Mene Inc. Reports Financial Results for First Quarter 2019

Menē Inc. (TSX-V:MENE) (US:MENEF) (“Menē” or the “Company”), an online 24 karat investment jewelry brand, today announced financial results for the first quarter ended March 31, 2019 (“Q1 2019”). All amounts are expressed in Canadian dollars unless otherwise noted.

FINANCIAL HIGHLIGHTS:

• IFRS Revenue of $2.7 million, a $1.7 million (163%) increase year-over-year (“YoY”). Non-IFRS Adjusted Revenue of $2.9 million, an increase of 151% YoY.
• Gross Profit of $0.7 million, an increase of $0.5 million (298%) YoY.
• Gross Margin expanded by 900 basis points, from 16% in Q1 2018 to 25% in Q1 2019.
• Generated $0.3 million in Free Cash Flow in Q1 2019, the net of operating cash flow less capital expenditures.
• Reduced Net Loss by 26% to $1.1 million from $1.5 million in Q1 2018. Non-IFRS Adjusted Loss decreased by 54% YoY to $0.6 million.
• Sold 8,182 units of jewelry through 7,354 customer orders, an increase of 7,242 units (770%) and 6,469 orders (731%) respectively compared to Q1 2018.
• Gold Weight Sold increased by 17 kilograms (115%) and Platinum Weight Sold increased by 9.6 kilograms (685%) from Q1 2018.
• Strong Tangible Common Equity of $17.8 million, with $17.5 million in cash and cash equivalents and $16.2 million in short-term investments as of March 31, 2019. Tangible Common Equity increased by 58% YoY, demonstrating the Company’s ability to access cash to grow the business and its high-margin and low fixed-cost business model.

OPERATIONAL HIGHLIGHTS:

• Introduced 99 new product designs during the quarter.
• Launched “Menē x”, a new product category of limited-edition jewelry collections designed in collaboration with select creators, artists and tastemakers. Unveiled first collaboration with world-renowned fashion photographers Inez van Lamsweerde and Vinoodh Matadin (“Inez & Vinoodh”).
• Raised $20 million in a Debt Financing Round with a strategic lender.

IFRS Consolidated Income Statement Data & Key Performance Indicators (KPIs) 5

FY 2019

FY 2018

July 11, 2017 to December 31, 2017 6

Q1

Q4

Q3

Q2

Q1

        
        
           
        
      
      
        
          Revenue (CAD)
        
        
           
        
        
           
        
        
          2,733,596
        
        
           
        
        
          3,510,374
        
        
           
        
        
          1,985,711
        
        
           
        
        
          1,392,867
        
        
           
        
        
          1,038,947
        
        
           
        
        
          63,909
        
      
      
        
          Gross profit (CAD)
        
        
           
        
        
           
        
        
          678,814
        
        
           
        
        
          983,840
        
        
           
        
        
          208,408
        
        
           
        
        
          229,461
        
        
           
        
        
          170,486
        
        
           
        
        
          12,143
        
      
      
        
          Gross margin (%)
        
        
           
        
        
           
        
        
          25%
        
        
           
        
        
          28%
        
        
           
        
        
          10%
        
        
           
        
        
          16%
        
        
           
        
        
          16%
        
        
           
        
        
          19%
        
      
      
        
          Total comprehensive loss
        
        
           
        
        
           
        
        
          (1,166,288)
        
        
           
        
        
          (2,681,362)
        
        
           
        
        
          (1,691,124)
        
        
           
        
        
          (919,106)
        
        
           
        
        
          (1,348,026)
        
        
           
        
        
          (1,702,048)
        
      
      
        
          Non-IFRS Adjusted Revenue (CAD) 1
        
        
           
        
        
           
        
        
          2,914,297
        
        
           
        
        
          3,948,113
        
        
           
        
        
          2,346,622
        
        
           
        
        
          1,891,608
        
        
           
        
        
          1,162,777
        
        
           
