UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 17, 2016
EMPIRE RESORTS, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-12522 | 13-3714474 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
c/o Monticello Casino and Raceway, 204 State Route 17B, P.O. Box 5013, Monticello, NY |
12701 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (845) 807-0001
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01. Other Events.
Closing of the Rights Offering
On February 18, 2016, Empire Resorts, Inc. (the Company) issued a press release announcing its rights offering (the Rights Offering) and standby purchase of shares not sold in the Rights Offering, which generated approximately $290 million in gross proceeds for the Company, closed on February 17, 2016. The Company issued a total of 20,138,888 shares of common stock at $14.40 per share. This includes 176,086 shares issued to holders upon exercise of their basic subscription rights and 13,136,817 shares issued to Kien Huat Realty III Limited (Kien Huat), our largest stockholder, upon exercise of its basic subscription rights. Kien Huat also acquired the remaining 6,825,985 shares not sold in the Rights Offering pursuant to the terms of a standby purchase agreement. The Company paid Kien Huat a fee of $1,450,000 for its commitment pursuant to the standby purchase agreement and reimbursed Kien Huat for its expenses related to the standby purchase agreement in an amount of $50,000.
The Company will use the net proceeds of the Rights Offering (i) for the expenses relating to the development of the Montreign Resort Casino (the Casino Project) at the site of the Adelaar (Adelaar) in Sullivan County, New York, (ii) to redeem the Series E Preferred Stock of the Company in accordance with an existing settlement agreement and (iii) for the expenses related to the development of the Golf Course and Entertainment Village, each of which are part of the initial phase of Adelaar, and to support the working capital needs of the Company. A copy of the press release is filed as Exhibit 99.1 hereto.
Conversion of the Kien Huat Note
On June 26, 2014, Kien Huat and the Company entered into that certain Commitment Letter, which was last amended on September 22, 2015 (as amended, the Commitment Letter), pursuant to which Kien Huat committed to support the Companys equity financing needs with respect to the Casino Project and Adelaar. Kien Huats commitment to participate in, and backstop, the Rights Offering was made in accordance with the Commitment Letter. Pursuant to the Commitment Letter, Kien Huat also agreed to convert in accordance with its terms that certain convertible note in the principal amount of $17.4 million (the Note) into shares of the Companys common stock upon the earlier to occur of (i) the closing of this Rights Offering and (ii) the maturity of the Note, which is March 31, 2016. Accordingly, upon consummation of the Rights Offering, on February 17, 2016, the Note was converted into 1,332,058 shares of common stock, which conversion, along with the payment in cash of interest due, satisfied the Note in full (the Note Conversion). After giving effect to the Rights Offering (including the standby purchase) and the Note Conversion, Kien Huat will own approximately 88.7% of the outstanding shares of the Companys common stock.
Letter Agreement
As a result of Kien Huats increased proportionate ownership following the consummation of the Rights Offering and the conversion of the Note, at the request of the Company, on February 17, 2016, Kien Huat and the Company entered a letter agreement (the Letter Agreement) pursuant to which, during the period commencing on February 17, 2016 and ending on the earlier of (i) the three year anniversary of the closing of the Rights Offering and (ii) the one year anniversary of the opening of the Casino Project, Kien Huat has agreed not to take certain actions with respect to the Company. In particular, during such time period, Kien Huat has agreed not to, and to cause its affiliates other than the Company or its subsidiaries (collectively with Kien Huat, Kien Huat Parties) not to, take certain actions in furtherance of a going-private transaction (as such term is defined in the Letter Agreement) involving the Company unless such transaction is subject to the approval of (x) holders of a majority of the votes represented by the common stock, Series B preferred stock and any other capital stock of the Company entitled to vote together with the common stock in the election of the board of directors (the Board) of the Company (other than any such capital stock owned by any Kien Huat Parties) and (x) either (A) a majority of disinterested members of the Board of Directors of the Company (the Board) or (y) a committee of the Board composed of disinterested members of the Board. In addition, during such period, the Company and Kien Huat have agreed to cooperate to ensure that, to the greatest extent possible, the Board includes no fewer than three (3) independent directors (the definition of independence as determined under the standards of The Nasdaq Stock Market or any other securities exchange on which the common stock of the Company is then listed).
