E-Commerce Special Report Precious Metals

E-COMMERCE SPECIAL REPORT PRECIOUS METALS

July 2020

3 E-COMMERCE SPECIAL REPORT PRECIOUS METALS

TABLE OF CONTENTS EMERGING TRENDS

 Emerging Trends COVID-19 has introduced a heightened degree of uncertainty and widespread  Macroeconomic Drivers disruption as businesses have grappled with mandated store closures, lower consumer sentiment, and a decline in personal consumption. While the Retail  Flight to Quality industry has encountered significant headwinds, the E-Commerce sector has  Private Company Spotlights demonstrated resilience with sales increasing 81% in May year-over-year (YOY), 1  Public Company Profiles according to ACI Worldwide Research. Retailers offering robust digital platforms have been able to capitalize on unprecedented levels of demand,  Market & Operating Data evidenced by Shopify’s (NYSE:SHOP) 47% YOY revenue increase, according to its  Notable Transactions most recent earnings release.2 Despite volatility in the broader public markets,  Gold in the News top e-commerce providers have experienced a substantial increase in returns largely driven by the pandemic accelerating broader adoption of online  Report Contributors shopping by consumers amid social distancing and shutdown measures.  Consumer & Retail Group  Select M&A Track Record Recent volatility has unveiled the weaknesses of highly correlative and cyclical businesses while simultaneously illuminating recession resistant and opportunistic profiles. As COVID-19 prompted consumers to shift buying habits towards online channels, investors sought risk adjusted returns outside of severely battered equities. Amidst this elevated uncertainty, digital trading of gold and precious metals has emerged as an attractive alternative. Online platforms facilitating the purchase, sale, and delivery of gold represent the CONTACTS intersection of an expanding E-Commerce industry and heightened demand among investors for safe-haven assets yielding steady returns. Despite the John Ferrara resurgence of equity markets, gold has continued to appreciate through year- Founder & CEO to-date (YTD) with prices rising 18.0%. 617-619-3325 Price of Gold [email protected] $2,000 Joel Schneyer Managing Director $1,800 303-619-4211 [email protected] $1,600

Lisa Tolliver per Price Ounce $1,400 Senior Director 773-791-9493 $1,200 [email protected] Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20

Source: FactSet and Capstone Research www.capstoneheadwaters.com July 2020 3 E-Commerce Special Report | July 2020

EMERGING TRENDS (CONTINUED)

YOY VOLUME INCREASE ON GOLD ~75% of their portfolio in stocks and ~25% in gold. 718% TRADING APP GLINT “What we find, having been in business for almost 50 years now, there is a certain set of clients who want to As a finite resource with intrinsic value, gold is one of the take physical delivery of their gold,” David McAlvany, CEO most secure long-term investment options available. of McAlvany Wealth Management, said in a December However, the history and unique complexities of gold news article.3 “And then the new generation…that’s trading have long created barriers for an average investor. interested in owning gold but not interested in the Physical gold trading is unregulated, allowing pricing to inconvenience with figuring out what to do with it.” be driven by supply and demand and set by the individual seller. This has made fair pricing difficult for novice buyers to ascertain. Transparency and trust have This year, amid the market volatility, gold trading apps consequently become a crucial part of the over-the- have seen unprecedented jumps in activity. Glint Pay counter Precious Metals industry. Additionally, as a Services, a gold trading app with operations in the U.S. physical commodity, once procured gold must be and U.K., saw trading volumes increase 718% in the five th 4 securely stored, whether it be under the owner’s mattress weeks leading up to March 25 . Vaulted reported a or in a bank vault. These additional considerations and 540% increase in YOY trading volumes in March, with th complexities have created barriers to gold which are now March 24 setting a record for the most trades in one day being eased with online gold sales and digital gold. in the company’s history. Similarly, Goldex, profiled on page seven, reported a 350% increase in monthly deposits compared to the 2019 average, with June being The emergence of digital gold, or gold that is physically the largest trading month on record. backed in vaults but is traded instantly online, has brought the Precious Metals industry into the 21st century. In digital form, an investor does not need to Amid the surge in app usage, Revulot, a provider of have $1,745 dollars to buy an ounce of gold. Instead, he mobile foreign exchange and money transferring, added or she can invest $100 dollars and own a fraction of an gold purchasing and trading options to its app as of th 5 ounce of gold. This price point has made gold more March 11 . Additionally, APMEX, profiled on page five, attainable to younger demographics and novice investors. expanded from online gold sales and trading to mobile Additionally, widely accessible online platforms and with the launch of its OneGold app in December 2019. smartphone applications (apps) have made gold pricing Unlike many trading apps, OneGold allows customers to easier to compare and find competitive pricing, although not only buy and sell gold, but also to redeem their digital fraud and gold quality remain paramount considerations. precious metals by having them shipped directly to their home. OneGold is available in more than 100 countries and reports ~$75 million in assets under management. In recent years, a number of fintech companies have introduced digital gold offerings to their platforms, as investors seek alternative assets for their portfolios and As shown below, many of these apps are new to the payers seek the safety of a currency with intrinsic value. space and much of the data to-date has shown that the In 2018, McAlvany Wealth Management launched the app emergence of digital trading is attracting a new Vaulted to help clients diversify, advising investors to hold generation to gold.

Select Gold Trading Apps

Glint Pay Services Goldex Vaulted OneGold (App Launched 2017) (App Launched 2017) (App Launched 2018) (App Launched 2019) 2 E-Commerce Special Report | July 2020

MACROECONOMIC DRIVERS

INCREASE IN GOLD DURING Price of Gold Vs. 10-Year U.S. Treasury Yield 28.8% THE FINANCIAL CRISIS U.S 10-Year Treasury Yield Price of Gold Gold is considered to be the ultimate safe haven asset, $2,000 6.0% rising in times of market turmoil and fiscal crises. $1,800 Historically, treasury yields and gold prices have moved 5.0% inversely. Due to rising market volatility and central banks $1,600 cutting rates, the 10-year treasury note yield plummeted $1,400 4.0% to a record low of 0.5% in March and simultaneously, gold $1,200 climbed towards $1,700 per ounce. $1,000 3.0% $800 Daily Yield

Price per Ounce 2.0% In the previous market downturn (2009-2011) global $600 demand for gold increased 28.8% to 4,730.5 tonnes. The $400 1.0% fallout from the 2008 Financial Crisis, including record low $200 interest rates, increased deficit spending, and a collapsed $0 0.0% stock market, were all key factors driving demand. Gold demand subsequently peaked in 2011 due to investors losing faith in historically safe government securities. Europe was suffering from a sovereign debt crisis and S&P downgraded U.S. debt for the first time in history. When the U.S. lost its AAA rating, the stock market fell 20% by CBOE Volatility Index the end of the year. 90 80 From 2012 to 2019, gold demand declined amid a strong 70 economy, including a rising stock market, higher U.S. 60 interest rates, and record levels of consumer optimism. 50 40 In February, the National Bureau of Economic Research 30 officially stated that the U.S. has once again entered a 20 6 Daily Closing Price VIX recession, ending 128 months of expansion. The CBOE 10 Volatility Index, Wall Street’s “fear gauge,” subsequently 0 reached a historic high of 82.7 as investors rushed to exit Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 equity positions. Source: FactSet and Capstone Research

COVID-19 MARKET VOLATILITY CREATES PERFECT STORM FOR GOLD INVESTMENTS

Resurgence in Quantitative Easing Increased Market Volatility The Federal Reserve (Fed) and other In March 2020, market volatility reached central banks worldwide announced levels that have not been witnessed since limitless asset purchases. The Fed the bankruptcy of Lehman Brothers and balance sheet has gone parabolic the depths of the 2008 Financial Crisis. since March, jumping from $4 trillion The end of the longest bull run in history in January to reach a record $6.1 has led to a surge in investor interest in trillion in April. precious metals to safeguard assets.

