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

Good morning, ladies and gentlemen. 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 factors that could cause results to vary, please refer to the risks identified in the company's filings with Canadian regulatory authorities. Except as required by Canadian securities laws, the company does not undertake to update any 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. Hope everyone is wrapping up Q1 in a good way. And it's been a pretty crazy period in the world at large, but we're happy to report here in EMERGE Commerce that we're heads down, as always, doing the work and making sure that we're following through with our plan. Today, I wanted to just share some slides. Some of you are new here. Others are first -- others have been familiar with the story. We'll try to bridge some gaps, but also try to share where we're at and where we see this going. So with that, I'm going to jump in, share our presentation. A couple of slides here for some first-timers, but also just updates in general. Today, EMERGE, as you all know, we acquire and operate a diversified portfolio of e-commerce brands. We do so across North America. We're about 5 years in. The growth, of course, that we've seen since going public is a completely different level. The business pretty much grew from about $30 million in Gross Merchandise Sales, or GMS, at the time of go public, around December 2020. We grew from about $30 million in top line to about $120 million in our first year or so of being a public company. That equates to about $60 million in revenue pro forma when we were at around $9 million at the time of go public, so over 6x growth in revenue. And then on an EBITDA basis, we were pretty much a marginally profitable business at the time of go public, about $800,000 in adjusted EBITDA. Today, we're sitting on in and around $7 million or so pro forma adjusted EBITDA for all of the companies that we've acquired. As many of you know, we are, as I said, a diversified portfolio. So we are in multiple verticals. Those include meat subscriptions, outdoor gear and pets. These are all verticals that we jumped into since going public. But of course, when we went public, we had a golf vertical as well as inexperienced vertical. Overall, I think it's a pretty interesting time to sit in the middle of e-commerce and really commerce, in general, and we'll watch and iterate around where shopping online is going and where consumers as well as our B2B business now showing us a lot of different insights and a lot of different levers to work with. I want to take a minute to just touch on the partnership that we struck with Ocgrow Ventures earlier in Q1, bringing them in as the strategic adviser. They are a relatively low key investor. But when it comes to e-commerce, they know it better than most. They've joined us as a strategic adviser. They are an early investor in Amazon. We're talking 1998, right? And they've never sold a share there. So a sizable position in Amazon, a pre-IPO stake in Shopify as well as an early investment in Coupang, which is the Amazon of South Korea. So Harish Consul and Ocgrow Ventures, they know e-commerce well, and they are making a bet here that EMERGE Commerce is one of the winners in this space in our approach of consolidating, accelerating e-commerce businesses. I'd like to always give a snippet of the types of acquisitions we make. Let's start with the WholesalePet acquisition. As many of you may have seen today with our press release, we shared that WholesalePet's first full quarter under EMERGE has gone very well. In fact, this is a business that has a 20-year track record, as I've said before. So through thick and thin, through recessions and pandemics, this business has always found the way to grow organically. And we've seen no different in our first quarter under EMERGE. Of course, they are a B2B play. So they connect about 8,000 retailers, with about 1 million SKUs. So products, things like pet food, toys, treats, apparel and so forth. And that business has really stood the test of time. We have a veteran management team behind it. It is a technology platform. So we sit in the middle between these retailers and vendors and we connect them, not carry any inventory risk with this model. And that's what leads to that 75% adjusted EBITDA margin, something that really stood out to us when we were due diligencing the business. And again, they've proven that very much -- the expectation of that stickiness is very much in play. So many of you are familiar with sort of our acquisition-driven model. The nuts and bolts here, are that we're acquiring businesses that are cash flowing, that are EBITDA-positive. And that, in turn, drives our ability to increase our debt capacity and tie that to the next acquisition. Because of Shopify and other e-commerce enablement technologies, we have a world now with millions of e-commerce businesses, but really thousands of niche e-com businesses with greater than $1 million or more in EBITDA, right? So that's our threshold. We don't look -- that's our minimum threshold, I should say. We do not look to acquire any loss-making businesses, any businesses that are really at the mercy of the markets, if you