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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K


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

For the Fiscal Year Ended December 31, ~~2016~~2017


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

For the transition period from to .

Commission File No.: 000-25244

TRANS WORLD CORPORATION

(Exact name of Registrant as specified in its charter)


Nevada		13-3738518
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)


545 Fifth Avenue, Suite 940
New York, New York		10017
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 983-3355

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒

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 ☒ 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 during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). YES ☒ NO ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-X is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the ~~Registrant~~registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” ~~and~~ “smaller reporting company,” and “emerging growth company” in ~~Rule12b~~Rule 12b-2 of the ~~Securities~~ Exchange Act ~~of 1934~~.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer (Do not check if a smaller reporting company) ☐ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

The aggregate market value of the Common Stock of the Registrant held by non-affiliates as of June 30, ~~2016~~2017, based upon the average bid and asked price of $35.7075 as reported on the OTCQB on that date, was $351,~~713~~054,~~786~~313.00. As of March 722, ~~2017~~2018, there were 8,~~854~~879,011 shares of Common Stock of the Registrant deemed outstanding.

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES ☐ NO ☐

Documents incorporated by reference: ~~Portions of the definitive Proxy Statement prepared for the 2017 Annual Meeting of Stockholders are incorporated by reference into Part II and III of this Form 10-K~~None.

Table of Contents

TRANS WORLD CORPORATION
FORM 1O-K

TABLE OF CONTENTS

			Page
PART I.
	Item 1.	~~Business~~Forward Looking Statements	1
		Business	1
		General Development of Business	1
		Corporate Information	2
		Description of Business	2
		Market Overview and Competition	2
		Costs and Effects of Environmental Compliance	3
		Research and Development	3
		Available Information - Internet Access	3
		Our Facilities	4
		Intellectual Property	5
		Long Range Objectives	56
		Marketing and Sales	56
		Regulations and Licensing	6
		Iran Sanctions Disclosure	89
		Taxation	89
		Our Employees	1112
	Item 1A.	Risk Factors	1112
	Item 1B.	Unresolved Staff Comments	1718
	Item 2.	Properties	1819
		Our Corporate Offices	1920
		Czech Republic	1920
		Germany	1920
	Item 3.	Legal Proceedings	20
		Austria	21
	Item 4.	Mine Safety Disclosures	20
	Item 3.	Legal Proceedings	21
	Item 4.	Mine Safety Disclosures	21
PART II.
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2122
		Return Analysis	2122
		Market Prices and Liquidity	2223
		Dividends	2223
		Sales of Unregistered Equity Securities; Use of Proceeds from Registered Securities	2223
	Item 6.	Selected Financial Data	2425
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2527
		Forward-Looking Statements	2527
		Performance Measures and Indicators	2527
		Exchange Rates	26
		New Gaming Acts and Their Impacts	27
		Critical Accounting Policies	27
		Exchange Rates	28
		Results of Operations	28
		Critical Accounting Policies	29
		Our Business Units	30
		Results of Operations	30
		Liquidity and Capital Resources	31
		Our Plan of Operations	32

Table of Contents

	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	33
		Our Business Units	32
	Item 8.	Financial Statements and Supplementary Data	35
		Liquidity and Capital Resources	34
	Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	65
		Our Plan of Operations	36
	Item 9A.	Controls and Procedures	65
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	36
	Item 9B.	Other Information	66
	Item 8.	Financial Statements and Supplementary Data	38
	Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	74
	Item 9A.	Controls and Procedures	74
	Item 9B.	Other Information	75
PART III.
	Item 10.	Directors, Executive Officers and Corporate Governance	6776
	Item 11.	Executive Compensation	6776
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	6776
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	6776
	Item 14.	Principal Accountant Fees and Services	6776
PART IV.
	Item 15.	Exhibits and Financial Statement Schedules	6877
	Item 16.	Form 10-K Summary	7383
EXHIBITS INDEX			6877
SIGNATURES			7383
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			3538

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Forward Looking Statements

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. This Annual Report on Form 10-K contains certain forward-looking statements including expectations of market conditions, challenges and plans, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is subject to the Safe Harbor provisions created by that statute. Reference is made to Part I, Item 1A “Risk Factors” and to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Forward Looking Statements” for a discussion of the Registrant’s qualifications with respect to certain information presented in this Annual Report on Form 10-K.

All references to “$” or “USD” means U.S. dollars, “€” or “EUR” means euros, and “Kč” or “CZK” means Czech korunas. Unless noted otherwise, all USD equivalents of foreign currency amounts are converted at the year-end, December 31, ~~2016~~2017 exchange rates.

Item 1. Business.

General Development of Business

Trans World Corporation (hereinafter referred to as “we,” “us,” the “Company,” or “TWC” or terms of similar import) was organized as a Nevada corporation in October 1993 for the acquisition, development and management of gambling establishments, to the extent permitted by applicable local laws, featuring live and mechanized gaming, including video gaming devices such as video poker machines, primarily in Louisiana.

In 1998, we revised our operating strategy by shifting our focus to the casino market in Europe. Furthermore, as a means of diversification of our business, we have also expanded our growth strategy to develop and/or acquire small-to-mid-size hotels of 80-250 rooms located in or near key metropolitan and/or resort areas in Europe, which may also include gambling operations.

Today, we own and operate three full-service casinos and ~~four~~five hotels, ~~three~~all of which are four-star rated ~~and one is three-star rated~~, as per the ratings from the ~~German~~Hotelstars ~~Hotel~~Union, ~~and~~under ~~Restaurant~~the ~~Association~~patronage ~~for~~of ~~our~~HOTREC, ~~German-based~~the umbrella association of hotels, restaurants and ~~the~~cafés ~~Czech~~in ~~Association~~Europe, ofand ~~Hotels~~covers ~~and~~hotel ~~Restaurants~~associations ~~for~~of ~~our~~Austria, the Czech~~-based~~ ~~hotel~~Republic and Germany. Our European operating units are organized under two reportable segments: a casino segment and a hotel segment. Both segments are operated through our wholly-owned European subsidiaries.

Our casinos are all in the Czech Republic (~~also~~ “CZ” ~~or “Czechia”~~) and are part of the casino segment, located in Ceska Kubice (“Ceska”), Hate (“Route 59”), and Dolni Dvoriste (“Route 55”). The Czech casinos, which conduct business under our registered brand name, American Chance Casinos (“ACC”), are situated at border locations and draw the majority of their customers from Germany and Austria.

ACC’s operating strategy centers on differentiating its products and services from its direct competitors. We operate our establishments with an emphasis on high customer service and attention to details. We strive to create gambling environments with casual and exciting atmospheres, highlighting entertainment, state-of-the-art equipment, and ~~professionalism~~professional service to our customers.

Our hotels include the Hotel Savannah and Spa, a 7779-room, four-star deluxe hotel, located in Hate, ~~Czechia~~Czech Republic, and is part of our casino segment as it is physically attached to our Route 59 casino; ~~the~~ Hotel Columbus, a 117-room, four-star property located in Seligenstadt, Germany; ~~the~~ Hotel ~~Freizeit~~ Auefeld, a 93-room four-star hotel located in Hannoversch Münden (“Hann. Münden”), Germany; ~~and the recently acquired~~ Hotel Kranichhöhe, a 107-room ~~three~~four-star hotel located in Much, Germany; ~~(see~~and ~~below~~Hotel ~~for~~Donauwelle, ~~more~~a ~~details)~~176-room, four-star property located in Linz, Austria. All three German hotels ~~comprised~~and the Austrian hotel comprise our hotel segment.

Two of our units, ~~the~~ Hotel Savannah and Spa and the Route 59 casino, operate as complementary businesses and are referred to jointly herein as the “Route 59 Complex.” In addition to the gaming area, guest rooms, and the spa, which is ~~operated by an independent contractor, the Complex features eight banquet halls for meetings and special events as well as two full-service restaurants and two bars.~~

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Onoperated ~~December~~by ~~21,~~an ~~2016,~~independent ~~TWHG acquired the Lindner Sport & Aktivhotel Kranichhöhe~~contractor, ~~and subsequently rebranded~~ the ~~hotel~~Complex asfeatures ~~the~~eight ~~Hotel~~banquet ~~Kranichhöhe,~~halls ~~a 107-room hotel with extensive meeting space and recreational amenities located in Much, Germany,~~ for ameetings ~~purchase price of €4.9 million, or $5.3 million at the acquisition date. The assets acquired by TWHG include: the hotel building~~ and ~~its~~special ~~contents;~~events ~~three~~as ~~food~~well ~~and~~as ~~beverage outlets; 18 meeting rooms; a wellness center and spa; a fitness center with an indoor swimming pool; an adjoining tennis complex with~~ two ~~indoor~~full-service ~~courts~~restaurants and two ~~outdoor courts; and a beach volleyball court~~bars. The new hotel is located approximately two hours driving time from the Company’s Hotel Columbus in Seligenstadt, near Frankfurt, and three hours driving time from its Hotel Freizeit Auefeld in Hann. Münden. We intend to invest approximately $1.6 million in 2017 to update and partially renovate the hotel, with the objective of upgrading it to a four-star hotel.

~~TWC’s~~On ~~hotel~~December ~~operating~~21, ~~strategy~~2016, ~~centers~~our onwholly-owned ~~offering~~German ~~both~~subsidiary, ~~business~~Trans ~~and~~World ~~leisure~~Hotels ~~travelers~~Germany ~~attractive~~GmbH ~~facilities,~~(“TWHG”) ~~professional~~acquired ~~service,~~the ~~comfortable~~Lindner ~~accommodations~~Sport & Aktivhotel Kranichhöhe, a 107-room hotel with extensive meeting space and recreational amenities located in Much, Germany, for a ~~wide~~purchase ~~range~~price of ~~amenities~~€4.9 million, ~~including~~or $5.3 million at the acquisition date. The Company subsequently rebranded the hotel as Hotel Kranichhöhe. The assets acquired by TWHG include: the hotel building and its contents; three food and beverage ~~services,~~outlets; ~~conference,~~18 meeting rooms; a wellness center and ~~recreational~~spa; ~~facilities. The~~a ~~Company~~fitness ~~uses~~center ~~multiple~~with ~~channels~~an toindoor ~~actively~~swimming ~~market~~pool; ~~its~~an ~~hotels~~adjoining totennis ~~both~~complex ~~business~~with two indoor courts and ~~leisure~~two ~~travelers~~outdoor courts; and a beach volleyball court. ~~Further~~The hotel is located approximately two hours driving time from the Company’s Hotel Columbus in Seligenstadt, ~~management~~near ~~strives~~Frankfurt, toand ~~foster~~approximately ~~strong~~three ~~relationships~~hours ~~with~~driving ~~local~~time ~~businesses~~from its Hotel Auefeld in Hann. Münden. We are investing approximately $1.9 million to update and ~~communities~~partially renovate this hotel, ~~which~~including ~~primarily~~the ~~support~~refurbishment of a majority of the ~~hotels~~hotel’s ~~food~~guestrooms, ~~and~~installation ~~beverage~~of air conditioning in those rooms, refurbishment of the property’s conference space, and ~~banquet~~renovation of the hotel’s lobby. Approximately $1.1 million was spent in 2017, ~~and~~with ~~recreation~~the ~~facilities~~remainder to be disbursed in 2018. The hotel was upgraded to a four-star rating on June 27, 2017.

On March 1, 2017, TWC, through its wholly-owned Czech subsidiary, Trans World Hotels & Entertainment, a.s. (“TWH&E”) and TWHG jointly acquired 100% of the shares of Hotel Donauwelle Betriebsgesellschaft M.B.H, which owned a four-star business hotel located in Linz, Austria. The hotel is situated on the banks of the Danube River in Linz, approximately 35 minutes driving time from our Route 55 Casino. The assets acquired included the ground lease rights through March 2062 to the plot upon which the hotel building stands, and the building contents. The hotel features 176 rooms, six meeting/banquet rooms, a 120-seat restaurant, a 40-seat bar, a 100-seat outdoor terrace, and a spa and gym room. The hotel was under management contract with Steigenberger Hotels AG until September 30, 2017, when the contract was terminated. TWC assumed active management on October 1, 2017 and renamed the hotel as “Hotel Donauwelle” (herein referred to as “Hotel Donauwelle”).

TWC’s hotel operating strategy centers on offering both business and leisure travelers attractive facilities, professional service, comfortable accommodations, and a wide range of amenities, including food and beverage services, conference space, and recreational facilities. The Company uses multiple channels to actively market its hotels to both business and leisure travelers. Further, management strives to foster strong relationships with local businesses and communities, which primarily support the hotels’ food and beverage, conference and banquet, and recreation facilities.

While our principal executive offices are located in New York City, we have no operating presence in the United States.

Corporate Information

Our corporate offices are located at 545 Fifth Avenue, Suite 940, New York, New York 10017, our telephone number is (212) 983-3355, our website is www.transwc.com and the ACC website is www.acc.cz. Neither website is a part of this Form 10-K.

Description of Business

TWC is engaged in the acquisition, development and management of niche casino operations in Europe, which feature gaming tables and mechanized gaming devices, such as video slot machines, as well as the acquisition, development and management of small-to-mid-size, four-star hotels, which may include casino facilities. Our expansion into the hotel industry is founded on management’s belief that hotels in the small-to-mid-size class are complementary to our casino brand, that opportunities in one of these two industries often lead to, or are tied to, opportunities in the other industry, and that a more diversified portfolio of assets gives us greater stability and makes TWC more attractive to potential investors. TWC’s top management executives include individuals with extensive experience in both the casino and hotel industries.

Market Overview and Competition

Historically, casinos in Germany and Austria have been characterized by formal atmospheres and a sense of exclusivity. While this dynamic has changed across Europe over time, ACC was at the forefront of the movement towards more relaxed casino atmospheres. This, coupled with our emphasis on integrating live entertainment into the gambling experience and creating strong customer loyalty programs, allowed us to become a preferred alternative for many of our patrons. Further, we have established ACC as a reputable casino company in Czechia through our more than fifteen years of high service standards, consistent professionalism and strict adherence to all local gaming regulations.

As of December 31, 2016, five casinos operate in direct competition with our Ceska casino. Each of our Route 59 and Route 55 casinos currently has two direct competitors. Some of these competitors are larger and have financial and/or other resources that are greater than ours.

While we do not consider our gambling business to be seasonal, it is occasionally impacted by extreme weather conditions and major sporting events, such as the FIFA World Cup (“World Cup”) and the UEFA Euro Cup (“Euro Cup,”), which have and can negatively impact attendance at our casinos. See also Item 1A “Risk Factors — Climate impact.”

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~~security~~towards ~~and~~more ~~the~~relaxed ~~ability~~casino ~~to earn and redeem loyalty program points~~atmospheres. WeThis, ~~believe~~coupled ~~that~~with ~~increased~~our ~~gambling~~emphasis inon ~~other~~integrating ~~locations~~live inentertainment orinto ~~near~~ the ~~markets~~gambling ~~areas~~experience ~~in which we operate,~~ and ~~the~~creating ~~increase~~strong incustomer ~~popularity~~loyalty ~~of internet gambling~~programs, ~~could~~allowed ~~create~~us ~~additional~~to ~~competition~~become ~~for~~a uspreferred ~~and~~alternative ~~could~~for ~~adversely~~many ~~affect~~of our ~~casino operations and development plans~~patrons. Further, ~~the~~we ~~gaming~~have ~~industry~~established inACC ~~Eastern~~as ~~Europe faces competition from~~ a ~~variety~~reputable ofcasino ~~sources~~company ~~for~~in ~~discretionary~~the ~~consumer~~Czech ~~spending,~~Republic ~~including~~through ~~spectator~~our ~~sports~~twenty ~~and~~plus ~~other~~years ~~entertainment~~of ~~and~~operations ~~gaming~~that ~~options.~~has ~~Competitive~~featured ~~gambling~~high ~~activities~~service ~~include traditional casinos~~standards, ~~video~~consistent ~~lottery~~professionalism ~~terminals, state-sponsored lotteries~~ and ~~other~~strict ~~forms~~adherence ofto ~~legalized~~all local gaming. ~~We anticipate competition in this area will become more intense as the industry consolidates and new web-based ventures enter the industry~~regulations.

~~With~~As ~~respect~~of ~~to our hotel segment~~December 31, ~~in Germany~~2017, ~~our~~five ~~Hotel~~casinos ~~Columbus~~operate ~~has six hotel competitors~~ in ~~the~~direct ~~Seligenstadt~~competition ~~area~~with ~~and~~our ~~surrounding~~Ceska ~~region that it serves, four of which are privately-owned and two of which are part of German hotel chains~~casino. Our ~~Hotel~~Route ~~Freizeit~~59 ~~Auefeld~~and isRoute ~~the~~55 ~~largest~~casinos ~~hotel~~currently inhave ~~Hann.~~two ~~Münden~~ and nothree ~~hotel~~direct ~~chains~~competitors, ~~are represented in that market~~respectively. ~~However,~~Some ~~Hotel~~of ~~Freizeit~~these ~~Auefeld does compete with eight smaller, privately-owned, hotel~~ competitors inare ~~the~~larger ~~Hann.~~and ~~Münden~~have ~~area.~~financial ~~Our~~and/or ~~recently~~other ~~acquired~~resources ~~Hotel~~that ~~Kranichhöhe~~are ~~has~~greater nothan ~~direct major competitors in the city of Much or in the surrounding areas~~ours.

While we do not consider our gambling business to be seasonal, it is occasionally impacted by extreme weather conditions (see also Item 1A “Risk Factors — Climate impact”) and major sporting events, such as the FIFA World Cup (“World Cup”) and the UEFA Euro Cup (“Euro Cup,”), as well as regulatory changes, which have and can negatively impact attendance at our casinos.

We compete for guests based primarily on brand name recognition and reputation, location, customer satisfaction, quality of service, amenities, quality of the gaming experience, quality of our accommodations, room rates, security and the ability of our customers to earn and redeem loyalty program points. We believe that increased gambling in other locations in or near the market areas in which we operate, coupled with the increase in popularity of internet gambling, could create additional competition for us and could adversely affect our casino operations and development plans. Further, the gambling industry in Eastern Europe faces competition from a variety of sources for discretionary consumer spending, including spectator sports and other entertainment and gambling options. Competitive gambling activities include traditional casinos, video lottery terminals, state-sponsored lotteries and other forms of legalized and illegal gambling. We anticipate competition in this area will become more intense as the industry consolidates and new web-based ventures enter the industry.

With respect to our hotel segment, in Germany, Hotel Columbus has six competitors in the Seligenstadt area and surrounding region that it serves, four of which are privately-owned and two of which are part of German hotel chains. Hotel Auefeld is the largest hotel in Hann. Münden and no hotel chains are represented in that market. However, Hotel Auefeld does compete with eight smaller, privately-owned, competitors in the Hann. Münden area. Hotel Kranichhöhe has one direct competitor in the city of Much and three competitors in the surrounding areas. Hotel Donauwelle has six direct competitors in Linz.

Owing to our quality product, adherence to high standards of hospitality and customer service, professionalism and strict compliance with all local hotel regulations and governances, we believe that we can compete effectively with these hoteliers.

Costs and Effects of Environmental Compliance

We incurred no material costs or effects due to environmental compliance for the years ended December 31, ~~2016~~2017 and ~~2015~~2016.

Research and Development

The Company does not engage in research and development other than internal market research for general business development, does not account for research expenditures separately under generally accepted accounting principles, and did not incur any separate research and development expense for ~~2016~~2017 or ~~2015~~2016.

Available Information - Internet Access

TWC is a “smaller reporting company” under the rules of the Securities and Exchange Commission (“SEC”). Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge on or through our website (www.transwc.com) as soon as reasonably practicable after we electronically file the material with the SEC. In addition, the public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site ~~(www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers (including the Company) that file electronically with the SEC.~~

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(www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers (including the Company) that file electronically with the SEC.

Our Facilities

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Ceska — The Ceska casino, which is located approximately one hour’s driving time from Regensburg, Germany, was acquired through a lease in March 1998 in conjunction with the Company’s entry into the casino market in Europe. On November 23, 2011, TWC purchased the Ceska casino building, associated land and an adjacent outbuilding and related plot from the town of Ceska Kubice, from which TWC had been renting the facilities. The acquisition allowed us to undertake much needed capital improvements to the building, as competition in the Ceska area has increased dramatically in recent years. As of ~~February 28~~March 26, ~~2017~~2018, the two-story Ceska casino offered 1413 gaming tables, including seven card tables, ~~six roulette tables,~~ and asix ~~10-position, Slingshot, multi-win~~ roulette ~~table~~tables. The casino also features ~~110~~118 video slot machines and a dedicated stage area for live performances. Amenities also include a separate dining facility and five luxurious hotel guest rooms. The address of our Ceska casino is Ceska Kubice 64, Ceska Kubice 345 32, Czech Republic.

Route 59 — Located approximately one hour’s driving time from Vienna, Austria, and opened in December 1999, Route 59 was constructed by the Company on land that had been acquired by TWC in conjunction with our entry into the European casino market in 1998. On February 22, 2016, we completed ~~the~~ expansion and reconfiguration of the casino’s existing slot area and introduced 32 additional video slot machines. As of ~~February 28~~March 26, ~~2017~~2018, our Route 59 casino operated 2524 gaming tables, consisting of 12 card tables, and 12 roulette tables, ~~and a 16-position, Slingshot multi-win roulette table,~~ as well as ~~190~~214 video slot machines. Route 59 is located at 199 American Way, Hate-Chvalovice, Znojmo 669 02, Czech Republic.

Route 55 — Located approximately 4535 minutes driving time from Linz, Austria, and opened in December 2004, Route 55 was constructed by the Company on a parcel of land that had been purchased by TWC in April 2002. As of ~~February 28~~March 26, ~~2017~~2018, the two-story Route 55 offered 2122 tables, including 12 card tables, 8and 10 roulette tables, ~~a 16-position, Slingshot multi-win roulette table,~~ as well as ~~150~~192 video slot machines. On the mezzanine level, the casino features an Italian restaurant, an open buffet area, and three luxurious hotel guest rooms. Similar to the five guest rooms at Ceska, these rooms, when not used as ~~free courtesy~~ accommodations for our VIP players and guests, ~~can~~are be rented to other customers. Route 55 is located at Grenzubergang Wullowitz, Dolni Dvoriste 382 72, Czech Republic.

Hotel Savannah — As a complement to our Route 59 gaming operations, in January 2009, we ~~built and~~ opened Hotel Savannah, a 77-room, four-star deluxe hotel, attached to Route 59 by the hotel’s restaurant, on land that had been acquired by TWC in conjunction with our entry into the European casino market in 1998. In conjunction with opening the hotel, we also launched a full-service spa, the Spa at Hotel Savannah, which is attached to the hotel and is sub-contracted to a local operator who pays TWC a percentage of its gross revenues. The Spa features a large, 22 x 8 meter, indoor pool and Ayurvedic therapy facility. Hotel Savannah also features eight banquet halls for meetings and events. ~~The~~On ~~creation~~March of26, ~~the~~2017, ~~Route~~we 59added ~~Complex~~two ~~has attracted~~ additional ~~business~~guest rooms to the ~~casino,~~hotel ~~contributing~~room ~~incremental cash~~inventory, ~~and~~which ~~enhancing~~now ~~the~~totals ~~Company’s~~79 ~~overall results~~rooms. The

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~~Hotel~~creation ~~Columbus~~of ~~— We acquired~~ the ~~Hotel~~Route ~~Columbus,~~59 aComplex ~~four-star~~has ~~117-room~~attracted ~~hotel,~~additional ~~located~~business into ~~Seligenstadt, a town that is approximately 25 minutes equidistant from Frankfurt city center and~~ the ~~Frankfurt~~casino, ~~International~~contributing ~~Airport~~incremental ~~in September 2014. Hotel Columbus features five meeting rooms; a restaurant and separate breakfast room~~cash, ~~each with its own kitchen; two bars; a 37-space parking garage;~~ and 43enhancing ~~surface lot parking places, including a satellite parking area located across~~ the ~~street~~Company’s ~~from~~overall ~~the Hotel~~results. With the coming withdrawal of the United Kingdom from the European Union, the city of Frankfurt is aggressively soliciting British financial institutions to relocate their European operations in the city. Hotel Columbus is located at Am Reitpfad 4, 63500 Seligenstadt-Froschhausen, Germany.

Hotel ~~Freizeit~~Columbus ~~Auefeld~~ — ~~The~~We acquired Hotel ~~Freizeit Auefeld~~Columbus, a ~~93-room,~~ four-star 117-room hotel, ~~with~~located ~~extensive~~in ~~meeting~~Seligenstadt, ~~space~~a ~~and~~town ~~recreational~~that ~~amenities~~is ~~located~~approximately in25 ~~Hann.~~minutes ~~Münden,~~equidistant ~~Germany~~from ~~was~~Frankfurt ~~acquired~~city center and the Frankfurt International Airport, in ~~June~~September ~~2015~~2014. ~~The~~Hotel ~~hotel~~Columbus features ~~three~~five ~~food~~meeting rooms; a restaurant and ~~beverage~~separate ~~outlets;~~breakfast ~~ten~~room, ~~meeting~~each ~~rooms;~~with anits ~~adjoining~~own ~~13,000~~kitchen; ~~square~~two ~~foot~~bars; ~~event~~a ~~hall~~37-space parking garage; anand ~~adjoining~~43 ~~tennis~~surface ~~complex~~lot ~~with~~parking ~~four~~places, ~~indoor~~including ~~courts;~~a ~~and~~satellite ~~several~~parking ~~additional~~area ~~recreation~~located ~~areas~~across the street from the Hotel. AnWith ~~independent~~the ~~townhouse~~coming ~~comprised~~withdrawal of ~~one~~ ~~four-room~~the ~~and~~United ~~one~~Kingdom ~~six-room~~from ~~apartment~~the ~~was~~European ~~also~~Union ~~included~~(“EU”), in the ~~assets~~city ~~associated~~of ~~with~~Frankfurt is aggressively soliciting British financial institutions to relocate their European operations to the ~~deal~~city. Hotel ~~Freizeit~~Columbus ~~Auefeld~~ is located at ~~Hallenbadstrasse~~Am 33Reitpfad 4, ~~34346~~63500 ~~Hann. Münden~~Seligenstadt-Froschhausen, Germany.

Hotel ~~Kranichhöhe~~Auefeld — ~~The~~ Hotel ~~Kranichhöhe~~Auefeld, a ~~107~~93-room, ~~three~~four-star hotel ~~includes~~with extensive meeting space and recreational amenities located in ~~Much~~Hann. Münden, Germany, was acquired in June 2015. ItThe hotel features three food and beverage outlets; 18ten meeting rooms; aan ~~wellness~~adjoining ~~center~~13,000 ~~and~~square ~~spa;~~foot aevent ~~fitness center with an indoor swimming pool~~hall; an adjoining tennis complex with ~~two~~four indoor courts ~~and two outdoor courts~~; and aseveral ~~“beach”~~additional ~~volleyball~~recreation ~~court~~areas. ~~The~~ An ~~Company~~independent ~~intends~~townhouse tocomprised ~~invest~~of one ~~approximately~~four-room ~~$1.6~~and ~~million~~one insix-room ~~2017~~apartment towas ~~update~~also ~~and~~included ~~partially~~in ~~renovate~~ the ~~hotel,~~assets associated with the ~~objective of upgrading it to a four-star hotel~~transaction. Hotel ~~Kranichhöhe~~Auefeld is located at ~~Boevingen~~Hallenbadstrasse ~~129~~33, ~~53804~~34346 ~~Much~~Hann. Münden, Germany.

~~Our~~Hotel ~~casinos~~Kranichhöhe ~~each~~— ~~offer~~Hotel ~~free~~Kranichhöhe ~~parking~~is a 107-room, ~~restaurant~~four-star hotel that includes extensive meeting space and ~~lounge~~recreational ~~areas,~~amenities and ~~multiple~~is ~~bars~~located ~~while~~in ~~our~~Much, ~~Hotel~~Germany. The ~~Columbus~~hotel features three food and ~~Hotel~~beverage ~~Freizeit~~outlets; ~~Auefeld~~18 ~~each~~meeting ~~offer~~rooms; ~~free~~a ~~outdoor~~wellness ~~parking,~~center and ~~our~~spa; ~~Hotel~~a ~~Kranichhöhe~~fitness ~~offers~~center ~~outdoor~~with ~~parking~~an atindoor aswimming ~~nominal~~pool; ~~cost,~~an ~~available~~adjoining ~~garage~~tennis ~~parking,~~complex ~~restaurant~~with two indoor courts and ~~lounge~~two ~~areas,~~outdoor ~~bars,~~courts; and ~~meeting~~a ~~rooms~~“beach” volleyball court. The ~~Our~~Company ~~Hotel~~intends ~~Savannah,~~to ~~Hotel~~invest ~~Freizeit~~approximately ~~Auefeld~~$1.9 ~~and~~million ~~Hotel~~to ~~Kranichhöhe~~update ~~also~~and ~~offer~~partially ~~extensive~~renovate ~~recreational~~the ~~facilities~~hotel. ~~With~~TWC ~~the~~spent ~~exception~~approximately $1.1 million of ~~the~~this ~~long-term~~budget ~~ground~~in ~~lease~~2017 ~~for~~toward the ~~land~~renovation, onwith ~~which~~the ~~Hotel~~balance ~~Freizeit~~to ~~Auefeld~~be ~~stands~~expensed in 2018. Hotel Kranichhöhe, wewhich ~~own~~was ~~the~~upgraded ~~land~~to ~~and~~a ~~buildings~~four-star ~~that~~rated ~~comprise~~hotel ~~our~~on ~~casino~~June ~~and~~27, ~~hotel~~2017, ~~assets~~is located at Boevingen 129, 53804 Much, Germany.

Hotel Donauwelle — Hotel Donauwelle is a 176-room, four-star hotel, situated on the banks of the Danube River in Linz approximately 35 minutes driving time from our Route 55 Casino. The hotel includes six meeting/banquet rooms, a 120-seat restaurant, a 40-seat bar, a 100-seat outdoor terrace, and a spa and gym, as well as indoor and outdoor parking areas. As a condition to our acquisition of the property, the lender required TWC to invest a minimum of €2.5 million (50% of which has been escrowed with the lender) to renovate the hotel within the first twelve months after acquisition, an action that we had previously determined to be necessary to make the property competitive in the marketplace. Due to high business volume (i.e. high room occupancy), TWC asked for, and was granted, an extension to the end of August 2018 to complete its planned renovation of the property. The first of a two-part room renovation was completed in August 2017, with 84 remaining rooms slated to be completed in July through August 2018. Hotel Donauwelle is located at Am Winterhafen 13, 4020 Linz, in the State of Upper Austria, Austria.

Our casinos each offer a restaurant, lounge areas, multiple bars and free parking. Our Hotel Columbus, Hotel Auefeld and Hotel Donauwelle properties offer indoor and outdoor parking for a nominal fee, and our Hotel Kranichhöhe property offers outdoor parking for a nominal fee. All of our hotels offer restaurant and lounge areas, bars, and meeting rooms. Our Hotel Savannah, Hotel Auefeld and Hotel Kranichhöhe also offer extensive recreational facilities. With the exception of the long-term ground leases for the plots on which Hotel Auefeld and Hotel Donauwelle each stands, we own the land and buildings that comprise our casino and hotel assets.

Intellectual Property

In the highly competitive gaming and hospitality industries in which we operate, our trade names and logos are important to the success of our business. All of our casinos operate under the trademarked trade name “American Chance Casinos,” which we believe has become synonymous in our markets with our reputation for excellence in service, casual fun, international presence and state-of-the-art gaming equipment. In addition, the Hotel Savannah’s flowering tree logo has come to represent luxury and convenience for our overnight guests at our Route 59 Complex. The Company also maintains separate websites for our casinos and four hotels that provide users with updated information about news and events, and for the hotels, the ability to make room reservations online.

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Long Range Objectives

With the acquisitions of Hotel ~~Columbus,~~Kranichhöhe ~~Hotel Freizeit Auefeld~~ and Hotel ~~Kranichhöhe~~Donauwelle in ~~2014,~~2016 ~~2015~~ and ~~2016~~2017, respectively, our current operations consist of three casinos and ~~four~~five hotels, with four units located in ~~Czechia~~the ~~and~~Czech Republic, three units located in Germany, and one unit in Austria. Our recent geographic and industry diversification is consistent with our long-range objective of positioning TWC as an international hotel and casino company.

TWC, the senior management of which is composed of individuals who have extensive experience in both the hotel and casino industries, continues to explore ways to expand the Company’s operations through the acquisition and/or development of complementary gaming and hotel business units, while continuing to maximize the potential of the Company’s existing operations. Future additions may include stand-alone operations, or complexes with integrated hotel and casino operations, such as our Route 59 Complex.

Marketing and Sales

During the year ended December 31, ~~2016~~2017, we maintained and enhanced our marketing and promotional programs for our casinos, focusing primarily on internal and customer-oriented loyalty reward programs and greater use of social media and digital communication methods. In 2017, we strove to offer higher-value amenities and to provide, in the case of our casinos, live entertainment, in an ongoing effort to secure and enhance our competitive position in the markets that we serve. The casinos’ event calendars concentrated on key, player-tested, popular events and holidays, while simultaneously focusing on higher player-incentive games designed to reward existing players with redeemable points via our Player’s Loyalty Program, and thereby promote customer loyalty. In addition, we continued to be a benefactor in a number of community and social programs during the year as a way to further promote our image and make a positive contribution to the communities in which we operate. We also continued our popular, cultural-themed and holiday-related parties, which feature live entertainment, raffles and complimentary grand buffets. Further, we aggressively targeted key cities in our media campaigns, most notably Vienna, Linz and Regensburg and the areas surrounding these cities for our casinos and Hotel Savannah. With respect to our three German hotels and one Austrian hotel, we focused our sales efforts on targeting corporate business and other market segments from the surrounding areas and neighboring countries, and worked to cultivate existing and new local and regional business relationships.

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of social media and digital communication methods. In 2016, we strove to offer higher-value amenities and more giveaways and also to provide live entertainment, in an ongoing effort to secure and enhance our competitive position in the markets that we serve. The casinos’ event calendars concentrated on key, player-tested, popular events and holidays, while simultaneously focusing on higher player-incentive games designed to reward existing players with redeemable points via our Player’s Loyalty Program, and thereby promote customer loyalty. In addition, we continued to be a benefactor in a number of community and social programs during the year as a way to further promote our image and make a positive contribution to the communities in which we operate. We also continued our popular, cultural-themed and holiday-related parties, which feature live entertainment, raffles and complimentary grand buffets. Further, we aggressively targeted key cities in our media campaigns, most notably Vienna, Linz and Regensburg and the areas surrounding these cities for our casinos and Hotel Savannah. With respect to our three German hotels, we focused our sales efforts on targeting corporate business and other market segments from the surrounding areas and neighboring countries, and worked to cultivate existing and new local and regional business relationships.

Regulations and Licensing

We are subject to numerous foreign international, national and local government laws and regulations, including those relating to the operation of a casino business, the operation of our hotel business, the preparation and sale of food and beverages, building and zoning requirements, data privacy and general business license and permit requirements, in the various jurisdictions in which we own and operate our properties. Our ability to acquire and/or develop new casino and/or hotel properties and to remodel, refurbish or add to existing properties is also dependent on obtaining permits from local authorities. We are also subject to laws governing our relationships with employees, including minimum wage requirements, overtime, working conditions, hiring and firing, non-discrimination for disabilities and other individual characteristics, work permits and benefit offerings. Compliance with these various laws and regulations can affect the revenues and profits of the properties we own and could adversely affect our operations. We believe that our businesses are conducted in compliance with all applicable laws and regulations.

On June 7, 2016, the President of ~~Czechia~~the Czech Republic signed the 2017 Gambling Act (186/2016 Coll.) (the “Gambling Act”) and the 2017 Gambling Tax Act (187/2016 Coll.) (the “2017 Gambling Tax Act”) (collectively referred to as the “Gambling Acts”). The Gambling Acts became law on June 15, 2016, when they were published in the official Collection of Laws, maintained by the Czech Ministry of the Interior. The 2017 Gambling Tax Act became effective on January 1, 2017, and raised the gaming tax rate on technical game (i.e. slot machine or electromechanical roulette or dice) revenues to a “minimum tax,” and ~~raises~~raised the tax rate from 28% to 35%, and ~~eliminates~~eliminated the per diem fixed fee of Kč 80 (approximately $3.76) on each slot machine.

