EMERGE Commerce Ltd. (ECOM) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Emerge Commerce webcast. [Operator Instructions] On behalf of the speakers that follow, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking statements. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. For additional information about the factors that could cause results to vary, please refer to the risks identified in the company's annual information form and other filings with Canadian regulatory authorities. Except as required by Canadian securities laws, the company does not undertake to update any of the forward-looking statements. Such statements speak only as of the date made. Your host today will be Mr. Ghassan Halazon, Founder and Chief Executive Officer of Emerge. I will now pass the call over to Mr. Halazon.

Thank you so much, James. Great to be with you all shareholders, investors, prospective investors and partners. I hope everyone's New Year is off to a productive and healthy start. It's been a while. We've been trying to up our game on the webcast side of things, as many of you know, trying to keep everyone informed. Today, we came out with a shareholder letter that I penned entitled 'Rebels on the Rise'. We hope you'll take some time to go through it. It's an in-depth piece, spent a lot of time thinking through articulating our journey, our progress and our plans. So definitely one to not miss. It's out there now available on our latest PR from today, but also available in the news section of our corporate site. With that, I'm going to jump right into the presentation that we have in mind for today. As usual, we'll take a Q&A on the back end of the presentation and give [indiscernible] a chance to ask us directly and we will answer transparently and as openly as we are able to. With that, I'm going to jump right into our presentation. We have some new slides as well today. But first, I always like to sort of level set for anyone that is new to the Emerge story and give you a general view of where we are collectively as a diversified portfolio. As many of you are aware and have gathered for now for some time, our thesis and our approach is such that we are building what we believe will one day be one of the preeminent portfolios in digital and commerce and e-commerce, right? So we are -- we view ourselves as first and foremost, disciplined capital allocators. We've advanced our pipeline, and we've achieved a certain level of minimum scale that we believe is a starting point to much more exciting territory. Our collective brands today, combined for about $120 million in pro forma gross merchandise sales. In other words, GMS, for sure, meaning that is sort of the amount that we are processing across our various brands. We currently count approximately $60 million or 50% of our GMS as actual IFRS revenue on a pro forma basis, inclusive of all of our acquisitions and about $7 million in pro forma adjusted EBITDA. I think something to highlight with this sort of pro forma level of EBITDA is if you think of our progress over the last year and at the time we went public when we had about $800,000 in EBITDA, the transformation that's occurred in 2021 and hopefully continues as we plan to progress here, really sort of graduates us from what I would call a marginally profitable company to a meaningfully profitable company. And I think that's the 2022 theme here is that we want to start showing that EBITDA tripled to cash flows, and we'll talk a bit more about that. But inherent in our model, we have 5 key verticals today, 8 brands, practically what you see from the meat section, i.e., truLOCAL and Carnivore Club to the right with outdoor gear, BattlBox, which is our camping and hiking and survival gear business as well as our ex B2B business, wholesalepet.com, all of that has occurred post go public. We initially went public on December 14. Prior to that, we came into the public markets at the time with our experience within golf verticals, which continue to be with us today and have -- we still have some ambitious fans across all of our various verticals. Of course, all our acquisitions currently are in North America. We're based out of Toronto as a company, where we have offices across the major regions in Canada as well as multiple locations and regions in the U.S. So I want to kind of start us off a bit with the announcement that we made earlier last week , which is that Harish Consul of Ocgrow Ventures has joined Emerge as a strategic adviser. Really, that's, in our view, the perfect way to start the year. Ocgrow is a rather low-key investor, but make no mistake, they are a prolific technology and specifically E-commerce investor having made big bets early with Amazon, with Shopify and with Coupang. For those of you who are familiar, Coupang is The Amazon Of South Korea, a multibillion-dollar marketplace, market leader in South Korea. Ocgrow is actually also quite active in the broader technology world. They are co-investors with Bill Gates in a recent stack from last year of Heliogen. Helen. There are co-investors with [indiscernible] Ventures with Steve Case, the Founder of AOL and multiple [indiscernible] Silicon Valley and really global investors. So for them to come in as a strategic adviser and to partner with us is a major milestone and a starting point, quite frankly, and a graduation of ours into this sort of bigger longer-term institutional phase for Emerge. And again, you have to start somewhere and we believe our spreading point with Ocgrow here coming in as a strategic adviser as a partner, as an investor, we think is a tremendous way to start 2022. I'm going to do a quick case study. It's one slide on wholesalepet -- for some of you as I see a lot of new people on the call today, and we have pretty much a record number of registrants and attendees today, super exciting to see and really sort