4.Summary of Selected Significant Accounting Policies

(a)

Cash and Cash Equivalents  Cash and cash equivalents comprise of cash on hand; current balances with banks and similar institutions; and term deposits of three months or less with banks and similar institutions. The carrying amounts of cash at banks and on hand and term bank deposits approximate their fair values.

(b)

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 include room rentals, sales of food, beverage, cigarettes, spa services, and casino logo merchandise,which are recognized at the time the related services are performed or goods sold. Rooms revenue from the hotel segment represented 4.3% and 0.0% of total revenues, for the quarters ended March 31, 2015 and 2014, respectively. Food and beverage (“F&B”) revenues from the hotel segment represented approximately 2.4% and 0.0% of total consolidated revenues for the quarters ended March 31, 2015 and 2014, respectively.

(c)

Business Acquisitions  Assets acquired and liabilities assumed in business combinations are recorded on the Company’s consolidated balance sheets as of the respective acquisition dates based upon their estimated fair values at such dates. The results of operations of businesses acquired by the Company have been included in the consolidated statements of income since their respective dates of acquisition. In certain circumstances, the purchase price allocations may be based upon preliminary estimates and assumptions. Accordingly, the allocations are subject to revision until the Company receives final information and other analyses during the measurement period ending a year after the date of acquisition.

(d)

Segment Reporting  Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting, the Company has two reportable segments, a casino segment and a hotel segment. ASC 280 designates the internal reporting that is used by management for making operating decisions and assessing performance as the source of the Company’s reportable segments. The Company is including this segment reporting under Note 6 below.

(e)

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, restricted stock, and deferred compensation stock. Thus, unexercised stock options to purchase up to 585,100 and 522,600 shares as of March 31, 2015 and March 31, 2014, respectively, were included in the computation of diluted earnings per common share, if such unexercised stock options were “in-the-money” and vested. Restricted stock to purchase up to an aggregate of 75,000 shares as of March 31, 2015 and March 31, 2014 were also respectively included, if they were “in-the-money” and vested. Warrants to purchase up to 75,000 shares as of March 31, 2014 were also included if they were “in-the-money,” but were not included in 2015 as they had expired in November 2014. In addition, 423,664 and 309,606 issuable shares, as of March 31, 2015 and March 31, 2014, respectively, under the Company’s Deferred Compensation Plan were also included in the computation.

The Company has not paid dividends on its Common Stock since inception. Our stock repurchase program expired in November 2014.

A table illustrating the impact of dilution on earnings per share is presented below:

	(UNAUDITED)
	For the Three Months Ended
(amounts in thousands, except for	March 31,
share and per share information)	2015		2014
Basic earnings per share:
Net income	$	523	$	485

Weighted average common shares	8,821,205		8,809,894

Basic earnings per share	$	0.06	$	0.06

Diluted earnings per share:
Net income	$	523	$	485

Weighted average common shares	8,821,205		8,809,894

Addition due to the effect of dilutive securities using the treasury stock method:	14		2,482
Stock options, restricted stock and warrants Stock issuable under the Deferred Compensation Plan	423,664		309,606

Dilutive potential common shares	9,244,883		9,121,982

Diluted earnings per share	$	0.06	$	0.05

(f)

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, and a parcel of land in Hate (upon a portion of which the Route 59 Casino and Hotel Savannah are situated). Goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. Goodwill impairment tests require the Company to first assess qualitative factors, which include macroeconomic conditions, financial performance, and industry and market considerations, to determine whether it is necessary to perform a two-step quantitative goodwill impairment test. TWC 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. TWC has allocated the goodwill over two geographical reporting units that are components of the casino segment and are classified as the “German reporting unit” which consists of the Ceska casino and the “Austrian reporting unit” which consists of the land in Hate. There were no indicators of impairment present during the first quarter of 2015; therefore, TWC determined that there was no impairment of goodwill at March 31, 2015. The Company expects to perform its next required annual assessment of goodwill during the third quarter of 2015. Changes to goodwill during the periods presented are strictly related to the fluctuation in foreign currency exchange rates.

(g)

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

Buildings		20-50 years
Furniture, fixtures and equipment		3-12 years
Leasehold improvements		5-20 years

At March 31, 2015 and December 31, 2014, land, property and equipment consisted of the following:

	As of March 31, 2015			As of December 31, 2014
	(unaudited)

Land	$	2,798		$	3,148
Building and improvements	29,806			33,480
Furniture, fixtures and equipment	9,903			10,940
	42,507			47,568
Less accumulated depreciation and amortization	(11,155		)	(12,099		)

	$	31,352		$	35,469

The reduction in asset value at the end of the first quarter of 2015 was primarily due to the impact of declining currency value of the CZK versus the USD as translated to USD. The variance is recorded in other comprehensive loss for the three months ended March 31, 2015. (See also Note 4(i) “Foreign Currency Translation” and Note 4(k) “Comprehensive Income (Loss)” below).

(h)

Impairment of 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 indicators of impairment for long-lived assets recorded for the three months ending March 31, 2015 and 2014.

