Aumento Capital VII Corporation Provides Further Details About Business Combination Transaction with Emerge Commerce Inc. in Respect of its Qualifying Transaction

Toronto, Ontario--(Newsfile Corp. - October 9, 2020) - Aumento Capital VII Corporation (TSXV: AUOC) ("Aumento") is pleased to announce further details about its definitive agreement (the "Business Combination Agreement") with Emerge Commerce Inc. ("Emerge") as initially announced on August 25, 2020.

About Emerge

Emerge is a private company incorporated under the Business Corporations Act (British Columbia). Emerge is a leading acquirer and operator of niche e-commerce brands across North America with a variety of offers on golf, groceries, essentials, staycations, experiences and retailer coupons. Emerge's main brands include UnderPar.com, WagJag.com, and JustGolfStuff.ca among others. Emerge leverages shared technology, data, and resources of its portfolio companies through its e-commerce software solutions to drive growth and synergies.

Selected Financial Information

The following is selected financial information for Emerge as at and for the periods indicated. The requisite financial data presented for the relevant periods has been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Interpretations Committee.

 (1) Discontinued operations relate to Mighty Deals Limited, whose operations were disposed by Emerge in February 2019.
(2) Non-GAAP measure. Refer to Metrics and Non-IFRS Financial Measures for additional details.

Metrics and Non-IFRS Financial Measures

The following non-IFRS definitions are used because management believes that they provide useful information regarding our ongoing operations. Readers are cautioned that the definitions are not recognized measures under IFRS, do not have standardized meanings prescribed by IFRS, and should not be construed to be alternatives to revenues and net loss and comprehensive loss for the period determined in accordance with IFRS or as indicators of performance, liquidity or cash flows. Management's method of calculating these measures may differ from the method used by other entities and accordingly these measures may not be comparable to similarly named measures used by other entities or in other jurisdictions.

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. 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.

Adjusted EBITDA as defined by Emerge means earnings before interest and financing costs, income taxes, 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 to management about the operating and financial performance and its ability to generate ongoing operating cash flow to fund future working capital needs and fund future capital expenditures or acquisitions.

The intent of Adjusted EBITDA is to provide additional useful information to investors and analysts and the measure does not have any standardized meaning under IFRS. Adjusted EBITDA should therefore not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Other issuers may calculate Adjusted EBITDA differently.

About the Transaction

Pursuant to the Business Combination Agreement, Aumento has agreed to acquire all of the securities of Emerge by way of a three-cornered amalgamation, subject to the terms and conditions of the Agreement. Pursuant to the Transaction, Aumento's wholly-owned subsidiary, 1260383 B.C. Ltd. ("Subco"), will amalgamate with Emerge (the "Amalgamation") to complete Aumento's qualifying transaction (the "Transaction") in accordance with the policies of the TSX Venture Exchange Inc. ("TSXV"). As a result of the Amalgamation, Emerge will become a wholly-owned subsidiary of Aumento. Upon completion of the Amalgamation, it is intended that Aumento will change its name (the "Name Change") to "Emerge Commerce Inc." (the "Resulting Issuer"). The Transaction is subject to the receipt of all necessary regulatory and shareholder approvals as well as the satisfaction of the conditions to closing as set out in the Business Combination Agreement.

Under the terms of the Business Combination Agreement, at the effective time of the Amalgamation (the "Effective Time"), among other things:

1. Aumento will consolidate 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 (the "Consolidation");

2. The holders of common shares of Emerge ("Emerge Shares") will receive common shares of the Resulting Issuer in exchange for their Emerge Shares on the basis of an exchange ratio of one (1) Aumento post-Consolidation common share for every one (1) Emerge Share issued and outstanding as at the Closing (the "Exchange Ratio");

3. All outstanding warrants and stock options of Emerge either automatically adjust in accordance with the terms thereof such that following completion of the Transaction, the holders thereof shall acquire the post-Consolidation common shares of Aumento in lieu of the common shares of Emerge adjusted to reflect the Exchange Ratio, with the exercise prices adjusted by the inverse of the Exchange Ratio, or will be replaced with equivalent convertible or exchangeable securities of Aumento entitling the holders thereof to acquire post-Consolidation common shares of Aumento in lieu of common shares of Emerge adjusted to reflect the Exchange Ratio, and otherwise bearing the same terms of the securities they replace;

4. All outstanding convertible debentures of Emerge will either automatically adjust in accordance with the terms thereof or be exchanged for convertible debentures of Aumento on similar terms and adjusted in accordance with the Exchange Ratio and Consolidation; and

5. The board of directors and management of the Resulting Issuer will be replaced with Ghassan Halazon, Drew Green, Kia Besharat, Nima Besharat, Jonson Sun, and John Kim (the "Contingent Board").

