8-K

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): July 25, 2019

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)

Registrant’s 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))

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	NYNY	The Nasdaq Capital Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).                

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.  ☐

Item 7.01. Regulation FD Disclosure.

Empire Resorts, Inc. (the “Company”) today announced that the special committee (the “Special Committee”) of its board of directors (the “Board”) has received a letter, dated July 25, 2019 (the “Letter”), from Kien Huat Realty III Limited (“Kien Huat”), its controlling stockholder. Kien Huat, which currently owns approximately 86% of the outstanding shares of the Company’s common stock, indicated, among other things, its willingness to entertain an invitation from the Company to acquire all outstanding equity of the Company not already owned by Kien Huat. The Letter further indicated that, at this time, Kien Huat did not intend to provide further equity or debt financing to the Company, beyond its obligations under the Commitment Letter, dated November 5, 2018 and as last amended on May 7, 2019, by and between the Company and Kien Huat, while the Company remains a public company. A copy of the Letter is attached as Exhibit 99.1 hereto and incorporated by reference into this Item 7.01.

As previously announced, the Board recently formed a Special Committee comprised of independent, disinterested directors, to evaluate strategic alternatives. The special committee, with the assistance of Moelis & Company LLC and Paul, Weiss, Rifkind, Wharton & Garrison LLP, its financial and legal advisors, respectively, will consider the Letter and any response thereto in connection with its ongoing review of strategic alternatives.

The Company cautions stockholders and others considering trading the Company’s securities that the Company has just received the Letter and has not had an opportunity to carefully review and evaluate the Letter or make any decision with respect to Company’s response to the Letter. There can be no assurance that any definitive agreement will be executed relating to a transaction with Kien Huat or any other party or that any transaction with Kien Huat or any other party will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

On July 25, 2019, the Company issued a press release in which it announced the receipt of the Letter. A copy of the press release is attached as Exhibit 99.2 and incorporated by referenced in to this Item 7.01.

The information set forth in or incorporated by reference into this Item 7.01, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Important Notice Regarding Forward-Looking Statements

The information in this Current Report on Form 8-K contains forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would,” and variations of these terms and similar expression, or the negative of these terms or similar expressions. These statements are based on

management’s current beliefs, expectations, plans, assumptions and objectives of the Company and are subject to significant risks and uncertainties. All forward-looking statements speak only as of the date as of which they are made. These statements are not guarantees and involve certain risks, uncertainties and assumptions concerning future events that are difficult to predict. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, risks related to the expected timing and likelihood of completion of a potential transaction with Kien Huat or a third party, including the risk that the potential transaction may not occur, and the risk that any announcements relating to the potential transaction could have adverse effects on the market price of the Company’s securities. Risk factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and subsequent reports filed with the Securities and Exchange Commission (“SEC”) and will be found in the filings that may be filed with the SEC by the Company and/or Kien Huat or a third party if a negotiated transaction is agreed to. Such reports are available on the SEC’s website (www.sec.gov). We caution you not to place undue reliance on any forward-looking statements, which are made as of the date hereof or as otherwise specified herein. The Company undertakes no obligation to update any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1.	Letter, dated July 25, 2019, from Kien Huat Realty III Limited to the Special Committee of the Board of Directors of Empire Resorts, Inc.
99.2	Press Release, dated July 25, 2019

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: July 25, 2019

EMPIRE RESORTS, INC.
By:	/s/ Ryan Eller
Name: Ryan Eller
Title: President and Chief Executive Officer

EX-99.1

Exhibit 99.1

Kien Huat Realty III Limited

c/o 21^st Floor Wisma Genting

Jalan Sultan Ismail

Kuala Lumpur

Malaysia

Special Committee of the Board of Directors

Empire Resorts, Inc.

c/o Monticello Casino and Raceway

204 State Route 17B, P.O. Box 5013

Monticello, NY 12701

July 25, 2019

Members of the Special Committee:

Empire Resorts, Inc. (the “Company” or “Empire”) is at a critical juncture. Despite repeated cash infusions from lenders and equity holders, the Company has operated with significant financial losses year after year, has been unable to become financially self-sustaining from revenues from its operations and does not appear to have any reasonable prospect for becoming financially self-sustaining in the future. The Company’s recent announcement on June 20, 2019 that it has created a special committee to oversee the evaluation of strategic alternatives for the Company as a whole was likely in recognition of this reality.

