Mene Inc. — Annual Report 2020

Apr 30, 2021

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MENĒ INC.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (EXPRESSED IN CANADIAN DOLLARS)

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Independent Auditor’s Report

To the Shareholders of Mene Inc.

Opinion

We have audited the consolidated financial statements of Mene Inc. and its subsidiary (the “Company”), which comprise the consolidated statement of financial position as at December 31, 2020, and the consolidated statement of operations and comprehensive loss, consolidated statement of cash flows, and consolidated statement of changes in equity for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2020 and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other matter

The consolidated financial statements of the Company for the year ended December 31, 2019, were audited by another auditor who expressed an unmodified opinion on those statements on June 15, 2020.

Other information

Management is responsible for the other information. The other information comprises Management’s Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

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We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risks of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

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• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner of the audit resulting in this independent auditor’s report is Koko Yamamoto.

McGovern Hurley LLP

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Chartered Professional Accountants Licensed Public Accountants

Toronto, Ontario April 29, 2021

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Menē Inc.

Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

Note	December 31, December 31, 2020 2019
Assets Cash and cash equivalents Trade and other receivables 5,16 Inventory 6 Short-term investments 7 Other financial assets Prepaid and other assets Total current assets Property and equipment 8 Intangible assets 9	9,144,563 $ 12,978,883 $ 100,390 428,674 17,001,537 12,551,060 5,160,029 16,067,824 124,510 8,022 231,214 326,603
	31,762,243 42,361,066 621,677 745,255 562,142 36,811
Total assets	32,946,062 $ 43,143,132 $
Equity and Liabilities Liabilities Accounts payable and accrued liabilities 16 Deferred revenue Borrowings and payables to related parties 10,17 Current portion of note payable 11 Total current liabilities Notepayable 11	856,389 $ 623,950 $ 364,553 342,355 10,297,099 8,009,928 9,924,979 -
	21,443,020 8,976,233 - 19,039,583
Total liabilities	21,443,020 28,015,816
Shareholders' Equity Share capital 12 Contributed surplus 13 Accumulated other comprehensive loss Deficit	25,635,092 $ 25,573,992 $ 5,365,195 5,348,388 (1,050,260) (693,011) (18,446,985) (15,102,053)
Total shareholders' equity	11,503,042 15,127,316
Total shareholders' equity and liabilities	32,946,062 $ 43,143,132 $

The accompanying notes are an integral part of these consolidated financial statements Contingencies (Notes 11 and 18)

Subsequent events (Note 19)

Approved on behalf of the Board:

"Roy Sebag", Director

"Joshua Crumb", Director

5

Menē Inc. Consolidated Statements of Operations and Comprehensive Loss (Expressed in Canadian Dollars)

Note	For theyear ended
	December 31, 2020 December 31, 2019
Revenue Cost of sales 6,17	21,129,540 $ 13,062,408 $ (15,928,729) (10,324,464) $
Grossprofit	5,200,811 2,737,944
Operating expenses Advertising and promotion Personnel related expenses Professional fees Distribution centre and processing Stock-based compensation 17 General and administrative Foreign exchange (gain) loss Technology and development costs Other selling expenses Depreciation and amortization	801,983 $ 1,864,288 $ 1,417,927 1,214,217 1,211,158 1,406,388 1,739,097 1,574,380 16,807 972,611 460,533 449,615 (147,611) 474,281 577,089 109,674 - 725,755 173,163 157,387
Total operatingexpenses	6,250,146 8,948,596
Operating loss for the year Interest income Interest and accretion expense 10,11 Gain on derecognition of payable to related party 10 Loss on revaluation of precious metal note payable to related party 10 Gain on debt modification 11 Gain on financial assets	(1,049,335) $ (6,210,652) $ 222,692 413,227 (1,065,053) (1,369,356) - 1,336,499 (1,680,658) (945,256) 216,135 - 11,287 10,916
Net loss for theyear	(3,344,932) $ (6,764,622) $
Other comprehensive income (loss) Items that will be reclassified subsequently to income Unrealized (loss) on foreign currency translation Items that will not be reclassified subsequently to income Gain on revaluation of digital assets 9	(629,755) (710,563) 272,506 43,630 (357,249) $ (666,933) $
Other comprehensive loss for theyear
Net loss and comprehensive loss for the year	(3,702,181) $ (7,431,555) $
Net loss attributable to equity holders: Basic and diluted loss per share 15 Weighted average number of common shares - basic and diluted 15	(3,344,932) $ (6,764,622) $ (0.01) $ (0.03) $ 244,290,000 237,897,093

The accompanying notes are an integral part of these consolidated financial statements

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Menē Inc.

Consolidated Statements of Cash Flows (Expressed in Canadian Dollars)

Note	December 31, 2020 December 31, 2019 For theyear ended
Cash provided by (used in): Operating Activities Net loss for the year Items not involving cash: Depreciation and amortization Gain on debt modification Gain on financial assets Loss on revaluation of precious metal note payable to related party Gain on derecognition of payable to related party Stock-based compensation Unrealised foreign exchange Interest expense Changes in operating assets and liabilities: Inventory Trade and other receivables Prepaid and other assets Digital assets Other financial assets Accounts payable and accrued liabilities Deferred revenue
	(3,344,932) $ (6,764,622) $ 173,163 157,387 (216,135) - (11,287) - 1,680,658 945,256 - (1,336,499) 16,807 972,611 (91,527) 442,042
	1,065,053 1,369,356
	(4,737,232) 1,253,921
	322,840 (26,333)
	81,088 (40,124)
	(270,186) 36,409
	(106,355) (8,196)
	294,314 (512,637)
	(222,540) 110,665
Net cash(used in) operating activities	(5,366,271) (3,400,764)
Investing Activities Sale of short-term investments 2.7,7 Purchase of short-term investments 2.7,7 Purchase ofpropertyand equipment
	79,814,777 35,479,646
	(68,815,456) (37,728,027)
	(51,060) (55,615)
Net cashprovided by (used in) investing activities	10,948,261 (2,303,996)
Financing Activities Proceeds from warrant exercise Proceeds from stock options Interest paid (Repayment of) proceeds from note payable Received from(paid to)relatedparties
	61,100 1,225,900
	- 25,000
	(300,000) (488,333)
	(9,300,000) 19,408,855
	242,991 (3,514,940)
Net cashprovided by (used in) financing activities	(9,295,909) 16,656,482
Increase (decrease) in cash and cash equivalents Change in cash and cash equivalents related to foreign exchange Cash and cash equivalents,beginningofyear
	(3,713,919) 10,951,722
	(120,401) (72,032)
	12,978,883 2,099,193
Cash and cash equivalents, end of year	9,144,563 $ 12,978,883 $

The accompanying notes are an integral part of these consolidated financial statements

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Menē Inc.

