating costs.

As of June 30, 2014, we had a total of 1,927 EGM seats of which 233 were held in inventory and 1,694 were in operation.  Of the 1,694 EGM seats in operation, 1,126 were in three venues in Cambodia and 568 were in three venues in the Philippines.

	June 30, 2014				December 31, 2013
(amounts in thousands, except per unit data)	Units		Carrying Value		Units		Carrying Value
EGMs and systems used in operations (1)		1,694	$	6,581		1,730	$	7,862
EGMs and systems held for future use		233		291		204		309
Total EGMs and systems		1,927	$	6,872		1,934	$	8,171

(1) EGMs and systems used in operations as of December 31, 2013 included 12 EGM seats, which were in operation on a trial basis subject to achieving certain performance objectives prior to acceptance and, therefore, their carrying values were not included.

As part of our ongoing efforts to improve the returns on the gaming operations, we seek to refine the existing operating EGM base to focus on those venues with the greatest potential and selectively add new venues. In March 2013, we soft opened Dreamworld Club (Poipet) in Cambodia with approximately 300 EGM seats.

Gaming Products

Gaming products revenue, which consisted of gaming chips and plaques sales, increased approximately $362,000 to $524,000 for the three-month period ended June 30, 2014 compared to approximately $162,000 in the prior year period. The increase was mainly a result of higher sales orders and production volumes for the three-month period ended June 30, 2014 and a shortened production period due to the relocation of our manufacturing facilities from Australia to Hong Kong in the three-month period ended June 30, 2013.

Gross margin loss on gaming products increased approximately $17,000 to approximately $401,000 for the three-month period ended June 30, 2014 compared to approximately $384,000 in the prior year period. The increase in gross margin loss was mainly due to production inefficiencies relating to the delay in installation of certain new automation equipment and unexpected machinery issues.

During the three-month period ended June 30, 2014, we began production of two large gaming chip and plaque orders received earlier in the year.  These orders are anticipated to be delivered in the second half of 2014.

Gaming products revenue decreased approximately $254,000 to $1.3 million for the six-month period ended June 30, 2014 compared to approximately $1.6 million in the same period of the prior year mainly as a result of lower reorders from existing customers in the six-month period ended June 30, 2014.

Gross margin loss on gaming products increased approximately $626,000 to approximately $1.1 million for the six-month period ended June 30, 2014 compared to approximately $452,000 in the same period of the prior year. The increase in gross margin loss was mainly due to the lower production volumes and the reasons as stated above.

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Operating Expenses

The schedule of expenses on a consolidated basis consisted of the following:

	Three-Month Periods Ended June 30,					Six-Month Periods Ended June 30,
(amounts in thousands)	2014			2013		2014			2013
Selling, general and administrative	$	1,098		$	1,328	$	2,579		$	2,823
Stock-based compensation expenses		69			198		141			445
Gain on dispositions		(8	)		—		(8	)		—
Impairment of assets		19			—		19			—
Product development expenses		101			35		156			155
Depreciation and amortization		50			47		99			75
	$	1,329		$	1,608	$	2,986		$	3,498

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased approximately $230,000 to $1.1 million for the three-month period ended June 30, 2014 compared to $1.3 million in the same period of the prior year period. Travel and entertainment, rent, utilities and other office expenses decreased approximately $64,000 primarily due to fewer gaming projects and various cost reduction initiatives. Other expenses decreased $448,000 primarily as a result of a reversal in the three-month period ended June 30, 2014 of a previously accrued one-time other tax liability related to the Philippines operations. The decreases were also a result of approximately $15,000 in gaming products sales commission in the three-month period ended June 30, 2013. The decreases were partially offset by an increase of approximately $132,000 in salaries and wages, advertising and investor relations primarily due to increased sales and marketing activities in relation to the expansion of the gaming products operations. Legal, consulting and accounting expenses increased approximately $147,000 mainly as a result of higher fees for new and completed projects. Freight, printing and office expenses increased approximately $18,000 primarily due to the increased scale of the gaming products operations.

Selling, general and administrative expenses decreased approximately $244,000 to $2.6 million for the six-month period ended June 30, 2014 compared to $2.8 million in the same period of the prior year period. In addition to start-up costs of approximately $89,000 related to the soft opening of Dreamworld Club (Poipet) in the six-month period ended June 30, 2013, travel and entertainment, rent, utilities and other office expenses decreased approximately $137,000 primarily due to fewer gaming projects and various cost reduction initiatives. Other expenses decreased $452,000 primarily as a result of a reversal in the three-month period ended June 30, 2014 of a previous accrued one-time other tax liability related to the Philippines operations. The decreases were also a result of approximately $109,000 in gaming products sales commission in the three-month period ended June 30, 2013 as the distribution agreement was terminated in mid 2013 with the replacement of in-house sales resources. The decreases were partially offset by an increase of approximately $305,000 in salaries and wages, advertising and investor relations primarily due to increased sales and marketing activities in relation to the expansion of the gaming products operations. Legal, consulting and accounting expenses increased approximately $194,000 mainly as a result of higher fees for new and completed projects. Freight, printing and office expenses increased approximately $44,000 primarily due to the increased scale of the gaming products operations.

Stock-Based Compensation Expenses

Stock-based compensation expenses decreased approximately $129,000 to $69,000 for the three-month period ended June 30, 2014 compared to approximately $198,000 in the prior year period primarily due to a decrease in average stock prices during the three-month period ended June 30, 2014 as compared to the prior year period.

Stock-based compensation expenses decreased approximately $304,000 to $141,000 for the six-month period ended June 30, 2014 compared to $445,000 in the same period of the prior year primarily due to fewer new option grants issued and the same reason as stated above.

Gain on Disposition of Assets

Gain on disposition of assets was approximately $8,000 for the three-month and six-month periods ended June 30, 2014, which primarily related to the sale of non-performing EGMs and systems. There were no dispositions of assets for the three-month and six-month periods ended June 30, 2013. 

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Impairment of Assets

Impairment charges of approximately $19,000 were recognized for long-lived assets for the three-month and six-month periods ended June 30, 2014 related to non-performing assets. There were no impairment charges for the three-month and six-month periods ended June 30, 2013.

Product Development Expenses

Product development expenses increased approximately $66,000 to $101,000 for the three-month period ended June 30, 2014 compared to approximately $35,000 in the prior year period mainly as a result of increased efforts to develop new products and security features for our gaming products business in the three-month period ended June 30, 2014.

Product development expenses increased approximately $1,000 to $156,000 for the six-month period ended June 30, 2014 compared to approximately $155,000 in the same period of the prior year.

Depreciation and Amortization Expenses

Total depreciation and amortization expenses increased approximately $3,000 to $50,000 for the three-month period ended June 30, 2014 compared to approximately $47,000 in the prior year period as there was no principal changes in our fixed assets.

Total depreciation and amortization expenses increased by approximately $24,000 to $99,000 for the six-month period ended June 30, 2014 compared to approximately $75,000 in the same period of the prior year primarily as a result of an increase in fixed assets for the new gaming products manufacturing plant and operations in Hong Kong since April 2013.

Other Income/(Expenses)

	Three-Month Periods Ended June 30,					Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013			2014			2013
Interest expense and finance fees	$	—	$	(1	)	$	(2	)	$	(5	)
Interest income		—		—			—			4
Foreign currency gains/(losses)		16		(247	)		1			(172	)
Other		4		7			12			10
Total	$	20	$	(241	)	$	11		$	(163	)

Interest Expense and Finance Fees

Interest expense and finance fees were approximately $NIL and $1,000 for the three-month periods ended June 30, 2014 and 2013, respectively as there were no major financing activities.

Interest expense and finance fees decreased approximately $3,000 to $2,000 for the six-month period ended June 30, 2014 compared to approximately $5,000 in the same period of the prior year for the same reason as stated above.

Interest Income

Interest income was approximately $NIL for the three-month periods ended June 30, 2014 and 2013 primarily as a result of low bank balances.

Interest income decreased approximately $4,000 to $NIL for the six-month period ended June 30, 2014 compared to approximately $4,000 in the same period of the prior year for the same reason as stated above.

Foreign Currency Transactions

Foreign currency gains were approximately $16,000 for the three-month period ended June 30, 2014 compared to losses of approximately $247,000 in the same period of the prior year. The favorable differential was primarily due to the decrease in the value of U.S. dollar denominated payables for the Philippines operations, where the functional currency is the Philippine peso compared to an increase in the value of U.S. denominated payables in the same period in the prior year. In addition, in the three-month period ended June 30, 2014, the U.S. dollar had a comparatively lower appreciation relative to the Australian dollar resulting in lower depreciation of receivables, which are denominated in Australian dollars, related to the Dolphin Australia assets that were sold in March 2013.

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Foreign currency gains were approximately $1,000 for the six-month period ended June 30, 2014 compared to losses of approximately $172,000 for the same period in the prior year for the same reasons as stated above.

Other

Other income was approximately $4,000 for the three-month period ended June 30, 2014 compared to $7,000 in the same period of the prior year primarily due to miscellaneous income received by the Philippines operations.

Other income was approximately $12,000 for the six-month period ended June 30, 2014 compared to approximately $10,000 in the prior year period primarily due to the same reason as stated above.

Income Tax Provisions

Effective tax rates for the three-month and six-month periods ended June 30, 2014 and 2013 were approximately 6.4% and 7.6% and (4.7)% and 48.2%, respectively. We continue to review the treatment of tax losses and future income generated by our foreign subsidiaries to minimize taxation costs.

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Income tax provisions	$	15	$	7	$	30	$	48

FINANCIAL CONDITION

Liquidity and Capital Resources

As of June 30, 2014, we had total cash and cash equivalents of approximately $4.7 million and working capital of approximately $5.8 million. Our cash and working capital during the six-month period ended June 30, 2014 was positively impacted by the cash received from gaming operations but was negatively impacted by the expansion of the gaming products production facilities and purchases of EGMs for the gaming operations of a combined total of $2.4 million.

As part of our growth strategy for gaming operations, we expect to purchase EGMs to supplement existing inventory and source future targeted deployment plans. As part of our growth strategy for gaming products, we intend to incur costs related to increasing capacity and enhancing production efficiencies for these operations.

We also continue to pursue new gaming projects, however, there is no guarantee we will be successful in securing such new projects.

We presently expect that our capital expenditures for the remainder of 2014 will be approximately $1.0 million to $1.5 million. This includes approximately $600,000 to $800,000 for EGMs and systems purchases, upgrades and general maintenance for the gaming operations and approximately $400,000 to $700,000 for equipment purchases and general maintenance and working capital for the gaming products facility.

We anticipate our available working capital, along with cash expected to be generated from operations, will allow us to meet our capital expenditure needs through 2014.

As noted above, however, we continue to pursue additional gaming projects. While there is no guarantee we will be successful in securing new projects, if we were to secure new projects our capital expenditures through 2014 would increase beyond the $1.0 million to $1.5 million currently contemplated. Where possible, we intend to fund our gaming projects from our cash flow from operations and cash on hand. Further, we will seek to structure the development of these projects in phases to better control and pace the related capital expenditures. However, should we commit to large projects, to the concurrent development of multiple gaming projects or a new project requires large upfront payments, we may need to acquire additional capital. We would endeavor to obtain any required additional capital from various financing sources including commercial debt financing and the sale of our debt or equity securities. However, there are no commitments or arrangements in place as of the date of this report for receipt of additional capital and there are no assurances we will be able to acquire additional capital if, and when, needed on commercially reasonable terms or at all.

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Cash Flows Summary

	Six-Month Periods Ended June 30,
(amount in thousands)	2014			2013
Cash provided by/(used in):
Operations	$	1,701		$	1,623
Investing		(2,354	)		(7,174	)
Financing		—			—
Effect of exchange rate change in cash		16			(25	)
	$	(637	)	$	(5,576	)

Operations

Cash provided by operations was approximately $1.7 million for the six-month period ended June 30, 2014 essentially unchanged with the same period of the prior year period. For the six-month period ended June 30, 2014, cash provided by operations primarily resulted from operating income from gaming operations partially offset by an increase in the use of funds for working capital and operating losses incurred by Dolphin Hong Kong. For the six-month period ended June 30, 2013, cash provided by operations primarily resulted from operating income from gaming operations partially offset by a general cash reduction of approximately $1.0 million as part of the settlement of payable balances related to the sale of Dolphin non-gaming assets in addition to the one-off costs for Dolphin Hong Kong, including severance, relocation charges and contract termination fees, of approximately $1.3 million associated with the sale of the non-gaming products assets and relocation of the gaming chips and plaques operations from Australia to Hong Kong.

Investing

Cash used in investing activities was approximately $2.4 million for the six-month period ended June 30, 2014 compared to approximately $7.2 million in the same period of the prior year period. The decrease in cash used in investing activities was mainly a result of the capital expenditures related to the construction of Dreamworld Club (Poipet) as well as the purchase of a greater amount of EGMs and related systems in the six-month period of ended June 30, 2013.

Financing

Cash used in financing activities was $NIL for the six-month periods ended June 30, 2014 and 2013.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States. Accordingly, we are required to make estimates incorporating judgments and assumptions we believe are reasonable based on our historical experience, contract terms, observance of known trends in our Company and the industry as a whole, as well as information available from other outside sources. Our estimates affect amounts recorded in the financial statements and actual results may differ from initial estimates.

We consider the following accounting estimates to be the most critical to fully understanding and evaluating our reported financial results. They require us to make subjective or complex judgments about matters that are inherently uncertain or variable. Senior management has discussed the development, selection and disclosure of the following accounting estimates, particularly those considered most sensitive to changes from external factors, with the audit committee of our board of directors.

Allowance for Doubtful Accounts Receivable

As of June 30, 2014, we had net accounts receivable of approximately $906,000, representing 2.7% of total assets. We specifically analyze the collectability of each account based upon the age of the account, the customer’s financial condition, collection history and any other known information, and we provide specific allowances for aged account balances. Revenue is recognized on a cash basis for customers with doubtful accounts receivable. Our allowance for doubtful accounts receivable was $NIL as of June 30, 2014 and December 31, 2013.

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Inventory

The determination of obsolete or excess inventory requires us to estimate the future demand for our products within specific time horizons, generally one year or less. If we experience a significant unexpected decrease in demand for our products or a higher occurrence of inventory obsolescence because of changes in technology or customer requirements, we could be required to increase our inventory provisions.

Gaming Equipment and Property and Equipment

As of June 30, 2014, we had gaming equipment and property and equipment of approximately $15.9 million, representing 48% of our total assets. We depreciate gaming equipment and property and equipment on the straight-line basis over their estimated useful lives. The estimated useful lives are based on the nature of the assets as well as current operating strategies and legal considerations such as contractual life. Future events, such as property expansions, property developments, trends in market demand, new competition, or technology obsolescence, could result in a change in the manner in which we use certain assets and require changes in the estimated useful lives of such assets.

For assets to be held and used, they are reviewed for impairment whenever indicators of impairment exist. If an indicator of impairment exists, we first group assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (the “asset group”). Secondly, we estimate the undiscounted future cash flows that are directly associated with and expected to arise from the use and eventual disposition of such asset group. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model.

To estimate the undiscounted cash flows of an asset group, we consider potential cash flow scenarios based on management estimates given current conditions. Determining the recoverability of our asset groups is judgmental in nature and requires the use of significant estimates and assumptions, including estimated cash flows, growth rates and future market conditions, among others. Future changes to our estimates and assumptions based upon changes in macro-economic factors, regulatory environments, operating results or management’s intentions may result in future changes to the recoverability of our asset group.

