Emerge Commerce Ltd. (formerly Aumento Capital VII Corporation) Closes Reverse Takeover Transaction

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TORONTO, Dec. 8, 2020 /CNW/ - Emerge Commerce Ltd. (TSXV: ECOM) (the "Company" or "Emerge"), formerly Aumento Capital VII Corporation ("Aumento"), a company incorporated under the laws of Ontario, is pleased to announce the closing of the previously announced three-cornered amalgamation (the "Transaction") whereby Emerge Commerce Inc. (the "Target") amalgamated with a wholly-owned subsidiary of Aumento. The Transaction constituted a change of business and a reverse takeover transaction of Aumento pursuant to the TSX Venture Exchange (the "Exchange") Policy 2.4 – Changes of Business and Reverse Takeovers.

The Transaction

Immediately prior to completing the Transaction, Aumento consolidated its outstanding common shares on the basis of three quarters (0.75) of a post-consolidation common share for every one (1) common share of Aumento, and changed its name from Aumento Capital VII Corporation to Emerge Commerce Ltd. Further details regarding the Transaction can be found in Aumento's Filing Statement (the "Filing Statement") dated November 23, 2020, filed under Aumento's profile on SEDAR.

The Exchange has provided conditional acceptance of the Transaction including the listing of the Company as a Tier One Technology issuer on the Exchange. The parties to the Transaction will be making their final submission to the Exchange post-closing in connection with the Exchange's issuance of its listing bulletin.

As part of the Transaction, Emerge has issued to the holders of common shares of Aumento  ("Aumento Shares"), approximately 1,500,000 common shares of Emerge ("Emerge Shares"), representing one fully paid and non-assessable Emerge Share for each Aumento Share (on a post-consolidation basis) held by such holder. Emerge has issued to holders of common shares of the Target ("Target Shares") approximately 79,975,712 Emerge Shares (on a post-consolidation basis) as consideration for the Transaction.

Following the completion of the Transaction, there are 81,475,712 Emerge Shares issued and outstanding with: (a) former Target shareholders (not including holders of subscription receipts of the Target (the "Subscription Receipts") holders) holding an aggregate of 67,754,496 Emerge Shares, representing approximately 83.2% of the outstanding Emerge Shares; (b) former Aumento shareholders holding an aggregate of 1,500,000 Emerge Shares, representing approximately 1.8% of the outstanding Emerge Shares; (c) former subscribers for Subscription Receipts as part of the Target's private placement of Subscription Receipts, holding an aggregate of 11,639,254 Emerge Shares, representing approximately 14.3% of the outstanding Emerge Shares; and (d) agents for the Target's private placement of Subscription Receipts, holding an aggregate of 581,962 Emerge Shares, representing approximately 0.7% of the outstanding Emerge Shares.

Following the completion of the Transaction, Emerge has the following convertible securities issued and outstanding:

Convertible Securities
Emerge Shares issuable upon exercise of Resulting Issuer Options	9,718,445
Emerge Shares issuable upon exercise of Resulting Issuer Warrants	5,616,200
Emerge Shares issuable upon exercise of Compensation Options	208,000
Emerge Shares issuable upon exercise of Compensation Option Warrants	208,000
Emerge Shares issuable upon exercise of Broker/Finders' Warrants	931,142
Emerge Shares issuable upon vesting of RSUs	4,054,000
Emerge Shares issuable upon exercise of Convertible Debentures	1,784,615
Total Convertible Securities	22,520,402

New Board and Management

Upon closing of the Transaction, the board of directors and management of the Company has been reconstituted as follows:

Ghassan Halazon, Director and President and Chief Executive Officer

Ghassan Halazon is a serial e-commerce entrepreneur with a decade of scaling some of the country's most coveted digital brands. Halazon was recently recognized as one of Canada's Top 40 under 40 honourees for 2020, presented by BNN Bloomberg and National Post.

Ghassan is the Founder and CEO of Emerge Commerce Ltd., an acquirer and operator of niche e-commerce assets with 2 million members across North America. EMERGE was recognized as a winner on the Startup 50, and Canada's Top Growing Companies by the Globe and Mail.