KčThe 802017 ~~(approximately~~Gambling ~~$3.12)~~Act introduced many new changes, requirements and conditions, that will become effective at various times, some taking effect on ~~each~~the ~~slot~~date ~~machine~~of enactment, some on January 1, 2017 and certain provisions taking effect upon the renewal of the casino operator’s gambling licenses. TWC’s 10-year federal gambling license was scheduled to expire at the end of 2018, and its one-year slot operating license expired at the end of 2017, the timing of

The 2017 Gambling Act introduces many new changes, requirements and conditions, that take effect at various times, some taking effect on the date of enactment, some on January 1, 2017 and certain provisions taking effect upon the renewal of the casino operator’s gambling licenses. Although TWC’s 10-year gambling license expires in September 2018, and its slot operating one-year license expires at the end of 2017, the Company has begun to take steps to conform to these requirements for when it applies for its slot and other technical game license renewals, which is due to expire at the end of 2017. The Company is also awaiting the Ministry of Finance of the Czech Republic’s (the “MOF”) final interpretation of these new measures, some of which were clarified in August 2016 and others are awaiting further clarifications from the MOF. The notable changes and requirements are as follow:

· Upon the effective date of the Gambling Act, any gambling operator may apply for a gambling license if it meets all of the following conditions, having: (i) an office in Czechia, in another European Union Member state or in a state that is a party to the Agreement on the European Economic Area; (ii) an organizational chart that sets clear and comprehensive definitions of jurisdictions and decision-making powers; (iii) an established board of directors or similar control body; (iv) equity of at least of €2,000,000 ($2.1 million); (v) a transparent and unobjectionable origin of its financial resources; and (vi) transparent ownership structure. During the licensing process, confirmation of corporate ownership of the Czech entity and required documents (e.g. criminal and tax records, etc.) from all members of the board of directors and representatives from all levels of the company structure must be furnished to the MOF. TWC is currently preparing a list of the required documentation to submit for its slot and technical game license renewal at the end of 2017.

· A basic, general gambling license from the MOF will be issued for a maximum of six (6) years and a gambling

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~~license~~which ~~for~~required ~~each~~the ~~location~~Company atto ~~which~~reapply ~~live~~for ~~game~~both ~~and~~gambling ~~technical~~licenses ~~game~~under ~~operations~~the ~~will~~new belegislation. Therefore, ~~conducted~~TWC ~~(will~~took beall ~~issued~~the ~~from~~proper ~~local~~measures ~~municipality~~to ~~councils)~~conform ~~for~~to athe ~~maximum~~underlying ofrequirements ~~three~~for ~~(3)~~each ~~years.~~basic ~~(Previously~~gambling license, ~~the~~one ~~MOF~~to ~~general~~cover ~~gambling licenses for~~ live games ~~had~~and ~~been~~the ~~issued~~other ~~for~~to ~~ten~~cover technical games (10e.g. slots). On ~~years~~November 15, 2017 and ~~for~~December ~~one~~28, 2017, TWC received from the Ministry of Finance (1“MOF”) ~~year~~its gambling licenses for live games and technical games), respectively. Further, ~~Licenses~~on ~~can~~December be29, ~~issued~~2017, ~~and/or~~TWC ~~renewed~~was ifgranted ~~the~~premises ~~Company~~licenses ~~meets~~in the ~~following~~three ~~pre-existing~~municipalities ~~conditions:~~in ~~(i)~~which ~~maintains~~it aoperates. The ~~clean~~Company ~~criminal~~is ~~record~~also ~~and~~awaiting ~~all~~the ~~necessary~~Ministry ~~certifications;~~of ~~(ii)~~Finance ~~pays~~of ~~its~~the ~~taxes~~Czech onRepublic’s ~~time;~~final ~~(iii)~~interpretation ~~stays~~of incertain ~~good~~new ~~standing; and~~measures, ~~(iv)~~some ~~confirms~~of ~~its~~which ~~ability~~were toclarified ~~comply~~in ~~with~~August ~~all~~2016. The ~~technical~~Company ~~and~~is ~~supervisory~~also ~~standards~~awaiting ~~required~~clarification byfrom the ~~new~~MOF ~~law.~~whether Asa recertification of ~~December~~its ~~31,~~casino ~~2016~~management ~~and~~system ~~the~~(“CMS”) ~~date~~is ~~hereof,~~required ~~TWC~~following ~~was~~any upgrades to the CMS. The notable changes and isrequirements inof ~~compliance~~the ~~with~~2017 ~~these~~Gambling ~~conditions.~~Act are as follows:

· ~~Individual~~Upon ~~municipalities~~the ~~and~~effective ~~their~~date ~~local~~of ~~councils~~the ~~will~~Gambling beAct, ~~entitled~~any togambling ~~issue~~operator ~~decrees~~may toapply ~~prohibit~~for ora ~~restrict~~ gambling ~~operations,~~license toif ~~set~~it ~~permissible~~meets ~~hours~~all of ~~gambling~~the ~~operations~~following ~~and~~conditions, ~~designate~~having: ~~locations~~(i) ofan ~~operations~~office ~~within~~in ~~their~~the ~~respective~~Czech ~~jurisdictions. Previously~~Republic, ~~municipalities,~~in byanother ~~decree,~~EU ~~have~~Member ~~been~~state ~~allowed~~or in a state that is a party to ~~ban~~the ~~gambling~~Agreement ~~operations~~on the European Economic Area; (ii) an organizational chart that sets clear and comprehensive definitions of jurisdictions and decision-making powers; (iii) an established board of directors or ~~set~~similar ~~the~~control ~~locations~~body; (iv) equity of ~~gambling~~at ~~operations~~least ~~within~~of ~~their~~€2,000,000 ~~respective~~(approximately ~~jurisdictions~~$2.4 Asmillion); (v) a transparent and unobjectionable origin of ~~December~~its ~~31,~~financial ~~2016~~resources; and (vi) a transparent ownership structure. During the ~~date~~licensing ~~hereof~~process, ~~TWC~~confirmation ~~was~~of corporate ownership of the Czech entity and isrequired indocuments ~~good~~(e.g. ~~standing~~criminal ~~with~~and tax records, etc.) from all members of the ~~municipalities~~board inof ~~which~~directors itand ~~operates~~representatives from all levels of the company structure must be furnished to the MOF.

· ~~Gambling~~A ~~operations~~basic, ~~will~~general ~~not~~gambling license from the MOF will be ~~permitted~~issued infor ~~certain~~a maximum of six (6) years and a gambling license (i.e. premises ~~such~~license) asfor ~~schools,~~each ~~children’s~~location ~~leisure~~at ~~facilities,~~which ~~health~~live game and ~~social~~technical ~~care~~game ~~facilities~~operations are conducted will be issued from local municipality councils for a maximum of three (3) years. Previously, ~~churches~~the MOF general gambling licenses for live games had been issued for ten (10) years and for one (1) year for technical games. Licenses can be issued and/or ~~religious~~renewed ~~societies~~if the Company meets the following pre-existing conditions: (i) the Company and its representatives maintain a clean criminal record and all necessary certifications; (ii) the Company and its representatives pay their taxes and other necessary charges on time; (iii) the Company stays in good standing; (iv) the Company confirms its ability to comply with all technical and supervisory standards required by the new law; and (v) the Company does not disturb public order. As of December 31, ~~2016~~2017 and the date hereof, TWC’s ~~existing~~was, ~~casinos were~~ and ~~are~~is in, compliance with ~~this~~these ~~requirement~~conditions and thereby has received all required licenses to operate.

· ~~Gambling~~Individual ~~operators~~municipalities ~~will~~and betheir ~~required~~local tocouncils ~~follow~~will ~~certain~~be ~~self-restricting~~entitled ~~measures~~to ~~put~~issue indecrees ~~place~~to byprohibit ~~individual~~or ~~players.~~restrict ~~For~~gambling ~~instance~~operations, ~~an operator must create an individual account for each player, which the player can use~~ to ~~manage~~set ~~his/her~~permissible ~~gaming~~hours ~~expenditures and frequency~~ of ~~play,~~gambling ~~including~~operations aand ~~maximum~~designate ~~number~~locations of ~~casino~~operations ~~visits~~within ~~per~~their ~~month~~respective jurisdictions. ~~These~~Previously, ~~accounts~~municipalities, ~~must~~by ~~also~~decree, ~~allow~~were ~~players~~allowed to ~~set~~ban ~~individual limits on~~ gambling ~~activities,~~operations ~~including setting maximum bets per day~~ or ~~per~~set ~~calendar month or a maximum amount of net loss per day or per calendar month. Each customer’s identity must be checked against~~ the ~~MOF’s~~locations ~~central database~~ of ~~individuals excluded from the participation of~~ gambling ~~(i.e.~~operations ~~black-listed).~~within ~~For~~their ~~expats,~~respective ~~the individual account would be valid for only 90 days, following which a reapplication would be required to setup the account~~jurisdictions. ~~Some~~As of ~~these~~December ~~provisions~~31, ~~will~~2017 ~~not~~and ~~become effective until one year after~~ the ~~MOF~~date ~~has set up their central database~~hereof, ~~but~~TWC ~~the self-restriction provisions will become effective immediately after new licenses are obtained. In order to meet these self-restricting measures~~was, ~~the~~and ~~Company will implement a new casino management system~~is, ~~that~~in isgood ~~currently~~standing ~~being~~with ~~evaluated~~all ~~and~~of ~~tested~~the bymunicipalities ~~local~~in ~~management~~which ~~and~~it ~~will be implemented prior to September 2017~~operates.

· Gambling ~~operators~~operations will ~~also~~not be ~~required~~permitted toin ~~bar~~proximity ~~from~~to ~~entry~~certain ~~individuals~~premises, ~~flagged~~such ~~by the MOF and registered in its central database~~ as ~~black-listed~~schools, orchildren’s ~~noted~~leisure asfacilities, ~~being~~health ~~“destitute”~~ and onsocial ~~public~~care ~~assistance~~facilities, ~~bankrupt,~~churches ~~are subject to an order banning them from gambling under Czech criminal law~~ or ~~are~~religious ~~a compulsive gambler~~societies. ~~No one under age 18 will be allowed on the casino floor.~~ As of December 31, ~~2016~~2017 and the date hereof, TWC’s ~~was~~existing casinos were, and isare, in compliance with this requirement.

· Gambling operators will ~~not~~ be ~~able~~required to ~~provide~~follow ~~for~~certain ~~free~~self-restricting measures put in place by individual players. For instance, oran atoperator amust ~~reduced~~create ~~price~~an individual account for each player, ~~any~~which ~~benefits~~the player can use to manage his/her gaming expenditures and frequency of play, including a ~~player~~maximum number of casino visits per month. These accounts must also allow players to set individual limits on gambling activities, including ~~food~~setting maximum bets per day or per calendar month or a maximum amount of net loss per day or per calendar month. Each customer’s identity must be checked against the MOF’s central database of individuals excluded from participation in gambling activities (i.e. blacklisted). For foreign citizens living in the Czech Republic (expats), ~~beverages~~the individual account would be valid for only 90 days, ~~tobacco~~following ~~products~~which ora ~~“stimulating~~reapplication ~~substances~~would be required to setup the account.” ~~TWC~~Some ~~anticipates~~of ~~that~~these itprovisions will benot inbecome ~~compliance~~effective ~~with~~until ~~this~~one ~~requirement~~year ~~when~~after the MOF has published a complete technical specification of its ~~slot~~central ~~and~~database (gambling operation information system), but the self-restriction provisions for technical ~~license~~games ~~renewal~~became ~~application~~effective isimmediately ~~being~~after ~~reviewed~~new ~~during~~gambling ~~autumn~~licenses were obtained. In order to meet these self-restricting measures, the Company implemented a casino management system in all of its three casinos in August 2017.

· Gambling operators will also be required to ~~post~~ban afrom ~~sign~~entry onindividuals ~~each~~flagged ~~technical~~by ~~game warning that gambling is “harmful,” advising of~~ the ~~amount~~MOF ~~of the player’s net losses~~ and ~~how~~registered ~~long~~in ~~the~~its ~~player~~central ~~has~~database ~~been~~as ~~playing,~~blacklisted ~~with~~or anoted ~~requirement~~as ~~that~~being ~~there~~“destitute” ~~be a 15 minute break every 2 hours of play. TWC anticipates that it will be in compliance with this requirement when its slot~~ and ~~technical~~on ~~license~~public ~~renewal~~assistance, ~~application~~bankrupt, issubject ~~being~~to ~~reviewed during autumn 2017.~~an

· All customer transactions, such as exchanging money for gambling chips, must be logged and such records be kept for 10 years, up from five years under the previous law. TWC will extend its record archiving to 10 years to comply with this requirement.

· The required retention period of all required real time color audio/visual surveillance recordings will increase from three months to 24 months. The Company is currently evaluating new surveillance systems that will meet this requirement.

· Maximum bets for technical games will be increased to Kč 1,000 (about $41) from the current amount of

Kč 675 (about $28) and maximum win (or jackpot) per slot machine will be decreased to Kč 500,000 (approximately $20,500) from the current amount of Kč 675,000 (approximately $27,700). Slot and electromechanical machine vendors/suppliers will be required to incorporate these limit changes to all slots and technical games that they sell/service to the casinos. Further, a new anti-money laundering regulation imposes a maximum daily transaction of €10,000 (or $10,500) on purchases and/or cash transactions. Any slot jackpot payouts exceeding this limit on any given day, can only be paid either directly to the player’s bank account or

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inorder ~~two~~banning ~~per~~them ~~diem~~from ~~payments~~gambling ~~where~~under ~~the~~Czech ~~player~~criminal ~~can~~law, ~~pick~~or upcompulsive ~~the~~gamblers. ~~remainder~~As ~~amount~~noted onabove, this provision will not become effective until one year after the ~~following~~MOF ~~day~~has published a complete technical specification of its central database (gambling operation information system). ~~TWC~~ ~~anticipates~~No ~~that~~one itunder age 18 will be inallowed ~~compliance~~on ~~with~~the ~~this~~casino ~~requirement~~floor. ~~when~~As ~~its~~of ~~slot~~December 31, 2017 and ~~technical~~the ~~license~~date ~~renewal~~hereof, ~~application~~TWC iswas, ~~being~~and ~~reviewed~~is, in ~~autumn~~compliance ~~2017~~with this age requirement.

· ~~Casinos~~Gambling ~~must~~operators ~~have~~will anot ~~minimum~~be ofable ~~three~~to ~~live~~provide ~~games~~for ~~tables and 30 technical games available during operating hours. For each live game table~~free, ~~a casino may operate an additional 10 slot~~ or ~~technical~~at ~~game~~reduced ~~machines.~~prices, Ifany abenefits ~~casino~~to ~~has~~players, ~~more~~including ~~than~~food, ~~10 live game tables~~beverages, ~~there~~tobacco isproducts ~~no limit on number of slot~~ or ~~technical~~“stimulating ~~game machines permitted~~substances.” ~~All of~~ TWC’s ~~existing~~has ~~casinos~~been ~~each~~in ~~have~~full ~~more~~compliance ~~than~~with 10this ~~live~~requirement ~~game~~since ~~tables~~January in1, ~~operation~~2018, ~~thereby~~when ~~are~~its ~~already~~new ingambling ~~compliance~~licenses ~~with~~became ~~this requirement~~effective.

· AGambling ~~gaming~~operators ~~bond equal to Kč 10 million (approximately $410,000)~~ will be required to bepost ~~paid by~~ a ~~casino~~sign ~~operator~~on ~~to the MOF for~~ each oftechnical ~~its~~game ~~casino~~warning ~~units.~~that ~~For~~gambling ~~operators owning multiple casinos, a minimum bond of Kč 20 million (approximately $820,000)~~ is ~~required~~“harmful”, upadvising ~~to a maximum~~ of Kčthe 50amount ~~million ($2.0 million) for any licensee, regardless~~ of the ~~number~~player’s ofnet ~~casinos~~losses ~~owned~~ and ~~operated~~how ~~beyond~~long ~~five~~the ~~casino~~player ~~units.~~has ~~Previously~~been playing, ~~only~~with ~~one~~a ~~gaming~~requirement ~~bond~~that ofthere Kčbe 22a ~~million~~15-minute ~~($900,000)~~break ~~was~~after ~~required,~~every ~~which~~two ishours ~~used~~of ~~for~~continuous ~~the existing licenses~~play. ~~When~~In ~~TWC~~the ~~renews~~event ~~its~~a ~~gaming~~player ~~license,~~takes itthe ~~will~~obligatory ~~have~~break toearlier ~~provide~~than athe ~~new~~elapse ~~gaming bond~~ of Kčtwo 30hours ~~million~~of ~~($1.2~~continuous ~~million),~~play toAND ~~meet~~ the ~~new~~break ~~bond~~is ~~requirements~~at ~~for~~least ~~its~~15 ~~three casinos~~minutes, ~~resulting~~then in a ~~net~~new ~~increase~~two-hour ofplay Kčperiod 8would ~~million (approximately $330,000) from its existing bond~~start. However, aif ~~casino operator cannot access~~ the ~~funds~~break ~~underlying~~is ~~the~~shorter ~~old~~than ~~bond~~15 ~~until~~minutes, then the ~~expiration~~break ofwill ~~one~~not ~~year~~qualify ~~after~~as the ~~termination~~obligatory of15-minute ~~the old bond. Therefore~~break, ~~the~~and ~~casino~~would ~~operator~~not ~~must~~constitute ~~initially~~a ~~pledge~~restart ~~additional~~of ~~funds to secure~~ the ~~new~~two-hour ~~bond~~play ~~requirement, which for TWC, will amount to Kč 30 million ($1~~period.2 ~~million).~~ TWC ~~will~~is ~~make~~in ~~the~~full ~~additional~~compliance ~~bond~~with ~~payment~~this ~~upon its license renewal application~~requirement.

· ~~Any~~All ~~marketing~~customer ~~advertisements~~transactions, ~~beginning~~such ~~January~~as 1,exchanging ~~2017~~money for gambling chips, must ~~have~~be alogged ~~written~~and ~~warning~~those ~~label~~records inmust ~~the~~be ~~Czech~~kept ~~language~~for ~~about~~10 ~~the~~years, ~~damage~~up ~~gambling~~from ~~can~~five doyears tounder ~~participants~~the ~~and~~previous ~~that~~law. ~~participants~~TWC ~~must~~extended beits ~~older~~record ~~than~~archiving 18to 10 years ofto ~~age~~comply with this requirement.

The required retention period of all required real time color audio/visual surveillance recordings will increase from three months to 24 months. The Company has installed new surveillance systems in all its casinos that meet this requirement.

Maximum bets for technical games will be increased to Kč 1,000 (about $45) from the current amount of Kč 675 (about $32) and maximum win (or jackpot) per slot machine will be decreased to Kč 500,000 (approximately $23,500) from the current amount of Kč 675,000 (approximately $31,700). Slot and electromechanical machine vendors/suppliers will be required to incorporate these limit changes into all slots and technical games that they sell/service to the casinos. Further, a law on limitation of cash payments imposes a maximum daily transaction limit of Kč 270,000 (or approximately $12,700) on cash transactions. Any slot jackpot payouts exceeding this limit on any given day can only be paid either directly to the player’s bank account or in two per diem payments where the player can pick up the remainder amount on the following day. TWC was and is in full compliance with this requirement since January 1, 2018, when its new gambling licenses became effective.

Casinos must have a minimum of three live games tables and 30 technical games available during operating hours. For each additional live game table, a casino may operate an additional 10 slot or technical game machines. If a casino has more than 10 live game tables, there is no limit on the number of slot or technical game machines permitted. All of TWC’s existing casinos each have more than 10 live game tables in operation and are, thereby, already in compliance with this requirement.

A gaming bond equal to Kč 10 million (approximately $470,000) will be required to be paid by a casino operator to the MOF for each of its casino units. For operators owning multiple casinos, a minimum bond of Kč 20 million (approximately $940,000) is required, up to a maximum of Kč 50 million ($2.3 million) for any licensee, regardless of the number of casinos owned and operated beyond five casino units. Previously, only one gaming bond of Kč 22 million ($1.0 million) was required, which was used for all of the existing licenses. As a condition to acquiring new gaming licenses, the Company provided a new gaming bond of Kč 30 million ($1.4 million) to meet the new bond requirements for its three casinos, resulting in a net increase of Kč 8 million (approximately $381,000) from its existing bond. Therefore, the casino operator must initially pledge additional funds to secure the new bond requirement, which, for TWC, will amount to Kč 30 million ($1.4 million). TWC posted the additional bond payment in December 2017. On March 7, 2018, the old gaming bond was cancelled by the MOF and the funds were released free and clear to the Company.

Beginning January 1, 2017, any marketing advertisements were required to have a written warning label in Czech language about the damage gambling can do to gambling participants and that gambling participants must be older than 18 years of age. As of December 31, 2017 and the date hereof, TWC is in full compliance with this requirement.

Failure to comply with the new Gambling Act could result in a misdemeanor punishable by fines up to

Kč 1,000,000 (approximately $41,000) or an administrative offense punishable by an injunction against the violative practice, fines up to Kč 50,000,000 ($2.0 million) and/or asset forfeiture to, or confiscation by, the government. 8

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Kč 1.0 million (approximately $45,000) or an administrative offense punishable by an injunction against the prohibited practice, fines up to Kč 50 million ($2.3 million) and/or asset forfeiture to, or confiscation by, the Czech government, or prohibition of activities in the most serious cases.

We have been, and are currently, in compliance with all such conditions that are currently in effect. See also “Taxation,” below.

There can be no assurance that such licenses, approvals or findings of suitability will be obtained in the future or will not be revoked, suspended or conditioned, or that we will be able to obtain the necessary governmental approvals for our future activities.

Iran Sanctions Disclosure

Pursuant to Section 13(r) of the Exchange Act, if during ~~2016~~2017, TWC or any of its affiliates have engaged in certain transactions with Iran or with persons or entities designated under certain executive orders, we would be required to disclose information regarding such transactions in our Annual Report as required under Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, or ITRA. Certain of the Iran sanctions were lifted on January 16, 2016. During ~~2016~~2017, the Company did not engage in any of the law’s enumerated transactions with Iran or with persons or entities related to Iran.

Taxation

Gaming Taxes

As noted above, we are subject to legislative changes that, at times, result in material adverse effects on our results of operations and financial condition.

On June 7, 2016, the President of ~~Czechia~~the Czech Republic signed the Gambling Acts. The 2017 Gambling Tax Act became effective on January 1, 2017. The new law raised the gaming tax rate on technical game (i.e. slot machine or electromechanical roulette or dice) revenues to the greater of a “minimum tax,” or 35%, and eliminated the per diem fixed fee of Kč 80 (~~approximately~~ $3.1276) on each slot machine.

8 This new “minimum tax” on technical games is equal to the product of: (x) the sum of all gambling positions of individual approved terminal devices (such as slot machines, electromechanical roulette and dice machines) permitted for the location of the gambling premises, times (y) Kč 9,200 (approximately $432). Therefore, if the aggregate tax amount collected from the 35% gaming tax on technical game revenues is lower than the computed “minimum tax,” then the casino operator must pay the “minimum tax” and not the aggregate tax amount collected from the 35% gaming tax. Otherwise, if the aggregate tax amount collected from the 35% gaming tax on technical game revenues is greater than the computed “minimum tax,” then the casino operator need only pay the aggregate tax amount collected from the 35% gaming tax and not the “minimum tax.” The gaming tax rate on live game (i.e. cards, roulette or dice) revenues remains

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This new “minimum tax” on technical games is equal to the product of: (x) the sum of all gambling positions of individual approved terminal devices (such as slot machines, electromechanical roulette and dice machines) permitted for the location of the gambling premises, times (y) Kč 9,200 (approximately $359). Therefore, if the aggregate tax amount collected from the 35% gaming tax on technical game revenues is lower than the computed “minimum tax,” then the casino operator must pay the “minimum tax” and not the aggregate tax amount collected from the 35% gaming tax. Otherwise, if the aggregate tax amount collected from the 35% gaming tax on technical game revenues is greater than the computed “minimum tax,” then the casino operator need only pay the aggregate tax amount collected from the 35% gaming tax and not the “minimum tax.” The gaming tax rate on live game (i.e. cards, roulette or dice) revenues remains unchanged at 23%. Further, the 2017 Gambling Tax Act modified the tax revenue allocation between the federal government and local municipalities. A summary table of the 2017 Gambling Tax Act is shown below:

		2017 Gambling Tax Act
(in actual amounts)		(Effective from January 1, 2017)
Live Games		23% gaming tax from revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).
Slot and other technical games		The greater of either: (a) the aggregate amount collected from 35% gaming tax from revenue earned from slot and other technical games (35% of tax allocated to the federal government; 65% of tax allocated to the local municipality), or (b) a "minimum tax," calculated as the product of the sum of all gambling positions of individual approved terminal devices referred to in the permit for the location of the gambling premises times Kč 9,200 (approximately $359).
Net Income		No change from the 19% corporate income tax noted below.

The Company currently estimates that if the 2017 Gambling Tax Act were in effect for the full year ended December 31, 2016, it would have resulted in an annual reduction of approximately $1.3 million to the Company’s consolidated earnings before income taxes, assuming all other factors remained constant. The total impact of the 2017 Gambling Act cannot be quantified or estimated pending the interpretation and enforcement of these measures by the MOF and their eventual implementation into the Company’s gambling operations. See also, Part I, Item 1A. “Risk Factors — Potential changes in legislation and regulation of our operations.”

On December 15, 2015, the President of Czechia signed an amendment to the Gaming Law that increased gaming tax rates payable by all gaming operators, including TWC, effective January 1, 2016 (the “2016 Gaming Tax Amendment”). (See TWC’s Form 8-K, dated December 21, 2015). As a result of this amendment, gaming taxes on live game revenues increased from 20% to 23% and gaming taxes on slot revenues increased from 20% to 28%. In addition, the amendment increased the fee per slot machine per day to CZK 80 (approximately $3.12) from CZK 55 (approximately $2.25). The amendment became law on December 28, 2015, when it was published as Act No. 380/2015 Coll. in the official Collection of Laws, maintained by the Czech Ministry of the Interior.

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		2016 Gaming Tax Amendment
(in actual amounts)		(Effective from January 1, 2016 to December 31, 2016)
Live Games		23% gaming tax from revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).
Slots		28% gaming tax from revenue earned from slot games (20% of tax allocated to the federal government; 80% of tax allocated to the local municipality); and a per diem fixed fee of Kč 80 (approximately $3.12) per slot machine (allocated to the federal government).
Net Income		No change from the 19% corporate income tax noted below.

unchanged at 23%. Further, the 2017 Gambling Tax Act modified the tax revenue allocation between the federal government and local municipalities. A summary table of the 2017 Gambling Tax Act is shown below:

In December 2011, the Czech parliament passed sweeping gaming tax legislation (“2012 Gaming Tax Law”), which took effect on January 1, 2012. Our Czech gaming operations were subject to the 2012 Gaming Tax Law through the year ended December 31, 2015. Thereafter, those operations will be subject to the 2016 Gaming Tax Amendment (see below) and thereafter until the law is further revised. The changes in the gaming tax law are summarized below:


		2017 Gambling Tax Act
(in actual amounts)		(Effective from January 1, 2017)
Live Games		23% gaming tax from revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).

Slot and other technical games		The greater of either: (a) the aggregate amount collected from 35% gaming tax from revenue earned from slot and other technical games (35% of tax allocated to the federal government; 65% of tax allocated to the local municipality), or (b) a "minimum tax," calculated as the product of the sum of all gambling positions of individual approved terminal devices referred to in the permit for the location of the gambling premises times Kč 9,200 (approximately $432).

Net Income		No change from the 19% corporate income tax noted below.

		2012 Gaming Tax Law
(in actual amounts)		(Effective from January 1, 2012 to December 31, 2015)
Live Games		20% gaming tax from revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).
Slots		20% gaming tax from revenue earned from slot games (20% of tax allocated to the federal government; 80% of tax allocated to the local municipality); and a per diem fixed fee of Kč 55 (approximately $2.15) per slot machine (allocated to the federal government).
Net Income		19% corporate income tax on adjusted net income earned in Czechia, net of exemptions (allocated to the federal government).

On December 15, 2015, the President of the Czech Republic signed an amendment to the Gaming Law that increased gaming tax rates payable by all gaming operators, including TWC, effective January 1, 2016 (the “2016 Gaming Tax Amendment”). (See TWC’s Form 8-K, dated December 21, 2015). As a result of this amendment, gaming taxes on live game revenues increased from 20% to 23% and gaming taxes on slot revenues increased from 20% to 28%. In addition, the amendment increased the fee per slot machine per day to Kč 80 ($3.76) from Kč 55 ($2.58). The amendment became law on December 28, 2015, when it was published as Act No. 380/2015 Coll. in the official Collection of Laws, maintained by the Czech Ministry of the Interior.

TWC’s gaming-related taxes and fees for the years ended December 31, 2016 and 2015 are summarized in the following table:

	For the Year Ended
(amounts in thousands)	2016			2015
Gaming revenues (excl. ancillary revenues)	$	44,967		$	35,682
Gaming taxes	$	12,398		$	7,441
Gaming taxes as % of gaming revenues (above)		27.6	%		20.9	%

Gaming taxes are payable by the 25th day following the end of each calendar quarter, while corporate income tax is paid by June 30th of the subsequent year. Estimated quarterly income tax payments are also required since the third quarter of 2013. TWC was current on all of its Czech tax payments at December 31, 2016 and through the date of this report.

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		2016 Gaming Tax Amendment
(in actual amounts)		(Effective from January 1, 2016 to December 31, 2016)
Live Games		23% gaming tax from revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).

Slots		28% gaming tax from revenue earned from slot games (20% of tax allocated to the federal government; 80% of tax allocated to the local municipality); and a per diem fixed fee of Kč 80 ($3.76) per slot machine (allocated to the federal government).

Net Income		No change from the 19% corporate income tax noted below.

TWC’s gaming-related taxes and fees for the years ended December 31, 2017 and 2016 are summarized in the following table:


	For the Year Ended
(amounts in thousands)	2017			2016

Gaming revenues (excl. ancillary revenues)	$	37,462		$	44,967

Gaming taxes	$	11,754		$	12,398
Gaming taxes as % of gaming revenues (above)		31.4	%		27.6	%

Corporate Income Taxes

Effective January 1, 2012, in conjunction with other changes to gaming tax rates, the Czech government instituted an effective corporate income tax, currently 19.0%, on all income, including gaming income. Prior to the law change, our Czech casino operations were subject only to gaming taxes. The income tax rate in Germany is approximately 30.0%. We have no gambling operations in Germany as of the date of the Annual Report. For the year ended December 31, ~~2016~~2017, the Company incurred ana total net income tax expense of approximately $21.71 million, inclusive of a deferred income tax ~~benefit~~liability of $~~130~~367,000. The prior year income tax expense of approximately $12.47 million included a deferred income tax benefit of $~~266~~130,000. We did not incur any corporate income taxes in Germany from our hotel operations for the years ending December 31, ~~2016~~2017 and ~~2015~~2016, due to the consolidated losses ~~associated~~arising ~~with~~from acquisition-related closing costs incurred in these two years.

On December 22, 2017, H.R. 1, originally known as the Tax Cuts and Jobs Act (the “TCJA”), was enacted in the United States. The TCJA made many significant changes to the U.S. federal income tax laws applicable to businesses and their owners, including stockholders of publicly traded corporations. Pursuant to this legislation, as of January 1, 2018, among other things, (i) the federal income tax rate applicable to corporations is reduced to 21%; (ii) the highest marginal individual income tax rate is reduced to 37% (through taxable years ending in 2025); (iii) the corporate alternative minimum tax is repealed; (iv) the backup withholding rate for U.S. stockholders is reduced to 24% and; (v) there is a migration from a “worldwide” system of taxation to a territorial system. The deduction of net interest expense is limited for all businesses; provided that certain businesses may elect not to be subject to such limitations and instead to depreciate their real property related assets over longer depreciable lives. The reduced 21% federal income tax rate applicable to corporations will apply to taxable earnings reported for the full 2018 fiscal year. As a result of this legislation, the Company remeasured its deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The Company is still analyzing certain aspects of the TCJA and refining

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its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of the Company’s deferred tax balances was $2,810 which was offset fully by the provisional amount recorded related to the reversal of previously established valuation allowances against these deferred tax balances. In addition, the Company recognized $5,203 of tax expense related the deemed repatriation of foreign accumulated earnings.

We are still in the process of evaluating the income tax effect and other changes required by the TCJA that will be effective for our fiscal year 2018. Because we do not generate earnings in the United States, we have not paid U.S. corporate income taxes in 2017 or 2016.

Value Added Taxes

In conformity with the ~~European Union (“~~EU”) taxation legislation, ~~Czechia~~the Czech Republic’s value added tax (“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~~hotel ~~Savannah,~~segment ~~Hotel Columbus and Hotel Freizeit Auefeld operations~~ was not material for the years ended December 31, ~~2016~~2017 and ~~2015~~2016, respectively.

Our Employees

As of December 31, ~~2016~~2017, we had a total of ~~605~~629 full and part-time employees, of which 9083 work in Ceska; ~~174~~168 in Route 59; ~~144~~125 in Route 55; 4445 in Hotel Savannah; 3332 in Hotel Columbus; 4448 in Hotel ~~Freizeit~~ Auefeld; 5156 in Hotel Kranichhöhe; 2043 in Hotel Donauwelle; 24 in our shared services offices, located atin our Ceska Casino; and five in the Company’s headquarters in New York City, New York. None of our employees are represented by a union nor are we a party to any labor contract.

Item 1A. Risk Factors.

We have described below what we currently believe to be the material risks and uncertainties in our business.

Before making an investment decision with respect to our Common Stock, you should carefully consider the risks and uncertainties described below, together with all of the other information included or incorporated by reference in this Annual Report on Form 10-K, including Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.” We also face other risks and uncertainties beyond what is described below. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. Further, past financial performance may not be a reliable indication of future performance and historical trends should not be used to anticipate results or trends in future periods. This Annual Report on Form 10-K is qualified in its entirety by these risk factors. If any of the following risks actually occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. If this were to happen, the value of our Common Stock could decline significantly. You could lose all or part of your investment.

The proposed Merger may not be completed within the expected timeframe, or at all, and the failure to complete the Merger could adversely affect our business, operating results, liquidity and financial condition, and the price of our Common Stock.

On March 2, 2018, the Company entered into an Agreement and Plan of Merger (the ‘‘Merger Agreement’’) with FEC Overseas Investment (UK) Limited, a limited company formed under the laws of the United Kingdom (the “Parent”), and FEC Investment (US) Limited, a Nevada corporation and wholly-owned subsidiary of Parent and Far East Consortium Limited, a Cayman Islands limited company that is party solely for the limited purposes set forth in the Merger Agreement. The Merger Agreement is an executory contract subject to closing conditions beyond our control, and there is no guarantee that these conditions will be satisfied in a timely manner or at all. Completion of the Merger is subject to various conditions. If any of the conditions to the proposed Merger are not satisfied (or waived by the other party), the Merger may not be completed. In addition, we could be required to pay to the Parent a fee equal to $1,500,000 or transaction expenses up to $700,000 in the aggregate, if the Merger Agreement is terminated under certain limited circumstances more thoroughly described in the Merger Agreement. If we fail to complete the Merger our business,

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operating results, liquidity and financial condition, and the price of our common stock, could be materially adversely affected.

Regulation and licensing

Our gambling operations are subject to regulation by each federal and local jurisdiction in which we operate. Each of our officers may be subject to strict scrutiny and approval from the gaming commission or other regulatory body of each jurisdiction in which we conduct gambling operations. Furthermore, the operations of our casinos are contingent upon maintaining all necessary regulatory licenses, permits, approvals, registrations, findings of suitability, orders and authorizations. The laws, regulations and ordinances requiring these licenses, permits and other approvals generally relate to the operations of the casinos, the payment of taxes, the responsibility, financial stability and character of the owners and managers of gambling operations, as well as persons financially interested or involved in gambling operations. All of our casinos are duly licensed by the MOF, and we are subject to ongoing regulation to maintain these operations.

Czech regulatory authorities have broad powers to request detailed financial and other information, to limit, condition, suspend or revoke a registration, gaming license or related approval and to approve changes in our operations. The suspension or revocation of any license which may be granted to us could significantly harm our business, financial condition, results of operations and prospects. Any change in the laws, regulations or licenses applicable to our business or a violation of any current or future laws or regulations applicable to our business or gaming licenses could require us to make substantial expenditures or could otherwise negatively affect our gambling operations.

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The suspension or revocation of any license which may be granted to us could significantly harm our business, financial condition, results of operations and prospects. Any change in the laws, regulations or licenses applicable to our business or a violation of any current or future laws or regulations applicable to our business or gaming licenses could require us to make substantial expenditures or could otherwise negatively affect our gambling operations.

Potential changes in legislation and regulation of our operations

Laws and regulations governing the conduct of gambling activities and the obligations of gaming companies in any jurisdiction in which we have or in the future may have gambling operations are subject to change and could impose additional operating, financial or other burdens on the way we conduct our business.

In early January 2016, the MOF imposed a ban on certain types of marketing and promotional events, under the stipulation that the operation of these promotional events were in violation of gaming law. The ban affected all casinos operating in ~~Czechia~~the Czech Republic. In late September 2016, the MOF reversed its position and removed the ban for all casino operators. Although the temporary ban did not materially affect the Company’s casino operating results, any other similar actions by the MOF could have a negative impact on the Company’s business, operating results and prospects.