The Resulting Issuer will hold on a consolidated basis all of the assets and will be subject to all the liabilities of Emerge and Aumento, and will continue the business of Emerge. The Resulting Issuer has applied to list on the TSXV as a Tier One Technology issuer.

The completion of the Amalgamation is conditional on the parties obtaining all necessary regulatory and shareholder approvals in connection with the matters described above and other conditions customary for a transaction of this type.

Resulting Issuer Security-Holdings

The Resulting Issuer will issue to the holders of Emerge Shares approximately 79,522,774 common shares of the Resulting Issuer ("Resulting Issuer Shares") (on a post-consolidation basis) as consideration for the Transaction, and the Emerge shares shall thereafter be cancelled.

The Resulting Issuer will issue to the holders of common shares of Aumento ("Aumento Shares"), approximately 1,500,000 Resulting Issuer Shares (on a post-consolidation basis), representing one fully paid and non-assessable Resulting Issuer Share for each Aumento Share held by such holder, and the Aumento Shares shall thereafter be cancelled.

Following the completion of the Transaction, it is anticipated that, immediately thereafter, the Resulting Issuer will have 81,022,774 Resulting Issuer Shares issued and outstanding with: (a) former Emerge shareholders (not including Subscription Receipt holders) holding an aggregate of 67,301,558 Resulting Issuer Shares, representing approximately 83.1% of the outstanding Resulting Issuer Shares; (b) former Aumento shareholders holding an aggregate of 1,500,000 Resulting Issuer Shares, representing approximately 1.9% of the outstanding Resulting Issuer Shares; (c) Subscription Receipt holders holding an aggregate of 11,639,254 Resulting Issuer Shares, representing approximately 14.4% of the outstanding Resulting Issuer Shares; and (d) Agent Subscription Receipt holders holding an aggregate of 581,962 Resulting Issuer Shares, representing approximately 0.7% of the outstanding Resulting Issuer Shares.

Following the completion of the Transaction, it is anticipated that, immediately thereafter, the Resulting Issuer will have the following convertible securities issued and outstanding:

The Resulting Issuer will adopt a stock option plan (the "Stock Option Plan") for the granting of stock options. The Stock Option Plan will be a "fixed" plan pursuant to which the total maximum number of Resulting Issuer Shares that may be issued pursuant to it is 16,204,500 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 Resulting may be listed or traded on, if required.

Shareholder Meetings

Aumento held a meeting of its shareholders on September 8, 2020 at which its shareholders approved the Name Change, the Consolidation and the Contingent Board.

Emerge held an annual general and special shareholder meeting on September 29, 2020 at which its shareholders approved, among other matters, the Amalgamation and related matters.

Arm's Length Transaction

The Transaction is an arm's length transaction in accordance with the policies of the TSXV and is subject to Emerge shareholder approval.

Proposed Management and Board of Directors of the Resulting Issuer

Upon completion of the Amalgamation, James Walker, Paul Pathak and Roger Daher shall resign as directors of Aumento and Roger Daher shall resign as President, Chief Executive Officer, Chief Financial Officer and Corporate Secretary of Aumento. Subject to Exchange approval, the directors of the Resulting Issuer as at the Effective Time shall be Ghassan Halazon, Drew Green, Kia Besharat, Nima Besharat, Jonson Sun, and John Kim. The Resulting Issuer will appoint Ghassan Halazon as President and Chief Executive Officer, Jonathan Leong as Chief Financial Officer, Fazal Khaishgi as Chief Operating Officer, and Nima Besharat as Corporate Secretary, subject to Exchange approval. Further information concerning the proposed directors and officers of the Resulting Issuer is as follows:

Ghassan Halazon, Director and President and Chief Executive Officer

Ghassan Halazon is the Founder and CEO of Emerge Commerce Inc., named Canada's fastest growing e-commerce Startup in Canada, 12th overall, by the 2019 Startup 50, a CanadianBusinesss.com and Maclean's list.