Intangible Assets, including Goodwill and Casino Contracts

As of June 30, 2014, we had intangible assets, including goodwill and casino contracts of $5.3 million, representing 16% of our total assets.

Goodwill is not subject to amortization and is tested for impairment and recoverability annually or more frequently if events or circumstances indicate that the assets might be impaired. The impairment test consists of a comparison of its fair value with its carrying amount. If the carrying amount is not recoverable and exceeds its fair value, an impairment will be recognized in an amount equal to that excess. If its carrying amount does not exceed the fair value, no impairment is recognized.

Finite-lived intangible assets, including casino contracts are amortized on a straight-line basis over their estimated useful lives. The estimated useful lives are based on the nature of the assets as well as legal considerations such as contractual life. Future events, such as technology obsolescence could result in a change in the manner in which we use the assets and require a change in the estimated useful lives of such assets. Finite-lived intangible assets, including casino contracts are tested for impairment and recoverability when there are indicators of impairment. The impairment test consists of a comparison of its fair value with its carrying amount. If the carrying amount is not recoverable and exceeds its fair value, an impairment will be recognized in an amount equal to that excess. If its carrying amount does not exceed the fair value, no impairment is recognized.

As of June 30, 2014, we had casino contracts and gaming operation agreement of $4.7 million, representing 88% of our total intangible assets. The fair value of our casino contracts and gaming operation agreement was estimated using a form of the income approach known as the excess earnings method, excess earnings were discounted to present value at rates commensurate with our capital structure and the prevailing borrowing rates within the industry in general. Determining the fair value of the casino contracts and gaming operation agreement is judgmental in nature and requires the use of significant estimates and assumptions, including revenue, operating expenses, growth rates, discount rates and future market conditions, among others. Future changes to our estimates and assumptions based upon changes in macro-economic factors, operating results or management’s intentions may result in future changes to the fair value of the casino contracts and gaming operation agreement.

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Stock-Based Compensation

We apply ASC 718, Compensation-Stock Compensation, to account for stock-based compensation. Under the fair value recognition provisions of ASC 718, we recognize stock-based compensation expense for all service-based awards to employees and non-employee directors with graded vesting schedules on the straight-line basis over the requisite service period for the entire award. Estimates are revised if subsequent information indicates that forfeitures will differ from previous estimates, and the cumulative effect on compensation costs of a change in the estimated forfeitures is recognized in the period of the change.  For non-employee awards, we remeasure compensation costs each period until the service condition is complete and recognize compensation costs on the straight-line basis over the requisite service period.  Option valuation models require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the fair value estimate. Judgment is required in estimating stock price volatility, forfeiture rates, expected dividends, and expected terms that options remain outstanding. For restricted stock awards with performance conditions, the Company evaluates if performance conditions are probable in each reporting period. The compensation expense of restricted awards is recognized ratably over the implicit service period if achieving performance conditions is probable. Initial accruals of compensation expense are based on the estimated number of shares for which requisite service is expected to be rendered.

Stock-based compensation expense totaled approximately $69,000 and $ 198,000 and $141,000 and $445,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively, in the accompanying consolidated statements of comprehensive income.

Income Taxes

We are subject to income taxes in the U.S. (including federal and state) and several foreign jurisdictions in which we operate. We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carryforwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is “more-likely-than-not” that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a “more-likely-than-not” realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with operating loss and tax credit carryforwards not expiring, and implementation of tax planning strategies.

We recorded a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. Management will reassess the realization of deferred tax assets based on the applicable accounting standards for income taxes each reporting period and consider the scheduled reversal of deferred tax liabilities, sources of taxable income and tax planning strategies. To the extent that the financial results of these operations improve and it becomes “more-likely-than-not” that the deferred tax assets are realizable, we will be able to reduce the valuation allowance. For valuation allowance related to deferred tax assets generated prior to Quasi-Reorganization, which was effected on December 31, 2010, reductions in the valuation allowance will be recorded directly in equity.

Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions for which the tax treatment is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is “more-likely-than-not” that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. We recognize interest and penalties, if any, related to unrecognized tax benefits in the provision of income taxes in the statements of comprehensive income.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet financing arrangements.

Item 3.   Quantitative and Qualitative Disclosures about Market Risks

Not applicable.

Item 4.   Controls and Procedures

(a)   Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our chief executive officer and chief accounting officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934.  Based on this evaluation, management concluded that our disclosure controls and procedures were effective as of June 30, 2014.

36

(b)   Changes in Internal Control Over Financial Reporting.

There were no changes in our internal control over financial reporting that occurred during the three-month period ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

37

PART II — OTHER INFORMATION

Item 6.      Exhibits

Exhibit No.	Description	Method of Filing
10.1	Share Purchase Agreement dated June 20, 2014 among Elixir Gaming Technologies (Cambodia) Limited, Ban Kea, a Cambodian individual, and Dreamworld Leisure (Pailin) Limited	Incorporated by reference from the Registrant’s Current Report on Form 8-K filed on June 26, 2014
10.2	Termination Agreement dated June 20, 2014 among Elixir Gaming Technologies (Cambodia) Limited, Ban Sreymom, a Cambodian individual, and Dreamworld Leisure (Pailin) Limited	Incorporated by reference from the Registrant’s Current Report on Form 8-K filed on June 26, 2014
31.1	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed electronically herewith
31.2	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed electronically herewith
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).	Filed electronically herewith
101.INS**	XBRL Instance Document	Filed electronically herewith
101.SCH**	XBRL Taxonomy Extension Schema Document	Filed electronically herewith
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document	Filed electronically herewith
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document	Filed electronically herewith
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document	Filed electronically herewith
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document	Filed electronically herewith

**Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.

38

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		ENTERTAINMENT GAMING ASIA INC.
		(Registrant)
Date:	August 8, 2014	By:	/s/ Clarence Chung
			Clarence Chung
		Its:	President and Chief Executive Officer
Date:	August 8, 2014	By:	/s/ Andy Tsui
			Andy Tsui
		Its:	Chief Accounting Officer

39

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Section 302 Certification

I, Clarence Chung, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Entertainment Gaming Asia Inc.;

2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fiscal quarter presented in this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2014	By:	/s/ Clarence Chung
		Clarence Chung, President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

Section 302 Certification

I, Andy Tsui, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Entertainment Gaming Asia Inc.;

2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fiscal quarter presented in this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2014	By:	/s/ Andy Tsui
		Andy Tsui, Chief Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Entertainment Gaming Asia Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Clarence Chung, President and Chief Executive Officer of the Company, and Andy Tsui, Chief Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By:	/s/ Clarence Chung	Dated:	August 8, 2014
	Clarence Chung
Title:	President and Chief Executive Officer
By:	/s/ Andy Tsui	Dated:	August 8, 2014
	Andy Tsui
Title:	Chief Accounting Officer

This certification is made solely for the purposes of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose.

XML

Earnings/(Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

Computation of the basic and diluted earnings/(loss) per share from continuing operations consisted of the following:

	Three-Month Periods Ended June 30,
	2014				2013
(amounts in thousands, except per share data)	Income		Number of Shares	Per Share Amount	Income		Number of Shares	Per Share Amount
Basic
Net income attributable to equity shareholders	$	217	30,013	0.01	$	92	29,975	$	—
Effect of dilutive securities
Dilutive stock options/restricted shares			135				738
Diluted
Net income attributable to equity shareholders plus assumed conversion	$	217	30,148	0.01	$	92	30,713	$	—

	Six-Month Periods Ended June 30,
	2014				2013
(amounts in thousands, except per share data)	Loss		Number of Shares	Per Share Amount	Income		Number of Shares	Per Share Amount
Basic
Net (loss)/income attributable to equity shareholders	$	(657)	30,016	(0.02)	$	52	29,975	$	—
Effect of dilutive securities
Dilutive stock options/restricted shares (1)			—				737
Diluted
Net (loss)/income attributable to equity shareholders plus assumed conversion	$	(657)	30,016	(0.02)	$	52	30,712	$	—

(1) There was no difference in diluted loss per share from basic loss per share as the assumed exercise of common stock equivalents would have an anti-dilutive effect due to losses for the six-month period ended June 30, 2014.

XML

Goodwill and Intangible Assets, including Casino Contracts (Details 1) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Indefinite-lived Intangible Assets [Line Items]
Balance as of January 1	$ 353	$ 380
Foreign currency translation adjustment	5	(27)
Balance as of June 30/December 31	$ 358	$ 353

XML

Receivables (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Receivables [Line Items]
Trade accounts	$ 906	$ 922
Other	103	453
Accounts Receivable, Gross, Current	1,009	1,375
Less: allowance for doubtful accounts	0	0
Net	$ 1,009	$ 1,375

XML

Earnings/(Loss) Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014		Jun. 30, 2013
Basic
Net loss attributable to equity shareholders - Loss	$ 217	$ 92	$ (657)		$ 52
Net loss attributable to equity shareholders - Number of Shares	30,013	29,975	30,016		29,975
Net loss attributable to equity shareholders, Per share Amount (in dollars per share)	$ 0.01	$ 0	$ (0.02)		$ 0
Effect of dilutive securities
Dilutive stock options/restricted shares	135	738	0	[1]	737	[1]
Diluted
Net loss attributable to equity shareholders plus assumed conversion - Loss	$ 217	$ 92	$ (657)		$ 52
Net loss attributable to equity shareholders plus assumed conversion - Number of shares	30,148	30,713	30,016		30,712
Net loss attributable to equity shareholders plus assumed conversion - Per Share Amount (in dollars per share)	$ 0.01	$ 0	$ (0.02)		$ 0

[1] There was no difference in diluted loss per share from basic loss per share as the assumed exercise of common stock equivalents would have an anti-dilutive effect due to losses for the six-month period ended June 30, 2014.

XML

Goodwill and Intangible Assets, including Casino Contracts (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Indefinite-lived Intangible Assets [Line Items]
Amortization of intangible assets			$ 151,000	$ 151,000
Casino Contracts [Member]
Indefinite-lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 687,000	$ 693,000	$ 1,400,000	$ 1,400,000

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Inventory [Line Items]
Raw materials	$ 1,717	[1]	$ 809	[1]
Work-in-process	1,182	[1]	342	[1]
Finished goods	31		367
Spare parts and supplies	127		145
Inventory, Net	$ 3,057		$ 1,663

[1] Raw materials and work-in-process increased from December 31, 2013 to June 30, 2014 in preparation for gaming chip and plaque orders expected to be delivered in the second half of 2014.

XML

Prepaids, Deposits and Other Assets (Tables)

6 Months Ended

Jun. 30, 2014

Prepaids Deposits and Other Assets Disclosure [Abstract]

Schedule Of Prepaid Deposits And Other Assets [Table Text Block]

Prepaids, deposits and other assets consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Prepaid taxes	$	1,014	$	927
Prepaid leases		217		222
Prepayments to suppliers		235		279
Deposits on EGM and system orders		92		16
Rentals, utilities and other deposits		291		353
	$	1,849	$	1,797

XML

Prepaids, Deposits and Other Assets (Details Textual) (Cambodian Provinces Of Kampot [Member], USD $)	Jun. 30, 2014
Cambodian Provinces Of Kampot [Member]
Prepaids, Deposits and Other Assets [Line Items]
Prepaid Leases	$ 217,000

XML

Earnings/(Loss) Per Share (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Earnings Loss Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,093,402	2,166,738	3,093,402	2,166,738

XML

Description of Business and Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Foreign Currency Translations and Transactions [Table Text Block]

Below is a summary of closing exchange rates as of June 30, 2014 and December 31, 2013, and average exchange rates for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

(US$1 to foreign currency)	June 30, 2014	December 31, 2013
Australian dollar	1.06	1.13
Hong Kong dollar	7.75	7.75
Philippine peso	43.77	44.45
Thai baht	32.52	32.92

	Three-Month Periods Ended June 30,		Six-Month Periods Ended June 30,
(US$1 to foreign currency)	2014	2013	2014	2013
Australian dollar	1.07	1.01	1.09	0.99
Hong Kong dollar	7.75	7.76	7.76	7.76
Philippine peso	44.18	41.90	44.56	41.37
Thai baht	32.51	29.95	32.61	29.93

XML

Gaming Equipment (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Gaming Equipment [Line Items]
Cost Of Services Electronic Gaming Machine Depreciation and Amortization	$ 758,000	$ 1,000,000	$ 1,500,000	$ 2,000,000

XML

Description of Business and Significant Accounting Policies (Details Textual) (USD $)	3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 Gaming Products [Member]	Jun. 30, 2013 Gaming Products [Member]	Jun. 30, 2014 Gaming Products [Member]	Jun. 30, 2013 Gaming Products [Member]	Jun. 20, 2014 Dreamworld Casino [Member]	Jun. 30, 2014 Patents and Trademarks [Member]	Jun. 30, 2013 Patents and Trademarks [Member]	Jun. 30, 2014 Patents and Trademarks [Member]	Jun. 30, 2013 Patents and Trademarks [Member]	Jun. 30, 2014 Technical Know How [Member]	Jun. 30, 2013 Technical Know How [Member]	Jun. 30, 2014 Technical Know How [Member]	Jun. 30, 2013 Technical Know How [Member]	Jun. 30, 2014 Casino Contracts [Member]	Jun. 30, 2013 Casino Contracts [Member]	Jun. 30, 2014 Casino Contracts [Member]	Jun. 30, 2013 Casino Contracts [Member]	Jun. 30, 2014 Other Gaming Related Intangible Assets [Member]	Jun. 30, 2013 Other Gaming Related Intangible Assets [Member]	Jun. 30, 2014 Other Gaming Related Intangible Assets [Member]	Jun. 30, 2013 Other Gaming Related Intangible Assets [Member]	Jun. 30, 2014 New EGMs and Systems [Member]	Jun. 30, 2014 Refurbished EGMs and Systems [Member]	Jun. 30, 2014 Property, Plant and Equipment, Other Types [Member] Maximum [Member]	Jun. 30, 2014 Property, Plant and Equipment, Other Types [Member] Minimum [Member]
Accounting Polices [Line Items]
Cash, FDIC Insured Amount	$ 4,400,000		$ 4,400,000
Casino contract amortization	612,000	617,000	1,222,000	1,238,000															612,000	617,000	1,200,000	1,200,000
Commitment	180,000		180,000		234,000
Stock-based compensation expenses	69,000	198,000	141,000	445,000
Product development expenses	101,000	35,000	156,000	155,000
Minimum Percentage Of Tax Benefit Likely To Be Realized Upon Ultimate Settlement			50.00%
Cost of Goods Sold, Depreciation	150,000	138,000	297,000	174,000		185,000	67,000	321,000	108,000
Gaming property and equipment depreciation	758,000	1,000,000	1,500,000	2,000,000
Amortization of Intangible Assets			151,000	151,000							6,000	6,000	12,000	12,000	7,000	7,000	13,000	13,000	687,000	693,000	1,400,000	1,400,000	63,000	63,000	126,000	126,000
Lease Term Percentage			75.00%
Impairment of assets	$ 19,000	$ 0	$ 19,000	$ 0
Present Value Of Future Minimum Lease Payments Percentage Description			lease term is 90% or more of the fair value of the leased property to the lessor at the inception date.
Equity Method Investment, Ownership Percentage										100.00%
Property, Plant and Equipment, Useful Life																											5 years	3 years	10 years	3 years

XML

Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Schedule Of Transactions With Related Parties [Table Text Block]