Moreover, legislation to prohibit, limit, or burden our gambling business have been introduced via the recent Gambling Acts and may be further introduced in the future in ~~Czechia~~the Czech Republic or elsewhere where gambling has been legalized. In addition, from time to time, legislators and special interest groups (which may include our competitors) have proposed legislation that would expand, restrict or prevent gambling operations or which may otherwise adversely impact our operations in the jurisdictions in which we operate. Any expansion of gambling or restriction on or prohibition of our gambling operations, increase in gaming taxes, or enactment of other adverse regulatory changes could have a material adverse effect on our business, financial condition, operating results and prospects.

In addition to the Gambling Acts that were passed on June 7, 2016 and effective for the calendar year 2017 and forward, there may be other proposed legislation and/or amendments to these Gambling Acts that may further increase the constraints and limitations on our operations. We cannot, as of the date of this report, specifically predict any proposed legislation or its effect on the results of operations or financial condition or business prospects of the Company.

Taxation of gambling operations

Gambling operators are typically subject to significant taxes, which may increase at any time. Material increases in these taxes or fees have and would adversely affect our business, results of operations, financial condition and prospects. ~~Czechia~~The Czech Republic currently has a number of laws related to various taxes imposed by governmental authorities. Applicable taxes include VAT, gaming tax, corporate income tax, and payroll (social) taxes. In December 2011, the Czech government passed sweeping gaming tax legislation that became effective in 2012. In this new tax law, the government eliminated the “charity contribution tax” scheme and, in lieu of it, changed the existing revenue-based, tiered rate gaming tax structure to a flat 20% gaming tax on all gambling revenues, plus an applicable corporate income tax of 19% on adjusted net income derived from any revenue sources, including gambling. These tax law changes have negatively and materially impacted our results of operations since 2012.

In December 2015, the Czech government passed an amendment to the gaming tax law which effectively and significantly raised the gaming tax rates. The amendment is effective for the calendar year 2016 and forward. See also “Gaming Tax” section under “Taxation” above. These tax law changes, together with other legal compliance areas (for example, customs and currency control matters) are subject to review and investigation by a number of different Czech governmental authorities, which are authorized by law to impose fines, penalties and interest charges. These reviews may create additional tax risks that, if applied to TWC, could have a material adverse effect on our business, results of operations, financial condition and prospects.13

On June 7, 2016, the President of Czechia signed the Gambling Acts. The Gambling Acts became law on June 15, 2016, when they were published in the official Collection of Laws, maintained by the Czech Ministry of the Interior. The 2017 Gambling Tax Act became effective on January 1, 2017, raised the gaming tax rate on technical game (i.e. slot machine or electromechanical roulette or dice) revenues to a “minimum tax,” raised the tax rate from 28% to 35%, and eliminated the per diem fixed fee of Kč 80 (approximately $3.12) on each slot machine. See “Taxation – Gaming

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~~Taxes~~revenue-based,” ~~above. This~~tiered ~~new~~rate gaming tax ~~law~~structure ~~will~~to ~~have~~ a ~~material~~flat ~~adverse~~20% ~~effect~~gaming tax on ~~our~~all ~~net~~gambling revenues, plus an applicable corporate income ~~for~~tax ~~our~~of ~~fiscal~~19% ~~year~~on ~~ended~~adjusted ~~December~~net 31income derived from any revenue sources, ~~2017~~including gambling. These tax law changes have negatively and materially impacted our results of operations since 2012.

In December 2015, the Czech government passed an amendment to the gaming tax law which effectively and significantly raised the gaming tax rates. The amendment was effective for the calendar year 2016 and forward. See also “Gaming Tax” section under “Taxation” above. These tax law changes, together with other legal compliance areas (for example, customs and currency control matters) are subject to review and investigation by a number of different Czech governmental authorities, which are authorized by law to impose fines, penalties and interest charges. These reviews may create additional tax risks that, if applied to TWC, could have a material adverse effect on our business, results of operations, financial condition and prospects.

On June 7, 2016, the President of the Czech Republic signed the Gambling Acts. The Gambling Acts became law on June 15, 2016, when they were published in the official Collection of Laws, maintained by the Czech Ministry of the Interior. The 2017 Gambling Tax Act became effective on January 1, 2017, raised the gaming tax rate on technical game (i.e. slot machine or electromechanical roulette or dice) revenues to a “minimum tax,” raised the tax rate from 28% to 35%, and eliminated the per diem fixed fee of Kč 80 ($3.76) on each slot machine. See “Taxation – Gaming Taxes,” above. This new tax law will have a material adverse effect on our net income for our fiscal year ended December 31, 2017.

General economic trends are unfavorable

The ~~recent~~ worldwide economic downturn in 2009 and the anemic economic growth that followed as well as the current debt and immigrant and terrorism crises in the EU, has, and may, in the future, continue to have a negative impact on our financial performance. Lingering adverse economic conditions in local, regional, national and global markets could negatively impact our operations in the future. During periods of economic contraction like that recently experienced, certain costs can remain fixed or even increase, while revenues decline. The gambling services we provide are similar to other leisure activities in that they depend on personal discretionary expenditures, which are likely to decline during economic downturns. Continued adverse developments affecting economies throughout the world, and particularly in Europe, including a general tightening of the availability of credit, increasing interest rates, unemployment, deflation, political or economic turmoil, government debt crises, acts of war or terrorism, natural disasters, declining consumer confidence or significant declines or volatility in world stock markets could lead to a further reduction in discretionary spending on entertainment and leisure activities, which could adversely affect our business, financial condition, results of operations and prospects. In some cases, even the perception of an impending economic downturn or the continuation of a recessionary climate can be enough to discourage consumers from spending on leisure activities. We cannot predict at this time what the full effect and extent of ~~a possible global recession and~~ the ~~subsequent~~ extended period of slow-growth in Europe will be on our business, financial condition, or results of operations.

We face significant competition

We operate in the highly competitive gaming industry with a large number of participants, many of which have financial and other resources that are greater than ours. The gaming industry faces competition from a variety of sources for discretionary consumer spending including spectator sports and other entertainment and gaming options, as well as home entertainment alternatives. Competitive gambling activities include traditional casinos, video lottery terminals, internet gaming, sports betting, state-sponsored lotteries and other forms of legalized ~~gaming~~and illegal gambling in ~~Czechia~~the Czech Republic, Germany, Austria and in other jurisdictions. Moreover, these established gambling jurisdictions could award additional gaming licenses or permit the expansion of existing gambling operations. If additional gaming opportunities become available near our operations, such gaming opportunities could have a material, adverse impact on our business, financial condition, results of operations and prospects.

Additionally, internet gaming and wagering is growing rapidly and is affecting competition in our industry. Web-based businesses may offer consumers a wide variety of events to wager on, including other games, racetracks, sporting and even e-sporting events. Unlike most web-based gaming companies, we pay taxes in the jurisdictions in which we operate and our operations require ongoing capital expenditures for both their continued smooth operations, maintenance, renovation and growth. We could also face significantly greater costs in operating our business compared to these “virtual” internet gaming companies. We cannot offer the same number of gaming options as internet-based gaming companies. Many internet-based gaming companies are located off-shore and avoid regulation under applicable Czech laws. These companies may divert wagering dollars from live wagering venues, such as our casinos. The continued growth and success of these on-line ventures could have a material, adverse impact on our business, financial condition, results of operations and prospects.

Our principal hotel competitors are other operators of full-service and select-service properties, including other major hospitality chains with well-established and recognized brands. We also compete against smaller hotel chains and privately owned hotels. If we are unable to compete successfully, our revenues or profits may decline or our ability to maintain or increase our market share may be diminished. We compete for guests based primarily on location, customer satisfaction, room rates, quality of service, amenities, and quality of accommodations. Most of our competitors are larger than we are, based on the number of properties they manage, franchise or own, or based on the number of rooms or geographic locations where they operate. Many of our competitors also have recognizable brands, participate with online travel merchants and have a large number of members participating in their guest loyalty programs which may enable them to attract more customers and more effectively retain such guests. Our competitors generally also may have greater financial and marketing resources than we do, which could allow them to improve their properties and expand their marketing efforts in ways that could affect our ability to compete for guests effectively. If we are unable to 14

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~~successfully~~to ~~compete~~these ~~against~~“virtual” ~~competitors~~internet ingaming ~~our~~companies. ~~market~~We ~~areas~~cannot offer the same number of gaming options as internet-based gaming companies. Many internet-based gaming companies are located off-shore and avoid regulation under applicable Czech laws. These companies may divert wagering dollars from live wagering venues, itsuch ~~will~~as our casinos. The continued growth and success of these on-line ventures could have a material, adverse ~~effect~~impact on our business, financial condition, results of operations and ~~business~~ prospects.

Our principal hotel competitors are other operators of full-service and select-service properties, including other major hospitality chains with well-established and recognized brands and integrated reservation systems. We also compete against smaller hotel chains and privately owned hotels. If we are unable to compete successfully, our revenues or profits may decline or our ability to maintain or increase our market share may be diminished. We compete for guests based primarily on location, customer satisfaction, room rates, quality of service, amenities, and quality of accommodations. Most of our competitors are larger than we are, based on the number of properties they manage, franchise or own, or based on the number of rooms or geographic locations where they operate. Many of our competitors also have recognizable brands, participate with online travel merchants and have a large number of members participating in their guest loyalty programs which may enable them to attract more customers and more effectively retain such guests. Our competitors generally also may have greater financial and marketing resources than we do, which could allow them to improve their properties and expand their marketing efforts in ways that could affect our ability to compete for guests effectively. If we are unable to successfully compete against competitors in our market areas, it will have a material adverse effect on our business, financial condition, results of operations and business prospects.

Fluctuations in currency exchange rates could adversely affect our business

Our facilities in ~~Czechia~~the Czech Republic represent a significant portion of our business, and the revenue generated is generally denominated in EUR and the expenses incurred by these facilities are largely denominated in CZK, while revenues and expenses from our three hotels in Germany and one hotel in Austria are denominated in EUR. The potential depreciation in the value of either of these currencies against the USD would adversely impact the revenue and operating profit from our operations when translated into USD, which would have a corresponding effect on our consolidated results of operations. (See also “Item 7A. Quantitative and Qualitative Disclosure about Market Risk — Foreign Currency Exchange Rate Risk”). We do not currently hedge our exposure to fluctuations of these foreign currencies, and there is no guarantee that we will be able to successfully hedge any future foreign currency exposure, if we subsequently choose to do so in the future.

We are subject to the business, financial and operating risks inherent to the hospitality industry

Our hotel segment is subject to a number of business, financial and operating risks inherent to the hospitality industry, including:

financing risks, including the risk of leverage and the corresponding risk of default on our existing indebtedness and potential inability to refinance or extend the maturities of our existing indebtedness;

levels of spending for business and leisure travel, as well as consumer confidence;

changes in consumer trends and preferences, particularly by younger consumers;

changes in taxes and governmental regulations that influence or set wages, prices, interest rates or construction and maintenance procedures and costs;

hostilities, including future terrorist attacks, or fear of hostilities that affect travel;

the degree and nature of our competition, including their marketing power, loyalty programs and integrated reservation systems, most of which may be more advanced and better financed than ours;

the costs and administrative burdens associated with complying with applicable laws and regulations;

the costs or desirability of complying with local practices and customs;

the availability and cost of capital necessary for us to fund acquisitions, investments, capital expenditures and service debt obligations;

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delays in or cancellations of planned or future acquisition or development projects;

foreign exchange rate fluctuations;

· changes in operating costs, including, but not limited to, interest rates, energy, food, workers’ compensation, benefits, insurance and unanticipated costs resulting from statutory requirements and/or force majeure events;

increases in cost for healthcare coverage for employees and potential government regulation in respect of health coverage;

shortages of labor or labor disruptions;

shortages of desirable locations for acquisition or development;

· unrealistic purchase prices set by ~~sellers~~vendors; and

the ability of third-party internet travel intermediaries to attract customers for our properties.

Any of these factors could substantially decrease customer stays, increase our costs of doing business or limit or reduce the prices we charge for our hospitality products or services, including the rates our properties charge for accommodations. These factors can also affect our ability to develop or acquire new properties or maintain and operate our existing properties. As a result, any of these factors can reduce our profits and limit our opportunities for growth. Many of these risk factors apply to our casino segment as well.

Need to diversify

Prior to 2014, all of our operations were primarily located in ~~Czechia~~the Czech Republic. Therefore, any future adverse legislation in ~~Czechia~~the Czech Republic may have an adverse impact on our Czech operations, financial results, financial condition and prospects. ToIn ~~counteract~~an attempt to minimize this risk, we acquired ~~the~~ Hotel Columbus in Seligenstadt, Germany, in September 2014, ~~the~~ Hotel ~~Freizeit~~ Auefeld in Hann. Münden, Germany, in June 2015, ~~and the~~ Hotel Kranichhöhe in Much, Germany, in December 2016~~. We~~, ~~have~~and ~~earmarked~~Hotel aDonauwelle ~~sizable~~in ~~portion~~Linz, ofAustria, ~~the~~in ~~Company’s~~March ~~cash~~2017. However, ~~reserves~~all ~~for~~of ~~expansion~~our ~~and~~operations are ~~currently~~in ~~seeking~~the toEU ~~develop~~ and~~/or~~ ~~acquire~~are ~~additional~~exposed ~~interests~~to inlegislative ~~gambling~~risk ~~operations~~from ~~and/or~~the ~~hotels~~Council inof ~~other~~the European ~~countries. However~~Union, ~~there~~as ~~can~~well beas nofrom ~~assurance~~the ~~that~~individual wecountries ~~will be able to develop or acquire such new operations~~ in ~~the~~which ~~future~~we operate.

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Need for additional financing

Pursuant to our growth strategies, we may require additional debt and/or equity financing for the acquisition and development of new businesses or business units. We may also need to access the capital markets or otherwise obtain additional funds to finance acquisitions, the continuing maintenance, renovation, or re-theming of currently owned facilities or the development of new operations. There is no guarantee that we will be able to obtain such financing or funds in the future on favorable terms to us, or at all.

Dependence upon key personnel

Our ability to successfully implement our strategy of expansion, manage the existing casinos, and maintain a competitive position will continue to depend, in large part, on the services of Mr. Rami S. Ramadan, the Company’s President and Chief Executive Officer (“CEO”). The Company is also dependent upon other key employees, casino managers, and consultants, whom we retain from time to time.

International activities

Our operations are completely outside of the United States. Operating internationally involves additional risks including, but not limited to currency exchange rates, different legal or regulatory environments, political and economic risks relating to the stability or predictability of foreign governments, differences in the manner in which different cultures do business, difficulties in staffing and managing foreign operations, differences in financial reporting, operating difficulties, terrorism, different types of criminal threats and other factors. The occurrence of any of these risks, if severe enough, could have a material adverse effect on our business, financial condition, results of operations, and prospects.

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Climate impact

The operations of our facilities are subject to disruptions or reduced patronage as a result of severe weather conditions, natural disasters and other casualty events, including loss of service due to casualty, forces of nature, mechanical or electrical or telecommunications failure, traffic and road conditions, extended or extraordinary maintenance, flood, wind, snow, ice or other severe weather conditions. As the majority of our casino clientele travel from German and Austrian border regions by automobile, we are highly dependent on the volume and frequency of these players’ visitations. Inclement weather conditions on the roads to our casinos can serve to substantially reduce the number of visitations, which occurred inbetween ~~the~~December ~~first~~2016 and ~~second~~February ~~quarter of 2013~~2017. On the other hand, warm and favorable outdoor weather can also divert players to alternative activities, such as family outings. The frequency and strength of any of these aforementioned climate conditions could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Liability insurance

We may not have sufficient insurance coverage in the event of a catastrophic property or casualty loss. We may also suffer disruption of our business in the event of a terrorist attack (at our premises or elsewhere), or other catastrophic property or casualty loss, or be subject to claims by third parties injured or harmed while visiting our locations. While we currently carry adequate general liability insurance and business interruption insurance, such insurance may not be sufficient to cover all losses in such event.

We do not currently have cyber insurance policies to provide supplemental coverage above the coverage of our general liability insurance policies. Despite various precautionary steps to protect our casinos and hotels from losses resulting from cyber-attacks, however, any occurrence of a cyber-attack could result in losses at our properties, which could affect our operations. To date, we are not currently aware of any cyber incidents that we believe to be material or that could have a material adverse effect on the business, financial condition, results of operations or prospects of the Company.

No dividends

We have not paid any dividends to date on our Common Stock. Currently, our plan is to retain future earnings, if and when generated, for investment in our current operations and for future project developments. Any future determination to pay dividends will be at the discretion of TWC’s Board of Directors (our “Board”) and will depend on our financial condition, capital requirements, restrictions contained in current or future financing instruments and such other factors as our Board deems relevant. See the “Dividend” section of Item 5. “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Dividends.”

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Dilutive effect of options, restricted stock and deferred stock compensation

As of ~~February 28~~March 26, ~~2017~~2018, there were options outstanding to purchase 665,000 shares of our Common Stock, plus ~~626~~734,~~028~~232 shares issuable under the Company’s Deferred Compensation Plan and 5025,000 shares of performance-tied restricted stock, which, if all were vested and exercised, would represent 1213.98% of the 10,~~195~~303,~~039~~243 fully-diluted shares outstanding as of such date. The issuance of such securities would have a dilutive effect on any earnings per share that we may generate when the earnings per share are evaluated on a fully-diluted basis.

Possible adverse effect of issuance of preferred stock

Our Articles of Incorporation authorize the issuance of 4,000,000 shares of “blank check” preferred stock, with designations, rights and preferences to be determined from time to time by our Board. Accordingly, our Board is empowered, without further stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights that could adversely affect the dividend rights and/or voting power or other rights of the holders of the Common Stock. In the event of issuance, the preferred stock could be used, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Our Board has no current plans to issue any shares of preferred stock. However, there can be no assurance that preferred stock will not be issued at some time in the future.

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Failure to maintain the security of personally identifiable and other information, non-compliance with our contractual or other legal obligations regarding such information, or a violation of the Company’s privacy and security policies with respect to such information

In connection with our business, we collect and retain large volumes of certain types of personally-identifiable, financial and other information pertaining to our customers, stockholders and employees. Such information includes, but is not limited to, large volumes of customer identity and credit and payment card information. The legal, regulatory and contractual environment surrounding information security and privacy is constantly evolving and under increasing attack by cyber-criminals in the U.S. and Europe. A significant actual or potential theft, loss, fraudulent use or misuse of customer, employee or our corporate data by cybercrime or otherwise, non-compliance with our contractual or other legal obligations regarding such data, or a violation of our privacy and security policies with respect to such data could adversely impact our reputation, business integrity, and ultimately, our business prospects, and could result in fines, litigation or regulatory action against us.

We are subject to Anti-Money Laundering laws or regulations and the Foreign Corrupt Practices Act, violations of which could adversely affect our business.

We deal with significant amounts of cash in our operations and are subject to various reporting and anti-money laundering laws and regulations. Recently, European and U.S. governmental authorities have evidenced an increased focus on the ~~gaming~~gambling industry and compliance with anti-money laundering laws and regulations.

Further, because all of the Company’s revenue is derived from customers, outside of the United States, the Company is subject to regulations imposed by the Foreign Corrupt Practices Act (“FCPA”) and other anti-corruption laws that generally prohibit U.S. companies and their intermediaries from offering, promising, authorizing or making improper payments to foreign government officials for the purpose of obtaining or retaining business. Violations of the FCPA and other anti-corruption laws may result in criminal and civil sanctions as well as other penalties and the Securities and Exchange Commission (“SEC”) and U.S. Department of Justice have increased their enforcement activities with respect such laws and regulations.

Internal control policies and procedures and employee training and compliance programs that we have implemented to prevent prohibited practices may not be effective in deterring our directors, employees, contractors or agents from violating or circumventing our policies and the law. If we or our directors, employees or agents fail to comply with applicable laws or Company policies governing our operations, the Company may face investigations, prosecutions and other legal proceedings and actions which could result in civil penalties, administrative remedies and criminal sanctions. Any such government investigations, prosecutions or other legal proceedings or actions could adversely affect our business, performance, prospects, value, financial condition, and results of operations.

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Any violation of applicable Anti-Money Laundering laws or regulations or the FCPA could adversely affect our business, financial condition, results of operations and prospects.

Three stockholders exert control over the Company

Three stockholders, Value Partners, Ltd., the Wynnefield Funds and the Miller Funds own ~~more than 88~~87.9% of our voting common stock and each has representation on our Board of Directors. Accordingly, these stockholders exert a controlling interest on all matters relating to the future operations and direction of the Company, including the approval of significant corporate transactions.

Item 1B. Unresolved Staff Comments.

None.

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Item 2. Properties.

A summary of our properties as of ~~February 28~~March 26, ~~2017~~2018 is presented below in square feet and in square meters:

Property Name	City/Town	Country	Owned/Leased	Square Feet	Square Meters
TWC Corporate Offices	New York	United States	Leased	1,915	178
Ceska (1)	Ceska Kubice	Czech Republic
Total Plot #1 - Casino & Land			Owned	40,221	3,738
Casino Building (footprint)				25,426	2,363
Casino Building - footprint				25,426	2,363
Parking & Landscape				6,596	613
Vacant Land				8,199	762
Parking & Landscape			Leased	64,366	5,982
Staff Housing			Leased	15,871	1,475
Folmova Vacant Land (1)	Folmova	Czech Republic	Owned	210,175	19,533
Route 55 (1)	Dolni Dvoriste	Czech Republic
Total Plot #1 - Casino & Land			Owned	365,410	33,960
Casino Building (footprint)				20,315	1,888
Casino Building - footprint				20,315	1,888
Vacant Land				345,095	32,072
Total Plot #2 - Vacant Land (total 14,497 m2) (50% owned by Czech Federal Government)			50% Owned	77,999	7,249
Total Plot #3 - Vacant Land			Owned	352,153	32,728
Parking & Landscape			Owned	176,604	16,413
Staff Housing I			Leased	4,756	442
Staff Housing II			Leased	6,155	572
Route 59 Complex (1)	Hate/Znojmo	Czech Republic
Total Plot #1 - Casino & Land			Owned	476,916	44,323
Casino Building (footprint)				25,512	2,371
Casino Building - footprint				25,512	2,371
Parking & Landscape				53,628	4,984
Vacant Land				397,776	36,968
Total Plot #2 - Hotel Savannah			Owned	91,923	8,543
Hotel Building (footprint)				32,463	3,017
Hotel Building - footprint				32,463	3,017
Parking & Landscape				48,700	4,526
The Spa at the Hotel Savannah (footprint)				10,760	1,000
The Spa at the Hotel Savannah - footprint				10,760	1,000
Staff Housing			Leased	17,151	1,594
Hotel Columbus (2) (3)	Seligenstadt	Germany
Total Plot #1 - Hotel & Land			Owned	37,638	3,498
Hotel Building (footprint)				18,303	1,701
Hotel Building - footprint				18,303	1,701
Parking & Landscape				7,693	715
Vacant Land				11,642	1,082
Total Plot #2 - Columbus Parking			Owned	11,298	1,050
Parking & Landscape				7,532	700
Vacant Land				3,766	350
Hotel Freizeit Auefeld (2) (4)	Hann. Münden	Germany
Total Plot #3 - Columbus Parking			Leased	1,883	175
Total Plot #1 - Hotel & Land				306,520	28,487
Parking				1,883	175
Hotel Auefeld (2) (4)	Hann. Münden	Germany
Total Plot - Land			Leased	86,080	8,000
Hotel Building - footprint			Owned	38,930	3,618
Hotel Parking & Landscaping			Leased	220,440	20,487
Event Hall			Owned	12,912	1,200
Indoor Tennis			Owned	25,824	2,400
Townhouse			Owned	3,863	359
Fitness center			Owned	4,551	423
Hotel Parking & Landscaping			Leased	220,440	20,487
Hotel Kranichhöhe (2) (5)	Much	Germany
Total Plot - Hotel & Land			Owned	259,209	24,090
Hotel Building - footprint			Owned	111,151	10,330
Building I - footprint (main hotel)				16,140	1,500
Hotel Parking & Landscaping			Owned	95,387	8,865
Building II - footprint (conference center)				11,083	1,030
Spa/massage room			Owned	1,076	100
Building III - footprint (fitness center)				7,317	680
Pool and sauna			Owned	3,067	285
Tennis Hall				20,982	1,950
Tennis hall			Owned	44,116	4,100
Outdoor Tennis				12,159	1,130
Fitness center			Owned	4,412	410
Hotel Parking & Landscaping				191,528	17,800
Total Square Feet/Meters Owned:				2,185,626	203,125
Hotel Donauwelle (2) (6)	Linz	Austria
Total Square Feet/Meters under control:				2,514,365	233,677
Total Plot - Land			Leased	26,685	2,480
Hotel Building - footprint (main hotel)			Owned	19,110	1,776
Outdoor Restaurant			Owned	7,575	704
Total Square Feet/Meters Owned:				2,212,311	205,605
Total Square Feet/Meters under control:				2,571,533	238,990

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(1)

Casino segment.

(2)

Hotel segment.

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(3)

This property is subject to a bank loan from Bank Sparkasse Langen-Seligenstadt. See Note 4 of the Notes to the Consolidated Financial Statements, included in this Annual Report in Part II, Item 8.

(4)

TWC owns all buildings and facilities, but all underlying land is leased from the County of Göttingen. This property is subject to two loans: Bank Sparkasse Hann. Munden bank loan and a seller-carried loan. See Note 4 of the Notes to the Consolidated Financial Statements, included in this Annual Report in Part II, Item 8.

(5)

This property is subject to a bank loan from Bank Kreissparkasse Köln. See Note 4 of the Notes to the Consolidated Financial Statements, included in this Annual Report in Part II, Item 8.

(6)

This property is subject to a bank loan from Erste Bank. See Note 4 of the Notes to the Consolidated Financial Statements, included in this Annual Report in Part II, Item 8.

Our Corporate Offices

Our corporate offices are located at 545 Fifth Avenue, Suite 940, New York, New York, USA, occupying 1,915 square feet of office space pursuant to a five-year lease, expiring in March 2020.

We believe that our existing office and other operating properties are in good condition and are sufficient and suitable for the conduct of our business. In the event we need to expand our operations, we believe that suitable space will be available on commercially reasonable terms.

Czech Republic

On November 23, 2011, we acquired the Ceska casino building and associated land and an adjacent outbuilding and related parcel of land from the town of Ceska Kubice, from which we had been renting the facilities. We built out the casino by constructing an annex building to it, making it the largest casino by size we own to date. See Part I, Item 1, “Our Facilities” above for more details.

We also own a parcel of raw land in the town of Folmova, Czech Republic, near the German border, approximately a quarter mile away from our Ceska casino.

In Hate, we own the casino building and a parcel of land upon a portion of which the casino building sits. On another portion of this land, we constructed and opened Hotel Savannah and the Spa on January 14, 2009, which are connected to the Route 59 casino, thereby creating the Route 59 Complex. The combined facilities have become a thriving entertainment complex that has attracted visitors and regular guests and players from the surrounding region.

In April 2002, we acquired a parcel of land in Dolni Dvoriste, Czech Republic. On this parcel and on a portion of a piece of land we co-owned 50% with the federal government of the Czech Republic (representing approximately 18% of the total land we own and control in Dolni Dvoriste), we constructed what was at the time, our largest casino, Route 55, which was completed and opened in December 2004. (See “Properties” table above).

On an annual basis, we also lease accommodations for staff in Ceska Kubice, Hate (Route 59) and in Dolni Dvoriste (Route 55).

Germany

In September 2014, we acquired a four-star 117-room hotel, ~~the~~ Hotel Columbus, located in the suburbs of Seligenstadt, Germany, about a 20-minute, equidistant drive from Frankfurt city center and the Frankfurt International Airport. Hotel Columbus was constructed in 2001 and was operated profitably at the time of purchase by a private family primarily as a business hotel. Hotel Columbus currently has 99 single rooms and 18 double rooms. It also features six meeting rooms, a spacious restaurant and separate breakfast room, each with its own kitchen, two bars, a 37-place parking garage and 43 surface lot parking places.

In June 2015, we acquired a 93-room four-star hotel, Hotel Freizeit Auefeld, located in Hann. Münden, Germany. The hotel includes extensive meeting space and recreational amenities and features three food and beverage outlets, ten meeting rooms, an adjoining 12,912 square foot event hall, and an adjoining tennis complex with four indoor courts; several additional recreation areas; and an independent townhouse comprised of one four-room and one six-room 20

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In June 2015, we acquired a 93-room four-star hotel, Hotel Auefeld, located in Hann. Münden, Germany. The hotel includes extensive meeting space and recreational amenities and features three food and beverage outlets, 10 meeting rooms, an adjoining 12,912 square foot event hall, and an adjoining tennis complex with four indoor courts; several additional recreation areas; and an independent townhouse comprised of one four-room and one six-room apartment. The Company owns all the buildings and facilities, but the underlying land is leased from the County of Göttingen.

In December 2016, we acquired a 107-room three-star hotel, Hotel Kranichhöhe, located in Much, Germany. The hotel was subsequently upgraded to a four-star rating on June 27, 2017. The hotel includes three food and beverage outlets; 18 meeting rooms; a wellness center and spa; a fitness center with an indoor swimming pool; an adjoining tennis complex with two indoor courts and two outdoor courts; and a “beach” volleyball court. The Company ~~intends~~is toinvesting ~~invest~~ approximately $1.69 million ~~in 2017~~ to update and partially renovate the hotel~~, with the objective of upgrading it to a four-star hotel~~.

Austria

On March 1, 2017, TWC acquired a four-star business hotel located in Linz, Austria. The hotel is situated on the banks of the Danube River in Linz, approximately 35 minutes driving time from our Route 55 Casino. The assets acquired included the ground lease rights through March 2062 to the plot upon which the hotel building stands, and the building contents. The hotel features 176 rooms, six meeting/banquet rooms, a 120-seat restaurant, a 40-seat bar, a 100-seat outdoor terrace, and a spa and gym room. The hotel was under management contract with Steigenberger Hotels AG until September 30, 2017, the contract termination date. TWC assumed active management on October 1, 2017 and renamed the hotel, “Hotel Donauwelle.”

Item 3. Legal Proceedings.

We may be, from time to time, a party to various legal proceedings and administrative actions, all arising from the ordinary course of our business. We are not currently involved in any material legal proceeding nor were we involved in any material litigation during the year ended December 31, ~~2016~~2017 and through the date of the filing of this report.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our Common Stock is quoted on the Over-The-Counter Markets Group (“OTCQB”) under the symbol “TWOC.”

Return Analysis

The stock performance graph and related information presented below is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically incorporate it by reference into such a filing.

The following graph illustrates a five-year comparison of cumulative total return performance of our Common Stock from December 31, ~~2011~~2012 through December 31, ~~2016~~2017, and compares it to the cumulative total return of the “NASDAQ Composite” and the “S&P SmallCap 600” indices. The comparison assumes a $100 investment on December 31, ~~2011~~2012, in our Common Stock and in each of the foregoing indices, and assumes reinvestment of dividends, if any. We paid no dividends during this period.

The above table is not intended to forecast future performance of our Common Stock.

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Market Prices and Liquidity

As of ~~February 28~~March 26, ~~2017~~2018, ~~our~~the ~~stock~~closing price of our Common Stock as quoted by the OTCQB was $63.3794 per share. The following table sets forth the high and low prices of the Company’s Common Stock for fiscal years ~~2015~~2016 and ~~2016~~2017 as quoted on OTCQB. All such quotations reflect inter-dealer prices, without retail mark up, mark down or commission, and may not represent actual transactions. There is minimal market liquidity for our Common Stock, as 8887.29% of the stock was, as of ~~February 28~~March 26, ~~2107~~2018, held by institutional investors. Thus, infrequent and minor trades can occur, which typically precipitate wide spreads in the “bid” and “ask” quotes of our Common Stock, on any given day.

Common Stock	High		Low
2015
First Quarter	$	3.23	$	2.75
Second Quarter	$	3.08	$	2.62
Third Quarter	$	3.00	$	2.55
Fourth Quarter	$	3.10	$	2.52
2016
First Quarter	$	3.02	$	2.25
Second Quarter	$	3.76	$	2.85
Third Quarter	$	4.75	$	3.52
Fourth Quarter	$	6.00	$	4.25
2017
First Quarter	$	7.20	$	5.90
Second Quarter	$	7.25	$	5.45
Third Quarter	$	6.05	$	4.85
Fourth Quarter	$	5.85	$	3.35

As of ~~February 28~~March 26, ~~2017~~2018, there were 8,~~854~~879,011 outstanding shares of Common Stock held of record by approximately ~~300~~200 shareholders and outstanding options to purchase an aggregate of 665,000 shares of Common Stock, of which ~~297~~463,~~500~~750 ~~are~~were exercisable. At such date, there were also 5025,000 shares of unvested/unissued restricted stock~~, 25,000 of which are in process to be vested~~. In addition, there ~~are~~were ~~626~~734,~~028~~232 shares of Common Stock issuable under the Company’s Deferred Compensation Plan at ~~February 28~~March 26, ~~2017~~2018.

Dividends

Sales of Unregistered Equity Securities; Use of Proceeds from Registered Securities

On August 15, 2014, we issued to each of Mr. Julio E. Heurtematte, Jr. and Mr. Geoffrey B. Baker (the “Former Directors”) 6,985 (or a total of 13,970) authorized but unregistered shares of the Common Stock, plus to each a check for approximately $38 representing the cumulative residual balance of their quarterly deferments. These stock and cash issuances were in full satisfaction of TWC’s obligation (which amounted to an aggregate of approximately $70,000) to them under the Company’s Deferred Compensation Plan, as a result of their separation of service as a director of the Company.

On November 2, 2015, we issued to Mr. Malcolm M.B. Sterrett, a former director, 7,806 shares of the Common Stock, plus a check for $43 representing the cumulative residual balance of his quarterly deferments, resulting from his separation of service as a director pursuant to the terms of the Company’s Deferred Compensation Plan. These shares were registered under the Company’s Form S-8, which became effective immediately upon its filing on September 18, 2015. As such shares were issued in lieu of cash for director’s fees, no proceeds were received by TWC.

On August 8, 2016, upon achieving the designated earnings per share targets pursuant to the terms of his July 2005 restricted stock grant, Mr. Rami S. Ramadan, the Company’s CEO, was issued 25,000 shares of the Company’s Common Stock. As this was a compensatory stock grant, there were no proceeds to the Company.

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The issuance of the shares of the Company’s Common Stock to the Former Directors and to Mr. Ramadan were effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act of 1933, as amended (the “Securities Act”) and in Section 4(a)(2) of the Securities Act, based on the following: (a) the Former Directors and Mr. Ramadan confirmed to the Company that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) the Former Directors and Mr. Ramadan confirmed to the Company that they were acquiring the Common Stock for their separate personal accounts and not with a view towards distribution or sale thereof; (c) there was no public offering, advertising or general solicitation with respect to the issuance of the Common Stock; (d) the Company instructed its Transfer Agent and Registrar to issue share certificates representing the Common Stock to the Former Directors and to Mr. Ramadan that contain a legend putting the public on notice that such shares are “restricted securities;” and (e) the Former Directors and Mr. Ramadan confirmed in writing to the Company that the shares of Common Stock being issued have not been registered under the Securities Act or any state securities laws, and are “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and the Common Stock can only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

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The issuance of the shares of the Company’s Common Stock to Mr. Ramadan were effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act of 1933, as amended (the “Securities Act”) and in Section 4(a)(2) of the Securities Act, based on the following: (a) Mr. Ramadan confirmed to the Company that he was an “accredited investor,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) Mr. Ramadan confirmed to the Company that he was acquiring the Common Stock for his separate personal account and not with a view towards distribution or sale thereof; (c) there was no public offering, advertising or general solicitation with respect to the issuance of the Common Stock; (d) the Company instructed its Transfer Agent and Registrar to issue share certificates representing the Common Stock to Mr. Ramadan that contain a legend putting the public on notice that such shares are “restricted securities;” and (e) Mr. Ramadan confirmed in writing to the Company that the shares of Common Stock being issued have not been registered under the Securities Act or any state securities laws, and are “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and the Common Stock can only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

On March 17, 2017, upon achieving the designated earnings per share targets pursuant to the terms of his July 2005 restricted stock grant, Mr. Rami S. Ramadan, the Company’s CEO, was issued an additional 25,000 shares of the Company’s Common Stock. As this was a compensatory stock grant, there were no proceeds to the Company. The issuance of these shares were under the same exemptions and stipulations stated above.

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Item 6. Selected Financial Data.

The selected financial data below has been derived from our audited consolidated financial statements (except for the variance data) and should be read in conjunction with Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as Part II, Item 8. “Financial Statements and Supplementary Data” of this Form 10-K, which provide for a detailed discussion of the accounting policies that we believe require complex and subjective judgments that could potentially affect reported results. Variances are presented according to the impact to the respective year’s Consolidated Statements of Operations and are unaudited. Our historical results are not necessarily indicative of the results expected for any future period.