will. For us, our focus has always, always been here on the acquiring businesses that stand on their own 2 feet. And what do we do when we find these businesses and negotiate win-win scenarios for them to join the EMERGE ecosystem? We typically pay around 4 to 6x EBITDA. We've been steadfast in our formulas, and we've delivered every time. We have 8 brands today. Normally, as I said, the range $1 million to $5 million in EBITDA is what we look for. Lately, we've been averaging sort of $3 million, $3.5 million in EBITDA per acquisition that we've been acquiring. We are not looking to fix stuff. I make that clear often. We are looking to partner with businesses and management teams that know their stuff. As I mentioned with WholesalePet, there's a track record. There's a sort of secret sauce. There's an approach to things. We are here to support. We'll talk about how we help them save and accelerate, but we're really not here to fix things. So we are not a distress buyer, et cetera. The way we've acquired these businesses has typically been in and around 50% of the total in cash upfront. So think of it as if we took the high end of the range that we acquire businesses for 6x EBITDA, we're typically paying around 3, 3.5x EBITDA upfront, which happens to match our debt appetite, right? So typically, we're looking at debt to EBITDA of 3.5x, give or take. And that allows us -- as long as we can continue to buy these businesses at those multiples, it really does allow us the opportunity to essentially continue to scale up, leveraging that and minimizing dilution. One interesting tidbit for you, at the time of go public, we've pretty much increased sort of share count as a result of acquisitions and raises by about 30%, 35% after the RTO and so forth. But we've actually grown revenue since then by 6x. So we grew share count by 30%, 35%, including warrant exercises and so forth, but we grew revenue by 6x. So that goes to show you, we take dilution very seriously. We want to make it so that our shareholders feel like the value we're acquiring, the business we're building is way more than any dilution they ever take. And hopefully, we minimize that with more debt in a responsible manner, of course. So let's talk pipeline. I mean we closed 3 acquisitions, 4 brands in 2021. When we -- prior to the go-public year, we had only closed about 1 a year, right? And that was limited capital, limited resources, limited access to debt. All of these things have changed since going public. And so from our perspective, we continue with our guidance that we'd look to make in and around 3 to 4 acquisitions this year again. And I think heading into next year, we'll probably start setting ourselves up for a quarterly cadence, give or take. And those include tuck-in acquisitions as well as new vertical opportunities. There are a couple of opportunities ahead of us. As at any given point, we have multiple signed LOIs through our M&A team. And I think really, as you look at these categories, health and wellness, more golf tuck-in opportunities, we actually see tuck-in opportunities as a big theme this year, and we expect to do at least one, if not 2 tuck-ins, in addition to 1 to 2 new verticals. But as you can see, they're all self-reliant. They're all EBITDA-positive today. And really the exciting part here and the marker for everyone watching is to keep your eye on that $100 million revenue and $10 million EBITDA that we believe we're about 1 to 2 acquisitions away. In fact, if we acquired a business that the size or -- with the EBITDA that BattlBox or WholesalePet achieved, that pretty much gets us to in and around the $10 million mark. And so that's very exciting for us. And it's more than just a nice round number, it's the number that we've been talking to a lot of institutional investors about, a lot of research coverage analysts, folks that seem to be intrigued by this. Of course, in our bigger road map, graduating to the TSX, eventually graduating to the NASDAQ, all of these things become that much more lucrative with, say, a minimum level of profitability and scale. And we think we're approaching it fast. So nuts and bolts of what we do when we acquire these businesses. If you've been on our calls, you've heard some of this. But as you think through things like payment processing, e-mail marketing, logistics, every e-commerce company, when we acquire it, has to plug into a variety of vendor software solutions. And the reality is when you're a relatively small to medium-sized business, call it $10 million to $50 million in revenue, doing all of this on your own doesn't really make all that much sense, right? We can leverage our collective skill. So payment processing is my favorite example and was actually a live example. We just acquired, as I said, 4 brands last year. And each one or a set of brands has come in with a different payment processor. Some are on PayPal. Some are on Stripe. Some are on Braintree or Moneris. And just sort of putting all of these businesses on a single payment processor and even cutting as much as -- as low as 0.5% of the fees we pay on our payments and credit cards, et cetera, on $120 million, that's $600,000 in EBITDA straight to the bottom line, right? That's a very powerful yet