TIDMTBLD
RNS Number : 3620G
tinyBuild, Inc.
29 March 2022
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29 March 2022
tinyBuild, Inc
("tinyBuild" or the "Company")
Preliminary Unaudited Results for the year ended 31 December
2021
tinyBuild, a premium video games publisher and developer with
global operations, is pleased to announce its full year results for
the 12 months ended 31 December 2021, slightly ahead of
expectations.
Financial Summary (unaudited):
(12 months ended December, 2020
$'000)
--------------------------- ------ ------ ----
Revenue 37,648 52,153 39%
------ ------ ----
Operating profit 7,664 12,532 64%
------ ------ ----
Profit before tax 7,700 12,524 63%
------ ------ ----
Basic earnings per share
($ cent) 2.8 4.4 57%
------ ------ ----
Operating cash flow 16,470 13,290 -19%
------ ------ ----
Net cash, at 30 December 26,313 48,832 86%
------ ------ ----
Adj. EBITDA(1) 15,275 22,239 45%
------ ------ ----
Adj. EBITDA margin 40.6% 42.6%
------ ------ ----
(1) Excludes share-based compensation expenses, and exceptional
items (e.g. IPO cost) includes amortisation of Development
costs
Financial highlights:
-- Strong revenue growth of 39% to $52.2m (2020: $37.7m),
slightly ahead of expectations, reflecting a strong performance in
the last part of the year from new titles including Potion Craft
and back catalogue sales.
-- Record Adj. EBITDA of $22.2m (2020: $15.3m) up 45% y-o-y
growth, slightly ahead of expectations. Margin increased to 42.5%
(2020: 40.6%) primarily due to the ongoing shift towards own-IP
versus third party IP.
-- Operating profit increased by 64% to $12.5m (2020: $7.7m), as
a result of lower share-based payment expenses. Profit before tax
and basic EPS also grew by a similar amount to $12.5m and 4.3c,
respectively.
-- Operating cash flow was $13.3m, below the previous year
record of $16.5m, as a result of $5.5m IPO costs .
-- Net cash as of 31 December 2021 was $48.8m compared to $26.3m
as at 31 December 2020), after accounting for gross proceeds of
GBP36.2m ($50m) from the IPO, acquisitions, and a significant
increase in development costs.
Operational highlights:
-- Portfolio increased to over 70 titles (30 at the time of the
IPO), thanks to addition of Versus Evil publishing label and nine
new titles launched by tinyBuild during FY 2021.
-- Contribution to revenues from first-/second-party games
increased to 81% of Group revenues (2020: 70%), supporting
long-term margin expansion.
-- Robust back catalogue sales represented 83% of total revenue
(2020: 75%), demonstrating the Company's ability to extend the life
cycle of games, while adding new titles.
-- Five acquihires of games studios completed (We're Five,
Hungry Couch, Doghelm, Animal and Bad Pixel) for a total upfront
consideration of $12.7m (cash and shares).
-- Major acquisition of Versus Evil, a US-based publisher
focused on RPG and strategy games, and of Red Cerberus, a QA and
testing services provider based in Sao Paolo, Brazil. The upfront
consideration was $12.5m, with a maximum consideration of up to
$31.3m.
Post Period End highlights:
-- tinyBuild has been working hard to support staff (employees
and independent contractors) and their families in areas affected
by the war in Ukraine. At the time of print, all employees and
independent contractors have moved out of the riskiest areas and
plans are in place to welcome anybody fleeing the conflict in our
studios across Europe. We continue to monitor the situation
carefully and have further contingency plans in place.
-- Versus Evil signed four new titles, all own-IP, since the
acquisition closed in November 2021. Red Cerberus is looking to
expand its capacity to fulfil a growing pipeline of potential new
contracts.
-- Deadside development team grew to ten people and accelerated
its growth plans. The latest update 0.2.7 (re-spawn beacons) was
released from Kyiv on 4th March. A combination of more content and
renewed marketing efforts means Deadside has been the best-selling
game in the tinyBuild portfolio for the past few weeks.
-- Potion Craft (early access released in September 2021),
continued to perform strongly after topping the Steam Global Sales
charts at launch and it has now crossed 600,000 downloads.
-- Not for Broadcast released its last episode and moved to
version 1.0 in January 2022, recording over 300,000 downloads since
its launch in 2019.
Outlook
-- The pipeline for 2022 and beyond is strong and includes the
closed Beta pre-orders (7 April 2022) for Hello Neighbor 2, that
has seen a constant increase in the number of followers for over a
year now.
