Mr. Ghassan Halazon reports

EMERGE COMPLETES ACQUISITION OF VIRAL LOOPS, LAUNCHING PROFITABLE B2B VERTICAL

Emerge Commerce Ltd. has closed the acquisition of substantially all assets of Viral Loops and specified liabilities from Wishpond Technologies Ltd.

Ghassan Halazon, founder and chief executive officer of Emerge, commented: "On behalf of the Emerge family, I would like to extend a warm welcome to the talented team at Viral Loops and their hundreds of international B2B [business-to-business] customers. At approximately 2.9 times adjusted EBITDA [earnings before interest, taxes, depreciation and amortization], we believe this acquisition reflects disciplined capital allocation with compelling returns, particularly for a cash-flow-generating technology business. Beyond the financial benefits, the Viral Loops platform provides a powerful tool to help drive referral-driven customer acquisition for our D2C [direct-to-consumer] brands while enhancing the quality and durability of Emerge's earnings and cash flow."

Founded in 2016, Viral Loops is a highly profitable, B2B referral marketing platform that enables businesses to design and manage subscription-based referral programs that drive word of mouth, increase retention and reduce customer acquisition costs.

Viral Loops operates an asset-light, recurring-revenue model with high gross margins and strong cash flow conversion. The business serves a diversified base of global B2B customers.

For the year ended Dec. 31, 2025, Viral Loops generated $1.3-million in revenue, with gross margins of approximately 86 per cent, and adjusted EBITDA of $800,000 (approximately 62-per-cent adjusted EBITDA margin), based on unaudited results.

Viral Loops will continue to maintain its experienced team, brand, website and its hundreds of client relationships under Emerge.

Strategic and financial rationale

Viral Loops is Emerge's first acquisition under its newly formed Emerge B2B vertical, designed to complement and strengthen the company's overall portfolio:

• Portfolio synergies: Viral Loops' referral technology is expected to be deployed across Emerge's direct-to-consumer (D2C) grocery and golf verticals to drive cost-effective customer acquisitions and word-of-mouth campaigns
• Improved financial profile: The transaction is expected to be immediately accretive to earnings and cash flow, materially improving Emerge's consolidated margin profile:
  • Enhances gross margin: Viral Loops' gross margin of 86 per cent (2025) versus Emerge's reported average of 36 per cent year to date 2025;
  • Strengthens adjusted EBITDA: inclusive of Viral Loops, Emerge's pro forma 2025 adjusted EBITDA would have been $2.2-million, an approximately 52-per-cent increase;
  • High EBITDA-to-cash-flow conversion given the asset-light nature of the business model (no inventory);
  • Reduced seasonality and improved earnings stability: Viral Loops generates recurring revenue throughout the year, which is expected to reduce the seasonality inherent in Emerge's consumer-facing businesses and enhance overall earnings stability;
  • Return on invested capital (ROIC) expected to exceed 25 per cent in Year 1.

Go-forward business

Emerge now houses five brands across three verticals. The D2C portfolio includes the grocery and golf verticals while Emerge B2B houses Viral Loops.

Transaction overview

Pursuant to the agreement and in consideration for the transaction, Emerge paid to the seller cash consideration of $2.1-million on closing of the transaction, subject to certain closing adjustments, and will pay $200,000 in deferred cash consideration at the one-year anniversary pursuant to a promissory note issued in favour of the seller by Emerge on closing.

The purchase price equates to a 2025 adjusted EBITDA multiple of approximately 2.9 times.

At Dec. 31, 2025, Viral Loops had total assets of approximately $1.2-million. The company is also assuming deferred revenue liability of approximately $82,000 (U.S.) at closing.

All conditions precedent to the completion of the transaction have been satisfied, including receipt of TSX Venture Exchange approval.

The transaction constituted an expedited acquisition in accordance with Policy 5.3 of the TSX-V.

No finders' fees were paid in connection with the transaction.

Emerge financed the acquisition entirely from the proceeds of its recently completed private placement. As a result, the company expects to fully capture the cash flow generated by Viral Loops following closing.

Webcast details

Emerge's chief executive officer will be hosting a virtual webcast on Wednesday, March 11, 2025, at 11 a.m. EST to discuss the Viral Loops acquisition, overall operational progress and coming plans. Registration details are below.

Webinar ID:  839 6020 1618

Passcode:   153084

About Emerge Commerce Ltd.

Emerge is a disciplined acquirer and operator of profitable e-commerce brands and technologies across direct-to-consumer (D2C) and business-to-business (B2B) segments. The company's D2C portfolio spans its grocery and golf verticals. truLocal is Emerge's flagship Canadian meat and seafood subscription service. Emerge's golf vertical includes UnderPar (discounted golf experiences), JustGolfStuff and Tee 2 Green (discounted apparel and equipment). Emerge B2B houses Viral Loops, the company's referral marketing platform, which enables hundreds of international clients to acquire and retain customers. Emerge is publicly traded on the TSX-V under the symbol ECOM.

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