Consolidated Statement of Changes in Equity (Expressed in Canadian Dollars)

							Accumulated
							other
					Contributed	comprehensive				Shareholders'
	Number of shares		Share capital		surplus		loss		Deficit		equity
Balance, December 31, 2019	243,997,856	$	25,573,992	$	5,348,388	$	(693,011)	$	(15,102,053)	$	15,127,316
Stock-based compensation	-		-		16,807		-		-		16,807
Exercise of warrants	610,998		61,100		-		-		-		61,100
Other comprehensive loss for the year	-		-		-		(357,249)		-		(357,249)
Net loss for theyear	-		-		-		-		(3,344,932)		(3,344,932)
Balance, December 31, 2020	244,608,854	$	25,635,092	$	5,365,195	$	(1,050,260)	$	(18,446,985)	$	11,503,042
Balance, December 31, 2018	231,655,521	$	24,323,092	$	2,534,663	$	(26,078)	$	(8,337,431)	$	18,494,246
Stock-based compensation	-		-		919,674		-		-		919,674
Warrants issued - debt financing	-		-		986,130		-		-		986,130
Exercise of options	83,333		25,000		-		-		-		25,000
Exercise of warrants	12,259,002		1,225,900		-		-		-		1,225,900
Gain on forgivness of payable to related party	-		-		907,921		-		-		907,921
Other comprehensive loss for the year	-		-		-		(666,933)		-		(666,933)
Net loss for theyear	-		-		-		-		(6,764,622)		(6,764,622)
Balance, December 31, 2019	243,997,856	$	25,573,992	$	5,348,388	$	(693,011)	$	(15,102,053)	$	15,127,316

The accompanying notes are an integral part of these consolidated financial statements

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Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

1. Nature of operations

Menē Inc. ("Menē" or the "Company") designs, manufactures, and markets 24 karat gold and platinum jewelry under the brand name Menē. The Company retails its jewelry by gram weight direct-to-consumer through an online shopping experience.

Menē was incorporated on July 11, 2017, under the laws of the Province of Ontario, Canada. Menē, Inc., (“Menē Delaware”) was incorporated on November 10, 2016, in the State of Delaware, United States of America. On July 11, 2017, the Company entered into a share exchange agreement with Menē Delaware pursuant to which the Company acquired all the issued and outstanding shares of Menē Delaware in exchange for Class A and Class B common shares in the capital of the Company (the “Acquisition”). Menē Delaware had minimal business activities prior to July 11, 2017.

On October 30, 2018, the Company completed a legal separation from Goldmoney Inc. in a spin-off transaction whereby a reverse take-over transaction with Amador Gold Corp. (“Amador”) and its subordinate voting shares took place and subsequently listed on the TSX Venture Exchange under the symbol “MENE”.

The principal office of the Company is located at 334 Adelaide Street West, Suite 307, Toronto, Ontario M5V 1R4.

These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities in the normal course of business. The Company has sustained substantial losses and negative cash flows from operations from inception and its ability to continue as a going concern is dependent on the Company’s ability to generate future profitable operations and cash flows and/or obtain additional financing. The Company has determined that it has sufficient working capital and that there are no material uncertainties that would impact its ability to continue as a going concern.

2.0 Significant accounting policies

2.1 Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”). Accounting policies are consistently applied to all periods presented, except if mentioned otherwise.

These consolidated financial statements were approved for issuance by the Board of Directors on April 29, 2021.

2.2 Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis except for digital assets (a portion of intangible assets) and borrowings and payables to related parties, which are measured

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Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets. In addition, the consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow disclosure.

2.3 Basis of consolidation

Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed or has rights to variable returns from an investee and has the ability to affect those returns through its control over the investee. The results of subsidiaries acquired or disposed of during the period are included in the consolidated statement of operations and comprehensive loss from the effective date of acquisition and up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial records of the subsidiary to bring their accounting policies in line with those used by the Company. All intercompany transactions, balances, income and expenses are eliminated upon consolidation. Where the Company’s interest in a subsidiary is less than 100%, the Company recognizes a non-controlling interest.

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Mene Delaware.

2.4 Functional and foreign currency translation

The presentation currency of these consolidated financial statements is Canadian dollars. For each entity within the consolidated financial statements, the functional currency is determined based on the currency of the primary economic environment in which the entity operates. Primary and secondary indicators are used to determine the functional currency (primary indicators have priority over secondary indicators). The functional currency for the Company is the Canadian dollar. The functional currency of the Company’s foreign subsidiary, Mene Delaware, is the United States dollar.

For the subsidiary, whose functional currency is other than the Canadian dollar, assets and liabilities are translated into the presentation currency at the exchange rate in effect at the reporting date. Revenues and expenses are translated at the rates in effect on the transaction dates. Exchange gains or losses on translation are included in other comprehensive income ("OCI"). The cumulative amount of the exchange differences is presented as a separate component of equity until disposal of the foreign subsidiary.

Transactions denominated in foreign currencies are translated into each of the entities' functional currency as follows:

• Monetary assets and liabilities are translated at the exchange rate in effect at the reporting date;

• Non-monetary assets and liabilities are translated at historical exchange rates prevailing at each transaction date;

• Deferred tax assets and liabilities are translated at the exchange rate in effect at the reporting date with translation gains and losses recorded in income tax expense; and

• Revenues and expenses are translated at the average exchange rates throughout the reporting period, except depreciation, which is translated at the rates of exchange applicable to the related assets.

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Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Exchange gains or losses on translation of transactions are included in the consolidated statements of operations. When a gain or loss on certain non-monetary items, such as financial assets at fair value through other comprehensive income, is recognized in OCI, the translation differences are also recognized in OCI.

2.5 Critical accounting judgments and estimates

The preparation of these consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual outcomes could differ from these estimates. Revisions to accounting estimates are recognized prospectively. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The following are the Company’s critical accounting judgments and estimates:

(i) Valuation of warrants and stock options

The fair value of warrants and stock options are determined using the Black-Scholes option pricing formula. Option pricing models require the input of subjective assumptions including expected dividend yield, expected volatility and expected average life (Notes 13.1 and 13.2). Changes in these assumptions could have a material impact on fair value estimates.

(ii) Functional currency

Under IFRS, each entity must determine its own functional currency, which becomes the currency that entity measures its results and financial position in. In determining the functional currencies of the Company and its subsidiary, the Company considered many factors, including the currency that mainly influences sales prices for goods and services, the currency of the country whose competitive forces and regulations mainly determine the sales prices, and the currency that mainly influences labour material and other costs for each consolidated entity.

(iii) Income, value added, withholding and other taxes

The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company’s provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company’s income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company’s interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made (Note 14).

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Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

(iv) Impairment of non-financial assets

At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets with finite lives to determine whether there is any indication that those assets have suffered an impairment loss. Where such an indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. The recoverable amount is the higher of an asset’s fair value less cost to sell or its value in use. In addition, long lived assets that are not amortized are subject to an annual impairment assessment.

(v) Discount rate used

The Company measures the fair value of certain financial instruments by discounting the contractual cash flows of those instruments to their present value. Management uses its experience and judgment in determining the appropriate discount rate to be used.

(vi) Digital assets

There is limited guidance on the recognition and measurement of digital assets. The Company has assessed that its digital assets meet the definition of an intangible asset. The Company’s digital assets are traded in active markets and are valued based upon quoted prices (less costs to sell). See Notes 9 and 16.

2.6 Cash and cash equivalents

Cash and cash equivalents comprise of cash at banks and cash at payment processors, which may be settled on demand or an original maturity of less than 30 days. The cash and cash equivalents are held in various currencies such as Canadian dollar, US dollar and Euro. The Company did not hold any cash equivalents as at December 31, 2020 and 2019.