Ghassan has 10 years of experience acquiring and operating e-commerce businesses in North America. Ghassan is also an early stage technology investor and mentor. Over the past decade, companies founded by Ghassan have driven $400 million in gross merchandise value ("GMV"), hired over 300 employees, completed 7 M&A transactions, across 3 countries, and raised over $40 million in capital.

Ghassan's experience leading an e-commerce business through a challenging climate became the basis of founding Emerge, to consolidate quality assets cost-effectively and build a truly profitable e-commerce portfolio.

Formerly, Ghassan was an Investment Banker with Citi (New York) during which his team advised on $5 billion worth of capital raising and M&A transactions. Ghassan Halazon holds an MBA from Georgetown University, and a Bachelor of Commerce from McGill University.

Ghassan sits on the Boards of the Canadian Arab Institute, a non-partisan organization that focuses on issues and interests of the community. Ghassan is also a board member of the Be-Abled Society, a not-for-profit that enables individuals with non-visible disabilities transition back into everyday life.

Ghassan is an e-commerce and technology speaker haven given keynote speeches and fireside chats at Harvard, TEDx, TechTO, and TechStars among others. Ghassan and his companies have been featured on major news and technology publications including the Financial Post, Globe & Mail, Toronto Star, CBC (Dragons' Den), CTV and BetaKit.

Upon completion of the Transaction, Ghassan Halazon will own approximately 10,222,469 Resulting Issuer Shares representing approximately 11.7% of the share capital of the Resulting Issuer on a fully diluted basis and approximately (13.3% on a non-diluted basis). It is anticipated that the only other insiders of the Resulting Issuer will be its directors and senior officers.

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 Inc. 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, creating one of the world's fastest growing apparel brands. Previously recognized as top 40 under 40, as well as CEO of the year, in 2017 Green 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.

Drew was CEO of SHOP.CA, Canada's first multi-merchant marketplace (acquired by Emerge). Drew has helped create billions in shareholder value through leadership roles at DoubleClick (acquired by Google), SHOP.COM (acquired by Market America) and Flonetwork (acquired by DoubleClick).

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 Commerce Inc., Pishon Innovation Lab, and Kore Alliance. He is also active in philanthropic and faith-based organizations around the world.

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.

Mr. Kim currently sits on the board as lead independent director 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.

Subscription Receipt Financing

In connection with the Transaction and as previously announced on July 17, 2020, Emerge has completed a private placement offering (the "Subscription Receipt Financing") of 11,639,254 subscription receipts (the "Subscription Receipts") at a price of $0.75 per Subscription Receipt for gross proceeds of $8,729,440.50, with the final tranche completed on September 22, 2020. Each Subscription Receipt will entitle the holder thereof to receive, upon satisfaction of certain escrow release conditions (the "Escrow Release Conditions") on or before the escrow release deadline, and without any further action payment of additional consideration, one common share in the capital of Emerge for each Subscription Receipt then held.

Details of Agents' Compensation

Canaccord Genuity Corp. (the "Lead Agent") and Gravitas Securities Inc. were engaged as lead agents in connection with the Subscription Receipt Financing (the "Agents"). The Agents received a cash commission equal to 8% of the gross proceeds of the Financings, less any finders' fee (the "Agent's Commission"), together with broker warrants equal to 8.0% of the number of Subscription Receipts issued under the Subscription Receipt Financing (the "Broker's Warrants"). Upon and conditional on the satisfaction of the Escrow Release Conditions, each Broker's Warrant will be exercisable for one Common Share at a price of C$0.75 and following completion of the Transaction, one common share of the Resulting Issuer ("Resulting Issuer Share") at a price of C$0.75 per share for a period of 36 months following the completion of the Transaction. In addition, a corporate finance fee (the "Corporate Finance Fee") was paid to the Lead Agent equal to 5% of the gross proceeds raised in the Offering, which Corporate Finance Fee will be payable in Subscription Receipts in such amount as equals 5% of the number of Subscription Receipts issued, totaling 581,962 Subscription Receipts. Emerge will pay all of the Agents' reasonable expenses of the Subscription Receipt Financing, including reasonable fees, taxes and disbursements of the Agents' legal counsel (the "Agents' Expenses"), such Agents' Expenses being payable whether or not the Subscription Receipt Financing or the Transaction are completed