Ghassan's entrepreneurial journey started at the age of 25. Over the past decade, companies founded or acquired by Ghassan and his partners have saved Canadians close to $1 billion, hired 350 employees, and raised capital from over 150 global investors.

Formerly, Ghassan was an investment banker with Citi (New York) during which his team advised on $5 billion of capital raising and M&A transactions.

Ghassan holds an MBA from Georgetown University, and a Bachelor of Commerce from McGill University.

Ghassan sits on the Boards of the Canadian Arab Institute and the Be-Abled Society.

Ghassan is an avid technology and startup speaker, having delivered keynote speeches and fireside chats at Harvard, TEDx, TechTO, and TechStars.

Jonathan Leong, Chief Financial Officer

Jonathan Leong has been involved in a number of public and private market transactions, including business acquisitions and reverse take-overs, for both domestic and international entities. Jonathan is a Chartered Professional Accountant, Chartered Accountant and Chartered Business Valuator with experience working in a variety of financial reporting, audit, advisory, M&A and valuation engagements.

Prior to joining Emerge, Jonathan held senior level positions at a private-equity roll-up within the veterinary industry with over 100 clinics and $300 million in sales. He has also served as an advisor and CFO for several companies that successfully went public, including Aphria Inc. and TerrAscend Corp. Jonathan articled with Grant Thornton LLP and obtained his Master of Accounting from the University of Waterloo.

Fazal Khaishgi, Chief Operating Officer

Fazal is a savvy operator with over 10 years of proven success in operating and scaling high growth e-commerce and SaaS businesses. He was among the first 5 employees at Buytopia.ca, an Emerge Commerce Ltd. company, where he helped pioneer a unique marketing strategy, leveraging traditional media and digital assets to obtain the lowest cost of customer acquisition, and in the process, helping Buytopia rank #3 profit HOT 50, 2013.

Fazal co-led the development of SnapSaves (sold to Groupon in 2014), a disruptive mobile couponing platform enabling CPG companies to target consumers directly, bypassing retailers and collecting valuable data. Fazal successfully concluded the sale of Buytopia.ca to Emerge and joined the management team to lead operations. Fazal is deeply passionate about building sustainable e-commerce by leveraging innovative technology and achieving a critical scale through M&A and cost-effective digital marketing. Fazal holds a BA Hons from the University of Toronto (St. George) in Economics.

Drew Green, Director

Drew Green is an award winning chief executive officer, entrepreneur and expert in managing fast-paced, high-growth companies. A visionary leader, Drew has created one of the world's fastest growing apparel brands. Since 2015, he has established significant strategic capital, hired a world class management team and created global alliances that has led to over +500% growth, significantly increasing profitability KPI's. Over the past five years, INDOCHINO created, launched and then expanded to 50 showrooms, employing over 800 people, with another 1700 people working daily to produce the one of a kind garments each INDOCHINO customer creates.

Previously recognized as top 40 under 40, as well as CEO of the year, Drew has been recognized for his accomplishments throughout his career. In 2017, Drew was awarded the Innovation in Retail award by the University of Alberta. In 2018 he was awarded Breakout Retailer of the Year by Chain Store Age, and in 2018, Drew was selected as The Entrepreneur of the Year by Ernst and Young. In 2019, Canadian Business announced that between 2015-2019, INDOCHINO was the #1 fastest growing Canadian retailer, with sales globally, and third fastest growing retailer in Canada amongst retailers with revenues over $100M.

Prior to INDOCHINO, Drew founded and was chief executive officer of SHOP.CA, Canada's first multimerchant marketplace, which is now owned by Emerge. Throughout his career, Drew has played key roles at companies that have created billions in shareholder value through leadership roles at DoubleClick (acquired by Google), SHOP.COM (acquired by Market America) and Flonetwork (acquired by DoubleClick).