Stimulus Packages, Record Deficits Record Low Interest Rates The $2.0 trillion stimulus relief The U.S. 10-year treasury yield package has added greatly to the plunged to a record low of 0.5% in deficit. This year, the figure is March and yields worldwide have expected to surpass the historic 2009 continued to descend further into record of $1.5 trillion. negative territory. 3 E-Commerce Special Report | July 2020

FLIGHT TO QUALITY

Gold’s attractiveness as an alternative, counter cyclical Gold vs. S&P 500 Returns asset class, which can help provide superior risk-adjusted NY Gold (NYM $/ozt) S&P 500 portfolio returns, has contributed to its growing embrace by both Wall Street and Main Street investors. +18.0% Historically, gold investment has been viewed as a 120 beneficial asset during times of economic uncertainty and offers several enhancements to a portfolio including 110 diversification, liquidity, and a hedge against currency depreciation and inflation. Notably, in years of inflation 100 greater than 3%, gold’s price increased 15% on average, according to World Gold Council.7 As investors 90

increasingly add alternative investments to their portfolio, 100 = base Index -3.1% gold demand has grown by an average of 14% per year 80 since 2001. Recent pandemic-induced market volatility 70 has highlighted the benefits of gold as a strategic asset, Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 which has recorded a 18.0% price increase in YTD 2020, compared to -3.1% return from the S&P 500 in the YTD. Source: FactSet and Capstone Research The Gold market’s resurgence in 2020 has even drawn speculationLondon that prices may exceed previous highs experienced in 2011, according to Kitco.8 Notably, the average gold price through 2020 of $1,650 per ounce has bested the 2011 average of $1,571 per ounce. In addition, trading of precious metals has drastically increased with London gold vaults holding a record high 8,515 tonnes, equivalent to $440.5 billion at the end of March, according to the London Bullion Market Association.9 The pandemic has also broadened the scope of investors in gold assets, with younger age demographics demonstrating increased appetite, drawn to user-friendly digital trading platforms, gold-backed exchange-traded products, and elevated incorporation in brokerage accounts. In the YTD, online precious metals platforms have experienced record trading volumes and new account registrations largely fueled by a younger customer base.

Gold-backed exchange traded funds (ETFs) have served as an accessible investment vehicle to the Gold market since North American Gold-Backed ETF Flows their initial launch in 2003 with fees typically ranging 160 between 0.40% and 0.75% annually. Gold ETFs offer a 140 cost efficient means to participate in gold gains and have 120 attracted substantial interest as of late with inflows 100 increasing by approximately 90% over the last 12 months, 80 according to World Gold Council.10 Global gold ETFs 60 experienced net inflows of $8.5 billion in May, leading to a Tonnes 40 record high in assets under management of $195 billion. 20 North American gold ETFs in particular recorded 0 substantial gains in investment, adding 102.2 tonnes or -20 $5.6 billion in May which has contributed to a record high -40 in holdings of 1,815 tonnes, surpassing highs achieved in 2012. Notably, popular gold ETF, iShares Gold Trust ETF has witnessed a nearly 65% increase in volume since the start of 2020. Source: World Gold Council, and Capstone Research

With lingering uncertainty remaining as health experts and economists assess the long-term ramifications of the pandemic and prospects of a potential second wave of infections, volatility is likely to persist in the near-term, lending to continued increased demand for precious metals in the foreseeable future. With the upcoming U.S. presidential election, equity markets may react negatively to the political unknown, which is expected to bode well for gold performance and demand. However, in the scenario of a maintained resurgence in equity markets, the non-correlative nature of gold also supports continued investment demand through 2020. As Q2 comes to a close, top public companies in key Precious Metals subsectors have showcased robust performance despite heightened market volatility in the YTD. In addition, niche online precious metals platforms have garnered heightened interest as investors have moved towards efficient gold investment. 4 E-Commerce Special Report | July 2020

PRIVATE COMPANY SPOTLIGHT

Founded: 2001 Chief Executive Officer: Kenneth Lewis Ownership: Private Headquartered: Oklahoma City, OK Employees: 227 Industry: E-Commerce & Internet Retailing

Company Description

APMEX (originally American Precious Metals Exchange) is the world’s largest online retailer of precious metals offering more than 14,000 products, including gold, silver, platinum and palladium bullion bars, rounds and coins, as well as premium bullion and numismatic products. Founded in 2001 by the company’s current president Scott Thomas, the company has ~1,878,581 registered users with customers in 67 countries. APMEX.com was subsequently launched in 2003, and the e-commerce platform now accounts for 80% of the company’s orders. In addition to its mobile and website sales, APMEX products are sold over the phone, through its wholesale website, and through third-party online channels eBay, Amazon, and Walmart. The company has since continued to expand its services offerings (as highlighted in the timeline below).

In 2012, APMEX launched Citadel, private storage services which are operated by Brink's Global Services USA, Inc. With the addition of APMEX Wholesale in 2015, the company created a two-way market for purchases and sales where precious metals are sourced at a lower cost than that of original equipment manufacturers (OEMs) due to a network of certified dealers. APMEX also started its own ISO 9001 certified 9FineMint line in 2018, allowing the company to mint high-end, silver products in house. Most recently, APMEX partnered with asset management service provider Sprott (TSX:SII) to launch OneGold—an online trading platform that allows consumers to real time trade, fund, redeem, or withdraw funds; with a key differentiator being its ability to link the user’s bank account to fund trades. In December 2019, the OneGold app was launched. APMEX’s growth plans for OneGold include expanding geographically by adding new payment methods with local currency options and rolling out a lending feature. APMEX is also considering a credit card launch and expanding its online vintage coin features (see next page).

Founded Website Citadel Wholesale OneGold Oklahoma City Launched Launched Launched Launched

2001 2003 2012 2015 2018

Scott Thomas founded APMEX launched APMEX launched APMEX launched APMEX launched APMEX in 2001. APMEX.com and wholly owned wholesale website OneGold, an online begins to sell precious subsidiary Citadel, allowing a two-way trading platform that metals online. offering customers’ market for purchases is soon followed by a secure, private storage. and sales where trading app in orders may be placed December 2019. 24/7/365.

5 E-Commerce Special Report | July 2020

PRIVATE COMPANY SPOTLIGHT

Ken Lewis, CEO of APMEX

Ken has more than 20 years of leadership experience across a broad range of retail and technology organizations including Fortune 500 companies The Home Depot, Microsoft, and Office Depot. His strategic and operational initiatives have resulted in increased profits for multiple organizations. He joined APMEX in 2011 as EVP of Operations and was promoted to the position of COO, before ultimately being appointed CEO in 2015.

Why is it important to modernize physical gold sales with concepts like data integration and phone apps?