simple and almost boring example. And that's the point of the slide. It's boring, but brilliant, right? We are going after the clear nuts and bolts that allow these businesses to gain scale advantages and discounts that are unavailable to them on their own. But of course, none of this happens overnight, right? If we acquired 2 businesses in Q4, obviously, those migrations and integrations are under process way -- underway now. And really sort of the second half of this year and leading into next year, a lot of that cash flow will start trickling and showing. But make no mistake, the teams are busy. They're working on these shared services, and we think we're going to be able to point to significant progress here in the latter part of the year. The other aspect to our playbook, or sort of the third pillar after acquiring and integrating these businesses, is accelerating them, right? And I always give the example that if you play golf, you can't play golf in Jan and Feb in Ontario, but might you be interested in a ski trip on WagJag, right, a winter ski trip that is. If you like our meat subscription with truLOCAL, right, then you're getting organic grass-fed beef, would you be interested in some wines? That's something truLOCAL is actually testing on its own, but now rolling out potentially to other areas. The other thing to keep in mind is a lot of these niche bootstrap businesses. When you're talking about 10 employees, 15 employees, 20 employees that are really focused on their, for example, subscription box, they really often have very limited knowledge or resources to do M&A, right? So our M&A team, led by George Marouchos from Dye & Durham, a $3 billion legal software rollout here, a Canadian company. When John came from WELL Health on our Board, we have tremendous M&A expertise that we bring to these businesses. And from our perspective, it's the idea of tucking in and acquiring whether to grow geographically, whether to improve your overall logistics. There are a lot of tuck-in opportunities, and we've yet to scratch that surface. And of course, again, as I mentioned with scale and the payment processing, e-mail marketing savings, same applies for margin enhancement. Again, when we're coordinated, when we have more to offer, we have leverage with merchants, a lot of things can be improved in our favor. This is a very important slide, and it touches on our PR update today. The big theme -- one of the big themes in e-commerce lately, and no doubt in advertising at large, is the impact that Apple's privacy changes to the iOS 14 that caused really sort of shock waves through the ad world and specifically through Facebook and Instagram. I don't know if you would recall a couple of months ago, I mean there's just been a lot going on in the world, but certainly one of the highlights was when Facebook had to state that they expected to lose $10 billion worth of revenue because of the ad changes that Apple instilled. And the problem there is the reality for most e-commerce companies is that if you were reliant on Facebook and Instagram to drive customer acquisition in a very big way and you hadn't diversified your channels, you're in trouble, right? And essentially, the reality of that situation is something EMERGE, quite frankly, saw early. And we always focused and zoomed in on acquiring businesses that already seem to have their scrappy secret sauce, the customer acquisition. My favorite example here is BattlBox. BattlBox is the outdoor gear leader, a market leader in the U.S. And of course, on one hand, they have their own Netflix show, called Southern Survival, where they continue to get very attractive customer acquisition out of the show just by it living on, on Netflix. But the other side of it, and maybe the more involved side at this point, is their progress on TikTok. They have about 3 million plus likes, about 295,000 followers. TikTok, I'm sure many of you know by now, is sort of being viewed as an emergent social media network. Still young on the ad side, but really no shortage of engagement. And really, the BattlBox team has done a disproportionately good job of starting early, building up that fan base -- building out that enthusiast audience, but then now starting to monetize through ads and it's working. So it's a very, very exciting progress and minimizing the impact of something like an Instagram and Facebook issue with the lack of tracking and visibility due to Apple's changes. So that is a very concrete example. We have others, the extreme case being WholesalePet, a B2B platform that doesn't even need to market. It's been around for 20 years. And even though we're dabbling and testing a few things, they're not on Facebook. They're not on Google in any meaningful way. And their business is going incredibly well. As we reported today, we've seen a terrific consistency in their profit, in their cash flows. truLOCAL, really out-of-the-box. Pardon the pun marketing approach with working with partnerships, with fitness centers and gyms and brands like CrossFit. They have a WW or Weight Watchers partnership Orangetheory. They do a lot of influencer work. So they too are shielded, in some ways. Of course, all of our brands outside of WholesalePet still spend some dollars