of resonates with really the momentum we're seeing on the business side. So I've got to see that and I'm excited to have a lot of new views as well as well as existing investors. So wholesalepet was the acquisition we made mid-November. We've highlighted that we believe it's a transformative acquisition. It's a B2B play. Most of our other brands were, of course, consumer focused. So business-to-business sort of platform. It is one that has processed over $250 million in gross merchandise sales, USB over the last 20 years, with more than $40 million in just the last year. So this is a business that has had a tremendous CAGR, or compounded annual growth rate over a 20-year period through thick and thin, longest graphic at the bottom shows you that no matter what's happened in the world, ups and downs, recessions and pandemics, it's always found a way to thrive and continuously steadily grow and it's doing so at a 75% EBITDA margin, to its actual revenue, okay? So this is sort of -- and a Canadian just -- for Canadian dollar terms, we're talking about $3.5 million or so in adjusted EBITDA. Graphic below is, of course, in USD as it is a U.S.-based business. The way it works is it connects about 8,000 retailers who come to wholesalepet.com. These are retailers looking to buy that food, toy, treats, apparel, they find about 1 million SKUs available on a wholesalepet.com, and they come -- a lot of times they call every month, very sticky audience. There's no customer concentration. It's a highly diversified business, right? One of the -- our favorite attributes of all of this and actually quite contrary to many consumer E-commerce brands, including some of our own is that wholesalepet need not market and has a very minimal marketing budget. And the reason it's able to do so is because of the flywheel it has created over 20 years, 8,000 retailers, 400 vendors, 1 million SKUs, tremendous [indiscernible], tremendous repeat revenue, right? And so all of these things give you a sense. When we talk about going out and leading through the ocean of E-commerce businesses, we're looking for hitting jobs. We call them [indiscernible] rebels internally, which is also, as I said, the shareholder lever to this entitled 'Rise of the Rebels' -- ' right, 'Rebels on the Rise '. And really, a lot of that is finding consistent through that noise, a lot of little companies out there. Where are those hidden gems that demonstrate cash flow? Where are those hidden jumps that have proved the test of time? Where are those hidden gems where the founders and management teams that come on board are interested in building and scaling alongside Emerge? Wholesalepet is one such example, and it's a brilliant one at that. So coming in on our M&A model, as I said, our approach is such that we acquire, we integrate and we accelerate these businesses. And the slide that starts with sort of our M&A philosophy. And I should say, not too dissimilar from other roll-up or consolidation plays in various spaces. M&A, in our case, accretive M&A, i.e., profitable very early on, many times on day one is kind of how we do it. We are acquiring businesses that add that EBITDA on day 1, much like wholesalepet does. That translates to good cash flow conversion, often is our focus. We want businesses that are going to show not only EBITDA and EBITDA growth, but also cash flow growth. And so from our perspective, that cash is critical, growing that cash flow is critical for servicing our debt, but also for adding ability to expand our debt. And so with our size, with our improved profitability profile, we are starting to see and believe that we will continue to see increasingly better and cheaper cost-effective debt facilities out there for the purposes or the primary purpose, I should say, of acquisitions. And that's -- that's sort of that next step, with the added profitability comes more debt. With more debt, we are able to continue to acquire. Today, there are thousands of niche E-commerce businesses, tens of thousands by some studies and research, but we have -- we've identified tons. And in our pipeline is an expansive pipeline. We've invested heavily last year in M&A -- and those thousands, I might add, are profitable businesses. There are, of course, millions of unprofitable ones, but there are thousands of million-plus EBITDA businesses, of course, our sweet spot is somewhere between 1% to 5% we normally stated. Now speaking of our pipeline, and as my legal team often reminds us, these are illustrative examples. Of course, our pipeline, we're screening anywhere between 120 to 250 potential businesses to acquire. So an expansive pipeline is growing. At any given time, we may have multiple signed MOIs and advanced opportunities. Now we've checked these boxes. For those of you who have known us in some previous webcasts, we've talked about buying a subscription portfolio and that turned out to be BattlBox in that case. We talked about buying a B2B platform. That turned out to be wholesalepet, and then we completed both of those acquisitions in Q4 of last year. Looking ahead, wireless and beauty, both very interesting areas online. We have another interesting growth opportunity over here that we anticipate. There are multiple direct-to-consumer specialty phases. This is one we're highlighting. Smart home is obviously a growing category, regardless of whether people are leaving their homes more often or not. People are investing in technology in their homes. As you can see, EBITDA last couple of acquisitions are in the 3.5% range. You're seeing some 4s and 3s. So a lot of that mid-range between 1% to 5% is where we are focused for new verticals as well as some existing opportunities. We also have some bigger and more audacious ones. In this case, the smart home target is $11 million in EBITDA. And that's sort of a sign of things to come if we continue to