Kingsway Arms Retirement Residences Inc. Provides Business Update

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Kingsway Arms Retirement Residences Inc. (TSX VENTURE:KWA) (the "Company" or
"Kingsway") provides the following business update:




1.  The Company filed its unaudited quarterly financial statements as of
    June 30, 2012 on August 29, 2012, which statements can be viewed on
    SEDAR.

2.  The Company held its Annual General Meeting on Thursday, August 23, 2012
    having previously filed the requisite documentation and notices, which
    can be viewed on SEDAR. At the AGM, the shareholders elected the
    following six directors:

     a. Dan Amadori    
     b. Patrick Byrne  
     c. Frank Rossi    
     d. John Mackinnon 
     e. Bruce Dimytosh 
     f. Don MacKinnon  



Messrs. Rossi, Mackinnon, Dimytosh and MacKinnon serve as independent directors.

At the AGM, the disinterested shareholders also approved the proposed fixed
stock option plan that was disclosed in the Information Circular previously
circulated to the shareholders.




     a. Dan Amadori, as Chair of the Board.                       
                                                                  
     b. Bruce Dimytosh, as Chair of the Audit Committee; Don      
        MacKinnon and Dan Amadori as the other members of the     
        Audit Committee.                                          
                                                                  
     c. Frank Rossi, as Chair of the Compensation Committee; John 
        Mackinnon as the other member of the Compensation         
        Committee.                                                

4.  On August 29th the Company received final acceptance from the TSXV of
    the Company's stock option plan as approved by the disinterested
    shareholders at the AGM. Upon acceptance of the stock option plan, on
    September 1, 2012, the Directors approved the issuance of 1,475,000
    stock options to officers, directors and employees as below:



The options have a strike price of $0.10 per share and have a term of 5 years
through August 31, 2017. The options are fully vested upon issuance.


Subsequent to the issuance of these stock options, the Company has 2,440,800
stock options outstanding.




5.  Further to the press release issued on July 23, 2012, the Company
    advises that the 500,000 common shares and warrants purchased by Dan
    Amadori as of that date are subject to a hold period until November 24,
    2012. 
    
6.  The Company continues to evaluate potential acquisition opportunities
    and continues its efforts to secure additional financing for such
    acquisitions. 



About Kingsway Arms Retirement Residences Inc.:

Kingsway is the owner of senior housing facilities located in Aurora, Ontario
and in Clarington, Ontario. The Corporation continues to actively pursue the
acquisition of development of additional senior housing facilities in order to
grow the Company's portfolio of properties.


Safe Harbor Statement:

This press release contains forward-looking statements. Such forward-looking
statements are subject to a number of risks, assumptions and uncertainties that
could cause the Company's actual results to differ materially from those
projected in such forward-looking statements. In particular, factors that could
cause actual results to differ materially from those in forward-looking
statements include: our inability to obtain additional financing on acceptable
terms; risk that our facilities will not gain widespread market acceptance;
inability to compete with others who provide comparable facilities.
Forward-looking statements speak only as of the date made and are not guarantees
of future performance. We undertake no obligation to publicly update or revise
any forward-looking statements. When used in this document, the words "believe,"
"expect," "anticipate," "estimate," "project," "plan," "should," "intend,"
"may," "will," "would," "potential," and similar expressions may be used to
identify forward-looking statements.


This press release is not an offer of securities for sale in the United States.
The securities of the Corporation referred to herein have not been and will not
be registered under the United States Securities Act of 1933, as amended.
Securities of the Corporation may not be offered or sold in the United States
absent registration or an exemption from registration.