Significant revenues, purchases and expenses arising from transactions with related parties consisted of the following:

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Melco Crown (Macau) Limited
Sales of gaming products	$	—	$	—	$	135	$	630
MCE Leisure (Philippines) Corporation
Sales of gaming products	$	98	$	—	$	98	$	—
Melco Services Limited
Technical services	$	—	$	2	$	1	$	10
Office rental		—		8		1		48
Golden Future (Management Services) Ltd
Management services	$	90	$	21	$	148	$	21

XML

Property and Equipment (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Property, Plant and Equipment [Line Items]
Cost of Goods Sold, Depreciation	$ 150,000	$ 138,000	$ 297,000	$ 174,000
Gaming Products [Member]
Property, Plant and Equipment [Line Items]
Cost of Goods Sold, Depreciation	$ 185,000	$ 67,000	$ 321,000	$ 108,000

XML

Discontinued Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues from discontinued operations	$ 12	$ 907	$ 228	$ 4,044
Benefit for income taxes related to discontinued operations	0	0	0	28
Loss from discontinued operations, net of tax	(239)	(378)	(395)	(2,846)
Dreamworld Casino [Member]
Revenues from discontinued operations	12	907	228	2,001
Pre-tax income/(loss) from discontinued operations	(239)	(476)	(395)	(765)
Non Gaming Products [Member]
Revenues from discontinued operations	0	0	0	2,043
Pre-tax income/(loss) from discontinued operations	$ 0	$ 98	$ 0	$ (2,109)

XML

Stock-Based Compensation (Details 1) (USD $)	6 Months Ended
	Jun. 30, 2014
Stock Based Compensation [Line Items]
Granted, Number of Shares	95,000
Granted, Weighted Average Fair Value at Grant Date	$ 1.21
Restricted Stock [Member]
Stock Based Compensation [Line Items]
Unvested balance, Number of Shares	0
Granted, Number of Shares	95,000
Vested, Number of Shares	(40,000)	[1]
Unvested balance, Number of Shares	55,000
Unvested balance, Weighted Average Fair Value at Grant Date	$ 0
Granted, Weighted Average Fair Value at Grant Date	$ 1.21
Vested, Weighted Average Fair Value at Grant Date	$ 1.21	[1]
Unvested balance, Weighted Average Fair Value at Grant Date	$ 1.21
Granted, Weighted Average Remaining Contractual Life (in years)	1 year 3 months 29 days
Vested, Weighted Average Remaining Contractual Life (in years)	3 months 22 days	[1]
Unvested balance, Weighted Average Remaining Contractual Life (in years)	1 year 3 months 29 days

[1] Vested shares included 25,000 shares of restricted common stock issued in 2014 for which final vesting is subject to the approval of Company’s compensation committee.

XML

Prepaid Expenses and Other Current Assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Prepaid expenses and other current assets [Line Items]
Prepaid expenses and other current assets	$ 723	$ 443
Prepayments to suppliers [Member]
Prepaid expenses and other current assets [Line Items]
Prepaid expenses and other current assets	710	400
Prepaid leases [Member]
Prepaid expenses and other current assets [Line Items]
Prepaid expenses and other current assets	$ 13	$ 43

XML

Prepaid Expenses and Other Current Assets

6 Months Ended

Jun. 30, 2014

Prepaid Expense and Other Assets, Current [Abstract]

Deferred Costs Capitalized Prepaid And Other Assets [Text Block]

Note 4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Prepayments to suppliers	$	710	$	400
Prepaid leases		13		43
	$	723	$	443

XML

Stock-Based Compensation (Details 2)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Stock Based Compensation [Line Items]
Expected volatility - Low	73.03%	73.78%
Expected volatility - High	74.03%	76.49%
Expected dividends - Low	0.00%	0.00%
Expected dividends - High	0.00%	0.00%
Risk free rate - Low	1.16%	0.55%
Risk free rate - High	2.52%	2.45%
Minimum [Member]
Stock Based Compensation [Line Items]
Expected term (in years)	3 years 8 months 23 days	3 years 8 months 23 days
Maximum [Member]
Stock Based Compensation [Line Items]
Expected term (in years)	9 years 1 month 10 days	9 years 8 months 12 days

XML

Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Revenues	$ 4,944	$ 5,196	$ 9,638	$ 11,021
Operating income/(loss)	212	340	(638)	263
Depreciation and amortization	1,824	1,954	3,570	3,744
Gaming Operations [Member]
Segment Reporting Information [Line Items]
Revenues	4,420	5,034	8,303	9,432
Operating income/(loss)	1,931	2,332	3,415	4,213
Depreciation and amortization	1,597	1,851	3,165	3,583
Gaming Products [Member]
Segment Reporting Information [Line Items]
Revenues	524	162	1,335	1,589
Operating income/(loss)	(401)	(384)	(1,078)	(452)
Depreciation and amortization	219	93	386	147
Corporate and Other Operating Costs and Expenses [Member]
Segment Reporting Information [Line Items]
Operating income/(loss)	(1,318)	(1,608)	(2,975)	(3,498)
Depreciation and amortization	$ 8	$ 10	$ 19	$ 14

XML

Receivables (Tables)

6 Months Ended

Jun. 30, 2014

Receivables [Abstract]

Schedule Of Accounts And Other Receivables [Table Text Block]

Accounts and other receivables consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Trade accounts	$	906	$	922
Other		103		453
		1,009		1,375
Less: allowance for doubtful accounts		—		—
Net	$	1,009	$	1,375

XML

Prepaid Expenses and Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2014

Prepaid Expense and Other Assets, Current [Abstract]

Schedule Of Prepaid Expenses And Other Current Assets [Table Text Block]

Prepaid expenses and other current assets consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Prepayments to suppliers	$	710	$	400
Prepaid leases		13		43
	$	723	$	443

XML

Prepaids, Deposits and Other Assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Prepaids, Deposits and Other Assets [Line Items]
Prepaids, deposits and other assets	$ 1,849	$ 1,797
Prepaid taxes [Member]
Prepaids, Deposits and Other Assets [Line Items]
Prepaids, deposits and other assets	1,014	927
Prepaid leases [Member]
Prepaids, Deposits and Other Assets [Line Items]
Prepaids, deposits and other assets	217	222
Prepayments to suppliers [Member]
Prepaids, Deposits and Other Assets [Line Items]
Prepaids, deposits and other assets	235	279
Deposits on EGM and system orders [Member]
Prepaids, Deposits and Other Assets [Line Items]
Prepaids, deposits and other assets	92	16
Rentals, utilities and other deposits [Member]
Prepaids, Deposits and Other Assets [Line Items]
Prepaids, deposits and other assets	$ 291	$ 353

XML

Segments (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Revenues	$ 4,944	$ 5,196	$ 9,638	$ 11,021
Cambodia [Member]
Segment Reporting Information [Line Items]
Revenues	3,752	4,264	6,895	7,726
Macau [Member]
Segment Reporting Information [Line Items]
Revenues	137	34	497	700
Philippines [Member]
Segment Reporting Information [Line Items]
Revenues	930	898	1,864	2,259
Australia [Member]
Segment Reporting Information [Line Items]
Revenues	125	0	316	163
Other [Member]
Segment Reporting Information [Line Items]
Revenues	$ 0	$ 0	$ 66	$ 173

XML

Gaming Equipment (Tables)

6 Months Ended

Jun. 30, 2014

Electronic Gaming Machines Egms and Systems And Other Gaming Equipment Disclosure [Abstract]

Disclosure Of Electronic Gaming Machines EGMs and Systems [Table Text Block]

The major categories of gaming equipment and accumulated depreciation consisted of the following:

	Useful Life
(amounts in thousands)	(years)	June 30, 2014		December 31, 2013
		(Unaudited)
EGMs	3-5	$	17,731	$	17,587
Systems	5		1,503		1,417
Other gaming equipment	3-5		—		42
			19,234		19,046
Less: accumulated depreciation			(12,362)		(10,875)
		$	6,872	$	8,171

XML

Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Property and equipment are stated at cost and consisted of the following:

	Useful Life
(amounts in thousands)	(years)	June 30, 2014		December 31, 2013
		(Unaudited)
Equipment, vehicles, furniture and fixtures	3-10	$	6,174	$	4,109
Land and building	5		2,928		2,949
Leasehold improvements	1-5		1,188		1,029
Construction in progress	N/A		581		996
System development cost	N/A		201		116
			11,072		9,199
Less: accumulated depreciation			(2,004)		(1,342)
		$	9,068	$	7,857

XML

Inventories

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 3. Inventories

Inventories consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Raw materials (1)	$	1,717	$	809
Work-in-process (1)		1,182		342
Finished goods		31		367
Spare parts and supplies		127		145
	$	3,057	$	1,663

(1) Raw materials and work-in-process increased from December 31, 2013 to June 30, 2014 in preparation for gaming chip and plaque orders expected to be delivered in the second half of 2014.

XML

Goodwill and Intangible Assets, including Casino Contracts (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

Intangible assets are stated at cost and consisted of the following:

	Useful Life
(amounts in thousands)	(years)	June 30, 2014		December 31, 2013
		(Unaudited)
Gaming operation agreement	4-5	$	1,184	$	1,178
Less: accumulated amortization			(693)		(567)
			491		611
Goodwill	N/A		358		353
Patents	5-6		114		114
Less: accumulated amortization			(72)		(62)
			42		52
Trademarks	5-9		26		26
Less: accumulated amortization			(11)		(10)
			15		16
Technical know-how	10		261		261
Less: accumulated amortization			(54)		(41)
			207		220
Casino contracts	5-6		12,795		12,764
Less: accumulated amortization			(8,577)		(7,335)
			4,218		5,429
		$	5,331	$	6,681

Schedule of Goodwill [Table Text Block]

Goodwill movements during the periods consisted of the following:

(amounts in thousands)	2014		2013
	(Unaudited)
Balance as of January 1	$	353	$	380
Foreign currency translation adjustment		5		(27)
Balance as of June 30/December 31	$	358	$	353

XML

Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2014

Comprehensive Income Loss Disclosure [Abstract]

Schedule of Comprehensive Income (Loss) [Table Text Block]

The accumulated balances in respect of other comprehensive income consisted of the following:

(amounts in thousands)	Unrealized Actuarial Income		Foreign Currency Translation		Accumulated Other Comprehensive Income
Balances, January 1, 2013	$	62	$	867	$	929
Current period other comprehensive income/(loss)		37		(224)		(187)
Balances, December 31, 2013		99		643		742
Current period other comprehensive income		—		58		58
Balances, June 30, 2014	$	99		701		800

XML

Goodwill and Intangible Assets, including Casino Contracts (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Indefinite-lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Net, Total	$ 5,331	$ 6,681
Gaming Operation Agreement [Member]
Indefinite-lived Intangible Assets [Line Items]
Definite-life intangible assets	1,184	1,178
Less: accumulated amortization	(693)	(567)
Finite-Lived Intangible Assets, Net, Total	491	611
Gaming Operation Agreement [Member] | Maximum [Member]
Indefinite-lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years
Gaming Operation Agreement [Member] | Minimum [Member]
Indefinite-lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	4 years
Goodwill [Member]
Indefinite-lived Intangible Assets [Line Items]
Definite-life intangible assets	358	353
Patents [Member]
Indefinite-lived Intangible Assets [Line Items]
Definite-life intangible assets	114	114
Less: accumulated amortization	(72)	(62)
Finite-Lived Intangible Assets, Net, Total	42	52
Patents [Member] | Maximum [Member]
Indefinite-lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	6 years
Patents [Member] | Minimum [Member]
Indefinite-lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years
Trademarks [Member]
Indefinite-lived Intangible Assets [Line Items]
Definite-life intangible assets	26	26
Less: accumulated amortization	(11)	(10)
Finite-Lived Intangible Assets, Net, Total	15	16
Trademarks [Member] | Maximum [Member]
Indefinite-lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	9 years
Trademarks [Member] | Minimum [Member]
Indefinite-lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years
Technical Know How [Member]
Indefinite-lived Intangible Assets [Line Items]
Definite-life intangible assets	261	261
Less: accumulated amortization	(54)	(41)
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years
Finite-Lived Intangible Assets, Net, Total	207	220
Casino Contracts [Member]
Indefinite-lived Intangible Assets [Line Items]
Definite-life intangible assets	12,795	12,764
Less: accumulated amortization	(8,577)	(7,335)
Finite-Lived Intangible Assets, Net, Total	$ 4,218	$ 5,429
Casino Contracts [Member] | Maximum [Member]
Indefinite-lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	6 years
Casino Contracts [Member] | Minimum [Member]
Indefinite-lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years

XML

Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Unrealized Actuarial Income, Beginning Balance	$ 99	$ 62
Unrealized Actuarial Income, Current period other comprehensive income/(loss)	0	37
Unrealized Actuarial Income, Ending Balance	99	99
Foreign Currency Translation, Beginning Balance	643	867
Foreign Currency Translation, Current period other comprehensive income/(loss)	58	(224)
Foreign Currency Translation, Ending Balance	701	643
Accumulated Other Comprehensive Income, Beginning Balance	742	929
Accumulated Other Comprehensive Income, Current period other comprehensive income/(loss)	58	(187)
Accumulated Other Comprehensive Income, Ending Balance	$ 800	$ 742

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 4,664	$ 5,301
Accounts receivable, net	906	922
Amount due from a related party	0	108
Other receivables	103	453
Inventories	3,057	1,663
Assets held for sale	273	0
Prepaid expenses and other current assets	723	443
Total current assets	9,726	8,890
Gaming equipment, net	6,872	8,171
Casino contracts	4,218	5,429
Property and equipment, net	9,068	7,857
Goodwill	358	353
Intangible assets, net	755	899
Contract amendment fees	180	234
Prepaids, deposits and other assets	1,849	1,797
Total assets	33,026	33,630
Current liabilities:
Accounts payable	637	840
Amount due to a related party	20	19
Accrued expenses	1,431	2,366
Customer deposits and other current liabilities	1,863	457
Total current liabilities	3,951	3,682
Other liabilities	721	742
Deferred tax liability	199	199
Total liabilities	4,871	4,623
Stockholders' equity:
Common stock, $.001 par value, 75,000,000 shares authorized; 30,102,162 and 30,024,662 shares issued and outstanding	30	30
Additional paid-in-capital	33,298	33,156
Accumulated other comprehensive income	800	742
Accumulated losses	(5,974)	(4,922)
Total EGT stockholders' equity	28,154	29,006
Non-controlling interest	1	1
Total stockholders’ equity	28,155	29,007
Total liabilities and stockholders’ equity	$ 33,026	$ 33,630

XML

Segments (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Dreamworld Leisure Limited [Member]
Segment Reporting Information [Line Items]
Equity Method Investment, Ownership Percentage	100.00%		100.00%
Sales Revenue, Services, Net [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	70.00%	74.00%	69.00%	72.00%
Sales Revenue, Segment [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	27.00%	59.00%	24.00%	37.00%

XML

Description of Business and Significant Accounting Policies

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

Note 1.   Description of Business and Significant Accounting Policies

The business activities of the Company entail the owning and leasing of electronic gaming machines (EGMs) placed in premier hotels and other venues in Cambodia and the Philippines, the development and operation of gaming establishments under the Dreamworld brand in select emerging markets in the Indo-China region and the design, manufacture and distribution of gaming chips and plaques under the Dolphin brand to major casinos primarily in Southeast Asia and Australia.