Gold ownership has traditionally been complicated. What should I buy? How is the price determined? Where do I store the metal? Companies like APMEX have made this less complicated by offering retail websites which consumers are accustomed to. With this said, some consumers don’t want to have physical metal in their home. They’re used to online investment apps and want the same level of convenience when buying a product like gold, while still having the protection of knowing the metal is there and they can take possession with a few clicks. We’re able to do so much more in a digital offering, whether it’s micro transactions, which enable you to link your bank account for easy passing of funds, or push notifications, to let you know when markets are on the move.

Is there a difference in the demographics of your customers as you gain market penetration into digital and mobile?

OneGold, our digital presence, is showing a younger demographic and it’s embracing concepts like reoccurring transactions which account for 60%+ of our transactions on OneGold. It's a platform that's only 18 months old, but it's on a run rate to do $150 million in business. We also just conducted a survey asking customers about credit cards and their interest in things like reward points that are paid in gold and the reception we got was astonishing. Of those taking the survey, 50% of APMEX customers and 60% of OneGold customers said they were likely to apply for the card. I'd also say it's very important to note that a digital buyer is not a physical buyer necessarily. When we talk about attracting younger clientele, we always worry about giving up higher margin, physical business for lower margin digital business. The reality is that crossover is not anywhere near what we expected. You're really finding people who embraced the digital concept are not necessarily physical buyers that are migrating away from physical. They tend to be very different in their psyche about how they view precious metals investments. I think people are looking for more modern ways to invest. An example of this is the exponential adoption of our app, which as recently as June was already handling 70% of all transactions and 40% of the dollars.

What about the future of vintage coins?

I think a lot about the numismatic product, it's very clunky, very old school. How you procure that inventory, how you research that inventory, how you build out your want list, and where you want to go with your collections is kind of dated. There are opportunities there. Today, vintage coins are already a significant driver to our bottom line, with more consistent demand and growth rates exceeding the rest of our business. So it's a very profitable piece of business for us. Imagine I have an app, and I can go in and put all my collection onto my app by just scanning the barcode on the graded product with my phone and up comes the product. It tells me the vintage, it tells me its current retail value, shows me the auction comps for it. It loads all this information right onto my phone, right? And then from there you build a want list to add these coins to your collection over time. That's really what our vision is, where we want to go. It requires significant data integration with third parties to pull the right information and a vast network of dealers that you can procure product from, so it's actually fairly complicated to pull off, but I'd say we're more than halfway through that process.

What do you see as long-term impacts of COVID-19 on the industry?

I really am not expecting a massive change in the business. I think our industry is going to be more driven by key financial indicators including the dollar, equity markets, political unrest, worldwide relations, trade, things like that are going to drive demand and the price of metals. As a matter of fact, short term, the biggest impact on us, outside of consumers looking for other investments because the equity's got hit so hard for awhile, is really the coin shops that we buy from weren't open. So it made the supply a little bit less available. 6 E-Commerce Special Report | July 2020

PRIVATE COMPANY SPOTLIGHT

Founded: 2014 Chief Executive Officer: Sylvia Carrasco Ownership: Private (Institutional and Angel Backed) Headquartered: London, United Kingdom Employees: 13 Most recent financing: $1 Million (April 2020) Industry: Financial Technology

Company Description

Goldex offers a smart trading platform leveraging innovative financial technology to facilitate a fair and transparent gold marketplace. Goldex’s sophisticated trading technology ensures the best available prices by using Smart Order Routers that, at the point of trade, execute with the dealer that offers the best price. All dealers that use the Goldex platform to buy and sell gold have to adhere to strict due diligence and all gold has to be sourced and approved by the London Bullion Market Association. Goldex operates 24/7 and matches a customer’s bid to the best price consolidated from a number of international gold dealers. Goldex differentiates itself from other gold dealers in the fact that it does not own any gold, rather it acts as a facilitator for customers to buy, sell, and store fully allocated physical gold. Its main competitive advantage lies in the fact that it is the first company bringing this agency model to both retail and institutional customers.

The Goldex app provides trade recommendations, market news, and relevant charts to assist its customers in trading. Its short term trade recommendations are published on a weekly basis and are complemented by a market news section which provides third-party industry articles and news releases. There is no minimum investment to fund an account and customers have the option of purchasing and selling micro orders of gold (minimum of 0.001g).

Goldex has continued on its initiative to bolster the app’s capabilities and geographic reach, evidenced by its most recent funding round in April 2020 of $1 million. The investment has come from a well-established Indian Asset Manager, which will enable expansion into the Indian Institutional market, allowing traditional investment firms to offer gold to their customers by connecting to the first electronic multi-dealer hub available to them (see next page).

Founded $0.7M $1.5M $1M +304% London Raised Raised Raised YOY Trading

2014 2017 2018 2019 2020

Sylvia Carrasco founded Goldex raised $0.7 Goldex raised $1.5 Quantum Asset Goldex trading volume Goldex in 2014. million of angel million in seed round Management India through the first six funding from funding with the invested a further $1 months of 2020 prominent investors investment led by Acies million in April 2020. increased 304% such as Gaël de Ventures and compared to the same Boissard, Henry Ascension Ventures. period in 2019. Ritchotte, and Peter Hancock. 7 E-Commerce Special Report | July 2020

PRIVATE COMPANY SPOTLIGHT

Sylvia Carrasco, Founder & CEO of Goldex

With over 18 years of experience in investment banking and brokerage, Sylvia was part of the original team at Credit Suisse that developed the first electronic trading and algorithmic systems in the equity markets. In 2009 she successfully founded the first FCA regulated firm in the UK to advise the largest institutional investment houses in both electronic trading services and Best Execution policies across multi-asset classes.

Has the current market volatility from COVID-19 impacted the number of Goldex users or the volume of gold being traded?

June has been our largest month on record for trading volume, beating the previous records set in March and April of this year. In fact, for the first six months of 2020, we have experienced more than double the trading volume for the entirety of 2019, which just demonstrates how physical gold demand has surged dramatically amidst the pandemic. Monthly deposits have also increased by an average of 350% since 2019 and we are also experiencing a significant increase in account openings, with approximately 70% more accounts being opened per month compared to the same period last year.

On gold’s future as an investment…

Outside of the current pandemic, gold prices had already started raising in November 2019. Before COVID, gold prices were already breaking levels which have been accelerated by the health events since March 2020. As per today, we are touching the highest historical price ever paid for physical gold. Going forward, I personally believe that gold will absolutely continue to rise in the face of unprecedented central bank intervention and governmental policy to support the economy at all costs. Analysts all over the world are revising their forecasts for gold prices higher and higher with a price of $2k per ounce being within reach. It is clear that gold is not going anywhere, quite the opposite, it is going to become more mainstream as a viable investment asset and offers the ultimate security cushion and safe haven outside of the banking system.

Why do you think gold demand will stay at an elevated level?

