Mr. Steve Levely reports

ACKROO PROVIDES UPDATE ON RECENT ACQUISITION

Ackroo Inc. has provided an update on its recent acquisition of Simpliconnect. On Jan. 1, 2024, Ackroo acquired all of the assets related to Simpliconnect, a United States-based loyalty marketing provider focused on the convenience and petroleum merchant segment. The company has provided investors with an update on its progress integrating, operating and optimizing that business.

The company has managed to streamline operations from a vendor management, client pricing, support and employee standpoint, resulting in operational efficiencies and profitability. Ackroo is also building product parity between the Simpliconnect platform and its Ackroo Anywhere platform and has already begun migrating clients over to Ackroo's core marketing product. This work, both product parity and migration, is expected to be completed by the end of April, 2024, which will allow acquired merchants to begin benefiting from the continuing advancements within the Ackroo platform while also allowing current and prospective Ackroo merchants the ability to take advantage of the many features and integrations added via the Simpliconnect product parity work. Once complete the legacy platform will be decommissioned, driving greater focus for sales and marketing, saving Ackroo hosting costs, and allowing engineering and support staff to be redirected to focus on supporting the core Ackroo platform and the recent acquisition of GiftFly.

The company has also achieved financial gain from the acquisition in its first year of contribution, delivering $1,234,108 of annual revenue and adding $202,698 of net income, representing a strong 16-per-cent profit margin. As of Jan. 1, 2024, through continued normalization, Ackroo is now generating a 60-plus-per-cent profit margin from this business which it expects will continue through migration and beyond.

From a return on invested capital standpoint, the final consideration from Ackroo was just under $1.8-million plus 5,625,000 shares after an amendment was made in the spring of 2023, with Ackroo expecting to see the cash investment paid back within 39 months of closing based on the past and current margins being generated. Over the last year, the company has also bought back 6,068,681 shares via a normal course issuer bid at an average price of 8.7 cents per share, effectively cancelling out the shares issued to Simpliconnect earlier in the year. At 8.7 cents per share the 5,625,000 shares cost Ackroo approximately $489,375 which equates to about eight months of future earnings from this business for a total expected payback time of about 47 months. This falls within the company's payback model and positions Ackroo for another successful accretive acquisition.

"We are very happy with the continued progress we have made integrating and optimizing the Simpliconnect business," said Steve Levely, chief executive officer of Ackroo. "The Simpliconnect business was a bit more complex than we originally thought from both a technical and operational standpoint. Ackroo, being very self-serve technology-focused versus Simpliconnect being more services-support-focused, created early support challenges. The Simpliconnect engineering team was also outsourced versus Ackroo's in-house development team so managing those outsourced relationships and gaining internal control created initial challenges. While normalization and migration is expected to take 16 months versus our 12-month model, there were plenty of great wins for the business operationally, technically and certainly financially that we are ultimately very happy at this stage. This acquisition is pushing our technology forward, is helping us expand further into the U.S. market, helping reinforce our specialization in areas like convenience and petroleum, and financially contributing to our growing earnings. All very positive things for Ackroo and our investors."

The company cautions that figures for revenue have not been audited and are based upon calculations prepared by management. Actual results may differ from those reported in this release once these figures have been audited. The company expects to complete its 2023 audit in April to confirm revenue figures, along with other financial results.

About Ackroo Inc.

As an industry consolidator, Ackroo acquires, integrates and manages gift card, loyalty marketing, payment and point-of-sale solutions used by merchants of all sizes. Ackroo's self-serve, data-driven, cloud-based marketing platform helps merchants in-store and on-line process and manage loyalty, gift card and promotional transactions at the point of sale. Ackroo's acquisition of payment independent sales organizations affords Ackroo the ability to resell payment processing solutions to its growing merchant base through some of the world's largest payment technology and service providers. As a third revenue stream, Ackroo has acquired certain custom software products, including hybrid management and point-of-sale solutions that help manage and optimize the general operations for niche industries, including automotive dealers and more. All solutions are focused on helping to consolidate, simplify and improve the merchant marketing, payments and point-of-sale ecosystem for their clients. Ackroo is headquartered in Hamilton, Ont., Canada.

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