The Company owned and operated a casino under the Dreamworld name in the Pailin Province of Cambodia. On June 1, 2014, the Company ceased operations of the casino in Pailin and, on June 20, 2014, entered into an agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited, a wholly-owned Cambodian subsidiary of the Company established for the purpose of owning and operating the casino. In addition, the Company was engaged in the design, manufacture and distribution of other, non-gaming plastic products, primarily for the automotive industry. These operations were sold on March 28, 2013. All related historical revenues and expenses for the casino in Pailin and the non-gaming plastic products operations have been reclassified as discontinued operations. The accounting policies of these discontinued operations are consistent with the Company’s policies for the accompanying consolidated financial statements. 

Basis of Presentation

These consolidated financial statements are prepared pursuant to generally accepted accounting principles in the United States for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”) and reflect all adjustments, consisting of normal recurring adjustments and other adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company, for the respective periods presented. The results of operations for an interim period are not necessarily indicative of the results that may be expected for any other interim period or the year as a whole. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 31, 2014. Certain previously reported amounts have been reclassified to conform to the current period presentation.

Principles of Consolidation

These consolidated financial statements include the accounts of Entertainment Gaming Asia Inc. and all its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The Company is required to make estimates, judgments and assumptions that it believes are reasonable based on its historical experience, contract terms, observance of known trends in the Company and the industry as a whole, and information available from other outside sources. These estimates affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On a regular basis, the Company evaluates its estimates, including those related to revenue recognition, product returns, long-lived assets, inventory obsolescence, stock-based compensation, income taxes, bad debts, warranty obligations, long-term contracts, contingencies and litigation. Actual results may differ from those estimates.

Discontinued Operations

A discontinued operation is a component of an entity that either has been disposed of, or that is classified as held for sale, and (i) represents a separate major line of business or geographical area of operations; and (ii) is a part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or (iii) is a subsidiary acquired exclusively with a view to resale.

Non-current assets held for discontinued operations are carried at the lower of their carrying amount or fair value less costs to sell. Any gain or loss from disposal of a business, together with the results of its operations until the date of disposal, is reported separately as discontinued operations. The financial information of discontinued operations is excluded from the respective captions in the Company's consolidated statements of comprehensive income and related notes for all periods presented.

Cash and Cash Equivalents

All highly-liquid instruments with original maturities of three months or less are considered cash equivalents. The Company places its cash and temporary investments with financial institutions. As of June 30, 2014, the Company had deposits with financial institutions in excess of Federal Deposit Insurance Corporation (FDIC) insured limits by approximately $4.4 million.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at face value less any allowances for doubtful accounts. Allowances for doubtful accounts are maintained at levels determined by Company management to adequately provide for uncollectible amounts. In determining the estimated uncollectable amounts, the Company evaluates a combination of factors, including, but not limited to, activity in the related market, financial condition of customers, specific customer collection experience and history of write-offs and collections. Interest income is imposed on overdue accounts receivable after the Company evaluates a combination of factors, including but not limited to, customer collection experiences, customer relationships and contract terms. Accounts receivable balances are written off after all collection efforts have been exhausted.

Inventories

Inventories are stated at the lower of cost, determined using the first-in, first-out method, or market. Cost elements included in work-in-process and finished goods include raw materials, direct labor and manufacturing overheads.

Long-Lived Assets

The Company accounts for impairment of long-lived assets in accordance with Financial Accounting Standards Board (FASB) ASC 360, Property, Plant and Equipment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In such instances, the Company estimates the undiscounted future cash flows that result from the use of the asset and its ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the Company recognizes an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset, determined principally using discounted cash flows. Impairment charges of approximately $19,000 were recognized for long-lived assets for the three-month and six-month periods ended June 30, 2014. There were no impairment charges for long-lived assets for the three-month and six-month periods ended June 30, 2013.

Prepaids, Deposits and Other Assets

Prepaids, deposits and other assets consist primarily of prepaid leases, prepaid value-added taxes in foreign countries, prepayments to suppliers, rental and utilities and other deposits.

Gaming Equipment

Gaming equipment consists primarily of EGMs and systems. Gaming equipment is stated at cost. The Company depreciates new EGMs and systems over a five-year useful life and depreciates refurbished EGMs and systems over a three-year useful life once placed in service. Depreciation of gaming equipment of approximately $758,000 and $1.0 million and $1.5 million and $2.0 million was included in cost of gaming operations in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the useful lives of the assets currently estimated to be three to ten years, which in the case of leasehold improvements, is limited to the life of the lease and throughout the renewal period as long as renewal is reasonably assured.

Depreciation of property and equipment of approximately $150,000 and $138,000 and $297,000 and $174,000 was included in the cost of gaming operations in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Depreciation of property and equipment of approximately $185,000 and $67,000 and $321,000 and $108,000 was included in cost of gaming products in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Goodwill and Intangible Assets, Including Casino Contracts

Intangible assets consist of patents, trademarks, technical know-how, gaming operation agreement, casino contracts and goodwill. Intangible assets other than goodwill are amortized on the straight-line basis over the period of time the asset is expected to contribute directly or indirectly to future cash flows, which ranges from four to ten years. The straight-line amortization method is utilized because the Company believes there is no more reliably determinable method of reflecting the pattern for which the economic benefits of the intangible assets are consumed or otherwise used.

Amortization expenses related to casino contracts were approximately $612,000 and $617,000 and $1.2 million and $1.2 million for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. Amortization expenses related to other gaming related intangibles were approximately $63,000 and $63,000 and $126,000 and $126,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. The amounts were accounted for as cost of gaming operations in the consolidated statements of comprehensive income. Amortization expenses related to technical know-how were approximately $7,000 and $7,000 and $13,000 and $13,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. The amounts were accounted for as cost of gaming products in the consolidated statements of comprehensive income. Amortization expenses related to patents and trademarks were approximately $6,000 and $6,000 and $12,000 and $12,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. The amounts were accounted for as selling, general and administrative expenses in the consolidated statements of comprehensive income.

The Company measures and tests finite-lived intangibles for impairment when there are indicators of impairment in accordance with ASC 360-10-05, Property, Plant and Equipment.

The Company measures and tests goodwill for impairment, at least annually in accordance with ASC 350-10-05, Intangibles — Goodwill and Other.

Impairment testing for goodwill and other intangibles requires judgment, including the identification of reporting units, allocation of related goodwill, assignment of corporate shared assets and liabilities to reporting units, estimated future cash flows and determinations of fair values. While the Company believes its estimates of future revenues and future cash flows are reasonable, different assumptions could materially affect the assessment of useful lives, recoverability and fair values. No impairment charges relating to intangible assets were recorded for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Litigation and Other Contingencies

In the performance of its ordinary course of business operations, the Company is subject to risks of various legal matters, litigation and claims of various types. The Company has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. See Note 16.

ASC 450, Contingencies, requires that liabilities for contingencies be recorded when it is probable that a liability has been incurred and that the amount can be reasonably estimated. Significant management judgment is required related to contingent liabilities and the outcome of litigation because both are difficult to predict. For a contingency for which an unfavorable outcome is reasonably possible and which is significant, the Company discloses the nature of the contingency and, when feasible, an estimate of the possible loss.

Revenue Recognition

The Company recognizes revenue when all of the following have been satisfied:

· Persuasive evidence of an arrangement exists;

·  The price to the customer is fixed and determinable;

·  Delivery has occurred and any acceptance terms have been fulfilled;

·  No significant contractual obligations remain; and

·  Collection is reasonably assured.

Gaming Revenue and Promotional Allowances

The Company earns recurring gaming revenue from its gaming operations.

For slot operations, the Company earns recurring gaming revenue by providing customers with EGMs and casino management systems which track game performance and provide statistics on installed EGMs owned by the Company and leased to venue owners. Revenues are recognized on the contractual terms of the slot agreements between the Company and the venue owners and are based on the Company’s share of net winnings and reimbursement of expenses, net of customer incentives and commitment fees.

Revenues are recognized as earned unless collection is not reasonably assured, in which case revenues are recognized when the payment for net winnings is received. All slot operations revenues were recognized as earned during the three-month and six-month periods ended June 30, 2014 and 2013.

Commitment fees paid to the venue operators relating to contract amendments which are not recoverable from daily net win are capitalized as assets and amortized as a reduction of revenue over the term of the amended contracts. The Company had commitment fee balances related to contract amendments of approximately $180,000 and $234,000 as of June 30, 2014 and December 31, 2013, respectively.

For the discontinued casino operations, the Company’s revenues are measured by the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs and for chips in the customers’ possession, if any. Cash discounts, other cash incentives related to casino play and commissions rebated through junkets or tour guides, if any, to customers are recorded as a reduction to casino revenue. Consequently, the Company’s casino revenues are reduced by discounts and commissions.

The Company does not accrue jackpot liabilities for its slot machine base and progressive jackpots as regulations do not prohibit removal of gaming machines from the gaming floor without payment of the jackpots.

Promotional allowances represent goods and services, which would be accounted for as revenue if sold, that a casino gives to customers as an inducement to gamble at that establishment. Such goods and services include food and beverages. The Company includes the retail value of promotional allowances in gross revenues and deducts it from gross revenues to reach net revenues on the face of the consolidated statements of comprehensive income.

The Company also earned recurring gaming revenue through leasing table game equipment and providing casino management services to gaming operators within its casino property. Revenues from gaming table leasing arrangements are recognized as earned over the contractual terms of the arrangement between the Company and the gaming promoters and are included in discontinued operations.

Gaming Products Sales

The Company recognizes revenue from the sale of its gaming products to end users upon shipment against customer contracts or purchase orders.

Stock-Based Compensation

Under the fair value recognition provisions of ASC 718, Compensation-Stock Compensation, the Company recognizes stock-based compensation expenses for all service-based awards to employees and non-employee directors with graded vesting schedules on the straight-line basis over the requisite service period for the entire award. Estimates are revised if subsequent information indicates that forfeitures will differ from previous estimates, and the cumulative effect on compensation cost of a change in the estimated forfeitures is recognized in the period of the change. For non-employee awards, the Company remeasures compensation cost each period until the service condition is complete and recognizes compensation cost on the straight-line basis over the requisite service period. Option valuation models require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the fair value estimates. Judgment is required in estimating stock price volatility, forfeiture rates, expected dividends, and expected terms that options remain outstanding. For restricted stock awards with performance conditions, the Company evaluates if performance conditions are probable in each reporting period. The compensation expense of restricted awards is recognized ratably over the implicit service period if achieving performance conditions is probable. Cumulative catch-up adjustments are required in the event of changes in assessment of probability. See Note 12 for additional information relating to stock-based compensation assumptions. Stock-based compensation expenses totaled approximately $69,000 and $198,000 and $141,000 and $445,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Product Development

Product development expenses are expensed as incurred. Employee related costs associated with product development are included in product development expenses. Product development expenses were approximately $101,000 and $35,000 and $156,000 and $155,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. Product development expenses increased in the three-month period ended June 30, 2014 due to increased efforts to develop new products and security features for the Company’s gaming products business in the three-month period ended June 30, 2014. Product development expenses were essentially unchanged for the six-month period ended June 30, 2014.

Leases

Leases are classified at the inception date as either a capital lease or an operating lease. A lease is a capital lease if any of the following conditions exists:

· Ownership is transferred to the lessee by the end of the lease term;

· There is a bargain purchase option;

· The lease term is at least 75% of the property’s estimated remaining economic life; or

· The present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date.

A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed as incurred. The Company had no capital leases as of June 30, 2014 and December 31, 2013.

Income Taxes

The Company is subject to income taxes in the United States (including federal and state) and several foreign jurisdictions in which it operates. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. ASC 740, Income Taxes, requires that deferred tax assets be evaluated for future realization and reduced by a valuation allowance to the extent the Company believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience and expectations of future taxable income by taxing jurisdiction, the carry-forward periods available to the Company for tax reporting purposes, and other relevant factors.

The Company accounts for uncertain tax positions in accordance with ASC 740, which contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely to be realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in the provision for income taxes in the statements of comprehensive income.

On December 31, 2010, the Company effected a Quasi-Reorganization. As of that date, the Company’s deferred taxes were reported in conformity with applicable income tax accounting standards described above, net of applicable valuation allowances. Deferred tax assets and liabilities were recognized for differences between the assigned values and the tax basis of the recognized assets and liabilities with corresponding valuation allowances as appropriate. In accordance with the Quasi-Reorganization requirements, pre-existing tax benefits realized subsequent to the Quasi-Reorganization are recorded directly in equity.

Earnings/(Loss) per Share

Basic earnings/(loss) per share are computed by dividing the reported net earnings/(loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing the net income by the weighted average number of shares of common stock and shares issuable from stock options and restricted shares during the period. The computation of diluted earnings per share excludes the impact of stock options and restricted shares that are anti-dilutive. There is no difference in diluted loss per share from basic loss per share as the assumed exercise of common stock equivalents would have an anti-dilutive effect due to losses.

Foreign Currency Translations and Transactions

The functional currency of the Company’s international subsidiaries, except for its operations in Cambodia whose functional currency is also U.S. dollars ("US$"), is generally the local currency. For these subsidiaries, the Company translates the assets and liabilities at exchange rates in effect at the balance sheet date and income and expense accounts at average exchange rates during the year. Resulting currency translation adjustments are recorded directly to accumulated other comprehensive income within stockholders’ equity. Gains and losses resulting from transactions in non-functional currencies are recorded in the statements of comprehensive income.

Below is a summary of closing exchange rates as of June 30, 2014 and December 31, 2013, and average exchange rates for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

(US$1 to foreign currency)	June 30, 2014	December 31, 2013
Australian dollar	1.06	1.13
Hong Kong dollar	7.75	7.75
Philippine peso	43.77	44.45
Thai baht	32.52	32.92

	Three-Month Periods Ended June 30,		Six-Month Periods Ended June 30,
(US$1 to foreign currency)	2014	2013	2014	2013
Australian dollar	1.07	1.01	1.09	0.99
Hong Kong dollar	7.75	7.76	7.76	7.76
Philippine peso	44.18	41.90	44.56	41.37
Thai baht	32.51	29.95	32.61	29.93

Fair Value Measurements

Fair value is defined under ASC 820, Fair Value Measurements and Disclosures, as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard establishes a fair value hierarchy based on three levels of input, of which the first two are considered observable and the last unobservable.

· Level 1 — Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.

·  Level 2 — Input, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments.

· Level 3 — Unobservable input, where there is little or no market activity for the asset or liability. This input reflects the reporting entity’s own assumptions of the data that participants would use in pricing the asset or liability, based on the best information available under the circumstances.

As of June 30, 2014, the fair values of cash and cash equivalents,  accounts receivable and accounts payable approximate their carrying values due to the short maturity of these items.

Guarantees

The Company recognizes a guarantee at its inception which is the greater of (i) the fair value of the guarantee and (ii) the contingent liability amount. The fair value of a guarantee is determined by using expected present value measurement techniques. The initial liability recognized is amortized over the guarantee period.  The Company does not accrue any guarantee liabilities as of the balance sheet dates.

Recent Accounting Pronouncements

In April 2014, the FASB issued Accounting Standards Update No. 2014-08 (ASU 2014-08) “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It is effective for annual periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. We do not expect the impact of the adoption of ASU 2014-08 to be material to our consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. We are currently in the process of evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements. 