Income statement data:
	Year Ended December 31,
(in thousands)	2016		2015		Variance $		Variance %
					(unaudited)		(unaudited)
Revenues, by department:
Gaming	$	46,556	$	37,102	$	9,454	25.5	%
Rooms		3,771		2,994		777	26.0	%
Food & beverage		2,598		1,996		602	30.2	%
Spa and other departments		132		132		—	—	%
Other revenue		181		162		19	11.7	%
Total revenues		53,238		42,386		10,852	25.6	%
Cost of revenues, by department
Gaming		24,764		18,820		5,944	31.6	%
Rooms		1,307		1,037		270	26.0	%
Food & beverage		2,351		1,687		664	39.4	%
Spa and other departments		145		122		23	18.9	%
Other costs		106		81		25	30.9	%
Total cost of revenues		28,673		21,747		6,926	31.8	%
Gross operating profit		24,565		20,639		3,926	19.0	%
Overhead expenses:
Marketing, general and administrative		8,839		9,625		(786)	(8.2)	%
Corporate expense		4,396		3,842		554	14.4	%
Depreciation and amortization		2,220		1,863		357	19.2	%
Total overhead expenses		15,455		15,330		125	0.8	%
Operating income		9,110		5,309		3,801	71.6	%
Interest expense		(243)		(206)		(37)	18.0	%
Other income		124		149		(25)	(16.8)	%
Income before income taxes		8,991		5,252		3,739	71.2	%
Income taxes		(2,668)		(1,394)		(1,274)	91.4	%
Net income	$	6,323	$	3,858	$	2,465	63.9	%
Balance sheet data:
Total assets	$	66,104	$	55,239
Total liabilities	$	20,448	$	15,070
Stockholders’ equity	$	45,656	$	40,169

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Income statement data:
	Year Ended December 31,
(in thousands)	2017		2016		Variance $		Variance %
					(unaudited)		(unaudited)
Revenues, by department:
Gaming	$	38,874	$	46,556	$	(7,682)	(16.5)	%
Rooms		8,449		3,771		4,678	124.1	%
Food & beverage		5,843		2,598		3,245	124.9	%
Spa and other departments		437		132		305	231.1	%
Other revenue		505		181		324	179.0	%
Total revenues		54,108		53,238		870	1.6	%

Cost of revenues, by department
Gaming		24,364		24,764		(400)	(1.6)	%
Rooms		3,629		1,307		2,322	177.7	%
Food & beverage		4,958		2,351		2,607	110.9	%
Spa and other departments		479		145		334	230.3	%
Other costs		212		106		106	100.0	%
Total cost of revenues		33,642		28,673		4,969	17.3	%

Gross operating profit		20,466		24,565		(4,099)	(16.7)	%

Overhead expenses:
Selling, general and administrative		11,237		8,839		2,398	27.1	%
Corporate expense		4,029		4,396		(367)	(8.3)	%
Depreciation and amortization		2,802		2,220		582	26.2	%
Total overhead expenses		18,068		15,455		2,613	16.9	%

Operating income		2,398		9,110		(6,712)	(73.7)	%

Other income (expense)
Interest expense		(417)		(243)		(174)	(71.6)	%
Other income (expense)		802		124		678	546.8	%
		385		(119)		504	423.5	%

Income before foreign income tax		2,783		8,991		(6,208)	(69.0)	%

Foreign income taxes		(898)		(2,668)		1,770	66.3	%

Net income	$	1,885	$	6,323	$	(4,438)	(70.2)	%

Balance sheet data:

Total assets	$	84,726	$	66,104
Total debts	$	16,260	$	11,478
Total liabilities	$	27,261	$	20,448
Stockholders’ equity	$	57,465	$	45,656

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Information set forth in this discussion and analysis (as well as in other sections of this Form 10-K) contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “should,” “will,” and similar words, although some forward-looking statements are expressed differently. The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides certain “safe harbor” provisions for forward-looking statements. All forward-looking statements made in this Annual Report on Form 10-K are made pursuant to the PSLRA. The reader is cautioned that such forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from expectations include but not be limited to those factors described in Item 1A, “Risk Factors” of this Annual Report on Form 10-K. Forward-looking statements speak only as of the date the statement was made. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information.

Further information on potential factors that could affect our financial condition, results of operations and business are included in this Annual Report and our other filings with the SEC. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to us. You should read this discussion with the financial statements and other financial information included in this report. Our significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Performance Measures and Indicators

In discussing the consolidated results of operations, we may use or refer to performance measures and indicators that are common to the gaming industry, such as: (i) total drop, the dollar value of gaming chips purchased in a given period; (ii) drop per head (“DpH”), the per guest average dollar value of gaming chips purchased; (iii) slot revenue per head, the per guest average dollar value of revenue generated in our slot machines; (iv) our net win, the difference between gaming wagers and the amount paid out to patrons; and (v) our win percentage (“WP”), the ratio of net win to total drop, or commonly referred to as the “hold percentage.” We may also use or refer to performance measures and indicators common to the hospitality industry, such as: (i) occupancy rate, the percentage derived from rooms sold to available rooms; (ii) average daily rate (“ADR”), the average of room rental rates paid per day; ~~and~~ (iii) revenue per available room (“RevPAR”), revenue generated per available room; and (iv) total revenue per available room (“TRevPAR”), total revenue per available room. In this report and in our quarterly and annual earnings releases, we may use or refer to another performance measure, earnings before income taxes, depreciation and amortization (“EBITDA”). All of these measures and indicators are non-GAAP financial measures that we believe provide useful information to investors and potential investors, as well as to others who might be interested in purchasing shares of our Common Stock. This belief is based on conversations and meetings our management has had with our investors where the substance of these talks has typically centered on historical and prospective EBITDA measurements. Based on management’s observations, even though the EBITDA and other noted measurements are not “GAAP,” they do enhance investors’ understanding of the Company’s business. In short, these performance measurements give an analytic view of the Company’s operational earnings and EBITDA, in particular, reflects earnings on a cash-basis, excluding the impact of debt obligations, taxes and (non-cash) depreciation and amortization.

New Gambling Acts and their Impact

On June 7, 2016, the President of ~~Czechia~~the Czech Republic signed the Gambling Acts. In addition to the gambling tax rate increase imposed by the 2017 Gambling Tax Act, the 2017 Gambling Act sets other conditions in order to obtain a gambling license and subsequent compliances to maintain such license. These new laws have and will have broad impact on the Company’s daily operations and results of operations. The Company cannot determine the full impact of

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a gambling license and subsequent compliances to maintain such license. These new laws have had and will have broad impact on the Company’s daily operations and results of operations. The Company cannot determine the full impact of these Gambling Acts until they are fully implemented by the MOF and at least a full year of the Company’s operation under these Acts has passed. (See also sections “Taxation” and “Regulations and Licensing” in Item 1. “Business.”

Exchange Rates

Due to the fact that the Company’s operations are located principally in ~~two~~three ~~European~~EU countries, ~~Czechia~~the ~~and~~Czech Republic, Germany and Austria, our financial results are subject to the influence of fluctuations in foreign currency exchange rates. The revenue generated by our Czech operations is generally denominated in EUR and the majority of the expenses incurred by these facilities are generally denominated in the local currency, the CZK, while both the revenue and expenses from our three German hotels and one Austrian hotel are denominated in EUR. As our primary reporting subsidiary, TWH&E, is a Czech entity, all revenues and expenses, regardless of sources of origin, including those of the German hotels, are recognized in the Czech currency and translated to USD for reporting purposes. A substantial change in the value of either the CZK and/or the EUR in relation to each other and/or to the value of the USD would have an impact on the results from our operations when translated into USD. In other words, the higher the value of the foreign currency, the greater the positive impact on the Company’s results of operations and vice versa. We do not hedge our foreign currency holdings (see also “Item 7A - Quantitative and Qualitative Disclosures about Market Risk”).

The actual ~~2016~~2017 and ~~2015~~2016 operating results in local currency for the Czech casino units and Hotel Savannah were converted to USD using the average of the daily exchange rates of each month in the reporting periods, while the monthly operating results of the ~~German~~ hotel ~~operation,~~segment ~~Hotel Columbus, Hotel Freizeit Auefeld and Hotel Kranichhöhe,~~ were converted from EUR to CZK, then converted to USD, using the respective average of the daily exchange rates of each month in the reporting periods. The monthly average exchange rates for the CZK versus the USD and EUR, respectively, are presented in the following graphical chart.

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The balance sheet totals of our foreign subsidiaries at December 31, ~~2016~~2017 were converted to USDs using the prevailing interbank exchange rates, as found at www.oanda.com, which are depicted in the following table.

As Of	USD	CZK	EUR
December 31, 2017	1.00	21.291	0.835
December 31, 2016	1.00	25.639	0.950
December 31, 2015	1.00	24.824	0.917

Critical Accounting Policies

Our Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). Certain of the accounting policies require management to apply significant judgment in defining the estimates and assumptions for calculating financial estimates. These judgments are subject to an inherent degree of uncertainty. Management’s judgments are based on our historical experience, terms of various past and present agreements and contracts, industry trends, and information available from other sources, as appropriate. There can be no assurance that actual results will not differ from those estimates. Changes in these estimates could adversely affect our financial position or our results of operations.

We have determined that the following accounting policies and related estimates are critical to the preparation of our Consolidated Financial Statements:

Goodwill

Goodwill represents the excess of the cost of the Company’s subsidiaries over the fair value of their net assets at the date of acquisition. In the CZCzech Republic, this ~~consisted~~consists 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). In Germany, it consists of the Hotel ~~Freizeit~~ Auefeld. 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 to earnings will be recorded. In light of the recent acquisition of German assets, TWC’s allocation of its Czech goodwill over two geographical reporting units, which are components of the casino segment, have been ~~renamed and~~ classified as the “Pilsen reporting unit” (“PRU”), which consists of the Ceska casino, and the “South Moravia reporting unit” (“SMRU”), which consists of the land in Hate. The German goodwill is derived from the ~~newly-acquired~~ Hotel ~~Freizeit~~ Auefeld, and is represented by the “Lower Saxony reporting unit” (“LSRU”).

As required, we performed the required annual assessment at September 30, ~~2016~~2017 and ~~2015~~2016, respectively, and determined that goodwill was not impaired in either assessment. There were no indicators of impairment present during the fourth quarter of ~~2016~~2017 and ~~2015~~2016; therefore we determined that there was no need to perform a goodwill impairment test at December 31, ~~2016~~2017 and ~~2015~~2016. We expect to perform our next required annual assessment of goodwill during the third quarter of ~~2017~~2018. (See also the Notes to the Consolidated Financial Statements, included in this Annual Report in Part II, Item 8).

Other Significant Accounting Policies

Our other significant accounting policies are disclosed as follows:

Income Taxes - Note 2 “— Income Taxes” of the Notes to the Consolidated Financial Statements, included in this Annual Report in Part II, Item 8.

Business Acquisitions - Note 2 “— Business Acquisitions” of the Notes to the Consolidated Financial Statements, included in this Annual Report in Part II, Item 8.

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Results of Operations

The following discussion and analysis relates to our consolidated results of operations for the years ended December 31, ~~2016~~2017 and ~~2015~~2016.

Year Ended December 31, ~~2016~~2017 Compared to Year Ended December 31, ~~2015~~2016

	Year Ended December 31,
(in thousands)	~~2016~~2017		~~2015~~2016		Variance $		Variance %
					(unaudited)		(unaudited)
Revenues, by reporting segment:
Casino	$	4840,~~262~~747	$	3848,~~762~~262	$	9(7,~~500~~515)	24(15.56)	%
Hotel		413,~~976~~361		34,~~624~~976		18,~~352~~385	37168.35	%
Total revenue		5354,~~238~~108		4253,~~386~~238		~~10,852~~870	251.6	%
Operating expenses:
Casino		25,~~879~~618		1925,~~839~~879		~~6,040~~(261)	30(1.40)	%
Hotel		28,~~794~~024		12,~~908~~794		~~886~~5,230	46187.42	%
General and administrative		8,839		9,625		(786)	(8.2)	%
Selling, general and administrative		11,237		8,839		2,398	27.1	%
Corporate expenses		4,~~396~~029		34,~~842~~396		~~554~~(367)	14(8.43)	%
Depreciation and amortization		2,~~220~~802		12,~~863~~220		~~357~~582	1926.2	%
Total operating expenses		4451,~~128~~710		3744,~~077~~128		7,~~051~~582	1917.02	%
Operating income		92,~~110~~398		59,~~309~~110		3(6,~~801~~712)	71(73.67)	%
Interest expense		(~~243~~417)		(~~206~~243)		(37174)	18(71.06)	%
Other income		~~124~~802		~~149~~124		~~(25)~~678	~~(16~~546.8)	%
Income before foreign income tax		8,991		5,252		3,739	71.2	%
Income before income taxes		2,783		8,991		(6,208)	(69.0)	%
Income taxes		(2,668)		(1,394)		(1,274)	91.4	%
Income tax expense		(898)		(2,668)		1,770	66.3	%
Net income	$	61,~~323~~885	$	36,~~858~~323	$	2(4,~~465~~438)	63(70.92)	%

For the year ended December 31, ~~2016~~2017, we generated $5354.21 million in consolidated total revenues, which was 251.6%, or ~~approximately~~ $~~10.9 million~~870,000, higher than in the previous year, attributable in large part to the ~~operations~~year-over-year of(“YOY”) ~~all~~revenue ~~three~~improvements ~~casinos~~in ~~that~~our ~~comprise~~hotel segment, coupled with the ~~casino~~recent ~~segment~~acquisitions of Hotel Donauwelle in March 2017 and Hotel Kranichhöhe in December 2016. ~~Total~~The casino segment revenue decline in 2017 was ~~aided~~due ~~also~~primarily byto the ~~full~~negative ~~year~~impact ~~operation~~of implementations of ~~Hotel~~new ~~Freizeit~~measures ~~Auefeld,~~required ~~which~~by ~~was~~the ~~acquired~~Gambling onActs. These ~~June~~new 1,regulations ~~2015~~included marketing and ~~one-month’s~~promotional ~~revenue~~restrictions ~~from~~as ~~Hotel~~well ~~Kranichhöhe~~as the following: i) the implementation in August 2017 of a CMS, ~~beginning~~as onrequired ~~December 1~~by the 2017 Gambling Act, ~~2016~~in all of our casinos, ~~when~~which itposed ~~was~~an ~~acquired. The~~unforeseen challenge as a sizable number of our casino ~~revenue~~clients ~~improvements~~had ~~were~~initial ~~supported~~concerns byregarding ~~year~~the CMS’s ability to track the gambling activities of all players; ii) the implementation in July 2017 of the EU-~~over~~directed, Czech government-~~year~~mandated Anti-Money Laundering (“~~YOY~~AML”) ~~attendance~~registration ~~increases~~forms inrequiring ~~both~~all ~~live~~players ~~games~~to ~~and~~affirm ~~slot~~in ~~games.~~writing ~~Consolidated~~that ~~live~~his/her ~~game~~funds ~~revenue~~do ~~rose~~not ~~19.0%~~support criminal or terrorist activities, ~~when~~nor ~~compared~~have ~~with~~his/her ~~the~~funds ~~prior~~been ~~year,~~sourced ~~due~~from ~~primarily~~criminal toor terrorist activities (a ~~9.6%~~standard ~~improvement~~verification practice in ~~DpH~~other ~~and~~EU casinos for many years); iii) a 0decrease of 2.59 percentage ~~point~~points (“~~ppt~~ppts”) ~~increase~~ in ~~our~~consolidated WP versus the consolidated WP in the prior year, ~~when~~due ~~compared~~to proportionally higher losses to ~~last~~regular ~~year. Our~~players; ~~consolidated~~iv) ~~slot~~the ~~revenue~~impact ~~increased~~of bya ~~29.4%~~new ~~YOY~~competitor for one of our larger casinos, ~~further~~Route ~~boosting~~55; ~~total~~and ~~revenue~~v) the negative impact of the indoor smoking ban that became effective on May 31, 2017. ~~The~~ ~~Hotel~~These ~~Savannah~~new ~~and~~regulations ~~Spa~~were ~~saw~~perceived aby 2many of our customers to have created an entirely different casino experience/environment.9% ~~YOY~~Our ~~increase~~guests inwere ~~total~~initially ~~revenue~~not accustomed to, ~~mainly~~or ~~from~~comfortable awith, ~~stronger~~these ~~ADR~~changes and as a ~~2.3~~result, ~~ppt~~reduced ~~occupancy~~their ~~rate~~visitation ~~increase~~and play. ~~Our~~ ~~hotel segment~~Consequently, ~~which~~our ~~consists~~casino ofattendance and business volume was negatively impacted during the ~~three~~second ~~German~~half ~~hotels~~of 2017, ~~contributed~~when ~~approximately~~compared $5with the prior year. Consolidated live game revenue fell by 20.0%, ~~million~~when compared with the prior year, ordue 9primarily to an 16.31%, ofdecline ~~our~~in ~~consolidated~~live ~~total~~game ~~revenue~~attendance, ~~for~~despite ~~2016~~a 10. 8% increase

~~The operating expenses of the casino segment increased by~~ 30.4% over the prior year, largely from both volume-driven costs and revenue-driven gaming taxes, which proportionally increased as a result of the higher gaming tax rates imposed by the 2016 Gaming Tax Amendment. Our slot lease expense was $2.4 million versus $2.3 million in 2015 due to a net addition of 60 slot machines on lease, over the course of the operating year. Operating expenses for the hotel segment increased by 46.4%, largely due to the full year operation of Hotel Freizeit Auefeld, which operated only seven months in the 2015 calendar year when it was acquired on June 1, 2015, and to the one-month operation of Hotel Kranichhöhe, which was began on December 1, 2016. We also incurred non-capitalizable expenses related to renovations of the guest rooms, restaurant and kitchen facilities at Hotel Freizeit Auefeld in 2016.

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~~Unlike~~ in UDpH.~~S.-based~~ Our ~~casinos,~~consolidated ~~visitors~~slot torevenue ~~the~~decreased ~~TWC’s casinos are required~~ by Czech law to register at the entrance reception by presenting acceptable forms of picture identification, which effectively permits the Company to track the frequency of their visits and, to a limited extent, the duration of each visit15. As3% anyear-over-year ~~incentive to its players, the Company offers a Premium Club card, which is a “loyalty” card program, whereby players earn points~~ (~~i.e. Loyalty Points”), according to the volume and duration of their play that are redeemable for prizes, food and beverage (~~“~~F&B~~YOY”), ~~and/or~~but ~~additional~~with ~~play. In~~only ~~addition~~a ~~to these general amenities, TWC also issues different classes of loyalty cards, depending on the relative level of play time~~0.4% ~~These~~decrease ~~loyalty~~in ~~cards~~slot ~~entitle the holders and a set number of the holders’ guests to various additional benefits~~attendance. ~~These~~Not ~~cards~~affected ~~are~~by ~~granted~~the ~~based~~changes onin the ~~frequency~~Czech ofgambling ~~players’~~laws, ~~visits~~Hotel Savannah and ~~the~~Spa ~~aggregate~~saw ~~total drop for~~ a ~~pre-determined number of visits~~9. ~~The~~7% ~~Company~~YOY ~~also~~increase ~~grants~~in ~~certain~~total ~~other privileges to its VIP players~~revenue, atmainly ~~the casino management’s discretion, such as ordering free a la carte meal~~ from ~~our restaurant facilities, opening private gaming tables, extending~~ a ~~casino’s~~6.5 ~~operating~~ppts ~~hours,~~improvement ~~and/or~~in ~~providing free hotel or~~ room ~~accommodations. Further,~~occupancy ~~TWC~~rate ~~provides complimentary drinks~~ and ~~buffets~~a to7.8% ~~all~~increase ofin ~~its casino guests~~TRevPAR. ~~The~~Our ~~complimentary F&B and~~ hotel ~~accommodations costs were recognized in the gaming departmental expenses~~segment, which ~~totaled~~consists ~~$2.8 million, or 6.1%~~ of ~~gaming revenues, for~~ the ~~year~~three ~~ended~~German ~~December 31,~~hotels ~~2016, versus $2.5 million, or 6.9% of gaming revenues a year ago. General gifts~~ and ~~giveaways,~~one ~~which~~Austrian ~~were also recognized in the gaming department expenses~~hotel, ~~excluding~~contributed ~~personal~~approximately ~~gifts, represented~~ $~~865,000 or 1~~13.9%4 ~~of gaming revenues for 2016~~million, ~~compared with $836,000,~~ or 224.37%, of ~~gaming~~our ~~revenues,~~consolidated ~~for~~total ~~2015. The~~revenue ~~Gambling Acts also prohibit casino operators from providing complimentary F&B and other benefits to its customers, which will reduce these operational costs~~ for ~~us for the year ended December 31,~~ 2017.

~~The~~Operating ~~complimentary~~expenses in the casino segment increased proportionally in the gaming tax category due to the tax rate increase from 28% to 35% on slot revenue in 2017. Our slot lease expense was approximately $3.0 million versus $2.4 million in 2016 due to a net addition of 80 slot machines on leases, over the course of the operating year~~-end~~. The ~~personal~~operating ~~gifts~~expenses of the hotel segment increased by 187.2% over the prior year, ~~mainly~~largely ~~consisting~~from the addition of ~~Loyalty~~Hotel ~~Points~~Donauwelle in 2017 and the one-month that Hotel Kranichhöhe was on the books in 2016, ~~were~~as ~~booked~~well as ~~special~~for ~~promotions~~the ~~expenses~~launching ~~under~~and ~~marketing~~establishment ~~department~~of the Trans World Hotels hotel brand across all of its hotel properties. We also incurred non-capitalizable expenses related to renovations of the guest rooms and ~~totaled~~certain ~~approximately~~public ~~$61~~areas in Hotel Donauwelle and Hotel Kranichhöhe in 2017 and the staggered rollout of the hotel management system (“HMS”) in all hotel properties,~~000~~ which was completed in Hotel Donauwelle in October 2017, followed by Hotel Kranichhöhe in February 2018 and is scheduled to be installed in March 2018 for ~~2016~~Hotel Auefeld, ~~versus~~May ~~$103~~2018 for Hotel Columbus,~~000~~ and finally October 2018 for ~~2015~~Hotel Savannah. We do not currently have a loyalty/frequent traveler program for our hotels.

~~General~~Unlike ~~and~~in ~~administrative expenses decreased by 8~~U.~~2%,~~S.-based ~~or $787~~casinos,~~000,~~ invisitors ~~part due~~ to the ~~ban~~TWC’s ofcasinos ~~certain~~are ~~marketing~~required ~~and promotional events imposed~~ by ~~the~~Czech ~~MOF~~law onto ~~all~~register ~~casino~~with ~~operators~~our ~~from~~CMS at the ~~beginning~~entrance ofreception ~~January~~by topresenting ~~the~~acceptable ~~end~~forms of ~~September.~~picture ~~(See~~identification, ~~“Potential~~which ~~changes~~effectively inpermits ~~legislation~~the ~~and~~Company ~~regulation~~to oftrack ~~our~~the ~~operations”~~frequency inof ~~Item~~their ~~1A. “Risk Factors~~visits,” ~~above). This~~the ~~savings~~drop ~~was~~of ~~partially~~slot ~~offset~~players, byand ~~overhead~~to ~~expenses~~a ~~related~~limited toextent, the ~~full-year~~duration ~~operation~~ of ~~Hotel~~each ~~Freizeit Auefeld and one-month operation of Hotel Kranichhöhe~~visit.

~~Corporate~~As ~~expenses~~an ~~were~~incentive upto 14our players, the Company offers a “loyalty” program, which is administered by our CMS, whereby players earn points (i.4%e. “Loyalty Points”), according to the volume and duration of their play that are redeemable for additional play or ~~$554~~as cashable credit. Patrons who spend €500 of play/wager earn 100 Loyalty Points,~~000,~~ ~~from~~or the ~~year-ago~~equivalent ~~period~~of €1.00 cashable credit. The Loyalty Points are banked and accumulate, ~~largely~~allowing ~~due~~players to ~~several~~redeem ~~factors,~~them ~~including~~for ~~higher~~a ~~stock~~number ~~option~~of ~~expenses,~~different ~~greater~~types ~~professional~~of ~~consultations~~incentives, which include cash and ~~higher~~other ~~employee~~goods ~~incentive-related~~and ~~expenses~~services, asor free play. The Loyalty Points are earned automatically by players through their player account card (“PAC”) which is issued to all players upon registration. The PAC must be inserted into a ~~result~~card ofreader ~~significantly~~which ~~better~~is ~~operating~~located ~~results~~on ~~achieved~~each slot machine in ~~2016~~order to enable play and is presented at the live game tables together with any cash buy-in, and is recorded by the CMS when chips are exchanged.

~~Depreciation~~We ~~expense~~classify ~~increased~~our bymore 19valued players in three different tiers (RED, GOLD and PLATINUM), depending on the frequency of their visits and the aggregate total drop for a pre-determined number of visits.2% These tiers entitle the holders and a set number of the holders’ guests to various additional privileges, ~~largely~~which ~~from~~may include, at the ~~full~~casino ~~year~~management’s ~~depreciation~~discretion, ~~expense~~opening ~~for~~private ~~Hotel~~gaming ~~Freizeit~~tables, ~~Auefeld~~and/or extending casino operating hours. Prior to January 1, 2018, TWC provided complimentary drinks and ~~one~~buffets ~~month~~to all of its casino guests. The complimentary food and beverage (“F&B”) and other amenities’s ~~depreciation~~costs were recognized in the gaming departmental expenses, which totaled approximately $2.9 million, or 7.5% of ~~Hotel~~gaming ~~Kranichhöhe~~revenues, for the year ended December 31, 2017, versus $2.8 million, or 6.1% of gaming revenues a year ago. General gifts and giveaways, which were also recognized in the gaming department expenses, excluding personal gifts, represented $621,000 or 1.6% of gaming revenues for 2017, compared with $865,000, or 1.9% of gaming revenues for 2016. The Gambling Acts also prohibit casino operators from providing complimentary F&B to its customers, which will reduce these operational costs for us for the year ended December 31, 2018. See also Item 1. “Business” above.

~~Interest~~The ~~expense~~complimentary ~~in 2016 included the full~~ year~~’s interest payments on both the Bank Sparkasse Hann. Münden loan (the “Sparkasse Hann. Münden Loan”) and the seller~~-~~financed~~end ~~loan~~personal (~~the~~Christmas ~~“Seller Loan”~~gifts) ongifts, ~~the~~mainly ~~Hotel~~consisting ~~Freizeit~~of ~~Auefeld~~Loyalty ~~as well as the full year’s interest payments on the Bank Sparkasse Langen-Seligenstadt loan (the “Sparkasse Seligenstadt Loan”) . In 2015~~Points, ~~interest~~were ~~expense~~booked ~~consisted~~as ofspecial ~~the~~promotions ~~full~~expenses ~~year’s~~under ~~interest~~marketing ondepartment ~~the~~expenses ~~Sparkasse Seligenstadt Loan~~ and ~~seven~~totaled ~~months~~approximately of$38,000 ~~interest~~for on2017, ~~the~~versus ~~Sparkasse~~$61,000 ~~Hann.~~for ~~Münden Loan~~2016.

~~Other~~Selling, ~~income~~general ~~consists~~and administrative expenses increased in 2017 by 27.1%, or approximately $2.4 million, in part due to the ban of certain marketing and promotional events imposed by the ~~gains~~MOF on all casino operators from ~~bargain~~the ~~purchases~~beginning of January to the ~~Hotel~~end ~~Kranichhöhe~~of ~~and~~September ~~Hotel~~2016. ~~Columbus~~(See “Potential changes in ~~2016~~legislation and ~~2015~~regulation of our operations” in Item 1A. “Risk Factors,” ~~respectively~~above).

The increase of approximately $1.3 million, or 91.4%, in income taxes, was primarily due to a higher taxable income base for our Czech operations and from alternative minimum taxes paid in the U.S. for intercompany dividends used principally to retire intercompany loans. There was no income tax liability incurred from the TWHG entity, the Germany holding company of the three German hotels, due to the carry-over losses associated with acquisition costs incurred for Hotel Columbus in 2014, Hotel Freizeit Auefeld in 2015 and Hotel Kranichhöhe in 2016.31

Therefore, for the year ended December 31, 2016, we achieved a net income of $6.3 million, an approximately $2.5 million, or 63.9%, increase over the prior year’s approximately $3.9 million.

During the past nine years, inflation has not been a major factor that has materially affected the Company’s operating results. We have generally recovered costs associated with any nominal inflation through price adjustments in

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~~our~~ Corporate ~~food~~expenses ~~and~~were ~~beverage~~down ~~and~~by ~~hotel room pricing~~8.3%, ~~and~~or ~~in 2017~~$367,000, wefrom ~~expect to continue to apply~~ the ~~same~~year-ago ~~principle uniformly throughout our operations. However~~period, ~~primarily~~largely due to ~~competitive~~lower ~~market~~employee ~~and~~incentive-related ~~other~~expenses ~~economic~~as ~~pressures,~~a ~~any~~result ~~such~~of ~~future~~significantly ~~increases~~weaker inoperating ~~costs~~results ~~associated~~achieved ~~with~~in ~~our~~2017, ~~casino~~which orwere ~~hotel~~partially ~~operations~~offset ~~and maintenance of our properties may not be completely recovered~~ by ~~the~~higher ~~Company~~financing-related expenses.

Depreciation expense increased by 26.2%, largely from the full year’s depreciation expense for Hotel Kranichhöhe and 10 months from Hotel Donauwelle, inclusive of the new assets incidental to the rooms renovations at both these hotels, as well as depreciation of the new CMS installed in August 2017 at all three casinos and one HMS installed at Hotel Donauwelle in September 2017.

Interest expense in 2017 included the 12 months and 10 months of interest payments on both the Kreissparkasse Köln bank loan for Hotel Kranichhöhe and the Erste Bank loan for Hotel Donauwelle, respectively, which did not exist in 2016.

Other income consists of the gains from bargain purchases of Hotel Donauwelle and Hotel Kranichhöhe in 2017 and 2016, respectively.

The decrease of approximately $1.8 million, or 66.3%, in income taxes in 2017, was primarily due to a lower taxable income base for our Czech operations. There was no income tax liability incurred from the TWHG entity, the Germany holding company of the three German hotels, nor from the Trans World Hotels Austria GmbH (“TWHA”) entity, the Austrian holding company of Hotel Donauwelle, due to the carry-over losses associated with acquisition costs incurred for these hotel acquisitions.

Therefore, for the year ended December 31, 2017, we achieved a net income of approximately $1.9 million, a decline of 70.2%, or $4.4 million from the prior year’s $6.3 million.

During the past 10 years, inflation has not been a major factor that has materially affected the Company’s operating results. We have generally recovered costs associated with any nominal inflation through price adjustments in our food and beverage and hotel room pricing, and in 2018, we expect to continue to apply the same principle uniformly throughout our operations. However, primarily due to competitive market and other economic pressures, any such future increases in costs associated with our casino or hotel operations and maintenance of our properties may not be completely recovered by the Company.

Our Business Units:

Casino Segment

Ceska, Czech Republic

For ~~2016~~2017, Ceska posted a 314.02% total revenue ~~increase~~decrease versus ~~2015~~2016, ~~despite a 6.1% decrease in overall attendance,~~ due largely to the negative impact ~~from~~of ~~2016~~factors ~~UEFA~~related ~~Champion~~to ~~soccer~~the ~~tournament~~implementation ~~held~~of ~~during~~Gambling ~~mid-June~~Acts torequirements ~~mid-July,~~ as well as aother ~~2.1~~new ~~ppt~~measures ~~reduction~~imposed inby the ~~WP. The~~Czech ~~improved~~government ~~revenue~~(e.g. ~~was~~smoking ~~due~~ban, toAML adirective, 12etc.5%). See ~~increase~~factors highlighted in ~~players’~~the ~~DpH,~~“Results ~~which~~of ~~contributed~~Operations” tosection above. As a ~~3.6%~~result ~~increase~~of inthese ~~total~~measures, ~~drop. Slot~~slot revenue ~~increased~~decreased by 613.54% from the prior year, even with a 31.75% ~~decrease~~increase in slot attendance. Operating expenses were down by 121.09% from a year ago, mainly from lower ~~amenity~~revenue-driven ~~expenses~~gaming taxes, ~~which~~albeit ~~include~~at ~~complimentary~~a ~~F&B~~higher ~~and~~percentage ~~giveaways~~of gambling revenue (30.3% in 2017 versus 26.5% in 2016) as a result of the increase of gaming tax rate on slot revenue, from 28% to 35%. Overhead expenses were ~~down~~up 214.97% compared to last year, largely due to significantly ~~lower~~higher marketing and promotional activities, which were temporarily banned from January ~~2016~~ to September ~~2016~~in the prior year by the MOF under the premise that the operation of these promotional events were in violation of the law, as interpreted by the MOF. The suspension affected all casinos operating in ~~Czechia~~the Czech Republic. In late September 2016, the MOF reversed its position and removed the suspension for all casino operators. ~~Neither Ceska nor its sister casinos were materially affected by the ban.~~

Route 55, Czech Republic

In ~~2016~~2017, Route 55’s revenue ~~increased~~decreased by 2322.46% from the previous year, due primarily to athe ~~combination~~appearance of a ~~13.9%~~new ~~increase~~local incasino ~~overall attendance~~competitor, ~~higher~~as ~~DpH~~well ofas ~~5.8%,~~to ~~and a 2.0 ppt rise in~~ the ~~WP. The~~negative ~~continuing~~impact ~~shift~~of inimplementation ~~the~~of ~~casino’s~~Gambling ~~clientele~~Acts ~~mix~~requirements ~~from~~and ~~live~~other ~~games~~new ~~toward slots is reflected in the 69.0% slot revenue composition of total revenue~~measures, ~~compared~~mentioned ~~with 67~~above.~~7% in the prior year.~~ ~~Despite~~Operating ~~the~~costs ~~shift~~were indown ~~business, both live game revenue and slot revenue increased year-over-year~~ by ~~double-digits, 21~~5.20% ~~and~~compared ~~25.7%,~~to ~~respectively. Operating~~last ~~costs~~year, ~~were up largely~~ due to volume-based costs and revenue-based gaming taxes, while overhead expenses were ~~down~~up by 161.2%, due to ~~lower~~higher marketing and ~~promotional expenditures, as a result of the MOF’s temporary suspension noted above, and to lower utility expenses, from a milder winter and cooler summer.~~

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promotional expenditures in 2017, when compared with 2016, which had a nine-month temporary suspension by the MOF noted above.

Route 59, Czech Republic

In ~~2016~~2017, Route 59’s overall attendance was updown by 12.3% from last year, resulting from anfactors ~~effective~~related ~~players’~~to ~~loyalty~~the ~~program~~implementation ~~and~~of ~~superior~~Gambling ~~customer~~Acts ~~service. DpH~~requirements ~~increased~~as bywell ~~10.1%~~as ~~while~~other ~~total~~new ~~drop~~measures ~~rose~~imposed by ~~22.7% over~~ the ~~prior~~Czech ~~year. The~~government ~~casino posted a 35~~(e.5%g. ~~increase~~smoking ~~in total revenue, despite the approximately nine-month promotional~~ ban ~~by the MOF~~, ~~which~~AML ~~had no discernible impact on its business and operations~~directive, ~~as the ban applied equally to all Czech casino operators~~etc. ). Operating costs in ~~2016~~2017 increased by 1.3% primarily from volume-based costs and revenue-based gaming taxes, in totality and in percentage to gambling revenue. Overhead costs were ~~down~~up by 133.82% due principally to the ~~lower~~higher marketing and promotional expenses, ~~and~~which towere ~~lower~~partially ~~utility~~offset ~~expenses. The~~by ~~business~~lower ~~improvement~~credit ~~was~~card ~~also,~~commission ~~in part, attributable to the synergic operation of the adjoining Hotel Savannah and the Spa, which supports and enhances the casino operation~~expenses.

Hotel Savannah and the Spa, Czech Republic

In ~~2016~~2017, Hotel Savannah posted a YOY occupancy increase of 26.35 ppts. Although ~~and~~ADR adecreased 4by 9.0%, ~~improvement~~RevPAR inwas ~~ADR~~up 3.8%. These improvements contributed to 2.a 9.7% increase in total revenue. The business improvement was in spite of a weaker regional hospitality market, and competitive online booking venues, which forced the hotel to discount its room rates to compete. ~~Lower~~Higher costs in the F&B department and in overhead costs, principally in ~~payroll and~~ utility expense from a ~~milder~~colder weather year, contributed to ~~improved~~lower earnings. ~~The~~ Hotel Savannah continues to play a crucial role as part of the Route 59 Complex by helping to attract new and existing players to the casino.

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Hotel Segment

Hotel Columbus, Germany

Occupancy rate for Hotel Columbus rose by 0.3%.2 ppts over the prior year, while ADR and RevPAR improved by 20.6% and 8.5%, respectively, thereby contributing to aan 5.8.3% increase in total revenue over the prior year. When compared with last year, operating costs were 221.31% higher, mainly in volume-related payroll and higher cost of goods sold, while overhead expenses were 112.72% lower, ~~thanks~~primarily toin ~~lower~~ payroll ~~and lower repairs and maintenance costs~~.