        
        
          67,114
        
      
      
        
          Non-IFRS Adjusted Gross Profit (CAD) 2
        
        
           
        
        
           
        
        
          723,686
        
        
           
        
        
          1,106,524
        
        
           
        
        
          246,287
        
        
           
        
        
          311,623
        
        
           
        
        
          190,806
        
        
           
        
        
          12,752
        
      
      
        
          Non-IFRS Adjusted Loss 3
        
        
           
        
        
           
        
        
          (577,218)
        
        
           
        
        
          (469,487)
        
        
           
        
        
          (1,136,242)
        
        
           
        
        
          (758,895)
        
        
           
        
        
          (1,251,091)
        
        
           
        
        
          (1,639,950)
        
      
      
        
          Total Shareholders' Equity (CAD)
        
        
           
        
        
           
        
        
          17,833,109
        
        
           
        
        
          18,516,087
        
        
           
        
        
          10,077,520
        
        
           
        
        
          11,251,166
        
        
           
        
        
          11,878,195
        
        
           
        
        
          13,192,937
        
      
      
        
          Inventory balance (kg of gold) 4
        
        
           
        
        
           
        
        
          222
        
        
           
        
        
          244
        
        
           
        
        
          135
        
        
           
        
        
          131
        
        
           
        
        
          90
        
        
           
        
        
          54
        
      
      
        
          Customer orders
        
        
           
        
        
           
        
        
          4,437
        
        
           
        
        
          6,729
        
        
           
        
        
          3,994
        
        
           
        
        
          2,389
        
        
           
        
        
          951
        
        
           
        
        
          74
        
      
      
        
          Units of jewelry sold
        
        
           
        
        
           
        
        
          8,182
        
        
           
        
        
          9,111
        
        
           
        
        
          6,168
        
        
           
        
        
          2,920
        
        
           
        
        
          941
        
        
           
        
        
          80
        
      
      
        
          Jewelry weight sold (total kg)
        
        
           
        
        
           
        
        
          43
        
        
           
        
        
          51
        
        
           
        
        
          35
        
        
           
        
        
          23
        
        
           
        
        
          16
        
        
           
        
        
          1
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
        
        
        
      
    
    

Notes:

(1) The Company adjusts its revenue by adding back the value of jewelry that the Company bought back from customers, or was returned by customers, and discounts given to customers. These adjustments are made to assess the gross revenue before deducting these items from revenue per IFRS. See Non-IFRS Measures for a full definition.

(2) The Company adjusts its gross profit by adjusting for Non-IFRS revenue and the attributable weighted average cost of sales for the value of jewelry that the Company bought back from customers, or was returned by customers, and discounts given to customers. See Non-IFRS Measures for a full definition.

(3) The Company adjusts its total comprehensive loss by adjusting for Non-IFRS Adjusted Gross Profit, and removing the impact of non-cash expenses, consisting of depreciation and amortization, stock based compensation, and a one-time listing expense, the fair value of 5,984,750 shares issued for the amalgamation with Amador Gold Corp.’s subsidiary in Q4 2018. See Non-IFRS Measures for a full definition.

(4) Inventory balances in kilograms of gold are calculated by taking the total Canadian Dollar (CAD) inventory value at each quarter-end date, and dividing the value by the CAD gold spot price per gram.

(5) The period July 11, 2017 to December 31, 2017 and the fiscal year ended December 31, 2018 are audited figures. The period Q1 to Q3 2018 have been reviewed by the same independent audit firm, KPMG. Q1 2019 has not been reviewed.

(6) The Company began generating sales to an invite-only group in October 2017. The Company began selling to the general public in January 2018.