execute. We build up our own scale, then those bigger acquisitions start becoming possible. So that's big dive a bit more maybe in a way that I haven't lately induced out of our planning around what we're sitting on from an organic business perspective. As I said, we have 8 brands -- and we're going out on a limb here to say 2022 is a big synergies year for us. We went on sort of a shopping spree last year. We have acquired 3 businesses with 4 brands. And so extracting synergy and unlocking additional growth opportunities from across the portfolio really is a priority for us. And as you can imagine, when you buy these businesses and when you're partnering with management, you can expect a bit of a lag between the time some of these things happen. Some things require integration. Some things are not necessarily suited in that moment in time when you acquire a new company -- but as we're getting to spend time with these management teams and as everyone is lining up what those opportunities are, there are some key ones that we've highlighted that we're looking into or tackling now or in the near future year in 2022. Examples up here, payment processor, one of my favorite because it's the easiest to experience. When you have $120 million worth of gross sales that you're processing, it makes total sense for all of those brands to ultimately process on a single -- with a single provider. In other words, locking in a discounted rate or the best rate for that matter across -- when you look at the world of payment processors, it's highly fragmented. They're companies innovating like Strike. There are the moments of the world, obviously, PayPal, there's all sorts of different companies out there offering different terms. Who wants $120 million worth of business? And what rate are you willing to give us to get all of our business, right? So as an example, I'd say -- if we were successful in reducing the payment processing fee by 0.5%, on $120 million over time, that's $600,000 worth of savings straight to the bottom line. It's very powerful stuff -- very straightforward, it's very powerful, what we call Boeing but brilliant internally. Email service provider, same concept, why are different brands using different e-mail providers. Once we acquire them, [indiscernible] something with their own e-mail arrangement but we are offering different pricing terms, scaling sort of our overall offering and therefore, speaking to e-mail providers about a better price. Some of these conversations are happening now. Warehouses and logistics, a multiple -- so initially, we have experiences businesses, but now we have multiple subscription/D2C businesses that have their own warehousing or outsource some of it. Project is underway now to look into how we share facilities between multiple brands, right? It's not an overnight, but it's in the works, and we're looking at it very seriously. Customer service. Sure, every brand has its unique way and approach and rules and refund rules and so forth. But overall, it makes 0 sense for this to be fragmented. Over time, customers service ticket data, analytics, our approach with customers, our value form, how we speak to them. Ultimately, synchronization there unlocks in a more efficient approach. Marketing dollars, there's certainly learnings out of every brand that we're getting. Some brands are trying different types of creative, the way they speak in an app, the types of images. Sometimes are trying new channels. BattlBox has 1.5 million likes on TikTok. No one else has as deepened TikTok and emerging social channel, one of the fastest growing in the world. We're learning from BattlBox about TikTok, right? We're learning about influencers from truLOCAL. These are learnings that get passed along to the entire group. And by consolidating teams and agencies over time, there's tremendous opportunities for us to tap into a smarter marketing and analytics engine. Obviously, the admin and back offices are given. There's a lot of stuff we can consolidate, again, the boring stuff, but they're pretty sure stuff. We've just acquired these businesses. We have not yet realized some of these savings. There's more HR functions. There's things like this that we're building at HQ for everyone else. We are -- in the end;, we're saving our brand portfolio companies money and time. Time is key. We need them to focus on countering their respective needs, right? So wholesalepet that needs to go deeper and spend more time on conquering at B2B E-commerce and less time figuring out what to pay and how to get a good price for payments, how to figure out security on this side and all of that stuff, right? So we are imparting our brands to go all out and giving us the bites to take care of. Now the third piece of our equation, as we said, its first piece was acquired and do so with discipline, attract the right people, retain them, right and pay the right price, of course. Integrate them. We just talked about a bunch of integration that's going on across the company and then accelerate them, there's different aspects to it. So we launched a case study for just all stuff. We've highlighted it last year. It was the fastest-growing brand and across Emerge in 2021, right? Sales basically more than doubled, essentially -- almost tripled essentially. Cross-selling is when you take your brand or one brand rather their audience and see how to monetize that audience on other brands or channels within the company. And there was not any better case study than saying when under far had some challenges on golf. We were able to rotate that customer base and have to go towards golf products. And at a time when everyone was golfing and still is, right? Despite the winter, you'd be surprised, December and November, big, big months for selling golf experiences, which was great to see. But it showed us the agility of the team and the