2.7 Short-term investments

Short-term investments are guaranteed investment certificates (“GIC”) with a maturity greater than thirty days and less than twelve months and are recorded at amortised cost.

2.8 Inventory

Inventory is comprised of gold and platinum jewelry. Inventory is measured at the lower of cost or net realizable value. Cost is determined using the weighted-average method. Cost includes the purchase price of the metal, cost of supplies, cost of direct labour, manufacturing overhead directly attributable to production, and other direct costs for production and distribution. Net realizable value is the estimated selling price in the ordinary course of business less any applicable selling expenses.

2.9 Stock-based compensation

Share-based payment awards are direct awards of stock to employees or directors, call for settlement in cash or other assets, or are stock appreciation rights that call for settlement by issuing equity instruments. The awards are measured at fair value using the Black-Scholes option pricing model on the grant date. The cost is recognized on a graded vesting method basis adjusted for expected forfeitures as an employee

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Menē Inc.

Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

or director expense with a corresponding increase to equity in contributed surplus. Consideration paid by employees or directors on the exercise of stock options is recorded as share capital.

Share-based payments with parties other than employees assumes a rebuttable presumption that the fair value of the goods or services received can be estimated reliably. In certain circumstances, the Company rebuts this presumption because it cannot estimate reliably the fair value of the goods or services received. The Company then measures the goods or services received, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted, measured at the date the Company obtains the goods or the counterparty renders the service. Consideration paid by parties other than employees on the exercise of stock options is recorded as share capital.

On expiration, the grant date fair value of stock options and warrants remains in contributed surplus.

2.10 Research and development

Research and development costs are expensed in the period incurred unless development costs meet the criteria for capitalization as an intangible asset.

2.11 Property and equipment

Property and equipment is carried at cost, less accumulated depreciation and accumulated impairment losses. The cost of an item of equipment consists of the purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for its intended use.

Depreciation is recognized based on the cost of an item of equipment, less its estimated residual value, over its estimated useful life at the following rates:

Office equipment, furniture and machinery	20%	Straight-line
Computer equipment	30%	Straight-line

An asset's residual value, useful life and depreciation method are reviewed, and adjusted prospectively, if appropriate, on an annual basis.

2.12 Financial instruments

Financial instruments are defined as any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity. The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.

Financial assets are classified into the following categories at their initial recognition:

• financial assets at fair value through profit or loss ("FVTPL");

• amortised cost; or

• fair value through other comprehensive income (“FVOCI”).

In the periods presented, the Company does not have any financial assets categorized as FVOCI.

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Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

Financial assets are classified as amortized cost if both of the following conditions are met and the asset is not designated as FVTPL:

• the asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows (Held-to-Collect – “HTC”); and

• the contractual terms of the instrument give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).

All other financial assets are classified as FVTPL.

Financial liabilities are classified into the following categories at their initial recognition:

• financial liabilities at FVTPL; or

• amortised cost.

Financial assets are subsequently measured at fair value, except for financial assets classified as amortised cost, which are subsequently measured at amortised cost using the effective interest method.

Financial liabilities are subsequently measured at amortized cost using the effective interest method except for derivatives and financial liabilities at FVTPL, which are carried subsequently at fair value with gains and losses in profit or loss.

Financial assets are derecognized when:

• the contractual rights to the cash flows from the financial asset expire; or

• when the Company transfers substantially all the risks and rewards of ownership of the financial asset.

Financial liabilities are derecognized when the obligations are discharged, cancelled, or expire.

2.13 Intangible assets

Intangible assets acquired by way of an asset acquisition or business combination are recognized if the asset is separable or arises from contractual or legal rights and the fair value can be measured reliably on initial recognition.

Intangible assets also comprise non-monetary assets which the Company controls, has no physical substance and are identifiable, and from which future economic benefits are expected.

Intangibles other than digital assets are measured at cost, less accumulated amortization and accumulated impairment losses.

Intangible assets with finite useful lives are amortized on a straight-line basis over their useful lives. The estimated useful lives of intangible assets are as follows:

Capitalized website domain cost 5 years

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Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

The amortization expense is included in ‘Depreciation and amortization’ on the consolidated statements of operations and comprehensive loss.

The useful life and amortization method are reviewed, and adjusted if appropriate, on an annual basis.

Digital assets are measured initially at cost and then subsequently measured at fair value (i.e. the revaluation method). The revaluation method can only be used if there is an active market for the digital asset. Under the revaluation method, increases in fair value are recorded in other comprehensive income (“OCI”), while decreases are recorded in profit or loss. There is no recycling of gains from OCI to profit or loss. However, to the extent that an increase in fair value reverses a previous decrease in fair value that has been recorded in profit or loss, that increase is reported in profit or loss. As a result, the cumulative effect on profit or loss includes the net decrease in fair value of the digital assets over time. Similarly, a decrease in fair value that reverses a previous increase, is recorded in OCI, resulting in the cumulative effect on OCI being the net increase in fair value of the digital assets over time. Upon disposal of the digital assets, the OCI balance, if any, is transferred directly to deficit and is not recycled through profit or loss.

2.14 Leases

At inception of a contract, the Company will determine whether a contract is, or contains, a lease. A lease exists if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company has elected to apply the practical expedient to account for each lease component and any non-lease components as a single lease component. The Company has also elected to apply the practical expedient not to recognize right-of-use assets and lease liabilities for (1) short-term leases, that have a lease term of 12 months or less, as well as for (2) leases of low value assets. The lease payments associated with these leases are recognized as expenses on a straight-line basis over the lease term.

A right-of-use asset and a lease liability are recognized at the commencement date of a lease. The lease liability is initially measured at the present value of lease payments to be paid after the commencement date, discounted using the interest rate implicit in the lease, or if not readily determinable, the lessee’s incremental borrowing rate. The right-of-use asset is initially measured at cost, which consists of the initial amount of the lease liability adjusted for any lease payments made on or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle or restore the leased asset, less any lease incentives received.

Right-of-use assets are depreciated on a straight-line basis over the shorter of the useful life of the asset or the term of the lease. If a purchase option is expected to be exercised, the asset is amortized over its useful life.

Lease liabilities are subsequently measured at amortized cost using the effective interest method and are re-measured if and when there is a change in future lease payments arising from a change in an index or rate, or if and when there is a change in the assessment of whether a purchase, extension or termination option will be exercised.

15

Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

The Company did not have any material lease liabilities or right of use assets during the years ended December 31, 2020 and 2019.

2.15 Impairment of non-financial assets

At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. Where such an indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss. The recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statements of operations and comprehensive loss.

The Company will reverse any previous impairment losses where circumstances have changed such that the level of impairment in the value of the assets has been reduced. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined net of depreciation or amortization if no impairment loss had been recognized.

2.16 Impairment of financial assets

IFRS 9’s impairment requirements use more forward-looking information to recognize expected credit losses – the ‘expected credit loss (ECL) model’. This replaced IAS 39’s ‘incurred loss model’. Instruments within the scope of the new requirements included loans and other debt-type financial assets measured at amortized cost and FVOCI, trade receivables, contract assets recognized and measured under IFRS 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss.

To recognize credit losses, the Company considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

In applying this forward-looking approach, a distinction is made between:

• financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (‘Stage 1’) and

• financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’).

