EMERGE proposes amendments to senior unsecured convertible debentures

Canada NewsWire

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

TORONTO, Oct. 8, 2026 /CNW/ -- EMERGE Commerce Ltd. (TSXV: ECOM) ("EMERGE", or the "Company"), a premium e-commerce brand portfolio, announces its intention to amend (the "Amendment") certain terms of the 10% senior unsecured convertible debentures (the "Debentures") that were issued by the Company on November 24, 2022, as part of an offering (the "Offering") of convertible debenture units of the Company, with each unit comprised of one Debenture and 4,000 common share purchase warrants of the Company. The Offering was made pursuant to a prospectus supplement of the Company dated November 3, 2022, which supplemented a final short form base shelf prospectus of the Company dated April 8, 2022. The Debentures were issued pursuant to, and are governed by, a debenture indenture dated November 22, 2024, as amended by a first supplemental indenture dated April 29, 2024, between the Company and TSX Trust Company (the "Indenture").

The Debentures will mature on November 24, 2026, 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 $0.135 per Common Share (the "Conversion Price").

The Company wishes to reduce the Conversion Price to $0.10 per Common Share (the "New Conversion Price"). The Company further wishes to amend the Alternative Redemption Right (as defined in the Indenture) of the Company so as to allow the Company to redeem up to 100% of the aggregate principal amount of the Debentures and to pay the principal amount and any accrued and unpaid interest thereon in cash or in Common Shares, at the Company's discretion, with any Common Shares to be issued at the New Conversion Price.

Ghassan Halazon, Founder and CEO, EMERGE, commented, "The proposed amendments and planned settlement of the debentures in shares would build on the significant progress we have made in strengthening EMERGE's financial position. If approved and completed, the transaction would reduce our debt, improve cash flow and strengthen our working capital. Together with our recently announced 7-year refinancing with Desjardins, which lowered our interest rate from 11.0% to 7.3%, this step would further enhance our financial flexibility as we focus on generating cash flow, investing in our brands and pursuing disciplined, opportunistic acquisitions."

All other terms of the Debentures will remain the same.

The Amendment is subject to the approval of the TSX Venture Exchange and the approval of holders of not less than 66⅔% of the principal amount of the Debentures outstanding, which holder approval the Company expects to seek at a meeting of the holders of the Debentures to be held on November 18, 2026 (the "Meeting"). In connection with the Meeting, the Company has filed a notice of meeting and record date to its SEDAR+ profile at www.sedarplus.ca ("NOMRD"). For additional information, please refer to the NOMRD.

Assuming the approval of the Amendment at the Meeting, the Company hereby provides notice to the Debentureholders of its intention and decision to exercise the Redemption Right and to redeem 100% of the aggregate principal amount of the 1,390 Debentures currently outstanding, subject to rounding, in accordance with the Indenture, once amended. As a result of this rounding, an aggregate of $1,390,000 of principal amount (the "Redemption Amount") will be redeemed on a pro rata basis. The Company anticipates that it will elect to settle the Redemption Amount by the issuance of 13,900,000 Common Shares, which shares will be issued at the New Conversion Price.

Assuming the approval of the Amendment at the Meeting, the date fixed for the redemption is anticipated to be November 23, 2026 (the "Redemption Date").

Completion of the redemption remains subject to final TSXV approval and Debentureholder approval of the Amendment. In the event final TSXV approval of the Amendment is not received on or before the second Business Day (as defined in the Indenture) preceding the Redemption Date, then the redemption will not proceed.

Assuming the approval of the Amendment at the Meeting and a Redemption Date of November 23, 2026, an aggregate of $20,564.38 (the "Interest Amount") in unpaid interest is expected to have accrued on the Redemption Amount as of the Redemption Date, calculated in accordance with the Indenture. Interest on the principal amount of the redeemed Debentures will be payable on the Redemption Date and interest on the redeemed Debentures will cease to accrue on and after the Redemption Date.

Assuming the approval of the Amendment at the Meeting, in accordance with the Indenture, as amended, the Company hereby also provides notice to the Debentureholders of its intention and decision to exercise the Interest Conversion Right, and to settle the Interest Amount by the issuance of approximately 205,643 Common Shares, which shares will be issued at the New Conversion Price, assuming that the New Conversion Price is greater than the lowest price permitted by the TSXV Policy 4.3 – Shares for Debt. This settlement will be a Shares for Debt Settlement and remains subject to TSXV approval. In the event that conditional TSXV approval of the Shares for Debt Settlement is not received on or before the second Business Day preceding the Redemption Date, then the Interest Amount will be paid in cash on the Redemption Date.

Based on the register of Debentures maintained by the Trustee, all of the Debentures are registered in the name of CDS & CO, the registration name for The Canadian Depository for Securities Limited ("CDS"). As such, CDS is the sole registered Debentureholder and the redemption will take place in such manner as may be agreed upon by CDS, the Company and the Trustee.

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 Commerce (TSXV: ECOM) is a disciplined acquirer and operator of profitable e-commerce brands and technologies across Direct-to Consumer ("D2C") and Business-to-Business ("B2B") segments. Our D2C portfolio spans our Grocery and Golf verticals. truLOCAL is our flagship Canadian meat and seafood subscription service. Our Golf vertical includes UnderPar (discounted golf experiences), JustGolfStuff and Tee 2 Green (discounted apparel and equipment). EMERGE B2B houses Viral Loops, our referral marketing platform. 

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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 TSX Venture Exchange approval for the Amendment, receipt of approval of the Debenture holders for the Amendment, 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 TSX Venture Exchange or holders of the Debentures will not approve the Amendment, 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.

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