If you look at the emergence of cryptocurrencies, there has been an explosion in interest with people looking at buying and trading alternative investments. If you think about it, gold is the original and ultimate cryptocurrency–it doesn’t trade on an exchange, is used to store value, and can be used as way of payment. There have been many barriers of entry in the past when it comes to investing in gold, but the development of technologies and platforms like Goldex offers easier access to gold than ever before. There used to be a perception that you needed to be a millionaire to invest in gold, and that owning a gold bar was only for the rich elite. Now people are realizing that gold is a liquid market, and price barriers like minimum investments are being removed. Gold is easy to store, it’s cheap to vault, and you can sell it instantly and electronically. The moment you start removing barriers across trust, accessibility, and price, people start coming in and in terms of education, every human being already knows what gold is, what it looks like, and how valuable and cherished it is.

What are the near-term growth prospects and expansion plans for Goldex?

We have two main projects in hand: continuing the product development and geographical expansion of our existing retail app and launching the Goldex Institutional platform in both Western and Indian markets. I believe that the Goldex retail app is by far the most sophisticated platform currently available but we have the vision to become the point of reference in all things gold. We have been listening to our customers and we want to implement features that will not only allow them to invest in gold easily and at the best prices, but also use it as a medium of exchange. We are adding USD and EUR to the app, which will allow customers from all over the world to access it via the app stores, since at the moment we are UK/GBP only. In regards to institutional business, this is very exciting for us as we believe we are the first company in the world bringing multi-venue trading via a single connection. Whereas in all other asset classes (equities, bonds, futures, ETFs, etc.) financial institutions deliver Best Execution policies and it’s now standard practice to execute trades in multiple venues, this is something that we’re offering first. We’re a few weeks away from going live with the first institution in the UK and a few months away from going live with our first Indian customer. Beyond 2020, we are already thinking about the Goldex expansion into other geographies with the USA, Middle East, and other Asian countries at the top of our agenda. 8 E-Commerce Special Report | July 2020

PUBLIC COMPANY PROFILES

“Our business model, underpinned by a large, diverse and gold- based operating portfolio, has performed well and allowed us to REVLON (NYSE:REV) deliver another solid quarter of operating and financial results as Trading Data 06/23/2020 (Currency USD): unprecedented challenges caused by COVID-19 began to develop.” 11 Stock Price $119.58 - Bill Heissenbuttel, President and CEO

52 Week High $138.65 Results for fiscal third quarter ended March 31,2020: EV/EBITDA 21.5x • $136.4 million in revenue in Q3 2020, a 24.3% increase compared EV/Revenue 16.1x to Q3 2019 revenues of $109.8 million • Operating cash flow increased 28.7% YOY to $99.7 million in Q3 Market Capitalization $7.8 billion 2020 • Gold equivalent ounces (GEOs) volume of 86,200 in Q3 2020, an Volume (mm) Price increase of 2.4% YOY

$160 2.0 Analysis:

$120 1.5 Following the initial COVID-induced market turbulence, which drove Royal Gold’s stock price to fall to $69.64, the gold royalty and $80 1.0 streaming provider has recovered from significant losses with its stock

$40 0.5 price rising nearly 72% since its March 18 trough. Royal Gold benefited from a rise in precious metals prices with gold and silver $0 0.0 increasing 21% and 9% respectively in the quarter, especially as gold Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 comprised 79% of total revenues. In addition, Royal Gold has drawn Note: Box indicates time after WHO declared COVID-19 a $200 million on its revolving credit facility in order to ensure sufficient pandemic in March 11 liquidity in light of the uncertainty brought by the pandemic in the near-term.

“Our robust balance sheet provides us with significant financial flexibility to continue allocating capital where it is needed most during this time of uncertainty, while maintaining our industry- Trading Data 06/23/2020 (Currency USD): leading returns to shareholders.” - Tom Palmer, President and CEO12 Stock Price $58.91

52 Week High $67.90 Results: • Revenue increased 43% from the prior year quarter to $2.6 billion EV/EBITDA $10.7x in Q1 2020 EV/Revenue 4.9x • Generated $1.1 billion in adjusted EBITDA, an increase of 63% YOY Market Capitalization $47.3 billion • Gold production increased 20% compared to the prior year quarter at 1.5 million ounces in Q1 2020

Volume (mm) Price Analysis: $80 25 In Q1 2020, senior gold producer Newmont completed its sale of 20 $60 19.9% equity stake in Continental Gold for $260 million in cash, 15 supporting its approach to foster disciplined capital allocation and to $40 strengthen its balance sheet. In addition, Newmont completed a sale 10 $20 of its 50% interest in Kalgoorlie Consolidated Goldmines to Northern 5 Star Resources (ASX:NST) for cash proceeds of $800 million. $0 0 Newmont concluded the quarter with total liquidity of $6.6 billion Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 with net-debt to EBITDA of 0.7x.

Source: Company press releases and Capstone Research 9 E-Commerce Special Report | July 2020

PUBLIC COMPANY PROFILES

“The environment today is lending itself much more to existing precious metals buyers purchasing more as well as new buyers REVLON (NYSE:REV) coming into the marketplace.” Trading Data 06/23/2020 (Currency USD): - Gregory N. Roberts, CEO and Director13 Stock Price $19.31 Results for fiscal third quarter ended March 31,2020: 52 Week High $19.61 • Revenues decreased 1% to $1.26 billion in fiscal Q3 2020 compared EV/EBITDA NM to $1.27 billion in fiscal Q3 2019 EV/Revenue 0.1x • Gold ounces sold amounted to 508,000 ounces, representing a 7% increase YOY Market Capitalization $137.5 million • Gross profit increased 158% in fiscal Q3 2020 YOY to $22.5 million

Volume (mm) Price Analysis: Precious metals trading company A-Mark has experienced a steady $25 0.12 increase in its stock price, trading slightly below its 52-week high. $20 0.10 Through fiscal Q3, A-Mark benefited from a substantial increase in 0.08 $15 wholesale trading ticket volume, rising 57% YOY. Notably, through 0.06 $10 the first nine months of fiscal 2020, trading ticket volume has grown 0.04 20% compared to the previous year. Strong profitability was also $5 0.02 driven by its subsidiary SilverTowne Mint, which allowed for price $0 0.00 stability and efficient access to silver through the quarter. Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20

Note: Box indicates time after WHO declared COVID-19 a pandemic in March 11

“Fiscal year 2020 was the most important year in our company’s history as our three business lines (storage, coins & bars, and jewelry) harmonized into producing significant gross profit and Trading Data 06/23/2020 (Currency CAD): revenue growth.” - Roy Sebag, CEO14 Stock Price $1.74

52 Week High $2.04 Results for fiscal fourth quarter ended March 31, 2020: • Quarterly IFRS revenue increased 160% YOY in fiscal Q4 2020, EV/EBITDA NM amounting to $164.4 million EV/Revenue 0.4x • Annual gross profit rose to $22.3 million, an increase of 96% YOY Market Capitalization $180.3 million • Annual fee revenue rose to $4.4 million, representing an 87% increase compared to the prior year

Volume (mm) Price Analysis: $2.50 0.60 Leading digital metals provider, Goldmoney experienced robust $2.00 0.50 growth in fiscal year 2020, achieving record annual revenue of $458.9 0.40 $1.50 million. Notably, Goldmoney.com asset under custody grew 18% YOY 0.30 to $2.1 billion. In addition, Goldmoney has continued to receive $1.00 0.20 strong revenue contributions from SchiffGold which experienced $0.50 0.10 substantial growth in gross margin and operating income of 169% $0.00 0.00 and 355%, respectively. Furthermore, with the expansion of the Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Goldmoney Global Vault Network to Singapore and Frankfurt, Germany, the company now offers 15 vault locations. Source: Company press releases and Capstone Research 10 E-Commerce Special Report | July 2020

