FORWARD-LOOKING STATEMENTS

This management discussion and analysis of financial condition and results of operations ("MD&A") on Form 10-K includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding guidance, industry prospects or future results of operations or financial position, made in this MD&A on Form 10-K are forward-looking. We use words such as anticipate, believe, expect, future, intend, plan, aim, project, estimate, will, should, could and similar expressions to identify forward-looking statements. Forward-looking statements reflect management's current expectations and are inherently uncertain. Factors that could cause our future results to differ from these expectations include general economic conditions, particularly as they affect our ability to acquire a target business and raise sufficient working capital and the impact of foreign exchange fluctuations, changes in global economic conditions and consumer spending. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives requires the exercise of judgment. To the extent that the assumed events do not occur, our outcome may vary substantially from our anticipated or projected results, and accordingly, we express no opinion on the outcome of those forward-looking statements and give no assurance that any of the assumptions relating to the forward-looking statements are accurate. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from management's expectations, are described in greater detail in Item 1(C) of Part I, "Risk Factors", which describes some, but not all, of the factors that could cause actual results to differ significantly from management's expectations.

GENERAL

Empire was incorporated in the state of Delaware on August 26, 1998. Our principal executive office is located in Toronto, Canada. Our operations from activities in 2005 and in the first three quarters of 2006 consisted of activities related to our investment in income producing commercial real estate properties based in Toronto, Canada. In 2006, the Company investigated concerns about the dismal performance of these assets and subsequently found grounds to terminate and rescind the agreement to acquire these assets. The Company abandoned the operations as of the end of the third quarter of 2006 and has been seeking new business opportunities during the period covered by this report.

On July 9, 2004 we acquired 100% of the shares of IMM Investments Inc. ("IMM"), an Ontario Corporation. IMM owns 5 million shares of common stock of Armistice Resources Corp. Warrants to purchase an additional 5 million shares expired in August 2008. Armistice shares trade on the Toronto Stock Exchange under the symbol AZ. On June 17, 2005, our previous management entered into an agreement to dispose of the shares of IMM in exchange for a promissory note. Empire received no cash or other consideration. Subsequent to the period covered by this report, the purchaser failed to respond to our requests for disclosures, and therefore abandoned the agreement. This was deemed an Event of Default and as a result we rescinded the agreement and recovered the shares of IMM Investments Inc. Accordingly, the Company filed the appropriate documents and tax returns with both the Ministry of Finance in Ontario and Canada Customs and Revenue Agency reflecting the ownership of IMM. IMM is now a wholly owned subsidiary of the Company. The 5 million common shares plus 5 million common share warrants of Armistice owned by IMM are currently held in escrow as a result of certain legal proceedings related to events involving our former management as described elsewhere in this report. At time of this report, it is unknown if the Company will recover these assets.

The Company's auditors have issued an opinion on our ability to continue as a going concern. This means that its auditors believe there is doubt that the Company can continue as an on-going business for the next twelve months unless it obtains additional capital to pay its obligations. This is because the Company has not generated any revenues and no revenues are anticipated until it begins operations from a new business plan. Accordingly, we must raise cash from sources such as investments by others in the Company and through possible transactions with strategic or joint venture partners. The following discussion and analysis should be read in conjunction with the financial statements of the Company and the accompanying notes appearing under the caption "Financial Statements and Supplementary Data."

PLAN OF OPERATION

At December 31, 2007 we had no cash and approximately $996,394 in assets.
Our cash flow requirement for the twelve-month period from January 2008 to
December 2008 was $283,121. Anticipated cash outflows are as follows:

ANTICIPATED CASH OUTFLOWS:                            Amount (USD)
                                                      ------------

General and administrative expenses:
Consulting and Wages                                  $     50,000
Accounting                                                  80,000
Legal                                                       50,000
Office and General                                           2,000
                                                      ------------
Total General and Administrative                      $    182,000

Accounts payable due                                       101,121
                                                      ============
Total                                                      283,121
                                                      ============

Working capital deficit: 156,273

Empire Consolidated General and Administrative Expenses:
The general and administrative expenses projection of $182,000 is based on the actual expenses incurred during the two most recent years. Future general and administrative expenses are anticipated to be similar to those incurred during these most recent years.