on Facebook and Instagram, and it's part of reality. The point I'm making is instead of it being 90% of how you drive customer acquisition, we're pushing it to be more like 10% to 20%, which is very, very advantageous for us in a time like this. I'll skip through here because I kind of brought this up upfront, kind of the progress we've made over the last year. Terrific progress. But let's go deeper into sort of our corporate updates. Of course, for those of you who don't know, our Q4 results will be reported pretty much the last week of April. Those are also our year-end results. But we gave a quick snippet of our preliminary view on Q4. And just real quick, just to highlight, obviously, a lot of this is M&A-driven. But I want to make clear that when we went public, we said we would be delivering these sorts of growth numbers. GMS grew from $8 million to $26 million, which is, of course, a record for us. Revenue grew from $2 million plus to $14 million plus. And then EBITDA, adjusted EBITDA, basically was close to 0, 2020. And now we're looking at the range of $1.1 million to $1.4 million. So again -- and this is not pro forma. Pro forma these numbers would look higher if you included WholesalePet and BattlBox from the beginning of Q4. WholesalePet, for example, came in November 15, but BattlBox came in October 7. So we're very pleased with these results, but I think encourage you to look out for our actuals, our Q4 is end of April and our year-end is, of course, for that matter. And we're excited to showcase, even though it's a glimpse, it's not a full view, but a glimpse of the power of the portfolio will emerge here in the Q4 results. We pointed this out as well, $100 million in GMS has been eclipsed. It's still a drop in the bucket. I mean e-commerce is $4 trillion today. Even $1 billion is 0.25%. And that $4 trillion is growing to $7 trillion by the way, in the next 4, 5 years. So we want to stay grounded. We want to stay focused. Listen, it's a great thing to have accomplished this. It's great to have jumped from $30 million to $120 million in about a year's time. That's a lot of growth, especially for a scrappy little team like we had heading into the go public. We have about 115 employees, give or take, today, which, relative to our gross merchandise sales, is about $1 million per employee is what we're doing now. I challenge anyone to come up with any of the names we're all familiar with in e-commerce and show us something that -- someone that is doing it more efficiently and more tight than we are. I'm always looking to learn. I'm a student of the space, but that is a ratio that we pride ourselves on, about $1 million per employee. I think some of the giants like Amazon, although there are in many other areas, are closer to $400,000 to $500,000 at this point. Although that may change any day, depending on whether they hire 10,000 or 20,000 here or there. And then also the other point I want to make is, again, ties to our PR update today. Both WholesalePet and BattlBox were completed in Q4. We now have a full quarter plus under our belts with both of them. And we're able to share that their profitability is excellent. BattlBox is, despite a tough supply chain and ad sort of a climate, where Facebook and Instagram are challenged at the moment from an advertising perspective, someone like a BattlBox, leveraging TikTok, leveraging Netflix, shows you that we are buying brands that are scrappy and that know how to solve problems and move fast, move very, very fast. Otherwise, they wouldn't have bootstrapped from $0 million to $28 million in such a short time period, with no outside capital. So we're really excited about some of that progress that we shared, specifically about profitability. Nothing you haven't heard if you know the EMERGE Commerce story. This is another boring slide, with the exception of that bullet number 7. We're really focused on the execution, on making sure these brands that have shot up during the pandemic, almost 2x, that they maintain this growth and that they start growing again, right? Last year was the second year sort of us being in a different climate. So the brands like truLOCAL, that grew from $9 million to $20 million, we were very happy that they were able to maintain that 20 million, not go back to a $15 million or $12 million or $10 million back down to pre-pandemic levels. That was the million dollar question. We think we've so far answered it positively. But now the new growth engine starts kicking in. Now the new initiatives, the new areas. BattlBox is looking at a launch here in Canada. WholesalePet is exploring that as well. truLOCAL has been doing a lot of B2B testing that we've talked about in Q4, that some of which is very exciting to us. So there are a number of different initiatives happening. And of course, we're excited about golf season coming back in Q2. Golf was quiet in Q1, typically when the weather is like it is here in Ontario, our largest market. But of course, the U.S. business is also moving, and Q2 is a big golf period as well for them. Lastly, that 7th bullet, again, I mentioned this before, but keep your eyes on how we execute on us achieving a certain minimum level of scale, $100 million in revenue. Very few e-commerce