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Events Subsequent to December 31, 2024

Sale of Carnivore Club

On January 15, 2025, EMERGE completed the asset sale of Carnivore Club for a total purchase price of $500,000. Carnivore Club was a non-core asset, and EMERGE was actively eliminating its revenue in 2024, while prioritizing the growth of our larger, more profitable businesses.

2024 results include Carnivore Club. Q1 2025 will be the first financial report to classify Carnivore Club as discontinued operations, with prior period results to reflect the reclassification, where noted.

Acquisition of Tee 2 Green

On April 4, 2025, EMERGE closed the acquisition of all the issued and outstanding shares of Tee 2 Green Ltd. ("T2G"). T2G is a profitable, discount golf apparel and equipment business with a 38-year track record of operations, focused on the Canadian market. T2G achieved revenue of $6.4M, Adjusted EBITDA⁽¹⁾ of $1M and net income of $700K in 2024 (unaudited). T2G is expected to be highly synergistic with EMERGE's extensive golf business, which includes UnderPar and JustGolfStuff, along with a 400,000+ golf subscriber database.

EMERGE utilized the cash proceeds from the Carnivore Club transaction, as well as the previously announced sale of the premium, dormant SHOP domains to Shopify (TSX: SHOP) towards closing the T2G acquisition.

Debt Refinancing

Alongside the T2G transaction on April 4, 2025, the Company also entered into a first amendment (the "Amended Facility") to the second amended and restated credit agreement dated January 31, 2024 with its existing lender.

The Amended Facility provides an 18-month extension, and an additional 6-month extension option provided that lender consent is obtained. Inclusive of the 6-month extension, the Amended Facility would mature in April 2027. The Company remains in good standing with existing lender, which it has worked with since November 2019. The recent interest rate cuts, as well as the anticipated upcoming rate reductions, are expected to result in meaningful cash savings for the business.

Outlook 

Management is seeing continued operational momentum year-to-date.

truLOCAL, our flagship Canadian meat and seafood subscription brand, has been a benefactor of the "Buy Canadian" movement sweeping the country with strong revenue growth, profitability and key operating metrics in recent months.

Our discounted golf experiences and products vertical is expected to continue to gain from the weakening macro climate given the recession-friendly nature of the business model.

The addition of Tee 2 Green, starting Q2 2025, is expected to substantially enhance the Company's revenue, profitability and cash flow profile, and in the process, strengthen its balance sheet, and potentially improve its cost of capital over time.

Top Priorities

The Company's top priorities in the near-term are to i) accelerate revenue growth, ii) extract further operational efficiencies and synergies to drive profitability, and iii) opportunistically explore avenues to enhance cash flow and reduce interest expense.

Conference Call

Management will host a conference call on Monday, April 28 at 9:00 am ET to discuss its fourth quarter results. To access the conference call, please dial (416) 945-7677 or (888) 699-1199 and provide conference ID 24913.

Alternatively, the conference call can be accessed online at: https://app.webinar.net/19ELXr1gZKB

Selected Financial Highlights

The tables below set out selected financial information and should be read in conjunction with the Company's consolidated financial statements and MD&A for the three and twelve months ended December 31, 2024, which are available on SEDAR.

¹ Non-GAAP Financial Measure. Refer to section "Non-GAAP Financial Measures" for additional information.

Results from WholesalePet, WagJag and Battlbox have been reclassified to discontinued operations.

The following table highlights Adjusted EBITDA and a reconciliation of the Company's reported results to its adjusted measures:

The following table highlights GMS and a reconciliation of the Company's reported results to its adjusted measures:

About EMERGE

EMERGE is a premium, Canadian e-commerce brand portfolio. Our subscription, marketplace, and retail businesses provide our members with access to offerings across our grocery and golf verticals. truLOCAL is our flagship Canadian meat and seafood subscription service, connecting local farmers with a health-conscious audience. Our golf vertical includes our discounted tee-times/ experiences brand, UnderPar, and our discounted golf apparel and equipment brands, JustGolfStuff and Tee 2 Green.

Follow EMERGE:
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Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Non-GAAP Measures

This press release makes reference to certain non-GAAP measures. These non-GAAP measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the financial information of the Company reported under IFRS. Gross Merchandise Sales ("GMS"), EBITDA, and Adjusted EBITDA should not be construed as alternatives to revenue or net income/loss determined in accordance with IFRS. GMS, EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers.

GMS as defined by management is the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of discounts and refunds. Management believes GMS provides a useful measure for the dollar volume of e-commerce transactions made through our platforms and an indicator for our business performance.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA as defined by management means earnings before interest and financing costs, income taxes, depreciation and amortization, transaction costs, foreign exchange gains/losses, discontinued operations, unrealized gains/losses on contingent consideration and share-based compensation. Management believes that Adjusted EBITDA is a useful measure because it provides information about the operating and financial performance of EMERGE and its ability to generate ongoing operating cash flow to fund future working capital needs and fund future capital expenditures or acquisitions.

A reconciliation of the adjusted measures is included in the Company's management discussion & analysis for the twelve months ended December 31, 2024 in the section "Non-GAAP Financial Measures" available through SEDAR at www.sedar.com.

Notice regarding forward-looking statements

This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including, without limitation, statements related to the closing of the Transaction and the timing thereof, the satisfaction of all conditions precedent to the closing of the Transaction, including, without limitation, TSXV approval in respect of the Transaction, any benefit that may be derived by the Company from the Transaction, including, without limitation, any material benefit to the working capital or financial position of the Company as a result of the Transaction, expectations regarding cash flow both as a result of the Transaction and in general, as well as other statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. There is no guarantee the Transaction will be completed as contemplated or at all, and the forward-looking information contained herein is based on the assumptions of management of the Company as of the date hereof including, without limitation, assumptions with respect to the financial position, cash flow, and working capital of the Company, the ability of the Company to obtain TSXV approval for the Transaction and the satisfaction of any other conditions thereto, and the conditions of the financial markets and the e-commerce markets generally, among others. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company, its securities, or financial or operating results (as applicable). Although the Company believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including risks related to the disposition of a operating business by the Company, risks that the benefits derived from the Transaction may not be as expected or that the Company may not see any benefit from the Transaction, risks that each party to the Agreement may not satisfy its obligations or covenants, risks that the Company may be subject to litigation as a result of the Transaction including allegations of misrepresentation or breach of conditions or covenants, risks that the TSXV may not approve the Transaction, as well as the risk factors discussed in the Company's MD&A, which is available through SEDAR+ at www.sedarplus.ca. The forward-looking information contained in this press release are expressly qualified by this cautionary statement and are made as of the date hereof. The Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

On Behalf of the Board
Ghassan Halazon
Director, President, and CEO
EMERGE Commerce Ltd.

SOURCE Emerge Commerce Ltd.

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