-- The implication of the conflict in Ukraine and the fluid
macroeconomic situation impose caution and vigilance in the medium
and long term. In particular, tinyBuild continues to carefully
assess the position of its staff, its exposure in terms of revenues
and any other factor that may have an impact on the business.
-- All considered, the Board remains confident the Company is on
track to deliver results at least in line with expectations, plus
accretive acquisitions.
Alex Nichiporchik, Chief Executive Officer of tinyBuild,
commented:
"Last year has been an incredible ride, from the IPO to our
largest deal ever with Versus Evil and Red Cerberus opening up new
avenues of growth. Our back catalogue has performed strongly, and
we have an even more diverse revenue mix in terms of titles,
genres, geography and audience. Our strategy to accumulate owned-IP
has resulted in a strong financial performance and has translated
into an improved profitability.
"A growing pipeline of high-quality titles set for release in
the next two years, the majority of which are first and
second-party, means we can build more multi-game franchises and
emulate the success of Hello Neighbor. It is great to see an
enlarged fanbase engaging with Hello Neighbor 2, and we look
forward with confidence to the closed Beta pre-orders. With books,
graphic novels, and early work for a potential animated TV series,
Hello Neighbor provides a template of how we might for many of our
future games.
Our goal is to expand our position as a leading global developer
and publisher, focusing on IP ownership while creating long-term
scalable franchises that will survive for generations regardless of
the media. 2021 has seen significant progress towards that
ambition, and we look to the future with confidence."
Enquiries :
tinyBuild, Inc investorrelations@tinybuild.com
Alex Nichiporchik - Chief Executive Officer
and co-founder
Luke Burtis - Chief Operating Officer and
co-founder
Antonio Jose Assenza - Chief Financial
Officer
Giasone (Jaz) Salati - Head of M&A and
IR
Berenberg (Nominated Adviser and Sole Broker)
Ben Wright, Mark Whitmore, Ciaran Walsh,
Milo Bonser +44 (0)20 3207 7800
SEC Newgate (Financial PR) tinybuild@secnewgate.co.uk
Robin Tozer, Bob Huxford, George Esmond +44 (0)7540 106366
About tinyBuild:
Founded in 2013, tinyBuild (AIM: TBLD) is a global video games
publisher and developer, with a catalogue of more than 70 premium
titles across different genres. tinyBuild's strategy is to focus on
its own intellectual property (IP) to build multi-game and
multimedia franchises, in partnership with developers.
tinyBuild is headquartered in the USA with operations stretching
across the Americas and Europe. The Group's broad geographical
footprint enables the Company to source high-potential IP, access
cost-effective development resources, and build a loyal customer
base through its innovative grassroots marketing.
tinyBuild was admitted to AIM, a market by the London Stock
Exchange, in March 2021.
For further information, visit: www.tinybuildinvestors.com .
Chairman's Statement
Level One complete, here comes the Boss
As tinyBuild (AIM:TBLD) enters its second year as a publicly
traded company, I'm honoured to update shareholders on the success
of our strategy, games and teams during a period marked by very
difficult events.
Looking back to tinyBuild's listing in March 2021, the macro
question lurking on the horizon was how much of the pandemic's
tailwinds we would shed in the course of the year, given the
significant bump the games industry sales experienced during the
lockdowns prior. Despite the logical rationale that such
exceptional growth couldn't prove permanent, it was a longstanding
belief held by game developers and publishers alike that, once a
gamer, always a gamer - thus privately most of us expected to
retain the attention of these newfound audiences.
The games industry, much like every other sector, has had to
contend with many recent setbacks, particularly the global chip
shortage. This affected the manufacturing of consoles, mobiles and
PC gaming GPUs, limiting the games industry's full potential.
Despite this challenge, last year saw 1.4% sales growth for the
whole industry and 5.3% growth in the number of players,
corroborating our expectations: not only did we retain the lockdown
audience we gained, we expanded our reach through the excellence of
our content.
At tinyBuild, we executed our M&A strategy aimed at
expanding our capabilities in IP generation, games development and
publishing, while continuing to invest organically to launch more
games on more platforms. The industry's growth corroborated our
approach of boldly investing in our future.
In November, the acquisition of Versus Evil (USA) and Red
Cerberus (Brazil) bolstered our publishing capabilities in RPG and
Strategy genres. The acquisitions also added Quality Assurance
functions to the Group, and improved our in-house porting
facilities. This has helped make our titles as widely available as
possible from day one.
With Bad Pixel and Animal studios joining the group, we
continued our venture into GaaS (Games as a Service). GaaS offers
higher long tail revenue and longer life cycles for games thanks to
titles that are played over and over as a hobby, translating into
greatly improved ROI.
