WINNIPEG, Tuesday, February 15, 2011 – Empire Industries Ltd. (“Empire” or the “Company”) (TSX-V: EIL) is pleased to announce that it completed the closings of the previously announced non-brokered private placements of Units and Convertible Debentures for aggregate gross proceeds of $2,660,000. The proceeds from the financings will be used for working capital purposes for Empire’s North American activities.
Private Placement – The Unit Private Placement was fully subscribed placing a total 40,000,000 Units at a price of $0.05 per Unit for gross proceeds of $2,000,000. Each Unit consisted of one (1) Common Share in the capital of the Company (the “Common Shares”) and one-half Common Share Purchase Warrant. Each whole Common Share Purchase Warrant entitles the holder to purchase one (1) Common Share of the Company at an exercise price of $0.10. The 7,000,000 Warrants issued at the first closing on January 31, 2011 will expire on January 31, 2013. The 13,000,000 Warrants issued at the final closing on February 14, 2011 will expire on February 14, 2013. The Common Shares, Warrants and Common Shares issuable upon exercise of the Warrants are subject to a four month hold period.
Convertible Debentures – The Company also placed $660,000 principal amount of the 10.00% Secured Subordinated Convertible Debentures. The Debentures have an annual coupon of 10% and a term of 5 years. The Debentures will initially be convertible at $0.10 per common share, however, in the event the Company obtains shareholder approval for a share consolidation, the conversion price can be lowered to $0.065 on a pre-consolidation basis. The Company is planning to seek approval for the consolidation at the next shareholder meeting scheduled for the Spring of 2011. The Debentures and Common Shares issuable upon conversion of the Debentures are subject to a four month hold period.