• financial instruments that have objective evidence of impairment at the reporting date (‘Stage 3’).

‘12-month expected credit losses’ are recognized for Stage 1 while ‘lifetime expected credit losses’ are recognized for Stage 2 and Stage 3.

16

Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument.

2.17 Revenue

The Company generates revenue from the sale of gold and platinum jewelry through its website. Revenue is measured based on the consideration promised in a contract with a customer. The Company recognizes revenue when it transfers control of a good or service to a customer. This generally occurs when the goods are delivered to customers.

The revenue amount recognized for jewelry is adjusted for expected returns, which are estimated based on historical data and adjusted as needed. Customers pay in full at the time revenue is recognized.

The Company recognises a contract liability for promotional gift vouchers issued, based on the historic redemption rate of such vouchers. The Company recognises deferred revenue when it has received consideration from customers but has not yet satisfied its performance obligations.

2.18 Provisions

A provision is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be reliably estimated. Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date. Discounting is omitted when its effect is immaterial.

2.19 Cost of sales

Cost of sales is calculated using a weighted average cost formula for each category of inventory and costs attributable to the sale, manufacturing, and shipping of products.

These costs primarily include the cost of metals and other raw materials, direct and indirect labour, and manufacturing overhead directly attributable to production.

2.20 Earnings (loss) per share

The Company presents basic and diluted earnings (loss) per share (“EPS”) data for its common shares, calculated by dividing the earnings (loss) attributable to common shareholders of the Company by the weighted-average number of common shares outstanding during the year.

Diluted EPS is calculated by dividing adjusted net income (loss) for the year attributable to common shareholders by the weighted-average number of diluted common shares outstanding for the year. In the calculation of diluted EPS, earnings (loss) are adjusted for changes in income or expenses that would result from the issuance of dilutive shares. The weighted-average number of diluted common shares outstanding for the year reflects the potential dilution that would occur if options, securities, or other

17

Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

contracts that entitle their holders to obtain common shares had been outstanding from the beginning of the year (or a later date) to the end of the year (or an earlier date). Instruments determined to have an antidilutive impact for the year are excluded from the calculation of diluted EPS.

2.21 Share capital and contributed surplus

Share capital represents the nominal value of the shares that have been issued. Contributed surplus includes any premiums received on issue of share capital, plus the impact of stock-based compensation, warrants issued and other contributions by shareholders. Any transaction costs associated with the issuing of shares are deducted from share capital, net of any related income tax benefits.

2.22 Income taxes

Income tax comprises current and deferred tax. Income tax is recognized in the consolidated statements of operations and comprehensive loss except to the extent that it relates to items recognized directly in equity, in which case the income tax is also recognized directly in equity.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous periods.

In general, deferred tax is recognized in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted or substantively enacted at the consolidated statement of financial position date and are expected to apply when the deferred tax asset or liability is settled. Deferred tax assets are recognized to the extent that it is probable that the assets can be recovered.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except, in the case of subsidiaries, where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are presented as non-current.

2.23 New accounting standards effective January 1, 2020

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2020. Many are not applicable or do not have a significant impact to the Company and have been excluded.

During the year ended December 31, 2020, the Company adopted a number of amendments and improvements of existing standards. These included IAS 1 and IAS 8. These new standards and changes did not have any material impact on the Company’s consolidated financial statements.

18

Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

2.24 Accounting standards issued but not yet effective

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2021. The Company is currently evaluating the impact of these new standards on the consolidated financial statements. Many are not applicable or do not have a significant impact to the Company and have been excluded.

IFRS 10 – Consolidated Financial Statements (“IFRS 10”) and IAS 28 – Investments in Associates and Joint Ventures (“IAS 28”) were amended in September 2014 to address a conflict between the requirements of IAS 28 and IFRS 10 and clarify that in a transaction involving an associate or joint venture, the extent of gain or loss recognition depends on whether the assets sold or contributed constitute a business. The effective date of these amendments is yet to be determined, however early adoption is permitted.

IAS 1 – Presentation of Financial Statements (“IAS 1”) was amended in January 2020 to provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify that the classification of liabilities as current or noncurrent is based solely on a company’s right to defer settlement at the reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company’s own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the definition of an equity instrument. The amendments are effective for annual periods beginning on January 1, 2023.

IAS 37 – Provisions, Contingent Liabilities, and Contingent Assets (“IAS 37”) was amended. The amendments clarify that when assessing if a contract is onerous, the cost of fulfilling the contract includes all costs that relate directly to the contract – i.e. a full-cost approach. Such costs include both the incremental costs of the contract (i.e. costs a company would avoid if it did not have the contract) and an allocation of other direct costs incurred on activities required to fulfill the contract – e.g. contract management and supervision, or depreciation of equipment used in fulfilling the contract. The amendments are effective for annual periods beginning on January 1, 2022.

IAS 16 – Property, Plant and Equipment (“IAS 16”) was amended. The amendments introduce new guidance, such that the proceeds from selling items before the related property, plant and equipment is available for its intended use can no longer be deducted from the cost. Instead, such proceeds are to be recognized in profit or loss, together with the costs of producing those items. The amendments are effective for annual periods beginning on January 1, 2022.

3. Segment information

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, and for which discrete financial information is available. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer.

19

Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

The Company sells 24 karat gold and platinum jewelry. These segments are aggregated into one operating segment because they have similar economic characteristics (gross profit margins and trends in sales growth) and are similar in each of the following respects:

• a) the nature of products;

• b) the nature of the production process;

• c) the type or class of customers for products; and d) the methods used to distribute the product.

The Company has a single reportable segment and all its assets are in North America. There have been no changes in the reportable segments in the years ended December 31, 2020 and 2019.

4. Capital risk management

The Company manages its capital with the following objectives:

• (i) to ensure sufficient financial flexibility to achieve the ongoing business objectives, including funding of future growth opportunities, and pursuit of accretive acquisitions; and

• (ii) to maximize shareholder return through enhancing the share value.

The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its objectives given the current outlook of the business and industry in general.

The Company may manage its capital structure by issuing new shares, adjusting capital spending, or disposing of assets. The capital structure is reviewed by management and the Board of Directors on an ongoing basis. The Company considers its capital to be share capital, contributed surplus and deficit, which at December 31, 2020 totaled $12,553,302 ($15,820,327 as at December 31, 2019).

The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, and other investing and financing activities. The forecast is updated based on actual activities and selected financial information is provided to the Board of Directors of the Company.

There were no changes in the Company's approach to capital management during the years ended December 31, 2020 and 2019

20

Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

5. Trade and other receivables

Trade and other receivables consist of accounts receivable, HST sales tax receivable, and interest income receivable on short-term investments.

	2020	2019
Trade receivable	$83,984	$121,701
HST receivable	2,576	160,956
Interest income receivable	13,830	146,017
Trade and other receivables	$100,390	$428,674

6. Inventory

Inventory includes raw materials (metals), work in progress (metals in production), finished goods (jewelry), supplies (packaging bags), which includes an allocation of labour costs and overhead.

	2020	2020	2019	2019
	Quantity (grams)	Amount	Quantity (grams)	Amount
Raw materials	16,579	$1,063,603	4,538	$214,284
Work in progress	37,217	2,697,104	3,282	166,398
Finished goods	186,129	12,806,771	205,063	11,561,107
Supplies		434,058		609,271
Inventory	239,925	$17,001,537	212,883	$12,551,060

Total inventory expensed during the year was $15,928,729 (2019: $10,324,464). As at December 31, 2020 and 2019, no inventory is carried at fair value less cost to sell.