ability to merchandise and reroute attention of customers from experiences to [indiscernible], which is, again, a huge growth area for us. Advertising initiatives, maybe not the most exciting that it sounds like, but what we like is this idea that someone like [indiscernible] or a McDonald's or a Starbucks come to us and say, "Hey, we're looking to advertise this special credit card on [indiscernible]. We want to access our high end, largely male demographic with a certain income. Well, great. We got under part for that. We got the outer part, do you have anyone in the millennial base that's highly social, et cetera? What does what to localize a tremendous female-driven audience that is digitally savvy, health conscious has a lot of millennial attributes, right? So as we start pushing these partnerships, we are opening more doors by having more brands. Margin enhancement. This is a Q1, and this is where there's a lot of, let's say, quiet additions and improvements. An example would be a service charge that under par has added on its service ever since -- and ever since it's been will emerge, driving hundreds of thousands of dollars a year in incremental margin by adding a service charge because of the added investments of staff in various areas like customer service and technology. Customers don't seem to mind through local in the face of higher meat prices. We've all seen that. It's been a big headline. The ability to come in and raise prices and think through the market that you leverage and infuse knowledge and support to think through how to improve margin, how to think through that analysis and also need to deploy it in their case, a $10 increase, which is about a 4% increase in the overall average box value per month. And to see that, that churn wasn't impacted because customers love the truLOCAL brand and understand the macro environment. So for truLOCAL to proportionally make that increase -- that's something that we work with them from HQ to think through those sorts of ideas of how to improve margin, whether it's to offset macro plan or opportunistic, as I said, with under service charge. BattlBox is another big example here, they've added a mystery box that you can add upon checkout. You're buying older counting and hiking here, right, for $49 or for $59, -- can you -- would you add added the school marks with stuff really? It's a great way for clearance for BattlBox. It's working nicely and customers love the added value and the surprise and [indiscernible]. Finally, M&A expertise. A lot of these bootstrap companies, they don't have time or knowledge or resources to do M&A. With our M&A team, we are pushing and looking at tuck-in opportunities. Obviously, we haven't done much in that front. We've been buying up new verticals, but tuck-in opportunities is something where we can accelerate their geographical footprint and double down where they're already winning as well. Next up, what we call beyond the shopping cart. And this is the first time I talk a bit more about the future beyond just sort of the M&A, which continues to be a big part of our journey. So emerge, obviously, first and foremost, our shopping cart as a reference, few E-commerce, that's where shopping car revenue happens when people check out on virtual shopping carts. We have about $120 million soft -- but there are multiple areas, we're super excited about that we think we're going to bring value not only in 2022. In fact, this is just a starting point, but for many years to come. You think about all of these virtual shopping stores. Think of us as a virtual mall, I often say. Well, wouldn't it make sense to create a unified loyalty or perks program. Some of our brands already have some loyalty inherent in them. But over time, we wouldn't a buyer of truLOCAL needs be interested potentially in buying a trip somewhere or buying wine or buying some go off. They're buying a gift for 5 days for hiking or comp, right? So there's tremendous opportunities across the portfolio. And over time, you'll see us connect the dots more, right? We are still in the early stages where we've been amassing this profitable portfolio. But over time, you're going to see dot connections. You're going to see correlations and our technology and our recommendations and our port underlying or you can anticipate a sort of loyalty program over time. Monetizing data, again, as a unified data up, and we talked about advertising, but there are also all sorts of data monetization opportunities available to us that we're starting to explore. Some of them are online and you may be surprised to hear, but some of them are offline, [indiscernible] millions of both people, for example, right? We have great information that allows us to potentially make great relationships and monetization with experts in the data sets. Emerging Technologies, we're all meeting about, I'm sure over the holidays, everybody spend a little bit of time at least and we probably should learn thing about NFTs, learning about where the blockchain is going, obviously, the metaverse. We won't go there just yet. But these are very interesting technologies. A lot of times, if you wonder -- if you spend time thinking about what makes some of these projects super successful, it starts with the reach. Lower grades of libraries going to the sort of stuff because they have great reach. We think emerging has tremendous reach, millions of course, directly and indirectly through our broader community. And so we think these sorts of emerging technologies over time, you will see us be involved. That's because we are a boiling business looking about boiling profitable companies doesn't preclude us from entering really exciting spaces if we believe that they can be highly profitable over the medium to long term. So you're going to see more of us exploring and thinking through how to leverage our collective