6. Summary of Selected Significant Accounting Policies.

(a) Revenue recognition- Casino revenue is defined as the net win from gaming activities, which is the difference between gaming wagers and the amount paid out to patrons, and is recognized on the day it is earned. Revenues generated from ancillary services, including lodging, sales of food, beverage, cigarettes, and casino logo merchandise are recognized at the time the related services are performed and represent, on an individual basis, less than five percent of total revenues.

(b) Earnings per share- Basic earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share incorporate the dilutive effect of common stock equivalents on an average basis during the period. The Company’s common stock equivalents currently include stock options, warrants and deferred compensation stock. Thus, unexercised stock options to purchase up to 660,325 and 662,425 shares as of June 30, 2013 and June 30, 2012, respectively, were included in the computation of diluted earnings per common share, if such unexercised stock options were “in-the-money” and vested. Warrants to purchase up to 75,000 shares were also included, if they were “in-the-money” and vested. In addition, 224,762 and 149,654 issuable shares, as of June 30, 2013 and June 30, 2012, respectively, under the Company’s Deferred Compensation Plan were also included in the computation.

A table illustrating the impact of dilution on earnings per share, based on the treasury stock method, is presented below:

	(UNAUDITED)
	For the Six Months Ended				For the Three Months Ended
(amounts in thousands, except for	June 30,				June 30,
share information)	2013		2012		2013		2012
Basic Earnings Per Share:
Income from continuing operations	$	673	$	749	$	405	$	246
Weighted average common shares	8,826,904		8,871,635		8,825,343		8,871,635
Basic earnings per share	$	0.08	$	0.08	$	0.05	$	0.03

Diluted Earnings Per Share:
Income from continuing operations	$	673	$	749	$	405	$	246
Weighted average common shares	8,826,904		8,871,635		8,825,343		8,871,635
Addition due to the effect of dilutive securities:
Stock options and warrants (1)	18		10,038		18		10,038
Stock issuable under the Deferred Compensation Plan	224,762		149,654		224,762		149,654
Dilutive potential weighted average common shares	9,051,684		9,031,327		9,050,123		9,031,327
Diluted earnings per share	$	0.07	$	0.08	$	0.04	$	0.03

(1) Per the treasury stock method.

(c) Goodwill- Goodwill represents the excess of the cost of the Company’s Czech subsidiaries over the fair value of their net assets at the date of acquisition, which consisted of the Ceska casino, the Rozvadov casino (which was sold in 2012) and the land in Hate, which is currently the Route 59 Casino. Goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. The Company has allocated the goodwill over two reporting units that are components of the operating segment “Czech subsidiaries” and are classified as the “German reporting unit” which consists of the Ceska casino, and the “Austrian reporting unit” which consists of the Route 55 and Route 59 casinos and the Hotel Savannah. Goodwill impairment tests require the Company to first assess qualitative factors to determine whether it is necessary to perform a two-step quantitative goodwill impairment test. The Company is not required to calculate the fair value of a reporting unit unless it determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The Company assesses the potential impairment of goodwill annually (as of September 30th) and on an interim basis whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Upon completion of such review, if impairment is found to have occurred, a corresponding charge will be recorded.

Based on TWC’s own assessment of qualitative factors which included an analysis of macroeconomic conditions, financial performance, and industry and market considerations, the Company concluded that it was not necessary to perform a two-step quantitative goodwill impairment test on an interim basis in this quarter and that the goodwill of the Company was not impaired as of June 30, 2013.

(d) Property and equipment - Property and equipment is stated at cost less accumulated depreciation and amortization. TWC capitalizes the cost of improvements that extend the life of the asset and expenses maintenance and repair costs as incurred. The Company provides for depreciation and amortization using the straight-line method over the following estimated useful lives:

Asset		Estimated Useful Life

Building and improvements		5-50 years
Furniture, fixtures and other equipment		4-12 years

At June 30, 2013 and December 31, 2012, property and equipment consisted of the following:

	As of June 30, 2013			As of
	(unaudited)			December 31, 2012
Land	$	2,705		$	2,691
Building and improvements	31,199			31,131
Furniture, fixtures and other equipment	12,001			13,122

	45,905			46,944
Less accumulated depreciation and amortization	(12,335		)	(12,877		)

	$	33,570		$	34,067

(e) Impairment for long-lived assets- The Company periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable assets to be held and used may be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived assets, or the appropriate grouping of assets, is compared to the carrying value to determine whether an impairment exists. If an asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. An estimate of the asset’s fair value is based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The Company reports an asset to be disposed of at the lower of its carrying value or its estimated net realizable market value. There were no impairment losses for long-lived assets recorded for the six months ending June 30, 2013 and 2012.

(f) Foreign currency translation - Foreign subsidiaries whose functional currency is the local foreign currency, balance sheet accounts and cash flows are translated at exchange rates in effect at the end of each reporting period and resulting translation adjustments are included in “accumulated other comprehensive income.” Statement of operations accounts are translated by applying the monthly averages of the daily exchange rates of one (1) US dollar (“USD”) to the Czech Koruna (“CZK”) on the respective monthly local Czech statement of operations accounts for the period.