7. Short-term investments

Short-term investments consist of guaranteed investment certificates (“GIC”) that the Company holds in the bank. GICs denominated in Canadian dollar currency and US dollar currency earn interest income ranging from 0.02% to 2.00% per annum (2019: 0.95% to 2.53% per annum), maturing in less than 12 months.

	2020	2019
Canadian dollar GIC	$5,020,000	$15,600,000
US dollar GIC	140,029	467,824
Short-term investments	$5,160,029	$16,067,824

21

Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

8 Property and equipment

			Office
		Computer	equipment &
Cost	Machines	Equipment	Furniture	Total
Balance, December 31, 2018	$ 726,639	$ 23,654	$ 325,841	$ 1,076,134
Additions	27,864	16,012	11,739	55,615
Foreign exchange	(34,323)	-	(28,053)	(62,376)
Balance,December 31,2019	$720,180	$39,666	$309,527	$1,069,373
Additions	26,306	1,699	19,501	47,506
Foreign exchange	(16,856)	3,800	(1,614)	(14,670)
Balance,December 31,2020	$729,630	$45,165	$327,414	$1,102,209
Accumulated depreciation
Balance, December 31, 2018	170,676	2,378	79	173,133
Depreciation	140,897	9,440	648	150,985
Balance, December 31, 2019	$ 311,573	$ 11,818	$ 727	$ 324,118
Depreciation	148,624	13,875	4,227	166,726
Foreign exchange	(9,405)	(682)	(225)	(10,312)
Balance,December 31,2020	$450,792	$25,011	$4,729	$480,532
Net book value
Balance,December 31,2019	$408,607	$27,848	$308,800	$745,255
Balance,December 31,2020	$278,838	$20,154	$322,685	$621,677

22

Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

9. Intangible assets

Intangible assets consist of the Company website and digital assets.

Cost	Website
Balance, December 31, 2018	$ 34,325
Foreign exchange	(1,126)
Balance, December 31, 2019	$ 33,199
Foreign exchange	(2,642)
Balance,December 31,2020	$30,557
Accumulated amortization
Balance, December 31, 2018	$ 8,001
Amortization	6,401
Balance, December 31, 2019	$ 14,402
Amortization	6,437
Foreign exchange	(2,597)
Balance,December 31,2020	$18,242
Carrying value
Balance,December 31,2019	$18,797
Balance,December 31,2020	$12,315
Carrying value	Digital assets
Balance, December 31, 2018	$ 49,773
Additions	154,076
Disposal	(227,765)
Foreign exchange	(1,700)
Fair valuegain	43,630
Balance, December 31, 2019	$ 18,014
Additions	290,609
Disposal	(24,156)
Foreign exchange	(7,146)
Fair valuegain	272,506
Balance,December 31,2020	$549,827

23

Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

10. Borrowings and payables to related parties

			December 31,
		Metal price per	2020
	Metal amount(ounces)	ounce	Amount
Gold	4,079	$2,411	$9,835,457
Platinum	338	1,366	461,642
Total	4,413		$10,297,099
			December 31,
		Metal price per	2019
	Metal amount(ounces)	ounce	Amount
Gold	3,906	$1,976	$7,715,090
Platinum	232	1,271	294,838
Total	4,138		$8,009,928

The balance consists of precious metals extended to the Company and various operating expenses paid by Goldmoney Inc. (“Goldmoney”) on behalf of the Company. Refer to Note 17 for a description of the Company’s related party relationship with Goldmoney.

On March 19, 2019, the Company and Goldmoney agreed to terms on a new line of credit promissory note (the “2019 Loan”) in replacement of the Original Loan. The 2019 Loan established that the loan principal is a maximum of 5,000 troy ounces in any weight combination of gold and platinum, to be valued per the spot prices on March 19, 2019. The 2019 Loan is unsecured, bears 4% interest per annum, and matures at the earlier of March 19, 2020, or on demand by Goldmoney. For the year ended December 31, 2020, interest expense of $363,522 (2019- $264,164) was recorded in the consolidated statements of operations.

Upon issuance of the 2019 Loan, the Company realised a gain of $1,336,499, calculated as the difference between the carrying value of the Original Loan before extinguishment ($10,032,299) and the fair value of the 2019 Loan ($8,695,800).

As the 2019 Loan is indexed to commodity prices, it is accounted for as a derivative financial instrument at FVTPL. A revaluation of the loan is completed at each period end based on the spot prices of metals, multiplied by the gold and platinum ounces respectively. The difference arising from the revaluation is recognized in profit and loss, which resulted in a $1,680,658 loss during the year ended December 31, 2020 (2019 - $945,256).

On June 30, 2019, Goldmoney exercised 12,259,002 Class A common share purchase warrants and provided Menē with $1,225,900 of additional working capital. The Company utilized these funds to pay

24

Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

down a portion of the 2019 Loan. Goldmoney further reduced the amount owing to them under the 2019 Loan by $907,921. The Company recognised this amount in contributed surplus (see note 13), during the year ended 31 December, 2019, as this additional debt forgiveness was provided by Goldmoney in its capacity as a shareholder of the Company.

On March 19, 2020, Goldmoney agreed to extend the maturity of the line of credit promissory note issued to the Company on March 19, 2019. The note will bear interest at the rate of 3% per annum and is payable of March 19, 2021, or on demand by Goldmoney. See Note 19.

11. Note payable

On March 8, 2019, the Company completed a $20,000,000 debt financing deal with an investor. The note payable consists of $20,000,000 in principal loan issued to Menē, in exchange for repayment of principal upon maturity, 3% interest payable semi-annually, and 15,000,000 Menē Class B warrants, each warrant exercisable at $1 per unit for 1 Menē Class B share, expiring on November 29, 2020. The note payable is secured by $20,000,000 of cash and finished precious metals jewelry inventory and has a maturity date of March 8, 2021. As at December 31, 2020 and 2019, the Company is compliant with all debt covenants and terms of the note payable agreement. See Note 19.

The fair value of the note at inception was $19,013,870. The residual amount of $986,130 was allocated to the warrants and recognized in contributed surplus (note 13). Debt issuance costs of $591,146 were required in securing the note payable, and netted against the fair value, and this resulted in a beginning carrying value of the note payable as $18,422,725. The discount of $1,577,275 will be amortised over a 24 month period using the effective interest method at an effective interest rate of 7.29%.

On March 19, 2020, the Company made a prepayment on the $20,000,000 note payable issued by the Company on March 8, 2019. The Company and the lender have agreed to a prepayment of $10,000,000 of the principal amount of the note payable in consideration for a cash payment of $9,300,000. The note payable continues in good standing in accordance with its terms.

The prepayment was effective from January 1, 2020 and the principal amount outstanding at December 31, 2020 is $10,000,000. The Company realised a gain of $216,135 as a result of this non-substantial debt modification during the year ended December 31, 2020.