Empire Consolidated Current Accruals Due:
The balance of the current accounts payable at December 31, 2007 due to various parties for services rendered was approximately $101,121. Terms on these accruals vary but they are all currently due on demand. On November 5, 2007 the Company issued 3,378,900 shares for payment of debts owed by the Company, of which 2,061,138 were allocated to pay $247,337 of the accounts payable due at December 31, 2006 and on May 5, 2008 the Company issued 2,500,000 shares to pay $175,000 of the accounts payable due at December 31, 2007.

Empire Additional Working Capital:
Additional working capital is not currently assessable since the Company is seeking business opportunities but has not entered into any arrangement or agreement. Therefore, the amount of working capital cannot be determined, if any, at this time.

The company plans to fund the above operations, with loans and advances from our current management and to execute private placements with related and other parties over the next twelve months.

CASH INFLOWS

Research and Development:
The Company's plan of operation for the subsequent twelve months is actively seeking an acquisition or new business opportunity, finding a business partner, or locating a qualified company as a candidate for a business combination. We are authorized to enter into a definitive agreement with a wide variety of businesses without limitation as to their industry or revenues. It is not possible at this time to predict with which company, if any, we will enter into a definitive agreement or what will be the industry, operating history, revenues, future prospects or other characteristics of that company.

We may seek a business opportunity with entities which have recently commenced operations, or that may wish to utilize the public marketplace in order to raise additional capital to expand their business, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

We are not limiting our search for business opportunities to any particular industry; therefore, our management may not be experienced in matters relating to the business of any such target and will rely upon its own reasonable efforts in accomplishing our business purposes. The Company may employ outside consultants or advisors to assist in the search for qualified target companies in which case any outside consultants or advisors fees will need to be assumed by the target business, as we have no cash assets with which to pay such obligation.

In analyzing prospective business opportunities, management may consider factors such as:

a. financial strength and quality of managerial resources;
b. history of operations, if any;
c. the available empirical and technical data;
d. the availability of audited financial statements;
e. the nature of its present business and future prospects;
f. specific risk factors associated with the proposed activities;
g. the potential for profit, growth or expansion;
h. the perceived public recognition or acceptance of products, services, or trades;
i. public identity; and other relevant factors.

Our Management does not have the capacity to conduct exhaustive due diligence of a target business as might be undertaken by a venture capital fund or similar institution. As a result, management may elect to merge with a target business which has one or more undiscovered shortcomings and may, if given the choice to select among target businesses, fail to enter into an agreement with the most investment-worthy target business.

Following a business combination we may benefit from the services of others in regard to accounting, legal services, underwritings and corporate public relations. If requested by a target business, management may recommend one or more underwriters, financial advisors, accountants, public relations firms or other consultants to provide such services.

A potential target business may have an agreement with a consultant or advisor, providing that services of the consultant or advisor be continued after any business combination. Additionally, a target business may be presented to us only on the condition that the services of a consultant or advisor are continued after a merger or acquisition. Such pre-existing agreements of target businesses for the continuation of the services of attorneys, accountants, advisors or consultants could be a factor in the selection of a target business.

In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. On the consummation of a transaction, our present management and stockholders may no longer control the Company. In addition, it is likely that our officers and directors will, as part of the terms of the acquisition transaction, appoint one or more new officers and directors.

It is anticipated that any securities issued in any such reorganization would be issued in reliance upon an exemption from registration under applicable federal and state securities laws. In some circumstances however, as a negotiated element of a transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance, it will be undertaken by the surviving entity after we have entered into an agreement for a business combination or have consummated a business combination. Although there can be no assurance that a market for our common stock will develop or be sustained, the issuance of additional securities and their potential sale into any trading market may depress the market value of our securities in the future.