And with DogHelm we bring into the Group a critically acclaimed
IP - Streets of Rogue - and a development partner whose historic
relationship with tinyBuild made the acquisition an obvious move.
Added to the studios acquired pre-IPO (We're Five Games and Hungry
Couch), tinyBuild can execute on its strategy for the foreseeable
future. Now we aim to improve our internal management processes to
ensure the seamless integration of the new studios, team members
and operational units. We are aware that scaling up creative and
technical teams is a big undertaking in its own right.
Furthermore, new monetisation models are being considered to
adapt in light of increasing inflation and its effect on our
players around the world. We continue to pursue opportunities for
IP expansion in order to maximise our engagement with our growing
audiences.
2022 is going to be yet another exciting year for our teams. The
mindset of thriving in change is a defining aspect of tinyBuild's
culture, a key element that should prove particularly useful in the
short to medium term global entertainment landscape.
Finally, the appalling situation in Ukraine which directly
impacts many colleagues. Management's unique understanding of the
region means contingency plans had already been prepared and could
be executed promptly to relocate teams to safer locations, from
both Ukraine and Russia. Critically, this ensured the safety of our
staff, and to their great credit, projects remained on track.
In our second public annual report, we're proud to once again
announce record revenue and EBITDA, and a performance that exceeded
the market's expectations. This is testimony to the Executive
team's strategic and delivery capabilities. These results will add
to our standing in the games industry and puts us in a stronger
position to deliver the Group's plans for FY 2022, and helps with
M&A.
Above everything, our focus remains on people, as demonstrated
by one of the lowest staff turnover in the industry. We recognise
that an appropriate share-based awards plan is important to retain
key employees and to align staff incentives with shareholders value
creation for the long term. For that reason, during FY22 we intend
to implement a formal share-based incentive plan and look forward
to providing more details soon.
We hope the following pages provide valuable insight into our
strategy and validation of our strategy, building confidence in our
ability to deliver an exciting future for tinyBuild, its games,
players and investors alike.
Henrique Olifiers
Non-Executive Chairman
CHIEF EXECUTIVE'S REVIEW
Over the last 15 years, I am proud to say we've built tinyBuild
into a tremendous global entertainment company - against all the
odds. Personally, my career started off during a global recession,
few industry contacts, and with a passport that didn't allow me any
freedom of travel (Sadly, it still does not, hence why I can't make
it to the UK to present these results in person).
tinyBuild has gone through the 2014 Orange Revolution in Kyiv,
the 2020-2021 global pandemic, and now as I'm writing this we're in
the process of extracting people to safety from the biggest war
Europe has seen since my grandfather was given a rifle at the age
of 17. For me, the last few months has put everything into context.
What is really worth fighting for? Whom do you want to surround
yourself with? The experience of the last few months - from
starting a war room meeting to plan out logistics and routes in
different scenarios of a Russian invasion, to hitting the button to
actually start moving people.
The only constant here is people. People you want to work with,
people you trust - not just with work, but literally with your own
life. This is what we built. We built a company where colleagues
trust each other with their own lives.
The situation in Ukraine
The team behind Hologryph - who joined us as a first party
studio in 2020 - created a shelter location within Lviv in Western
Ukraine, renting apartments, setting up work spaces, helping
everyone who was fleeing from the war zone, until nobody was left
behind. From there people who can - with their elderly parents,
kids, dogs, cats - would get support in crossing the border with
Poland, and then head out into either our Netherlands or Latvia
studios. In both locations I've welcomed everyone to my own home,
setting up living spaces and getting people everything they'd need
while our HR team searches for more permanent housing.
We are also supporting Russian colleagues who are no longer
comfortable staying in Russia. The issue is they, much like me,
don't have freedom of travel. They can't even go to the European
Union. Nor can they get a visa in today's situation. So we've
implemented a complex extraction operation - as flights were
getting cancelled in real time - to get people out of Russia. The
first stage of this operation is complete, and we are setting up a
new tinyBuild location in the Balkans. We're getting an office and
helping all team members relocate. This will be a mid-term
temporary location (unless everyone loves it there and decides to
stay!) for all departments who weren't able to get into the EU. We
will be figuring out visas from that location and we are planning a
third studio in Western Europe to help more people relocate.
Looking back at 2021
Current events in Ukraine puts last year into perspective. As a
business, we achieved record growth, through M&A and
organically. We listed on the London Stock Exchange, preparing our
business for exponential growth. We have proven success is not
about the amount of games you launch but how you treat them once
they are launched.