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Other Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Other Liabilities [Line Items]
Tax liabilities	$ 689	$ 659
Others	32	83
Other liabilities	$ 721	$ 742

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Other Liabilities (Tables)

6 Months Ended

Jun. 30, 2014

Other Liabilities [Abstract]

Schedule of Other Assets and Other Liabilities [Table Text Block]

Other liabilities consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Tax liabilities	$	689	$	659
Others		32		83
	$	721	$	742

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Related Party Transactions (Details Textual)	Jun. 30, 2014
Melco Services Limited [Member]
Related Party Transaction [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	38.00%
Melco International Development Limited [Member]
Related Party Transaction [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	33.60%
Melco Crown Limited [Member]
Related Party Transaction [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	90.00%
Melco Crown Entertainment Limited [Member]
Related Party Transaction [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	68.80%
MCE Leisure Philippines [Member]
Related Party Transaction [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	100.00%

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Earnings/(Loss) Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 17. Earnings/(Loss) Per Share

Computation of the basic and diluted earnings/(loss) per share from continuing operations consisted of the following:

	Three-Month Periods Ended June 30,
	2014				2013
(amounts in thousands, except per share data)	Income		Number of Shares	Per Share Amount	Income		Number of Shares	Per Share Amount
Basic
Net income attributable to equity shareholders	$	217	30,013	0.01	$	92	29,975	$	—
Effect of dilutive securities
Dilutive stock options/restricted shares			135				738
Diluted
Net income attributable to equity shareholders plus assumed conversion	$	217	30,148	0.01	$	92	30,713	$	—

	Six-Month Periods Ended June 30,
	2014				2013
(amounts in thousands, except per share data)	Loss		Number of Shares	Per Share Amount	Income		Number of Shares	Per Share Amount
Basic
Net (loss)/income attributable to equity shareholders	$	(657)	30,016	(0.02)	$	52	29,975	$	—
Effect of dilutive securities
Dilutive stock options/restricted shares (1)			—				737
Diluted
Net (loss)/income attributable to equity shareholders plus assumed conversion	$	(657)	30,016	(0.02)	$	52	30,712	$	—

(1) There was no difference in diluted loss per share from basic loss per share as the assumed exercise of common stock equivalents would have an anti-dilutive effect due to losses for the six-month period ended June 30, 2014.

For the three-month periods ended June 30, 2014 and 2013, outstanding stock options of 3,093,402 and 2,166,738 shares of common stock were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive. For the six-month periods ended June 30, 2014 and 2013, outstanding stock options of 3,093,402 and 2,166,738 shares of common stock were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive.

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of all current and expired plans as of June 30, 2014 and changes during the period then ended are presented in the following table:

Options

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2013		3,291,738	$	2.11		6.13	$	738
Granted		225,000		1.21		3.78		—
Exercised		—		—		—		—
Forfeited or expired		(160,836)		2.04		—		—
Outstanding as of June 30, 2014		3,355,902		2.05		5.83		169
Exercisable as of June 30, 2014		2,949,235	$	2.12		5.38	$	169

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

Restricted Stock

	Number of shares		Weighted Average Fair Value at Grant Date		Weighted Average Remaining Contractual Life (in years)
Unvested balance as of December 31, 2013		—	$	—		—
Granted		95,000		1.21		1.33
Vested (1)		(40,000)		1.21		0.31
Unvested balance as of June 30, 2014		55,000		1.21		1.33

(1) Vested shares included 25,000 shares of restricted common stock issued in 2014 for which final vesting is subject to the approval of Company’s compensation committee.

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The following table summarizes the range of assumptions utilized in the Black-Scholes-Merton option-pricing model for the valuation of stock options granted during the six-month periods ended June 30, 2014 and 2013.

	Six-Month Periods Ended June 30,
	2014				2013
Range of values:	Low		High		Low		High
Expected volatility	73.03	%	74.03	%	73.78	%	76.49	%
Expected dividends	—		—		—		—
Expected term (in years)	3.73		9.11		3.73		9.70	%
Risk free rate	1.16	%	2.52	%	0.55	%	2.45	%

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Description of Business and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

These consolidated financial statements are prepared pursuant to generally accepted accounting principles in the United States for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”) and reflect all adjustments, consisting of normal recurring adjustments and other adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company, for the respective periods presented. The results of operations for an interim period are not necessarily indicative of the results that may be expected for any other interim period or the year as a whole. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 31, 2014. Certain previously reported amounts have been reclassified to conform to the current period presentation.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

These consolidated financial statements include the accounts of Entertainment Gaming Asia Inc. and all its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The Company is required to make estimates, judgments and assumptions that it believes are reasonable based on its historical experience, contract terms, observance of known trends in the Company and the industry as a whole, and information available from other outside sources. These estimates affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On a regular basis, the Company evaluates its estimates, including those related to revenue recognition, product returns, long-lived assets, inventory obsolescence, stock-based compensation, income taxes, bad debts, warranty obligations, long-term contracts, contingencies and litigation. Actual results may differ from those estimates.

Discontinued Operations, Policy [Policy Text Block]

Discontinued Operations

A discontinued operation is a component of an entity that either has been disposed of, or that is classified as held for sale, and (i) represents a separate major line of business or geographical area of operations; and (ii) is a part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or (iii) is a subsidiary acquired exclusively with a view to resale.

Non-current assets held for discontinued operations are carried at the lower of their carrying amount or fair value less costs to sell. Any gain or loss from disposal of a business, together with the results of its operations until the date of disposal, is reported separately as discontinued operations. The financial information of discontinued operations is excluded from the respective captions in the Company's consolidated statements of comprehensive income and related notes for all periods presented.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

All highly-liquid instruments with original maturities of three months or less are considered cash equivalents. The Company places its cash and temporary investments with financial institutions. As of June 30, 2014, the Company had deposits with financial institutions in excess of Federal Deposit Insurance Corporation (FDIC) insured limits by approximately $4.4 million.

Accounts Receivable And Allowance For Doubtful Accounts [Policy Text Block]

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at face value less any allowances for doubtful accounts. Allowances for doubtful accounts are maintained at levels determined by Company management to adequately provide for uncollectible amounts. In determining the estimated uncollectable amounts, the Company evaluates a combination of factors, including, but not limited to, activity in the related market, financial condition of customers, specific customer collection experience and history of write-offs and collections. Interest income is imposed on overdue accounts receivable after the Company evaluates a combination of factors, including but not limited to, customer collection experiences, customer relationships and contract terms. Accounts receivable balances are written off after all collection efforts have been exhausted.

Inventory, Policy [Policy Text Block]

Inventories

Inventories are stated at the lower of cost, determined using the first-in, first-out method, or market. Cost elements included in work-in-process and finished goods include raw materials, direct labor and manufacturing overheads.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Long-Lived Assets

The Company accounts for impairment of long-lived assets in accordance with Financial Accounting Standards Board (FASB) ASC 360, Property, Plant and Equipment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In such instances, the Company estimates the undiscounted future cash flows that result from the use of the asset and its ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the Company recognizes an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset, determined principally using discounted cash flows. Impairment charges of approximately $19,000 were recognized for long-lived assets for the three-month and six-month periods ended June 30, 2014. There were no impairment charges for long-lived assets for the three-month and six-month periods ended June 30, 2013.

Prepaid Deposits And Other Assets [Policy Text Block]

Prepaids, Deposits and Other Assets

Prepaids, deposits and other assets consist primarily of prepaid leases, prepaid value-added taxes in foreign countries, prepayments to suppliers, rental and utilities and other deposits.

Electronic Gaming Machines EGMs and Systems [Policy Text Block]

Gaming Equipment

Gaming equipment consists primarily of EGMs and systems. Gaming equipment is stated at cost. The Company depreciates new EGMs and systems over a five-year useful life and depreciates refurbished EGMs and systems over a three-year useful life once placed in service. Depreciation of gaming equipment of approximately $758,000 and $1.0 million and $1.5 million and $2.0 million was included in cost of gaming operations in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the useful lives of the assets currently estimated to be three to ten years, which in the case of leasehold improvements, is limited to the life of the lease and throughout the renewal period as long as renewal is reasonably assured.

Depreciation of property and equipment of approximately $150,000 and $138,000 and $297,000 and $174,000 was included in the cost of gaming operations in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Depreciation of property and equipment of approximately $185,000 and $67,000 and $321,000 and $108,000 was included in cost of gaming products in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Intangible Assets, Including Casino Contracts

Intangible assets consist of patents, trademarks, technical know-how, gaming operation agreement, casino contracts and goodwill. Intangible assets other than goodwill are amortized on the straight-line basis over the period of time the asset is expected to contribute directly or indirectly to future cash flows, which ranges from four to ten years. The straight-line amortization method is utilized because the Company believes there is no more reliably determinable method of reflecting the pattern for which the economic benefits of the intangible assets are consumed or otherwise used.

Amortization expenses related to casino contracts were approximately $612,000 and $617,000 and $1.2 million and $1.2 million for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. Amortization expenses related to other gaming related intangibles were approximately $63,000 and $63,000 and $126,000 and $126,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. The amounts were accounted for as cost of gaming operations in the consolidated statements of comprehensive income. Amortization expenses related to technical know-how were approximately $7,000 and $7,000 and $13,000 and $13,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. The amounts were accounted for as cost of gaming products in the consolidated statements of comprehensive income. Amortization expenses related to patents and trademarks were approximately $6,000 and $6,000 and $12,000 and $12,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. The amounts were accounted for as selling, general and administrative expenses in the consolidated statements of comprehensive income.

The Company measures and tests finite-lived intangibles for impairment when there are indicators of impairment in accordance with ASC 360-10-05, Property, Plant and Equipment.

The Company measures and tests goodwill for impairment, at least annually in accordance with ASC 350-10-05, Intangibles — Goodwill and Other.

Impairment testing for goodwill and other intangibles requires judgment, including the identification of reporting units, allocation of related goodwill, assignment of corporate shared assets and liabilities to reporting units, estimated future cash flows and determinations of fair values. While the Company believes its estimates of future revenues and future cash flows are reasonable, different assumptions could materially affect the assessment of useful lives, recoverability and fair values. No impairment charges relating to intangible assets were recorded for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Litigation And Other Contingencies [Policy Text Block]

Litigation and Other Contingencies

In the performance of its ordinary course of business operations, the Company is subject to risks of various legal matters, litigation and claims of various types. The Company has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. See Note 16.

ASC 450, Contingencies, requires that liabilities for contingencies be recorded when it is probable that a liability has been incurred and that the amount can be reasonably estimated. Significant management judgment is required related to contingent liabilities and the outcome of litigation because both are difficult to predict. For a contingency for which an unfavorable outcome is reasonably possible and which is significant, the Company discloses the nature of the contingency and, when feasible, an estimate of the possible loss.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

The Company recognizes revenue when all of the following have been satisfied:

⋅	Persuasive evidence of an arrangement exists;
⋅	The price to the customer is fixed and determinable;
⋅	Delivery has occurred and any acceptance terms have been fulfilled;
⋅	No significant contractual obligations remain; and
⋅	Collection is reasonably assured.

Gaming Revenue and Promotional Allowances

The Company earns recurring gaming revenue from its gaming operations.

For slot operations, the Company earns recurring gaming revenue by providing customers with EGMs and casino management systems which track game performance and provide statistics on installed EGMs owned by the Company and leased to venue owners. Revenues are recognized on the contractual terms of the slot agreements between the Company and the venue owners and are based on the Company’s share of net winnings and reimbursement of expenses, net of customer incentives and commitment fees.

Revenues are recognized as earned unless collection is not reasonably assured, in which case revenues are recognized when the payment for net winnings is received. All slot operations revenues were recognized as earned during the three-month and six-month periods ended June 30, 2014 and 2013.

Commitment fees paid to the venue operators relating to contract amendments which are not recoverable from daily net win are capitalized as assets and amortized as a reduction of revenue over the term of the amended contracts. The Company had commitment fee balances related to contract amendments of approximately $180,000 and $234,000 as of June 30, 2014 and December 31, 2013, respectively.

For the discontinued casino operations, the Company’s revenues are measured by the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs and for chips in the customers’ possession, if any. Cash discounts, other cash incentives related to casino play and commissions rebated through junkets or tour guides, if any, to customers are recorded as a reduction to casino revenue. Consequently, the Company’s casino revenues are reduced by discounts and commissions.

The Company does not accrue jackpot liabilities for its slot machine base and progressive jackpots as regulations do not prohibit removal of gaming machines from the gaming floor without payment of the jackpots.

Promotional allowances represent goods and services, which would be accounted for as revenue if sold, that a casino gives to customers as an inducement to gamble at that establishment. Such goods and services include food and beverages. The Company includes the retail value of promotional allowances in gross revenues and deducts it from gross revenues to reach net revenues on the face of the consolidated statements of comprehensive income.

The Company also earned recurring gaming revenue through leasing table game equipment and providing casino management services to gaming operators within its casino property. Revenues from gaming table leasing arrangements are recognized as earned over the contractual terms of the arrangement between the Company and the gaming promoters and are included in discontinued operations.

Gaming Products Sales

The Company recognizes revenue from the sale of its gaming products to end users upon shipment against customer contracts or purchase orders.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

Under the fair value recognition provisions of ASC 718, Compensation-Stock Compensation, the Company recognizes stock-based compensation expenses for all service-based awards to employees and non-employee directors with graded vesting schedules on the straight-line basis over the requisite service period for the entire award. Estimates are revised if subsequent information indicates that forfeitures will differ from previous estimates, and the cumulative effect on compensation cost of a change in the estimated forfeitures is recognized in the period of the change. For non-employee awards, the Company remeasures compensation cost each period until the service condition is complete and recognizes compensation cost on the straight-line basis over the requisite service period. Option valuation models require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the fair value estimates. Judgment is required in estimating stock price volatility, forfeiture rates, expected dividends, and expected terms that options remain outstanding. For restricted stock awards with performance conditions, the Company evaluates if performance conditions are probable in each reporting period. The compensation expense of restricted awards is recognized ratably over the implicit service period if achieving performance conditions is probable. Cumulative catch-up adjustments are required in the event of changes in assessment of probability. See Note 12 for additional information relating to stock-based compensation assumptions. Stock-based compensation expenses totaled approximately $69,000 and $198,000 and $141,000 and $445,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Product Development [Policy Text Block]

Product Development

Product development expenses are expensed as incurred. Employee related costs associated with product development are included in product development expenses. Product development expenses were approximately $101,000 and $35,000 and $156,000 and $155,000 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. Product development expenses increased in the three-month period ended June 30, 2014 due to increased efforts to develop new products and security features for the Company’s gaming products business in the three-month period ended June 30, 2014. Product development expenses were essentially unchanged for the six-month period ended June 30, 2014.

Lease, Policy [Policy Text Block]

Leases

Leases are classified at the inception date as either a capital lease or an operating lease. A lease is a capital lease if any of the following conditions exists:

⋅ Ownership is transferred to the lessee by the end of the lease term;

⋅ There is a bargain purchase option;

⋅ The lease term is at least 75% of the property’s estimated remaining economic life; or

⋅ The present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date.

A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed as incurred. The Company had no capital leases as of June 30, 2014 and December 31, 2013.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company is subject to income taxes in the United States (including federal and state) and several foreign jurisdictions in which it operates. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. ASC 740, Income Taxes, requires that deferred tax assets be evaluated for future realization and reduced by a valuation allowance to the extent the Company believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience and expectations of future taxable income by taxing jurisdiction, the carry-forward periods available to the Company for tax reporting purposes, and other relevant factors.

The Company accounts for uncertain tax positions in accordance with ASC 740, which contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely to be realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in the provision for income taxes in the statements of comprehensive income.

