EMERGE Provides Update on Proposed Amendments to Senior Unsecured Convertible Debentures

12.04.24 23:30 Uhr

/NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, April 12, 2024 /CNW/ - EMERGE Commerce Ltd. (TSXV: ECOM) ("EMERGE", or the "Company"), a premium e-commerce brand portfolio, is pleased to provide an update to its news release dated March 22, 2024, announcing the proposed amendment of its 10% senior unsecured convertible debentures (the "Debentures"), which were issued by the Company on November 24, 2022, pursuant to a debenture indenture dated November 24, 2022, between the Company and TSX Trust Company (the "Indenture").

The Debentures will mature on November 24, 2025, and interest is payable on the last day of March, June, September and December in each year. The principal amount of the Debentures is convertible into common shares of the Company ("Common Shares") at a conversion price of $0.20 per Common Share (the "Conversion Price"). Upon the VWAP (as defined in the Indenture) for 10 consecutive trading days exceeding $0.50 per Common Share (the "Minimum VWAP"), the Company has the option to force the conversion of the Debentures at the Conversion Price.

The proposed amendment (the "Amendment") will (a) extend the maturity date of the Debentures to November 24, 2026, (b) reduce the Conversion Price to $0.135 per Common Share (the "New Conversion Price"), (c) reduce the Minimum VWAP with respect to the Company's option to force the conversion of the Debentures to $0.25 per Common Share, (d) provide the Company with a redemption right (the "Redemption Right") whereby the Company will have the option to redeem up to 50% (subject to rounding) of the aggregate principal amount of the Debentures (those Debentures redeemed pursuant to the Redemption Right are the "Redemption Debentures") and to pay the principal amount in cash or in Common Shares, at the Company's discretion, with any Common Shares to be issued at the New Conversion Price, (e) permit the Company to settle accrued but unpaid interest, less any taxes required to by law to be deducted (the "Interest"), on the Redemption Debentures, up to but excluding the date of redemption, in cash or in Common Shares, at the Company's discretion, with any Common Shares to be issued at a price per share (the "Settlement Price") equal to the greater of $0.135 and the lowest price permitted by the TSX Venture Exchange (the "TSXV") pursuant to TSXV Policy 4.3 – Shares for Debt (a "Shares for Debt Settlement"), and (f) provide that, upon notice of the exercise of the Redemption Right being given, the failure for 30 days to pay interest on the Redemption Debentures when due will not be considered an Event of Default.  

All other terms of the Debentures will remain the same.

The Amendment is subject to the approval of the TSXV and the approval of holders of not less than 66⅔% of the principal amount of the Debentures represented at a meeting (the "Meeting") of the holders of the Debentures, to be held on April 29, 2024 (the "Holder Approval" and together with TSXV approval, the "Approvals"). Any Common Shares issued pursuant to a Shares for Debt Settlement will be issued pursuant to prospectus exemptions available under applicable Canadian securities laws and will be subject to a four month hold period.

The Company further announces its intention to (a) exercise the Redemption Right and redeem 50% (subject to rounding) of the aggregate principal amount of the Debentures and (b) settle the Interest on the Redemption Debentures by the issuance of Common Shares at a price per share equal to the Settlement Price, in each case subject to receipt of the Approvals. The Company expects to announce this redemption and settlement of Interest immediately following the Meeting, assuming receipt of the Holder Approval.

None of the securities issuable in connection with the Amendment will be registered under the United States Securities Act of 1933, as amended, or state securities laws and none may be offered or sold in the United States, except under circumstances that do not require registration under the U.S. Securities Act or any applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About EMERGE

EMERGE is a premium e-commerce brand portfolio in Canada and the U.S. Our subscription and marketplace e-commerce properties provide our members with access to unique offerings across  grocery and golf verticals. Our grocery businesses include truLOCAL.ca, our premium meat subscription brand, and Carnivore Club, our artisanal / cured meat brand. Our golf businesses include UnderPar, our discounted tee-times/ experiences business, and JustGolfStuff, our golf products & apparel brand.

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Cautionary notice

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.

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 any benefit that may be derived by the Company from the Amendment, receipt of TSXV approval for the Amendment, receipt of Holder Approval for the Amendment, the Company's intention to exercise the Redemption Right, the Company's intention to issue Common Shares in connection with its exercise of the Redemption Right, the Company's intention to settle the Interest in Common Shares, 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. 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 and working capital of the Company, macro-economic factors including interest rate changes, 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 that the TSXV or holders of the Debentures will not approve the Amendment, that the Company may not exercise the Redemption Right and settle the Interest as described herein or at all, changes to general economic factors, as well as the risk factors discussed in the Company's MD&A, and other public disclosure filings which are 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

SOURCE EMERGE Commerce Ltd.