Summarized Quarterly Data (Unaudited)

On March 12, 2019, the Company's management concluded that its previously filed interim consolidated financial statements as of and for the quarterly periods ended March 31, 2018, June 30, 2018 and September 30, 2018 (“Restated Quarters”) should no longer be relied upon.

For the year ended December 31, 2018, the Company reviewed certain technical accounting guidance during its year-end review process related to the accounting for stock granted and an associated guaranty obligation with MHHA in February 2018. Based on this review, the Company concluded that the previously recorded accounting treatment recorded in the first quarter of 2018 was not appropriate. As a result, the Company determined that the previously issued quarterly financial statements for the quarterly periods ending March 31, June 30, and September 30, 2018 should be restated to properly reflect the accounting for this transaction for these periods.

On November 1, 2014, MRMI, a wholly-owned subsidiary of Empire and the MHHA entered into an agreement that governs the conduct of MRMI and MHHA relating to horseracing purse payments, the simulcasting of horse races and certain other payments (the "2014 MHHA Agreement"). Pursuant to the 2014 MHHA Agreement and that certain Securities Acquisition Agreement, dated March 3, 2014, between Empire and MHHA (the “MHHA SAA”), on March 16, 2018, Empire issued to MHHA 200,000 shares of common stock (the "MHHA Shares"), and on March 15, 2018, Empire issued to MHHA a warrant to purchase 60,000 shares of common stock at $81.50 per share (the “MHHA Warrants”). The funds generated from the sale of the MHHA Shares or the sale of any shares acquired by MHHA upon the exercise of the MHHA Warrants will be deposited into a purse account for the benefit of MHHA and its members. If, on February 8, 2025, the value of any MHHA Shares previously sold by MHHA and the fair market value of any MHHA Shares not sold by MHHA by February 8, 2025 is less than $5.5 million, then the Company agreed to deposit into the special purse account an amount equal to the difference between $5.5 million and the value of the shares of common stock sold by MHHA and not sold by MHHA.

Upon satisfaction of the conditions contained in the 2014 MHHA Agreement and the MHHA SPA, the Company issued the MHHA Shares and the MHHA Warrants on March 16, 2018 and March 15, 2018, respectively. On the date of issuance, the Company determined that the MHHA Shares had a fair value of $4.7 million, which had been recorded as a long-term asset, net of $1.4 million which was previously expensed through March 2018. In preparing its audited financial statements for the year ended December 31, 2018, the Audit Committee and management of the Company determined that based on further review of applicable technical accounting literature, the value of the MHHA Shares should be recognized as an expense upon issuance and the associated fair value of the guaranty liability of $5.5 million should be recognized as a liability-classified guaranty.

The restatement of the Company's consolidated financial statements for the Restated Quarters is set forth below in the tabular presentation.

The effect of the restatement to relevant financial line items included on the previously issued unaudited interim consolidated financial statements for the quarterly period ended March 31, 2018 was as follows:



Consolidated Balance Sheet			At March 31, 2018
	As Reported		Adjustments		As Restated
Assets			($ in thousands)
Total current assets	$39,458		—		$39,458
Other assets	3,592		(3,358	)	234
Total assets	$818,552		$(3,358)		$815,194
Liabilities and Stockholders’ equity
Current liabilities:
Total current liabilities	$93,299		—		$93,299
Other long-term liabilities	7,905		1,964		9,869
Total liabilities	564,251		1,964		566,215

Stockholders’ equity:
Accumulated deficit	(322,029	)	(5,322	)	(327,351	)
Total stockholders’ equity	254,301		(5,322	)	248,979
Total liabilities and stockholders’ equity	$818,552		$(3,358)		$815,194



Consolidated Statement of Operations and Comprehensive Loss	For the three months ended March 31, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Net revenues:	$33,522		—		$33,522
Costs and expenses:
Selling, general and administrative	8,084		5,097		13,181
Total costs and expenses	52,413		5,097		57,510
Loss from operations	(18,891	)	(5,097	)	(23,988	)
Other income (expense)	—		(225	)	(225	)
Loss before income taxes	(20,911	)	(5,322	)	(26,233	)
Net loss	(20,911	)	(5,322	)	(26,233	)
Net loss applicable to common stockholders	$(20,943)		$(5,322)		$(26,265)

Weighted average common shares outstanding
Basic	32,538		—		32,538
Diluted	32,538		—		32,538
Loss per common share
Basic	$(0.64)		$(0.16)		$(0.81)
Diluted	$(0.64)		$(0.16)		$(0.81)