The impact of foreign currency translation on goodwill is presented below:

Applicable

Goodwill

(UNAUDITED)

Foreign Exchange

German

Austrian

As of June 30, 2013 (in thousands, except FX)

Rate (“FX”)(2)

reporting unit

Total

Residual balance, as of January 1, 2003 (in USD) (1)

USD

3,042

USD

537

USD

3,579

USD residual balance, translated at June 30, 1998 (date of acquisition) FX rate of:

33.8830

CZK

103,072

CZK

18,195

CZK

121,267

2003 CZK balance, translated to USD, at June 30, 2013 FX of:

19.9699

USD

5,161

USD

911

USD

6,072

Net increase to Goodwill

USD

2,119

USD

374

USD

2,493

(1) Goodwill was amortized over 15 years until the Company started to comply with revised GAAP requirements, as of January 1, 2002. This balance represents the remaining, unamortized goodwill, after an impairment charge taken prior to January 1, 2003.

(2) FX (interbank) rates taken from www.Oanda.com.

(g) Stock-based compensation - The Company recognizes the fair value of stock-based compensation in the condensed consolidated statement of operations. The fair value of the Company’s stock option awards are estimated using a Black-Scholes option valuation model. This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. In addition, the calculation of compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of stock-based awards is amortized over the vesting period of the award. The award expenses for the six months ended June 30, 2013 and 2012 were $0 and $67, respectively.

(h) Stock repurchase program - On November 12, 2012, TWC’s board of directors approved a stock repurchase program (the “program”), in accordance with the retirement method, authorizing the repurchase of up to 500,000 shares of the Company’s Common Stock, over a 12-month period. The program does not obligate the Company to acquire any particular amount of Common Stock, and it could be modified, extended, suspended or discontinued at any time. Thus, pursuant to the stock repurchase program and through a registered broker-dealer, the Company conducted repurchases on the open market, arriving at an outstanding 8,825,835 shares at June 30, 2013. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors. Repurchases may be conducted in the open market or in privately negotiated transactions. The repurchase transactions since the inception of the program are listed in the table below:

ISSUER PURCHASES OF EQUITY SECURITIES

Date	Total Number of Shares Purchased	Average Price Paid per Share		Cumulative Total of Number of Shares Purchased as Part of Publicly Announced Plan	Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plan or Program
11/19/2012	4,900	$	2.50	4,900	495,100
12/20/2012	30,000	$	2.65	34,900	465,100
01/16/2013	5,000	$	2.50	39,900	460,100
01/18/2013	900	$	2.50	40,800	459,200
01/25/2013	4,500	$	2.50	45,300	454,700
03/08/2013	100	$	2.54	45,400	454,600
03/25/2013	200	$	2.50	45,600	454,400
03/26/2013	200	$	2.65	45,800	454,200
04/04/2013	250	$	2.65	46,050	453,950
04/09/2013	250	$	2.40	46,300	453,700

(i) Comprehensive income (loss) — The Company’s change in the foreign currency translation adjustments is included in other comprehensive income (loss).

(j) Promotional allowances — Promotional allowances primarily consist of food and beverages and, to certain of its valuable players, hotel accommodations, all of which are furnished gratuitously. For the six months ended June 30, 2013 and 2012, revenues do not include the retail amount of food and beverages and hotel accommodations of $1,962 and $2,033, respectively, provided at no-charge to customers. The retail value of the food and beverages given away is determined by dividing the food and beverage costs charged to the gaming operation of $727 and $700, for the respective periods, by the average percentage of cost of food and beverages sold. The cost of hotel accommodations is either the out-of-pocket expenses paid to other hotels that provide rooms for our players or the retail charge for rooms at the Hotel Savannah and at our VIP hotel rooms at Route 55 and at Ceska.

The promotional allowances are summarized below:

	(UNAUDITED)
	For the Six Months Ended						For the Three Months Ended
	June 30,						June 30,
(amounts in thousands)	2013			2012			2013			2012

Cost of gratuitous food and beverages (A)	$	727		$	700		$	156		$	150
Average cost of food and beverages sold (B)	37.6		%	34.7		%	41.6		%	37.2		%

Retail value of food and beverages (A/B)	$	1,934		$	2,017		$	375		$	403
Retail value of hotel accommodations	28			16			14			8
Total promotional allowances	$	1,962		$	2,033		$	389		$	411

(k) Czech gaming taxes — Effective January 1, 2012, TWC merged its three Czech slot subsidiary companies, ACC Slot, s.r.o., Hollywood Spin s.r.o. and LMJ Slot s.r.o. into its primary Czech operating entity company, American Chance Casinos a.s., in an effort to eliminate and/or reduce redundancy in operations, maintenance and operating costs.