companies in Canada can say they achieved that. $10 million in EBITDA across the corner within the next 1 to 2 deals, hopefully, that we can achieve. So research analysts and sort of where they're at, Canaccord and Raymond James cover us. The consensus price today is $1.73, almost 3x where share prices are today. And again, these are their estimates and consensus, not ours. We do not formally offer any guidance yet. And from what we can see, to me, the biggest thing to point out is that EBITDA jump that they're anticipating in 2022, as you can see from about $1 million or so in adjusted EBITDA in '21, expected to about close to $7 million, almost $6.8 million in pro forma EBITDA. And that, by the way, sorry, is excluding additional acquisitions, right? So that's just kind of on our current baseline business. And of course, revenue, and you can tell we're a profit-centric company, if I started on the EBITDA side. But going back to revenue for a second. Basically seeing the story unfold here with $4 million in 2019, jumping to $9 million in 2020, jumping to an expected $34 million, we can now say with our preliminary results in and around those ranges. And then now the expectation is approaching $65 million, again, excluding additional acquisitions. Hopefully, most of you have gotten to know me by now. And I've done e-commerce for 12 years plus. My bank -- my original background is in banking. But I've really, really been fortunate to surround myself with the best in e-commerce, in technology, in e-commerce and in capital markets. Jonathan, our CFO, was the original CFO at Aphria. But probably more relevant was with that strategy, which not a very well-known company per se, but a $1 billion plus business. It's a roll-up in veterinary clinics. Over 300 roll-ups conducted at the time Jonathan had left. A very exciting company. He recently done some work with Berkshire, and then merged with a European company. Fazal, Michele Romanow's partner from Clearco. He was her partner at Buytopia, which was the anchor asset we acquired, sold SnapSaves to Groupon. George, as I mentioned, from Dye & Durham. Tanya recently joined us as our HR Manager from Mastercard Foundation. We're building out our HQ team. We're leveraging all the resources, all the folks, all the teams around us to really sort of become that next-gen e-commerce business from Canada to North America, but then from Canada to the world one day, hopefully. Lastly, just before we wrap up here and take a couple of questions. Just wanted to mention that EMERGE at this point, I think I was looking up some stats that we'll be sharing, so a couple of million followers, obviously, e-mails and any way you spin it. I mean we're basically the size of a small country at this point, right? We have $120 million in gross sales. We have 8 brands across North America. Still a very tight team, I would say, emphasis on the sort of $1 million per employee of GMS. We have about 115 staff. But really what excites us about this next phase now is what we can do with that reach. It's not just the revenue and the EBITDA we're acquiring. We're acquiring the potential now to connect the dots, right? So like a unified loyalty program, makes a ton of sense. If you bought some groceries, you get some golf discounts. If you bought some pet products, it's [indiscernible], right? All of it can tie in, and we think that that's where it's headed. And obviously, nothing like this happens overnight. But the more we scale, the more valuable these things are, loyalty program, monetizing the data. A lot of talk about NFTs and all of that these days. Well, that only makes sense if you have a community that's loyal to and follows you. That's why celebrities get in and make a lot of money with NFTs these days because they have reach. And these are the things that we have today that many do not. Many spend millions and millions and millions of dollars to try to get the reach that we have now amassed through M&A. Of course, accretive acquisitions. Brand incubation, as you saw with just golf stuff, our ability to spin off a sister site, map it out with minimal additional cost and grow it from 0 to $4 million, $5 million overnight is something that we look to do more of, right? And we saw that opportunity during COVID when UnderPar in the golf business was weak. When golf courses were shut down, and then they were too busy, we were able to say, "Well, let's sell golf products. We still have 300,000 golfers." And that's what we did. Global partnerships as well. If we strike something with Amex, or Starbucks, or a bank, or a telecom, all of these things make way more sense at scale, and that's exactly where all of this is headed. Thank you very much. That concludes my prepared remarks for the presentation today. I think we're excited to showcase Q4, which comes out later in April. We gave the preliminary view. But I think sometimes the market really like those official numbers, those audited numbers. So please look out for a full update, a deeper dive update in various businesses and really the overall results that we're driving. We think that the preliminary view gives some sense. But in the end, there's no substitute for the actual numbers. So that's one. Two, of course, we're really focused on driving that operational execution and those synergies, now that we've acquired a reasonable amount of scale. And three, of course, we're still super focused on that accretive M&A strategy of ours that's driven us from $30 million to $120 million in a single year. And I think even that's, as I said, a drop in the bucket in the larger scheme of things -- scope of things, rather, in the e-commerce landscape. Thank you very much. And with that, I shall take a couple of questions. And I see a few here. So just give me a second to load up.