On December 31, 2010, the Company effected a Quasi-Reorganization. As of that date, the Company’s deferred taxes were reported in conformity with applicable income tax accounting standards described above, net of applicable valuation allowances. Deferred tax assets and liabilities were recognized for differences between the assigned values and the tax basis of the recognized assets and liabilities with corresponding valuation allowances as appropriate. In accordance with the Quasi-Reorganization requirements, pre-existing tax benefits realized subsequent to the Quasi-Reorganization are recorded directly in equity.

Earnings Per Share, Policy [Policy Text Block]

Earnings/(Loss) per Share

Basic earnings/(loss) per share are computed by dividing the reported net earnings/(loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing the net income by the weighted average number of shares of common stock and shares issuable from stock options and restricted shares during the period. The computation of diluted earnings per share excludes the impact of stock options and restricted shares that are anti-dilutive. There is no difference in diluted loss per share from basic loss per share as the assumed exercise of common stock equivalents would have an anti-dilutive effect due to losses.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translations and Transactions

The functional currency of the Company’s international subsidiaries, except for its operations in Cambodia whose functional currency is also U.S. dollars ("US$"), is generally the local currency. For these subsidiaries, the Company translates the assets and liabilities at exchange rates in effect at the balance sheet date and income and expense accounts at average exchange rates during the year. Resulting currency translation adjustments are recorded directly to accumulated other comprehensive income within stockholders’ equity. Gains and losses resulting from transactions in non-functional currencies are recorded in the statements of comprehensive income.

Below is a summary of closing exchange rates as of June 30, 2014 and December 31, 2013, and average exchange rates for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

(US$1 to foreign currency)	June 30, 2014	December 31, 2013
Australian dollar	1.06	1.13
Hong Kong dollar	7.75	7.75
Philippine peso	43.77	44.45
Thai baht	32.52	32.92

	Three-Month Periods Ended June 30,		Six-Month Periods Ended June 30,
(US$1 to foreign currency)	2014	2013	2014	2013
Australian dollar	1.07	1.01	1.09	0.99
Hong Kong dollar	7.75	7.76	7.76	7.76
Philippine peso	44.18	41.90	44.56	41.37
Thai baht	32.51	29.95	32.61	29.93

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

Fair value is defined under ASC 820, Fair Value Measurements and Disclosures, as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard establishes a fair value hierarchy based on three levels of input, of which the first two are considered observable and the last unobservable.

⋅ Level 1 — Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.

⋅  Level 2 — Input, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments.

⋅ Level 3 — Unobservable input, where there is little or no market activity for the asset or liability. This input reflects the reporting entity’s own assumptions of the data that participants would use in pricing the asset or liability, based on the best information available under the circumstances.

As of June 30, 2014, the fair values of cash and cash equivalents,  accounts receivable and accounts payable approximate their carrying values due to the short maturity of these items.

Guarantees, Indemnifications and Warranties Policies [Policy Text Block]

Guarantees

The Company recognizes a guarantee at its inception which is the greater of (i) the fair value of the guarantee and (ii) the contingent liability amount. The fair value of a guarantee is determined by using expected present value measurement techniques. The initial liability recognized is amortized over the guarantee period.  The Company does not accrue any guarantee liabilities as of the balance sheet dates.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In April 2014, the FASB issued Accounting Standards Update No. 2014-08 (ASU 2014-08) “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It is effective for annual periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. We do not expect the impact of the adoption of ASU 2014-08 to be material to our consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. We are currently in the process of evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements. 

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Discontinued Operations (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Discontinued Operations [Line Items]
Loss from discontinued operations, net of tax	$ (239)		$ (378)		$ (395)		$ (2,846)
Dreamworld Casino [Member]
Discontinued Operations [Line Items]
Loss from operations	(237)		(432)		(402)		(561)
Loss on disposal	0		0		0		(2,442)
Other	(2)	[1]	54	[1]	7	[1]	129	[1]
Income tax benefit	0	[2]	0	[2]	0	[2]	28	[2]
Loss from discontinued operations, net of tax	$ (239)		$ (378)		$ (395)		$ (2,846)

[1] Other represented foreign currency exchange differentials from Dreamworld Casino (Pailin) discontinued operations and recognized government grant income from Dolphin Australia discontinued operations.

[2] Income tax benefit represented a reversal of previously recognized uncertain tax benefits from Dolphin Australia discontinued operations.

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Segments

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 2. Segments

The Company currently conducts business in two operating segments: (i) gaming operations, which include EGM participation operations; and (ii) gaming products, which consist of the design, manufacture and distribution of gaming chips and plaques. The Company owned and operated a casino in the Pailin Province of Cambodia. In June 2014, the Company ceased operations of the casino and entered into an agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited, a wholly-owned Cambodian subsidiary of the Company established for the purpose of owning and operating the casino. The Company was also engaged in the design, manufacture and distribution of other non-gaming plastic products, primarily for the automotive industry. These operations were sold on March 28, 2013. All the related historical revenues and expenses for the casino in Pailin and non-gaming plastic products operations have been reclassified as discontinued operations. The accounting policies of these discontinued operations are consistent with the Company’s policies for the accompanying consolidated financial statements.

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Revenues:
Gaming operations	$	4,420	$	5,034	$	8,303	$	9,432
Gaming products		524		162		1,335		1,589
Total revenues	$	4,944	$	5,196	$	9,638	$	11,021
Operating income/(loss):
Gaming operations gross margin	$	1,931	$	2,332	$	3,415	$	4,213
Gaming products gross margin		(401)		(384)		(1,078)		(452)
Corporate and other operating costs and expenses		(1,318)		(1,608)		(2,975)		(3,498)
Total operating income/(loss)	$	212	$	340	$	(638)	$	263
Depreciation and amortization:
Gaming operations	$	1,597	$	1,851	$	3,165	$	3,583
Gaming products		219		93		386		147
Corporate		8		10		19		14
Total depreciation and amortization	$	1,824	$	1,954	$	3,570	$	3,744

Geographic segment revenues for the three-month and six-month periods ended June 30, 2014 and 2013 consisted of the following:

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Cambodia	$	3,752	$	4,264	$	6,895	$	7,726
Macau		137		34		497		700
Philippines		930		898		1,864		2,259
Australia		125		—		316		163
Other		—		—		66		173
	$	4,944	$	5,196	$	9,638	$	11,021

For the three-month and six-month periods ended June 30, 2014 and 2013, in the gaming operations segment, the largest customer represented 70% and 74% and 69% and 72%, respectively, of total gaming operations revenue. For the three-month and six-month periods ended June 30, 2014 and 2013, in the gaming products segment, the largest customer represented 27% and 59% and 24% and 37%, respectively, of total gaming products sales.

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Consolidated Balance Sheets [Parenthetical] (USD $)	Jun. 30, 2014	Dec. 31, 2013
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	30,102,162	30,024,662
Common stock, shares outstanding	30,102,162	30,024,662

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2014

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 12. Stock-Based Compensation

Options

The Company effected a 1-for-4 reverse stock split of its common shares as of June 12, 2012. All historical share amounts and share price information presented in this Note have been proportionally adjusted to reflect the impact of this reverse stock split.

At the annual shareholders meeting held on September 8, 2008, a new stock option plan, the “2008 Stock Incentive Plan” (the “2008 Plan”), was voted on and became effective on January 1, 2009, which replaced two previous plans, the Amended and Restated 1999 Stock Option Plan and the Amended and Restated 1999 Directors’ Stock Option Plan (the “Stock Option Plans”), thereby terminating both of the Stock Option Plans on December 31, 2008.

The 2008 Plan allows for incentive awards to eligible recipients consisting of:

· Options to purchase shares of common stock that qualify as incentive stock options within the meaning of the Internal Revenue Code;

· Non-statutory stock options that do not qualify as incentive options;

· Restricted stock awards; and

· Performance stock awards which are subject to future achievement of performance criteria or free of any performance or vesting.

The maximum number of shares reserved for issuance under the 2008 Plan was originally 1,250,000 shares, and in July 2010 the Company’s shareholders approved an increase in the number of shares reserved for issuance to 2,500,000 shares. At the annual shareholders meeting held on July 13, 2012, the Company’s shareholders approved a further increase in the number of shares reserved for issuance to 3,750,000 shares. The exercise price shall not be less than 100% of the fair market value of one share of common stock on the date of grant, unless the participant owns more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company, in which case the exercise price shall then be 110% of the fair market value. The outstanding stock options generally vest from six-months and one-day to over three years and have ten-year contractual terms.

During the six-month period ended June 30, 2014, stock options for the purchase of 225,000 shares of common stock were granted with a weighted average exercise price of $1.21 and weighted average fair value of $0.67 (2013: $1.18) per share and will vest from six-month and one day to three-year periods. During the six-month period ended June 30, 2014, 95,000 shares of restricted stock awards with a weighted average fair value of $1.21 per share were issued. The shares of restricted stock shall vest, subject to and upon the recipient’s achievement of key operational and financial performance milestones or according to the vesting period. For restricted stock awards with performance conditions, the Company evaluates if performance conditions are probable in each reporting period. The compensation expense of restricted awards is recognized ratably over the implicit service period if achieving performance conditions is probable. Cumulative catch-up adjustments are required in the event of any changes in the assessment of probabilities.

During the six-month period ended June 30, 2014, there were no exercises of outstanding stock options.

Prior to January 1, 2009, the Company had two stock options plans, the Amended and Restated 1999 Stock Option Plan and the Amended and Restated 1999 Directors’ Stock Option Plan (the “Previous Stock Option Plans”), through which 3,750,000 shares and 75,000 shares were authorized, respectively. Both Previous Stock Option Plans expired on December 31, 2008; however, options granted under the Previous Stock Option Plans that were outstanding as of the date of termination remain outstanding and subject to termination according to their terms.

As of June 30, 2014, stock options for the purchase of 936,864 and 20,000 shares of common stock, respectively, were outstanding in relation to the Amended and Restated 1999 Stock Option Plan and the Amended and Restated 1999 Director’s Stock Option Plan.

As of June 30, 2014, there were no outstanding non-plan options to purchase common stock. All previously granted non-plan options had expired by December 31, 2012. The non-plan options were issued to certain employees and non-employees of EGT Entertainment Holding Limited as approved by the Company’s stockholders in September 2007 pursuant to the initial closing of the transactions under the Securities Purchase and Product Participation Agreement dated June 12, 2007 between the Company and EGT Entertainment Holding Limited.

As of June 30, 2014, stock options for the purchase of 2,399,038 shares of common stock were outstanding under the 2008 Plan.

As of June 30, 2014, 2,949,235 stock options were exercisable with a weighted average exercise price of $2.12, a weighted average fair value of $0.90 and an aggregate intrinsic value of approximately $169,000. The total fair value of shares vested during the six-month period ended June 30, 2014 was approximately $312,000. The total compensation cost related to unvested shares as of June 30, 2014 was approximately $176,000. The amount was expected to be recognized over 1.8 years.

A summary of all current and expired plans as of June 30, 2014 and changes during the period then ended are presented in the following table:

Options

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2013		3,291,738	$	2.11		6.13	$	738
Granted		225,000		1.21		3.78		—
Exercised		—		—		—		—
Forfeited or expired		(160,836)		2.04		—		—
Outstanding as of June 30, 2014		3,355,902		2.05		5.83		169
Exercisable as of June 30, 2014		2,949,235	$	2.12		5.38	$	169

Restricted Stock

	Number of shares		Weighted Average Fair Value at Grant Date		Weighted Average Remaining Contractual Life (in years)
Unvested balance as of December 31, 2013		—	$	—		—
Granted		95,000		1.21		1.33
Vested (1)		(40,000)		1.21		0.31
Unvested balance as of June 30, 2014		55,000		1.21		1.33

(1) Vested shares included 25,000 shares of restricted common stock issued in 2014 for which final vesting is subject to the approval of Company’s compensation committee.

Recognition and Measurement

The fair value of each stock-based award to employees and non-employee directors is estimated on the measurement date which generally is the grant date while awards to non-employees and restricted common stock with performance criteria are measured at the earlier of the performance commitment date or the service completion date using the Black-Scholes-Merton option-pricing model. Option valuation models require the input of highly subjective assumptions, and changes in assumptions used can materially affect the fair value estimates. The Company estimates the expected life of the award by taking into consideration the vesting period, contractual term, historical exercise data, expected volatility, blackout periods and other relevant factors. Volatility is estimated by evaluating the Company’s historical volatility data. The risk-free interest rate on the measurement date is based on U.S. Treasury constant maturity rates for a period approximating the expected life of the award. The Company historically has not paid dividends, nor does it expect to pay dividends in the foreseeable future and, therefore, the expected dividend rate is zero.

The following table summarizes the range of assumptions utilized in the Black-Scholes-Merton option-pricing model for the valuation of stock options granted during the six-month periods ended June 30, 2014 and 2013.

	Six-Month Periods Ended June 30,
	2014				2013
Range of values:	Low		High		Low		High
Expected volatility	73.03	%	74.03	%	73.78	%	76.49	%
Expected dividends	—		—		—		—
Expected term (in years)	3.73		9.11		3.73		9.70	%
Risk free rate	1.16	%	2.52	%	0.55	%	2.45	%

For stock-based compensation accrued to employees and non-employee directors, the Company recognizes stock-based compensation expense for all service-based awards with graded vesting schedules on the straight-line basis over the requisite service period for the entire award. Initial accruals of compensation expense are based on the estimated number of shares for which requisite service is expected to be rendered. Estimates are revised if subsequent information indicates that forfeitures will differ from previous estimates, and the cumulative effect on compensation cost of a change in the estimated forfeitures is recognized in the period of the change.

For non-employee awards, the Company remeasures compensation cost each period until the service condition is complete and recognizes compensation cost on the straight-line basis over the requisite service period.

The Company estimates forfeitures and recognizes compensation cost only for those awards expected to vest assuming all awards would vest and reverse recognized compensation cost for forfeited awards when the awards are actually forfeited.

For awards with service conditions and graded vesting that were granted prior to the adoption of ASC 718, the Company estimates the requisite service period and the number of shares expected to vest, and recognizes compensation expense for each tranche on the straight-line basis over the estimated requisite service period.

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Document And Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 01, 2014
Document Information [Line Items]
Entity Registrant Name	Entertainment Gaming Asia Inc.
Entity Central Index Key	0001004673
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	EGT
Entity Common Stock, Shares Outstanding		30,102,162
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2014

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Related Party Transactions

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 13. Related Party Transactions

Effective January 1, 2010, the Company began sub-leasing office space from Melco Services Limited, a wholly-owned subsidiary of Melco International Development Limited, which is also the parent of the Company’s principal shareholder, EGT Entertainment Holding Limited. This sub-lease expired at the end of March 2013 and the Company moved its principal executive office to the premises of the new Hong Kong Dolphin facilities in April 2013. The relocation of the Company’s principal executive office serves to minimize costs and improve oversight of its Dolphin operations.

Significant revenues, purchases and expenses arising from transactions with related parties consisted of the following:

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Melco Crown (Macau) Limited
Sales of gaming products	$	—	$	—	$	135	$	630
MCE Leisure (Philippines) Corporation
Sales of gaming products	$	98	$	—	$	98	$	—
Melco Services Limited
Technical services	$	—	$	2	$	1	$	10
Office rental		—		8		1		48
Golden Future (Management Services) Ltd
Management services	$	90	$	21	$	148	$	21

Melco Services Limited is a wholly-owned subsidiary of Melco International Development Limited, which owns 38.0% of Entertainment Gaming Asia Inc.