reach. We basically have the reach of a small country. So it's start to think through all of these areas. Accretive acquisitions, the only thing I thing on that -- we already know that we made 3 acquisitions last year. We already know we're going to be very active on M&A this year and beyond. It's part of our DNA. But the one thing I'll say is, over time, we may not just be buying consumer or B2B to the e-commerce businesses, right? There might be really interesting technologies, add-on technologies, data companies, analytics companies, e-commerce enablement companies. So over time, we're building this core portfolio, but that doesn't preclude us from thinking through the future as the space evolves as well. Were the incubation, I love the just gold stuff idea. It was practically nothing when we acquired them other than a sign business. We trained it into the fastest-growing business in man. There will be more of that as we leverage our data and finally, global partnerships. Again, just like any company with the reach, why not strike bearing an exciting partnerships, whether it's with telecom, whether it's with media companies and so forth. So quickly, just to talk through sort of the last year, I already highlighted this before, so I won't spend much done. We've seen tremendous growth over our first year of being a public company. We've grown gross sales by 4x, revenue by 6x EBITDA, adjusted EBITDA, rather that is pro forma by 9x. Jumping into the corporate update, a snippet of Q4 and what we've shared with the market so far, really beautiful run numbers up left, as you might have heard, we eclipsed the $100 million mark comfortably, I might add. We have a first ever $1 million a day in our first $10 million a month, exceeding all of Q3 in November alone. And of course, as we -- as you can imagine, December is also a big holiday month. We haven't shared those results yet. Lower last, we also talked a bit about the organic business. We profiled multiple brands that have done really great things during certain stretches of Q4 as we've highlighted. So it's not just the M&A. We're also seeing some really solid early results. assets on a double-digit growth curve. A couple of our brands are still seeing that 2x pre-pandemic. Consensus forecast, I won't touch on too much. You've heard this before, potentially you've tuned in or if you're following. Cantor, Raymond James, consensus price at $1.73. The forecasting around in million for 2021, about $1 million or so in EBITDA consensus for 2021. But look at that [indiscernible] 2022, that is their expectation. The EBITDA jumps up. And of course, we do not necessarily talk about our own estimates or guidance yet and we do not endorse research and estimates either. But this is for you to be aware, this is what they're seeing and they're projecting us to go to almost $65 million in 2022 with just under $7 million or so in EBITDA as well. So -- and that's, by the way, just to be clear, excluding additional acquisitions. All right. Comparables. It's been a volatile start to the year for most, and it's been quite messy. The only thing I'd like to highlight from these different buckets of e-commerce companies and consolidate our companies that we tend to look at and peg ourselves at gains. When you look at the revenue correlation emerge remains highly undervalued relative to peers. There are some reasons for it. Of course, some of these companies are world giants. So they've come at a certain premium. We are not the ones who talk about or should talk about share price per se. We are ones that talk about our own value and our own aspirations and plans. So we leave it to investors to take a look. But nonetheless, a very noticeable gap in valuation from -- if you look at emerges 1 to 1.4x revenue relative to peers in the various buckets. If you look at EBITDA to enterprise value, again, on the low -- much lower end of the spectrum, most e-commerce companies or a number of them at least are not actually profitable, as you all might know. So we're really zooming in on that cost of billing on that cash flow to differentiate us over time. And of course, increased scale matters as well. The leadership the team. You've seen this many times and it's available publicly. I'm not going to spend too much time here. We have a veteran team of technology, e-commerce, MA and capital markets folks. We have our updated actable on the right, with 103.3 million shares outstanding, a $67 million market cap, enterprise value of $85 million plus with $7 million in cash and $25 million in debt from our recent facility. Finally, and this is a good time if anyone has questions to drop them down. I really see some coming through. Our key priority is just to highlight. A lot of this has been touched on, driving that help organic growth. It is not just about buying companies, it's what we're doing with them. Translating that in EBITDA into positive operating cash flow, a big theme for 2022 and something I think will separate us from a lot of second e-comm companies out there. Driving that synergy all tied in with #1 and to, continuing down that accretive acquisition staff. We showed you a wholesalepet today showing you the value and the approach and the cash flow on that business. More of that, where are we going to get it from and how you ultimately tuck-in acquisitions to improve our existing verticals. Of course, with acquisitions, that getting better debt and better pricing in terms, something that we've continuously tried to do. Increasing awareness with investors, something like an off-road is a starting point, as I said. It is a sophisticated long-term deep-pocketed institutional type investors and that's exciting for us. And we're starting to see the merits of that. And we believe it's, again, the door-opener for other like-minded institutions over time. And finally, we're practically 1 to 