Hotel ~~Freizeit~~ Auefeld, Germany

~~The~~Hotel ~~hotel~~Auefeld ~~had its first full year of operation in 2016, and~~ underwent several renovations in ~~the year~~2016, which ~~encompassed~~enhanced its guest rooms, restaurant and the main kitchen facilities and select public areas. ~~Although~~As ~~the~~a ~~renovations~~result, ~~did~~in ~~not~~2017, ~~materially affect~~ the hotel ~~operations,~~posted ~~which~~a ~~was~~8.6% ~~open~~increase ~~throughout~~in ~~this period~~ADR, ~~the unseasonably cold~~ and ~~rainy weather deterred significant business arrivals~~12.2% ~~Therefore,~~increase ~~occupancy~~in ~~rate~~RevPAR ~~fell~~over ~~3.1~~the ~~ppts~~prior ~~from last~~ year, ~~which~~with ~~only~~a ~~included~~1.9 ~~the~~ppts ~~period~~increase ~~from~~in ~~June~~occupancy ~~to December~~rate. ~~Despite~~As ~~the~~a ~~weaker business~~result, ~~the~~total ~~hotel~~revenue ~~was~~rose ~~able to boost ADR~~ by 811.28% ~~over~~YOY. ~~the~~Operating ~~prior~~costs ~~year’s~~were ~~seven-month~~up ~~period~~5. ~~Operating~~7%, ~~and~~mainly ~~overhead~~in ~~expenses included non~~volume-~~capitalizable~~related costs, ~~associated~~while ~~with~~overhead ~~aforementioned~~expenses ~~renovations~~were ~~and~~up ~~higher~~11.7%, ~~utility~~mainly ~~expenses~~in ~~due~~marketing toexpenses ~~the~~and ~~colder~~professional ~~weather~~services.

Hotel Kranichhöhe, Germany

Acquired in December 2016, ~~the~~Hotel ~~hotel~~Kranichhöhe ~~will~~underwent ~~undergo~~the first of a two-part $1.69 million renovation in 2017 to address product deficiencies, ~~subsequent~~and tohas ~~which~~since itbeen ~~will be~~ repositioned from a three-star to four-star rated hotel inas ~~2018~~of June 27, 2017. The renovation scope ~~will~~included ~~include~~ complete refurbishment of approximately 5075% of the guest rooms; partial renovation of the remaining ~~guest rooms~~guestrooms; update of all ~~guest~~guestroom ~~room~~ corridors; minor refurbishments of public areas; upgrade of some meeting rooms, including audio/visual equipment; and improvements to the heating, ventilation, and other technical installations. (See also Note 13 - “Acquisition and Purchase Price Allocation” of the Notes to the Consolidated Financial Statements, included in this Annual Report in Part II, Item 8).

Hotel Donauwelle

Acquired in March 2017, this four-star business hotel is situated on the banks of the Danube River in Linz, approximately 35 minutes driving time from our Route 55 Casino. Hotel Donauwelle features 176 rooms, six meeting/banquet rooms, a restaurant, a bar, a dining terrace, and a spa and gym room. In July/August 2017, TWC completed the second phase of a three-part guestroom renovation project, in which 52 guest rooms were completely refurbished (40 rooms were previously renovated in 2014 by the prior owners), including installation of air

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conditioning. The final phase of the project is planned to take place in July/August 2018, when the remaining 84 guestrooms will be refurbished and two suites will be created, which will be additions to the current guestroom inventory. The planned works for July/August 2018 also include refurbishment of the hotel lobby and other public areas; upgrade of all meeting rooms, including the installation of new audio/visual equipment; installation of new flatscreen televisions in all guestrooms; and technical system upgrades and other minor improvements. In total, TWC plans to invest approximately $3.1 million on improvements to the property by August 2018.

Liquidity and Capital Resources

At December 31, ~~2016~~2017, we had a working capital surplus of approximately $83.40 million, compared with a working capital surplus of approximately $48.04 million at December 31, ~~2015~~2016. ~~Excluding for the impact of the timing variance of Kreissparkasse Köln bank loan receivable, which was funded on January 25, 2017, we would have had a working capital surplus of $4.1 million.~~

For the year ended December 31, ~~2016~~2017, our net cash ~~provided~~used byin operating activities was approximately $102.90 million, which primarily consisted of approximately $61.39 million from net income; $2.28 million from depreciation and amortization; ~~increases~~changes in ~~Czech~~deposits ~~gaming~~and ~~tax~~other ~~accrual~~assets, notably the disbursement from Kreissparkasse Köln bank loan from the loan receivable of $14.2 million, ~~accrued~~and ~~expenses~~the ~~and~~old ~~other~~gaming ~~current~~bond ~~liabilities~~receivable ~~aggregating~~of $1.50 million, ~~that~~partially ~~included~~offset anby ~~accrual~~the of $~~277,000~~1.4 ~~for~~million deposit securing the ~~Hotel~~gaming ~~Kranichhöhe’s~~bond ~~real~~for ~~estate~~the ~~transfer~~new ~~tax~~Gambling license and an$0.8 ~~additional~~million ~~$255~~for the bank guarantee for the Erste Bank loan,~~000~~ inand ~~employee~~to ~~incentive-~~$3.1 million related ~~accrual~~to ~~from~~the unfavorable lease liability in connection with the ~~stronger~~Hotel ~~earnings~~Donauwelle ~~achieved~~acquisition, ~~plus~~which, ~~$358~~in aggregate,~~000~~ were partially offset by net decrease in ~~stock~~deposits and ~~options~~other ~~expenses~~assets of approximately $4.8 million, increase in receivables, which primarily included the renovation deposit for Hotel Donauwelle of $931.5 million,~~750~~ ~~for~~as ~~the~~well ~~common~~as ~~stock~~changes ~~issued~~in ~~for~~foreign ~~vested~~income ~~restricted~~tax ~~stock~~and ~~award~~Czech togaming ~~Mr.~~tax ~~Ramadan~~accruals of $956,000 ~~pursuant~~and to$673,000, ~~achievement~~respectively. Decreases in prepaid expenses of ~~earnings~~approximately ~~per~~$2.1 ~~share~~million, ~~targets~~an increase in ~~his~~prepaid ~~employment~~foreign ~~agreement. These~~income ~~increases~~tax ~~were~~of ~~partially~~$959,000, ~~offset~~a bydecrease ~~decreases~~accrued inexpenses and other current ~~assets~~liabilities aggregating $550,000 ~~deferred~~and ~~tax~~increases in other current assets of $435,000 ~~deposits~~were ~~and~~notably ~~other~~offset ~~assets~~by an increase of accounts payable of $711,000. These asincreases ~~well~~were aspartially ~~the~~offset by a gain of $~~124~~803,000 from athe bargain purchase of ~~said~~Hotel ~~hotel~~Donauwelle, ~~plus~~which awas ~~small~~partly ~~gain~~offset onby ~~assets~~a minor loss from disposal of fully-depreciated assets.

Our net cash used in investing activities totaled approximately $78.91 million, ~~which~~ included $25.79 million in capital improvements to our casino properties, ~~and~~largely from the ~~investment~~compliance ~~and~~to ~~advance~~the ~~totaling~~new ~~approximately~~Gambling Acts (e.g. CMS, High-Definition surveillance equipment, high-capacity digital data storage, etc.), and $51.27 million ~~for~~in capital improvements in the hotel segment, inclusive of $309,000 paid to the seller, in connection with the acquisition of Hotel ~~Kranichhöhe~~Donauwelle, which were partially offset by approximately $3811,000 of proceeds from the sale of fully-depreciated assets.

Our net cash ~~used~~provided inby financing activities consisted of ~~principal~~the ~~payments~~proceeds onof the ~~Sparkasse~~loan ~~Seligenstadt~~receivable ~~Loan~~from Kreissparkasse Köln Bank, ~~the~~partially ~~Sparkasse~~offset ~~Hann.~~by ~~Münden~~principal ~~Loan~~payments ~~and~~on ~~the~~outstanding ~~Seller~~bank ~~Loan,~~loans and ~~capital~~Hotel ~~lease~~Auefeld’s ~~payments~~Seller Loan.

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We are also obligated under various contractual commitments. The following is a summary of our contractual commitments over the next five years, as of December 31, ~~2016~~2017:

(in thousands, except in the footnotes)			Within			Years		Years
			Within		Years		Years
Contractual Obligations	Total		1 Year		2 - 3		4 - 5		Thereafter
Contractual Obligations (Unaudited)	Total		1 Year		2 - 3		4 - 5		Thereafter
Long-term, secured debt, foreign (1)	$	11,478	$	832	$	1,733	$	1,828	$	7,085
(in thousands, except in the footnotes)
Slot machine leases (2)		489		489
Long-term, secured debt, foreign (1)	$	16,260	$	1,453	$	2,985	$	4,854	$	6,968
Operating and other capital leases (3)		351		123		202		26
Gaming equipment loan (2)		988		329		659
Ground lease (4)		1,834		27		54		54		1,699
Slot machines and other gaming equipment leases (3)		587		587
Employment agreements (5)		680		680
Operating and other capital leases (4)		259		131		128
Total contractual obligations	$	14,832	$	2,151	$	1,989	$	1,908	$	8,784
Ground leases (5)		12,174		271		557		577		10,769
Employment agreements (6)		680		680
Total contractual obligations	$	30,948	$	3,451	$	4,329	$	5,431	$	17,737

(1) On September 9, 2014, the Company received a €3.6 million, or ~~approximately~~ $34.83 million, 15-year, amortized loan granted by a local German bank, Bank Sparkasse Langen-Seligenstadt, to purchase ~~the~~ Hotel Columbus. The loan terms provide for monthly payments with a fixed interest rate of 3.1% for the first ~~ten~~10 years, followed by a prevailing market-based fixed rate for this type of commercial loan for the remainder of the term. On June 16, 2015, as part of ~~the~~ Hotel ~~Freizeit~~ Auefeld acquisition, TWC assumed the hotel’s outstanding five bank loans from Bank Sparkasse Hann. Münden. The assumed bank debt was converted in November 2015 to a single loan of approximately €2.0 million, or $2.14 million, with the same lender, at 2.99% annual interest, fixed for 10 years, and amortized and payable monthly over 15 years. The Hotel ~~Freizeit~~ Auefeld was acquired also through a seller-financed loan of €2.2 million, or $2.36 million, with terms of 3.0% annual fixed interest, amortized over 10 years, with monthly payments and a first two-month no-interest grace period. On December 21, 2016, TWC signed a loan agreement with Bank Kreissparkasse Köln for a €4.0 million, (or $4.28 million), 13-year, amortized loan to purchase ~~the~~ Hotel Kranichhöhe. The loan terms provide ~~for~~monthly payments with a fixed interest rate of 1.95% for the first ~~ten~~10 years, followed by a prevailing market-based fixed rate for this type of commercial loan for the remainder of the term. The loan was disbursed on January 25, 2017. On March 1, 2016, TWC acquired Hotel Donauwelle (Linz), in part through a bank loan from a local Austrian bank, Erste Bank, for €3,866, or $4,639. The five-year amortized commercial loan provides for quarterly payments with a fixed interest rate of 2.95%, and a balloon payment of €1,966, or $2,359, at maturity. (See also “Note 4 — Long Term Debt” of the Notes to the Consolidated Financial Statements, included in this Annual Report in Part II, Item 8).

(2) ~~The~~On ~~annual~~December ~~slot~~18, ~~lease~~2017, ~~expenses~~TWC ~~are~~signed ~~estimated~~an agreement effective January 1, ~~since~~2018 ~~each~~to ~~slot~~purchase ~~machine~~70 isslot onmachines afrom ~~five~~IGT-~~year~~Europe ~~lease~~B.V. ~~with~~for ~~varying~~approximately ~~term~~€824,000, ~~maturity~~or $988,000, ~~and~~on ~~can~~manufacturer’s beoffered ~~terminated~~terms atof ~~any~~a ~~time~~36-month, interest-free loan, with a ~~3-month~~grace ~~payment~~period ~~penalty~~of three months. The ~~estimated~~gaming ~~total~~equipment ~~cost~~were isreceived ~~based~~in onJanuary ~~442~~2018, ~~leased~~with ~~slot~~payment ~~machines~~commencing asin ofApril ~~December 31, 2016~~2018.

(3) ~~Include~~The ~~the~~annual ~~long-term~~slot lease ~~for~~expenses ~~corporate~~are ~~office space~~estimated, ~~expiring~~since each slot machine is on ~~March~~a ~~31,~~five-year ~~2020~~lease ~~and~~with ~~employee~~varying ~~housing~~term ~~leases~~maturity, ~~which~~and can be terminated at any time, with a ~~six~~three-month ~~prior~~payment ~~notice~~penalty. The ~~six-month~~estimated ~~period~~total ~~commitment equates to a~~ cost ofis ~~approximately~~based ~~$25,000~~on ~~for~~442 ~~all~~leased ~~existing~~slot ~~employee~~machines ~~housing leases~~ as of December 31, ~~2016~~2017.

(4) ~~Ground~~Includes ~~lease rights to~~ the ~~plot~~long-term oflease ~~land~~for ~~upon~~corporate ~~which~~office ~~the~~space ~~Hotel~~in ~~Freizeit~~New ~~Auefeld~~York, ~~stands~~expiring ~~for~~on anMarch ~~additional~~31, 702020 ~~years,~~and the ~~contract~~Czech ~~for~~employee ~~which~~housing ~~includes~~leases, ~~both~~which ~~right~~can ofbe ~~first~~terminated ~~refusal~~at ~~buyout~~any ~~and~~time ~~renewal~~with ~~options~~a insix-month ~~favor~~prior ~~of TWC, the leaseholder~~notice. The ~~plot~~six-month isperiod ~~owned~~commitment byequates ~~the~~to ~~County~~a cost of ~~Göttingen~~approximately ~~and~~$30,000 ~~leased~~for toall ~~the~~existing ~~hotel~~employee athousing aleases ~~current~~as ~~cost~~ of ~~€26,078~~December ~~(or approximately $27~~31,~~500)~~ ~~per year~~2017.

(5) ~~Represents~~Includes two ground leases: i) the ~~salary~~ground ~~obligation~~lease ~~under~~rights ~~two~~to ~~corporate~~the ~~executives’~~plot ~~employment~~of ~~agreements.~~land ~~(See~~upon ~~also~~which ~~Part~~Hotel ~~III~~Auefeld stands for an additional 70 years, ~~Item~~the 11contract for which includes both right of first refusal buyout and renewal options in favor of TWC, the leaseholder. ~~“Executive~~The ~~Compensation”~~plot is owned by the County of Göttingen and is leased to TWC at a current cost of €26,078, or approximately $31,300 per year; and ii) the non-renewable ground lease rights to the plot of land upon which Hotel Donauwelle stands for an additional 45 years. The plot is owned by an Austrian family partnership and leased to the Company at a current annual cost of €184,000, or $220,720 per year, with an annual 2.2% rent escalation on each anniversary of its lease, March 1, 2018.

(6)

Represents the salary obligation under two corporate executives’ employment agreements.

The Company has no off-balance sheet arrangements.

~~Our Plan of Operations~~35

We will continue to develop and refine our marketing and operational strategies designed to increase attendance and revenues at our existing locations in Czechia while striving to minimize costs, through cost-sharing alliances with non-competing businesses, where advantageous. With respect to Hotel Savannah, we are utilizing the synergy of both gaming and hospitality resources to lower operating costs and improve profit margins.

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InOur ~~Germany,~~Plan in addition to recent product improvements made in 2016 at the Hotel Freizeit Auefeld, that included renovations to the guest rooms, restaurant, main kitchen facilities and certain public areas, and the planning of the Hotel Kranichhöhe’s renovation in 2017, we recently implemented a dynamic sales strategy that includes the use of an outside company that provides lead sourcing and sales support as a complement to our in-house team, which we expect to help fuel occupancy growth for our hotels in 2017 and beyond.Operations

We will continue to develop and refine our marketing and operational strategies designed to increase attendance and revenues at our existing locations in the Czech Republic while striving to minimize costs, through cost-sharing alliances with non-competing businesses, where advantageous. With respect to Hotel Savannah, we are utilizing the synergy of both gaming and hospitality resources to try to lower operating costs and improve profit margins.

In addition to recent hotel product improvements, which included renovation of 77 guestrooms and related corridors in Hotel Kranichhöhe and 52 guestrooms and related corridors in Hotel Donauwelle in the third quarter of 2017, we expect to complete refurbishment of the remaining 84 guestrooms in Hotel Donauwelle as well as refurbishment of the hotel’s conference rooms, lobby, and other public areas by end of August 2018. In Hotel Kranichhöhe, lobby and conference room upgrades will also be completed by the end of August 2018. Further, as part of TWC’s hotel improvement strategy, we are rolling out a new hotel/property management system, “Amadeus,” accompanied by a yield management module for our reservations systems, which will become a Trans World Hotels’ standard. Amadeus installations were completed in Hotel Donauwelle in October 2017 and in Hotel Kranichhöhe in February 2018, and the schedule for the remaining properties includes Hotel Auefeld in March 2018, Hotel Columbus in May 2018, and finally Hotel Savannah in October 2018. We believe that these improvements to the hotel products and systems, combined with the rebranding of the hotels, will help fuel occupancy growth in 2018 and beyond.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. TWC does not maintain any instruments in a trading portfolio to offset or to hedge market risk.

Interest Rate Risk

The interest rate on our Hotel Columbus remaining bank debt of €2.9 million, or $3.35 million at December 31, ~~2016~~2017, represented by the Sparkasse Seligenstadt Loan, is based on a fixed rate of 3.1% per annum, for the first ~~ten~~10 years of a 15-year loan term, maturing on September 9, 2029. The terms of the loan agreement stipulate that the interest rate in the last five remaining years of the term will be based upon the prevailing market-based fixed rate for this type of commercial loan, which may be higher than it is today. ~~The~~ Hotel ~~Freizeit~~ Auefeld was acquired with the assistance of the Sparkasse Hann. Münden Loan and the Seller Loan. TWC assumed the hotel’s outstanding five bank loans from Sparkasse Hann. Münden. The assumed bank debt was converted in November 2015, as per mutual agreement, to a single loan, ofwith ~~approximately~~remaining balance of €21.07 million, or $2.1 million at December 31, 2017, with the same lender, at a mutually agreed-upon 2.99% annual interest, fixed for 10 years, and paid over 15 years. ~~The~~ Hotel ~~Freizeit~~ Auefeld was acquired also through a seller-financed loan, with a remaining balance of €21.27 million, or $2.31 million at December 31, 2017, with terms of 3.0% annual fixed interest, amortized over 10 years, with a no-interest first two-month grace period. The interest rate on our Hotel Kranichhöhe remaining bank debt of €3.7 million, or approximately $4.25 million at December 31, ~~2016~~2017, represented by the Kreissparkasse Köln Loan, is based on a fixed rate of 1.95% per annum, for the first ~~ten~~10 years of a 13-year loan term, maturing on November 21, 2029. The terms of the loan agreement stipulate that the interest rate in the last three remaining years of the term will be based upon the prevailing market-based fixed rate for this type of commercial loan. Therefore, our interest expense in year 11 could increase as a result of this factor. The interest rate of our Hotel Donauwelle remaining Austrian bank loan with Erste Bank of approximately €3.5 million, or approximately $4.2 million at December 31, 2017, is based on a fixed interest rate of 2.95%, five-year term loan with a balloon payment of €1.966 million, or approximately $2.4 million, at maturity. We expect to finance this remaining balance at maturity. However, we cannot predict with any certainty the long-term direction of the local and national economy of Germany or Austria nor the impact of the world economy on interest rates. Any movement toward higher interest rates in year six for the Austrian bank loan, or year 11 for the three German bank loans could have a material adverse effect on our interest expense. We would have an interest rate risk exposure upon our remaining principal at that time of ~~approximately~~€1.966 million, or $2.4 million for Hotel Donauwelle in year six, and in year 11 of €1.4 million, or approximately $1.7 million for Hotel Columbus, approximately €759,000, or approximately $~~760~~911,000 for Hotel ~~Freizeit~~ Auefeld and €977,000, or approximately $1.32 million for Hotel Kranichhöhe, or interest-rate risk exposure of an aggregate of €3.14 million, or $3.8 million in year 11. We have not in the past and do not currently engage in interest-rate swap agreements or other types of interest-rate ~~hedging activities. Our Company’s management evaluates our exposure to market risk by monitoring interest rates in the marketplace to determine the best course of action, if needed.~~

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hedging activities. Our Company’s management evaluates our exposure to market risk by monitoring interest rates in the marketplace to determine the best course of action, if needed.

Foreign Currency Exchange Rate Risk

The information in this section should be read in conjunction with information related to changes in the exchange rates of foreign currency in “Part I, Item 1A. Risk Factors.” Changes in foreign currency exchange rates could materially adversely affect our consolidated results of operations and/or financial condition.

Due to the fact that our operations are all located overseas, our overall results are subject to the impact of fluctuations in foreign currency exchange (“FX”) rates. Pursuant to the January 2002 adoption of the EUR by Germany and Austria (but not ~~Czechia~~the Czech Republic) as the sole trading currency by all European Union member nations that had previously tied their local currencies to it, our operations conducted business in EURs and CZKs. Because the vast majority of our customers are German and Austrian, our revenues are generally received in EUR. However, because a portion of our operations are situated in the CZ, the majority of our expenses are denominated in CZKs. As our primary reporting subsidiary, TWH&E, is a Czech entity, all revenues and expenses, regardless of sources of origin, are recognized in the Czech currency and translated to USD for reporting purposes.

33Based on our sensitivity analysis, as of the year ended December 31, 2017, we determined that hypothetical 10% movements in the two functional currencies, the CZK, when converted to the USD, and the EUR, when converted to the CZK, would have resulted in the following changes to our operating results:

~~Table~~· A hypothetical 10% strengthening of ~~Contents~~ the USD to the CZK would have decreased our operating results before tax by an approximate $601,000;

~~Based~~· onA ~~our sensitivity analysis, as of the year ended December 31, 2016, we determined that~~ hypothetical 10% ~~movements~~weakening inof the ~~two functional currencies, the CZK, when converted to the~~ USD, ~~and the EUR, when converted~~ to the CZK, would have ~~resulted~~increased inour ~~the~~operating ~~following~~results ~~changes~~before totax ~~our~~by ~~operating~~an ~~results:~~ approximate $734,000;

· A hypothetical 10% strengthening of the ~~USD~~EUR to the CZK would have ~~decreased~~increased our operating results before tax by an approximate $12.37 million; and

· A hypothetical 10% weakening of the ~~USD~~EUR to the CZK would have ~~increased~~decreased our operating results before tax by an approximate $12.67 million;.

· A hypothetical 10% strengthening of the EUR to the CZK would have increased our operating results before tax by an approximate $3.4 million; and

· A hypothetical 10% weakening of the EUR to the CZK would have decreased our operating results before tax by an approximate $3.4 million.

In real world situations, the impact of the FX on our operating results could be positive or negative, depending on the combination, the variability and intensity of the above probabilities, coupled with the strength of the correlation of the functional currencies to the USD, among other factors. We have not in the past, and do not currently, hedge our currency holdings or transactions.

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Item 8. Financial Statements and Supplementary Data.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	3639
Consolidated Balance Sheets, December 31, 2016 and 2015	37
Consolidated Balance Sheets, December 31, 2017 and 2016	40
Consolidated Statements of Operations and Comprehensive Income, Years EndedDecember 31, 2016 and 2015	38
Consolidated Statements of Operations and Comprehensive Income, Years EndedDecember 31, 2017 and 2016	41
Consolidated Statements of Stockholders’ Equity, Years EndedDecember 31, 2016 and 2015	39
Consolidated Statements of Stockholders’ Equity, Years EndedDecember 31, 2017 and 2016	42
Consolidated Statements of Cash Flows, Years EndedDecember 31, 2016 and 2015	40
Consolidated Statements of Cash Flows, Years EndedDecember 31, 2017 and 2016	43
Notes to Consolidated Financial Statements	4144

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Trans World Corporation and Subsidiaries

WeOpinion ~~have~~on ~~audited~~ the ~~accompanying~~Consolidated ~~consolidated~~Financial balance sheets of Trans World Corporation and Subsidiaries (collectively, the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of operations and comprehensive income, stockholders’ equity and cash flows for each of the years ended December 31, 2016 and 2015. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.Statements

We ~~conducted~~have ~~our~~audited ~~audits~~the inaccompanying ~~accordance~~consolidated ~~with~~balance ~~the~~sheets ~~standards~~ of ~~the~~Trans ~~Public~~World ~~Company~~Corporation ~~Accounting~~and ~~Oversight~~Subsidiaries ~~Board~~ (~~United~~collectively, ~~States~~the "Company")~~. Those~~ ~~standards~~as ~~require~~of ~~that~~December we31, ~~plan~~2017 and ~~perform~~2016, ~~the~~and ~~audit to obtain reasonable assurance about whether~~ the related consolidated ~~financial~~ statements ~~are free~~ of ~~material~~operations ~~misstatement. The~~and ~~Company~~comprehensive ~~is not required to have~~income, ~~nor~~stockholders’ ~~were~~equity weand ~~engaged~~cash ~~to perform~~flows, anfor ~~audit~~each of ~~its~~the ~~internal~~two ~~control~~years ~~over~~in ~~financial~~the ~~reporting.~~period ~~Our~~ended ~~audit~~December ~~included~~31, ~~consideration~~2017, ofand ~~internal~~the ~~control~~related ~~over~~notes ~~financial~~(collectively ~~reporting~~referred to as athe ~~basis~~"consolidated ~~for~~financial ~~designing~~statements"). ~~audit~~In ~~procedures~~our ~~that~~opinion, ~~are appropriate in~~ the ~~circumstances,~~consolidated ~~but~~financial ~~not~~statements ~~for~~present ~~the~~fairly, ~~purpose~~in ofall ~~expressing~~material anrespects, ~~opinion on~~ the ~~effectiveness~~financial position of the Company’s ~~internal~~as ~~control~~of ~~over~~December ~~financial reporting. Accordingly~~31, we2017 ~~express~~and ~~no such opinion. An audit also includes examining~~2016, onand athe ~~test~~results ~~basis,~~of ~~evidence~~its ~~supporting~~operations ~~the amounts~~ and ~~disclosures~~its incash ~~the~~flows ~~consolidated~~for ~~financial~~each ~~statements,~~of ~~assessing~~ the ~~accounting~~two ~~principles~~years ~~used~~in ~~and~~the ~~significant~~period ~~estimates~~ended ~~made~~December by31, ~~management~~2017, asin ~~well~~conformity aswith ~~evaluating~~accounting ~~the~~principles ~~overall~~generally ~~financial~~accepted ~~statement~~in ~~presentation.~~the WeUnited ~~believe~~States ~~that~~of ~~our audits provide a reasonable basis for our opinion~~America.

InBasis our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Trans World Corporation and Subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for ~~each of the years ended December 31, 2016 and 2015, in conformity with accounting principles generally accepted in the United States of America.~~Opinion

/ These consolidated financial statements are the responsibility of the Company's/ ~~WithumSmith+Brown~~management. PCOur ~~Morristown,~~responsibility ~~New~~is ~~Jersey~~to ~~March~~express 7,an ~~2017~~opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

36We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company's auditor since 2014

/s/ WithumSmith+Brown, PC

Whippany, New Jersey

March 28, 2018

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TRANS WORLD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, ~~2016~~2017 and ~~2015~~2016(in thousands, except for share data)

	December 31, 2016		December 31, 2015
	December 31, 2017		December 31, 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	126,~~868~~383	$	1012,~~674~~868
Prepaid expenses		~~227~~4,067		~~409~~227
Loan receivable		4,215
Prepaid foreign income tax		959
Other current assets		853		509
Loan receivable				4,215
Total current assets		18,163		11,592
Other current assets		400		853
PROPERTY AND EQUIPMENT, net		41,524		37,122
Total current assets		11,809		18,163
PROPERTY AND EQUIPMENT, net		64,135		41,524
OTHER ASSETS:
Goodwill		45,~~857~~848		54,~~016~~857
Deferred tax assets		99		99
Deposits and other assets		12,~~461~~934		1,~~509~~461
Total other assets		68,~~417~~782		6,~~525~~417
TOTAL ASSETS	$	6684,~~104~~726	$	5566,~~239~~104
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Long-term debt, current maturities	$	~~832~~1,453	$	~~542~~832
Capital lease, current portion				22
Unfavorable lease liability, current portion		247
Accounts payable		12,~~169~~111		~~753~~1,169
Czech gaming tax accrual		32,~~305~~632		23,~~219~~305
Foreign income tax accrual		~~956~~		~~957~~956
Accrued expenses and other current liabilities		32,~~540~~059		3,~~052~~540
Total current liabilities		98,~~802~~502		79,~~545~~802
LONG-TERM LIABILITIES:
Long-term debt, less current maturities		1014,~~646~~807		710,~~493~~646
Deferred foreign tax liability				32
Unfavorable lease liability, less current portion		2,902
Total long-term liabilities		10,646		7,525
Long-term payables		744
Deferred foreign tax liability		306
Total long-term liabilities		18,759		10,646
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Preferred stock, $.001 par value, 4,000,000 shares authorized, none issued
Common stock, $.001 par value, 20,000,000 shares authorized, 8,854,011 shares in 2016 and 8,829,011 shares in 2015 issued and outstanding		9		9
Common stock, $.001 par value, 20,000,000 shares authorized, 8,879,011 shares in 2017 and 8,854,011 shares in 2016 issued and outstanding		9		9
Additional paid-in capital		5455,~~270~~312		5354,~~387~~270
Accumulated other comprehensive loss		(5,001)		(3,282)
Accumulated other comprehensive income (loss)		3,881		(5,001)
Accumulated deficit		(31,~~622~~737)		(93,~~945~~622)
Total stockholders’ equity		4557,~~656~~465		4045,~~169~~656
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6684,~~104~~726	$	5566,~~239~~104

See accompanying notes to consolidated financial statements.

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TRANS WORLD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOMEYears Ended December 31, ~~2016~~2017 and ~~2015~~2016(in thousands, except for share and per share data)

	Year Ended December 31,
	2016		2015
	2017		2016
REVENUES	$	53,238	$	42,386
REVENUES:
Gaming	$	38,874	$	46,556
Rooms		8,449		3,771
Food and beverage		5,843		2,598
Other		942		313
		54,108		53,238
COSTS AND EXPENSES:
Cost of revenues		28,673		21,747
Gaming		24,364		24,764
Depreciation and amortization		2,220		1,863
Rooms		3,629		1,307
Selling, general and administrative		13,235		13,467
Food and beverage		4,958		2,352
		44,128		37,077
Other		691		250
INCOME FROM OPERATIONS, before other income (expenses) and income taxes		9,110		5,309
Depreciation and amortization		2,802		2,220
OTHER INCOME (EXPENSES):
Selling, general and administrative		15,266		13,235
Interest expense		(243)		(206)
		51,710		44,128
Other income		124		149
INCOME FROM OPERATIONS		2,398		9,110
		(119)		(57)
OTHER INCOME (EXPENSE):
INCOME BEFORE INCOME TAXES		8,991		5,252
Interest expense		(417)		(243)
INCOME TAXES		(2,668)		(1,394)
Other income		802		124
NET INCOME		6,323		3,858
		385		(119)
Other comprehensive loss, foreign currency translation adjustments, net of tax of $0		(1,719)		(3,768)
INCOME BEFORE INCOME TAX EXPENSE		2,783		8,991
COMPREHENSIVE INCOME	$	4,604	$	90
INCOME TAX EXPENSE		(898)		(2,668)
NET INCOME		1,885		6,323
Other comprehensive income (loss), foreign currency translation adjustments		8,882		(1,719)
COMPREHENSIVE INCOME	$	10,767	$	4,604
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		8,~~838~~874,~~984~~148		8,~~822~~838,~~488~~984
Diluted		9,~~498~~870,~~578~~666		9,~~259~~498,~~553~~578
EARNINGS PER COMMON SHARE:
Basic	$	0.7221	$	0.4472
Diluted	$	0.6719	$	0.4267

See accompanying notes to consolidated financial statements.

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TRANS WORLD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Years Ended December 31, ~~2016~~2017 and ~~2015~~2016(in thousands, except for share data)

						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders'
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances, January 1, 2015	8,821,205	$	9	$	52,888	$	486	$	(13,803)	$	39,580
Balances, January 1, 2016	8,829,011	$	9	$	53,387	$	(3,282)	$	(9,945)	$	40,169
Deferred board fees to be paid in stock, pursuant to the Deferred Compensation Plan (DCP)					71100						71100
Deferred employee incentives to be paid in stock, pursuant to the DCP					350						350
Foreign currency translation adjustment, net of tax							(3,768)				(3,768)
Stock option expense					78						78
Issuance of stock pursuant to DCP	7,806
Net income									3,858		3,858
Balances, December 31, 2015	8,829,011	$	9	$	53,387	$	(3,282)	$	(9,945)	$	40,169
Deferred board fees to be paid in stock, pursuant to the DCP					100						100
Deferred employee incentives to be paid in stock, pursuant to the DCP					425						425
Foreign currency translation adjustment, net of tax							(1,719)				(1,719)
Stock option expense					264						264
Common stock issued for vested restricted stock award	25,000				94						94
Net income									6,323		6,323
Balances, December 31, 2016	8,854,011	$	9	$	54,270	$	(5,001)	$	(3,622)	$	45,656
Deferred board fees to be paid in stock, pursuant to the DCP					130						130
Deferred employee incentives to be paid in stock, pursuant to the DCP					564						564
Foreign currency translation adjustment, net of tax							8,882				8,882
Stock option expense					203						203
Common stock issued for vested restricted stock award	25,000				145						145
Net income									1,885		1,885
Balances, December 31, 2017	8,879,011	$	9	$	55,312	$	3,881	$	(1,737)	$	57,465

See accompanying notes to consolidated financial statements.

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TRANS WORLD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, ~~2016~~2017 and ~~2015~~2016(in thousands)

	2016		2015
	2017		2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	61,~~323~~885	$	36,~~858~~323
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Gain from assets disposal		(28)		(5)
Loss (gain) from disposal of assets		2		(28)
Gain on bargain purchase of assets		(124)		(149)
Gain on bargain purchases of hotels		(803)		(124)
Depreciation and amortization		2,~~220~~802		12,~~863~~220
Stock and option expenses		358		78
Stock options expense		203		264
Deferred board fees		100		71
Restricted stock issuance		145		94
Deferred income tax liability		(130)		(266)
Deferred board fees		130		100
Deferred income tax expense (benefit)		240		(130)
Changes in operating assets and liabilities:
Prepaid expenses		~~176~~(2,090)		~~(143)~~176
Other current assets		(575)		(66)
Prepaid foreign income tax		(959)
Deferred tax assets		(99)
Other current assets		(435)		(575)
Deposits and other assets		(4,767)		~~(431)~~
Accounts payable		461		(191)
Unfavorable lease liability		3,149
Czech gaming tax accrual		1,214		577
Accounts payable		711		362
Foreign income tax accrual		32		908
Czech gaming tax accrual		(673)		1,214
Accrued expenses and other current liabilities		996		1,137
Foreign income tax accrual		(956)		32
NET CASH PROVIDED BY OPERATING ACTIVITIES		10,924		7,241
Accrued expenses and other current liabilities		(550)		996
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES		(1,966)		10,924
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(27,~~743~~671)		(~~944~~2,743)
Investment for acquisition of Hotel Kranichhöhe		~~(957)~~		(957)
Advance for acquisition of Hotel Kranichhöhe		~~(4,215)~~		(4,215)
Cash payment to seller for acquisition of Hotel Freizeit Auefeld				(275)
Cash paid to seller for acquisition of Hotel Donauwelle		(390)
Proceeds from sale of assets		3811		538
NET CASH USED IN INVESTING ACTIVITIES		(78,~~877~~050)		(17,~~214~~877)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on Hotel Freizeit Auefeld's Seller Loan		(115)		(135)
Proceeds from loan receivable		4,215
Principal payments on bank loans		(436)		(296)
Principal payments on Hotel Auefeld's Seller Loan		(121)		(115)
Capital lease payments		(22)		(29)
Principal payments on bank loans		(1,219)		(436)
NET CASH USED IN FINANCING ACTIVITIES		(573)		(460)
Capital lease payments				(22)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(280)		(1,482)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		2,875		(573)
NET INCREASE IN CASH AND CASH EQUIVALENTS		2,194		4,085
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		656		(280)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(6,485)		2,194
CASH AND CASH EQUIVALENTS:
Beginning of period		1012,~~674~~868		610,~~589~~674
End of period	$	126,~~868~~383	$	1012,~~674~~868
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	~~243~~415	$	~~206~~243
Cash paid during the period for income taxes	$	21,~~653~~661	$	~~737~~2,653
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES:
Deferred compensation to be paid in common stock	$	~~425~~564	$	~~350~~425
Assumption of Sparkasse Hann. Münden loans for Hotel Freizeit Auefeld	$		$	2,220
Purchase price of Hotel Donauwelle	$	4,517	$
Seller loan received in connection with acquisition of Hotel Freizeit Auefeld	$		$	2,455
Assumption of Erste Bank loan for Hotel Donauwelle	$	4,096	$
Purchase price of Hotel Freizeit Auefeld	$		$	4,950
Kreissparkasse Köln loan in connection with acquisition of Hotel Kranichhöhe	$		$	4,215
Kreissparkasse Köln loan in connection with acquisition of Hotel Kranichhöhe	$	4,215	$

See accompanying notes to consolidated financial statements.

