WINNIPEG, Manitoba, Oct. 12, 2017 (GLOBE NEWSWIRE) — With reference to its prior new releases dated August 28, 2017 and August 31, 2017, Empire Industries Ltd. (TSX-V:EIL) is pleased to announce that it has closed a private placement (the “Empire Subscription Receipt Private Placement”) of 6,000,000 subscription receipts (“Subscription Receipts”) at a price of $0.50 per Subscription Receipt for gross aggregate proceeds of $3 million, subject to final regulatory approval. The Subscription Receipts were subscribed for by Excellence Raise Overseas Limited (“EROL”) pursuant to the terms of a subscription receipt agreement dated October 12, 2017 (the “Subscription Agreement”) entered into by EROL, Empire, Dynamic Entertainment Group Ltd. (“DEGL”) and Carscallen LLP as escrow agent. Pursuant to the terms of the Subscription Agreement, each Subscription Receipt will be automatically exchanged for one (1) Common Share of Empire and the proceeds of the Empire Subscription Receipt Private Placement will be released upon satisfaction of certain escrow release conditions (the “Escrow Release Conditions”). The Escrow Release Conditions include: (i) the closing of the Rights Offering to be completed by Empire (described below); and (ii) Empire shall have invested at least $6 million of equity in DEGL on or before January 31, 2018 (the “DEGL Private Placement”). The Subscription Receipts and the underlying Common Shares will be subject to a four month and one day hold period.
As previously announced, Empire’s Board of Directors appointed Empire’s Governance and Compensation Committee, comprised of three independent Directors of Empire, Messrs. Macdonald, Quinn and Marshall as an independent committee (the “Independent Committee”), to consider a potential conflict interest including alternatives to the transaction, to consider the impact of the transaction as negotiated on the shareholders of Empire and to make a recommendation to the Board of Directors regarding the same. After engaging independent legal advice, the Independent Committee provided its recommendations to Empire’s Board of Directors, which were implemented by Empire’s Board of Directors, and resulted in the following changes to the DEGL Private Placement:
- The aggregate exercise price of the options to purchase 15% of the issued and outstanding shares pursuant the option plan to be adopted by DEGL concurrent with the closing of the first tranche of the DEGL Private Placement (the “DEGL Option Plan”) is increased from $2.5 million to $3.3 million
- The initial Board of Directors of DEGL is to be comprised of (i) K. Guy Nelson, (ii) James Chui, (iii) David Kassie, (iv) Robert Marshall, (v) Terry Quinn, (vi) Ian Macdonald and (vii) Jack Li-Ting Chang.
- DEGL shall pay management fees to Empire for the services of Guy Nelson, Allan Francis and such other Empire personnel, with the authorization of the DEGL Board of Directors, who provide services to DEGL based on their fully burdened salary cost plus a 15% administrative markup for the percentage of the time that those individuals spend working on DEGL business.
The next step in the process to achieve the goal of setting up Co-venture attraction companies in North America and China is the completion of the previously announced rights offering for a maximum gross proceeds of $5,100,000 (the “Rights Offering”). Empire intends to complete the Rights Offering as soon as is practicable. A further press release will be issued once Empire has received regulatory approval for the Rights Offering and the record date for the Rights Offering has been determined.
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. Through Empire’s execution of its strategy over the years, Empire owns several non-entertainment investments that it seeks to optimize and liquidate at the appropriate time. Empire’s common shares are listed on the TSX Venture Exchange under the symbol EIL.
For more information about the Company, visit www.empind.com or contact:
Chief Executive Officer
Phone: (416) 366-7977
Vice President – Corporate Affairs and Administration
Phone: (204) 589-9301
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’’. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although Empire believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Such statements include statements with respect to: (i) the closing of the Rights Offering the DEGL Private Placement and that the conditions for completion of the of the same including regulatory approval will be met; and (ii) the execution of the co-ventures in North America and China and the results, if any, thereof, any increase in revenue and profitability of Empire and the success of any efforts in respect thereof. Actual results could differ materially from those anticipated in these forward-looking statements as a result of prevailing economic conditions, and other factors, many of which are beyond the control of Empire. The forward-looking statements contained in this news release represent Empire’s expectations as of the date hereof, and are subject to change after such date. Empire disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities regulations. 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.