EMERGE Commerce (ECOM) investor relations material

Deal rationale and strategic fit

• Acquisition of Viral Loops, a profitable B2B referral marketing platform, launches a new B2B vertical and complements existing D2C brands, enhancing organic customer acquisition and diversifying away from reliance on major digital ad platforms.

• Viral Loops' technology will be leveraged across D2C verticals to reduce customer acquisition costs, improve retention, and enhance word-of-mouth campaigns.

• The deal aligns with a disciplined capital allocation strategy focused on cash flow-generating technology businesses and strengthens both financial and operational aspects of the portfolio.

• The acquisition was opportunistic, driven by the seller's need to pay down debt, allowing for a favorable purchase price.

Financial terms and conditions

• Purchase price was CA$2.3M (CA$2.1M upfront, CA$200K deferred for one year), representing ~2.9x 2025 Adjusted EBITDA.

• Viral Loops achieved CA$1.3M in revenue and CA$800,000 in Adjusted EBITDA (60%+ margin) in 2025 unaudited statements.

• The deal was funded through an upsized private placement, resulting in about 15% dilution, and included assumption of deferred revenue liability of approximately US$82K.

Synergies and expected cost savings

• Viral Loops' asset-light, high-margin, recurring revenue model is expected to drive down customer acquisition costs, improve consolidated margin profile, and enhance cash flow conversion.

• Gross margin enhancement: Viral Loops at 86% vs. portfolio average of 36%.

• Integration is expected to reduce seasonality, stabilize earnings, and improve EBITDA conversion to cash flow.