Empire to Re-Acquire 100% Ownership of Dynamic Entertainment Group Ltd.
WINNIPEG, Manitoba, Nov. 14, 2019 (GLOBE NEWSWIRE) — With reference to its prior news release date December 21, 2017, Empire Industries Ltd. (TSX-V: EIL) (“Empire”, “EIL” or the “Company”) is pleased to announce that it has entered into a Purchase and Sale Agreement to re-acquire 100% ownership of its subsidiary (the “Acquisition”), Dynamic Entertainment Group Ltd. (“DEGL”). Empire will purchase the remaining 26.5% of DEGL’s outstanding shares from Jolly Admire Limited (“Vendor”) for $3,810,000 by the issuance of 381,000 convertible preferred shares in the capital of Company (the “Preferred Shares”), which Preferred Shares will have a redemption value of $10, accrue dividends at 8% per annum and are convertible into common shares of the Company at $0.45 per common share for a period of 36 months from the date of issue and thereafter for $0.75 per common share until 60 months from the date of issue.
The Acquisition, including the issuance of the Preferred Shares, is subject to approval from the TSX Venture Exchange and consent from the Company’s senior lenders. The Company intends to close the Acquisition as soon as possible after receipt of the applicable consents.“We are very excited to re-acquire 100% ownership and control of DEGL,” said Guy Nelson, Executive Chairman and Chief Executive Officer of Empire. “The Acquisition is another exciting step for our co-venture model established with our investment in DEGL, which is intended to provide Empire with long-term, stable, recurring revenue.”The Acquisition is a “related party transaction” within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 because a director of Empire, Mr. James Chui, is also an executive officer of the Vendor. The Company is relying 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 transaction, insofar as the interested party is involved, does not exceed 25% of the market capitalization of the Company. It is expected that a material change report will be filed less than 21 days before the closing date of the transaction. The Company considers this shorter period to be reasonable and necessary in the circumstances to allow the Company to close the transaction as soon as possible for sound business reasons, including improving the Company’s ability to control the future business.The capitalization of DEGL by the Company and the Vendor was limited to the first tranche on the DEGL private placement announced on December 21, 2017. The second tranche of the DEGL private placement, and the investments contemplated in Dynamic Technology Shanghai Company and Dynamic Technology Hong Kong Company by DEGL (described and referenced in the Company’s December 21, 2017 new release) were not completed by DEGL or the Vendor, as applicable. As a result, all of the rights and obligations of the parties in connection with the DEGL private placement will terminate and/or expire upon closing the Acquisition.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 AdvisoryThis 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’’, “believes”, “evaluating”, ‘‘expects’’ or ‘‘does not expect’’, ‘‘budget’’, ‘‘scheduled’’, “positions”, ‘‘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) completion of the Acquisition; and (ii) acceptance by the TSX Venture Exchange and consent of the senior lenders for the Acquisition. 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.