2 acquisitions a way. If you look at the size of our BattlBox or the size of a wholesalepet, we're in striking distance of about $100 million in revenue and $10 million in adjusted EBITDA. We believe that is a big deal from -- and maybe it's partly optics and the idea of round numbers but from our discussions with reinfusions and research analysts alike, we feel that is a range where we must be heard. We are now ultimately what I consider the largest of the small with those ranges we start becoming the smallest of the large, and we believe we deserve the attention, whether that's institution or whether that's research, whether that's other types of partnerships and opportunities available at better scale and profitability. Final reminder before we take any Q&A, definitely encourage you all to check into today's press release and go to our website, emerge-commerce.com. It is available in the news section to access shareholder letter that I spent a lot of time articulating what I believe answers many questions out there that sometimes we receive via investor-meatbrands.com or otherwise on your mind, as we think to the road ahead past the first $100 million is say the first $100 million is the hardest. We are on a mission to prove on right. With that, I'm going to open it up to some questions, and we can get started with answering some of your key questions.

All right. Good question. Number one, how is e-comm planning to use debt in a higher interest rate environment? That's a thoughtful question and a very timely one in this environment. Let me take a step back and first of all, say that people tend to forget that if you take ourselves a year back or a couple of years back, prior to the road to where we are from an interest rate perspective, businesses were practically quite fine in those early days with an extra 1 or 2, right? We're not saying that, that doesn't have implications, of course. But just want to remind that take 2 or 4 more hikes in interest rates at the end of the day. It just brings us back to where the world was a couple of years ago when it was booming. So we personally take the view that what's most important to our lenders and our prospective lenders is the health of our business. To the extent that we grow our business as an example, from $800,000 in EBITDA last year, to $7 million in adjusted EBITDA, for example, as analysts are projecting. That is way more meaningful to banks in terms of offering us cheaper pricing relative to where we were, right? That is really the key determining in the types of rates and types of packages that debt providers will likely give us. So I can also say conversations that we are having already reflects a new level -- our new level rather, and that's being price tag. So I believe that's the answer. Other question. How is the global supply chain impacting your business? That's actually a pretty good question. We get it a couple of times. And for those of you who don't know, it's hard not to have missed it says global supply chain is an issue for many businesses. There are specifically companies largely, I would say that are Amazon based, that are big product China vendors that will continue to see challenges for the foreseeable future. We at the verge are very fortunate . We have to -- and there are a few reasons why when it comes to this global supply chain issue. First of all, let me address, largely speaking, we are not seeing the games of supply chain in a meaningful way other than some aspects, which I'll highlight. But big picture, we are not. I know a couple of reasons why. Number one, we are a highly diversified platform. So think of our businesses, some are in experiences, right, like golf experiences, which we said was doing quite well in Q4. Others are in areas of local or regional supply chain, so think truLOCAL, working with local farmers, right? So that's not necessarily impacted by supply chain issues in China. However, as you know, there are other considerations, for example, the price of meat, which we offset to the price increase. So largely, what I would say is there are some cases where, for example, with BattlBox, there are some aspects of China impact supply. And a lot of that has to do with planning right, inventory management, making sure the customer experience is related. I think consumers have come to expect it. But largely, when you look at wholesalepet where we sit in the middle. So it's just connecting vendors and retailers when it's truLOCAL with the regional supply chain, when it's under par, Canada and U.S. as well as wild chart, it's all local experiences. So we have a lot of diversification away from actual supply chain in China. It's not a big part of our business. So that's sort of how I would say. Wholesale models, wholesalepet model seems to be quite sticky. Do you see other similar into the opportunities via M&A or organically? Great question. I've been pretty obsessed I must admit with B2B seeing how well one wholesalepet is how lean it is, how recurring the relationship is. Some of the top customers, one of my tirade stats that I may have not mentioned before, their average tenure on wholesalepet is 10-plus years, right? We haven't seen that, right? So for us, we are very much intrigued and interested in B2B e-commerce and in categories around those areas. Now I must admit there are not as many opportunities in B2B, you don't have thousands, for example, of B2B niche platforms. However, we certainly are big in and we have our conversations going, and we think this is a model that is very exciting. And to your point about whether you would look at it organically, and that's great foresight, by the way, we certainly are in different ways, though. So if you think of our merchant community, right, -- let's take truLOCAL as an example. We have tremendous relationships, a long-standing relationship with local farmers