As at December 31, 2020, the note payable balance comprises of the following:

Note payable – principal	$20,000,000
Discount on note	(1,577,275)
Accretion	616,858
Balance,December 31,2019	$19,039,583
Repayment	(9,300,000)
Gain on debt modification	(216,135)
Accretion	401,531
Balance,December 31,2020	$9,924,979

25

Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

For the year ended December 31, 2020, interest expense of $300,000 (2019- $488,333) was recorded in the consolidated statements of operations.

12. Share capital

The authorized share capital of the Company consisted of an unlimited number of common shares.

• Class A common shares without par value, 20 votes per share.

• Class B common shares without par value, 1 vote per share.

	Number of
	shares	Amount
Balance, December 31, 2018	231,655,521	$24,323,092
Exercise of options – Class B common shares (i)	83,333	25,000
Exercise of warrants – Class A common shares(ii)	12,259,002	1,225,900
Balance, December 31, 2019	243,997,856	$25,573,992
Exercise of warrants – Class A common shares(iii)	610,998	61,100
Balance,December 31,2020	244,608,854	$25,635,092

106,863,099 Class A common shares and 137,745,755 Class B common shares were outstanding at December 31, 2020 (106,419,601 and 137,578,255 respectively at December 31, 2019).

(i) On June 17, 2019, an employee of the Company exercised 83,333 Class B options at a price of $0.30 per option.

(ii) On June 30, 2019, Goldmoney agreed to purchase from an executive officer, who is a related party of Goldmoney Inc. and Menē, 12,259,002 Class A multiple voting share purchase warrants of Menē, which are exercisable at $0.10 per warrant. Goldmoney agreed to exercise the warrants and pay to Menē $1,225,900 in cash upon the exercise price of the warrants (notes 13.2 and 17), contingent on the approval of the Toronto Stock Exchange Venture (“TSX-V”). On July 26, 2019, the TSX-V approved the transfer and exercise of the warrants.

(iii) On July 10, 2020, 610,998 Class A common share warrants were exercised by a director of the Company, for proceeds of $61,100. 167,500 Class A common shares were converted to Class B common shares during the year ended December 31, 2020.

26

Menē Inc.

Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

13 Contributed surplus

	Note	Amount
Balance, December 31, 2018		$2,534,663
Vesting of options – Class B common shares		919,674
Warrants – Class B common shares	(i)	986,130
Gain on debt forgiveness byshareholder(Note 10)		907,921
Balance,December 31,2019		$5,348,388
Vestingof options – Class B common shares		16,807
Balance,December 31,2020		$5,365,195

• (i) During the year ended December 31, 2019 15,000,000 warrants were issued to a private investor as part of a debt financing deal on March 8, 2019. (See Note 11).

Refer to Note 13.2 – Warrants.

13.1 Stock options

On October 24, 2018, the Company adopted a new Stock Option Plan. The aggregate maximum number of shares available for issuance from treasury under this plan and all the Company’s other security-based compensation arrangements at any given time is 20% of the Company’s issued and outstanding shares as at the date of grant of an option under the Plan, subject to certain stated adjustments. Under the plan, options granted can be exercisable for a maximum of 10 years from the date of grant or a lesser period as determined by the Board at the time of such grant. In the event of a change in control in the Company, all options outstanding shall be immediately exercisable. The vesting schedule of the options is at the discretion of the board; some options disclosed below vest immediately, while others vest over a threeyear period.

The table below summarizes the granted, exercised, and forfeited options during the years ended December 31, 2020 and at December 31, 2019.

	December 31, 2020	December 31, 2020	December 31, 2019	December 31, 2019
	Average exercise price per option	Number of options	Average exercise price per option	Number of options
Beginningbalance	$0.61	2,482,890	$0.33	912,500
Granted	$0.51	50,000	$0.64	2,339,468
Exercised	-	-	$0.30	(83,333)
Forfeited	$0.62	(271,052)	$0.39	(685,745)
Endingbalance	$0.61	2,261,838	$0.61	2,482,890

27

Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

For share options exercised during the year ended December 31, 2019, the weighted average share price at the date of exercise was $0.53.

Shares options outstanding as at December 31, 2020 and 2019 have the following expiry dates and exercise prices:

Grant Date	Expiry Date	Exercise Price	Options Outstanding December 31,2020	Options Exercisable December 31,2020	Options Outstanding December 31,2019
September 2017	September 2020	$0.30	-	-	50,000
January2018	January2021	$0.451	100,000	66,667	100,000
March 2018	March 2023	$0.451	50,000	33,333	50,000
June 2018	June 2023	$0.451	50,000	33,333	50,000
July2018	July2023	$0.451	12,500	8,333	12,500
July2018	September 2023	$0.451	12,500	8,333	12,500
March 2019	March 2024	$0.71	936,838	936,838	1,107,890
April 2019	April 2024	$0.65	50,000	16,666	100,000
July2019	July2022	$0.55	1,000,000	1,000,000	1,000,000
July2020	July2025	$0.36	25,000	-	-
September 2020	September 2025	$0.66	25,000	-
Total			2,261,838	2,103,503	2,482,890
Weighted average remaining contractual life of options outstandingat end of theperiod			2.3 years	2.3 years	3.3 years

i) Fair value of options granted

All outstanding share options expected to vest were measured in accordance with IFRS 2, “Share-based Payment” at their market-based measure at the acquisition date. Options were priced using the BlackScholes option pricing model. Where relevant, the expected life used in the model has been adjusted based on management's best estimate for the effects of non-transferability, exercise restrictions, and behavioral considerations. Expected volatility is based on the historical share price volatility.

The fair value of options outstanding was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions at the measurement date:

	December 31, 2020	December 31, 2019
Shareprice	$0.36 to$0.66	$0.451 to$0.71
Exerciseprice	$0.36 to$0.66	$0.451 to$0.71
Risk-free interest rate	0.29% to 0.32%	1.37% to 1.86%
Expected life	5years	3.0 to 5.0years
Estimated volatilityin the marketprice of the common shares	92% to 95%	74% to 75%
Expected dividendyield	Nil	Nil

28

Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

13.2 Warrants

No warrants were issued during the year ended December 31, 2020. During the year ended December 31, 2019, the Company issued a total of 15,000,000 warrants in connection with the note payable issued (see note 11). These warrants had a grant date fair value of $986,130, valued using the residual value method.

The table below summarizes the granted, exercised, and cancelled warrants during the years ended December 31, 2020 and at December 31, 2019.

	December 31, 2020	December 31, 2020	December 31, 2019	December 31, 2019
	Average exercise price per warrant	Number of warrants	Average exercise price per warrant	Number of warrants
Beginningbalance	$0.82	28,703,998	$0.64	52,984,861
Granted	-	-	$1.00	15,000,000
Exercised	$0.10	(610,998)	$0.10	(12,259,002)
Expired	$1.00	(22,143,000)	$0.89	(27,021,861)
Endingbalance	$0.22	5,950,000	$0.82	28,703,998

For warrants exercised during the year, the weighted average share price at the date of exercise was $0.35 (2019: $0.49)

Warrants outstanding at the end of the year have the following expiry dates and exercise prices:

Grant Date	Expiry Date	Exercise Price	Warrants December 31,2020	Warrants December 31,2019
September 2017	July2020	$0.10	-	610,098
September 2017	July2021	$0.20	4,950,000	4,950,000
November 2018	August 2022	$0.30	1,000,000	1,000,000
December 2018	November 2020	$1.00	-	7,143,000
March 2019	November 2020	$1.00	-	15,000,000
Total			5,950,000	28,703,998
Weighted average remaining contractual life of warrants outstanding at end of theperiod			0.71 years	1.07 years

14. Income taxes

The following table reconciles the expected income tax expense (recovery) at the Canadian Federal and Provincial statutory rate of 26.5% (2019: 26.5%) to the amounts recognized in the consolidated statements of operations and comprehensive loss.