MARKET & OPERATING DATA

Sector: E-Commerce Price % 52 Wk Market Enterprise LTM EV / LTM Company 07/09/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA 1-800-FLOWERS.COM, Inc. $22.67 84.6% $1,457.3 $1,392.6 $1,331.1 $123.8 9.3% 1.0x 11.2x Amazon.com, Inc. $3,081.11 99.9% $1,536,783.8 $1,565,642.8 $296,274.0 $41,037.0 13.9% 5.3x 38.2x ASOS Plc $39.08 82.3% $3,888.2 $4,499.7 $3,850.5 $147.5 3.8% 1.2x 30.5x boohoo group plc $2.82 51.8% $3,276.8 $3,016.1 $1,576.6 $143.9 9.1% 1.9x 21.0x eBay Inc. $58.27 99.7% $40,945.1 $45,710.1 $10,761.0 $3,309.3 30.8% 4.2x 13.8x Overstock.com, Inc. $43.44 92.5% $1,754.1 $1,743.6 $1,443.3 NM NA 1.2x NM Rakuten, Inc. $9.36 84.3% $12,709.2 $14,653.2 $12,221.7 NM NA 1.2x NM Wayfair Inc. $221.48 95.9% $20,959.7 $22,579.8 $9,512.3 NM NA 2.4x NM Zalando SE $75.01 99.1% $18,748.4 $18,095.6 $7,284.1 $169.6 2.3% 2.5x NM

EV = enterprise value; LTM = last twelve months Mean 11.5% 2.3x 22.9x $ in millions, except per share data Median 9.2% 1.9x 21.0x NM = Not Meaningful Harmonic Mean 5.9% 1.7x 18.7x

Sector: Specialty E-Commerce Price % 52 Wk Market Enterprise LTM EV / LTM Company 07/09/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Asian Star Company Limited $8.28 70.4% $132.5 $175.1 $450.3 $20.0 4.4% 0.4x 8.8x Qurate Retail, Inc. $9.41 64.3% $3,927.7 $10,546.7 $13,293.0 $1,654.0 12.4% 0.8x 6.4x Renaissance Global Limited $2.93 53.8% $55.4 $102.8 $333.4 $21.6 6.5% 0.3x 4.7x Vaibhav Global Limited $17.71 88.9% $572.5 $551.8 $263.8 $34.8 13.2% 2.1x 15.9x Vipshop Holdings Limited $22.20 99.0% $14,927.7 $14,363.7 $12,774.5 $1,015.0 7.9% 1.1x 14.2x

Mean 8.9% 0.9x 10.0x Median 7.9% 0.8x 8.8x Harmonic Mean 7.6% 0.6x 8.1x

Sector: Financial Technology Brokerage & Asset Management

Price % 52 Wk Market Enterprise LTM EV / LTM Company 07/09/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Cboe Global Markets, Inc. $93.01 72.7% $10,205.1 $11,002.3 $2,815.0 $873.3 31.0% 3.9x 12.6x CME Group Inc. $168.08 74.6% $60,271.5 $63,548.1 $5,200.0 $3,706.1 71.3% 12.2x 17.1x Envestnet, Inc. $76.23 86.9% $4,079.3 $4,706.3 $947.0 $128.3 13.6% 5.0x 36.7x Magnite, Inc. $6.78 51.7% $728.2 $677.5 $160.3 NM NA 4.2x NM MarketAxess Holdings Inc. $544.42 99.7% $20,639.1 $20,343.2 $555.8 $317.0 57.0% NM NM Sprott Inc. $37.89 97.0% $960.8 $943.0 $69.2 $19.4 28.1% 13.6x 48.6x

Mean 40.2% 7.8x 28.7x Median 31.0% 5.0x 26.9x Harmonic Mean 28.9% 5.9x 21.6x

Source: Capital IQ and Capstone Research 11 E-Commerce Special Report | July 2020

MARKET & OPERATING DATA

Sector: Large Gold Producers

Price % 52 Wk Market Enterprise LTM EV / LTM Company 07/09/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Agnico Eagle Mines Limited $65.87 94.6% $15,845.2 $17,326.1 $2,634.5 $14,942.2 567.2% 6.6x 1.2x AngloGold Ashanti Limited $31.65 98.9% $13,183.8 $15,051.3 $3,685.0 $1,530.0 41.5% 4.1x 9.8x Barrick Gold Corporation $27.69 93.4% $49,232.3 $60,242.6 $10,345.0 $5,127.0 49.6% 5.8x 11.8x Compañía de Minas Buenaventura $9.48 53.1% $2,407.8 $2,985.0 $796.3 $83.4 10.5% 3.7x 35.8x First Quantum Minerals Ltd. $8.99 86.3% $6,173.8 $16,734.0 $4,392.0 $1,702.0 38.8% 3.8x 9.8x Gold Fields Limited $10.16 99.3% $8,978.9 $10,454.0 $2,967.1 $1,327.7 44.7% 3.5x 7.9x Kinross Gold Corporation $7.58 96.4% $9,530.1 $10,992.8 $3,590.9 $1,467.0 40.9% 3.1x 7.5x Kirkland Lake Gold Ltd. $47.43 94.6% $13,148.6 $12,620.6 $1,629.8 $1,134.6 69.6% 7.7x 11.1x Newmont Corporation $63.43 91.8% $50,907.9 $54,869.9 $10,518.0 $4,200.0 39.9% 5.2x 13.1x Sibanye Stillwater Limited $2.42 80.1% $6,486.7 $7,659.3 $5,211.7 $14,026.7 269.1% 1.5x 0.5x Yamana Gold Inc. $5.54 95.5% $5,275.6 $6,300.4 $1,561.6 $686.6 44.0% 4.0x 9.2x

EV = enterprise value; LTM = last twelve months Mean 110.5% 4.1x 10.7x $ in millions, except per share data NM = Not Meaningful Median 44.0% 3.7x 9.8x Harmonic Mean 39.3% 3.4x 5.2x