This summary description of Letter Agreement is qualified in its entirety by reference to the actual Letter Agreement, which is filed as Exhibit 4.1 to this Current Report on Form 8-K and are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) |
Exhibits. |
4.1 | Letter Agreement, dated February 17, 2016, by and between Empire Resorts, Inc. and Kien Huat Realty III Limited | |
99.1 | Press Release, dated February 18, 2016 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: February 18, 2016
EMPIRE RESORTS, INC. | ||
By: | /s/ Joseph A. DAmato | |
Name: Joseph A. DAmato |
||
Title: Chief Executive Officer |
Exhibit 4.1
Kien Huat Realty III Limited
February 17, 2016
Empire Resorts, Inc.
c/o Monticello Casino and Raceway
Route 17B, P.O. Box 5013
Monticello, New York 12701
Attention:
Emanuel R. Pearlman, Chairman of the Board of Directors
Joseph A. DAmato, Chief Executive Officer
Re: | Letter Agreement |
Gentlemen:
Reference is made to that certain Standby Purchase Agreement (the Standby Purchase Agreement), dated as of December 31, 2015, by and between Kien Huat Realty III Limited (KHRL) and Empire Resorts, Inc. (the Issuer), whereby, among other things, KHRL agreed to exercise certain subscription rights to purchase additional shares of common stock of the Issuer (Common Stock) pursuant to the rights offering contemplated thereby (the Rights Offering) and exercise rights not otherwise exercised by the other holders in the Rights Offering, in each case, subject to the terms, conditions and limitations set forth in the Standby Purchase Agreement.
As a result of the acquisition of additional shares of Common Stock by KHRL pursuant to the Standby Purchase Agreement, KHRLs proportionate ownership of the outstanding shares of Common Stock is anticipated to increase. In light of such increased proportionate ownership, the Issuer has requested KHRL to, and KHRL hereby does, agree as follows:
During the period (the Restricted Period) commencing on the date hereof and ending on the earlier of (x) the three year anniversary of the closing of the Rights Offering and (y) the one year anniversary of the opening of the Montreign Resort Casino, KHRL shall not, and shall cause its affiliates (as such term is defined under Rule 405 of the Securities Act of 1933, as amended) other than the Issuer or its subsidiaries (collectively with KHRL, the KHRL Parties) not to, agree to, make any public announcement with respect to, or submit a proposal for, or offer in respect of (with or without conditions, other than the approvals described below in this paragraph) any transaction or series of transactions that would constitute or result in a Going-Private Transaction, or knowingly encourage or participate in the effort of any other person or entity to do any of the foregoing, unless such Going-Private Transaction is subject to the approval of (i) holders of a majority of the votes represented by Common Stock and Series B Preferred Stock of the Issuer (together with any other capital stock of the Issuer entitled to vote together with the Common Stock in the election of the Board, Voting Stock) other than Voting Stock owned by any KHRL Parties and (ii) either (x) a majority of disinterested members of the Board or (y) a committee of the Board composed of disinterested members thereof (Disinterested Director Approval).
For the purposes of this letter agreement, Going-Private Transaction means either (a) a Rule 13e-3 transaction, as such term is defined in Rule 13e-3 of the Securities Exchange Act of 1934, as amended (the Exchange Act), with respect to the Issuer to which such Rule 13e-3 applies or (b) regardless of whether Rule 13e-3 applies to a transaction, any transaction or series of transactions involving (i) a purchase (as such term is defined in Rule 13e-3 of the Exchange Act) of any Voting Stock by a KHRL Party, (ii) a tender offer for or request or invitation for tenders of Voting Stock by any KHRL Party or (iii) a solicitation subject to Regulation 14A of the Exchange Act by a KHRL Party of any proxy, consent or authorization of, or a distribution subject to Regulation 14C of the Exchange Act of information statements to, any holder of Voting Stock by a KHRL Party in connection with (x) a merger, consolidation, reclassification, recapitalization, reorganization or similar corporate transaction of the Issuer or between the Issuer (or its subsidiaries) and a KHRL Party (or a group in which a KHRL Party is a member), (y) a sale of substantially all of the assets of the Issuer to a KHRL Party (or a group in which a KHRL Party is a member) or (z) a reverse stock split of any class of Voting Stock involving the purchase of fractional interests, which in the case of such clause (i), (ii) or (iii), has either a reasonable likelihood or a purpose of the KHRL Parties (or a group in which any KHRL Party is a member) obtaining beneficial ownership (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) of all of the Voting Stock or all of the assets of the Issuer.
During the Restricted Period, the Issuer and KHRL will cooperate to ensure that, to the greatest extent possible, the Board includes no fewer than three (3) independent directors (as determined under the standards of the NASDAQ or any other securities exchange on which the Common Stock is then listed).
This letter agreement (a) shall be governed by the laws of the State of Delaware, without giving effect to the conflict of laws provisions thereof, (b) is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto, (c) may not be amended or waived except by an instrument in writing signed by the parties hereto and (d) may be executed in any number of counterparts, each of which will be deemed an original and all of which will constitute one and the same instrument.