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(Figures in thousands, except for statistics and share data)

NOTE 1 - Nature of Business

Trans World Corporation and Subsidiaries (collectively, “TWC” or the “Company”), a Nevada corporation, is primarily engaged in the gambling business in the Czech Republic (“CZ” ~~or “Czechia”~~) and in the hospitality business in Germany (“DE”) and Austria (“AT”).

TWC owns and operates three full-service casinos and ~~four~~five hotels. The Company’s operating units are organized under two reportable segments: a casino segment and a hotel segment. The three casinos operate under its registered brand, American Chance Casinos (“ACC”). One casino is located in the western part of the CZ, close to the German border, in Ceska Kubice (“Ceska”), which currently has 1413 gaming tables and ~~102~~118 slot machines. The other two casinos are located in the southern part of the CZ, close to the Austrian border. The larger of these two, “Route 55,” located in Dolni Dvoriste, has 2122 gaming tables and ~~150~~192 slot machines. The other casino, “Route 59,” is located in Hate, near Znojmo, and currently has 2524 gaming tables and ~~190~~214 slot machines. In addition to the Czech casinos, TWC also owns and operates a 77 79-room, European four-star deluxe hotel, the Hotel Savannah, which is physically connected to our Route 59 casino, and also a full-service spa, the Spa at Savannah (the “Spa”), which is operated by an independent contractor and is attached to the hotel. The three casinos and the Hotel Savannah comprised the Company’s casino segment.

The Company’s five hotels operate under the brand Trans World Hotels (“TWH”). Hotel Columbus is a 117-room, four-star hotel, located in Seligenstadt, Germany, near Frankfurt that was acquired in September 2014. ~~The~~ Hotel ~~Freizeit~~ Auefeld, is a 93-room, four-star hotel, located in Hann. Münden, Germany, about a two-hour drive north of Frankfurt. Although the Company acquired the hotel on June 16, 2015, the signing parties agreed to set the acquisition date retroactive to June 1, 2015, which had no impact on the purchase price. ~~The Company also acquired~~ Hotel Kranichhöhe, a 107-room three-star hotel, located in Much, Germany, near Cologne, Germany, was acquired in December 2016. The hotel was subsequently upgraded to four-star rating on June 27, 2017. It is about a two-hour drive south-east to ~~the~~ Hotel Columbus and a three-hour drive east to Hotel ~~Freizeit~~ Auefeld. Although the Company acquired the hotel on December 21, 2016, the signing parties agreed to set the date of acquisition retroactive to December 1, 2016, which had no impact on the purchase price. In March 2017, TWC acquired Hotel Donauwelle, a 176-room, four-star business hotel located in Linz, Austria. The hotel is situated on the banks of the Danube River, approximately 35 minutes driving time from our Route 55 Casino. The three German hotels ~~comprised~~and one Austrian hotel comprise the Company’s hotel segment.

NOTE 2 - Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation - The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”), and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”) and Regulation S-X.

The functional currency of the Czech subsidiaries is the local Czech koruna ("CZK" or “Kč”) and the functional currency of the German ~~subsidiary~~and Austrian subsidiaries is the euro currency ("EUR" or “€”). However, as our primary reporting subsidiary, Trans World Hotels & Entertainment, a.s. (“TWH&E,”), is a Czech entity, all transactions, regardless of sources of origin, are recognized (and in the case of the German and Austrian hotel ~~operation~~operations, are recognized first) in the Czech currency and translated to USD for reporting purposes.

All intercompany balances and transactions have been eliminated in consolidation.

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

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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		30-50 years
Leasehold improvements		5-20 years
Furniture, fixtures and other equipment		4-10 years

Goodwill - Goodwill represents the excess of the cost of the Company’s subsidiaries over the fair value of their net assets at the date of acquisition. In the CZ, this 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). In Germany, it consists of ~~the~~ Hotel ~~Freizeit~~ Auefeld. In light of the recent acquisition of German assets, TWC’s allocation of its Czech goodwill over two geographical reporting units, which are components of the casino segment, have been renamed and classified as the “Pilsen reporting unit” (“PRU”), which consists of the Ceska casino, and the “South Moravia reporting unit” (“SMRU”), which consists of the land in Hate. The hotel segment goodwill is derived from ~~the~~ Hotel ~~Freizeit~~ Auefeld, and is represented by the “Lower Saxony reporting unit” (“LSRU”).

Goodwill impairment tests allow 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, industry and market considerations, and other factors, the Company concluded that it was not necessary to perform a two-step quantitative goodwill impairment test and that the goodwill of the Company was not impaired as of September 30, ~~2016~~2017, its annual assessment date. There were no triggering factors during the fourth quarter of ~~2016~~2017, hence, no additional goodwill impairment testing was warranted as of December 31, ~~2016~~2017.

Comprehensive Income (Loss) — The Company complies with requirements for reporting comprehensive income (loss). Those requirements establish rules for reporting and display of comprehensive income (loss) 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 were no other components of the Company’s comprehensive income (loss) in ~~2016~~2017 and ~~2015~~2016.

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 year and resulting translation adjustments are included in “accumulated other comprehensive income.” 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.

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(Figures in thousands, except for statistics and share data)

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

	Goodwill									Total
	Casino Segment						Hotel Segment			Total
(Unaudited)	Casino Segment						Hotel Segment
	Pilsen			South-Moravia			Lower Saxony
As of December 31, 2016 (in thousands, except FX)	reporting unit			reporting unit			reporting unit
As of December 31, 2017 (in thousands, except FX)	reporting unit			reporting unit			reporting unit
Balance in USD ($)	$	3,042	(1)	$	537	(1)	$	131		$	3,710
Balance in EUR (€)							€	119		€	119
Foreign Exchange Rate ("FX")		33.883			33.883			27.245
Foreign Exchange Rate ("FX") ($ to Kč or € to Kč)		33.883			33.883			27.245
Balance in CZK (Kč)	Kč	103,072	(2)	Kč	18,195	(2)	Kč	3,242	(3)	Kč	124,509
Applicable FX(4)		2521.~~639~~291			2521.~~639~~291			2521.~~639~~291
Balance at December 31, 2016	$	4,020		$	710		$	127		$	4,857
Balance as of December 31, 2017	$	4,841		$	855		$	152		$	5,848
Net cumulative change to goodwill due to foreign currency translation	$	~~978~~1,799		$	~~173~~318		$	~~(4)~~21		$	12,~~147~~138

(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 was taken prior to January 1, 2003.

(2)

USD residual balance translated to CZK at June 30, 1998, the date of acquisition of such assets, with the date of acquisition CZK to USD FX rate of 33.883.

(3) EUR balance translated to CZK at June 1, 2015, the date of acquisition of ~~the~~ Hotel ~~Freizeit~~Auefeld, with the date of acquisition FX rate of 27.245 from CZK to EUR.

(4)

FX central bank foreign exchange rates taken from www.CNB.CZ.

Earnings Per Common Share - The Company complies with accounting and disclosure requirements regarding 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. As of December 31, ~~2016~~2017, the Company’s Common Stock equivalents include 665,000 unexercised stock options, 5025,000 shares of restricted stock, and ~~626~~734,~~028~~232 shares issuable under the Company’s Deferred Compensation Plan. As of December 31, ~~2015~~2016, the Common Stock equivalents included ~~635~~665,000 unexercised stock options, 7550,000 shares of restricted stock, and ~~436~~626,~~842~~028 deferred compensation shares. These shares for the respective years were included in the computation of diluted earnings per common share, if such unexercised stock options, restricted stock, and deferred compensation stock were vested and/or “in-the-money,” as the case may be.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Figures in thousands, except for statistics and share data)

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

	For the Year Ended
	December 31,
	2016		2015
	2017		2016
Basic earnings per share:
Net income	$	61,~~323~~885	$	36,~~858~~323
Weighted average common shares		8,~~838~~874,~~984~~148		8,~~822~~838,~~488~~984
Basic earnings per share	$	0.7221	$	0.4472
Diluted earnings per share:
Net income	$	61,~~323~~885	$	36,~~858~~323
Weighted average common shares		8,~~838~~874,~~984~~148		8,~~822~~838,~~488~~984
Addition due to the effect of dilutive securities using the treasury stock method:
Stock options		33262,~~566~~286		~~223~~33,566
Stock issuable under the Deferred Compensation Plan		~~626~~734,~~028~~232		~~436~~626,~~842~~028
Dilutive potential common shares		9,~~498~~870,~~578~~666		9,~~259~~498,~~553~~578
Diluted earnings per share	$	0.6719	$	0.4267

Revenue Recognition - Casino revenue is defined as the net win from gambling 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~~Room ~~generated~~revenue ~~from~~recognition ~~ancillary~~criteria ~~services~~are ~~include~~met ~~hotel~~at ~~room~~the ~~rentals,~~time ~~sales~~ of occupancy. Food and beverage (“F&B,”) spa ~~services,~~ and ~~sales~~other ofdepartments’ ~~casino~~revenue ~~logo~~recognition ~~merchandise~~criteria ~~and~~ are ~~recognized~~met at the time the related services are performed or goods sold~~, as shown in the table below, as a percentage of total revenue~~.

Revenue segment as percentage of total revenue:

	For the Year Ended
	December 31,
	2016		2015
	2017		2016
Gaming	8771.48	%	87.54	%
Rooms	715.16	%	7.1	%
F&B	410.98	%	4.79	%
Spa/Other departments	0.28	%	0.32	%
Other	01.40	%	0.4	%
Total Revenue	100.0	%	100.0	%

Business Acquisitions - Assets acquired and liabilities assumed in business combinations are recorded on the Company’s consolidated balance sheets as of the respective agreed 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

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(Figures in thousands, except for statistics and share data)

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.

Segment Reporting  OnDue ~~September 1, 2014, the Company acquired Hotel Columbus and after this acquisition, the Company determined, due~~ to the significance of the ~~assets~~hotel properties acquired in recent years and pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting, ~~that~~ the Company determined that it had 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 1415 – “Segment Information,” below.

Promotional Allowances  Promotional allowances primarily consist of the provision of complimentary food and beverages and, to certain of its valuable players, hotel or room accommodations. For the years ended December 31, ~~2016~~2017 and ~~2015~~2016, revenues do not include the aggregate of retail amount of ~~food and beverages (“~~F&B”) and hotel or room accommodations of $7,~~496~~676 and $67,~~688~~496, respectively, provided at no-charge to customers. The retail value of the F&B given away is determined by dividing the F&B costs charged to the gaming operation of $2,~~655~~871 and $2,~~404~~655, for the respective periods, by the average percentage of cost of F&B sold. The cost of hotel or room accommodations is either the out-of-pocket expenses paid to other hotels to accommodate TWC’s customers or the retail charge of room accommodations at the Company’s Hotel Savannah and at its VIP guest rooms at Ceska and at Route 55.

The promotional allowances are summarized below:

	For the Year Ended
	December 31,
	2016			2015
	2017			2016
Cost of complimentary F&B (A)	$	2,~~655~~871		$	2,~~404~~655
Average cost of F&B sold (B)		3637.19	%		36.71	%
Retail value of F&B (A/B)		7,~~355~~576			67,~~550~~355
Cost of hotel accommodations		~~141~~100			~~138~~141
Total hypothetical retail value	$	7,~~496~~676		$	67,~~688~~496

~~External~~Effective ~~Advertising - The~~January Company complies with the accounting and reporting requirements for reporting on advertising costs. External advertising expenses are charged to operations as incurred and were $140 and $175 for the years ended December 311, ~~2016 and 2015~~2018, ~~respectively,~~under ~~as recorded in~~ the ~~selling~~Gambling Acts, ~~general~~no ~~and~~complimentary ~~administrative~~F&B ~~expenses~~can ofbe ~~the~~given ~~consolidated~~to ~~statements~~any ofplayers ~~operations~~or guests.

~~Fair~~External ~~Value of Financial Instruments~~Advertising - The ~~fair~~Company ~~values~~complies ofwith the ~~Company’s~~accounting ~~assets~~ and ~~liabilities~~reporting ~~that~~requirements ~~qualify~~for asreporting ~~financial~~on ~~instruments,~~advertising ~~mainly~~costs. External ~~the~~advertising ~~debts~~expenses ~~underlying~~are ~~the~~charged ~~assets~~to ofoperations as incurred and were $153 and $140 for the ~~three~~years ~~German~~ended ~~hotels~~December 31, ~~approximate~~2017 ~~their~~and ~~carrying~~2016, ~~amounts~~respectively, ~~presented~~as recorded in the ~~accompanying~~selling, ~~consolidated~~general ~~balance~~and ~~sheets~~administrative atexpenses ~~December 31,~~of ~~2016~~the ~~and~~consolidated ~~2015,~~statements ~~respectively~~of operations.

Fair Value of Financial Instruments - The fair values of the Company’s assets and liabilities that qualify as financial instruments, mainly the debts underlying the assets of the three German hotels and one Austrian hotel, approximate their carrying amounts presented in the accompanying consolidated balance sheets at December 31, 2017 and 2016, respectively.

Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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 by 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 48

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Figures in thousands, except for statistics and share data)

Impairment of Long-Lived Assets - The Company’s long-lived assets were carried at approximately $64,135, or 75.7% of consolidated total assets. TWC 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 Ansuch circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived assets, or by 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 isand ~~based~~its oncarrying ~~quoted~~value. ~~market~~TWC ~~prices~~also solicits third party valuation expertise to assist in ~~active~~the ~~markets,~~valuation ifof ~~available~~its investments. IfThere ~~quoted~~are ~~market~~three ~~prices~~generally ~~are~~accepted ~~not~~approaches available, in developing an opinion of value: the ~~estimate~~cost, sales comparison and income (or discounted cash flow) approaches. The Company generally considers each of these approaches in developing a recommendation of the fair value of the asset; however, the reliability of each approach is ~~based~~dependent onupon ~~various~~the ~~valuation~~availability ~~techniques~~and comparability of the market data, ~~including~~as well as, the decision-making criteria used by market participants when evaluating a ~~discounted~~property. TWC ~~value~~will apply the most indicative approach to overall fair valuation, and in most cases, a weighted analysis of ~~estimated~~any ~~future~~or ~~cash~~all ~~flows.~~of these methods. 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 years ended December 31, ~~2016~~2017 and ~~2015~~2016, respectively.

Stock-based Compensation The Company accounts for stock options using the modified prospective method in accordance with FASB ASC 718-10, “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 $~~358~~348 and $78358 for the years ended December 31, ~~2016~~2017 and ~~2015~~2016, respectively, and is included in selling, general and administrative expenses in the consolidated statements of operations.

Czech Gaming Taxes - In December ~~2011~~2015, the ~~Czech~~President ~~parliament~~of ~~passed~~the ~~sweeping~~Czech ~~gaming~~Republic ~~tax~~signed ~~legislation,~~an ~~which~~amendment ~~was~~to ~~then signed by~~ the ~~Czech~~Gaming ~~president~~Tax ~~into~~Law ~~law. The gaming tax law~~ (“~~2012~~2016 Gaming Tax ~~Law~~Amendment”) ~~law~~that ~~took~~effectively ~~effect~~raised onthe ~~January~~rates 1,of ~~2012~~these gaming taxes. The ~~gaming~~amendment ~~tax~~became ~~law~~effective ison ~~summarized~~January ~~below~~1, in2016 ~~actual~~and ~~monetary~~the ~~amounts~~new ~~(not~~rates in ~~thousands)~~the gaming tax law are as follow:

		2012 Gaming Tax Law
		2016 Gaming Tax Amendment
(in actual amounts)		(Effective from January 1, ~~2012~~2016 to December 31, ~~2015~~2016)
Live Games		2023% gaming tax ~~from~~on revenue earned from live games (70% of tax ~~paid~~allocated to the federal government; 30% ~~paid~~of tax allocated to the local municipality).
Slots		2028% gaming tax ~~from~~on revenue earned from slot games (20% of tax ~~paid~~allocated to the federal government; 80% ~~paid~~of tax allocated to the local municipality); and a per diem fixed fee of Kč 80 ($3.76) per slot machine (allocated to the federal government).
		CZK 55 (or approximately $2.15) gaming tax per slot machine, per day (paid to the federal government).
Net Income		19% corporate income tax on adjusted net income earned in the Czech Republic, net of exemptions (allocated to the federal government).
Net Income		19% corporate income tax on adjusted net income earned in the Czech Republic, net of exemptions (paid to the federal government).

InGaming ~~December~~taxes ~~2015,~~are payable by the ~~President~~25th ofday following the ~~Czech~~end ~~Republic~~of ~~signed~~each ancalendar ~~amendment~~quarter, towhile the ~~Gaming~~corporate ~~Tax~~income ~~Law~~tax ~~(“2016~~obligation ~~Gaming~~is ~~Tax~~paid ~~Amendment”)~~by ~~that~~June ~~effectively~~30th ~~raised~~of the ~~rates~~subsequent ~~of these gaming taxes~~year. The ~~amendment~~Company ~~became~~is ~~effective~~also onrequired ~~January~~to 1,make ~~2016~~estimated ~~and~~quarterly ~~the~~income ~~new rates in the gaming~~ tax ~~law~~payments. ~~are as follow:~~

		2016 Gaming Tax Amendment
(in actual amounts)		(Effective from January 1, 2016 to December 31, 2016)
Live Games		23% gaming tax from revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).
Slots		28% gaming tax from revenue earned from slot games (20% of tax allocated to the federal government; 80% of tax allocated to the local municipality); and a per diem fixed fee of Kč 80 (approximately $3.12) per slot machine (allocated to the federal government).
Net Income		No change from the 19% corporate income tax noted above

On June 7, 2016, the President of the Czech Republic signed the 2017 Gambling Act (186/2016 Coll.) (the “Gambling Act”) and the 2017 Gambling Tax Act (187/2016 Coll.) (the “2017 Gambling Tax Act”) (collectively referred to as the “Gambling Acts”). The Gambling Acts became law on June 15, 2016, when they were published in the official Collection of Laws, maintained by the Czech Ministry of the Interior. The 2017 Gambling Tax Act, which took effect on January 1, 2017, raised the gaming tax rate on technical game (i.e. slot machine or electromechanical roulette or dice)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Figures in thousands, except for statistics and share data)

~~Gaming~~revenues ~~taxes~~to ~~are~~the ~~payable~~greater byof ~~the~~a ~~25th~~“minimum ~~day~~tax” ~~following~~or 35%, and eliminated the ~~end~~per diem fixed fee of ~~each~~actual ~~calendar~~amount ~~quarter,~~of ~~while~~Kč ~~corporate~~80 ~~income~~(approximately $3.76) on each slot machine. This new “minimum tax” ~~obligation~~on technical games is ~~paid~~equal byto ~~June~~the ~~30th~~product of: (x) the ~~subsequent~~sum ~~year~~of all gambling positions of individual approved terminal devices (such as slot machines, electromechanical roulette and dice machines) permitted for the location of the gambling premises, times (y) Kč 9,200 (approximately $432). Therefore, ~~The~~if ~~Company~~the aggregate tax amount collected from the 35% gaming tax on technical game revenues is ~~also~~lower ~~required~~than tothe ~~make~~computed ~~estimated~~“minimum ~~quarterly~~tax,” ~~income~~then the casino operator must pay the “minimum tax” ~~payments~~and not the aggregate tax amount collected from the 35% gaming tax. Otherwise, ~~TWC~~if ~~was~~the ~~current~~aggregate ontax ~~all~~amount ofcollected ~~its~~from ~~Czech~~the 35% gaming tax ~~payments~~on attechnical ~~December~~game 31revenues is greater than the computed “minimum tax,” ~~2016~~then the casino operator need only pay the aggregate tax amount collected from the 35% gaming tax and ~~through~~not the ~~date~~“minimum oftax.” The ~~this~~gaming ~~report~~tax rate on live game (i.e. cards, roulette or dice) revenues remains unchanged at 23%. Further, the 2017 Gambling Tax Act modified the tax revenue allocation between the federal government and local municipalities. A summary table of the 2017 Gambling Tax Act is shown below:

TWC’s gaming-related taxes and fees, which are recognized in the Gaming Department’s expenses, for the years ended December 31, 2016 and 2015 are summarized in the following table:


		2017 Gambling Tax Act
(in actual amounts)		(Effective from January 1, 2017)
Live Games		23% gaming tax on revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).

Slot and other technical games		The greater of either: (a) the aggregate amount collected from a 35% gaming tax on revenue earned from slot and other technical games (35% of tax allocated to the federal government; 65% of tax allocated to the local municipality), or (b) a "minimum tax," calculated as the product of the sum of all gambling positions of individual approved terminal devices referred to in the permit for the location of the gambling premises times Kč 9,200 (approximately $432).

Net Income		No change from the 19% corporate income tax noted above (allocated to the federal government).

	For the Year Ended
(amounts in thousands)	December 31,
	2016			2015
Gaming revenues (excluding ancillary revenues)	$	44,967		$	35,682
Gaming taxes and fees		12,398			7,441
Gaming taxes and fees as % of above gaming revenues		27.6	%		20.9	%

The 2017 Gambling Act introduced many new changes, requirements and conditions, that will take effect at various times in the future, some taking effect on the date of enactment, some on January 1, 2017 and certain provisions taking effect upon the renewal of the casino operator’s gambling licenses. Although TWC’s 10-year gambling license was set to expire in September 2018, and its one-year slot operating license expired at the end of 2017, the Company took steps to conform to these requirements when it applied for renewal of its slot and other technical game license. The Company is also awaiting the Czech Ministry of Finance’s (“MOF”) final interpretation of these new measures, some of which were clarified in August 2016 and others are awaiting further clarifications from the MOF. The notable changes and requirements are summarized in the section, “New Gambling Acts and their Impact” in in Item 7. “Management Discussion and Analysis.”

InThe ~~conformity~~impact ~~with~~of the ~~European~~2017 ~~Union~~Gambling ~~(“EU”)~~Act ~~taxation~~cannot ~~legislation,~~be ~~the~~fully ~~Czech~~quantified ~~Republic’s~~or ~~VAT~~estimated ~~has~~pending ~~gradually increased from 5%, when that country joined~~ the EUinterpretation inof ~~2004,~~certain tomeasures ~~21%,~~by the ~~effective~~MOF ~~rate~~and ~~since~~their ~~2013.~~eventual ~~Unlike~~implementation ininto ~~other~~the ~~industries,~~Company’s ~~VATs are not recoverable for~~ gambling operations. ~~The recoverable VAT under the Hotel Savannah and Hotel Columbus operations was not material for the years ended December 31, 2016 and 2015, respectively.~~

On June 7, 2016, the President of Czechia signed the 2017 Gambling Act (186/2016 Coll.) (the “Gambling Act”) and the 2017 Gambling Tax Act (187/2016 Coll.) (the “2017 Gambling Tax Act”) (collectively referred to as the “Gambling Acts”). The Gambling Acts became law on June 15, 2016, when they were published in the official Collection of Laws, maintained by the Czech Ministry of the Interior. The 2017 Gambling Tax Act, which is took effect on January 1, 2017, raised the gaming tax rate on technical game (i.e. slot machine or electromechanical roulette or dice) revenues to the greater of a “minimum tax” or 35%, and eliminated the per diem fixed fee of actual amount of Kč 80 (approximately $3.12) on each slot machine. This new “minimum tax” on technical games is equal to the product of: (x) the sum of all gambling positions of individual approved terminal devices (such as slot machines, electromechanical roulette and dice machines) permitted for the location of the gambling premises, times (y) Kč 9,200 (approximately $359). Therefore, if the aggregate tax amount collected from the 35% gaming tax on technical game revenues is lower than the computed “minimum tax,” then the casino operator must pay the “minimum tax” and not the aggregate tax amount collected from the 35% gaming tax. Otherwise, if the aggregate tax amount collected from the 35% gaming tax on technical game revenues is greater than the computed “minimum tax,” then the casino operator need only pay the aggregate tax amount collected from the 35% gaming tax and not the “minimum tax.” The gaming tax rate on live game (i.e. cards, roulette or dice) revenues remains unchanged at 23%. Further, the 2017 Gambling Tax Act modified the tax revenue allocation 50

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~~between~~ TWC ~~the~~was ~~federal~~current ~~government~~on all of its Czech tax payments at December 31, 2017 and ~~local~~through ~~municipalities~~the date of this report. ATWC’s ~~summary~~gaming-related ~~table~~taxes ofand fees, which are recognized in gaming departmental expenses, for the years ended December 31, 2017 ~~Gambling~~and ~~Tax~~2016 ~~Act~~are issummarized ~~shown~~in ~~below:~~the following table:

		2017 Gambling Tax Act
	For the Year Ended
(in actual amounts)		(Effective from January 1, 2017)
	December 31,
Live Games		23% gaming tax from revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).
	2017			2016
Slot and other technical games		The greater of either: (a) the aggregate amount collected from 35% gaming tax from revenue earned from slot and other technical games (35% of tax allocated to the federal government; 65% of tax allocated to the local municipality), or (b) a "minimum tax," calculated as the product of the sum of all gambling positions of individual approved terminal devices referred to in the permit for the location of the gambling premises times Kč 9,200 (approximately $359).
Gaming revenues (excluding ancillary revenues)	$	37,433		$	44,967
Gaming taxes and fees		11,754			12,398
Gaming taxes and fees as % of above gaming revenues		31.4	%		27.6	%

~~The~~In ~~2017~~conformity ~~Gambling~~with ~~Act~~the ~~introduces~~European ~~many~~Union ~~new~~(“EU”) ~~changes,~~taxation ~~requirements and conditions~~legislation, ~~that~~the ~~will~~Czech ~~take~~Republic’s ~~effect~~VAT athas ~~various~~gradually ~~times~~increased infrom ~~the future~~5%, ~~some~~when ~~taking~~that ~~effect~~country onjoined the ~~date~~EU ofin ~~enactment~~2004, ~~some~~to ~~on January 1~~21%, ~~2017 and certain provisions taking effect upon~~ the ~~renewal~~effective ofrate ~~the~~since ~~casino operator’s gambling licenses~~2013. ~~Although~~ ~~TWC’s~~Unlike ~~10-year gambling license expires~~ in ~~September~~other ~~2018~~industries, ~~and~~VATs ~~its~~are ~~slot~~not ~~operating~~recoverable ~~one-year~~for ~~license~~gambling ~~expires~~operations. atThe ~~the~~recoverable ~~end~~VAT ofin ~~2017,~~ the ~~Company~~hotel ~~has~~segment ~~begun~~was tonot ~~take~~material ~~steps to conform to these requirements~~ for ~~when it applies for renewal of its slot and other technical game license. The Company is also awaiting~~ the ~~Czech~~years ~~Ministry~~ended ~~of Finance’s (“MOF”) final interpretation of these new measures~~December 31, ~~some~~2017 ~~of which were clarified in August 2016~~ and ~~others are awaiting further clarifications from the MOF. The notable changes and requirements are summarized in the section~~2016, ~~“New Gambling Acts and their Impact” in in Item 7~~respectively. ~~“Management Discussion and Analysis.”~~

Income Taxes - The Company ~~currently~~complies ~~estimates~~with ~~that~~accounting ifand ~~the~~reporting ~~2017~~requirements ~~Gambling~~with ~~Tax~~respect ~~Act~~to ~~were~~accounting infor ~~effect~~U.S. federal and foreign income taxes, which require an asset and liability approach to financial accounting and reporting for ~~the~~income ~~full~~taxes. Deferred ~~year~~income ~~ended~~tax ~~December~~assets ~~31,~~and ~~2016,~~liabilities itare ~~would~~computed ~~have~~for ~~resulted~~differences inbetween anthe ~~annual~~financial ~~reduction~~statement and the tax bases of ~~approximately~~assets $1and liabilities that will result in future taxable or deductible amounts,~~300~~ based on enacted tax laws and rates applicable to the ~~Company’s~~periods ~~consolidated~~in ~~earnings~~which ~~before~~the differences are expected to affect taxable income. Valuation ~~taxes~~allowances are established, ~~assuming~~when ~~all~~necessary, ~~other~~to ~~factors~~reduce ~~remained~~deferred ~~constant~~income tax assets to the amount expected to be realized. ~~The~~In ~~total~~accordance ~~impact~~with U.S. GAAP, the Company is required to determine whether a tax position of the ~~2017~~Company ~~Gambling~~is ~~Act~~more ~~cannot~~likely than not to be ~~quantified~~sustained upon examination by the applicable taxing authority, including resolution of any related appeals or ~~estimated~~litigation ~~pending~~processes, based on the ~~interpretation~~technical merits of ~~these~~the ~~measures~~position. The bytax benefit to be recognized is measured as the ~~MOF~~largest ~~and~~amount ~~their~~of ~~eventual~~benefit ~~implementation~~that ~~into~~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 years ended December 31, 2017 and 2016. However, management’s ~~gambling~~conclusions ~~operations~~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.

~~Income~~Effective ~~Taxes~~January ~~- The~~1, ~~Company~~2012, ~~complies~~the ~~with~~Czech ~~accounting~~government ~~and~~instituted ~~reporting requirements with respect to accounting for U.S. federal and foreign income taxes, which require~~ an ~~asset~~effective ~~and~~corporate ~~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~~19% ~~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~~derived ~~are~~from ~~established,~~gaming ~~when necessary~~revenues, towhich ~~reduce~~prior ~~deferred income tax assets~~ to the ~~amount~~law ~~expected~~changes towere besubject ~~realized. In~~only ~~accordance with U.S. GAAP, the Company is required~~ to ~~determine~~gaming 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 positiontaxes. ~~The~~ See ~~tax~~Note ~~benefit~~10 to– be“Income 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 thresholdsTaxes,” 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 entitiesbelow. ~~The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other expenses, respectively. No interest expense or penalties have~~

48Germany had an effective corporate income tax rate of approximately 30% for the years ended December 31, 2017 and 2016. Austria had an effective corporate tax rate of 25% for the year ended December 31, 2017. The Company’s German and Austrian hotel operations were not subject to income tax due to a net operating loss for the years ended December 31, 2017 and 2016, respectively.

Recent Accounting Pronouncements - Beginning in May 2014 and subsequently amended, the FASB issued updated 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. The revenue standard prescribes a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific guidance. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017,

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~~been~~and ~~recognized~~must asbe ofadopted ~~and~~by applying either a full retrospective approach for all periods presented in the ~~years~~period ~~ended~~of ~~December 31,~~adoption ~~2016~~or ~~and~~a ~~2015~~modified retrospective approach with the cumulative effect of initially applying the guidance recognized at the date of initial application. ~~However,~~TWC ~~management’s~~is ~~conclusions~~adopting ~~regarding~~the ~~this~~revenue ~~policy~~standard ~~may~~by befollowing ~~subject~~the tofull ~~review~~retrospective approach. The accompanying financial statements and ~~adjustment~~related atdisclosures ado ~~later~~not ~~date~~reflect ~~based~~the oneffects ~~factors~~of ~~including,~~the ~~but~~revenue ~~not~~standard. ~~limited~~The ~~to,~~Company ~~on-going~~is ~~analyses~~finalizing its assessment of ~~and~~the ~~changes~~effects toof ~~tax~~this ~~laws,~~revenue ~~regulations~~standard on its consolidated financial statements, and ~~interpretations~~will ~~thereof~~begin reporting under the new guidance effective with its first quarter 2018 financial report.

~~Effective~~Under ~~January 1,~~the ~~2012~~new guidance, ~~the~~revenues ~~Czech~~will ~~government~~be ~~instituted~~allocated anamong ~~effective~~our ~~corporate~~departmental ~~income~~classifications ~~tax~~based on the relative standalone selling prices of ~~19%~~the ongoods ~~income~~and ~~derived~~services ~~from~~provided ~~gaming~~to the customer. While the amount of net revenues will not change, ~~which~~this ~~prior~~methodology towill ~~the~~result ~~law~~in ~~changes~~a ~~were~~reduction ~~subject~~of ~~only~~our reported departmental revenues by an aggregate amount equivalent to ~~gaming~~our ~~taxes~~reported promotional allowance revenues. ~~See~~ ~~Note~~The 10majority –of ~~“Income~~this ~~Taxes,”~~adjustment ~~below~~will be applied to our gaming revenues.

~~Germany~~The ~~had~~accounting anfor ~~effective~~our ~~corporate~~loyalty ~~income~~player ~~tax~~program ~~rate~~will also be impacted. Historically, we have valued the points earned under these programs based on the estimated cost of ~~approximately~~redemption. ~~30%~~Under the new guidance, we will account for the ~~years~~point ~~ended~~programs ~~December~~under ~~31,~~a ~~2016~~deferred ~~and~~revenue ~~2015~~model. The ~~Company’s~~impact ~~German~~of ~~hotel~~this ~~operations~~change ~~were~~in accounting is not ~~subject~~expected to ~~income~~be ~~tax~~material ~~due~~ to aany ~~net~~annual ~~operating~~accounting ~~loss~~period. We ~~for~~currently ~~the~~do ~~years~~not ~~ended~~have ~~December~~a ~~31,~~loyalty/frequent ~~2016~~traveler ~~and~~program ~~2015,~~for ~~respectively~~our hotels.

~~Recent Accounting Pronouncements -~~ In ~~May~~June 2014, the FASB issued guidance on ~~recognizing~~stock ~~revenue~~compensation ~~from~~that ~~contracts~~requires ~~with~~that ~~customers.~~a ~~The~~performance ~~guidance~~target ~~clarifies~~that ~~the~~affects ~~principles~~vesting ~~for~~and ~~recognizing~~that ~~revenue~~could ~~and~~be ~~establishes~~achieved aafter ~~common~~the ~~revenue~~requisite ~~standard~~service ~~for~~period USbe ~~GAAP~~treated ~~and~~as ~~International~~a ~~Financial~~performance ~~Reporting Standards~~condition. ~~This~~As ~~guidance~~such, isthe ~~effective~~performance ~~for~~target ~~fiscal~~should ~~years,~~not ~~and~~be ~~interim~~reflected ~~periods~~in ~~within~~estimating ~~those~~the ~~years,~~grant ~~beginning~~date ~~after~~fair ~~December~~value ~~15,~~of ~~2017~~the award. ~~Early~~The ~~adoption~~guidance is ~~not~~effective ~~permitted.~~for ~~Retrospective~~annual ~~application~~reporting isperiods ~~required.~~beginning ~~The~~after ~~Company~~December is31, ~~currently~~2015, ~~evaluating~~with ~~the~~early ~~impact~~adoption ofpermitted. ~~adopting~~The ~~and~~Company’s ~~does~~adoption ~~not~~of ~~expect~~this ~~the~~ standard toin 2016 did not have ~~any~~a material impact on ~~its~~the Company’s consolidated financial statements.

In ~~June~~August 2014, the FASB issued guidance on ~~stock~~the ~~compensation~~presentation ~~that~~of ~~requires~~financial ~~that~~statements for a ~~performance~~going ~~target~~concern. ~~that~~The ~~affects~~aim ~~vesting~~is ~~and~~to ~~that~~provide ~~could~~guidance beon ~~achieved~~management’s ~~after~~responsibility ~~the~~to ~~requisite~~evaluate ~~service~~whether ~~period~~there beis ~~treated~~substantial asdoubt about a ~~performance~~company’s ~~condition.~~ability Asto ~~such,~~continue ~~the~~as ~~performance~~a ~~target~~going ~~should~~concern ~~not~~and beto ~~reflected~~provide inrelated ~~estimating~~footnote ~~the grant date fair value of the award~~disclosures. ~~The~~This guidance is effective for ~~annual~~fiscal ~~reporting~~years ~~periods~~ending ~~beginning~~ after December 3115, ~~2015~~2016, ~~with~~and ~~early~~annual ~~adoption~~and ~~permitted~~interim periods thereafter. The Company’s adoption of this standard in 2016 did not have a material impact on the Company’s consolidated financial statements.

In ~~August~~April ~~2014~~2015, the FASB issued amended accounting guidance onthat changes the balance sheet presentation of ~~financial~~debt ~~statements~~issuance ~~for a going concern~~costs. ~~The~~Under ~~aim~~the isamended ~~to provide~~ guidance, ondebt ~~management’s~~issuance ~~responsibility~~costs towill ~~evaluate~~be ~~whether~~presented ~~there~~on isthe ~~substantial~~balance ~~doubt~~sheet ~~about~~as a ~~company’s~~direct ~~ability~~deduction tofrom ~~continue~~the asrelated adebt ~~going~~liability ~~concern~~rather ~~and~~than toas ~~provide~~an ~~related~~asset. ~~footnote~~For ~~disclosures.~~public ~~This~~companies, the new guidance is effective for financial statements issued for fiscal years ~~ending~~beginning after December 15, ~~2016~~2015 (including interim periods within those fiscal years), and ~~annual~~is ~~and~~required ~~interim~~to ~~periods~~be ~~thereafter~~applied on a retrospective basis. The ~~Company’s~~impact ~~adoption~~ of ~~this~~the ~~standard~~adoption in 2016 did not have aan ~~material~~effect ~~impact~~ on the Company’s consolidated financial statements.