The gross proceeds from the Subscription Receipt Financing less the Agents' Expenses (the "Escrowed Proceeds") are held in escrow until the satisfaction of the Escrow Release Conditions, including the confirmation that all conditions precedent to the Transaction, other than the release of the Escrowed Proceeds, have been satisfied. In the event that the Escrow Release Conditions are not met on or before that date which is 210 days following the closing of the applicable tranche of the Subscription Receipt Financing, the Escrowed Proceeds, together with any interest accrued thereon while in escrow, shall be returned to the purchasers on a pro rata basis and the Subscription Receipts shall be automatically cancelled. Emerge shall make up for any short fall in funds payable to the purchasers.

Secured Bridge Loan

Pursuant to the terms of the Business Combination Agreement, at Emerge's request Aumento will advance an aggregate of $250,000 to Emerge by way of secured loan (the "Aumento Capital Loan"). The Aumento Capital Loan will be interest free until the earlier of closing of the Transaction or the date the Business Combination Agreement is terminated. Emerge will apply the proceeds of the Aumento Capital Loan to fund the costs of the Transaction. The Aumento Capital Loan will be secured against the assets of Emerge or such other security as necessary to obtain such approval, but will rank behind all existing registered security of Emerge. On closing of the RTO Transaction, the Aumento Capital Loan will be consolidated as a debt assumed by the Resulting Issuer.

Use of Proceeds

The funds to be available to the Resulting Issuer upon the closing of the Transaction are expected to be approximately $10,961,797, which includes the anticipated net proceeds of the Subscription Receipt Financing of approximately $7,714,441 and existing cash on hand of Emerge and Aumento immediately following the Amalgamation.

Such available funds are anticipated to be used, principally, as follows:

The Resulting Issuer intends to spend the funds available to it as stated above. There may be circumstances, however, where for sound business reasons, a reallocation of funds may be necessary.

Investor Relations Services

Emerge is pleased to announce that it has engaged Loderock Advisors Inc. ("Loderock") to provide investor relations services to Emerge. Services include developing and maintaining relationships with market participants, coordinating the disclosure of corporate information to shareholders, and providing capital markets advice to the Company. Loderock will be compensated at a rate of CAD$10,000 per month plus HST. The fees will automatically increase by 2.5 percent at the anniversary of the contract, unless otherwise negotiated.

Exemption from Sponsorship

Aumento plans to rely on the exemption from sponsorship requirements provided by the TSXV's policies where a brokered private placement greater than $500,000 is completed and the TSXV receives a satisfactory due diligence letter from the Agent.

Filing Statement

In connection with the Transaction and pursuant to TSXV requirements, Aumento will file a filing statement on SEDAR (www.sedar.com), which will contain details regarding the Transaction, the Amalgamation, the Subscription Receipts Financing, Emerge, Aumento and the Resulting Issuer.

Regulatory Statements

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.

The information contained or referred to in this press release relating to Emerge has been furnished by Emerge. Although Aumento has no knowledge that would indicate that any statement contained herein concerning Emerge is untrue or incomplete, neither Aumento nor any of its respective directors or officers assumes any responsibility for the accuracy or completeness of such information.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV approval and, if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the content of this press release.

Notice regarding forward-looking statements:

This release includes forward-looking statements regarding Aumento, Emerge, and their respective businesses, which may include, but is not limited to, statements with respect to the completion of the Transaction, the terms on which the Transaction are intended to be completed, the use of the net proceeds from the Subscription Receipt Financing, the ability to obtain regulatory approvals, the proposed business plan of Emerge, and other factors. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of the management of each entity. The forward-looking events and circumstances discussed in this release, including completion of the Transaction, may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding the e-commerce industry, the risk that Emerge and Aumento may not obtain all requisite approvals for the Transaction, including the approval of the TSXV for the Transaction (which may be conditional upon amendments to the terms of the Transaction), requirements to obtain regulatory approval, failure to obtain regulatory approvals, economic factors, the equity markets generally and risks associated with growth and competition. Although Aumento and Emerge have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Aumento and Emerge undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

For further information please contact:

Aumento Capital VII Corporation
Roger Daher, President
Email: rogerdaher@aol.com

Emerge Commerce Inc.
Ghassan Halazon, CEO
Email: ghassan@emerge-brands.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/65611