Sector: Midsize Gold Producers

Price % 52 Wk Market Enterprise LTM EV / LTM Company 07/09/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Argonaut Gold Inc. $1.94 88.3% $350.9 $314.5 $261.5 $49.2 18.8% 1.2x 6.4x Base Resources Limited $0.15 76.4% $171.2 $138.4 $190.8 $98.8 51.8% 0.7x 1.4x China Gold International Resources $0.68 52.3% $269.3 $1,400.4 $660.5 $182.5 27.6% 2.1x 7.7x Dundee Precious Metals Inc. $7.10 97.9% $1,285.0 $1,296.4 $485.4 $202.7 41.7% 2.7x 6.4x Eldorado Gold Corporation $10.85 98.1% $1,816.6 $2,182.8 $742.5 $293.8 39.6% 2.9x 7.4x Equinox Gold Corp. $11.57 98.4% $2,571.6 $3,050.5 $376.3 $140.0 37.2% NM 21.8x Golden Star Resources Ltd. $2.94 61.4% $323.1 $304.3 $264.9 $54.3 20.5% 1.1x 5.6x Guyana Goldfields Inc. $1.29 97.2% $225.6 $211.7 $163.2 $10.1 6.2% 1.3x 20.9x Hummingbird Resources PLC $0.43 100.0% $151.8 $215.3 $156.9 $43.7 27.8% 1.4x 4.9x Medusa Mining Limited $0.50 75.0% $104.1 $87.6 $146.3 $62.5 42.7% 0.6x 1.4x OceanaGold Corporation $2.45 79.6% $1,525.6 $1,652.3 $609.9 $173.9 28.5% 2.7x 9.5x Pretium Resources Inc. $8.73 64.6% $1,628.9 $2,069.1 $508.0 $219.2 43.2% 4.1x 9.4x Ramelius Resources Limited $1.46 94.6% $1,177.7 $1,155.5 $231.4 $121.1 52.3% 5.0x 9.5x Roxgold Inc. $1.15 96.3% $428.6 $441.8 $190.2 $78.3 41.2% 2.3x 5.6x SEMAFO Inc. $3.52 83.0% $1,179.7 $1,191.7 $460.4 $230.8 50.1% 2.6x 5.2x Teranga Gold Corporation $10.04 98.5% $1,682.6 $2,095.4 $395.5 $110.8 28.0% NM 18.9x TMAC Resources Inc. $1.14 22.2% $148.1 $262.0 $173.8 $79.8 45.9% 1.5x 3.3x Torex Gold Resources Inc. $16.46 99.0% $1,407.5 $1,427.9 $710.9 $329.2 46.3% 2.0x 4.3x Wesdome Gold Mines Ltd. $10.00 98.8% $1,384.1 $1,355.6 $133.2 $88.4 66.3% NM 15.3x

Mean 37.7% 2.1x 8.4x Median 41.2% 2.1x 6.4x Harmonic Mean 28.4% 1.6x 5.0x Source: Capital IQ and Capstone Research 12 E-Commerce Special Report | July 2020

MARKET & OPERATING DATA

Sector: Precious Metals Royalty & Streaming

Price % 52 Wk Market Enterprise LTM EV / LTM Company 07/09/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Abitibi Royalties Inc. $15.90 95.7% $198.8 $192.9 $1.9 $0.0 0.0% NM NM Altius Minerals Corporation $7.52 77.5% $311.9 $456.3 $40.4 $27.1 67.3% 11.3x 16.8x Franco-Nevada Corporation $144.40 91.0% $27,427.6 $27,208.0 $902.3 $725.2 80.4% 30.2x 37.5x Maverix Metals Inc. $4.48 82.8% $537.3 $588.7 $35.2 $23.8 67.6% 16.7x 24.7x Osisko Gold Royalties Ltd $10.72 83.1% $1,770.0 $1,957.4 $243.0 $59.2 24.3% 8.1x 33.1x Royal Gold, Inc. $126.75 90.8% $8,312.4 $8,355.8 $490.7 $367.5 74.9% 17.0x 22.7x Sandstorm Gold Ltd. $9.77 96.9% $1,856.6 $1,895.4 $92.6 $57.9 62.6% 20.5x 32.7x Wheaton Precious Metals Corp. $46.81 96.9% $20,985.5 $21,605.8 $891.1 $584.6 65.6% 24.2x 37.0x

EV = enterprise value; LTM = last twelve months Mean 55.3% 18.3x 29.2x $ in millions, except per share data Median 66.4% 17.0x 32.7x NM = Not Meaningful Harmonic Mean NA 15.4x 27.1x

Historic Multiples by Sector EV/Revenue Average EV/EBITDA Average

E-Commerce Specialty E-Commerce FinTech Brokerage 50.0x 20.0x 50.0x & Asset Management 39.2x 40.0x 15.0x 40.0x 32.5x 12.5x 13.0x 27.9x 30.0x 25.8x 30.0x 10.0x 21.9x 23.6x 21.8x 7.9x 7.8x 19.2x 20.0x 20.0x 11.8x 11.2x 5.0x 10.7x 10.9x 10.0x 10.0x 3.9x 3.1x 3.4x 3.7x 0.7x 0.9x 0.7x 0.8x 0.0x 0.0x 0.0x 2017 2018 2019 YTD 2017 2018 2019 YTD 2017 2018 2019 YTD

Large Gold Producers Midsize Gold Producers Precious Metals Royalty 20.0x 20.0x 50.0x & Streaming

40.0x 15.0x 15.0x 11.7x 30.9x 30.0x 8.9x 9.2x 24.7x 10.0x 10.0x 20.6x 7.2x 7.9x 7.7x 18.7x 19.5x 6.7x 6.7x 20.0x 16.1x 14.3x 13.5x 4.0x 5.0x 3.5x 5.0x 3.1x 2.8x 2.6x 2.9x 2.5x 2.4x 10.0x

0.0x 0.0x 0.0x 2017 2018 2019 YTD 2017 2018 2019 YTD 2017 2018 2019 YTD Source: Capital IQ and Capstone Research as of July 9, 2020 13 E-Commerce Special Report | July 2020

NOTABLE TRANSACTIONS

Several notable transactions have been announced or completed in the industry through 2020. Select transactions are outlined below, followed by a more comprehensive list on the following page.

INTL FCStone Inc. acquires GAIN Capital Holdings, Inc. (February 2020, $236.4 Million)

INTL FCStone (NASDAQ:INTL) has acquired leading trading and execution platform of foreign exchange, commodities, and global equities GAIN Capital Holdings for an enterprise value of $236.4 million and equivalent to 1.0x revenue. New Jersey-based GAIN Capital provides access to over-the- counter (OTC) and exchange-traded markets to approximately 140,000 retail and institutional investors Acquires across 180 countries. GAIN’s FOREX.com platform offers market leading services for forex and CFD trading and is complemented by GAIN’s City Index platform which offers access to over 12,000 markets across forex, indices, shares, and commodities.

INTL FCStone provides execution, post-trade settlement, clearing, and custody services to its clients across a variety of markets. Its offerings include physical trading in precious metals, asset management, and advisory services. The acquisition bolsters INTL’s capabilities, platform digitization, and significantly expands its distribution channel. GAIN’s technology solutions such as mobile trading, automated account opening and advanced marketing analytics will be leveraged to accelerate the digitization of INTL. The transaction increases INTL’s net operating revenue by 30% and estimates $100 million in capital synergies within 12 months.

“By leveraging INTL FCStone’s products and services, we can enhance GAIN’s product offering to drive market share growth by capturing additional business from existing clients, as well as enable the acquisition of new clients. As a clearer, we can enhance margins on their transaction flow, and by combining the transactional flows, we believe we can increase revenue capture by internally crossing more spreads and getting better execution from markets,” commented Sean O’Connor, CEO of INTL FCStone in a press release.15

JM Bullion LLC acquires Provident Metals, LLC (October 2019, Undisclosed)

JM Bullion, a leading online retailer of precious metals, has acquired Provident Metals for an undisclosed sum. Provident provides a robust collection of gold, silver, and other metals for purchase through its e-commerce site that are available for order 24 hours a day, seven days a week with real- time pricing. It also offers competitive pricing for customers selling precious metal coins and bars with Acquires payment options including ACH, check, or wire transfer. Provident carries a BBB rating of A+. JM Bullion product offerings include gold coins, gold bars, silver and platinum items, and other accessories all sold online. JM also partners with a custodian firm to assist clients in funding a self- directed IRA to purchase precious metals from its inventory. In January 2020, JM Bullion surpassed $3 billion in total sales since its founding in 2011, according to its website.