Comprehensive loss:
Net loss	$(20,911)		$(5,322)		$(26,233)
Unrealized income on Interest Rate Cap	115		—		115
Comprehensive loss	$(20,796)		$(5,322)		$(26,118)



Consolidated Statement of Cash Flows	For the three months ended March 31, 2018
	As Reported		Adjustments	As Restated
			($ in thousands)
Cash flows provided by (used in) operating activities:
Net loss	$(20,911)		$(5,322)	$(26,233)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	697		5,097	5,794
Changes in operating assets and liabilities:
Accrued expenses and other liabilities	10,174		225	10,399
Net cash used in operating activities	1,866		—	1,866
Net cash used in investing activities	(1,201	)	—	(1,201	)
Cash flows provided by (used in) financing activities:
Net cash provided by financing activities	10,923		—	10,923
Net increase/(decrease) in cash, cash equivalents and restricted cash	11,588		—	11,588
Cash, cash equivalents and restricted cash, beginning of year	53,055		—	53,055
Cash, cash equivalents and restricted cash, end of year	$64,643		$—	$64,643



Consolidated Balance Sheet			At June 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Current assets:
Total current assets	$29,828		—		$29,828
Other assets	3,471		(3,189	)	282
Total assets	$781,715		$(3,189)		$778,526
Liabilities and Stockholders’ equity
Total current liabilities	$93,817		—		$93,817
Other long-term liabilities	7,540		1,832		9,372
Total liabilities	564,101		1,832		565,933

Stockholders’ equity:
Accumulated deficit	(359,357	)	(5,021	)	(364,378	)
Total stockholders’ equity	217,614		(5,021	)	212,593
Total liabilities and stockholders’ equity	$781,715		$(3,189)		$778,526



Consolidated Statement of Operations and Comprehensive Loss	For the three months ended June 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Net revenues:	$49,136		—		$49,136
Costs and expenses:
Selling, general and administrative	16,949		(169	)	16,780
Total costs and expenses	71,530		(169	)	71,361
Loss from operations	(22,394	)	169		(22,225	)
Other income (expense)	—		132		132
Loss before income taxes	(37,298	)	301		(36,997	)
Net loss	(37,298	)	301		(36,997	)
Net loss applicable to common stockholders	$(37,330)		$301		$(37,029)

Weighted average common shares outstanding
Basic	32,663		—		32,663
Diluted	32,663		—		32,663
Loss per common share
Basic	$(1.14)		$0.01		$(1.13)
Diluted	$(1.14)		$0.01		$(1.13)

Comprehensive loss:
Net loss	$(37,298)		$301		$(36,997)
Unrealized income on Interest Rate Cap	72		—		72
Comprehensive loss	$(37,226)		$301		$(36,925)



Consolidated Statement of Operations and Comprehensive Loss	For the six months ended June 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Net revenues:	$82,658		—		$82,658
Costs and expenses:
Selling, general and administrative	25,033		4,928		29,961
Total costs and expenses	123,943		4,928		128,871
Loss from operations	(41,285	)	(4,928	)	(46,213	)
Other income (expense)	—		(93	)	(93	)
Loss before income taxes	(58,209	)	(5,021	)	(63,230	)
Net loss	(58,209	)	(5,021	)	(63,230	)
Net loss applicable to common stockholders	$(58,273)		$(5,021)		$(63,294)

Weighted average common shares outstanding
Basic	32,601		—		32,601
Diluted	32,601		—		32,601
Loss per common share
Basic	$(1.79)		$(0.15)		$(1.94)
Diluted	$(1.79)		$(0.15)		$(1.94)

Comprehensive loss:
Net loss	$(58,209)		$(5,021)		$(63,230)
Unrealized income (loss) on Interest Rate Cap	$187		—		$187
Comprehensive loss	$(58,022)		$(5,021)		$(63,043)



Consolidated Statement of Cash Flows	For the six months ended June 30, 2018
	As Reported		Adjustments	As Restated
			($ in thousands)
Cash flows provided by (used in) operating activities:
Net loss	$(58,209)		$(5,021)	$(63,230)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	1,449		4,928	6,377
Accrued expenses and other liabilities	12,996		93	13,089
Net cash used in operating activities	(27,624	)	—	(27,624	)
Cash flows provided by (used in) investing activities:
Net cash used in investing activities	(1,257	)	—	(1,257	)
Cash flows provided by (used in) financing activities:
Net cash provided by financing activities	15,967		—	15,967
Net increase/(decrease) in cash, cash equivalents and restricted cash	(12,914	)	—	(12,914	)
Cash, cash equivalents and restricted cash, beginning of year	53,055		—	53,055
Cash, cash equivalents and restricted cash, end of year	$40,141		—	$40,141