In ~~April~~September 2015, the FASB issued ~~amended~~updated ~~accounting~~ guidance on business combinations. US GAAP required that ~~changes~~during the ~~balance~~measurement ~~sheet~~period, ~~presentation~~the ofacquirer ~~debt~~retrospectively ~~issuance~~adjust ~~costs~~the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill. ~~Under~~Those adjustments are required when new information is obtained about facts and circumstances that existed as of the ~~amended~~acquisition ~~guidance~~date that, ~~debt~~if ~~issuance~~known, ~~costs~~would ~~will~~have beaffected ~~presented~~the onmeasurement of the ~~balance~~amounts ~~sheet~~initially asrecognized aor ~~direct~~would ~~deduction~~have ~~from~~resulted in the ~~related~~recognition ~~debt~~of ~~liability~~additional ~~rather~~assets ~~than~~or liabilities. The acquirer also must revise comparative information for prior periods presented in financial statements as anneeded, ~~asset~~including revising depreciation, amortization, or other income effects as a result of changes made to provisional amounts. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, this update eliminates the requirement to retrospectively account for those adjustments. For public companies, the ~~new~~updated guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015. This ~~(including~~update ~~interim~~should ~~periods~~be ~~within~~applied ~~those~~prospectively ~~fiscal~~to ~~years),~~adjustments ~~and~~to isprovisional ~~required~~amounts tothat beoccur ~~applied~~after onthe aeffective ~~retrospective~~date ~~basis.~~of this update with earlier application permitted for financial statements that have not been issued. The ~~impact~~Company ofadopted ~~the~~this ~~adoption~~guidance in 2016, which did not have anany ~~effect~~material impact on ~~the~~its ~~Company’s~~ consolidated financial statements.

In September 2015, the FASB issued updated guidance on business combinations. GAAP required that during the measurement period, the acquirer retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill. Those adjustments are required when new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts initially recognized or would have resulted in the recognition of additional assets or liabilities. The acquirer also must revise comparative information for prior periods presented in financial statements as needed, including revising depreciation, amortization, or other income effects as a result of changes made to provisional amounts. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, this update eliminates the requirement to retrospectively account for those adjustments. For public companies, the updated guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015. This update should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this update with earlier application permitted for financial statements that have not been issued. The Company adopted this guidance in 2016, which did not have any material impact on its consolidated financial statements.52

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In November 2015, the FASB issued updated guidance on income taxes. Current US GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, this update requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by this update. For public companies, the updated guidance is effective for financial statements issued for annual periods beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance in 2017 is reflected in the Company’s consolidated financial statements.

In February 2016, the FASB issued updated guidance to increase transparency and comparability among organizations by reporting lease assets and lease liabilities, both finance (capital) and operating leases, on the balance sheet and disclosing key information about leasing arrangements. Both finance and operating leases will result in the lessee recognizing a right-of-use asset and corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of use asset and, for operating leases, the lessee would recognize a straight-line lease expense. For public companies, the updated guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018 (including interim periods within those fiscal years). Early adoption is permitted. The Company has not adopted this guidance for ~~2016~~2017 and is currently evaluating the impact of adopting this standard. The adoption of this standard would require the Company to report its leases on slot machines, land and commercial space in assets and liabilities of its consolidated balance sheets. The changes to the Company’s consolidated balance sheet may be material.

In March 2016, the FASB issued updated guidance, as part of its Simplification Initiative, which covers several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the amendments in this updated guidance are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The ~~Company~~adoption isof ~~currently~~this ~~evaluating~~guidance ~~the~~in ~~impact~~2017 ofdid ~~adopting and does~~ not ~~expect~~have ~~the~~a ~~standard~~material toimpact ~~have~~and ~~any~~is ~~material~~reflected ~~impact~~in onthe ~~its~~Company’s consolidated financial statements.

In ~~January~~August ~~2017~~2016, the FASB issued updated guidance toon ~~clarify~~ the ~~definition~~classification of acertain ~~business~~cash ~~with~~receipts ~~the~~and ~~objective~~cash ofpayments ~~adding~~in ~~guidance~~the tostatement ~~assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals)~~ of ~~assets~~cash ~~or businesses~~flows. The ~~definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. Under the current implementation~~ guidance, ~~there are three elements of a business—inputs, processes, and outputs. While an integrated set of assets and activities (collectively referred to as a “set”) that~~ is aintended ~~business usually has outputs, outputs are not required~~ to bereduce ~~present.~~diversity Inin ~~addition,~~practice ~~all the inputs and processes that a seller uses~~ in ~~operating~~how acertain ~~set~~transactions are ~~not~~classified ~~required if market participants can acquire the set and continue to produce outputs, for example, by integrating the acquired set with their own inputs and processes. The amendments~~ in ~~this Update provide a screen to determine when a set is not a business. The screen requires that when substantially all of~~ the ~~fair~~statement ~~value~~ of ~~the~~cash ~~gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business~~flows. ~~This~~For ~~screen~~public ~~reduces the number of transactions that need to be further evaluated. If the screen is not met, the amendments in this Update (1) require that to be considered a~~ business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The updated guidance provide a framework to assist entities in evaluating whether both an input and a substantive process are present. The framework includes two sets of criteria to consider that depend on whether a set has outputs. Although outputs are not required for a set to be a business, ~~outputs generally are a key element of a business; therefore,~~ the ~~Board has developed more stringent criteria for sets without outputs. Lastly, the updated~~ guidance ~~narrows the definition of the term output so that the term~~ is ~~consistent~~effective ~~with~~for ~~how~~fiscal ~~outputs~~years ~~are described in another guidance regarding revenue from contracts with customers. Public business entities should apply the amendments in this Update to annual periods~~ beginning after December 15, 2017, ~~including~~and interim periods within those ~~periods. This~~fiscal ~~updated guidance should be applied prospectively on or after the effective date~~years. ~~No disclosures are required at transition.~~ The Company is currently evaluating the impact of adopting this guidance and does not expect the standard to have any material impact on its consolidated financial statements.

50In November 2016, the FASB issued updated guidance on the treatment of restricted cash in the statement of cash flows. The updated standard requires that the statement of cash flows explain the change during the period of cash, cash equivalents, and amounts generally described as restricted cash. Entities will also be required to reconcile to the balance sheet and disclose the nature of the restrictions. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. While TWC is continuing to assess all potential impacts of the standard, the Company believes the most significant impact relates to the presentation of its statement of cash flows where the Company will be required to reconcile to total cash, cash equivalents, and restricted cash. Currently, the Company’s statement of cash flows reconciles to total cash and cash equivalents.

In January 2017, the FASB issued updated guidance to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals,

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(Figures in thousands, except for statistics and share data)

Ingoodwill, ~~January~~and ~~2017,~~consolidation. Under the ~~FASB~~current ~~issued~~implementation ~~updated~~ guidance, tothere ~~simplify~~are ~~the~~three ~~subsequent~~elements ~~measurement~~ of ~~goodwill~~a business—inputs, byprocesses, ~~eliminating~~and ~~Step~~outputs. 2While ~~from~~an ~~the~~integrated ~~goodwill~~set ~~impairment~~of ~~test.~~assets Inand ~~computing~~activities ~~the~~(collectively ~~implied~~referred ~~fair~~to ~~value~~as ofa ~~goodwill~~“set”) ~~under~~that ~~Step~~is 2,a anbusiness ~~entity~~usually ~~had~~has tooutputs, ~~perform~~outputs ~~procedures~~are not required to ~~determine~~be ~~the~~present. ~~fair~~In ~~value~~addition, atall the ~~impairment~~inputs ~~testing date of its assets~~ and ~~liabilities~~processes ~~(including~~that ~~unrecognized~~a ~~assets~~seller ~~and~~uses ~~liabilities)~~in ~~following~~operating ~~the~~a ~~procedure~~set ~~that~~are ~~would~~not be required inif ~~determining~~market ~~the~~participants ~~fair~~can ~~value~~acquire ofthe ~~assets~~set ~~acquired~~ and continue ~~liabilities~~to ~~assumed~~produce inoutputs, afor ~~business combination. Instead~~example, ~~under~~by integrating the ~~amendments~~acquired inset ~~this~~with ~~Update,~~their anown ~~entity~~inputs ~~must~~and ~~perform~~processes. ~~its~~The ~~annual,~~amendments orin ~~interim,~~this ~~goodwill~~Update ~~impairment~~provide ~~test~~a byscreen ~~comparing~~to ~~the~~determine ~~fair~~when ~~value of~~ a ~~reporting~~set ~~unit~~is ~~with~~not ~~its~~a ~~carrying amount~~business. AnThe ~~entity~~screen ~~should~~requires ~~recognize~~that anwhen ~~impairment~~substantially ~~charge~~all ~~for~~of the ~~amount~~fair byvalue ~~which~~of the ~~carrying~~gross ~~amount~~assets ~~exceeds~~acquired ~~the~~(or ~~reporting~~disposed ~~unit’s~~of) ~~fair~~is ~~value;~~concentrated ~~however,~~in ~~the~~a ~~loss~~single ~~recognized~~identifiable ~~should~~asset ~~not~~or ~~exceed~~a ~~the~~group ~~total~~of ~~amount~~similar ofidentifiable ~~goodwill~~assets, ~~allocated~~the toset ~~that~~is ~~reporting~~not ~~unit~~a business. ~~Additionally,~~This anscreen ~~entity~~reduces ~~should~~the ~~consider~~number ~~income~~of ~~tax~~transactions ~~effects~~that ~~from~~need ~~any~~to ~~tax~~be ~~deductible~~further ~~goodwill~~evaluated. onIf the ~~carrying~~screen ~~amount~~is ofnot met, the ~~reporting~~amendments ~~unit~~in ~~when~~this ~~measuring~~Update: ~~the~~(1) ~~goodwill~~require ~~impairment~~that ~~loss,~~to ifbe ~~applicable.~~considered ~~The~~a ~~FASB~~business, ~~also~~a ~~eliminated~~set ~~the~~must ~~requirements~~include, ~~for~~at ~~any~~a ~~reporting~~minimum, ~~unit~~an ~~with~~input and a ~~zero~~substantive orprocess ~~negative~~that ~~carrying~~together ~~amount~~significantly contribute to ~~perform~~the aability ~~qualitative~~to ~~assessment~~create ~~and~~output, ifand it(2) ~~fails~~remove ~~that~~the ~~qualitative~~evaluation ~~test,~~of towhether ~~perform~~a ~~Step~~market 2participant ofcould ~~the~~replace ~~goodwill~~missing ~~impairment test~~elements. ~~Therefore,~~The ~~the~~updated ~~same~~guidance ~~impairment~~provides ~~assessment~~a ~~applies~~framework to ~~all~~assist ~~reporting~~entities ~~units.~~in Anevaluating ~~entity~~whether isboth ~~required~~an toinput ~~disclose~~and ~~the~~a ~~amount~~substantive ofprocess ~~goodwill~~are ~~allocated~~present. toThe ~~each~~framework ~~reporting~~includes ~~unit~~two ~~with~~sets aof ~~zero~~criteria orto ~~negative~~consider ~~carrying~~that ~~amount~~depend ofon ~~net~~whether ~~assets.~~a Anset ~~entity still~~ has ~~the~~outputs. ~~option~~Although tooutputs ~~perform~~are ~~the~~not ~~qualitative~~required ~~assessment~~ for a ~~reporting~~set ~~unit~~ to ~~determine~~be ifa ~~the~~business, ~~quantitative~~outputs ~~impairment~~generally ~~test~~are isa ~~necessary. An~~key ~~entity~~element ~~should~~of ~~apply~~a ~~this~~business; ~~updated~~therefore, ~~guidance~~the inFASB ~~this~~has ~~update~~developed onmore astringent ~~prospective~~criteria ~~basis.~~for Ansets ~~entity~~without isoutputs. ~~required~~Lastly, ~~to disclose~~ the ~~nature~~updated ofguidance ~~and~~narrows ~~reason for~~ the ~~change~~definition inof ~~accounting~~the ~~principle~~term ~~upon~~“output” ~~transition.~~so ~~That~~that ~~disclosure~~the ~~should~~term beis ~~provided~~consistent inwith ~~the~~how ~~first~~outputs ~~annual~~are ~~period~~described ~~and~~ in ~~the~~other ~~interim~~guidance ~~period~~regarding ~~within~~revenue ~~the~~from ~~first~~contracts ~~annual~~with ~~period~~customers. ~~when~~Public ~~the~~business ~~entity~~entities ~~initially~~should ~~adopts~~apply the amendments in this update. Ato ~~public~~annual ~~business~~periods ~~entity~~beginning ~~that~~after isDecember an15, ~~SEC~~2017, ~~filer~~including ~~should~~interim ~~adopt~~periods ~~this~~within ~~updated~~those ~~guidance~~periods. ~~for~~Early ~~its~~adoption ~~annual~~is oravailable. ~~any~~This ~~interim~~updated ~~goodwill~~guidance ~~impairment~~should ~~tests~~be inapplied ~~fiscal~~prospectively ~~years~~on ~~beginning~~or after ~~December~~the ~~15,~~effective ~~2019~~date. ~~Early~~The ~~adoption~~Company isplans ~~permitted~~to ~~for~~adopt ~~interim~~this orguidance ~~annual~~in ~~goodwill~~2018, ~~impairment~~as ~~tests~~required. No ~~performed~~disclosures onare ~~testing~~required ~~dates~~at ~~after January 1, 2017~~transition. The Company ~~has~~will ~~not~~assess ~~adopted~~future ~~this~~business ~~updated~~acquisitions, ~~guidance~~which may result in accounting for ~~2016~~an ~~and~~acquisition isas ~~currently~~an ~~evaluating~~asset ~~the~~purchase. ~~impact~~There ofwere ~~adopting~~no ~~this~~acquisitions ~~standard~~in the fourth quarter of 2017.

In January 2017, the FASB issued updated guidance to simplify the subsequent measurement of goodwill, by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity must perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The FASB also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. An entity should apply this updated guidance on a prospective basis. A public business entity that is an SEC filer should adopt this updated guidance for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has not adopted this updated guidance for 2017 and is currently evaluating the impact of adopting this standard.

In February 2018, the FASB issued updated guidance on Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. The FASB has been assisting stakeholders with implementation questions and issues as organizations prepare to adopt Topic 842. The amendments in this update affect entities with land easements that exist or expired before an entity’s adoption of Topic 842, provided that the entity does not account for those land easements as leases under Topic 840. The amendments in this update permit an entity to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity’s adoption of Topic 842

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and that were not previously accounted for as leases under Topic 840. An entity that elects this practical expedient should apply the practical expedient consistently to all of its existing or expired land easements that were not previously accounted for as leases under Topic 840. Once an entity adopts Topic 842, it should apply that Topic prospectively to all new (or modified) land easements to determine whether the arrangement should be accounted for as a lease. An entity that does not elect this practical expedient should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. An entity should continue to apply its current accounting policy for accounting for land easements that existed before the entity’s adoption of Topic 842. For example, if an entity currently accounts for certain land easements as leases under Topic 840, it should continue to account for those land easements as leases before its adoption of Topic 842. The amendment in this update clarifies that an entity should determine whether land easements are leases in accordance with Topic 842 before applying the guidance in that example. For public companies, the updated guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018 (including interim periods within those fiscal years). The Company has not adopted this guidance for 2017 and is currently evaluating the impact of adopting this standard.

In February 2018, the FASB issued updated guidance to any entity that is required to apply the provisions of Topic 220, Income Statement—Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by US GAAP. The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “TCJA”). Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the TCJA, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this update also require certain disclosures about stranded tax effects. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. The Company is currently evaluating the impact of adopting this updated guidance and does not expect the standard to have any material impact on its consolidated financial statements.

NOTE 3 - Property and Equipment

At December 31, ~~2016~~2017 and ~~2015~~2016, property and equipment consisted of the following:

	2016		2015
	As of		As of
Land	$	4,576	$	2,874
	December 31, 2017		December 31, 2016
Building and leasehold improvements		37,580		34,950
Land	$	5,049	$	4,576
Furniture, fixtures and other equipment		13,295		12,253
Buildings and leasehold improvements		53,651		37,580
		55,451		50,077
Furniture, fixtures and other equipment		24,956		13,295
Less accumulated depreciation and amortization		(13,927)		(12,955)
		83,656		55,451
	$	41,524	$	37,122
Less accumulated depreciation and amortization		(19,521)		(13,927)
	$	64,135	$	41,524

Depreciation and amortization expense for the years ended December 31, ~~2016~~2017 and ~~2015~~2016 were ~~approximately~~ $2,~~220~~802 and $12,~~863~~220, respectively.

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NOTE 4 - Long-Term Debt

At December 31, ~~2016~~2017 and ~~2015~~2016, long-term debt consisted of the following:

	2016		2015
	2017		2016
Sparkasse Seligenstadt Loan (1)	$	3,~~324~~522	$	3,~~638~~324
Sparkasse Hann. Münden Loan (2)		12,~~933~~072		21,~~112~~933
Freizeit Auefeld Seller Loan (3)		2,006		2,285
Hotel Auefeld Seller Loan (3)		2,041		2,006
Kreissparkasse Köln Loan (4)		4,~~215~~467		4,215
		11,478		8,035
Erste Loan (5)		4,158
		16,260		11,478
Less current portions:
Sparkasse Seligenstadt Loan		~~216~~253		216
Sparkasse Hann. Münden Loan		~~113~~132		113
Freizeit Auefeld Seller Loan		213		213
Hotel Auefeld Seller Loan		250		213
Kreissparkasse Köln Loan		~~290~~338		290
		832		542
Erste Loan		480
	$	10,646	$	7,493
		1,453		832
	$	14,807	$	10,646

(1) On September 9, 2014, the Company received a €3,600, or approximately $34,~~800~~320, 15-year, amortized loan granted by a local German bank, Bank Sparkasse Langen-Seligenstadt (the “Sparkasse Seligenstadt Loan”) to purchase ~~the~~ Hotel Columbus. The loan terms provide for monthly payments with a fixed interest rate of 3.1% for the first ~~ten~~10 years, followed by a prevailing market-based fixed rate for this type of commercial loan for the remaining five years of the term. The loan is secured by ~~the~~ Hotel Columbus’ assets as well as a cash deposit of €300, or $~~316~~360, equaling approximately one year’s principal and interest payments and is held in a savings account with, and a mortgage on the hotel in favor of, the lender. The loan terms require monthly payments of principal and interest at the end of each month and the loan will mature on September 9, 2029.

(2) On June 16, 2015, as part of its Hotel ~~Freizeit~~ Auefeld acquisition, TWC assumed five bank loans from Bank Sparkasse Hann. Münden (the “Sparkasse Hann. Münden Loan”), aggregating €2,018, or approximately $2,~~127~~422, with an average fixed interest rate of 4.94%. The assumed bank debt was converted in November 2015 to a single amortized loan with the same lender, with monthly payments at 2.99% annual interest, fixed for 10 years, and amortized over 15 years. The loan is secured by ~~the~~ Hotel ~~Freizeit~~ Auefeld’s assets as well as a cash deposit of €250, approximately $~~264~~300, equaling approximately one year’s principal and interest payments and is held in a savings account with, and a mortgage on the hotel in favor of, the lender. The loan terms required monthly payments of principal and interest at the end of each month and the loan will mature on November 30, 2030.

(3) On June 16, 2015, as part of its Hotel ~~Freizeit~~ Auefeld acquisition, TWC was also granted a seller-financed loan of €2,232, or ~~approximately~~ $2,~~353~~678 (the “~~Freizeit~~ Auefeld Seller Loan”), with terms of 3.0% annual fixed interest, to be repaid monthly over 10 years, with a first two-month no-interest grace period. The loan is also secured by ~~the~~ Hotel ~~Freizeit~~ Auefeld’s assets.

(4) On December 21, 2016, the Company signed for a €4,000, or $4,~~200~~800, 13-year, amortized loan granted by a local German bank, Bank Kreissparkasse Köln (the “Kreissparkasse Köln Loan”) to purchase ~~the~~ Hotel Kranichhöhe. The loan was funded on January 25, 2017. In December 2016, the Company advanced €4,000 of the loan, or $4,~~215~~800, in addition to its equity investment, for the purchase and recognized the loan proceeds as a receivable. The loan terms provide for monthly payments with a fixed interest rate of 1.95% for the first ~~ten~~10 years, followed by a prevailing market-based fixed rate for this type of commercial loan for the remaining three years of the term. The loan is secured by the Hotel Kranichhöhe’s assets as well as a cash deposit of €709, or $747, equaling approximately two years’ principal and interest payments, which will be deposited in January 2017 and is to be held in a savings account with, and a

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market-based fixed rate for this type of commercial loan for the remaining three years of the term. The loan is secured by Hotel Kranichhöhe’s assets as well as a cash deposit of €709, or approximately $851, equaling approximately two years’ principal and interest payments, and is held in a savings account with the lender, together with a mortgage on the hotel in favor of, the lender. The loan terms require monthly payments of principal and interest at the end of each month and the loan will mature on November 21, 2029.

(5)

On March 1, 2017, TWC acquired Hotel Donauwelle, in part, through a commercial bank loan from a local bank, Erste Bank, in the amount of €3,866, or $4,639. The amortized five-year loan provides for quarterly payments with a fixed interest rate of 2.95%, and a balloon payment of €1,966, or $2,359, at maturity. As part of the conditions of the granting of the loan, TWC made a cash deposit of €1,250, or $1,500, as an advance toward the Company’s planned €2,500, or $3,000, renovation of the hotel, which TWC was contractually obligated to complete within one year of acquisition. The deposit will be released to TWC upon the Company reaching the threshold of a similar amount spent toward the renovation. Due to high business volume, TWC asked for, and was granted, an extension to the end of August 2018 to complete its planned renovation of the property.

Principal payments due on long-term debt are as follows:

Year ending December 31,
2017	$	832
2018	$	1,453
2018		855
2019		1,479
2019		878
2020		1,506
2020		902
2021		3,772
2021		926
2022		1,082
Thereafter		76,~~085~~968
	$	1116,~~478~~260

NOTE 5 - Accrued Expenses and Other Current Liabilities

At December 31, ~~2016~~2017 and ~~2015~~2016, accrued expenses and other current liabilities consisted of the following:

	2016		2015
	2017		2016
Accrued payroll and related costs	$	1,~~190~~242	$	~~951~~1,190
Jackpots and player premium points		~~228~~51		~~192~~228
Operational accruals		~~407~~426		~~536~~407
Incentives/bonuses payable		~~1,438~~340		1,~~173~~438
Accrued real estate transfer tax, Hotel Kranichhöhe (Hotel Freizeit Auefeld in 2015)		277		200
Accrued real estate transfer tax, Hotel Kranichhöhe				277
	$	32,~~540~~059	$	3,~~052~~540

~~NOTE 6 - Commitments and Contingencies~~57

Lease Obligations - The Company is obligated under several operating leases, excluding leased slot machines. Rent expense under these operating and financial leases, which include: (i) the ground lease at Hotel Freizeit Auefeld; (ii) the Company’s corporate office lease in New York City, the lease of which was renewed for another five years, through March 31, 2020, and (iii) the employee housing leases, which can be terminated anytime with a six-month prior notice, was approximately $175 and $164 for the years ended December 31, 2016 and 2015, respectively. Future aggregate minimum annual rental payments under all of these leases for the lesser of five years or until their expiration dates are as follows:

Twelve Months Ending December 31,
2017	$	175
2018	$	127
2019	$	129
2020	$	53
2021	$	27

The Company is also obligated under a number of 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 annual option for replacement with different/newer machines during the term of the lease. For the years ended December 31, 2016 and 2015, the Company’s slot lease expense was $2,436 and $2,321, respectively. All slot leases can be terminated at any time, subject to an early-termination penalty equal to three-month lease payments for each leased slot machine.

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(Figures in thousands, except for statistics and share data)

~~Employment~~NOTE ~~Agreements~~ 6 - ~~The~~Commitments Company’s employment agreement with its Chief Executive Officer (“CEO”), Mr. Rami S. Ramadan, absent the intervention of either party by September 30th of each year, renewed automatically for another calendar year, ending, as of February 28, 2017, on December 31, 2017. 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. Annual compensation of $450 will be paid in 2017, pursuant to the evergreen renewal terms of said employment agreement, excluding any bonus awards that were earned in 2016 but payable in 2017 or may be or have been granted in 2017 at the discretion of TWC’s Board of Directors (the “Board”).Contingencies

OnLease ~~November~~Obligations - ~~11,~~The Company ~~2014,~~is ~~the~~obligated ~~Board~~under ofseveral ~~Director’s~~operating ~~Compensation Committee approved an amendment (the “Amendment”) to the Amended and Restated Employment Agreement dated November 18~~leases, ~~2008~~excluding ~~for~~leased ~~Mr.~~slot ~~Ramadan~~machines. ~~The~~Rent ~~Amendment~~expense ~~provides~~under ~~that~~these ~~if,~~operating ~~within~~and ~~120~~financial ~~days prior to~~leases, orwhich ~~twenty-four~~include: ~~months after a Change of Control~~ (~~as defined in the Employment Agreement), (~~i) ~~Mr. Ramadan is terminated by~~ the ~~Company~~ground ~~other~~lease ~~than~~ for ~~cause~~Hotel ~~(and~~Auefeld; ~~not due to his death or disability), or~~ (ii) ~~he provides~~ the ~~Company~~ground ~~with~~lease ~~written notice of his Voluntary Termination~~ for ~~Good~~Hotel ~~Reason~~Donauwelle; (~~as defined in the Employment Agreement), or (~~iii) ~~he is in~~ the ~~employ of the~~ Company’s oncorporate ~~the~~office ~~closing~~lease ~~date of a Change~~ in ~~Control~~New ofYork ~~the Company~~City, ~~then~~ the ~~Company~~lease ~~will~~of ~~pay~~which towas ~~him: (A)~~renewed anfor ~~amount~~another ~~equal~~five toyears, ~~two~~through ~~times~~March ~~his~~31, ~~Base~~2020, ~~Salary~~and (~~as defined in the Employment Agreement~~iv) ~~as of~~ the ~~date~~employee ofhousing ~~termination; and~~leases, ~~(B)~~which ~~any~~can ~~accrued~~be ~~but~~terminated ~~unpaid~~anytime ~~(1)~~with ~~base~~a ~~salary;~~six-month ~~(2)~~prior ~~sick~~notice, ~~pay;~~was ~~(3)~~in ~~vacation~~aggregate ~~pay;~~approximately $346 and ~~(4)~~$175 ~~health insurance benefits as described in the Employment Agreement~~ for the ~~period~~years ~~ending~~ended onDecember ~~the earlier of: (x) the date Mr. Ramadan obtains subsequent employment where medical insurance coverage is available to him~~31, or2017 ~~(y)~~and ~~two years after the date of termination or Change in Control~~2016, ~~as applicable~~respectively. IfFuture ~~the~~aggregate ~~above~~minimum ~~benefits~~annual ~~are~~rental ~~paid~~payments tounder ~~him~~all ~~as a result~~ of ~~(iii)~~these ~~above,~~leases ~~they cannot be paid to him again as a result of either (i) or (ii), above,~~ for the ~~same~~lesser ~~Change in Control event. The Amendment also includes a description~~ of ~~what~~five ~~actions~~years ~~TWC and Mr. Ramadan will take in the event that the aggregate payment~~ or ~~benefits~~until totheir beexpiration ~~paid~~dates ~~to him as described above~~ are ~~deemed by the Internal Revenue Service to be “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986,~~ as ~~amended (“Internal Revenue Code”).~~follows:

The Company has a 3-year evergreen employment agreement, dated June 1, 2005, with its Managing Director of Operations and Development, Mr. Paul Benkley. Unless communicated to Mr. Benkley within 60 days prior to the expiration of his employment agreement, which currently expires on December 31, 2019, it will renew automatically for another three-year term. In the event of termination without cause, excluding disability and retirement, he will be entitled to one year of severance at the annual salary in effect at the time of termination. In the event of non-renewal of this employment contract, he will receive severance equal to three months’ salary based on the salary in effect on the date of expiration of the contract.


Twelve Months Ending December 31,
2018	$	402
2019	$	378
2020	$	307
2021	$	286
2022	$	291

~~Change~~The ofCompany ~~control~~is ~~agreements~~also -obligated Onunder ~~October~~a 3number of five-year, ~~2014~~slot equipment operating leases, the ~~Company~~projected ~~entered~~costs ~~into~~of ~~severance~~which ~~agreements~~are ~~with~~not ~~four~~included ~~KMEs~~in ~~that~~the table above due to fluctuating inventory, expiring over staggered years, which provide for ~~the~~a ~~lump~~monthly ~~sum~~fixed ~~payment~~rental offee ~~one~~per ~~year’s~~slot ~~salary~~machine, and upan toannual ~~one~~option ~~year’s~~for ~~health~~replacement ~~insurance~~with ~~coverage~~different/newer inmachines during the ~~event~~term of athe ~~change~~lease. For ofthe ~~control~~years ofended ~~the~~December ~~Company~~31, or2017 ifand 2016, the ~~employee~~Company’s ~~voluntarily~~slot ~~leaves~~lease ~~the~~expense ~~Company~~was ~~for~~$2,979 ~~any~~and ~~reason~~$2,436, ~~(other~~respectively. All ~~than~~slot ~~death~~leases orcan ~~disability)~~be ~~within~~terminated ~~one~~at ~~year~~any ~~after~~time, ~~such~~subject to a ~~change~~three-month ofnotice ~~control event~~period.

~~Taxing~~Employment ~~Jurisdiction~~Agreements - The ~~Czech~~Company’s ~~Republic~~employment ~~and~~agreement ~~Germany~~with ~~currently~~its ~~has~~Chief aExecutive ~~number~~Officer of(“CEO”), ~~laws~~Mr. Rami ~~related~~S. toRamadan, ~~various~~absent ~~taxes~~the ~~imposed~~intervention of either party by ~~governmental~~September 30th ~~authorities,~~of ~~including~~each ~~gaming~~year, ~~tax~~renewed (automatically for ~~the~~another ~~Czech~~calendar ~~casinos)~~year, ~~VAT~~ending, ~~and~~as ~~payroll~~of ~~(social)~~March ~~taxes~~26, ~~and~~2018, ~~corporate~~on ~~income~~December 31, ~~tax~~2018. In ~~Tax~~addition ~~declarations,~~to ~~together~~a ~~with~~perpetually ~~other~~renewable ~~legal~~employment ~~compliance~~term ~~areas~~of ~~(for~~one ~~example,~~year ~~customs~~absent ~~and~~the ~~currency~~intervention ~~control~~of ~~matters)~~either ~~are~~party, ~~subject~~the toagreement ~~review~~provides ~~and~~for ~~investigation~~annual bycompensation, aplus ~~number~~participation ofin ~~Czech~~the Company’s benefits programs and ~~German~~equity ~~governmental~~incentive ~~authorities,~~plans. Annual ~~which~~compensation ~~are~~of ~~enabled~~$450 bywill ~~law~~be topaid ~~impose~~in ~~fines~~2018, ~~penalties~~pursuant ~~and~~to ~~interest~~the ~~charges,~~evergreen ~~and,~~renewal ~~ultimately~~terms of said employment agreement, ~~create~~excluding ~~tax~~any ~~risks~~bonus ~~for~~awards ~~the~~that ~~Company~~were earned in ~~these~~2017 ~~countries~~but payable in ~~which~~2018 itor ~~operates. Management~~may ~~believes~~be ~~that~~or ithave ~~has~~been ~~adequately~~granted ~~provided~~in ~~for~~2018 ~~its~~at ~~tax~~the ~~liabilities~~discretion of TWC’s Board of Directors (the “Board”).

~~Legal~~On ~~Matters -~~November 11, 2014, the Board of Director’s Compensation Committee approved an amendment (the “Amendment”) to the Amended and Restated Employment Agreement dated November 18, 2008 for Mr. Ramadan. The ~~Company~~Amendment ~~may~~provides bethat if, ~~from~~within ~~time~~120 days prior to, ~~time~~or twenty-four months, after a ~~party~~Change toof ~~various~~Control ~~legal~~(as ~~proceedings~~defined in the Employment Agreement), (i) Mr. Ramadan is terminated by the Company other than for cause (and ~~administrative~~not ~~actions~~due to his death or disability), ~~all~~or ~~arising~~(ii) ~~from~~he provides the ~~ordinary~~Company ~~course~~with written notice of ~~business. The~~his Voluntary Termination for Good Reason (as defined in the Employment Agreement), or (iii) he is in the employ of the Company ~~was~~on ~~not~~the closing date of a Change in Control of the Company, then the Company will pay to him: (A) an amount equal to two times his Base Salary (as defined in the Employment Agreement) as of the date of ~~this~~termination; ~~report~~and, ~~involved~~(B) any accrued but unpaid (1) base salary; (2) sick pay; (3) vacation pay; and (4) health insurance benefits as described in ~~any~~the ~~material~~Employment ~~legal~~Agreement ~~proceeding~~for ~~nor~~the ~~was~~period itending ~~involved~~on the earlier of: (x) the date Mr. Ramadan obtains subsequent employment where medical insurance coverage is available to him, or (y) two years after the date of termination or Change in ~~any~~Control, ~~material~~as ~~litigation~~applicable. ~~during~~If the ~~year~~above ~~ended~~benefits ~~December~~are 31paid to him as a result of (iii) above, ~~2016~~they cannot be paid to him again as a result of either (i) or (ii), above, for the same Change in Control event. The Amendment also includes a description of what actions TWC and ~~through~~Mr. Ramadan will take in the ~~date~~event that the aggregate payment or benefits to be paid to him as described above are deemed by the Internal Revenue Service to be “excess parachute payments” under Section 280G of ~~this~~the ~~filing~~Internal Revenue Code of 1986, as amended (“Internal Revenue Code”). This compensation arrangement was approved by the “say-on-pay” vote of the Company’s stockholders at its 2017 Annual Meeting of Stockholders in June 2017.

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The Company has a three-year evergreen employment agreement, dated June 1, 2005, with its Managing Director of Operations and Development, Mr. Paul Benkley. Unless communicated to Mr. Benkley within 60 days prior to the expiration of his employment agreement, which currently expires on December 31, 2019, it will renew automatically for another three-year term. In the event of termination without cause, excluding disability and retirement, he will be entitled to one year of severance at the annual salary in effect at the time of termination. In the event of non-renewal of this employment contract, he will receive severance equal to three months’ salary based on the salary in effect on the date of expiration of the contract.

Change of control agreements - On October 3, 2014, the Company entered into severance agreements with four KMEs that provide for the lump sum payment of one year’s salary and up to one year’s health insurance coverage in the event of a change of control of the Company, or if the employee voluntarily leaves the Company for any reason (other than death or disability) within 120 days prior to, or within one year after, such a change of control event.

Taxing Jurisdiction - The Czech Republic, Germany and Austria currently have a number of laws related to various taxes imposed by governmental authorities, including gaming tax (for the Czech casinos), VAT, and payroll (social) taxes and corporate income tax. Tax declarations, together with other legal compliance areas (for example, customs and currency control matters) are subject to review and investigation by a number of Czech, German and Austrian governmental authorities, which are enabled by law to impose fines, penalties and interest charges, and, ultimately, create tax risks for the Company in these countries in which it operates. Management believes that it has adequately provided for its tax liabilities.

Legal Matters - The Company may be, from time to time, a party to various legal proceedings and administrative actions, all arising from the ordinary course of business. The Company was not, as of the date of this report, involved in any material legal proceeding nor was it involved in any material litigation during the year ended December 31, 2017 and through the date of this filing.

NOTE 7 - Risks and Uncertainties

Regulation and Licensing  The Company’s operations are subject to regulation by each federal and local jurisdiction in which it operates. Each of the Company’s officers may be subject to strict scrutiny and approval from the gaming commission or other regulatory body of each jurisdiction in which TWC conducts gambling operations. Furthermore, the operations of its casinos are contingent upon maintaining all necessary regulatory licenses, permits, approvals, registrations, findings of suitability, orders and authorizations. The laws, regulations and ordinances requiring these licenses, permits and other approvals generally relate to the operations of the casinos, the payment of taxes, the responsibility, financial stability and character of the owners and managers of gambling operations, as well as persons financially interested or involved in gambling operations. All of TWC’s Czech casinos are duly licensed by the MOF, the national governmental authority that regulates gambling in the Czech Republic, and by the municipalities in which they operate. The Company is also subject to ongoing regulation and oversight to maintain these operations.