The acquisition of Provident expands JM Bullion’s presence and product offerings in the Precious Metals Online Retailing market. Provident Metals will continue to operate as a separate brand and will leverage JM Bullion’s capabilities to improve its e-commerce functions, mobile experience, and search functionality. Provident will also gain a new order fulfillment center and have the ability to store multiple payment methods in user accounts.

14 E-Commerce Special Report | July 2020

NOTABLE TRANSACTIONS

Enterprise EV / LTM Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA Gain Capital Provides trading solutions, including foreign 02/27/20 INTL FCStone $236.4 1.0x - Holdings exchange, precious metals and commodities.

IFCM Provides commodity price risk management 01/06/20 INTL FCStone - - - Commodities solutions for base and precious metals.

Endeavour Provides precious metals exploration and 12/03/19 Centamin $1,610.53 2.7x 5.6x Mining development services. Provides gold, silver and other metals through its 08/16/19 Provident Metals JM Bullion - - - e-commerce site. Provides an online auction platform for coins, 07/29/19 CIRCA Adama Capital - - - silver and other valuable items. Provides an e-commerce platform to buy and sell 03/13/19 CoinInvest INTL FCStone $21.93 - - precious metals. Korea Jewelry Provides gold products, as well as real-time gold 08/09/18 Itcen $100.10 0.1x - 3M Gold exchange rates, prices and related services. Metanor Bonterra Provides its own developed gold to retail 06/01/18 $51.97 2.3x - Resources, Resource customers in Canada. Citypoint Allen Market Provides precious metals and other commodity 05/15/18 - - - Trading Limited trading services. OANDA CVC Capital Provides online foreign exchange, precious 05/02/18 - - - Corporation Partners metals and commodities trading services. Provides an e-commerce platform for consumers 06/23/17 Cash 4 Gold ZIMBRIS - - - to buy and sell gold in France. Hard Asset Provides online precious metals appraisal and 05/03/17 BMC Capital - - - Management retail services.

Heraeus Provides precious metals products, as well as 04/03/17 Argor-Heraeus - - - Holding trading services.

Dominion The Washington 03/19/17 Provides diamonds to customers worldwide. $1,170.79 1.9x 4.5x Diamond Companies

Austral Gold Inversiones Provides precious metals exploration and 01/23/17 $99.93 1.2x 4.9x Limited Financieras development services. A-Mark Precious Provides precious metals such as coins, bars and 08/31/16 SilverTowne Mint $10.67 - - Metals rounds. Goldline A-Mark Precious Provides gold and precious metals trading and 08/14/16 $10.00 - - International, Inc. Metal retail services.

08/08/16 Trans Hex RAC Investment Provides diamonds and other precious metals. $6.52 0.1x 4.2x

Mandalay Provides precious metals refining, processing and 07/19/16 GMT Capital $370.96 1.9x 5.9x Resources reclamation services.

Provides discounted precious metals through an 07/08/16 Schiff Gold Goldmoney - - - online platform.

China Yinsheng 03/31/16 KB Bullion Provides precious metals trading services. $5.19 - - Capital

Source: Capital IQ, PitchBook, FactSet, and Capstone Research 15 E-Commerce Special Report | July 2020

GOLD IN THE NEWS

Miami FinTech Granted MSB License in Step Gold-Buying App sees 718% Spike in Volume Toward Making Payments with Gold the Norm MarketWatch | March 25, 2020 StartupBeat | May 8, 2020

“The global Fintech market has been growing at an “Gold-buying apps, which allow customers to buy and annual rate of 24.8 percent and is expected to be use the precious metal for everyday spending, are worth $309.98 billion by 2022. The rapid expansion of seeing record volumes as investors flock to the safe- Fintech has been driven by a number of reasons, haven commodity amid violent market swings on fears including offering faster, more secure, and in some of a coronavirus-fueled global recession. British-based cases, lower cost, payment options. And while startup Glint Pay Services, which operates in the U.S., cryptocurrencies tend to dominate the conversation the U.K. and continental Europe, said it had seen a when talking about fintech capabilities, instead, Miami- 718% increase in clients purchasing gold over the last based company, Coro Global Inc. (Coro) is five weeks as volatility stemming from the coronavirus revolutionizing transactions using gold.” pandemic swept through markets.”

Q1 Gold Demand Supported as COVID-19 BTSE lists Tether Gold Fueled Safe-Haven Investment Hedgeweek | March 13,2020 World Gold Council | April 30, 2020

“Q1 inflows into gold-backed ETFs saw a seven-fold “’Tether Gold is growing from strength to strength,’ year-on-year increase amid global uncertainty and says Paolo Ardoino, CTO at Tether. ‘The listing on BTSE financial market volatility. Holdings of gold-backed further underlines the popularity and trust in Tether ETFs reached a record high of 3,185t by the end of Q1. Gold. As a blockchain-based token that offers Sharp investment inflows helped push the US dollar ownership of gold without annual fees, Tether Gold gold price to an eight-year high. Consequently, represents an important evolution in the digital space.’ demand in value terms reached US$55bn – the highest Tether Gold was launched earlier this year in response since Q2 2013. The gold price reached a new record to an increase in demand for what is commonly viewed high in Indian rupees and Turkish lira, among others.” as the world’s most reliable precious metal.

Gold Prices to Double to a Record $3,000 Gold Now Available through Revolut Central Banks Fuel ‘Financial Repression’ FinTech Times | March 12, 2020 Markets Insider | April 21, 2020

“Central banks' stimulus frenzy amid the coronavirus “Global financial platform, Revolut, has today pandemic will drive gold to a lofty record by October announced that customers with a Metal or Premium 2021, Bank of America analysts projected in a note on account can now access gold through the Revolut app. Monday. The firm's analysts lifted their 18-month Gold will be available via the Revolut app through a price target for the precious metal to $3,000 per ounce new ‘Commodities’ widget on the dashboard. from $2,000, praising gold as "the ultimate store of Customers can purchase and trade exposure to gold, value" during the severe economic downturn. After an based on live market performance data which Revolut initial sell-off and subsequent rebound, the safe-haven obtains through its trusted gold services partner. Any asset sits near its highest level in eight years, but Bank gold exposure held by users is backed up by real, of America reckons that potent easing policies around physical gold, securely held by Revolut’s trusted gold the world will send value 50% higher than its record.” services partner.”

16 E-Commerce Special Report | July 2020

REPORT CONTRIBUTORS

John Ferrara Founder & CEO [email protected] | 617-619-3325 John has dedicated 30+ years to serving as a trusted advisor to privately held businesses. Representative of over 200 engagements, he has acted as investment banker, management consultant, interim executive, investor, founder and board member. John has been recognized as one of the Top 50 M&A advisors in the U.S. and honored as an M&A Advisor Hall of Fame inductee. Under his leadership, Capstone has expanded to 19 offices in the U.S., U.K., and Brazil with an international platform that spans over 450 professionals in 40 countries worldwide. John graduated from Wesleyan University with an MBA from UCLA and The London School of Economics.