Melco International Development Limited owns 33.6% of Melco Crown Entertainment Limited, which owns 90.0% of Melco Crown (Macau) Limited.

Melco Crown Entertainment Limited owns 68.8% of Melco Crown (Philippines) Resorts Corporation, which owns 100% of MCE Leisure (Philippines) Corporation.

Golden Future (Management Services) Limited is a wholly-owned subsidiary of Melco Crown (Macau) Limited.

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues:
Gaming operations	$ 4,420	$ 5,034	$ 8,303	$ 9,432
Gaming products	524	162	1,335	1,589
Total revenues	4,944	5,196	9,638	11,021
Operating costs and expenses:
Gaming property and equipment depreciation	908	1,153	1,789	2,185
Casino contract amortization	612	617	1,222	1,238
Other gaming related intangibles amortization	63	63	126	126
Other operating costs	895	869	1,740	1,670
Cost of gaming products	925	546	2,413	2,041
Selling, general and administrative expenses	1,167	1,526	2,720	3,268
Gain on dispositions	(8)	0	(8)	0
Impairment of assets	19	0	19	0
Product development expenses	101	35	156	155
Depreciation and amortization	50	47	99	75
Total operating costs and expenses	4,732	4,856	10,276	10,758
Income/(loss) from operations	212	340	(638)	263
Other income/(expenses):
Interest expense and finance fees	0	(1)	(2)	(5)
Interest income	0	0	0	4
Foreign currency gains/(losses)	16	(247)	1	(172)
Other	4	7	12	10
Total other income/(expenses)	20	(241)	11	(163)
Income/(loss) from continuing operations before income tax	232	99	(627)	100
Income tax expenses	(15)	(7)	(30)	(48)
Net income/(loss) from continuing operations	217	92	(657)	52
Net loss from discontinued operations, net of tax	(239)	(378)	(395)	(2,846)
Net loss attributable to EGT stockholders	(22)	(286)	(1,052)	(2,794)
Other comprehensive income/(loss), net of tax	99	(200)	58	(217)
Comprehensive income/(loss) to EGT stockholders	$ 77	$ (486)	$ (994)	$ (3,011)
Basic and diluted earnings/(loss) per share:
Loss (in dollars per share)	$ 0	$ (0.01)	$ (0.03)	$ (0.09)
Earnings/(loss) from continuing operations (in dollars per share)	$ 0.01	$ 0	$ (0.02)	$ 0
Loss from discontinued operations, net of tax (in dollars per share)	$ (0.01)	$ (0.01)	$ (0.01)	$ (0.09)
Weighted average common shares outstanding
Basic (in shares)	30,013	29,975	30,016	29,975
Diluted (in shares)	30,148	30,713	30,016	30,712

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Property and Equipment

6 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

Property And Equipment Excluding Gaming Equipment And Systems Disclosure [Text Block]

Note 7. Property and Equipment

Property and equipment are stated at cost and consisted of the following:

	Useful Life
(amounts in thousands)	(years)	June 30, 2014		December 31, 2013
		(Unaudited)
Equipment, vehicles, furniture and fixtures	3-10	$	6,174	$	4,109
Land and building	5		2,928		2,949
Leasehold improvements	1-5		1,188		1,029
Construction in progress	N/A		581		996
System development cost	N/A		201		116
			11,072		9,199
Less: accumulated depreciation			(2,004)		(1,342)
		$	9,068	$	7,857

Depreciation expense of property and equipment of approximately $150,000 and $138,000 and $297,000 and $174,000 was included in cost of gaming operations in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Depreciation expense of property and equipment of approximately $185,000 and $67,000 and $321,000 and $108,000 was included in cost of gaming products in the consolidated statement of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

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Gaming Equipment

6 Months Ended

Jun. 30, 2014

Electronic Gaming Machines Egms and Systems And Other Gaming Equipment Disclosure [Abstract]

Electronic Gaming Machines EGMs and Systems [Text Block]

Note 6. Gaming Equipment

Gaming equipment is stated at cost. The major categories of gaming equipment and accumulated depreciation consisted of the following:

	Useful Life
(amounts in thousands)	(years)	June 30, 2014		December 31, 2013
		(Unaudited)
EGMs	3-5	$	17,731	$	17,587
Systems	5		1,503		1,417
Other gaming equipment	3-5		—		42
			19,234		19,046
Less: accumulated depreciation			(12,362)		(10,875)
		$	6,872	$	8,171

Depreciation expense of gaming equipment of approximately $758,000 and $1.0 million and $1.5 million and $2.0 million was included in cost of gaming operations in the consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2014

Comprehensive Income Loss Disclosure [Abstract]

Comprehensive Income (Loss) Note [Text Block]

Note 18. Accumulated Other Comprehensive Income

The accumulated balances in respect of other comprehensive income consisted of the following:

(amounts in thousands)	Unrealized Actuarial Income		Foreign Currency Translation		Accumulated Other Comprehensive Income
Balances, January 1, 2013	$	62	$	867	$	929
Current period other comprehensive income/(loss)		37		(224)		(187)
Balances, December 31, 2013		99		643		742
Current period other comprehensive income		—		58		58
Balances, June 30, 2014	$	99		701		800

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Income Taxes

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 14. Income Taxes

The Company recorded income tax expenses of $15,000 and $7,000 and $30,000 and $48,000 for the three-month and six-month periods ended June 31, 2014 and 2013, respectively. The Company’s effective income tax rates were 6.4% and 7.6% and (4.7)% and 48.2% for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. EGT Cambodia entity and Dreamworld Casino (Pailin) are income tax exempt and only pay a fixed monthly tax rather than a tax on income.

The fixed obligation tax arrangement is subject to annual renewal and negotiation and the Company has renewed the fixed obligation tax arrangement for both EGT Cambodia and Dreamworld Casino (Pailin) for 2014.

The Company has been subjected to income tax examinations by tax authorities in jurisdictions in which it operates. During the years ended December 31, 2011 and 2012, the United States Internal Revenue Service (the “IRS”) conducted an audit of the Company’s 2008 and 2009 tax returns in the United States. On January 23, 2013, the IRS formally notified the Company that it had completed the review of the examination of the above-mentioned years with no changes to the Company’s tax position.

The Company's 2009 to 2013 Australian income tax returns remain open to examination by the Australian Taxation Office. The Company's 2010 to 2013 Cambodian income tax returns remain open to examination by the General Department of Taxation. The Company's 2011 to 2013 Philippines income tax returns remain open to examination by the Philippines Bureau of Internal Revenue. The Company's 2007 to 2013 Hong Kong income tax returns remain open to examination by the Hong Kong Inland Revenue Department.

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Accrued Expenses

6 Months Ended

Jun. 30, 2014

Payables and Accruals [Abstract]

Accrued Expenses Disclosure [Text Block]

Note 10. Accrued Expenses

Accrued expenses consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Payroll and related costs	$	252	$	601
Professional fees		388		312
Withholding tax expenses		553		551
Other tax expenses (1)		—		482
Others		238		420
	$	1,431	$	2,366

(1) Other tax expenses as of December 31, 2013 represented an accrued tax liability related to the Philippines operations resulting from the finalization of the Philippines income tax return for the 2010 year.  The accrual was reversed in the three-month period ended June 30, 2014.

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Stock-Based Compensation (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Stock Based Compensation [Line Items]
Granted, Number of Shares	225,000
Granted, Weighted Average Exercise Price (in dollars per share)	$ 1.21
Exercisable, Aggregate Intrinsic Value	$ 169,000
Employee Stock Option [Member]
Stock Based Compensation [Line Items]
Outstanding, Number of Shares	3,291,738
Granted, Number of Shares	225,000
Exercised, Number of Shares	0
Forfeited or expired, Number of Shares	(160,836)
Outstanding, Number of Shares	3,355,902	3,291,738
Exercisable, Number of Shares	2,949,235
Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 2.11
Granted, Weighted Average Exercise Price (in dollars per share)	$ 1.21
Exercised, Weighted Average Exercise Price (in dollars per share)	$ 0
Forfeited or expired, Weighted Average Exercise Price (in dollars per share)	$ 2.04
Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 2.05	$ 2.11
Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 2.12
Outstanding, Weighted Average Remaining Contractual Life (in years)	5 years 9 months 29 days	6 years 1 month 17 days
Granted, Weighted Average Remaining Contractual Life (in years)	3 years 9 months 11 days
Exercisable, Weighted Average Remaining Contractual Life (in years)	5 years 4 months 17 days
Outstanding, Aggregate Intrinsic Value	738,000
Granted, Aggregate Intrinsic Value	0
Exercised, Aggregate Intrinsic Value	0
Forfeited or expired, Aggregate Intrinsic Value	0
Outstanding, Aggregate Intrinsic Value	169,000	738,000
Exercisable, Aggregate Intrinsic Value	$ 169,000

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Goodwill and Intangible Assets, including Casino Contracts

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 8. Goodwill and Intangible Assets, including Casino Contracts

Intangible assets are stated at cost and consisted of the following:

	Useful Life
(amounts in thousands)	(years)	June 30, 2014		December 31, 2013
		(Unaudited)
Gaming operation agreement	4-5	$	1,184	$	1,178
Less: accumulated amortization			(693)		(567)
			491		611
Goodwill	N/A		358		353
Patents	5-6		114		114
Less: accumulated amortization			(72)		(62)
			42		52
Trademarks	5-9		26		26
Less: accumulated amortization			(11)		(10)
			15		16
Technical know-how	10		261		261
Less: accumulated amortization			(54)		(41)
			207		220
Casino contracts	5-6		12,795		12,764
Less: accumulated amortization			(8,577)		(7,335)
			4,218		5,429
		$	5,331	$	6,681

Amortization expense for finite-lived intangible assets was approximately $687,000 and $693,000 and $1.4 million and $1.4 million for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

Goodwill movements during the periods consisted of the following:

(amounts in thousands)	2014		2013
	(Unaudited)
Balance as of January 1	$	353	$	380
Foreign currency translation adjustment		5		(27)
Balance as of June 30/December 31	$	358	$	353

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Prepaids, Deposits and Other Assets

6 Months Ended

Jun. 30, 2014

Prepaids Deposits and Other Assets Disclosure [Abstract]

Prepaids Deposits And Other Assets Noncurrent Disclosure [Text Block]

Note 9. Prepaids, Deposits and Other Assets

Prepaids, deposits and other assets consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Prepaid taxes	$	1,014	$	927
Prepaid leases		217		222
Prepayments to suppliers		235		279
Deposits on EGM and system orders		92		16
Rentals, utilities and other deposits		291		353
	$	1,849	$	1,797

As of June 30, 2014, prepaid leases consisted of land lease prepayments of approximately $217,000 for a potential gaming development project located in the Kampot province of Cambodia.

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Other Liabilities

6 Months Ended

Jun. 30, 2014

Other Liabilities [Abstract]

Other Liabilities Disclosure [Text Block]

Note 11. Other Liabilities

Other liabilities consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Tax liabilities	$	689	$	659
Others		32		83
	$	721	$	742

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Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Related Party Transaction [Line Items]
Sales of gaming products	$ 4,944	$ 5,196	$ 9,638	$ 11,021
Melco Crown Ltd [Member]
Related Party Transaction [Line Items]
Sales of gaming products	0	0	135	630
Melco Services Limited [Member]
Related Party Transaction [Line Items]
Technical services	0	2	1	10
Office rental	0	8	1	48
Golden Future (Management Services) Ltd [Member]
Related Party Transaction [Line Items]
Management services	90	21	148	21
MCE Leisure Philippines Corporation [Member]
Related Party Transaction [Line Items]
Sales of gaming products	$ 98	$ 0	$ 98	$ 0

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Income Taxes (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Tax [Line Items]
Income Tax Expense (Benefit)	$ 15	$ 7	$ 30	$ 48
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	6.40%	7.60%	4.70%	48.20%

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Stock-Based Compensation (Details Textual) (USD $)	1 Months Ended	6 Months Ended	12 Months Ended					1 Months Ended						6 Months Ended
	Jun. 30, 2012	Jun. 30, 2014	Dec. 31, 2013	Sep. 08, 2008	Jun. 30, 2014 Stock Option Plan 2008 [Member]	Jul. 13, 2012 Stock Option Plan 2008 [Member]	Jul. 31, 2010 Stock Option Plan 2008 [Member]	Jul. 31, 2010 Stock Option Plan 2008 [Member] Upto Ten Percentage Of Total Combined Voting Power [Member]	Jul. 31, 2010 Stock Option Plan 2008 [Member] More Than Ten Percentage Of Total Combined Voting Power [Member]	Jun. 30, 2014 Amended and Restated 1999 Stock Option Plan [Member]	Jan. 01, 2009 Amended and Restated 1999 Stock Option Plan [Member]	Jun. 30, 2014 Amended and Restated 1999 Directors Stock Option Plan [Member]	Jan. 01, 2009 Amended and Restated 1999 Directors Stock Option Plan [Member]	Jun. 30, 2014 Restricted Stock [Member]
Stock Based Compensation [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance				1,250,000		3,750,000	2,500,000
Maximum Exercise Price Percentage On Fair Market Value								100.00%	110.00%
Granted, Weighted Average Exercise Price, Options (in dollars per share)		$ 1.21
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value, Options		$ 0.67	$ 1.18
Granted, Number of Shares, Restricted Stock		95,000												95,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Number of Shares Authorized											3,750,000		75,000
Outstanding, Number of Shares, Options					2,399,038					936,864		20,000
Share Based Compensation Arrangement By Share Based Payment Award Options Exercisable Weighted Average Fair Value, Options		$ 0.90
Exercisable, Aggregate Intrinsic Value, Options		$ 169,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value		312,000
Stockholders' Equity, Reverse Stock Split	1-for-4
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Options		$ 176,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition, Options		1 year 9 months 18 days
Granted, Number Of Shares		225,000
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Grants In Period, Weighted Average Grant Date Fair Value		$ 1.21												$ 1.21
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period														25,000

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2014

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

Accrued expenses consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Payroll and related costs	$	252	$	601
Professional fees		388		312
Withholding tax expenses		553		551
Other tax expenses (1)		—		482
Others		238		420
	$	1,431	$	2,366

(1) Other tax expenses as of December 31, 2013 represented an accrued tax liability related to the Philippines operations resulting from the finalization of the Philippines income tax return for the 2010 year.  The accrual was reversed in the three-month period ended June 30, 2014.

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Property and Equipment (Details) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Furniture and Fixtures [Member] Minimum [Member]	Jun. 30, 2014 Furniture and Fixtures [Member] Maximum [Member]	Jun. 30, 2014 Leasehold Improvements [Member] Minimum [Member]	Jun. 30, 2014 Leasehold Improvements [Member] Maximum [Member]	Jun. 30, 2014 Land and Building [Member]
Property, Plant and Equipment [Line Items]
Equipment, vehicles, furniture and fixtures	$ 6,174	$ 4,109
Land and building	2,928	2,949
Leasehold improvements	1,188	1,029
Construction in progress	581	996
System development cost	201	116
Property, Plant and Equipment, Gross	11,072	9,199
Less: accumulated depreciation	(2,004)	(1,342)
Property, Plant and Equipment, Net	$ 9,068	$ 7,857
Property, Plant and Equipment, Useful Life			3 years	10 years	1 year	5 years	5 years

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 16. Commitments and Contingencies

Legal Matters

Prime Mover/Strata Litigation

On March 26, 2010, a complaint (as subsequently amended on May 28, 2010 and December 20, 2011) (the “Complaint”) was filed by certain of the Company's shareholders including Prime Mover Capital Partners L.P., Strata Fund L.P., Strata Fund Q.P. L.P., and Strata Offshore Fund, Ltd (collectively, the “Plaintiffs”) in the United States District Court for the Southern District of New York against certain defendants including the Company and certain other of current and former directors and officers. The case number is 12-4393.

