Stockholders Equity

9 Months Ended

Sep. 30, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Stock-based compensation expense was approximately $121,000 and $144,000 for the three months ended September 30, 2015 and 2014, respectively and approximately $391,000 and $427,000 for the nine months ending September 30, 2015 and 2014, respectively. As of September 30, 2015, there was approximately $226,000 of total unrecognized compensation cost related to non-vested share-based compensation awards granted under Empire’s plans. That cost is expected to be recognized over the remaining vesting period. This expected cost does not include the impact of any future stock-based compensation awards, including the award of shares of restricted stock granted and discussed below.

An agreement between MRMI and the Monticello Harness Horsemen’s Association (the “MHHA”), which governs the conduct of MRMI and MHHA relating to horseracing purse payments, the simulcasting of horse races and certain other payments, was entered into on November 3, 2014 (the "2014 MHHA Agreement"). The 2014 MHHA Agreement will have an initial term of two (2) years. However, if Montreign is awarded a Gaming Facility License, the 2014 MHHA Agreement will be extended for an additional seven (7) years beginning on the date that the NYSGC approves the Casino Project to engage in legalized gaming. On that same date, MHHA will also receive 1,000,000 shares of Empire common stock and a warrant to purchase 300,000 shares of common stock, the proceeds of any sales of which will provide additional monies for the harness horsemen’s purse account.

On May 5, 2015, a total of 525,000 shares of restricted stock were granted to the Chairman of the Board of the Company (the "Chairman") and the Company's four (4) executive officers which restricted stock shall vest as to one half upon the date when the NYSGC authorizes the opening of the Montreign Resort Casino to the public (the "Casino Date") and as to one half on the six month anniversary of the Casino Date. The grants provide for immediate vesting upon a change in control (as defined in the grant). Further, the grant to the Chairman provides for immediate vesting in the event (i) the Chairman is removed from the Company's Board of Directors (the "Board") other than for cause; or (ii) if the Chairman is not re-nominated to stand for election to the Board. The stock based compensation expense for the shares will be approximately $2.7 million and we will recognize stock based compensation expenses if and when the Company is awarded a Gaming Facility License.

During the quarter ended June 30, 2015, the Company issued an aggregate of 416,668 shares of common stock at $6.00 per share from the exercise of warrants from a warrant holder. The Company received proceeds of $2.5 million from the exercise of these warrants. As of September 30, 2015, there are outstanding warrants to purchase 666,667 shares of Empire's common stock at $6 per share with an expiration date of May 10, 2020.

On January 5, 2015, the Company commenced the January 2015 Rights Offering. The January 2015 Rights Offering closed on February 6, 2015. The Company issued a total of 7,042,254 shares of common stock at $7.10 per share. This includes 53,291 shares issued to holders upon exercise of their basic subscription and over-subscription rights and 4,321,798 shares issued to Kien Huat upon exercise of its basic subscription rights. Kien Huat also acquired the remaining 2,667,165 shares not sold in the January 2015 Rights Offering pursuant to the Standby Purchase Agreement. At the conclusion of the January 2015 Rights Offering and after giving effect to the January 2015 Rights Offering, Kien Huat owned approximately 31,191,035 shares of the Company’s outstanding common stock. The net proceeds of the January 2015 Rights Offering are being used for the expenses relating to the pursuit of the Gaming Facility License for the Casino Project and for development purposes. If the Company is not awarded a Gaming Facility License, the remaining portion of the proceeds of the January 2015 Rights Offering will be used in on-going operations.

On April 2, 2014, the Company commenced the April 2014 Rights Offering. Upon completion of the April 2014 Rights Offering, the Company issued 2,138,881 shares of common stock and raised approximately $13.4 million. The Company utilized the net proceeds of the April 2014 Rights Offering, which was approximately $13.2 million for certain expenses relating to the the Adelaar Project and Casino Project and maintaining our on-going operations and facilities in support of our pursuit of a Gaming Facility License.

On August 19, 2009, the Company entered into an investment agreement with Kien Huat (the “Investment Agreement”), pursuant to which Kien Huat purchased shares of common stock for the aggregate proceeds of $55 million in two tranches during the year ended December 31, 2009. Under the Investment Agreement, if any options or warrants outstanding at the time of the final closing under the Investment Agreement, or the first 1,000,000 granted to directors or officers as of the final closing date under the Investment Agreement, are exercised, Kien Huat has the right to purchase an equal number of additional shares of common stock as are issued upon such exercise at the exercise price for the applicable option or warrant. The Company refers to these rights as the “Option Matching Rights”. Pursuant to the terms of the Investment Agreement, the Company is required to provide notice of any exercise within five (5) business days, after which notice is received, Kien Huat is required to notify the Company of whether it decides to exercise such Option Matching Rights within ten (10) business days. The Company has not provided such notice to Kien Huat for the approximately 1,032,000 shares of common stock as required by the Investment Agreement as of September 30, 2015. The Company has alerted Kien Huat to this matter and anticipates rectifying the matter by providing the necessary notice to Kien Huat and providing them with ten (10) business days to make a determination with respect to their Option Matching Rights, which decision period will commence upon the date the Company determines Kien Huat is no longer bound by the terms of the Confidentiality Agreement it has signed with the Company. Upon the delivery of notice, Kien Huat will have Option Matching Rights to acquire approximately 1,032,000 shares of common stock as of September 30, 2015. In the event any further options included on the Investment Agreement annex are exercised prior to their respective expiration dates, Kien Huat may obtain up to an approximately an additional 154,000 Option Matching Rights as of September 30, 2015.

Series E Preferred Stock

On July 14, 2015, the Company redeemed 26,667 shares of its Series E Preferred Stock, held by beneficial owners other than the Bryanston Group, for approximately $533,000.

Preferred Stock and Dividends

On February 9, 2015, our Board authorized the issuance of 25,509 shares of our common stock in payment of dividends due for the year ended December 31, 2014 on our Series B Preferred Stock. The recorded value of these shares was approximately $159,000. At December 31, 2014, the Company had undeclared dividends on the Series B Preferred Stock of approximately $159,000.

On February 19, 2014, our Board authorized the issuance of 30,833 shares of our common stock in payment of dividends due for the year ended December 31, 2013 on our Series B Preferred Stock. The recorded value of these shares was approximately $218,000. At December 31, 2013, the Company had undeclared dividends on the Series B Preferred Stock of approximately $218,000.