Brands Initiative’s Impact on EBITDA margin and EBITDA • This is more difficult to estimate due to very limited disclosures. But we will do our best. • Brands Initiative is losing money but the exact amount is not disclosed. • Other than public company costs and standalone company infrastructure we do not see why core dropshipping business should be operating with lower EBITDA margin now than in 2014 (i.e., the last year before CHUB acquired Mercent). • In 2014 CHUB had EBITDA margin ex-SBC of 59.9%. Caro-Kann Capital LLC 55