Empire Announces Completion of Preferred Share Exchange
WINNIPEG, Manitoba, Dec. 31, 2019 (GLOBE NEWSWIRE) — With reference to its prior News Releases dated June 11, 2019, November 14, 2019 and December 20, 2019, Empire Industries Ltd. (TSX-V: “EIL”, “Empire” or the “Company”) is pleased to announce that 100% of the holders of the issued and outstanding Preferred Shares (defined below) agreed to exchange all of their Preferred Shares for Class “A” Common Shares (“Common Shares”) of the Company effective December 31, 2019.
Subject to final acceptance by the TSX Venture Exchange, the holders of the Preferred Shares exchanged the Preferred Shares (the “Capital Reorganization”) early for an aggregate of up to 32,906,161 Common Shares at a weighted exchange price of $0.444 per Common Share comprised of 25,244,443 Common Shares at $0.45 per Common Share and 7,661,718 Common Shares at $0.425 per Common Share as a premium for the early exchange (the “Share Exchange Premium”). The Share Exchange Premium cash value of $3,356,230 was equivalent to 3.583 years of forgone 8% cumulative dividends that would have accrued on the Preferred Shares if they were not exchanged early. All of the Common Shares issued are subject to a four month and one day hold period.Certain insiders of the Company were holders of the Preferred Shares and as such their participation in the Capital Reorganization constitutes a “related party transaction” within the meaning of TSX-Venture Policy 5.9 and Multilateral Instrument 61-101. The Company relied on an exemption from the formal valuation and minority approval provisions of Multilateral Instrument 61-101 in reliance on sections 5.5(a) and 5.7(a) on the basis that the aggregate fair market value of the Capital Reorganization, insofar as each insider is involved, does not exceed 25% of the market capitalization of the Company. A material change report was filed less than 21 days before the completion of the Capital Reorganization. The Company considers this shorter period to be reasonable and necessary in the circumstances to allow the Company to complete the Capital Reorganization prior to year-end.Early Warning DisclosureAs a result of its participation in the Capital Reorganization, Jolly Admire Limited (“JAL”), located at No. 191 Shaanxi Road, Shanghai, 200030 China, acquired 10,384,560 Common Shares. JAL and High Express Holdings Limited (“HEHL”) are owned and controlled by Koizumi Tadashi. Prior to completion of the Capital Reorganization, HEHL held 20,731,707 Common Shares or 15.9% of Empire’s issued and outstanding voting shares. Upon completion of the Capital Reorganization, JAL and HEHL held an aggregate of 31,116,267 Common Shares representing a total of 19.05% of Empire’s outstanding voting shares. The Common Shares were acquired by JAL for investment purposes.About Empire Industries Ltd.Empire focuses on designing, supplying, and installing iconic media-based attractions and ride systems for the global theme park industry. Empire also uses these same turn-key integration services for special projects such as large optical telescopes and enclosures. Empire also has commenced an initiative to leverage its world class flying theater and attraction development capability on a co-venture ownership basis. Empire’s common shares are listed on the TSX Venture Exchange under the symbol EIL. 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:Reader Advisory
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’’, “evaluating” ‘‘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. 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.