29

Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

	For the Year Ended	For the Year Ended
	December 31,2020	December 31,2019
Net loss before income taxes	($3,344,932)	($6,715,922)
Expected income tax expense (recovery)	(886,407)	(1,779,719)
Foreign operations with difference in tax rates	(9,109)	(129,124)
Non-deductible expenses and other	227,234	(96,114)
Temporary differences not recognized in the year	76,684	16,061
Non-capital loss not recognized	591,598	1,988,896
Income tax(recovery)expense	-	-

Income earned in foreign countries through subsidiaries is generally subject to tax in those countries. Upon repatriation of retained earnings from certain foreign subsidiaries, the Company would be required to pay tax on certain of these earnings. As repatriation of such earnings is not planned in the foreseeable future, the related deferred income tax liability was not recorded.

Deferred taxes are provided as a result of temporary differences that arise due to the differences between the income tax values and the carrying amount of assets and liabilities. Deferred tax assets have not been recognized in respect of the following deductible temporary differences:

	2020	2019
Equipment	$156,552	$61,833
Digital assets and other items	277,505	46,352
Share issue costs	1,444,413	1,475,140
Long-term debt	1,529,717	-
Non-Capital losses Carried forward - Canada	4,594,083	10,990,920
Non-Capital losses Carried forward - U.S	9,354,505	8,239,155
Total	$17,356,775	$20,813,400

The total tax benefits of unused tax losses and other deductible temporary differences have not been recognized in the consolidated financial statements due to the unpredictability of future earnings. The Canadian portion of these unused tax losses expire starting in 2039 while the US portion have different expiry depending on which tax year it was generated. Losses generated in tax years beginning on or before December 31, 2019, are carried forward for 20 years. Losses generated in tax years afterwards do not have an expiry.

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Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

15. Loss per share

	December 31, December 31, 2020 2019 For the year ended
Basic and diluted loss per common share Net loss attributable to common shareholders Weighted average number of common shares outstanding Basic and diluted lossper common share	(3,344,932) $ (6,764,622) $ 244,290,000 237,897,093
	(0.01) $ (0.03) $

Equity instruments that are anti-dilutive, comprised of all stock options and warrants, have not been included in the calculation of weighted average number of diluted common shares outstanding.

16. Financial instruments

Classification of financial instruments

Financial assets included in the consolidated statement of financial position are classified under IFRS 9 as follows:

	December 31,	December 31,
	2020	2019
Fair value through profit or loss:
Other financial assets	$ 124,510	$ 8,022
Amortised cost:
Cash and cash equivalents	9,144,563	12,978,883
Short-term investments	5,160,029	16,067,824
Trade and other receivables	97,814	267,718
Total financial assets	$14,526,916	$29,483,403

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Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Financial liabilities included in the consolidated statement of financial position are classified under IFRS 9 as follows:

	December 31,	December 31,
	2020	2019
Fair value through profit or loss:
Borrowings and payable to related parties	$10,297,099	$8,009,928
Amortised cost:
Accounts payable and accrued liabilities	856,388	623,950
Notepayable	9,924,979	19,039,583
Total financial liabilities	$21,078,466	$27,673,461

Fair value of financial instruments

Financial instruments recorded at fair value on the consolidated statement of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

As of December 31, 2020 and 2019, all financial instruments held at fair value are considered to be Level 1. There were no transfers between levels in 2020 or 2019.

For financial instruments measured at amortized cost, the Company has determined that the carrying amount of its current financial assets and financial liabilities approximates its fair value, due to the shortterm maturity of these financial instruments.

Level 2 assets consist of the Company’s digital assets, where quoted prices in active markets are available. The fair value utilized is primarily either: (i) the volume-weighted average of prices across principal exchanges as of 12:00 UTC, per coinmarketcap.com, with no adjustments; or (ii) the quoted prices across principal exchanges as of 12:00 UTC, per coinmarketcap.com, with no adjustments.

• Coinmarketcap.com is a pricing aggregator, as the principal market or most advantageous market is not always known. The Company believes any price difference amongst the principal market and an aggregated price to be immaterial.

32

Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Financial risk factors

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate, currency and price risks).

Risk management is carried out by the Company's management team with guidance from the Company’s Audit Committee under policies approved by the Company’s Board of Directors. The Company’s Board of Directors also provides regular guidance for overall risk management.

Credit risk:

Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligation and arises from the Company`s cash and cash equivalents, trade receivables, short-term investments consisting of GICs and interest income receivable from its short-term investments. The carrying value of these financial assets represents the Company’s maximum exposure to credit risk. The Company has no significant concentration of credit risk arising from operations. Cash and cash equivalents, interest income receivables and short-term investments are held with reputable financial institutions, from which management believes the risk of loss to be remote.

The Company’s trade receivables consist of funds at the payment processors for completed customer orders.

IFRS 9 has a single expected credit loss (“ECL”) impairment model for all financial assets. ECL allowances represent credit losses that reflect an unbiased and probability-weighted amount which is determined by evaluating a range of possible outcomes, the time value of money and reasonable and supportable information about past events, current conditions and forecasts of future economic conditions.

ECL allowances are measured at amounts equal to either (i) 12-month expected credit losses (“ECL”) or (ii) lifetime ECL for those financial instruments that have experienced a significant increase in credit risk since initial recognition or when there is objective evidence of impairment.

The Company assesses its trade receivables, short-term investments and interest income receivables as stage 1 (credit risk has not increased significantly since initial recognition), and the expected credit loss is nil within a twelve-month period (2019: Nil).

Liquidity risk:

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. As at December 31, 2020, the Company had current assets balance totalling $31,762,243 (2019: $42,361,066) to settle current liabilities, consisting of: accounts payable and accrued liabilities, borrowings and payables to related parties and note payable of $21,443,020 (2019: $8,976,233). See Note 19.

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Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

The maturity analysis of undiscounted financial liabilities as at December 31, 2020 , including estimated interest is as follows:

	Due before December 31,2021
Accounts payable and accrued liabilities	$856,388
Borrowings and payables to related party	10,297,099
Notepayable	10,055,833
Total	$21,209,320

This analysis reflects the conditions prevailing at the end of 2020. Subsequent to the year end the Company entered into a debt retirement agreement for the note payable (see Note 19) and negotiated an extension to the line of credit from related party (see Note 19).

Market risk:

Market risk is the risk that changes in market prices – e.g. foreign exchange rates, interest rates, equity prices and metal prices – will affect the Company`s income or the value of its financial instruments.

 Interest rate risk

The Company has cash, cash equivalent and short-term investment balances and no variable interestbearing debt. The Company's current policy is to invest excess cash in investment-grade short term certificates of deposits issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.

 Currency risk:

The Company's functional and reporting currency is the Canadian dollar. Major purchases are transacted in Canadian dollars, US dollars (“USD”), Euros (“EUR”), Pound Sterling (“GBP”), and Swiss Francs (“CHF”). The Company holds financial instruments denominated in these currencies.