While the terms of a business transaction to which we may be a party cannot be predicted, it is expected that the parties to the business transaction will desire to avoid the creation of a taxable event and thereby structure the acquisition in a tax-free reorganization under Sections 351 or 368 of the Internal Revenue Code of 1986, as amended.

With respect to any merger or acquisition negotiations with a target business, management expects to give specific attention to the overall dilutive effect such a transaction would have on existing shareholders in exchange for the target business. Any merger or acquisition effected by us may have a dilutive effect on the percentage of shares held by our stockholders at such time, therefore, depending upon, among other things, the target business's assets and liabilities, our stockholders will in all likelihood hold a lesser percentage ownership interest in Empire.

No assurances can be given that we will be able to enter into a business combination, as to the terms of a business combination, or as to the nature of the target business.

As of the date of this report, management has not made any final decision concerning or entered into any written agreements for a business combination. When any such agreement is reached or other material fact occurs, the Company will file notice of such agreement or fact with the Securities and Exchange Commission on Form 8-K. Readers of this Annual Report are encouraged to refer to our filings with the SEC to determine if we have subsequently filed a Form 8-K.

We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes (but has not conducted any research to confirm) as previously described in this report that there are numerous firms in various industries seeking the perceived benefits of a publicly registered corporation. Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, increasing the opportunity to use securities for acquisitions, and providing liquidity for our stockholders and other factors. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We can provide no assurance that we will be able to locate compatible business opportunities.

OPERATIONS REVIEW

We have no cash to satisfy our working capital needs for the next year, therefore, over the subsequent twelve months we plan to seek new business opportunities. We anticipate funding our working capital needs through the issuance of common stock to independent contractors, the equity capital markets, private advances and loans. Although the foregoing actions are expected to cover our anticipated cash needs for working capital and capital expenditures for at least the subsequent twelve months, no assurance can be given that we will be able to raise sufficient funds to meet our cash requirements.

We are not currently conducting and do not anticipate conducting any research and development activities in the foreseeable future. If we enter into a new business opportunity, we may be required to hire additional employees, independent contractors as well as purchase or lease additional equipment.

We anticipate continuing to rely on equity sales of common shares or the issuance of convertible debt to fund our operations and to seek out or enter into new business opportunities. The issuance of any additional shares will result in dilution to our existing shareholders.

RELATED PARTY TRANSACTIONS

The amount due to related parties at December 31, 2007, is $57,500. None of the amounts due to related parties bear interest, have any fixed terms of repayment or are secured.

COMPARISONS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

Overall Results of Operations
The historical financial information about the Company upon which to base an evaluation of our performance has been interrupted by a number of failed business ventures. Accordingly, comparisons with prior periods are not meaningful. As described in Note 6 to the Consolidated Financial Statements presentation of certain prior period amounts have been reclassified to segregate discontinued operations from continuing operations so that both years are comparative.

The Company is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the decision and implementation of a new business plan.

For the year ended December 31, 2007, we had a net loss from continuing operations of $232,118 or a $0.03 net loss per share, which was an increase of $2,255 in net loss from our net loss of $229,863 or a $0.03 net loss per share from continuing operations for the year ended December 31, 2006. Our losses are primarily due to administrative legal costs and legal fees associated with the discontinuance and subsequent rescission of 501 Canada Inc. and Excel Empire Limited which were reported as discontinued operations.

Revenues
Prior to reorganization of the Company in 2005 we had no revenue and as a result of the rescission of the 501 Plan and the IMM Agreement the Company has no revenues for the period covered by this report. We do not expect to generate any revenue, unless we are able to merge with a revenue producing business opportunity.

Expenses
General and administrative expenses represented the bulk of our net operating results. The expenses relating to continuing operations increased approximately 1% from $229,863 in 2006 to $207,118 in 2007. The Company incurred expenses related to discontinued operations of $251,940 and $1,092,036 in 2007 and 2006 respectively the details of which are found in Note 6 to the Consolidated Financial Statements and elsewhere in this report.