Considering current stock price, how do you like to raise money for future acquisitions and meet current obligations? I think that's a very good and fair question. Of course, there's been no shortage of wreckage in, I guess, the public markets, large and small, by the way. Last year was a pretty tough small-cap environment. This year, larger tech got hit hard. Shopify was down 60% at one point, right? The Affirms, the DocuSigns of the world, of course, Facebook. So there was no shortage. There was no discrimination in how a lot of the tech companies have gotten hit to stay from their hides. I think with EMERGE Commerce, first and foremost, we are taking a debt-driven approach. We're trying to minimize dilution where it makes sense. Of course, the business today sits on about $6 million in cash. But from our perspective, any acquisitions that we make, we like to tie to that 3.5x debt-to-EBITDA formula that we've been pretty successful in doing so far. Like I recall when we closed the truLOCAL acquisition, and then we did the BattlBox transaction, there was an expectation that we were done. But we were able to upsize our debt facility and close WholesalePet and add another $3.5 million in EBITDA. And so for us I think the emphasis, first and foremost, is continuing to be a debt-driven company. Now that being said, we are briefly focused on accretive acquisitions. And what I think is sometimes lost on people is whether the arbitrage is alive, right? So when EMERGE today, you can say is valued at about 9 or 10x EBITDA, which we believe is undervalued, the key is that we're still able to buy businesses at 4 to 6x EBITDA. So I can report -- I can gladly report that, that arbitrage is alive and well for us. Of course, we would all like an EBITDA multiple of 15x or 20x. Like our peers command even higher numbers even after the correction that we all saw in the public markets for them. But even where we are, our arbitrage is alive and well, A. B, as you'll notice, we use shares in our acquisitions quite sparingly, right? So we've -- for example, with BattlBox, we issued no shares upfront. They're part of the earn-out. Now I generally like that our founders have some amount of shares, and I encourage it. But we are very careful with how we issue shares moving forward. And if we were to raise capital, it would have to be at levels we felt were appropriate and commensurate with the type of value we would get out of an acquisition, I wouldn't say we would look to raise capital at the current levels. Hopefully, that answers your question. So I do think that will be available to us. I think equity may be available to us, but it's not an immediate point. We don't have to raise equity right now. We have the cash we need. We expect to have more debt available to us. And of course as markets change and as we see opportunities, we'll be opportunistic, all with a lens towards sort of accretion and protecting shareholder value. Question 2. Will truLOCAL be looking to expand more aggressively into the U.S. this year? Let me touch on that first, and I see a few follow-ups as well. So really, our double down on truLOCAL has been in Canada, where we're the #1 player. We've noticed, as you might recall, that truLOCAL, of course, had its legs planted in Illinois in the U.S. And it was always a marginal part of the business, but we always felt like that could grow and so forth. I think where our thoughts are now, given the tremendous market leadership position we see in Canada, is that we double down here. That's kind of our -- we're not making big investments, really because we're also mindful of profitability. We can make big investments in the U.S. and probably lose a lot more money than we have appetite for. Our approach is, listen, if it's working, let's double down here. And let's also be super clear, we think Canada is a $100 million plus market for truLOCAL and brands around it. And by the way, that includes other initiatives that they're working on. They're testing some wine. They're testing some add-on services. There's some B2B opportunities that are really shining right now. We talked a bit about that during Q4. So I think overall right now is to go vertically leveraging truLOCAL's brand, its community, its team, its appeal to really double down on Canada. I think the U.S. may or may not open up the acquisitions down the line. I don't think you're going to look for us to spend and burn in the U.S. to figure out whether we can grow at scale. But we, obviously, certainly right next door. So it may be something we look at. And the second part of the question is something we don't disclose. Can you maybe provide us with more specific numbers with regards to organic