EMERGE Reports Third Quarter 2020 Results, Revenue Increases 196%, with Positive Adjusted EBITDA

TORONTO, Dec. 17, 2020 /CNW/ - EMERGE Commerce Ltd., ("EMERGE" or the "Company") (TSXV: ECOM), a leading acquirer and operator of niche e-commerce brands, today announces its financial results for the three months ended September 30, 2020. These financial results are for EMERGE Brands Inc. (formerly EMERGE Commerce Inc.) prior to the reverse takeover transaction and related financing activity completed on December 7, 2020.

2020 Third Quarter Financial Highlights

• Gross Merchandise Sales or GMS ⁽¹⁾ increased 251% to $7,746,068, compared to $2,207,830 in Q3 2019
• Revenue increased 196% to $2,226,314, compared to $752,857 in Q3 2019
• Adjusted EBITDA⁽¹⁾ was positive $62,196 compared to negative $173,681 in Q3 2019

¹ _{Non-GAAP Measure. See the Non-GAAP Measures section of this news release.}

"EMERGE's third quarter results demonstrate the impact of the acceleration of consumer spending online," said Ghassan Halazon, Founder and CEO, EMERGE. "Our diversified e-commerce portfolio grew rapidly in the quarter as we saw strong demand in a number of key verticals, including groceries, essentials, and golf products, which offset COVID affected categories. This performance is a testament to the agility of our business model, the resilience of our merchant partner network, as well as the great trust instilled in us by our loyal customer base."

"The quarter continues the trend this year of strong revenue growth and positive Adjusted EBITDA, demonstrating our consistent commitment to disciplined operations and prudent capital allocation," continued Halazon.

"It's truly a momentous time to be at the forefront of Canadian e-commerce, a sector that has experienced more growth in recent quarters than it has over the prior decade. EMERGE is better positioned than ever to continue to acquire, integrate, and accelerate quality e-commerce brands."

About EMERGE
EMERGE is a disciplined, diversified, rapidly growing acquirer and operator of e-commerce brands across North America.  Our network of e-commerce sites provide our members with offers on golf, groceries, essentials, nearby staycations and experiences.  Our portfolio houses some of Canada's most coveted online destinations including UnderPar.com, WagJag.com, JustGolfStuff.ca, and BeRightBack.ca. EMERGE was named one of the fastest growing companies in Canada by the Startup 50, and the Globe and Mail's 2020 Canada's Top Growing Companies.

To learn more visit www.emerge-commerce.com

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"), Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA should not be construed as alternatives to 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 EMERGE 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.

The following table provides a reconciliation of the Company's reported revenue for the three months ended September 30, 2020 and 2019 to GMS.

	Q3 2020	Q3 2019
Revenue	$        2,226,314	$            752,857
Merchant costs deducted from net revenue	5,962,004	1,732,612
Sales added to deferred revenue	3,769,815	-
Deferred revenue recognized	(4,038,928)	-
Advertising revenue	(173,137)	(277,639)
Gross Merchandise Sales	$        7,746,068	$        2,207,830

Adjusted EBITDA as defined by EMERGE 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.

The following table provides a reconciliation of the Company's reported net loss for the three months ended September 30, 2020 and 2019 to Adjusted EBITDA.

	Q3 2020	Q3 2019
Net loss	$      (1,291,668)	$      (516,943)
Interest and finance costs	427,528	253,064
Income tax (expense) recovery	53,559	-
Amortization and depreciation	355,223	48,881
Share-based compensation	417,803	44,272
Transaction costs	150,560	5,000
Foreign exchange and other losses	(50,809)	(7,955)
Adjusted EBITDA	$            62,196	$      (173,681)

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.

SOURCE EMERGE Commerce Ltd.

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