During 2007, we issued 3,378,900 restricted common shares to accredited investors, in exchange for the elimination of $405,468 of recorded expenses and on May 5, 2008 we issued 2,500,000 to eliminate an additional $175,000 of recorded expenses. During the subsequent twelve month period our operating costs are expected to decrease due to the limited scope of work and expenses are anticipated to be incurred for continued legal proceedings and active pursuit of new viable business ventures.

Net Income/Loss
The Net loss of $484,058 recorded for the year ended December 31, 2007 included loss from discontinued operations of $251,940 incurred during the fiscal year 2007. The lossses associated with continued operations of $232,117 versus $229,863 for the years ended December 31, in 2007 and 2006 respectively were due primarily to general and administrative expenses.

Assets and Liabilities

Assets
At December 31, 2007 we had no cash and our total assets were $996,393.

Liabilities
Our current liabilities of continuing operations at December 31, 2007 were $158,621 versus $357,150 in 2006. The decrease is a result of stock based payments described elsewhere. These liabilities are primarily accounts payable and advances from related parties. At September 30, 2006, we ceased operations of 501 Canada Inc. therefore, the mortgages and outstanding liabilities of the discontinued operations attributed to the 501 assets previously acquired by the Company and are no longer recorded.

On May 5, 2008, the company issued 2,500,000 shares of common stock to pay $175,000 towards accounts payable and accrued liabilities at December 31, 2007.

Results of discontinued operations
During 2004, we operated our subsidiaries as continuing operations. During 2005, we abandoned our efforts to acquire certain technology company interests and as of December 31, 2005, we reorganized the operations of our subsidiary to be an operating entity.

In June 2005, the Company announced that it had disposed of it's holdings in IMM and Montebello. On September 29, 2005 due to a default of the Montebello Agreement by Brookstreet Capital Corp., the Company recovered the shares of Montebello Investments and reinstated Montebello as a wholly owned subsidiary. Subsequent to the period covered by this report, the Company notified Blazing Holdings Inc. that Blazing Holdings was in default of the terms of the IMM Agreement, therefore, on October 1, 2007, the Company terminated and rescinded the IMM Agreement and reinstated IMM as a wholly owned subsidiary and returned the values of IMM to our books and records.

Following is a discussion of the results of the Company's divestment in the operations of EGAC and 501 Canada Inc. (amalgamated) formerly a wholly owned subsidiary of the Company.

On September 30, 2006, EGAC formerly our wholly owned subsidiary failed to provide financial records to the Company. The Company notified the former shareholder of 501 of material misrepresentations and breaches of several representations and warrantees made in the 501 Plan. The former shareholder was given notice within the time period prescribed by the 501 Plan to respond to and remedy the discrepancies, however, the notice was ignored. As a result, the Company discontinued the operations of our subsidiary EGAC on September 30, 2006, formally rescinded the 501 Plan and cancelled 6,240,000 shares issued pursuant to the 501 Plan on October 1, 2007.

Loss from Discontinued Operations

For the period January 1, 2007 to December 31, 2007 and January 1, 2006 to December 31, 2006, in connection with the rescission, we incurred losses of $251,940 in 2007 and $1,092,036 in 2006 respectively and recorded a gain of $1,321,983 on the disposal of our subsidiary and a loss of $2,204,324 on disposal of the Promissory Note for a net loss on discontinued operations of $1,974,377 in 2006 an explanation of which is provided in detail in Note 6 to the Consolidated Financial Statements.

Liquidity and capital resources

At December 31, 2007, the Company had total assets of $996,393 and current liabilities of $158,621. We have not generated cash flow from operations, consequently, we have been dependent upon cash advances from related or other parties and private investors as well as the issuance of our common stock to fund our cash requirements. Specifically, we issued 3,378,900 shares and 2,500,000 shares of common stock in 2007 and 2008 respectively in lieu of cash due to a number of independent contractors and a third party on December 31, 2007. The contractors submitted invoices for time and out of pocket expenses.