As you know, Kien Huat Realty III Limited (“Kien Huat” or “we”) is the largest stockholder in the Company, owning approximately 86% of the Company’s outstanding common stock, par value $0.01 per share (the “Common Stock”), including Common Stock issuable upon conversion of the Series F Convertible Preferred Stock, par value $0.01 (the “Series F Preferred Stock”). Kien Huat’s repeated infusions of equity and debt investments in the Company over the years have enabled the Company to continue operating until now. Kien Huat’s commitment to provide further equity financing to the Company pursuant to the Commitment Agreement by and between Kien Huat and the Company, dated as of November 9, 2018, as further amended on May 7, 2019 (the “Commitment Agreement”) will expire on April 15, 2020 and Kien Huat’s final equity investment may occur as early as November 15, 2019. As we no longer believe that the Company can become financially self-sustaining as a standalone public company, at this time, we do not intend to provide further equity or debt financing beyond our obligations under the Commitment Agreement while Empire remains a public company.

In view of the challenges facing the Company and our belief that these challenges cannot be overcome while Empire is a public company, Kien Huat would, if requested by the Special Committee, be willing to submit a proposal (the “Proposal”) to acquire all of the outstanding equity of the Company not owned by Kien Huat. We intend to immediately enter into discussions with potential equity and debt financing sources.

We believe that the Proposal would provide the Company’s minority stockholders an opportunity to preserve and recognize value and liquidity that is unavailable to them in the thinly traded market for the Company’s equity and that is unlikely to be available to them in the future if the Company continues as a public company.

The Proposal would assume: (a) 34,413,459 shares of Common Stock outstanding, of which 28,914,606 shares are owned by Kien Huat; (b) 44,528 shares of Series B Preferred Stock outstanding; (c) 740 shares of Series F Preferred Stock, all of which are owned by Kien Huat; (d) outstanding warrants to purchase (i) 60,000 shares of Common Stock at an exercise price of $81.50 per share and (ii) 133,334 shares of Common Stock at an exercise price of $30 per share (together, the “Warrants”); (e) 443,000 restricted stock units (“RSUs”) outstanding; (f) except for the Common Stock, the Series B Preferred Stock, Series F Preferred Stock, RSUs and the Warrants (which we expect would be cancelled upon consummation of the acquisition), no other equity securities or rights to acquire equity securities of the Company are outstanding; and (g) that the Company’s total indebtedness is less than $559,899,000.

Consistent with the letter agreement between Kien Huat and the Company, dated February 17, 2016, which was amended on December 28, 2017, the acquisition contemplated by the Proposal would be subject to the approval of (i) holders of a majority of the votes represented by the outstanding shares of Common Stock and Series B Preferred Stock (together with any other capital stock of the Company entitled to vote together with the Common Stock in the election of the board of directors of the Company, “Voting Stock”) other than Voting Stock owned by Kien Huat or its affiliates and executive management and (ii) the Special Committee or another committee of the board of directors of the Company (the “Board”) composed solely of disinterested members of the Board who are also independent of Kien Huat and its affiliates.

The acquisition contemplated by the Proposal would also be subject to, among other things: (a) the completion of due diligence, including financial, legal, accounting, tax and business and operations diligence, with results satisfactory to us in our sole discretion; (b) our reaching agreement with equity or debt financing sources; (c) the negotiation and execution of mutually acceptable definitive transaction documentation; (d) successfully obtaining all required or advisable regulatory approvals including, without limitation, any required approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the New York State Gaming Commission; (e) satisfaction of any other applicable regulatory or stock exchange requirements and (f) such other terms and conditions as are usual and customary in comparable transactions.

