E INC announces third quarter 2021 financial results

TORONTO, Nov. 12, 2021 /CNW/ - E Automotive Inc. d/b/a E Inc. (TSX: EINC) (the "Company" or "E INC") a company that connects the automotive wholesale and retail experiences with a proprietary technology platform operating under the brands EBlock and EDealer, today announced its financial and operational results for the three and nine months ended September 30, 2021 ("Q3 2021"). Financial references herein are in US dollars unless otherwise indicated.

"Effective inventory management is a critical element of auto dealership profitability. Our platform, which offers an online wholesale auction marketplace where dealerships can purchase or sell vehicles, as well as access innovative software solutions, empowers dealerships to operate more efficiently," said Jason McClenahan, President & CEO, E INC. "We have established great momentum and built a business of scale in this rapidly evolving and growing market. We continue to grow in Canada with the recent acquisitions of TradeHelper and ESP Auctions which extend our market penetration further into Quebec. Our market leadership in Canada, established scale in the western U.S., as well as the capital from the IPO put us in a great position to aggressively expand across the United States and fuel continued organic growth as dealerships increasingly adopt technology to drive performance."

Q3 2021 Highlights
(Comparison periods in each case are the three months ended September 30, 2020)

• Revenue of $19.8 million, up 108% compared to $9.5 million, primarily as a result of approximately 55% organic growth and the three acquisitions completed since the comparable period last year
• Gross transaction value of $538.4 million, up 129%, which is a function of the volume and dollar value of vehicles transacted
• Vehicles transacted of 41,970, up 84%
• Net loss of $6.3 million, compared to $0.4 million
• Adjusted EBITDA¹ loss of $1.8 million, compared to Adjusted EBITDA of $0.5 million
• In August 2021, the Company acquired Les Enchères D'Automobiles St- Pierre, Ltée d/b/a ESP and Gestion Malyka, Inc d/b/a TradeHelper, which further strengthened its position in Quebec.
• The Company raised net proceeds of approximately C$127.7 million from its initial public offering subsequent to the end of the quarter and its common shares began trading on the TSX under the symbol "EINC" on November 3, 2021.

E INC's unaudited financial statements for the three and nine months ended September 30, 2021 and Management's Discussion & Analysis for the same period have been filed on SEDAR at www.sedar.com.

Notice of Conference Call
E INC. will host a conference call Friday, November 12, 2021 at 8:30 AM ET to discuss its financial results. Jason McClenahan, President & CEO, and Andy Bohlin, CFO, will co-chair the call. All interested parties can join the call by dialing [phone] or [phone] with the conference identification of 9020280. Please dial in 15 minutes prior to the call to secure a line. A live audio webcast of the conference call will also be available at e.inc/investors. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.

About E INC.
E INC's mission is to optimize the online vehicle buying, selling, and management experience for automotive dealers and consumers. E INC has a digital platform (the "Platform") that provides automotive dealerships with access to an online wholesale auction marketplace where they can purchase or sell vehicles to other dealers, as well as access innovative software solutions to support dealers' digital retailing and inventory management. Access to E INC's Platform is complemented by ancillary service offerings to assist dealers with supplementary auction-related needs, along with driving consumer traffic to their digital properties and optimizing other business processes. E INC's digital wholesale marketplace goes to market under the brand EBlock, and E INC's digital suite of retail products goes to market under the brand EDealer.

Non-IFRS Financial Measures
This press release makes reference to certain non-IFRS measures and industry metrics. These measures are not recognized measures under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures, including "Adjusted EBITDA". This press release also makes reference to "vehicles transacted", "marketplace participants", "subscribers", "gross transaction value", each of which are operating metrics used in our industry. Non-IFRS measures and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures and industry metrics in the evaluation of issuers. Management also uses non-IFRS measures and industry metrics in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and forecasts and determine components of management compensation.