On December 18, 2013, the Second Circuit affirmed by Summary Order the District Court’s September 28, 2012 judgment granting the dismissal of the Plaintiffs’ Complaint. Since the Plaintiffs did not request a rehearing of the Summary Order in the permitted time, the civil action was concluded with all claims dismissed against all parties.

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Segments (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

The accounting policies of these discontinued operations are consistent with the Company’s policies for the accompanying consolidated financial statements.

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Revenues:
Gaming operations	$	4,420	$	5,034	$	8,303	$	9,432
Gaming products		524		162		1,335		1,589
Total revenues	$	4,944	$	5,196	$	9,638	$	11,021
Operating income/(loss):
Gaming operations gross margin	$	1,931	$	2,332	$	3,415	$	4,213
Gaming products gross margin		(401)		(384)		(1,078)		(452)
Corporate and other operating costs and expenses		(1,318)		(1,608)		(2,975)		(3,498)
Total operating income/(loss)	$	212	$	340	$	(638)	$	263
Depreciation and amortization:
Gaming operations	$	1,597	$	1,851	$	3,165	$	3,583
Gaming products		219		93		386		147
Corporate		8		10		19		14
Total depreciation and amortization	$	1,824	$	1,954	$	3,570	$	3,744

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Geographic segment revenues for the three-month and six-month periods ended June 30, 2014 and 2013 consisted of the following:

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Cambodia	$	3,752	$	4,264	$	6,895	$	7,726
Macau		137		34		497		700
Philippines		930		898		1,864		2,259
Australia		125		—		316		163
Other		—		—		66		173
	$	4,944	$	5,196	$	9,638	$	11,021

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Gaming Equipment (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Gaming equipment [Line Items]
Gaming equipment, Gross	$ 19,234	$ 19,046
Less: accumulated depreciation	(12,362)	(10,875)
Electronic gaming machines and systems, net	6,872	8,171
EGMs [Member]
Gaming equipment [Line Items]
Gaming equipment, Gross	17,731	17,587
EGMs [Member] | Minimum [Member]
Gaming equipment [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years
EGMs [Member] | Maximum [Member]
Gaming equipment [Line Items]
Finite-Lived Intangible Asset, Useful Life	5 years
Systems [Member]
Gaming equipment [Line Items]
Gaming equipment, Gross	1,503	1,417
Finite-Lived Intangible Asset, Useful Life	5 years
Other gaming equipment [Member]
Gaming equipment [Line Items]
Gaming equipment, Gross	$ 0	$ 42
Other gaming equipment [Member] | Minimum [Member]
Gaming equipment [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years
Other gaming equipment [Member] | Maximum [Member]
Gaming equipment [Line Items]
Finite-Lived Intangible Asset, Useful Life	5 years

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Description of Business and Significant Accounting Policies (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Australian Dollar [Member]
Accounting Polices [Line Items]
Foreign Currency Exchange Rate, Translation	1.06		1.06		1.13
Average Foreign Currency Exchange Rate Translation	1.07	1.01	1.09	0.99
Hong Kong Dollar [Member]
Accounting Polices [Line Items]
Foreign Currency Exchange Rate, Translation	7.75		7.75		7.75
Average Foreign Currency Exchange Rate Translation	7.75	7.76	7.76	7.76
Philippine Peso [Member]
Accounting Polices [Line Items]
Foreign Currency Exchange Rate, Translation	43.77		43.77		44.45
Average Foreign Currency Exchange Rate Translation	44.18	41.90	44.56	41.37
Thai baht [Member]
Accounting Polices [Line Items]
Foreign Currency Exchange Rate, Translation	32.52		32.52		32.92
Average Foreign Currency Exchange Rate Translation	32.51	29.95	32.61	29.93

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net loss	$ (1,052)	$ (2,794)
Adjustments to reconcile net loss to net cash provided by operating activities:
Foreign currency gains	0	(3)
Depreciation of gaming equipment and property and equipment	2,277	2,614
Amortization of casino contracts	1,222	1,238
Amortization of intangible assets	151	151
Amortization of contract amendment fees	54	54
Impairment of property and equipment	19	0
Stock-based compensation expense	141	445
Loss on disposition of subsidiary, including property and equipment	0	999
Gain on disposition of gaming equipment and property and equipment	(3)	0
Changes in operating assets and liabilities:
Accounts receivable and other receivables	360	743
Inventories	(1,393)	373
Prepaid expenses and other current assets	(270)	(132)
Prepaids, deposits and other assets	(46)	104
Accounts payable	(349)	(1,107)
Amount due from/to related parties	109	21
Accrued expenses and other liabilities	(1,021)	(1,054)
Customer deposits and other current liabilities	1,502	(29)
Net cash provided by operating activities	1,701	1,623
Cash flows from investing activities:
Construction/purchase of property and equipment	(2,027)	(2,401)
Purchase of gaming machines and systems	(359)	(3,983)
Addition of project costs	0	(1,155)
Proceeds from sale of subsidiary related to discontinued operations	0	365
Proceeds from sale of gaming equipment and property and equipment	32	0
Net cash used in investing activities	(2,354)	(7,174)
Cash flows from financing activities:
Net cash used in financing activities	0	0
Effect of exchange rate changes on cash	16	(25)
Decrease in cash and cash equivalents	(637)	(5,576)
Cash and cash equivalents at beginning of period	5,301	10,365
Cash and cash equivalents at end of period	4,664	4,789
Supplemental disclosure of cash flow information
Interest paid	0	0
Income tax paid	0	0
Non-cash investing/financing activities
Purchase of gaming machines and systems	$ 0	$ 659

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Receivables

6 Months Ended

Jun. 30, 2014

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 5. Receivables

Accounts and other receivables consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Trade accounts	$	906	$	922
Other		103		453
		1,009		1,375
Less: allowance for doubtful accounts		—		—
Net	$	1,009	$	1,375

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Accrued Expenses (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Accrued Expenses [Line Items]
Payroll and related costs	$ 252		$ 601
Professional fees	388		312
Withholding tax expenses	553		551
Other tax expenses	0	[1]	482	[1]
Others	238		420
Totals	$ 1,431		$ 2,366

[1] Other tax expenses as of December 31, 2013 represented an accrued tax liability related to the Philippines operations resulting from the finalization of the Philippines income tax return for the 2010 year. The accrual was reversed in the three-month period ended June 30, 2014.

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Discontinued Operations (Details Textual)	6 Months Ended			1 Months Ended	26 Months Ended		12 Months Ended
	Jun. 30, 2014 USD ($)	Jun. 30, 2014 Dolphin Australia [Member] AUD	Jun. 30, 2014 Dolphin Australia [Member] USD ($)	Sep. 30, 2011 Dreamworld Casino [Member]	Jun. 30, 2014 Dreamworld Casino [Member] USD ($)	Jun. 20, 2014 Dreamworld Casino [Member]	Dec. 31, 2013 Dreamworld Leisure Limited [Member] USD ($)	Jun. 30, 2014 Dreamworld Leisure Limited [Member] USD ($)
Discontinued Operations [Line Items]
Purchase Price For Share Sale Agreement		350,000
Net Of Sub lease Income	350,000
Employee Severance Liability Assumed			750,000
Discontinued Operation Amount Due	1,100,000
Profit Sharing Percentage					20.00%
Lease Initial Expiration Term				20 years
Operating Leases, Rent Expense					5,000
Equity Method Investment, Ownership Percentage						100.00%		100.00%
Disposal Group Including Discontinued Operation Initial Consideration Received								100,000
Disposal Group Including Discontinued Operation Remaining Consideration Monthly Installment Amount								25,000
Disposal Group, Including Discontinued Operation, Consideration								500,000
Disposal Group, Not Discontinued Operation, Loss (Gain) on Write-down							$ 2,500,000
Disposal Group Including Discontinued Operation Remaining Consideration Total Installments								16

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Inventories (Tables)

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories consisted of the following:

(amounts in thousands)	June 30, 2014		December 31, 2013
	(Unaudited)
Raw materials (1)	$	1,717	$	809
Work-in-process (1)		1,182		342
Finished goods		31		367
Spare parts and supplies		127		145
	$	3,057	$	1,663

(1) Raw materials and work-in-process increased from December 31, 2013 to June 30, 2014 in preparation for gaming chip and plaque orders expected to be delivered in the second half of 2014.

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2014

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

The following table details the significant components of revenues and loss from discontinued operations, net of income taxes.

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Revenues from casino operations	$	12	$	907	$	228	$	2,001
Revenues from non-gaming products		—		—		—		2,043
Total revenues from discontinued operations	$	12		907	$	228		4,044
Pre-tax loss from casino operations	$	(239)	$	(476)	$	(395)	$	(765)
Pre-tax income/(loss) from non-gaming products		—		98		—		(2,109)
Benefit for income taxes related to discontinued operations		—		—		—		28
Loss from discontinued operations, net of tax	$	(239)	$	(378)	$	(395)	$	(2,846)

The following table details selected financial information for the discontinued operations in the consolidated statements of comprehensive income.

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Loss from operations	$	(237)	$	(432)	$	(402)	$	(561)
Loss on disposal		—		—		—		(2,442)
Other (1)		(2)		54		7		129
Income tax benefit (2)		—		—		—		28
Loss from discontinued operations, net of tax	$	(239)	$	(378)	$	(395)	$	(2,846)

(1)	Other represented foreign currency exchange differentials from Dreamworld Casino (Pailin) discontinued operations and recognized government grant income from Dolphin Australia discontinued operations.
(2)	Income tax benefit represented a reversal of previously recognized uncertain tax benefits from Dolphin Australia discontinued operations.

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Discontinued Operations

6 Months Ended

Jun. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note 15. Discontinued Operations

From July 2006 until March 2013, the Company’s operations included the development, manufacture and sale of gaming chips and plaques from its subsidiary, Dolphin Australia. It also conducted the development, manufacture and sale of non-gaming plastic products for a number of industries, including the automotive industry, from the Melbourne facility.

On February 22, 2013, the Company entered into a Share Sale Agreement with the then general manager of the Dolphin Australia operations, pursuant to which it agreed to sell him the portion of its business dedicated to the non-gaming plastic products, mainly automotive parts. The sale was completed on March 28, 2013. In connection with the sale of non-gaming operations, the Company relocated its gaming products operations, which included gaming chips and plaques, from Melbourne, Australia to Hong Kong. Commercial production in the new facility commenced in May 2013.

Prior to the completion of the sale, the Company transferred out of Dolphin Australia to Dolphin Hong Kong, both of which are subsidiaries wholly-owned by the Company, all inventory on hand and all assets and operations relating to the Company’s gaming chips and plaques operations, including all trademarks, patent rights and other intellectual property.

The purchase price received pursuant to the Share Sale Agreement was 350,000 Australian dollars (AUD). The Company also agreed to assume Dolphin Australia’s liabilities for (i) severance under Australian labor laws for those employees to be terminated by Dolphin Australia as part of the transactions, approximately $750,000, (ii) the lease for the Melbourne facility through the end of its present term expiring in January 2014, net of sub-lease income, approximately $350,000, and (iii) all Dolphin Australia payables, net of receivables, relating to both gaming and non-gaming operations up to March 28, 2013.

The buyer owed the Company $1.1 million for the settlement of working capital related to the sale of the non-gaming Dolphin assets. As of December 31, 2013, the outstanding balance had been fully settled.

As part of the sale transaction, the Company also agreed to grant Dolphin Australia a non-transferable, substantially royalty-free license to utilize certain trademarks and patent rights in connection with Dolphin Australia’s manufacture and sale of plastic products for the non-gaming industries.

.

From May 2012 until June 2014, the Company owned and operated a casino in the Pailin Province of Cambodia (“Dreamworld Casino (Pailin)”). Dreamworld Casino (Pailin) was constructed on land leased from a local land owner and, in consideration, the land owner was entitled to receive a monthly rental fee in the amount of $5,000 and 20% of the profit before depreciation (the total gross revenue of the casino less any payouts paid to customers, operating expenses, and gaming and non-gaming taxes on the casino’s revenue). The initial lease term was 20 years, commencing in September 2011, and was subject to renewal by the parties in writing.

On June 1, 2014, the Company ceased operations of Dreamworld Casino (Pailin). On June 20, 2014, the Company entered into an agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited (“DWP”), a wholly-owned Cambodian subsidiary of the Company established for the purposes of owning and operating Dreamworld Casino (Pailin), to a local Cambodian individual. In connection with the sale of the issued capital shares of DWP, on June 20, 2014 the Company and its partner in the operations entered into an agreement to terminate the undertaking agreement and lease agreements  with the partner and all future obligations thereunder including future lease payments owed by the Company.

The sale includes all assets of DWP with the exception of all electronic gaming machines, certain surveillance equipment and other assets excluded in the agreement and prohibits any use of the Dreamworld brand name by the buyer. Total consideration paid to the Company by the buyer will be $500,000, of which $100,000 was paid at the time of entering the agreement and the balance is to be paid in sixteen $25,000 monthly installments commencing within one month of the signed agreement. The parties expect to complete the sale transaction subject to the buyer’s receipt of certain government approvals, which is expected within the next few months. The Company intends to recognize the anticipated gain on the disposal of the entity when the transaction is expected to close.

In compliance with the annual valuation review of the Dreamworld Casino (Pailin) facility and gaming assets under U.S. Generally Accepted Accounting Principles (GAAP), the Company had recorded an impairment charge of approximately $2.5 million as of December 31, 2013 related to these operations. The impairment charge represented the entire capital expenditure incurred by the Company for the property as of December 31, 2013, with the exception of those assets that the Company believed could be redeployed to other existing properties.

The following table details the significant components of revenues and loss from discontinued operations, net of income taxes.

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Revenues from casino operations	$	12	$	907	$	228	$	2,001
Revenues from non-gaming products		—		—		—		2,043
Total revenues from discontinued operations	$	12		907	$	228		4,044
Pre-tax loss from casino operations	$	(239)	$	(476)	$	(395)	$	(765)
Pre-tax income/(loss) from non-gaming products		—		98		—		(2,109)
Benefit for income taxes related to discontinued operations		—		—		—		28
Loss from discontinued operations, net of tax	$	(239)	$	(378)	$	(395)	$	(2,846)

The following table details selected financial information for the discontinued operations in the consolidated statements of comprehensive income.

	Three-Month Periods Ended June 30,				Six-Month Periods Ended June 30,
(amounts in thousands)	2014		2013		2014		2013
Loss from operations	$	(237)	$	(432)	$	(402)	$	(561)
Loss on disposal		—		—		—		(2,442)
Other (1)		(2)		54		7		129
Income tax benefit (2)		—		—		—		28
Loss from discontinued operations, net of tax	$	(239)	$	(378)	$	(395)	$	(2,846)

(1)	Other represented foreign currency exchange differentials from Dreamworld Casino (Pailin) discontinued operations and recognized government grant income from Dolphin Australia discontinued operations.
(2)	Income tax benefit represented a reversal of previously recognized uncertain tax benefits from Dolphin Australia discontinued operations.