Empire Industries Announces Closing of Second Subscription Receipt Private Placement by Affiliate

CALGARY, March 1, 2016 – Empire Industries Ltd. (“Empire”) (EIL: TSX-V) is pleased to announce that, further to its news release dated February 1, 2016, the wholly-owned subsidiary of Empire, Tornado Global Hydrovacs Inc. (“Tornado”), has closed a second private placement of subscription receipts for aggregate gross proceeds of RMB 11,946,110 (approximately $2,500,000) (the “Second Subscription Receipt Private Placement”).  As more particularly described in the February 1, 2016 news release, Empire proposes to spin-out its hydrovac business including all of the tangible and intangible assets, employees and operations to Tornado pursuant to a court approved plan or arrangement (the “Arrangement”).  In contemplation of the Arrangement, Tornado previously closed a subscription receipt private placement for aggregate gross proceeds of approximately $5,000,000 (the “First Subscription Receipt Private Placement”).  In the event that the Arrangement is completed, the aggregate gross proceeds of both of the subscription receipt private placements will be used as working capital of Tornado and a wholly-owned subsidiary of Tornado to be organized in China (the “WFOE”) to carry on the hydrovac business of Tornado in China.

Tornado has completed the Second Subscription Receipt Private Placement with Excellence Raise Overseas Limited (the “Subscriber”), the subscriber in the First Subscription Receipt Private Placement.  The subscription receipts issued under the Second Subscription Receipt Private Placement have been subscribed for by the Subscriber pursuant to the terms of a subscription receipt subscription agreement (the “Subscription Agreement”) entered into by the Subscriber, Empire, Tornado and Everbright Law Firm, a law firm in Shanghai, China, as escrow agent dated February 29, 2016.  The closing of the Second Subscription Receipt Private Placement resulted in the issuance of subscription receipts which entitle the Subscriber to receive, without payment of additional consideration or further action, such number of shares in the capital of Tornado (“Tornado Shares”) as shall equal no less than 15.17% of the issued and outstanding Tornado Shares immediately following the completion of the Arrangement for gross proceeds of RMB 11,946,110 (approximately $2,500,000).  The proceeds of the Second Subscription Receipt Private Placement will be released to Tornado upon satisfaction of the same escrow release conditions as in the First Subscription Receipt Private Placement which include: (i) the approval of the Arrangement by the holders of Empire’s common shares; (ii) the listing of the Tornado Shares on the TSX Venture Exchange (the “Exchange”); (iii) the receipt of the final order of the Court of Queen’s Bench of Alberta approving the Arrangement; and (iv) the closing of the Arrangement.

Assuming the Arrangement is completed and the subscription receipts held by the Subscriber are exchanged for Tornado Shares, the Subscriber will become a “control person” (as such term is defined under the policies of the Exchange) of Tornado, holding 45.5% of the issued and outstanding Tornado Shares.  Shareholders of Empire will hold 54.5% of the Tornado Shares.  The Arrangement will be an arm’s length transaction under the policies of the Exchange.

The Arrangement, the First Subscription Receipt Private Placement and the Second Subscription Receipt Private Placement and all the securities transactions associated therewith or arising therefrom shall be subject to all applicable rules, policies and regulations of securities regulatory authorities (including applicable stock exchange and shareholder approvals) and securities and corporate laws.

All references to currency in this news release are to Canadian Dollars unless otherwise specified.