Consolidated Balance Sheet			At September 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Current assets:
Total current assets	$37,772		—		$37,772
Other assets	3,307		(3,020	)	287
Total assets	$831,332		$(3,020)		$828,312
Liabilities and Stockholders’ equity
Current liabilities:
Total current liabilities	$100,199		—		$100,199
Other long-term liabilities	7,555		2,177		9,732
Total liabilities	646,463		2,177		648,640

Stockholders’ equity:
Accumulated deficit	(393,105	)	(5,197	)	(398,302	)
Total stockholders’ equity	184,869		(5,197	)	179,672
Total liabilities and stockholders’ equity	$831,332		$(3,020)		$828,312



Consolidated Statement of Operations and Comprehensive Loss	Three months ended September 30, 2018
	As Reported			Adjustments			As Restated
				($ in thousands)
Net revenues:	$59,948			—			$59,948
Costs and expenses:
Selling, general and administrative	19,754			(169		)	19,585
Total costs and expenses	77,838			(169		)	77,669
Loss from operations	(17,890		)	169			(17,721		)
Other income (expense)	—			(345		)	(345		)
Loss before income taxes	(33,716		)	(176		)	(33,892		)
Net loss	(33,716		)	(176		)	(33,892		)
Net loss applicable to common stockholders	$(33,748)			$(176)			$(33,924)

Weighted average common shares outstanding
Basic	32,689			—			32,689
Diluted	32,689			—			32,689
Loss per common share
Basic	$(1.03)			$(0.01)			$(1.04)
Diluted	$(1.03)			$(0.01)			$(1.04)

Comprehensive loss:
Net loss	$(33,716)			$(176)			$(33,892)
Unrealized income on Interest Rate Cap	39			—			39
Comprehensive loss	$	(33,677	)	$	(176	)	$	(33,853	)



Consolidated Statement of Operations and Comprehensive Loss	Nine months ended September 30, 2018
	As Reported			Adjustments			As Restated
				($ in thousands)
Net revenues	$142,606			$0			$142,606
Costs and expenses:
Selling, general and administrative	44,787			4,759			49,546
Total costs and expenses	201,781			4,759			206,540
Loss from operations	(59,175		)	(4,759		)	(63,934		)
Other income (expense)	—			(438		)	(438		)
Loss before income taxes	(91,925		)	(5,197		)	(97,122		)
Income tax benefit	—			—			—
Net loss	(91,925		)	(5,197		)	(97,122		)
Dividends on preferred stock	(96		)	—			(96		)
Net loss applicable to common stockholders	$(92,021)			$(5,197)			$(97,218)

Weighted average common shares outstanding
Basic	32,653			—			32,653
Diluted	32,653			—			32,653
Loss per common share
Basic	$(2.82)			$(0.16)			$(2.98)
Diluted	$(2.82)			$(0.16)			$(2.98)

Comprehensive loss:
Net loss	$(91,925)			$(5,197)			$(97,122)
Unrealized income on Interest Rate Cap	226			—			226
Comprehensive loss	$	(91,699	)	$	(5,197	)	$	(96,896	)



Consolidated Statement of Cash Flows	For the nine months ended September 30, 2018
	As Reported		Adjustments	As Restated
			($ in thousands)
Cash flows provided by (used in) operating activities:
Net loss	$(91,925)		$(5,197)	$(97,122)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	2,042		4,759	6,801
Accrued expenses and other liabilities	26,087		438	26,525
Net cash used in operating activities	(42,335	)	—	(42,335	)
Cash flows provided by (used in) investing activities:
Net cash used in investing activities	(20,252	)	—	(20,252	)
Cash flows provided by (used in) financing activities:
Net cash provided by financing activities	92,602		—	92,602
Net increase/(decrease) in cash, cash equivalents and restricted cash	30,015		—	30,015
Cash, cash equivalents and restricted cash, beginning of year	53,055		—	53,055
Cash, cash equivalents and restricted cash, end of year	$83,070		$—	$83,070

The following table summarizes the quarterly results of operations for the year ended December 31, 2017:




	Fiscal Quarter
	Quarter 1		Quarter 2		Quarter 3		Quarter 4
2017	(in thousands, except per share data)

Net revenues	$14,769		$17,186		$18,713		$15,183

Loss from operations	(6,356	)	(6,830	)	(6,844	)	(9,887	)

Net loss	(11,451	)	(11,916	)	(10,872	)	(12,105	)

Loss per common share:

Loss per common share, basic	$(0.37)		$(0.39)		$(0.35)		$(0.39)
Loss per common share, diluted	$(0.37)		$(0.39)		$(0.35)		$(0.39)