Mr. Ghassan Halazon reports

EMERGE REPORTS THIRD QUARTER 2023 RESULTS

Emerge Commerce Ltd. has released the results for its three and nine months ended Sept. 30, 2023. Copies of the interim financial statements and management discussion and analysis are available on the company's profile on SEDAR+.

"Considering the seasonal nature of Q3 for some of our key businesses, and the ongoing macro climate, we're pleased to have delivered another quarter of positive Adjusted EBITDA. Q3 also marks our third consecutive quarter with gross margin exceeding 50%, reflecting the team's numerous gross margin enhancement initiatives. Our revenue in Q3 2023 was down vs. Q3 2022 in part due to the unprofitable US operations and trading divisions eliminated in late 2022, in addition to what we view as more normalized post-pandemic revenue levels reflected lately. Most of our key businesses remain substantially higher than pre-pandemic (2019) levels, and we are seeing strong sales momentum lately across numerous brands, especially during the Black Friday shopping period," commented Ghassan Halazon, Founder and CEO, EMERGE.

Q3 2023 Financial Highlights

• Q3 GMS1 was $18.2M compared to $20.1M in Q3 2022 when excluding GMS from US operations and trading that were eliminated in 2022 (Q3 2022 $20.4M GMS prior to exclusion of these items)
• Q3 Revenue from continuing operations was $5.4M versus $5.9M in Q3 2022 when excluding revenue from US operations and trading that were eliminated in 2022 (Q3 2022 $6.3M revenue prior to exclusion of these items)
• Q3 Gross Margin improved to 51% compared to 46% in Q3 2022
• Q3 Adjusted EBITDA1 of $0.18M for 2023, compared to $0.20M in 2022, marking the Company's 8th consecutive quarter of positive Adjusted EBITDA, and 14th out of the last 15 quarters
• Net Loss from Continuing Operations of $0.5M for Q3 2023 compared to net income of $1.8M in Q3 2022. The increase in net loss is primarily attributable to unfavourable variances from foreign exchange and other gains (losses) and remeasurement of contingent consideration in Q3 2022.
• Cash on hand at September 30, 2023 was $2.3M

This marks EMERGE's first financial report which classifies WagJag as discontinued operations, with prior period results also restated to reflect the reclassification where noted. The Company completed its sale of WagJag in August 2023.

Brand-Level Updates

The EMERGE portfolio currently houses 3 verticals: Grocery/ Meat, Pets and Golf.

Our premium meat subscription business, and our largest brand by revenue, truLOCAL.ca, is seeing our most significant improvement in profitability in 2023 YTD following our various cost savings initiatives over the last 12 months. Gross margins are also materially stronger this year-to-date, in large part due to the elimination of the loss-making trading and US divisions in late 2022, in addition to the team's margin improvement efforts. Revenue has come down from peak-pandemic levels, but remains substantially above pre-pandemic (2019) levels.

Our B2B Pets marketplace, WholesalePet.com ("WSP"), remains highly profitable and cash flow generative. While WSP has come down from its peak pandemic highs, the business continues to be significantly larger and more profitable than its pre-pandemic (2019) levels, continuing to build on its 22-year track record. The business is also benefiting from improved take-rates, driven by a commission increase exercise in the 2nd half of the year.

Our Golf business includes UnderPar, our golf experiences business and JustGolfStuff, our products business. UnderPar continues to be adversely affected from the post-pandemic boom in the sport of golf that has reduced the need for golf course discounts on the platform to attract customers. However, the business is seeing encouraging signs lately, particularly this holiday season, that a number of prominent golf courses are returning to the platform, and we believe the recessionary environment ahead could be conducive to drive more golf course supply on the marketplace.

JustGolfStuff, our golf products business, remains our fastest growing brand across EMERGE, driving high double-digit organic growth year-to-date, and currently being optimized for profitability. JustGolfStuff is also seeing strong early momentum with its US expansion.

Management Transition

The Company will be appointing Kyle Burt-Gerrans as Chief Financial Officer and Corporate Secretary effective January 2024. Kyle succeeds Jonathan Leong, who will be stepping down to pursue other opportunities. Jonathan will remain with the Company until January 2024 and ensure an orderly and smooth transition of his responsibilities.

Kyle has been the Company's Director of Financial Reporting since July 2021, leading the financial reporting of the Company. He is a Chartered Professional Accountant with over 10 years in financial reporting and accounting and holds a Bachelor's degree from Queen's University.

"On behalf of the EMERGE team, I'd like to congratulate Kyle on his upcoming promotion to CFO in January. Over the last few years, Kyle has been an instrumental senior financial leader at EMERGE, working closely with management and our auditors, so this was a natural progression for him with us. This transition also aligns with our plans of operating with a leaner HQ team and structure to support our more focused brand portfolio moving forward. We'd also like to extend our sincere gratitude to Jonathan for his partnership over the years. We will continue to work closely with Jonathan throughout the transition period, and wish him nothing but the best in his future endeavours," commented Halazon.

Top Priorities

The Company's top priorities in the near-term are to i) continue to pay down debt, ii) drive organic growth from the existing portfolio, iii) extract further operational efficiencies, and iv) enhance EBITDA to cash flow conversion.

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 nine months ended September 30, 2023, which are available on SEDAR.

About EMERGE

EMERGE is a diversified acquirer and operator of quality niche e-commerce brands in Canada and the U.S. Our subscription and marketplace e-commerce properties provide our members with access to offerings across our pets, premium meat/grocery, and golf verticals. EMERGE was named one of Canada's Top Growing Companies by Globe and Mail in 2022 (and 2020), and one of the fastest growing companies in Canada by the Startup 50 in 2020.

We seek Safe Harbor.