Stock Options and Warrants

12 Months Ended

Dec. 31, 2014

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

Stock Options And Warrants

Stock Options and Warrants

On November 12, 2009, Kien Huat has, with the Company’s consent, assigned its Option Matching Rights to a director with respect to an existing option to purchase 83,333 shares of Empire’s common stock at an exercise price of $3.42 per share. The Option Matching rights expired on April 26, 2014 and were valued at approximately $673,000 using the Black-Scholes valuation model. As of December 31, 2013, all 83,333 Option Matching Rights granted to the director were outstanding.

As of December 31, 2014, the Company has outstanding the following warrants to purchase an aggregate of 1.1 million shares of Empire’s common stock at $6.00 per share, as follows: (i) 83,333 shares with an expiration date of May 10, 2015; (ii) 333,333 shares with an expiration date of May 10, 2015; and (iii) 666,667 shares with an expiration date of May 10, 2020, which may be exercised on a cashless basis and cannot be exercised until the warrants to purchase 416,666 shares described in clauses (i) and (ii) above have been exercised in full. The warrants were recorded as legal settlement expense and valued at approximately $5.6 million.

As of December 31, 2014, the Company has 3.5 million shares reserved for issuance in connection with its Second Amended and Restated 2005 Equity Incentive Plan and there are approximately 2,534,000 securities remaining available for future issuance under this plan.

Stock-based compensation expense is approximately $636,000, $385,000 and $647,000 for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014, there was approximately $617,000 of total unrecognized compensation cost related to non-vested share-based compensation awards granted under the Company’s plan. That cost is expected to be recognized over the remaining vesting period of two years. This expected cost does not include the impact of any future stock-based compensation awards.

In 2014 and 2013 the Company received approximately $2.8 million and $1.0 million, respectively, in proceeds from shares of Common stock issued as a result of the exercise of stock options. The Company did not receive any proceeds from shares of Common stock issued as a result of the exercise of stock options in 2012.

The following table sets forth the weighted average assumptions used in applying the Black Sholes option pricing model to the option grants in 2014, 2013 and 2012.

	2014			2013			2012
Weighted average fair value of options granted	$	5.65		$	3.78		$	1.24
Expected dividend yield	—%			—%			—%
Expected volatility	101.6		%	103.8		%	109.4		%
Risk—free interest rate	1.64		%	1.47		%	0.67		%
Expected life of options	5 years			5 years			5 years

The following table reflects stock option activity in 2014, 2013 and 2012.

	Approximate number of shares		Range of exercise prices per share		Weighted average exercise price per share		Weighted average remaining contractual life (years)
Options outstanding at January 1, 2012	2,676,000				$	6.93	1.77
Granted in 2012	50,000		$	1.59	$	1.59	4.85
Canceled in 2012	(522,000	)	$ 4.71 - $26.22		$	12.84
Options outstanding at December 31, 2012	2,204,000				$	8.45	2.26
Granted in 2013	50,000		$	4.95	$	4.95	4.87
Options exercised in 2013	(314,000	)	$2.79 - $4.71		$	3.23
Canceled in 2013	(50,000	)	$4.71 - $42.75		$	12.84
Options outstanding at December 31, 2013	1,890,000				$	6.63	1.46
Granted in 2014	8,000		$	7.17	$	7.17	3.87
Options exercised in 2014	(768,000	)	$2.79 - $6.90		$	4.67
Forfeited in 2014	(5,000	)	$	4.95	$	3.87
Canceled in 2014	(344,000	)	$3.00 - $42.75		$	14.46
Options outstanding at December 31, 2014	781,000				$	6.65	1.47
Options exercisable at December 31, 2014	781,000				$	6.65	1.47