The notes to our consolidated financial statements as of December 31, 2007, contain footnote disclosure regarding our uncertain ability to continue as a going concern. We have no revenues to cover our expenses, and we have an accumulated deficit of $4,012,132. As of December 31, 2007, we had $158,621 in current liabilities, when this is offset against our current assets of $2,348 we are left with a working capital deficit of $156,273 and as such we cannot assure that we will succeed in achieving a profitable level of operations sufficient to meet our ongoing cash needs or in locating a viable business opportunity.

No trends have been identified which would materially increase or decrease our results of operations or liquidity. We will need to raise significant additional operating capital to finance our operations and to acquire sources of operating revenues. Due to our poor financial condition, raising capital will be very difficult and expensive. The Company will seek funds from possible strategic and joint venture partners and financing to cover any short term operating deficits and provide for long term working capital. No assurances can be given that the Company will successfully engage strategic or joint venture partners or otherwise obtain sufficient financing through the sale of equity.

Below is a discussion of our sources and uses of funds for the year ended December 31, 2007.

CASH FLOWS

Prior period amounts have been reclassified to segregate cash flows from discontinued operations versus cash flows from continuing operations.

Net Cash Used In Operating Activities
Net cash used in operating activities of continuing operations during the year ended December 31, 2007 was $353,528. An in-kind contribution provided $1,600 while our net loss arises primarily from business development fees, consulting and professional fees associated with the planned completion and subsequent rescission of the Excel Agreement as well as legal fees and charges associated with legal proceedings initiated by the former 501 shareholders.

Net Cash Used In Investing Activities
There were no investing activities in 2007.

Net Cash Provided By Financing Activities During the year ended December 31, 2007, cash provided by financing activities was $25,000 due to advances from related parties.

OFF BALANCE-SHEET ARRANGEMENTS

We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities.

INCOME TAXES

Note 10 of the financial statements included in this report sets out our
deferred tax assets as of December 31, 2007 and 2006. We have established a 100% valuation allowance, as we believe it is more likely than not that the deferred tax assets will not be realized.

We based the establishment of a 100% valuation allowance against our deferred tax assets on our current operating results. If our operating results improve significantly, we may have to record our deferred taxes in our consolidated financial statements, which could have a material impact on our financial results.

CONTINGENCIES AND COMMITMENTS

We had no contingencies or long-term commitments at December 31, 2007.

CONTRACTUAL OBLIGATIONS

We had no contractual obligations at December 31, 2007.

INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY

We have funded our operations primarily through cash injections from related and other parties.

IMPACT OF INFLATION

We do not believe that general price inflation will have a material effect on the Company's business in the near future.

FOREIGN EXCHANGE

The functional and reporting currency of the Company is the U.S. dollar, while the functional and reporting currency for IMM Investments Inc., a wholly-owned Canadian subsidiary, is the Canadian dollar. Accordingly, the Company is exposed to foreign currency translation gains or losses as the relationship between the Canadian dollar and United States dollar fluctuates. Increases in the value of the Canadian dollar against the U.S. dollar will result in foreign exchange transaction gains and decreases in the value of the Canadian dollar will result in foreign exchange transaction losses. Other than for revenues from dividends if earned from assets owned by IMM in Canada, all other transactions involving the Company are generally denominated in U.S. dollars. (See Note 3 (k) of Notes to Financial Statements).

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

See Note 3(o) "Recently Accounting Pronouncements" of Notes to Financial Statements.

EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

On July 1, 2006 the Company amended the Excel Plan first entered into on November 4, 2005. The amendment required Excel to provide financial statements to the Company prepared in accordance with the Generally Accepted Accounting Principals of the United States and Item 310 B of Regulation S-B. Excel had not provided proper statements. Therefore on May 5, 2008, the Company cancelled 36,400,000 shares issued pursuant to the Excel Plan which were held in escrow contingent upon completion of the Excel Plan.

ABILITY TO CONTINUE AS A GOING CONCERN

We have suffered recurring losses from operations and are in serious need of additional financing. These factors among others indicate that we may be unable to continue as a going concern, particularly in the event that we cannot obtain additional financing or, in the alternative, complete a merger or acquisition. . . .