Statement from Founder & CEO Roy Sebag:

Menē continues to show compelling organic growth and sales momentum. In Q1, we generated over $2.7 million of sales, $0.7 million in gross margin, and $0.3 million in IFRS Free Cash Flow. It is important to remind our shareholders that this business has only been in operation for 15 months at the quarter-end date. Following the completion of our debt-note funding and a repayment of a portion of the historic loans from Goldmoney Inc., our balance sheet is strong and well-positioned for the next few years. We remain focused on building our brand equity within the fashion, art, and jewelry cultural segments, seeing that with each passing day, our brand is being embraced by popular thought leaders and tastemakers. As of today’s date, we have over 30,000 registered customers from over 20 countries around the world. Inventory levels remain strong and are being built up in anticipation of a strong 2019-2020 season (October-February). I am very proud of the hard work and dedication shown by our team and the disciplined way in which we are building this company and its business model. My personal focus this quarter has been in setting the infrastructure for several C-level executive hires in Paris and Toronto which will help the company scale its operations and position Menē for sustained growth in the years to come. I look forward to updating our shareholders on these developments as they formally materialize.

Non-IFRS Measures

This news release contains non-IFRS financial measures; the Company believes that these measures provide investors with useful supplemental information about the financial performance of its business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating its business. Although management believes these financial measures are important in evaluating the Company's performance, they are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS. These non-IFRS financial measures do not have any standardized meaning and may not be comparable with similar measures used by other companies. For certain non-IFRS financial measures, there are no directly comparable amounts under IFRS. These non-IFRS financial measures should not be viewed as alternatives to measures of financial performance determined in accordance with IFRS. Moreover, presentation of certain of these measures is provided for year-over-year comparison purposes, and investors should be cautioned that the effect of the adjustments thereto provided herein have an actual effect on the Company's operating results.

Non-IFRS Adjusted Revenue1 is a non-IFRS measure. The Company adjusts its revenue by adding back the value of jewelry that the Company bought back from, or was returned by customers, and discounts given to customers. These adjustments are made to assess the gross revenue before deducting these items per IFRS revenue.

Non-IFRS Adjusted Gross Profit2 is a non-IFRS measure. The Company adjusts its gross profit by adjusting for the additional revenue and associated cost of sales added back for the value of jewelry that the Company bought back from, or was returned by customers, and discounts given to customers.

Non-IFRS Adjusted Loss3 is a non-IFRS measure. The Company adjusts its total comprehensive loss by adjusting for Non-IFRS Adjusted Gross Profit, and removing the impact of non-cash expenses, consisting of depreciation and amortization, stock based compensation, and a one-time listing expense, the fair value of 5,984,750 shares issued for the amalgamation with Amador Gold Corp.’s subsidiary in Q4 2018.

For a full definition of non-IFRS financial measures used herein to their nearest IFRS equivalents, please see the section entitled "Non-IFRS Financial Measures" in the Company's MD&A for the three months ended March 31, 2019.

About Menē Inc.

Menē crafts pure 24 karat gold and platinum jewelry that is transparently sold by gram weight. Through mene.com, customers may buy jewelry, monitor the value of their collection over time, and sell or exchange their pieces by gram weight at prevailing market prices. Menē was founded by Roy Sebag and Diana Widmaier-Picasso with a mission to restore the relationship between jewelry and savings. Menē empowers consumers by marrying innovative technology, timeless design, and pure precious metals to create pieces which endure as a store of value.

For more information about Menē, visit mene.com.

Forward-Looking Statements

This news release contains or refers to certain forward-looking information. Forward-looking information can often be identified by forward-looking words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "may", "potential" and "will" or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. All information other than information regarding historical fact, which addresses activities, events or developments that the Menē Inc. (the "Company") believes, expects or anticipates will or may occur in the future, is forward looking information. Forward-looking information does not constitute historical fact but reflects the current expectations the Company regarding future results or events based on information that is currently available. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking information will not occur. Such forward-looking information in this release speak only as of the date hereof.

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Media and Investor Relations Inquiries:Renee WeiHead of Investor Relations+1 647 494 [e-mail]

Robert LeeChief Financial [e-mail]