Non-IFRS Measures
"Adjusted EBITDA" means net loss for the period, adjusted to exclude: finance expense, net, income tax expense, depreciation and amortization, share-based compensation expense, transaction costs, which are costs associated with this Offering that are not directly attributable to the issuance of new shares, acquisition-related expenses, expenses related to non-routine legal matters, and other expense (income), net.

The following table reconciles net loss to Adjusted EBITDA loss for the three and nine months ended September 30, 2021 and September 30, 2020:

	The three months ended				The nine months ended
	September 30, 2021		September 3 0, 2020		September 30, 2021		September 30, 2020
	$		$		$		$
Net loss for the period	(6,349,141)		(433,756)		(13,149,208)		(3,433,303)
Finance expense, net	1,124,538		74,366		2,536,800		199,620
Income tax expense	21,696		—		21,696		—
Depreciation and amortization	1,319,623		310,977		3,647,773		833,227
Share-based compensation expense	1,475,670		341,402		3,220,738		790,892
Transaction costs (1)	622,396		—		961,318		—
Acquisition costs	127,615		—		229,687		—
Non-routine legal expense (2)	—		—		52,932		—
Other expense (income), net (3)	(136,702)		182,579		79,630		(428,986)
Total Adjusted EBITDA	(1,794,305)		475,568		(2,398,634)		(2,038,550)
(1) Transaction costs represent one time costs associated with the Company's IPO that are not directly attributed to the issuance of new shares.  These expenses are recorded within Selling, general and administrative expenses.
(2) Non-routine legal expense is related to a one time settlement.  This expense is recorded within Selling, general and administrative expenses.
(3) Other expense, income (net) includes: foreign exchange loss (gain), mark to market impacts of our current and non-current liabilities carried at fair value through profit and loss, impairment on note receivable, gain on forgiveness of the E INC 2020 PPP Loan (as defined herein) and loss on early extinguishment of borrowings.

Forward Looking Statements
This press release may contain forward-looking information and statements within the meaning of applicable securities legislation, which reflect management's current expectations regarding future events. These statements are based on the Company's expectations, estimates, forecasts, and projections and include, without limitation, statements regarding the future success of the Company's business.

The forward-looking statements in this press release are based on certain assumptions, including that the Company's business will continue to perform in accordance with recent history and that industry fundamentals remain strong. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including the risks discussed under the heading "Risk Factors" in the Company's Supplemented Base Prep Prospectus dated November 2, 2021.  Actual results could differ materially from those projected herein. Readers, therefore, should not place undue reliance on any such forward-looking statements. The forward-looking statements included herein are made as of the date of this press release and the Company does not undertake any obligation to update such forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.

Unaudited Interim Condensed Consolidated Statements of Financial Position [Expressed in United States dollars]
As at	September 30, 2021		December 31, 2020
	$		$
ASSETS
Current assets
Cash and cash equivalents	29,257,422		37,038,524
Trade and other receivables	85,062,611		9,608,182
Prepaid expense	1,874,306		621,573
Net investment in lease	288,732		8,371
Total current assets	116,483,071		47,276,650
Non-current assets
Right-of-use assets	11,611,427		3,024,931
Property and equipment, net	2,022,028		1,330,339
Intangible assets, net	5,652,176		-
Goodwill	39,146,640		-
TOTAL ASSETS	174,915,342		51,631,920
LIABILITIES
Current liabilities
Trade and other payables	93,757,601		11,277,680
Deferred revenue	674,971		243,172
Lease obligations	4,115,065		810,175
Borrowings	15,004,971		278,896
Other current liabilities	3,671,445		-
Total current liabilities	117,224,053		12,609,923
Non-current liabilities
Lease obligations	8,504,226		2,720,066
Borrowings	-		61,766
Other non-current liabilities	5,777,655		-
TOTAL LIABILITIES	131,505,934		15,391,755
SHAREHOLDERS' EQUITY
Share capital	103,781,635		60,143,936
Warrants	6,005,606		1,162,572
Contributed surplus	(27,807,214)		57,510
Foreign currency translation reserve	227,811		525,369
Accumulated deficit	(38,798,430)		(25,649,222)
TOTAL SHAREHOLDERS' EQUITY	43,409,408		36,240,165
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	174,915,342		51,631,920

