Empire Industries Announces Closing of Rights Offering, Private Placement

November 29, 2017

WINNIPEG, November 29, 2017 – With reference to its prior new releases this year dated October 12th and 16th and August 28th and 31st, Empire Industries Ltd. (TSX-V: EIL) (“Empire”) is pleased to announce that it has completed its previously announced rights offering (the “Rights Offering”).  At closing, Empire issued 7,823,675 Class “A” Common Shares (“Common Shares”) at a price of $0.50 per share for gross proceeds of $3,911,837.50.

“Developing co-ventures is a natural extension of our attractions design, manufacturing and servicing business,” stated Guy Nelson, Empire’s Executive Chairman and CEO. “This is an important step in that strategy. We thank our shareholders for their confidence in the development of our co-venture business.”

$3.0 million of the net proceeds of the Rights Offering will be used to fund Empire’s initial investment in Dynamic Entertainment Group Ltd. (“DEGL”). The balance of Empire’s initial investment into DEGL will be funded from the $3.0 million in proceeds of the Subscription Receipts transaction, which closed on October 12, 2017.  The proceeds of the Subscription Receipts transaction are currently held in escrow, pending satisfaction of the escrow release conditions. One of those conditions is the successful closing of the Rights Offering. This $6.0 million investment triggers an additional investment in DEGL of $2.5 million from Excellence Raise Overseas Limited or its assign (“EROL”). The investments in DEGL by each of Empire and EROL, or its assign, will take place in two equal tranches (the “DEGL Private Placement”).   Empire and EROL have up to one year to invest the remaining $8.5 million of equity into DEGL.  Empire anticipates that the first tranche of the DEGL Private Placement will close on or before December 31, 2017.

DEGL will use the funds primarily to develop the first co-venture attraction at a tourist venue in North America, and also to fund DEGL’s $4.0 million investment in a newly incorporated Shanghai company (“DTSH”) and a newly incorporated Hong Kong company (“DTHK”). These Shanghai and Hong Kong companies will be developing co-venture attractions in China.  At the time, the $4.0 million investment is made in DTSH, a further investment of $14 million by EROL into DTSH is required.   Empire has identified several potential co-venture locations in China and North America, and is currently negotiating with these potential partners to determine which locations will be developed first.

To the knowledge of Empire, insiders of Empire as a group subscribed for and received 1,312,985 Common Shares under the Basic Subscription Privilege and 1,762,467 Common Shares under the Additional Subscription Privilege. All other rights holders as a group subscribed for and received an aggregate of 2,306,327 Common Shares under the Basic Subscription Privilege and 2,441,896 Common Shares under the Additional Subscription Privilege.

As at the closing date a total of 76,561,568 Common Shares are issued and outstanding.  Selling fees in the amount of $30,000 were paid to D.F. King in connection with the Rights Offering.


Private Placement for gross proceeds of up to $1,000,000

During the rights offering process, Empire was approached by some investors who hoped to participate in the rights offering through transfers of rights.  Unfortunately, they were not able to complete the rights transfer process in time to participate.  Because the rights offering was not fully subscribed to the $5.1 million limit, Empire has elected to allow these particular investors to participate via private placement, up to a maximum of $1 million.

Therefore, Empire intends to complete a non-brokered private placement financing of up to 2,000,000 common shares (“Shares”) at a price of $0.50 per Share for gross proceeds of up to $1,000,000 (the “Private Placement”).  Closing of the Private Placement is subject to customary conditions, including receipt of all regulatory approvals and approval from the TSX Venture Exchange, and is anticipated to close on or about December 15, 2017. All Shares issued as part of the Private Placement will be subject to a four month and one day hold period.  Empire intends to use the proceeds of the Private Placement for general corporate and administrative purposes.


About Empire Industries Ltd.

Empire focuses on designing, supplying, and installing premium theme park, media-based attractions and ride systems for the global entertainment industry. Empire also uses these same turn-key integration services for special projects such as large optical telescopes and enclosures. Empire Industries’ common shares are listed on the TSX Venture Exchange under the symbol EIL.

For more information about Empire, visit empind.com or contact:

Guy Nelson
Chief Executive Officer
Phone: (416) 366-7977
Email: gnelson@empind.com
Allan Francis
Vice President – Corporate Affairs and Administration
Phone: (204) 589-9301
Email: afrancis@empind.com



Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The offered securities mentioned in this news release will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act.

This news release contains forward‐looking statements, within the meaning of applicable securities legislation, concerning Empire’s business and affairs. In certain cases, forward‐looking statements can be identified by the use of words such as ‘‘plans’’, ‘‘expects’’ or ‘‘does not expect’’, ‘‘budget’’, ‘‘scheduled’’, ‘‘estimates’’, “forecasts’’, ‘‘intends’’, ‘‘anticipates’’ or variations of such words and phrases or state that certain actions, events or results ‘‘may’’, ‘‘could’’, ‘‘would’’, ‘‘might’’ or ‘‘will be taken’’, ‘‘occur’’ or ‘‘be achieved’’. Such forward‐looking statements include those with respect to the closing of the DEGL Private Placement and the ability of DEGL to implement its planned investment and Empire’s intention to complete  the Private Placement and use the proceeds of the Private Placement as working capital for general corporate and administrative purposes.

These forward‐looking statements are based on current expectations, and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially. Although Empire believes that the expectations represented in such forward‐looking statements are reasonable, there can be no assurance that these expectations will prove to be correct.

Readers are cautioned not to place undue reliance on such forward‐looking statements. Forward‐looking information is provided as of the date of this press release, and Empire assumes no obligation to update or revise them to reflect new events or circumstances, except as may be required under applicable securities laws. Any such forward‐looking statements are expressly qualified in their entirety by this cautionary statement.

Not for distribution to United States newswire services or dissemination in the United States.

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