In addition to Emerge, Drew is currently chairman of five publicly listed or pre public listed companies, including AIRES TECH (CSE: WIFI), LUCK BOX (reserved tickerTSXV: LUCK), BRUUSH (reserved tickerTSXV: BRSH) and APOLLO INSURANCE (reserved tickerTSXV: APLO). As a dedicated mentor to Canadian entrepreneurs, Drew is the founder, chairman, or an investor in 25 Canadian companies that drive innovation and growth within retail, direct to consumer products, insurance, artificial intelligence, technology, and real estate. A sought after expert, Drew has presented to hundreds of thousands of people, and has been quoted in more than 3,000 news articles, globally.

John Kim, Director

John is a Toronto based businessman and award-winning Institutional investor for 20+ years with an extensive capital markets network. His investment focus has included companies from a variety of sectors, including technology, healthcare, and resources at various stages of development, ranging from early start-ups to Fortune 1000 Companies. John has both public and private company board experience.

John currently sits on the board and serves as the Chair of the Governance and Compensation Committee of WELL Health Technologies Corp., a company listed on the Toronto Stock Exchange. Mr. Kim also previously served as lead independent director of Ascalade Communications Inc.

Kia Besharat, Director

Kia has over 15 years of Founder, Private Equity, Investment Banking, and Directorship experience. As Senior Managing Director & Head of Capital Markets, Kia leads the advisory, restructuring, corporate finance and mergers & acquisitions mandates across the firm's global platform. Since joining Gravitas Securities in 2016, he has played a key role in establishing the firm as one of the top boutique investment banks in Canada. His transactions have totaled in excess of $750 million and in aggregate of more than $3 billion over the span of his career. Kia was recognized by the Investment Industry Association of Canada (IIAC) as a Top 40 Under 40 Award Nominee in 2018.

He holds a Bachelor of Arts (Economics with minor in Management) from McGill University as well as a Master of Science (Finance & Investment) from the University of Edinburgh. Kia was one of Canada's top tennis players, having competed as a professional in tournaments across the world and at the NCAA division 1 level. He has supported numerous charitable organizations such as the Daily Bread Food Bank, Sick Kids Hospital Foundation and the Royal Columbian Hospital.

Nima Besharat, Director and Corporate Secretary

Nima Besharat has extensive Private Equity, Merchant Banking and Directorship experience. He currently serves as Vice President, Global Investment Banking at Gravitas Securities, a leading independent, internationally owned and operated wealth management and capital markets firm. Gravitas Securities is a full service investment dealer platform registered with IIROC and a member of CIPF.

Prior experience in Wealth Management at TD Bank and Scotiabank. Nima articled with Oxford Properties Group, the real estate investment arm of OMERS, one of Canada's largest pension plans. UK legal experience in Asset Management, Structured and Asset Finance and Corporate Finance and Private Equity at BNP Paribas, Allen & Overy and Bryan Cave Leighton Paisner.

Nima holds a Bachelor of Arts in Economics and History from Western University, a Bachelor of Laws (Hons.) from the University of Sheffield (UK), a Master of Laws in International Business Law (Dr. Peter Dyne Scholar) from King's College London, University of London (UK) and a Postgraduate Diploma in Legal Practice (Corporate Finance) from the University of Law (UK). He is a member of the Law Society of Ontario and the Ontario Bar Association.

Jonson Sun, Director

Jonson Sun is the founder and president of GIC Merchant Bank Corp, a merchant banking firm based in Toronto, Canada that specializes in investing in private companies and consolidation strategies. GIC services include providing start-up and growth business strategy advice and capital market consulting. The company has successfully incubated and seeded companies across multiple sectors, including e-commerce, staffing, and healthcare technology.

Jonson also sits on the board of Hire Technologies Inc., Emerge Brands Inc., Pishon Innovation Lab, and Kore Alliance. He is also active in philanthropic and faith-based organizations around the world.

New Security Based Compensation Plans

Stock Option Plan

As of the date of this News Release, the Company has implemented a stock option plan in accordance with the policies of the Exchange (the "Stock Option Plan"). The Stock Option Plan is a "fixed" plan pursuant to which the total maximum number of Emerge Shares that may be issued pursuant to it is 11,756,554 stock options or such additional amount as may be approved from time to time in accordance with the requirements of the stock exchange that the Company may be listed or traded on, if required.

The Stock Option Plan is subject to the approval of the Exchange and is conditional on disinterested shareholder approval at its 2021 annual general meeting.