growth for Q1? Obviously, we haven't officially reported Q1. And you might be referencing the first quarter of WholesalePet and BattlBox under EMERGE because that's the PR we gave today. To be clear, we acquired them midway through Q4. So we were saying that first quarter with EMERGE, they've been very profitable for us. We are not disclosing any specifics per brand or for the company yet for Q1. It's a bit too early. We're going to wrap up Q4, and then we'll get to Q1 eventually. Could you perhaps comment on the current macro environment and the impact of supply chain and inflationary pressures on the overall business? Do you anticipate a deceleration in future quarters? And is this impacting your M&A strategy going forward? Thanks for the question. So macro environment, no secret a mix of inflation, supply chain issues. We talked about the Facebook advertising issues that they're having and that a lot of e-commerce companies which are having. I think we're -- and I mean this, hopefully, some of you have gone to know me, we're very transparent with our approach and our communication. I think we're faring quite well. When you think of supply chain, that is for companies hugely reliant on China, okay? So fortunately, for us, in a diversified portfolio, you've got truLOCAL, which is a local and regional supply chain, right, of supporting local farmers and leveraging them, right? You got WholesalePet, which sits in the middle, has no inventory risk. We all know what's happening in the pet industry. It's going up like this, right? It's one of the few shielded -- or rather growth industries that have -- I actually read a report or a survey, I think it was distributed by Stifel GMP, saying that some customers are downgrading the type of food they're eating, but they're not downgrading what they're buying for their pets, right? So the pet industry is very resilient. Of course, as a B2B platform, it's even more resilient. A lot of these customers have been around with WholesalePet for 10 years plus. And then you got UnderPar experiences playing golf, nothing to do with China. So supply chain for us is not a big one, although BattlBox, with some of their vendors, they do deal with a bit of that. But they've been quite smart with their approach and their planning. So I cannot report that supply chain has been a major issue for us. Facebook and marketing, we talked about. We feel like we are really doing a good job of being diversified into other channels, like TikTok, like Netflix, and like B2B that doesn't even require Facebook and Instagram. Of course, influencers and gym partnerships at truLOCAL. All of these are areas where I think we're showing -- we're showcasing you want to see a company that can deal with all of these forces. I think we're dealing with them. I think Q1 from what I can share, and we haven't gone out with any of this, we feel good. We feel good about our positioning and our approach and our performance relative to the world, right? That's all I can say, is that we are not seeing any alarm bells or any major issues per se. But we are seeing that, listen, if we wanted something to grow from $9 million to $20 million to $25 million, maybe it will take $9 million, $20 million to $22 million, right? And I think that's reasonable. I think we're seeing companies that are actually decelerating. If you look at the direct-to-consumer and e-commerce space, many companies are decelerating right now. We are aiming for growth. We are continuing down that trend. And when it comes to acquisitions, I'll say this, as a company that's finally starting to show that EBITDA and show that cash flow and has access to that, that I actually think it's pretty opportune for us what's happening. I think that when we start going out and looking at other acquisitions, if we feel that some of these companies may have been out of reach because they thought they were worth $1 billion, well, come back down to earth. This is the EMERGE model. Let's talk real EBITDA. Let's talk real organic growth, and let's figure out a win-win. So I think that the landscape of companies that may have been out of reach before, because of some of these issues, may be in reach now. Another question, do you foresee making a bigger investor marketing push in the U.S. given your brand presence? So that's actually -- it's not the first time I hear that. We are increasingly spending time thinking through the U.S. investor strategy. And I think with WholesalePet being entirely a U.S. business, UnderPar has San Diego offices. truLOCAL, we mentioned, Illinois. BattlBox, of course, Atlanta, Georgia-based U.S., focused with a small presence in Canada via Carnivore Club. We really think it makes a lot of sense. We think U.S. investors truly value. And no disrespect to our Canadian investors, but truly seem to value e-commerce a bit differently. If you can see from the bigger examples, the bigger peer groups. So we think there's a tremendous amount to gain. We have real brands, real customers, real merchants. It makes sense to have real investors in the U.S. So we are going to be pushing ahead, things like DTC, OTC listing. But ultimately, our goal is the NASDAQ. But first step, I think, as I mentioned, we're going to graduate to the TSX