and suppliers, are there things we can do for them behind the scenes, are there technologies we can build for them? Are there ways we can connect them with each other? That is in that is really an opportunity that we believe is ripe for disruption. Same thing applies for golf. In the U.S., we partner with golf associations in many cases. And we find that, that idea of us powering, given our technology, our know-how, our golf relationship with their audience, golf associations tend to have very old school long-term audiences via mail or otherwise. And these are all ways we partner with them on a B2B basis. So I do think actually -- any said you some good foresight is we're really starting to think B2B compete an in-home almost secret sauce for advantage for emerge in the background. Are you seeing more competition in this space? And how do you stand out? There's a lot more noise lately. We used to -- there were times when we'd speak about consolidating e-commerce in rooms with very, very few people to unman very much unlike where we are today with just 100 plus again year-to-date, very fortunate, very humbling to see so many of you coming in asking great questions as well here. The landscape has changed, $12 billion plus have been raised in e-commerce consolidation last year. And that's just on the Amazon marketplace opportunity, which emerges is not actively in today. So that is the buying of other Amazon merchants opportunity, leader of which is a company called Thrasio just raised $1 billion at a $5 billion valuation, almost 5x growth sales. So think of that as a free of valuation. And they're the poster charge with the Amazon consolidation. Now there are others emerging that are make Shopify acquisitions as well. So certainly, there will be some added competition, I would imagine over time in some of the Shopify businesses that we're acquiring. Here is the main difference. And here's what I would say, separates us from the path, okay? First of all, I think we're probably going to be more picky buyers, right? So think of what I said, we have about 120 opportunities that we're sifting through. And really, we're looking at the way it acquire, for example, last year, we did 3. We're aiming to grow that, of course, with our investments, we're taking whether that's 4 or 5. You'll want to see us buying 50 companies middle companies, for that matter, $500,000 EBITDA is $1 million EBITDA. So we might do some tuck-ins if it makes sense. But we're not a factory of just acquiring, acquiring, acquiring and then we see what happens. We are methodical, disciplined fatal allocators and bite. And so what that means is we're going to set to the ruble to find that wholesalepet or that BattlBox or that truLOCAL, right? And so we are more careful. And I would say the other aspect is we are working with management. The first question I'll ask is if management wants out, that they want to in the conform that emerges setup, we are not interested in just figuring things out on our own. We would rather partner with management teams who have done it for years. We breathe passionate about it. We've developed great merchant relationships and we'll hear the back of and support and in the ways that we know how to do best. So those are the big differences in why I haven't seen competition be a major issue for us. At what stock price would you consider issuing new shares to raise additional capital? Now let me say that if these questions were a host or someone was feeding them to me from Investor Relations, and now one we don't have been one that I was given. I'm happy to be transparent and open to the extent that I can. I cannot comment exactly on what share price would make sense and so forth. But what I can say is this. We really have more interest at this particular point in time at the current share price to be raising capital via the equity or issuing equity. I think if you look back at our history and our approach, we've really been mindful to shareholders and dilution. If we take the last couple of acquisitions, Belly Bounce, we issued no shares upfront, although they have room to gain share via one if they achieve their goals, and we would want them to that as a good incentive alongside plans, of course. And then with wholesalepet, the vast majority was in cash, i.e., financed by that with some shares. But if you look at both deals, very transformative deals for us. We own issued about 4 million in shares out of our $103 million total to acquire really interesting businesses, almost $7 million in combined EBITDA between the both of them, one with no shares and one where some shares. But largely, I think if you follow our lodges, we're trying to hire businesses for 4 to 6x EBITDA with about 3x of that upfront. Now those that have followed what I've said before, we are generally comfortable with a 3 to 4x debt-to-EBITDA ratio, which means the vast majority of acquisitions should be financed with debt if we are able to do this our way. And so therefore, we're not looking to raise at these levels. I think we're pragmatic, obviously. We are not looking to raise for the sake of raising and we're not looking to raise in a very dilutive and penalizing level where we think we're highly undervalued. I hope that gives you a bit of context. In regards to your announcement on January 14 of raising $100 million, will the company be issuing additional equity and diluting existing shareholders over the company be going to the debt market? I think this -- I'm not quite sure that, that $100 million raises. So this might be sort of a misunderstanding. Obviously, we have not raised $100 million now, I see you might be mentioning the base shop prospectus essentially that we put out. The base prospectus essentially is nothing more than us setting ourselves up over the next 25 months is what it's for, if and when the opportunity arises. So I think