Given Kien Huat’s history with, and knowledge of, the Company, we believe we are well positioned to conduct diligence and negotiate and complete the transaction in an expedited manner and expect to promptly enter into an appropriate and customary confidentiality agreement and discussions to do so. To that end, we are prepared to immediately dedicate substantial internal and external resources to allow us to complete diligence on an accelerated time frame and we expect that the Company will assist with such diligence on an expedited basis.

This letter and the Proposal are non-binding, do not constitute an offer capable of acceptance or other binding commitment or obligation and we may terminate discussions regarding the Proposal, the acquisition or any other transaction at any time and for any or no reason. No commitment, including any obligation to negotiate, shall arise with respect to the Proposal, the acquisition or any other transaction unless and until such time as definitive agreements with respect to any such Proposal, the acquisition or other transaction are executed and delivered by the parties thereto, and then only to the extent set forth in such definitive agreements.

Due to Kien Huat’s obligations under the federal securities laws, we intend to promptly file an amendment to its Schedule 13D, including a copy of this letter, with the Securities and Exchange Commission.

We stand ready to immediately commence due diligence and begin discussions and negotiations relating to the Proposal. If you have any questions, please do not hesitate to contact us. We look forward to working together on this transaction.

Best regards,
KIEN HUAT REALTY III LIMITED
	/s/ Yap Chong Chew
	Name: Yap Chong Chew
	Title: Authorized Signatory

[SIGNATURE PAGE TO PROPOSAL LETTER]

EX-99.2

Exhibit 99.2

Empire Resorts Announces Receipt of Letter from Controlling Stockholder

MONTICELLO, N.Y. — (BUSINESS WIRE) — July 25, 2019 – Empire Resorts, Inc. (NasdaqGM: NYNY) (the “Company”), today announced that the special committee of its board of directors (the “Board”) has received a letter, dated July 25, 2019 (the “Letter”), from Kien Huat Realty III Limited (“KH”), its controlling stockholder. KH, which currently owns approximately 86% of the outstanding shares of the Company’s common stock, indicated, among other things, its willingness to entertain an invitation from the Company to acquire all outstanding equity of the Company not already owned by KH. The Letter further indicated that, at this time, KH did not intend to provide further equity or debt financing to the Company, beyond its obligations under the Commitment Letter, dated November 5, 2018 and as last amended on May 7, 2019, by and between the Company and KH, while the Company remains a public company. A copy of the Letter is attached as Exhibit 99.1 to the Company’s Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission today.

As previously announced, the Board recently formed a special committee comprised of independent, disinterested directors to evaluate strategic alternatives. The special committee, with the assistance of Moelis & Company LLC and Paul, Weiss, Rifkind, Wharton & Garrison LLP, its financial and legal advisors, respectively, will consider the Letter and any response thereto in connection with its ongoing review of strategic alternatives.

The Company cautions the Company’s stockholders and others considering trading the Company’s securities that the Company has just received the Letter and has not had an opportunity to carefully review and evaluate the Letter or make any decision with respect to the Company’s response to the Letter There can be no assurance that any definitive agreement will be executed relating to a transaction with KH or any other party or that any transaction with KH or any other party will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

Important Notice Regarding Forward-Looking Statements

The information in this press release contains forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would,” and variations of these terms and similar expression, or the negative of these terms or similar expressions. These statements are based on management’s current beliefs, expectations, plans, assumptions and objectives of the Company and are subject to significant risks and uncertainties. All forward-looking statements speak only as of the date as of which they are made. These statements are not guarantees and involve certain risks, uncertainties and assumptions concerning future events that are difficult to predict. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, risks related to the expected timing and likelihood of completion of a potential transaction with KH or any other party, including the risk that the potential transaction may not occur, and the risk that any announcements relating to the potential transaction could have adverse effects on the market price of the Company’s stock. Risk factors are detailed in the

Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and subsequent reports filed with the Securities and Exchange Commission (“SEC”) and will be found in the filings that may be filed with the SEC by the Company and/or KH or a third party if a negotiated transaction is agreed to. Such reports are available on the SEC’s website (www.sec.gov). We caution you not to place undue reliance on any forward-looking statements, which are made as of the date hereof or as otherwise specified herein. The Company undertakes no obligation to update any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.