to something that we see on the horizon. And I think size will matter, right? As I talked about, that 110 marker, that size will matter for us to get to a meaningful level in the U.S. It's easy to just say we're in the U.S. or we're dual listed. But how much does that move the needle? If you can't show impressive numbers, if you can't grow the way you want, you can raise the capital you want at the prices that you want to arrive at. So I think it's all a work in progress, but we're big believers that EMERGE should be as big a U.S. story as it is a Canadian story, if not more, over time, given the geographical reach and so forth. Another question says, more on truLOCAL supply chain. Is there an opportunity for truLOCAL in the B2B back end to become a key food supply chain facilitator in more categories than animal protein? And I smile because that is exactly the type of stuff we are spending time on. We're seeing some really encouraging early results in B2B. We're sitting in between all these local farmers. And the team, to their credit, does a really good job of sticking and staying true to the local concept. So local Ontario suppliers, local Quebec suppliers, local Alberta, BC, et cetera. And so that happens to be a great way to figure out what else they need of us. So we're selling -- we're bringing them online selling to consumers. What else do they need of us? Are they -- do they have any shortages? Do they have any supply excesses? Can we help in bridging those gaps? Can we help them in tracking? A lot of farmers and suppliers, the way they do things, it's pretty backward I must say, and there's a lot of room for technology for analytics, for support, for helping facilitate trade and so forth. So these are areas, given what we've seen with a WholesalePet, we really think B2B is also another aspect of our model that differentiates us. Is that if each of our brands, or at least most of our brands can adopt some sort of background B2B play. We think this is going to be a big theme for us. we are making some steps in that direction across multiple brands. We have not officially reported that sort of thing, but we feel good about adding more B2B, not less. All righty. And one more question, is Ocgrow actually an investor or just a strategic adviser? I mentioned the strategic advisory role that they've taken on. For those of you who know, Ocgrow is -- again, a really, really terrific, world-class e-commerce investors. Just because they're not running their mouth, doesn't mean they don't know what they're talking about. They are very quiet, actually. But no, I'm happy to share. Look, they are an investor. I met Harish pretty much the day of our IPO. His office reached out. We connected. They're based in Calgary. So I flew out, spent some time with him and really saw a long-term partner in it. It took a year or so to solidify our partnership. They're in. They're active. They are looking to build up. I don't need to tell you a group like that, if we're at 103 million or so shares outstanding today, I don't need to give you sort of math on what would be a meaningful stake for them. They're, I believe, a group that sees -- saw the progress all throughout the first year that we met and the year that we went from $30 million to $120 million. And we really believe they're going to be a true and long-term partner. So very excited. And yes, they are an investor in EMERGE through the open market. So we are -- as you can see, more and more questions trickling in. As usual, I'll always say, "Please send these, even if you can just copy pace them to [email protected]." We will absolutely get back to. I will personally make sure I get all the questions on here that have not been answered. If some of you would like to schedule a call with myself or IR with James Bowen, we're happy to do that as well. We remain, as always, very open to working with our investors, hearing your own ideas, of course, getting your support. We believe, and just to kind of close on this note, despite the chaos in the world, despite the inflationary pressures and the supply chain and the Facebook ad situation and even sort of the macroeconomic and political climate, we feel that e-commerce is going in one direction. Profitable e-commerce specifically is going in one direction, and the team and the progress and the tools and the approach that we are taking is prime for an environment where things are about proving that you've thought through your situation carefully. We think our ad program, our approach to it, our diversification, our acquiring profitable businesses today, not tomorrow and building out really a world-class team, all of that combines for what we think is super exciting. But enough of my talking, let's let the Q4 results and the full year-end results later in April come out. Let everybody have a chance to digest them. You'll hear from me some more, of course, as we go, but always feel free to reach out with questions, concerns, ideas and introductions. We're always happy to be part of the ecosystem. We are very much still about the "Rebels Unite" mentality. I appreciate everyone's time today. Thank you so much for tuning in, and we look forward to our next sit down with you guys all. Take care. Have a great day.