Czech regulatory authorities have broad powers to request detailed financial and other information, to limit, condition, suspend or revoke a registration, gaming license or related approval and to approve changes in the Company’s operations. Substantial fines for violations of gaming laws or regulations may be levied. The suspension or revocation of any license which may be granted to the Company or the levy of substantial fines for violations could significantly harm its business, financial condition and results of operations. Furthermore, compliance costs associated with gaming laws, regulations and licenses are significant. Any change in the laws, regulations or licenses applicable to its business or a violation of any current or future laws or regulations applicable to its business or gaming licenses could require the Company to make substantial expenditures or could otherwise negatively affect its gambling operations.

Moreover, legislation to further prohibit, limit, or add burdens to its business, such as the Gambling Acts, previously mentioned, may be introduced in the future in the Czech Republic or elsewhere where gambling has been legalized. In addition, from time to time, legislators and special interest groups (which may include its competitors) have proposed legislation that would expand, restrict or prevent gambling operations or which may otherwise adversely impact its operations in the jurisdictions in which the Company operate. Any expansion of gambling or restriction on or prohibition of its gambling operations, increase in gaming taxes, or enactment of other adverse regulatory changes could have a material adverse effect on the Company’s business, financial condition, operating results and prospects.

Foreign Activities - The Company’s operations are entirely outside of the United States of America. Operating internationally involves additional risks relating to such things as currency exchange rates, different legal and regulatory environments, political and economic risks relating to the stability or predictability of foreign governments, differences in the manner in which different cultures conduct business, difficulties in staffing and managing foreign operations, differences in financial reporting, operating difficulties, different types of criminal threats, and other factors. The occurrence of any of these risks, if severe enough, could have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.59

Cash and cash equivalents - Cash and cash equivalents consists of cash and short-term deposits in banks and on hand. The Company maintains a substantial portion of its cash balances in financial institutions that are outside the United States of America or that may exceed the Federal Deposit Insurance Corporation (“FDIC”) coverage of $250 per account. The Company has not experienced any losses in such accounts and believes it is not subject to any significant credit risk on cash. In addition, the FDIC does not insure the Company’s foreign cash, which totaled $13,723 and $10,172 at December 31, 2016 and 2015, respectively. The Company has not incurred any losses in such accounts and believes it is not exposed to any significant credit risk on its cash and cash equivalents.

NOTE 8 - Stockholders’ Equity

For the years ended December 31, 2016 and 2015, the Company recognized stock-based compensation expense of approximately $264 and $78, respectively, for the vesting of granted stock options. The Company also recorded in 2016

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anlegislation ~~expense~~that ofwould ~~approximately~~expand, ~~$94~~restrict ~~for~~or prevent gambling operations or which may otherwise adversely impact its operations in the ~~issuance~~jurisdictions ofin ~~common~~which ~~stock~~the ~~for~~Company ~~vested~~operate. ~~restricted~~Any ~~stock~~expansion ~~award~~of togambling or restriction on or prohibition of its ~~CEO~~gambling operations, ~~pursuant~~increase toin ~~reaching~~gaming ~~designated~~taxes, ~~earnings~~or ~~per~~enactment ~~share~~of ~~targets~~other asadverse ~~stipulated~~regulatory inchanges ~~his~~could ~~restricted~~have ~~stock~~a ~~grant.~~material adverse effect on the Company’s business, financial condition, operating results and prospects.

AsForeign ~~part~~Activities of- ~~their~~The ~~participation in the~~ Company’s ~~Deferred~~operations ~~Compensation~~are ~~Plan,~~entirely ~~each~~outside ~~member~~ of the ~~Board~~United ~~agreed~~States of America. Operating internationally involves additional risks relating to ~~receive~~such athings ~~portion~~as currency exchange rates, different legal and regulatory environments, political and economic risks relating to the stability or ~~all~~predictability of ~~his~~foreign ~~annual~~governments, ~~retainer~~differences in ~~shares~~the ofmanner ~~the~~in ~~Company’s~~which ~~Common~~different ~~Stock~~cultures conduct business, ~~aggregating~~difficulties ~~$100~~in staffing and ~~$71~~managing ~~for~~foreign ~~the~~operations, ~~entire~~differences ~~board~~in financial reporting, ~~for~~operating ~~the~~difficulties, ~~years~~different ~~ended~~types ~~December 31,~~of ~~2016~~criminal threats, and ~~2015,~~other ~~respectively~~factors. ~~KME~~The ~~contribution~~occurrence toof ~~the~~any ~~Deferred~~of ~~Compensation~~these ~~Plan~~risks, ~~was~~if ~~$425~~severe ~~and~~enough, ~~$350~~could ~~for~~have ~~the~~a ~~year~~material ~~ended~~adverse ~~December~~effect 31on the consolidated financial position, ~~2016~~results of operations and ~~2015,~~cash ~~respectively~~flows of the Company.

Cash and cash equivalents - Cash and cash equivalents consists of cash and short-term deposits in banks and on hand. The Company maintains a substantial portion of its cash balances in financial institutions that are outside the United States of America or that may exceed the Federal Deposit Insurance Corporation (“FDIC”) coverage of $250 per account. The Company has not experienced any losses in such accounts and believes it is not subject to any significant credit risk on cash. In addition, the FDIC does not insure the Company’s foreign cash, which totaled $11,720 and $13,723 at December 31, 2017 and 2016, respectively. The Company has not incurred any losses in such accounts and believes it is not exposed to any significant credit risk on its cash and cash equivalents.

NOTE 8 - Stockholders’ Equity

For the years ended December 31, 2017 and 2016, the Company recognized stock-based compensation expense of approximately $203 and $264, respectively, for the vesting of granted stock options. The Company also recorded in 2017 and 2016 an expense of $145 and $94, respectively, for the issuance of common stock for vested restricted stock award to its CEO, pursuant to reaching designated earnings per share targets as stipulated in his restricted stock grant.

As part of their participation in the Company’s Deferred Compensation Plan, each member of the Board agreed to receive a portion or all of his annual retainer in shares of the Company’s Common Stock, aggregating $130 and $100 for the entire board, for the years ended December 31, 2017 and 2016, respectively. KME contribution to the Deferred Compensation Plan was $564 and $425 for the year ended December 31, 2017 and 2016, respectively.

NOTE 9 - Deposits and Other Assets

Restricted Deposits - Restricted deposits include the bond deposit for the new Czech gaming license of ~~CZK~~Kč 2230,000, or $~~858~~1,409 at December 31, 2017, and Kč 22,000, or $~~886~~858, at December 31, 2016, ~~and~~representing ~~2015~~the bond deposit for the old gaming license, ~~respectively.~~expected to be returned to TWC in the first quarter of 2018. In addition, restricted deposits include a loan security deposit of €300, or approximately $~~316~~360, related to the Company’s Sparkasse Seligenstadt Loan, a loan security deposit of €250, or approximately $~~264~~300, related to the Company’s Sparkasse Hann. Münden Loan, a loan security deposit of €700, or approximately $840, related to the Company’s Kreissparkasse Köln Loan, and $24 as security deposit on the Company’s corporate office lease.

NOTE 10 - Income Taxes

The Company files income ~~taxes~~tax returns in the following jurisdictions: United States, Czech Republic, Germany and ~~Germany~~Austria. In the Czech Republic, prior to January 1, 2012, gaming income was not subject to corporate income tax. In lieu of income taxes, gaming income was subject to other taxes in the Czech Republic, including gaming and charity taxes, which were primarily based on percentages of gaming revenues. Foreign net operating loss carry-forwards (disclosed below) were derived from non-gaming activities and could only be applied against non-gaming activities. Effective January 1, 2012, the Czech government instituted a corporate income tax rate of 19.0% on income. For the year ended December 31, 2016, the Company recorded an income tax provision of $2,668, which includes a $130 deferred income tax benefit resulting from foreign book tax differences on fixed assets and other temporary items. For the year ended December 31, 2015, the Company recorded an income tax provision of $1,394, which included $266 deferred income tax benefit resulting from foreign book tax differences on fixed assets and other temporary differences. Corporate income tax is payable by the end of June of the subsequent year. In compliance with new tax regulations, the Company began making quarterly, estimated Czech corporate income tax payments beginning for the quarter ended September 30, 2013.

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~~Domestic~~below) were derived from non-gaming activities and ~~foreign~~could ~~income~~only ~~taxes~~be applied against non-gaming activities. Effective January 1, ~~included~~2012, inthe Czech government instituted a corporate income tax rate of 19.0% on income. For the ~~consolidated~~year ~~statements~~ended December 31, 2017, the Company recorded an income tax provision of ~~operations~~$898, ~~for~~which includes a $240 deferred tax provision resulting from foreign book tax differences on fixed assets and other temporary items. For the ~~years~~year ended December 31, 2016, the Company recorded an income tax provision of $2,668, which included $130 of deferred income tax benefit resulting from foreign book tax differences on fixed assets and ~~2015~~other ~~are~~temporary ~~summarized~~items. ~~below:~~Corporate income tax is payable by the end of June of the subsequent year. In compliance with tax regulations, the Company began making quarterly, estimated Czech corporate income tax payments beginning for the quarter ended September 30, 2013.

	2016		2015
Income (loss) before taxes:
U.S.	$	(946)	$	(957)
Foreign		9,937		6,209
Total income before taxes	$	8,991	$	5,252

Domestic and foreign income taxes, included in the consolidated statements of operations, for the years ended December 31, 2017 and 2016 are summarized below:

The Company’s provision (benefit) for income taxes at December 31, 2016 and 2015 is summarized as follows:


	2017		2016
Income (loss) before taxes:
U.S.	$	(196)	$	(946)
Foreign		2,979		9,937
Total income before taxes	$	2,783	$	8,991

	2016			2015
Current	$	2,798		$	1,660
Deferred		(130)			(266)
Provision for income taxes	$	2,668		$	1,394
Effective income tax rate		29.7	%		26.5	%

The Company’s provision (benefit) for income taxes at December 31, 2017 and 2016 is summarized as follows:


	2017			2016

Current	$	658		$	2,798
Deferred		240			(130)
Provision for income taxes	$	898		$	2,668
Effective income tax rate		32.2	%		29.7	%

The Company’s effective income tax rate differs from the statutory federal income tax rate as follows:

	2016		2015
	2017		2016
U.S. Federal income tax statutory rate	$	~~3,036~~946	$	13,~~786~~036
Foreign income tax rate differential		(~~1,566~~255)		(~~966~~1,566)
Tax credits		(~~248~~231)		(248)
State income tax (net of federal benefit)		~~150~~14		150
Permanent items		~~1,813~~398		~~408~~1,813
Other		~~273~~26		(~~137~~517)
Change in valuation allowance		(790)		303
Total provision for income taxes	$	898	$	2,668
Total provision for income taxes	$	2,668	$	1,394

The Company’s current year effective income tax rate was impacted due to losses in the United States for which no benefit has been recorded. A majority of the earnings recognized by the Company during the year ended December 31, ~~2016~~2017 were at our properties in the Czech Republic. Based on permanent items and the impact of foreign currency exchange rates, the earnings in the Company’s Czech properties accounted for nearly 100% of the total tax expense recorded.

On December 22, 2017, the “Tax Cuts and Jobs Act” (TCJA) was enacted which significantly reforms the Internal Revenue Code of 1986, as amended. The TCJA, among other things, reduces the U.S. federal corporate tax rate from 35% to 21%, repeals the corporate alternative minimum tax (AMT), imposes additional limitations on the deductibility of interest, allows for the expensing of capital expenditures, and puts into effect the migration from a “worldwide” system of taxation to a territorial system. As a result of this legislation, the Company remeasured its deferred tax assets

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and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, the Company is still analyzing certain aspects of the TCJA and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of the Company’s deferred tax balances was $2,810 which was offset fully by the provisional amount recorded related to the reversal of previously established valuation allowances against these deferred tax balances. In addition, the Company recognized $5,203 of tax expense related to the deemed repatriation of foreign accumulated earnings, however this was fully offset by utilization of Federal net operating losses.

While the Company has completed its provisional analysis of the income tax effects of the TCJA and recorded a reasonable estimate of such effects, the amounts recorded related to the TCJA may differ, possibly materially, due to, among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions that the Company has made, additional guidance that may be issued by the U.S. Government, and actions and related accounting policy decisions the Company may take as a result of the TCJA. The Company will complete its analysis over a one-year measurement period ending no later than December 22, 2018, and any adjustments during this measurement period will be included in loss from continuing operations as an adjustment to income tax expense/benefit in the reporting period when such adjustments are determined.

The Company records deferred tax assets and liabilities based on the difference between the financial statement and income tax basis of assets and liabilities using the enacted statutory tax rate in effect for the year these differences are expected to reverse. Deferred income tax expenses or credits are based on the changes in the asset or liability from period to period. The recorded deferred tax assets are reviewed for impairment on a quarterly basis by reviewing the Company’s internal estimates for future taxable income.

The Company assesses the continuing need for a valuation allowance that results from uncertainty regarding its ability to realize the benefits of the Company’s deferred tax assets. The Company has a valuation allowance ~~of $13,406~~ on its U.S. and foreign deferred tax assets of $5,992 and $3,267, respectively, as of December 31, ~~2016~~2017 due to the uncertainty of future taxable income. The ultimate realization of deferred income tax assets depends on generation of future taxable income in the jurisdictions where the assets are located during the periods in which those temporary differences become deductible. If the Company concludes that its prospects for the realization of its deferred tax assets are more likely than not, the Company will then reduce its valuation allowance as appropriate and credit income tax.

57 At December 31, 2017, the Company had U.S., state and foreign net operating loss carry forwards (NOL’s), of approximately $20,637, $12,887 and $16,973, respectively, available to offset certain future taxes payable. However, certain historical events may have triggered significant limitations on pre-existing U.S. NOL’s pursuant to Section 382

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~~At December 31, 2016, the Company had U.S., state and foreign net operating loss carry forwards (NOL’s),~~ of approximately $35,077, $13,078 and $358, respectively, available to offset certain future taxes payable. However, certain historical events may have triggered significant limitations on pre-existing U.S. NOL’s pursuant to Section 382 of the Internal Revenue Code. A full valuation allowance has been established for these deferred tax assets since their realization is considered uncertain. The Company’s NOLs will begin to expire in ~~2017~~2024.

The Company’s deferred income taxes at December 31, ~~2016~~2017 and ~~2015~~2016 are summarized as follows:

		2016		2015
		2017		2016
Deferred tax assets:
Accrued expenses	$	~~574~~842	$	~~556~~574
Tax credits		~~318~~532		318
Other		~~108~~356		27108
Net operating loss carryforwards		129,~~666~~371		1512,~~725~~666
Total deferred tax assets		1311,~~666~~101		1613,~~308~~666
Valuation allowance		(139,~~406~~259)		(1613,~~130~~406)
Total deferred tax assets		~~260~~1,842		~~178~~260
Deferred tax liabilities - property, plant, and equipment		(~~161~~2,148)		(~~210~~161)
Total deferred tax liability		(~~161~~2,148)		(~~210~~161)
Net deferred tax assets (liability)	$	99	$	(32)
Net deferred tax liability (assets)	$	(306)	$	99

In November 2015, the FASB issued guidance on balance sheet classification of deferred taxes, requiring that all tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The guidance is effective for annual reporting periods beginning after December 15, 2016. The Company ~~has early~~ adopted this guidance~~. This~~ in 2017, which did not result in aany ~~change~~changes to the Company’s classification of deferred tax assets and liabilities.

The Company has analyzed filing positions in all of the U.S. federal, state and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its U.S. federal tax return, its state tax return in New York and its foreign tax returns in Czech Republic, Germany and ~~Germany~~Austria, where it owns and operated casinos and hotels, as “major” tax jurisdictions, as defined by the Code.

The Company’s tax returns for the following periods are subject to examination:

Jurisdiction:	Periods
U.S. Federal	~~2013~~2014	–	~~2015~~2016
U.S. State – New York	~~2013~~2014	–	~~2015~~2016
Czech Republic	~~2009~~2010	–	~~2015~~2016
Germany	~~2014~~2015	–	~~2015~~2016
Austria	2017	–	2017

The Company has not recognized any tax liability for uncertain income tax positions on any of its returns. The Company may, from time to time, be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results.

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Based on the Company’s capital, debt and liquidity position, there is no expected need for cash repatriation from foreign subsidiaries, and all cash held in foreign jurisdictions is considered permanently reinvested. ~~These~~However, ~~earnings~~due ~~could~~to ~~become~~the ~~subject~~enactment toof ~~income~~the ~~taxes~~TCJA, ifthese ~~they~~earnings ~~are~~have ~~remitted~~been recognized as ~~dividends,~~taxable ~~are~~income ~~loaned~~in to2017. If ~~the~~these ~~Company~~earnings orare ~~any~~subsequently ofremitted ~~the~~as ~~Company’s~~dividends, ~~subsidiaries~~they ~~located~~will inbe ~~the~~considered ~~United~~previously ~~States,~~tax orincome ifand ~~the~~will ~~Company~~not ~~sells~~be ~~its~~subject ~~stock~~to inUS ~~the~~income ~~foreign~~taxes ~~subsidiaries~~at that time.

NOTE 11 - ~~Stock~~Compensation ~~Options~~Plans

~~The~~2014 ~~activity~~Equity inIncentive Plan - In April 2014, the ~~Company’s~~Board ~~stock~~unanimously ~~option~~adopted ~~plan~~the 2014 Equity Incentive Plan (“2014 Equity Plan”), which was assubsequently ~~follows~~approved ~~for~~by the ~~dates~~shareholders ~~indicated:~~of the Company at its Annual Meeting held in June 2014. The 2014 Equity Plan supercedes the 2004 Equity Incentive Plan, which expired in May 2014.

	Number of	Range of				Weighted Average
	Options	Exercise Prices				Exercise Price
Balance outstanding, January 1, 2015	595,125	$	2.00	-	4.10	$	3.41
Granted in 2015	60,000				2.75		2.75
Expired in 2015	(20,125)		2.00	-	4.10		3.42
Balance outstanding, December 31, 2015	635,000	$	2.75	-	3.50	$	3.39
Granted in 2016	415,000				3.34		3.34
Expired in 2016	(385,000)				3.50		3.50
Balance outstanding, December 31, 2016	665,000	$	2.59	-	3.50	$	3.34
Exercisable, December 31, 2016	278,750	$	2.59	-	3.50	$	3.36

The 2014 Equity Plan provides that certain awards made under the plan may be eligible for designation as “qualified performance-based compensation” which may be exempt from the $1,000 deduction limit imposed on publicly-held corporations by Section 162(m) of the Internal Revenue Code. The type of awards that may be granted, under the 2014 Equity Plan, by the Compensation Committee of the Board, in its discretion from time to time, include stock options, stock appreciation rights, restricted stock and restricted stock units, other stock-based awards and performance awards.

OnThe ~~November 11,~~ 2014, ~~pursuant~~Equity toPlan provides the ~~Company’s~~Committee ~~2014~~with ~~Equity~~the ~~Incentive~~discretion ~~Plan,~~to ~~Mr.~~grant ~~Ramadan~~to ~~was~~any ~~granted~~participant ~~five-year~~annually ~~options~~any awards not to ~~purchase~~exceed 200,000 shares of Common Stock ~~that~~and/or ~~vest~~any inrestricted ~~four~~stock ~~equal~~or ~~parts,~~restricted ~~with~~stock ~~the~~units ~~options~~that are not subject to ~~acquire~~the ~~50,000 shares~~achievement ~~vesting~~of ~~immediately~~a ~~upon~~performance ~~the~~target ~~date~~or oftargets ~~grant~~covering ~~and~~more ~~options~~than toan ~~acquire~~aggregate 50of 150,000 shares. ~~vesting~~The ~~subsequently~~plan ~~upon~~stipulates ~~each~~the ~~anniversary~~authorized number of ~~the~~shares ~~grant~~available ~~date.~~with ~~The~~respect ~~fair~~to ~~value~~which ofawards ~~this~~may ~~grant~~be ~~was~~granted ~~$234,~~under orthe ~~$1.17~~plan ~~per~~shall ~~option~~be 660,750. On ~~The~~June ~~exercise~~2, ~~price~~2016, ofan ~~all~~amendment ~~these~~to ~~options~~the ~~was~~2014 ~~initially~~Equity ~~set~~Plan atwas ~~$3.20~~approved ~~per~~by ~~share,~~ the ~~closing~~shareholders ~~stock~~at ~~price on~~ the ~~date~~Company’s ofAnnual ~~grant~~Meeting, ~~and~~adding ~~will~~250,000 ~~escalate~~to bythe ~~4.0%~~plan, ~~annually~~raising onthe ~~each~~total ~~anniversary~~available ~~date.~~awards Asto 910,750, of ~~December~~which 31245,750 ~~2016,~~remained ~~150,000~~available ~~options~~for ~~had~~issuance ~~vested~~as ~~and~~of ~~are~~December ~~exercisable~~31, at2017. ~~the~~See ~~escalated~~also ~~price~~Note of12 ~~$3.46~~“Stock ~~per~~Options,” ~~share~~below.

~~On April 15~~Additionally, ~~2015,~~option ~~pursuant~~awards towill ~~the~~be ~~Company’s~~available ~~2014~~for ~~Incentive~~grants ~~Equity~~to ~~Plan,~~ the ~~Compensation~~executive ~~Committee~~officers ~~recommended~~ and ~~the~~non-employee ~~Board~~directors ~~approved~~as awell ~~grant~~as toother ~~all~~key ~~six~~employees, ~~members~~except ~~of the Board at~~ that ~~time, each five~~non-~~year~~employee ~~options~~directors toare ~~purchase~~eligible ~~10,000 shares of Common Stock that vest in four equal parts, with the options~~ to ~~acquire~~receive ~~2,500~~only ~~shares~~awards ~~vesting immediately upon the date~~ of ~~grant~~non-qualified ~~and options to acquire 2,500 shares vesting subsequently upon each anniversary of the grant date. The exercise price of these options was initially set at $2.75 per share, the closing~~ stock ~~price on the date of grant, and will escalate by 4.0% annually on each anniversary date. The fair value of this grant was $76, or $1.27 per option. As of December 31, 2016, 12,500~~ options ~~had vested and are exercisable~~. The 10,000 options grant to Mr. Malcolm M.B. Sterrett, a former director, who stood down for re-election at the Company’s annual meetings of shareholders on June 26, 2015, expired on July 30, 2015, thirty days after his departure from the Board on June 30, 2015.

OnThe ~~January~~2014 ~~29,~~Equity ~~2016,~~Plan ~~the~~also ~~Compensation~~contains ~~Committee recommended and~~ the ~~Board~~following ~~of Directors~~ provisions: (~~or the “Board”~~i) no ~~approved~~stock aoption ~~grant~~repricings to(without ~~Mr.~~the ~~Ramadan,~~approval ~~our~~of ~~Chief Executive Officer, pursuant to~~ the Company’s ~~2014~~shareholders); ~~Equity~~(ii) limitations ~~Incentive~~on ~~Plan,of~~shares ~~five-year~~other than for stock options; to(iii) no ~~purchase~~discounts ~~75,000~~on ~~shares~~stock ofoptions; ~~Common~~(iv) minimum ~~Stock~~three ~~that~~year ~~vest~~vesting inperiods ~~four~~for ~~equal~~restricted ~~parts,~~stock ~~with~~and ~~the~~other ~~options~~stock-based toawards; ~~acquire~~(v) no ~~18,750~~“evergreen” ~~shares~~provisions; ~~vesting immediately upon the date of grant~~ and ~~options~~(vi) conformity to ~~acquire~~Section ~~18,750~~409A ~~shares~~of ~~vesting~~the ~~subsequently~~Internal Revenue Code.

59401 (k) Plan - The Company maintains a contributory 401(k) plan. This plan is for the benefit of all U.S.-based, eligible corporate employees, who may have a portion 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, which totaled $50 and $50 for the years 2017 and 2016, respectively. These costs were recognized in the selling, general and administrative expenses of the consolidated statements of operations.

2017 Profit Sharing Plan - The 2017 Profit Sharing Plan was recommended by the Compensation Committee of the Board and approved by the Board on March 17, 2017. The 2017 Profit Sharing Plan permits designated KMEs to share in the profits of the Company. The profit sharing pool was calculated based on 12.5% of consolidated year-end net income before taxes, the pool distribution of which will be determined annually as a percentage of each participating KME relative to the aggregate of the annual salaries of the participating KMEs. Each KME is required, pursuant to the 2017 Profit Sharing Plan, to defer 50% of his or her annual profit sharing award into the Deferred Compensation Plan. For the years ended December 31, 2017 and 2016, a pool of $340 and $1,126 was reserved respectively, in accordance with the terms of the plan. Pursuant to the terms of the 2017 and 2016 Profit Sharing Plans, 50%, or approximately $170 and $563, respectively, of the Profit Sharing Plan awards, will be and were deferred, respectively, into the Deferred Compensation Plan.

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TRANS WORLD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Figures in thousands, except for statistics and share data)

~~upon~~ Deferred ~~each~~Compensation ~~anniversary~~Plan of- On ~~the~~May 17, ~~grant~~2006, ~~date. The~~the ~~exercise~~Compensation ~~price~~Committee of ~~all~~the ~~these~~Board ~~options~~unanimously ~~was~~recommended, ~~initially~~and ~~set~~the atBoard ~~$2.59~~approved ~~per~~and ~~share~~adopted, TWC’s Deferred Compensation Plan (the ~~closing~~“Deferred ~~stock~~Plan”), ~~price~~which onprovides certain key employees and non-employee directors the ~~date~~opportunity ofto ~~grant,~~defer ~~and~~receipt ~~will~~of ~~escalate~~specified byportions ~~4.0%~~of ~~annually~~their oncompensation ~~each~~and ~~anniversary~~to ~~date. The~~have ~~fair~~such ~~value~~deferred ofamounts ~~the~~treated ~~grant~~as ~~was~~if ~~approximately~~invested ~~$78,~~in orthe ~~$1.04~~Common ~~per~~Stock ~~option~~of the Company.

OnThe ~~June~~Company 2,adopted ~~2016,~~the Deferred Plan with the ~~Compensation~~intention ~~Committee~~that ~~recommended~~it ~~and~~shall ~~the~~at ~~Board~~all ~~approved~~times ~~five-year~~be ~~stock~~characterized ~~option~~as ~~grants~~a to“top ~~eight~~hat” ~~KMEs,~~plan of andeferred ~~aggregate~~compensation maintained for a select group of ~~340~~management,~~000~~ ~~shares~~as described under the Employee Retirement Income Security Act of ~~Common~~1974 ~~Stock~~(“ERISA”) Sections 201(2), ~~pursuant~~301(a)(3) and to401(a)(1). The ~~the~~Deferred ~~Company’s~~Plan ~~2014~~shall ~~Equity~~at ~~Incentive~~all ~~Plan~~times satisfy Section 409A of the Internal Revenue Code. ~~These~~Pursuant ~~options~~to ~~vest~~a inparticipant’s ~~four~~election, ~~equal~~the ~~parts,~~unfunded ~~with~~Deferred Plan obligations are payable in the ~~first~~form ~~portion~~of ~~vesting~~Common ~~immediately~~Stock and cash upon the ~~date~~earlier of: (i) a ~~grant~~designated, ~~and~~in-service ~~remaining~~distribution ~~equal~~date ~~portions~~which ~~vesting~~must ~~subsequently~~be ~~upon~~a ~~each~~minimum ~~anniversary~~ of ~~the~~three ~~grant~~years ~~date. The~~from ~~exercise~~the ~~price~~year of ~~all~~the ~~these~~first ~~options~~deferral; ~~was~~(ii) separation ~~set~~from atservice; ~~$3.50~~(iii) disability; ~~per~~(iv) change ~~share,~~in control of the ~~closing~~Company; ~~stock~~or ~~price~~(v) death. A onparticipant’s ~~the~~election ~~date~~form ofmust ~~grant,~~specify ~~and~~whether the payments will ~~escalate~~be made by ~~4.0%~~lump ~~annually~~sum onor ~~each~~by ~~anniversary~~installments, ~~date. The~~and ~~fair~~the ~~value~~number of ~~the~~annual ~~entire~~installments ~~grant~~(with ~~was~~a ~~approximately~~minimum ~~$382,~~of ortwo ~~$1.12~~and ~~per~~a ~~option~~maximum of five installments).

AsNOTE of12 ~~December 31, 2016, there was $318 of total unrecognized compensation cost related to unvested share~~-~~based~~ ~~compensation~~Stock awards granted under the equity compensation plans, which will be amortized over the weighted average remaining requisite service period of three years. Of the $318 of total unrecognized compensation cost, the Company expects to recognize approximately $170 for 2017 and $148 for 2018.Options

InThe ~~each~~activity ~~instance,~~in the ~~option~~Company’s ~~exercise~~stock ~~price~~option ~~per~~plan ~~share~~ was equal to or above the market value of the underlying stock on the date of grant. Options are generally granted with terms between five and ten years after the date of grant or earlier upon termination of employment, as ~~defined~~follows infor the ~~plan~~dates ~~or agreements.~~indicated:

The fair value of each option grant given in 2015 and 2016 was estimated on the date of grant using the Black-Scholes option pricing model with the below assumptions related to risk-free interest rates, expected dividend yield, expected lives (i.e. life term of the grant) and expected stock price volatility.


	Number of	Range of				Weighted Average
	Options	Exercise Prices				Exercise Price

Balance outstanding, January 1, 2016	635,000	$	2.75	-	3.50	$	3.39

Granted in 2016	415,000				3.34		3.34

Expired in 2016	(385,000)				3.50		3.50

Balance outstanding, December 31, 2016	665,000	$	2.59	-	3.50	$	3.34

Balance outstanding, December 31, 2017	665,000	$	2.69	-	3.64	$	3.47

Exercisable, December 31, 2017	445,000	$	2.69	-	3.64	$	3.49

Grant Year	2016		2015
Stock price volatility	34.56% - 34.71%		43.5	%
Risk-free interest rate	1.2% - 1.5%		1.4	%
Expected life (in years)	5.0		5.0
Expected dividend yield	—	%	—	%

On November 11, 2014, pursuant to the Company’s 2014 Equity Incentive Plan (the “2014 Equity Plan,”) Mr. Ramadan was granted five-year options to purchase 200,000 shares of Common Stock that vest in four equal parts, with the options to acquire 50,000 shares vesting immediately upon the date of grant and options to acquire 50,000 shares vesting subsequently upon each anniversary of the grant date. The fair value of this grant was $234, or $1.17 per option at the date of grant. The exercise price of all these options was initially set at $3.20 per share, the closing stock price on the date of grant, and will escalate by 4.0% annually on each anniversary date. As of December 31, 2017, these options had fully vested and were exercisable at the escalated exercise price of $3.60 per share.

~~Other~~On ~~than~~April 15, 2015, pursuant to the ~~grants~~Company’s ~~described~~2014 ~~above~~Equity Plan, ~~there~~the ~~were~~Compensation noCommittee ~~other~~recommended ~~grants~~and ~~issued~~the Board approved a grant to all six members of the Board at that time, each five-year options to purchase 10,000 shares of Common Stock that vest in ~~2015~~four equal parts, with the options to acquire 2,500 shares vesting immediately upon the date of grant and ~~2016~~options to acquire 2,500 shares vesting subsequently upon each anniversary of the grant date. The exercise price of these options was initially set at $2.75 per share, the closing stock price on the date of grant, and escalate by 4.0% annually on each anniversary date. The fair value of this grant was $76, or $1.27 per option, at the date of grant.

~~Additional information about the Company’s outstanding stock options at December 31, 2016 is as follows:~~65

	Options Outstanding
		Weighted
		Average
		Remaining	Weighted
		Contractual	Average
	Number of	Life	Exercise		Intrinsic
Exercise Prices	Shares	(in Years)	Price		Value
$2.50 - $3.49	325,000	3.21	$	3.17	$	—
$3.50	340,000	4.42		3.50		—
	665,000	3.83	$	3.34	$	—

Warrants – There were no warrants outstanding as of December 31, 2016 and 2015.

Table of Contents

TRANS WORLD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Figures in thousands, except for statistics and share data)

~~NOTE~~As 12of -December ~~Compensation~~31, ~~Plans~~2017, 37,500 options had vested and were exercisable at the escalated exercise price of $2.97 per share.

On January 29, 2016, the Compensation Committee recommended and the Board approved a grant to Mr. Ramadan, our Chief Executive Officer, pursuant to the Company’s 2014 Equity ~~Incentive~~ Plan, of five-year Instock ~~April~~options ~~2014~~to purchase 75,000 shares of Common Stock that vest in four equal parts, with the ~~Board~~options ~~unanimously~~to ~~adopted~~acquire 18,750 shares vesting immediately upon the ~~2014~~date ~~Equity~~of ~~Incentive~~grant ~~Plan~~and ~~(“2014~~options ~~Equity~~to ~~Plan”)~~acquire 18,750 ~~which~~shares ~~was~~vesting subsequently ~~approved~~upon byeach anniversary of the ~~shareholders~~grant date. The exercise price of ~~the~~all ~~Company~~these options was initially set at ~~its~~$2.59 ~~Annual~~per ~~Meeting~~share, ~~held~~the inclosing ~~June~~stock ~~2014~~price on the date of grant, and escalate by 4.0% annually on each anniversary date. The ~~2014~~fair ~~Equity~~value ~~Plan~~of ~~supercedes~~the grant was approximately $78, or $1.04 per option, at the ~~2004~~date ~~Equity~~of ~~Incentive~~grant. As ~~Plan~~of December 31, ~~which~~2017, ~~expired~~37,500 inoptions ~~May~~had ~~2014~~vested and were exercisable at the escalated exercise price of $2.69 per share.

~~The~~On ~~2014~~June ~~Equity~~2, ~~Plan~~2016, ~~provides~~the ~~that~~Compensation ~~certain~~Committee ~~awards~~recommended ~~made~~and ~~under~~ the ~~plan~~Board ~~may~~approved befive-year ~~eligible~~stock ~~for~~option ~~designation~~grants asto ~~“qualified~~eight ~~performance-based~~KMEs, ~~compensation”~~of ~~which~~an ~~may~~aggregate beof ~~exempt~~340,000 ~~from~~shares of Common Stock, pursuant to the $1Company’s 2014 Equity Plan. These options vest in four equal parts,~~000~~ ~~deduction~~with ~~limit~~the ~~imposed~~first onportion ~~publicly-held~~vesting ~~corporations~~immediately byupon ~~Section 162(m)~~ the date of ~~the~~grant ~~Internal~~and ~~Revenue~~remaining ~~Code~~equal portions vesting subsequently upon each anniversary of the grant date. The ~~type~~exercise price of ~~awards~~all ~~that~~of ~~may~~these beoptions ~~granted~~was set at $3.50 per share, ~~under~~the closing stock price on the ~~2014~~date ~~Equity~~of ~~Plan~~grant, and escalate by ~~the~~4.0% ~~Compensation~~annually ~~Committee~~on each anniversary date. The fair value of the ~~Board,~~entire ingrant ~~its~~was ~~discretion~~approximately ~~from~~$382, ~~time~~or to$1.12 ~~time~~per option, ~~include~~at ~~stock~~the ~~options,~~date ~~stock~~of ~~appreciation~~grant. As ~~rights~~of December 31, ~~restricted~~2017, ~~stock~~170,000 options had vested and ~~restricted~~were ~~stock~~exercisable ~~units,~~at ~~other~~the ~~stock-based~~escalated ~~awards~~exercise ~~and~~price ~~performance~~of ~~awards~~$3.64 per share.

~~The~~As ~~2014~~of ~~Equity~~December ~~Plan~~31, ~~provides~~2017, ~~the~~there ~~Committee~~was ~~with~~approximately ~~the~~$149 ~~discretion to grant to any participant annually any awards not to exceed 200,000 shares~~ of ~~Common~~total ~~Stock~~unrecognized ~~and/or~~compensation ~~any~~cost ~~restricted~~related ~~stock or restricted stock units that are not subject~~ to ~~the~~unvested ~~achievement~~share-based ofcompensation ~~a performance target or targets covering more than an aggregate of 150,000 shares. The plan stipulates the authorized number of shares available with respect to which~~ awards ~~may be~~ granted under the ~~plan~~equity ~~shall~~compensation ~~be 660~~plans,~~750. On~~ ~~June~~which 2,will ~~2016,~~be anamortized ~~amendment~~over to the ~~2014~~weighted ~~Equity~~average ~~Plan~~remaining ~~was~~requisite ~~approved~~service byperiod ~~the~~of ~~shareholders~~three atyears. ~~the~~The Company’s ~~Annual~~expects ~~Meeting, adding 250,000~~ to ~~the~~recognize ~~plan, raising~~ the ~~total~~$149 ~~available awards to 910,750,~~ of ~~which~~total ~~245,750~~unrecognized ~~remained~~compensation ~~available~~cost ~~for~~in ~~issuance as of December 31, 2016~~2018. ~~See also Note 11 “Stock Options,” above.~~

~~Additionally~~In each instance, the option ~~awards~~exercise ~~will~~price beper ~~available~~share ~~for~~was ~~grants~~equal to or above the ~~executive~~market ~~officers~~value of the underlying stock on the date of grant. Options are generally granted with terms between five and ~~non-employee~~ten ~~directors~~years asafter

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