The new Czech Gaming Tax Law is summarized in the following table:

		New Gaming Tax Law *
		(effective January 1, 2012)

Live Games		20% Gaming Tax from Win (70% of tax to federal; 30% to local municipality).

Slots		20% Gaming Tax from Win (20% of tax to federal; 80% to local municipality); Fifty five Korunas (or three dollars) Gaming Tax per Slot Machine, per Day.

Net Income		19% corporate income tax on adjusted net income earned in the Czech Republic, net of exemptions (to federal)

* The new Gaming Tax is to be paid quarterly, by the 25th day following the end of a quarter,while the 2012 corporate income tax obligation was paid by end of June 2013, to be followed by estimated quarterly payments beginning in September 2013.

TWC’s gaming-related taxes and fees for the six and three months ended June 30, 2013 and 2012 are summarized in the following table:

	(UNAUDITED)
	For the Six Months Ended						For the Three Months Ended
(amounts in thousands)	2013			2012			2013			2012

Gaming revenues (live-game and slot only)	$	15,710		$	16,044		$	8,253		$	7,481

Gaming taxes on live games and slots	3,305			3,342			1,732			1,578
Licensing fees (eliminated in 2012) *				283						139
Total gaming taxes and fees	$	3,305		$	3,625		$	1,732		$	1,717
as % of gaming revenue	21.0		%	22.6		%	21.0		%	23.0		%

* As the non-refundable, six-month licensing fees effective for January 2012 through June 2012 were paid in October 2011, prior to the passing of New Gaming Tax laws in December 2011, the Company incurred additional taxes for the first six months of 2012. Excluding the non-recurring licensing fees, the gaming taxes and fees for the three months and six months ending June 30, 2012 would have been 21.1% and 20.8% of gaming revenue, respectively.

In conformity with the European Union (“EU”) taxation legislation, when the Czech Republic joined the EU in 2004, its VAT increased from 5% to 22%, from January 2004 through December 2009, and ranged between 9% and 19% for all intra-EU generated purchases. Between January 1, 2010 and December 31, 2012, VAT rates increased to between 10% and 20%, then to 15% and 21%, beginning on January 1, 2013. The applicable VAT rate varies depending on the product or services sold and/or received. All non-EU generated purchases were impacted by identical VAT increases, beginning in May 2004. The VAT top rate rose to 21% beginning on January 1, 2013. The Company pays its VAT directly to its vendors in connection with any purchases that are subject to this tax. Unlike in other industries, VATs are not recoverable for gaming operations. The recoverable VAT under the Hotel Savannah operation was non-material for the six and three months ended June 30, 2013 and 2012, respectively.

(l) Income taxes — Deferred income tax assets and liabilities are computed for differences between the financial statement and the tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. Accounting for income taxes prescribes, among other things, a recognition threshold and measurement attributes for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a company’s income tax return. Accounting for income taxes utilizes a two-step approach for evaluating uncertain tax positions. Step One, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. Step Two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority. The Company is subject to income tax examinations by U.S. and foreign taxing authorities for all tax years subsequent to 2008. The adoption of the provisions of the Financial Accounting Standards Board (“FASB”) standard, “Accounting for Income Taxes” did not have a material impact on the Company’s consolidated financial statements. However, management’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulation and interpretations, thereof. During the six months ended June 30, 2013, the Company recognized no adjustments for uncertain tax positions.

Effective January 1, 2012, the Czech government instituted an effective corporate income tax, currently at 19.0%, on gaming revenues, which prior to the law changes were subject only to gaming taxes. As a result of the new tax laws and due to the materiality of the income tax liability, the Company accrued an estimated foreign income tax expense of $364 and $684 for the six months ended June 30, 2013 and 2012, respectively. The foreign income tax expense of $355 for the six months ended June 30, 2013 included a 2012 accrual adjustment. Foreign book tax differences on fixed assets have resulted in a long-term deferred tax liability of $551, which is included in long-term liabilities on the balance sheet. Corporate income tax is payable by the end of June of the subsequent year, followed by estimated quarterly corporate income tax payments beginning in September 2013.

(m) Recently issued and adopted accounting standards:

In February 2013, the FASB issued guidance to improve the reporting of amounts reclassified out of accumulated other comprehensive income (“AOCI”). The guidance amends the presentation of changes in AOCI and requires an entity to disaggregate the total change of each component of other comprehensive income either on the face of the statement of income or as a separate disclosure in the notes. This guidance is effective prospectively for fiscal years beginning after December 15, 2012. The Company adopted the guidance on January 1, 2013, as required. There was no material impact on its consolidated financial statements resulting from the adoption.

(n) New accounting pronouncement:

In March 2013, the FASB issued guidance on a parent’s accounting for the cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. The guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. This guidance is effective prospectively for fiscal years beginning on or after December 15, 2013, and for interim periods within those fiscal years. The Company will adopt the guidance on January 1, 2014, as required, and it believes the adoption of this guidance will not have a material impact on its consolidated financial statements.