4. Commitments and Contingencies

Lease Obligations- The Company is obligated under one operating lease, for its corporate office space, expiring in March 2015. Future aggregate minimum annual rental payments under this lease for the next two years are as follows:

Twelve Months Ending March 31,
2014	$	88
2015	$	89

Rent expense under this lease was approximately $22 and $21 for the three months ended March 31, 2013 and 2012, respectively.

The Company is also obligated under certain five-year, slot equipment operating leases, the projected costs of which are not included in the table above due to fluctuating inventory, expiring over staggered years, which provide for a monthly fixed rental fee per slot machine, and an option for replacement with different/newer machines during the term of the lease. In the first quarter of 2013, the Company’s slot lease expenses were approximately $599 versus $635 in the comparable period in 2012.

Employment Agreements- The Company’s July 1, 2005 employment agreement with its Chief Executive Officer (“CEO”), Mr. Rami S. Ramadan, absent the intervention of either party by September 30th of each year, will renew automatically for another calendar year, currently ending December 31, 2013. In addition to a perpetually renewable employment term of one year absent the intervention of either party, the agreement provides for annual compensation, plus participation in the Company’s benefits programs and equity incentive plans. As of March 31, 2013, the Company is contractually obligated to pay approximately $338 of annual base compensation for the remainder of the year 2013.

401 (k) and Profit Sharing Plan- The Company maintains a contributory 401(k) plan and a profit sharing plan. These plans are for the benefit of all eligible corporate employees, who may have up to 16.5% of their salary withheld, not to exceed the maximum, federally-allowed amount. The Company makes an employer-matching contribution of 60 cents for each employee dollar contributed, per each pay period.

Notes Receivable- In connection with the TWC’s management of the Grand Casino Lav, on January 10, 2007, the Company extended three Euro-denominated loans totaling €967, or $1,240, to the Grand Hotel Lav, d.o.o. (“GHL”), the owner of the Grand Casino Lav and Nightclub. At March 31, 2013, the balance of approximately €472, or $633 in principal amount, remains payable, as per the executed payment allocation and pledge of payment agreement related to the existing credit agreement and the 2006 Management Agreement. In April 2013, GHL, under bank receivership since March 2013, acknowledged the outstanding debt and requested an extension for the repayment of the remaining balance in equal monthly installments ending December 2013, which TWC has granted. TWC still holds eight unexercised demand notes and believes the loan is fully collectible.

Advance Receivable- In August 2009, in pursuit of obtaining a gaming license in Hungary, TWC partnered with Vigotop Limited, a Cyprus-based company (“Vigotop”), to form a Hungarian company, KC Bidding Kft. (“KCB”), in which TWC became holder of a 25% equity interest. Subsequently, TWC extended a three-year, 1.0% interest per annum loan of approximately €930 (or about $1,191) to KCB to form a Hungarian license concession company, SDI Europe Kft. (“SDI”), for the purpose of eventually operating the Class I casino in Hungary. SDI is a wholly-owned subsidiary of KCB. Through SDI’s intermediary, IMT LLC, a Delaware limited liability company, American Chance Casinos (“ACC”), an operations subsidiary of TWC, received a three-year, 2.1505% interest per annum loan of approximately $1,165. TWC expects the full lump sum repayment of advance receivable, upon maturity, from KCB, to offset its outstanding loan with IMT LLC. TWC management believes the loan to KCB is fully collectible. In the event KCB defaults in its repayment obligation to TWC with respect to the above mentioned loan, IMT will cancel the loan obligation from ACC to IMT and ACC will no longer be obligated to pay off the loan balance of approximately €910, or $1,200. In November 2010, the loan agreement between ACC and KCB was amended to change the maturity date to January 31, 2016 from December 31, 2012 and to establish an interest rate of 1% from January 1, 2012 through the new maturity date of the loan. In March 2011, the loan agreement between IMT and ACC was amended to change the maturity date to February 21, 2016 from January 31, 2013, and to establish an interest rate of 1% from January 1, 2012 through the new maturity date of the loan. As of March 31, 2013, the principal on the TWC loan to KCB was approximately $1,191 and was included in the Company’s deposits and other assets, while the principal on the IMT loan to TWC was approximately $1,165 and was included in the Company’s long-term debt.

Since January 12, 2011, there have been several lawsuits and countersuits initiated by the Ministry for the National Economy of Hungary (the “MOE”) and by KCB, contesting the cancellation of the concession contract, which was signed on October 9, 2009, and alleged breaches of its terms. The various court hearings have either been inconclusive or postponed pending further discovery processes. The next court hearing, in the discovery process, in the case of KCB versus the State of Hungary is set for June 19, 2013; all other cases have been suspended pending the outcome of this case. Notwithstanding the foregoing, litigation results are never predictable. Further, by virtue of an existing agreement between Vigotop and TWC, all costs associated with obtaining the casino license were and will be borne by Vigotop. In the opinion of TWC’s management, after consultation with legal counsel, the amount of ultimate liability with respect to these actions, if adversely decided to KCB, will not materially affect the Company’s consolidated financial statements and/or results of operations.

Taxing Jurisdiction - The Czech Republic currently has a number of laws related to various taxes imposed by governmental authorities. Applicable taxes include corporate income tax, gaming tax, value-added tax (“VAT”), payroll (social) taxes and, formerly, charity taxes. Tax declarations, together with other legal compliance areas (e.g. customs and currency control matters) are subject to review and investigation by a number of governmental authorities, which are enabled by law to impose fines, penalties and interest charges, and create tax risks in the Czech Republic. Management believes that it has adequately provided for all of its Czech tax liabilities.

Effective January 1, 2012, charity taxes were eliminated in lieu of a new overall flat gaming tax (the “New Gaming Tax”) of 20.0% on all live game and slot revenues, as well as an applicable 19% corporate income tax on adjusted Czech net income. Additionally, the administration tax and state supervision fee have been eliminated in lieu of a per slot, per diem tax, payable along with the New Gaming Tax. The New Gaming Tax is payable by the 25th day following the end of each quarter, while the corporate income tax is payable by June 30th of the subsequent year, and, estimated quarterly income tax payments beginning in September 2013. (See also Note 6(k) “Czech Gaming Taxes” and Note 6(l) “Income Taxes” below).

Legal Proceedings- The Company is sometimes subject to various contingencies, the resolutions of which, its management believes, will not have a material adverse effect on the Company’s consolidated financial position or results of operations. TWC was not involved in any material litigation during the quarter ended March 31, 2013, and through the date of this filing.