Mr. Paul Bissett reports

ELEVATE SERVICE GROUP INC ANNOUNCES LETTER OF INTENT FOR THE STRATEGIC ACQUISITION OF A SECURITY SOLUTIONS PROVIDER

Elevate Service Group Inc. has entered into a letter of intent to acquire an Ontario-based security solution provider. This transaction represents Elevate's entry into the security service market -- an attractive vertical that complements the company's existing offerings and provides new opportunities to deepen relationships with national, multisite commercial customers. The proposed acquisition marks the launch of Elevate's broader consolidation and growth strategy aimed at integrating high-quality, synergistic operators across Canada's fragmented facility service landscape.

The target is a well-established provider of security solutions focused primarily on commercial clients. Its services include site assessments, system installations, access control systems, video surveillance, gate automation, intercom solutions and remote hosting. The target serves property managers, retailers, restaurants and other blue-chip customers that align well with Elevate's national footprint.

The proposed transaction values the target at approximately $3.5-million, consisting of: (i) $1.0-million in Elevate common shares (calculated using an average price formula prior to closing); (ii) $500,000 in cash at closing; (iii) $500,000 in cash on the 12-month anniversary of closing; and (iv) a $1.5-million subordinated promissory note bearing interest of 2 per cent in year one, 3 per cent in year two and 4 per cent in year three. The promissory note will be convertible into Elevate common shares at a 10-per-cent discount upon maturity. Shares issued to the vendor will be subject to a four-year phased lock-up. The vendor is expected to join Elevate in an operational leadership role under a new employment agreement.

Strategic rationale

The acquisition supports Elevate's strategy of becoming a national, integrated leader in facility management by expanding its service capabilities, increasing recurring revenue and building a more comprehensive customer offering:

• Expansion into a new service line: The proposed acquisition introduces a security solution division, allowing Elevate to offer a more complete suite of mission-critical services to its commercial customers. This is expected to generate meaningful cross-selling opportunities.
• Revenue growth and diversification: The target has an attractive mix of revenue, including approximately $1.4-million of recurring monitoring and hosting revenue with low customer churn, adding stability and visibility to Elevate's revenue base.
• Operational integration and synergies: The target's technicians will be integrated into Elevate's broader operations, driving internalization, improving response times and contributing to scale efficiencies across the platform.

The target is expected to generate over $4-million in revenue for the current fiscal year, representing over 25-per-cent growth from the prior fiscal year. The target has a record backlog and strong visibility supported by multiyear monitoring and hosting contracts. Earnings before interest, taxes, depreciation and amortization margins for the target for fiscal 2025 are forecast to be between 13 per cent and 15 per cent. All financial information is unaudited.

The transaction is anticipated to close in December, 2025, subject to customary closing conditions and any regulatory approvals.

About Elevate Service Group Inc.

Elevate is a national facility management and essential commercial service platform focused on consolidating and modernizing this fragmented sector. Through its operating companies, Elevate brings over 20 years experience as a trusted partner for national, blue-chip customers. Elevate's strategy is to integrate a portfolio of profitable operating businesses across a scalable, national platform with shared infrastructure, technology integration and operational synergies. The result is superior customer outcomes, more comprehensive services and expanded market reach. Elevate trades on the TSX Venture Exchange under the ticker SERV.

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