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Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

Exposure to currency risk:

	December 31,2020	December 31,2020	December 31,2020		December 31,2019	December 31,2019	December 31,2019
Asset (Liability)	USD ($Cdn)	EUR ($Cdn)	GBP ($Cdn)	CHF ($Cdn)	USD ($Cdn)	EUR ($Cdn)	GBP ($Cdn)	CHF (SCdn)
Cash and cash equivalents	3,715,769	3,035	-	-	11,336,860	9,504	-	1,061
Accounts receivables	74,903	-	-	-	121,701	-	-	-
Short-term investments	140,029	-	-	-	699,374	-	-	-
Other assets	124,510	-	-	-	8,022	-	-	-
Accounts payable and accrued liabilities	(610,588)	(8,060)	(16,480)	-	(117,143)	(15,813)	-	-
Net exposure	3,444,623	(5,025)	(16,480)	-	12,048,814	(6,309)	-	1,061

Sensitivity to foreign currency: The Company is exposed to foreign currency risk on fluctuations of financial instruments related to cash and cash equivalents, receivables, short-term investments, accounts payable and accrued liabilities. Financial instruments are denominated in US dollars, Euros, Pound Sterling and Swiss Francs. As at December 31, 2020, the net loss and comprehensive loss would have been $171,156 higher/lower, had the Canadian dollar strengthened/weakened by 5% as a result of foreign exchange gains/losses on translation of US dollar, Euros, Pound Sterling and Swiss Francs denominated financial instruments related to cash and cash equivalents, receivables, short-term investments, accounts payable and accrued liabilities.

 Price risk:

The Company is exposed to metal price risk, which arises from gold and platinum inventory held and metal loan payable to Goldmoney. The Company is also exposed to price risk for the digital assets it holds.

Sensitivity to price risk

The Company's metal inventory balance of $17,001,537 (2019: $12,551,060) is subject to a revaluation on the lower price of cost or net realizable value. The Company defines the net realizable value to be a minimum mark-up of 30% on the daily precious metal value. As such, the historical cost would, with a high degree of probability, be lower than the net realizable value. Thus, there is no impact on the net loss and comprehensive loss and deficit for the years ended December 31, 2020 and 2019.

The Company’s metal loan payable to Goldmoney at December 31, 2020 amounts to $10,297,099 (2019: $8,009,928) and is subject to fair value fluctuations. As at December 31, 2020, if the fair value of precious metals had increased/decreased by 5% with all other variables held constant, net loss and comprehensive loss for the year ended December 31, 2020 would have been approximately $514,855 higher/lower.

The Company’s digital asset balance of $549,827 (2019: $18,014) is subject to is subject to fair value fluctuations. As at December 31, 2020, if the fair value of digital assets had increased/decreased by 5% with all other variables held constant, comprehensive loss for the year ended December 31, 2020 would have been approximately $27,491 higher/lower.

35

Menē Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

17. Related party transactions

Related parties include the Board of Directors, senior management, close family members and enterprises that are controlled or managed by these individuals, as well as certain persons performing similar functions. Related party transactions conducted in the normal course of operations are measured at fair value. Key management is defined as those with authority and responsibility for planning, directing and controlling activities of the Company, including directors and the executive team.

Compensation of key management personnel

Compensation of keymanagementpersonnel
	December 31,	December 31,
	2020	2019
Salaries and consulting fees	$ 530,359	$ 527,715
Stock-based compensation	-	395,526
Total	$530,359	$923,241

Related party transactions with Goldmoney

Menē has a related party relationship with Goldmoney, which holds 35.88% ownership in Menē as at December 31, 2020 (2019: 36.09%) and shares the same Chief Executive Officer (“CEO”) who influences key business decisions.

Menē has a supply agreement with Goldmoney dated August 20, 2017. The supply agreement states that Goldmoney is the exclusive supplier of gold and platinum to Menē, and Menē agrees to purchase the metals at a price of 0.5% over the spot price, subject to the terms of the supply agreement.

Menē agreed to terms on a new line of credit promissory note with Goldmoney Inc. on March 19, 2019 (see Note 10), which was amended on March 19, 2021 (see Note 19).

On June 30, 2019, Goldmoney agreed to purchase 12,259,002 Class A common share purchase warrants from the related party member who serves as both CEO of Goldmoney and Menē for aggregate gross proceeds of $1. Each whole warrant entitles the holder to purchase one Class A common share of Menē for the payment of $0.10 per share until July 11, 2020. Goldmoney then exercised the 12,259,002 warrants and paid an exercise price of $1,225,900 to Menē. As additional consideration for the warrant purchase transaction, Goldmoney Inc. reduced the borrowings and payables Menē owed them by $907,921 (Note 10).

The table below summarizes the related party transactions between Menē and Goldmoney in 2020 and 2019.

36

Menē Inc.

Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

	December 31,2020	December 31,2019
Reimbursement of expenses	143,173	183,329
Purchase of inventory	19,949,831	8,126,661
Loan repayments	-	4,098,848

The total amount payable to Goldmoney as at December 31, 2020 was $10,297,099 ($8,009,928 at December 31, 2019). (See Note 10) See Note 12.

18. Contingency

A claim for damages was lodged during fiscal year 2019 against the company by a former employee. Management assesses the possibility of payout to be remote as the likelihood of success of the claim is improbable.

COVID-19

During the fiscal year 2020, the spread of COVID-19 has severely impacted many local economies around the globe. In many countries, including Canada, businesses are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. Global stock markets have also experienced great volatility and a significant weakening. Governments and central banks have responded with monetary and fiscal interventions to stabilize economic conditions.

At this time, it is unknown the extent of the continuing impact the COVID-19 outbreak may have on the Company as this will depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and additional quarantine/isolation measures that are currently, or may be put, in place by Canada, U.S. and other countries to fight the virus.

The potential effects of COVID-19 could impact the Company in a number of other ways including, but not limited to, reductions to our profitability, laws and regulations affecting our business, fluctuations in foreign currency markets, the availability of future borrowings, the cost of borrowings, credit risks of our counterparties and the potential impairment of the carrying value of indefinite-lived intangible assets.

While the Company believes that precious metals are generally well suited to withstand the COVID-19 pandemic, the Company continues to monitor its investments and assess the impact that COVID-19 will have on its business activities. The continuing extent of the effect of the COVID-19 pandemic on the Company is uncertain.

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Notes to Consolidated Financial Statements Years Ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

Menē Inc.

19. Subsequent events

Debt retirement

On March 8, 2021, the Company entered into a debt retirement agreement for the note payable issued by the Company on March 8, 2019 (note 11). Pursuant to the debt retirement agreement the Company issued an aggregate of 9,920,635 common shares in settlement of $5,000,000 ($0.504 per common share), and made a cash payment of $5,119,167 (including all accrued interest to the date of completion of the Debt Retirement), in consideration for the retirement of a total of $10,119,167 in principal and accrued interest owing to the Lender.

Extension of line of credit promissory note

On March 19, 2021, Goldmoney agreed to extend the maturity of the line of credit promissory note issued to the Company on March 19, 2020 (see Note 10). The note will bear interest at the rate of 3% per annum and is payable on March 19, 2022, or on demand by Goldmoney.

38