(i)

Foreign Currency Translation  The Company complies with requirements for reporting foreign currency translation, which require that for foreign subsidiaries whose functional currency is the local foreign currency, balance sheet accounts are translated at exchange rates in effect at the end of the period and resulting translation adjustments are included in “accumulated other comprehensive income (loss).” Statement of income accounts are translated by applying monthly averages of daily exchange rates on the respective monthly local statement of operations accounts for the year.

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

Applicable

Goodwill

As of March 31, 2015 (in thousands, except FX)

Foreign Exchange
Rate (“FX”) (2)

German
reporting unit

Austrian
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 March 31, 2015 FX rate of:

25.5860

USD

4,029

USD

711

USD

4,740

Net cumulative change to goodwill due to foreign currency translation

USD

987

USD

174

USD

1,161

(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.

(j)

Stock-based Compensation — The Company accounts for stock options and warrants using the modified prospective method in accordance with accounting and disclosure requirements for compensation-stock compensation. Under this method, compensation costs include the estimated grant date fair value of the awards amortized over the options’ vesting period. The Company currently utilizes the Black-Scholes option pricing model to measure the fair value of stock options granted to certain key management employees (“KMEs”). Stock-based compensation was approximately $15 and $0 for the quarters ended March 31, 2015 and 2014, respectively, and is included in selling, general and administrative expenses in the consolidated statements of income.

(k)

Comprehensive Income (Loss) — The Company complies with requirements for reporting comprehensive income (loss). Those requirements establish rules for reporting and display of comprehensive income and its components. Furthermore, they require the Company’s change in the foreign currency translation adjustments to be included in other comprehensive income (loss). There are no other components of the Company’s comprehensive income (loss) in the quarters ended March 31, 2015 and 2014.

(l)

Czech Gaming Taxes — The gaming taxes are summarized in the following table:

Based on the Gaming Tax Law

that became effective January 1, 2012.

Live Games		20% Gaming Tax (*) from revenue earned from live games (70% of tax paid to the federal government; 30% paid to the local municipality).

Slots		20% Gaming Tax (*) from revenue earned from slot games (20% of tax paid to the federal government; 80% paid to the local municipality);
		Fifty-five Korunas (or two U.S. dollars) Gaming Tax per Slot Machine, per Day (paid to the federal government).

* Gaming taxes are to be paid quarterly, by the 25th day following the end of a quarter.

TWC was current on all of its Czech gaming tax payments at March 31, 2015 and through the date of this report.

TWC’s gaming-related taxes and fees, which are recognized in the cost of revenues, for the three months ended March 31, 2015 and 2014 are summarized in the following table:

	(UNAUDITED)
	For the Three Months Ended
(amounts in thousands)	2015			2014

Gaming revenues (excluding ancillary revenues)	$	8,199		$	8,314

Gaming taxes	1,709			1,750
Gaming taxes as % of gaming revenues (above)	20.8		%	21.0		%

In conformity with the European Union (“EU”) taxation legislation, the Czech Republic’s VAT has gradually increased from 5%, when that country joined the EU in 2004, to 21%, the effective rate since 2013. Unlike in other industries, VATs are not recoverable for gaming operations. The recoverable VAT under the Hotel Savannah and Hotel Columbus operations was not material for the quarters ended March 31, 2015 and 2014, respectively.

(m)

Income Taxes — The Company complies with accounting and reporting requirements with respect to accounting for U.S. federal and foreign income taxes, which require an asset and liability approach to financial accounting and reporting for 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. In accordance with GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. This policy also provides guidance on thresholds, measurement, de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial statement comparability among different entities. The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other expenses, respectively. No interest expense or penalties have been recognized as of and for the three months ended March 31, 2015 and 2014, respectively. The Company is subject to income tax examinations by major taxing authorities for all tax years since 2011. 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, regulations and interpretations thereof.

The Company incurred an estimated foreign income tax expense of $282 and $231 for the three months ended March 31, 2015 and 2014, respectively. Of the $282 foreign tax expense in 2015, approximately $21 was incurred by the German hotel operation, which was acquired in September 2014. The Czech Republic has an applicable corporate income tax of 19%, while Germany has an applicable corporate income tax rate of 30%. Estimated Czech corporate income tax payments are required to be paid quarterly. TWC was current on all of its tax payments at March 31, 2015 and through the date of this report.

(n)

Recent Accounting Pronouncements — In May 2014, the FASB issued guidance on recognizing revenue from contracts with customers. The guidance clarifies the principles for recognizing revenue and establishes a common revenue standard for US GAAP and International Financial Reporting Standards. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is not permitted. Retrospective application is required. The Company is currently evaluating the impact of adopting and does not expect the standard to have any material impact on its consolidated financial statements.

In June 2014, the FASB issued guidance on stock compensation that requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The guidance is effective for annual reporting periods beginning after December 31, 2015, with early adoption permitted. The Company is evaluating the potential impacts of adopting the new guidance on its existing stock-based compensation plans.

In August 2014, the FASB issued guidance on the presentation of financial statements for a going concern. The aim is to provide guidance on management’s responsibility to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. This guidance is effective for fiscal years ending after December 15, 2016, and annual and interim periods thereafter. The Company is reviewing the new standard for adoption and does not expect this standard to have a material impact on the Company’s consolidated financial statements.