Unaudited Interim Condensed Consolidated Statements of Loss and Other Comprehensive Loss [Expressed in US dollars, except per number of shares]
	For the three months ended September 30,				For the nine months ended September 30,
	2021		2020		2021		2020
	$		$		$		$
Revenue	19,800,082		9,522,004		56,962,049		21,047,515
Cost of revenue	10,859,136		4,791,222		29,578,914		11,426,777
Gross profit	8,940,946		4,730,782		27,383,135		9,620,738
Operating expenses
Product, technology and development	809,002		622,295		3,805,976		1,749,976
Selling, general and administrative	12,151,930		3,974,321		30,440,468		10,700,204
Depreciation and amortization	1,319,623		310,977		3,647,773		833,227
Operating loss	(5,339,609)		(176,811)		(10,511,082)		(3,662,669)
Other expense (income), net	(136,702)		182,579		79,630		(428,986)
Finance expense, net	1,124,538		74,366		2,536,800		199,620
Loss before income taxes	(6,327,445)		(433,756)		(13,127,512)		(3,433,303)
Income tax expense	21,696		-		21,696		-
Net loss for the year	(6,349,141)		(433,756)		(13,149,208)		(3,433,303)
Other comprehensive gain (loss) that may be reclassified to profit or loss in subsequent years
Exchange differences on translation of foreign operations and reporting currency	(915,658)		293,179		(297,558)		(410,458)
Total comprehensive loss	(7,264,799)		(140,577)		(13,446,766)		(3,843,761)
Loss per common share - basic and diluted	$                (0.61)		$                 (0.03)		$                (1.21)		$                 (0.22)
Weighted average number of common shares outstanding - basic and diluted	10,400,100		15,394,850		10,909,710		15,386,540

Unaudited Interim Condensed Consolidated Statements of Cash Flows [Expressed in US Dollars]
For the nine months ended September 30,	2021		2020
	$		$
Operating activities
Net loss for the period	(13,149,208)		(3,433,303)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation and amortization	3,647,773		833,227
Share-based compensation	3,220,738		790,892
Non-cash other expense	(154,767)		-
Non-cash finance expense	2,464,427		209,614
Changes in non-cash working capital items:
Trade and other receivables	(61,753,292)		(18,903,120)
Prepaid expense	(714,858)		386,440
Trade and other payables	64,079,167		23,378,786
Deferred revenue	280,565		327,900
Cash flows (used in)/ provided by operating activities	(2,079,455)		3,590,436
Investing activities
Receipts from net investment in lease	14,797		70,829
Purchases of property and equipment	(559,476)		(1,116,893)
Acquisitions of business, net of cash acquired	(29,266,253)		-
Cash flows used in investing activities	(29,810,932)		(1,046,064)
Financing activities
Proceeds from borrowings	-		353,400
Proceeds from issuance of common shares	109,892		1
Proceeds from issuance of preferred shares	45,538,615		250,621
Proceeds from exercise of warrants	1,700,000		-
Common share repurchase	(20,296,555)		(261,221)
Repayment of lease obligations	(2,920,915)		(773,868)
Repayment of other current and non-current liability	(304,120)		-
Cash flows used in financing activities	23,826,917		(431,067)
Net change in cash and cash equivalents during the period	(8,063,470)		2,113,305
Effect of foreign exchange on cash and cash equivalents	282,368		(281,453)
Cash and cash equivalents, beginning of the period	37,038,524		12,862,435
Cash and cash equivalents, end of the period	29,257,422		14,694,287

SOURCE E Inc.

Andy Bohlin, Chief Financial Officer, 802-734-4475