Joel Schneyer Managing Director [email protected] | 303-619-4211 Joel Schneyer, Managing Director, joined the firm in 2010. His international career spans 30 plus years as an investment banker, financial analyst, metals trader and petroleum geologist. Recent focus has been on unconventional shale, including frac sand and disposal of oilfield production water. Joel joined Capstone Headwaters from Mercantile Resource Finance, an advisory firm to the natural resource sector that he founded in 1996. He holds a MS in Mineral Economics from Colorado School of Mines, an MA in Geology from the University of Texas, Austin, and a BA in Geology from Colgate University.

Lisa Tolliver Senior Director [email protected] | 773-791-9493 Lisa has 20 years of experience in the investment banking industry, primarily focused on advising middle market private business owners in liquidity related transactions. As a Senior Director based in Capstone Headwater’s Chicago office, she works closely with clients to advise and execute domestic and cross- border M&A transactions, recapitalizations and capital raises. Lisa received her BA on academic scholarship from Illinois State University and is a Series 7 and 63 Registered Securities Representative.

Sarah Doherty Vice President of Research [email protected] | 617-619-3310 Sarah joined Capstone Headwaters in 2016 and has more than eight years of research and writing experience. She oversees the firm’s corporate Research Team, which produces more than 150 reports annually on middle-market M&A activity. Sarah specializes in the Education & Training, Aerospace & Defense, and Transportation & Logistics industries. Sarah holds a BA in Journalism and Political Science from Biola University and is a certified Market Research Analyst through the IIMRA.

Connor McLeod Research Associate [email protected] | 617-619-3319 Connor is a Research Associate at Capstone Headwaters primarily specializing in Business Services, Building Products & Construction Services, Healthcare, and Cybersecurity. Prior to joining Capstone Headwaters, Connor was a specialist with the Investor Services team at BlackRock. Connor holds a BA in Economics from Bates College and is a Series 7 Registered Securities Representative. 17 E-Commerce Special Report | July 2020

CONSUMER & RETAIL GROUP

John Ferrara Jeff Ackerman Sophea Chau Founder & CEO Managing Director Managing Director 617-619-3325 617-275-4401 617-619-3307 [email protected] [email protected] [email protected]

Tom Elliott Paul Louie Lisa Tolliver Managing Director Managing Director Senior Director 813-251-7285 626-374-8856 773-791-9493 [email protected] [email protected] [email protected]

Tracy Patch Yogesh Punjabi Jesse Betzner Director Director Vice President 949-220-0540 617-619-3305 617-619-3355 [email protected] [email protected] [email protected]

To learn more about the Consumer & Retail Group and our most recent M&A Transactions visit Capstone’s Consumer & Retail Group

18 E-Commerce Special Report | July 2020

SELECT M&A TRACK RECORD

Capstone has advised on a number of high-profile, benchmark transactions spanning industries including niche E-Commerce Retailers, Precious Metals and Commodity/Brokerage, as highlighted below.

PRECIOUS METALS COMMODITIES

* * * * * U.S. Silver & Gold Inc.

has been acquired by has been acquired by has been acquired by has been acquired by has recapitalized with

an undisclosed Financial Buyer

Silver and Precious Precious Metals and Gold and Precious Online Commodity Online Retail Metals Producer Jewelry Retailer Metals Miner Exchange Brokerage Firm

E-COMMERCE & CONSUMER

has recapitalized with has been acquired by has been acquired by has been acquired by has been acquired by

DTC Seller of Trees E-Commerce Branded E-Commerce E-Commerce E-Commerce and Plants Packaging Products Mattress Company Vaping Products Auto Parts Retailer

has recapitalized with has been acquired by has been acquired by has been acquired by has been acquired by

Multi-Faceted CPG Reusable, On-The- E-Commerce All-Natural Pet Infant Health and Company Go Drinkware Streetwear Retailer Ingredients Producer Safety Products

*Note: Transactions completed by IMAP partner firms. Capstone actively leverages IMAP in our transactions, a partnership which provides immediate access to key contacts within the largest international buyers.

19 E-Commerce Special Report | July 2020

CITATIONS

1. ACI, “81 Percent Rise in May Retail eCommerce Sales, ACI Worldwide Research Reveals,” https://www.aciworldwide.com/news-and-events/press-releases/2020/june/81-percent-rise-in-may-retail-ecommerce- sales-aci-worldwide-research-reveals, accessed June 25, 2020. 2. Shopify, “Shopify Announces First-Quarter 2020 Financial Results,” https://investors.shopify.com/financial- reports/default.aspx#reports, accessed July 2, 2020. 3. The Durango Herald, “The Gold Market: There’s an App for That,” https://durangoherald.com/articles/307700, accessed July 2, 2020. 4. MarketWatch, “Gold-buying app sees 718% spike in volume as coronavirus volatility drives investors to havens,” https://www.marketwatch.com/story/gold-buying-app-sees-718-spike-in-volume-as-coronavirus-volatility-drives- investors-to-havens-2020-03-24, accessed July 2, 2020. 5. FinTech Times, “Gold Now Available through Revolut,” https://thefintechtimes.com/gold-now-available-through- revolut/, accessed July 2, 2020. 6. The National Bureau of Economic Research, “Determination of the February 2020 Peak in US Economic Activity,” https://www.nber.org/cycles/june2020.html, accessed June 26, 2020. 7. World Gold Council, “The relevance of gold as a strategic asset,” https://www.gold.org/goldhub/research/relevance-of- gold-as-a-strategic-asset-2020, accessed June 11, 2020. 8. Kitco, “Gold: record highs are now in view,” https://www.kitco.com/commentaries/2020-07-01/Gold-record-highs-are- now-in-view.html, accessed July 1, 2020. 9. LBMA, “Record Gold Stock – Over $440 billion of gold held in London Vaults,” http://www.lbma.org.uk/london- precious-metals-physical-holdings-statistics, accessed July 1, 2020. 10. World Gold Council, “Gold ETF inflows through May outpace record for any calendar year in only 5 months,” https://www.gold.org/goldhub/data/global-gold-backed-etf-holdings-and-flows/2020/may, accessed June 11, 2020. 11. Royal Gold, “Royal Gold Reports Third Quarter 2020 Results,” https://www.royalgold.com/investors/news/news- details/2020/Royal-Gold-Reports-Third-Quarter-2020-Results/default.aspx, accessed June 24, 2020. 12. Newmont, “Newmont Announces Solid First Quarter 2020 Results,” https://investors.newmont.com/investors/news- release/news-details/2020/Newmont-Announces-Solid-First-Quarter-2020-Results/default.aspx, accessed June 24, 2020. 13. A-Mark Precious Metals, “Q3 2020 A-Mark Precious Metals Inc Earnings Call,” http://ir.amark.com/financial- information/quarterly-results, accessed June 26, 2020. 14. Goldmoney, “June 2020 Investor Deck,” https://content.goldmoney.com/news/wp- content/uploads/sites/6/2020/06/Goldmoney-IR-Presentation-june-2020.pdf, accessed July 6, 2020. 15. INTL FCStone, “INTL FCStone Inc. Agrees to an All-cash Acquisition of GAIN Capital Holdings, Inc. at $6.00 Per Share,” http://ir.intlfcstone.com/news-releases/news-release-details/intl-fcstone-inc-agrees-all-cash-acquisition-gain-capital#, accessed June 18, 2020.

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