I've just addressed this in the sense that we have no interest in raising at these levels. We are going to be a debt-driven company from this point on. Obviously, we'll be pragmatic and opportunistic. We hope that we've earned our shareholders trust to make the right decisions. Last round, we only raised $1.40 when we felt like it would be minimum dilution to existing shareholders. So we're going to be pragmatic with how we tackle this. The base shelf was a first step to open the door over a 24- or 25-month period if and when it makes sense to us. Do you foresee making a bigger investor marketing push in the U.S. given your increased brand presence there? To go to question, I would say a timely one as well. Obviously, we are getting no shortage of outlook now from the U.S. side of the plant. And a part of that is because we've been acquiring businesses, I don't think many people realize, but we now have offices and teams in California, in Illinois, with truLOCAL in Virginia with wholesalepet outside of the tank that were part of us. So we are now more of a presence with our people, with our teams, but we also have hundreds of thousands of active customers and e-mails, maybe in the millions as well that we believe are -- was significant value from an awareness perspective. So when it gives back to investors, yes, absolutely. That is on the road map. We are going to be more active starting this year, laying the foundation with U.S. investors. We are doing non-deal road show spending time getting to know people, getting them to learn about the story. There are different listing opportunities available to us, both in sort of the OTC, DTC and eventually as any company would strive as we grow, the NASDAQ is not something that we take off the table either. So these are all opportunities for us to really continue to build up our awareness. And frankly, if I'm speaking transplant, which I always do over a year with you guys, I do think there's a general understanding and depreciation of e-commerce in the U.S. and really sort of a springboard or given how much more time they've had to absorb and digest the sector with companies like Amazon, with category leaders like Etsy and Wayfair and Zulily. All of that has made for a much more in-depth e-commerce audience and investor base we think the U.S. is going to become a bigger and bigger part of the story, and we are laying the foundation in 2022. So that is part of our investor awareness push. Guys, I'm doing a ton of questions, and I would definitely not be able to attend to all of these, but here's what I'll say. Please, please do reach out to investors at emergebrands.com. I personally review these questions with our IR team with James Boland and the IR team every week. And I often respond to anything that needs further depth or clarity. I do so closely and directly. These are tremendous questions, and I think I don't want you to miss out on the answers you deserve. So I would request that I'll take one last question. And after that, please do send to invest Emerge as ransom if it's of any interest of you for you to follow up. Here's the last question. In view of upcoming challenges in 2022, will we see Emerge being more patient with acquisitions? This is a terrific and thoughtful question. And I must say not typically kind of what investors tend to push for or try to, I guess, breach when we speak. I think, look, like we will continue to be selective is what I have to say. I think where we will be strategic is in picking niches and businesses that have that move and have that ability to stand out and differentiate in a rather crazy world from a macro perspective. As I mentioned, with wholesalepet, there's practically 0 marketing. You don't have to worry about some of the issues on Facebook or Google or privacy or Apple. So that was an edge here. When you look at Balloon, they'll have that Netflix show that gives them that free customer acquisition. When you look at truLOCAL, they have a tremendous cost following almost of consumers that are willing to do all sorts of things -- they write amazing letters to customer experience. You think it's Valentines. You look at under part, you see those relationships, deep relationships with customer -- golf associations where customer acquisition creatively is being done. You've got to have that edge. So when we're buying businesses, as I've mentioned, we are already being super careful and crafty about how we screen and ultimately, how we choose who we end up acquiring. So you can count us to continue to be disciplined. I'll say it now because it's old news. But last year, when you raised capital, some were saying, well, where is the next acquisition, it's May in June as July. Well, guess what? We might have had an acquisition that we thought we were going to do -- we did the due diligence, we were not satisfied. And that's okay. The market may say, "Hey, where is that next deal. But if it's the wrong deal, we're not doing it. As long as I'm CEO, we're not doing the wrong deal. In my mind, we are completely focused on picking the right acquisitions, the right partners, management teams that we truly believe can partner with us for years to come as we've built into our earn-out model. And so that's kind of the way I would address it. And it's a crazy world as is, but our diversified portfolio and our ability to continue to be nimble and lean and focused, I think, will be the key. Friends, investors, ladies and gentlemen, I really appreciate all your time and questions today. As I said, responses way more questions than I have personally seen before. So I would really appreciate if you follow up there. I hope you found some value in this. I hope you're all excited as we are about 2022 and beyond. And thank you so much for your time today. Reach out. And lastly, as always, Rebels Unite. Thank you so much. Have a great day.