RSU Plan

As of the date of this News Release, the Company has implemented a restricted share unit plan in accordance with the policies of the Exchange (the "RSU Plan"). The RSU Plan is a "fixed" plan pursuant to which the total maximum number of Emerge Shares that may be issued pursuant to it is 4,500,000 RSUs or such additional amount as may be approved from time to time in accordance with the requirements of the stock exchange that the Company may be listed or traded on, if required.

The RSU Plan is subject to the approval of the Exchange and is conditional on disinterested shareholder approval at its 2021 annual general meeting.

Escrow Agreements

As a condition to the completion of the Transaction, the Company was required to impose a 4‑month hold on 1,007,144 shares of the Company and enter into a Tier 1 value security escrow agreement (the "Value Escrow Agreement") with the Exchange and TSX Trust Company, as escrow agent ("TSX Trust"), in respect of 714,286 shares of the Company. Under the terms of the Value Escrow Agreement, 25% of such escrowed shares are immediately released upon the issuance of an Exchange Bulletin in respect of the Company, with subsequent 25% releases occurring 6, 12, and 18 months thereafter. The Company was also required to enter into certain Tier 1 surplus security escrow agreements (collectively, the "Surplus Escrow Agreements") with the Exchange and TSX Trust. The type and number of securities subject to the Surplus Escrow Agreements and their release terms are as follows:

Release Schedule	Emerge Shares	Stock Options	RSUs	Warrants
10% immediately released upon Exchange Bulletin	1,565,218	737,447	405,400	96,200
20% 6 months from Exchange Bulletin	4,230,437	1,474,895	810,800	192,400
30% 12 months from Exchange Bulletin	6,345,653	2,212,342	1,216,200	288,600
40% 18 months from Exchange Bulletin	8,460,870	2,949,789	1,621,600	384,800

Financing Transaction

As disclosed in the Filing Statement, prior to the closing of the Transaction the Target entered into a credit agreement dated as of October 30, 2020 with Cortland Credit Lending Corporation ("Cortland") pursuant to which the Target obtained a bridge credit facility in an initial principal amount of $8,000,000 plus interest calculated at the rate of the greater of (i) 10% per annum; and (ii) the floating annual rate of interest established from time to time by the Toronto-Dominion Bank and designated by the bank as its prime rate plus 6.55% (the "Facility"). In consideration of making the Facility available to the Target, Cortland was entitled to certain fees and expenses, including a bonus equal to the amount of $195,000, which was fully paid and satisfied by the issuance of 260,000 common shares of the Target. The Target agreed to pay a finder's fee of $200,000 to Gravitas Securities Inc., a non-arm's length party, with $50,000 due after closing of the Transaction and the remainder due after the remaining $3,000,000 of the Facility is drawn. As of the closing of the Transaction, the amount of $5,000,000 had been drawndown and advanced under the Facility.

Information for Shareholders

The Company's transfer agent, TSX Trust, will be mailing a statement pursuant to the Direct Registration System to all of the Target's former securityholders and Aumento's former securityholders representing the Company shares that they received in connection with the Transaction. Shareholders wishing to receive a physical share certificate should contact TSX Trust for information on how to obtain physical shares certificates in place of a DRS Advice.

Investors are cautioned that, except as disclosed in the Filing Statement prepared in connection with the transactions described herein, any information released or received with respect to the transactions described herein may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

Neither the TSX Venture Exchange Inc. ("TSXV") nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) has in any way passed upon the merits of the transactions described herein and neither of the foregoing entities has in any way approved or disapproved of the contents of this press 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 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 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 the risk factors discussed in the Filing Statement which are incorporated herein by reference and are available through SEDAR at www.sedar.com. 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.

Share numbers noted in this press release may not match the numbers disclosed in the Filing Statement due to rounding pursuant to the process of completing the Consolidation and the exchange of Target securities for Aumento Post-Consolidation Shares. 

SOURCE EMERGE Commerce Inc.

James Bowen, CFA, EMERGE Commerce Ltd., 416-519-9442, [email protected]; Media contact: Lauren Arnold, Talk Shop Media, [email protected]