[signature page follows]
Sincerely, | ||
KIEN HUAT REALTY III LIMITED | ||
By: | /s/ Gerald Lim Ewe Keng | |
Name: | Gerard Lim Ewe Keng | |
Title: | Authorized Signatory |
Accepted as of the date above written: | ||
EMPIRE RESORTS, INC. | ||
By: | /s/ Joseph A. DAmato | |
Name: | Joseph A. DAmato | |
Title: | Chief Executive Officer |
Exhibit 99.1
EMPIRE RESORTS ANNOUNCES CLOSING OF RIGHTS OFFERING
AND BACKSTOP PURCHASE FOR APPROXIMATE GROSS PROCEEDS OF $290 MILLION,
CONVERSION OF $17.4 MILLION NOTE INTO COMMON STOCK AND
ENTRY TO LETTER AGREEMENT WITH KIEN HUAT
Monticello, New York, February 18, 2016Empire Resorts, Inc. (NASDAQ-GM:NYNY) (the Company) announced its rights offering (the Rights Offering) and standby purchase of shares not sold in the Rights Offering, which generated approximately $290 million in gross proceeds for the Company closed on Wednesday, February 17, 2016. The Company issued a total of 20,138,888 shares of common stock at $14.40 per share. This includes 176,086 shares issued to holders upon exercise of their basic subscription rights and 13,136,817 shares issued to Kien Huat Realty III Limited (Kien Huat), our largest stockholder, upon exercise of its basic subscription rights. Kien Huat also acquired the remaining 6,825,985 shares not sold in the Rights Offering pursuant to the terms of a standby purchase agreement. The Company paid Kien Huat a fee of $1,450,000 for its commitment pursuant to the standby purchase agreement and reimbursed Kien Huat for its expenses related to the standby purchase agreement in an amount of $50,000.
The Company anticipates using the net proceeds of the Rights Offering towards the development of Montreign Resort Casino (the Casino Project), to redeem the Series E Preferred Stock of the Company, towards the development of the Golf Course and Entertainment Village that, along with the Casino Project, are part of the initial phase of the Adelaar project, and towards the working capital needs of the Company.
Upon consummation of the Rights Offering, a $17.4 million convertible note held by Kien Huat was converted into 1,332,058 shares of common stock of the Company in accordance with the conversion provisions of such note (the Note Conversion). After giving effect to the Rights Offering and Note Conversion, Kien Huat owns approximately 88.7% of the outstanding shares of the Companys common stock.
As a result of Kien Huats increased proportionate ownership following the consummation of the Rights Offering and the Note Conversion, at the request of the Company, Kien Huat and the Company entered a letter agreement today, pursuant to which Kien Huat has agreed neither it nor its affiliates (Kien Huat together with its affiliates, the Kien Huat Parties) will take certain actions in furtherance of a going-private transaction involving the Company unless such transaction is subject to the approval of (x) a majority of the voting stock of the Company held by stockholders other than the Kien Huat Parties and (x) either (A) a majority of disinterested members of the Board of Directors of the Company (the Board) or (y) a committee of the Board composed of disinterested members of the Board. In addition, the Company and Kien
Huat have agreed to cooperate to ensure that, to the greatest extent possible, the Board includes no fewer than three (3) independent directors. The terms of this letter agreement shall be valid beginning immediately and terminating on the earlier of (i) the three year anniversary of the closing of the Rights Offering and (ii) the one year anniversary of the opening of the Casino Project.
Cautionary Statement Regarding Forward Looking Information
Statements in this press release that are not historical facts are forward-looking statements that may involve material risks and uncertainties. The company wishes to caution readers not to place undue reliance on such forward-looking statements, which statements are made pursuant to the Private Securities Litigation Reform Act of 1995, and as such, speak only as of the date made. For a full discussion of risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Risk Factors in the companys registration statement on Form S-3 and the prospectus relating to the rights offering, dated January 4, 2016.
About Empire Resorts
Empire Resorts owns and operates, through its subsidiary Monticello Raceway Management, Inc., the Monticello Casino & Raceway, a harness racing track and casino located in Monticello, New York, and is 90 miles from midtown Manhattan. Further information is available at www.empireresorts.com .
As a result of the award of a gaming facility license from the New York State Gaming Commission, the Company, through its subsidiary Montreign Operating Company, LLC, will begin construction of Montreign Resort Casino an 18-story casino, hotel and entertainment complex with approximately 102 table games, 2,150 state of the art slot machines and 332 luxury rooms, which includes 12 penthouse suites, 8 garden suites and 7 two-story villas, designed to meet 5-star and 5-diamond standards. For additional information, please visit www.montreign.com.
Contacts
Empire Resorts, Inc.
Charles Degliomini, 845-807-0001
cdegliomini@empireresorts.com