For example, today our top selling game on PC is Deadside, by
our studio, Bad Pixel, which we acquihired in September 2021. Since
then, Deadside has seen a dramatic rise in concurrent users, sales,
and downloadable content (DLC) attachment rates. All of this was
delivered through a series of well timed, well designed updates to
the game. We're approached Deadside as a game-as-a-service product,
an approach we have used on other titles. All of our titles in
Early Access on PC (Deadside, Potion Craft, Despot's Game) are
seeing meaningful engagements with every single update, and have
player communities excited for when those titles get to version 1.0
and launch on more platforms.
Our original franchise, Hello Neighbor, continues to grow and
expand into new channels. We have a team of world-class writers
working on the Hello Neighbor Animated Series and the new video
game, Hello Neighbor 2. Our goal is to elevate the franchise with
both interactive and linear products that fans would love, so that
both complement each other with the aim to create a pop culture
phenomenon. We're pushing boundaries on the animation front -
because we don't have the restrictions typically imposed by a
mainstream TV network. The series will be dark, funny, thought
provoking, and touches the very core of human relationships. How
far would you go to save your loved ones? That's the theme of Hello
Neighbor, explored deeper in Hello Neighbor 2 and in the upcoming
Animated Series.
Finally in 2021, we increased our publishing capability, as well
as our game development expertise. As of today, we have two
publishing labels (tinyBuild, Versus Evil), plus Bad Pixel will
keep its own operations and self-publish Deadside, since 'games as
a service' doesn't fit well into a traditional publishing pipeline.
We anticipate that more of our studios will become their own
publishing labels as they gradually build up internal publishing
capacity tailored to their genre, platform, or specific
community.
Growth Strategy
tinyBuild has a dual approach to generating long-term
shareholder value through organic growth and M&A. On the one
hand, the Company develops franchises that will potentially live
for generations, independent of the medium. On the other hand,
tinyBuild continues to diversify its portfolio, its geographic
presence, its revenue sources and its business model to reduce
dependencies on any single factor and increase visibility on future
revenue.
Organic growth
tinyBuild focuses on three main avenues to drive organic growth.
First, the Company leverages existing partnerships and in-house
developers to:
-- Increase the quality and diversity of its pipeline, by
signing new titles with particular focus on genre-defining ideas
(e.g. Tinykin)
-- Invest in and support acquired studios to fully realize the
potential of the wider portfolio (e.g. Deadside).
-- Empower acquired publishing labels to consolidate their reach
in new genres (e.g. Versus Evil in RPG and strategy)
-- Create new IP by enabling creative teams to realize their
full potential by exploring new directions (e.g. Potion Craft)
-- Capitalize on the symbiotic relationship with influencers
while expanding our presence on new social media channels, to
retain tinyBuild's strategic marketing advantage.
Second, tinyBuild follows a multi-game and Game as a Service
franchise model expansion to:
-- Use the success of the Hello Neighbor IP as a blueprint for
expanding a game into a multi-title franchise (e.g. Streets of
Rogue 2 and Totally Reliable Adventure Park)
-- Extend IP lifespan by regularly adding new content to
existing titles (e.g. Graveyard Keeper's DLCs)
-- Port successful titles onto different platforms using mobile
primarily as a marketing tool (e.g. Secret Neighbor on iOS)
-- Add cross-play options to further extend the audience for the
most established franchises (e.g. Hello Neighbor 2)
Lastly, tinyBuild works specifically on its own-IP portfolio
to:
-- Pursue multimedia opportunities such as books and graphic
novels, providing off-screen extension (e.g. Hello Neighbor)
-- Produce TV series of successful titles while retaining
ownership of it's IP opening the door to potentially larger revenue
streams
-- Use merchandise as marketing and customer engagement tools
which can also generate, albeit modest, revenues.
M&A strategy
The Group's M&A strategy is evolving, reflecting tinyBuild's
growing success and ambitions. Since 2013, tinyBuild has completed
seven acquihires including DogHelm, Animal and Bad Pixel in the
second half of 2021. As a result of these transactions, tinyBuild
expanded its own-IP portfolio to include Streets of Rogue (June
2021), Rawmen (August 2021) and Deadside (September 2021).
In the acquihire model, the consideration typically consists of
cash and tinyBuild shares to help align the goals of tinyBuild with
those of the key developers. While the acquihire model will remain
an important part of the inorganic growth strategy, tinyBuild will
utilise other models too, as it looks to increase its access to
in-house development talent, games services, publishing labels and
diversify its business model. The growing in-house capability in
terms of development talent, games services, and publishing gives
the Group greater visibility on the whole process and protects the
business against potential delays caused by lack of access to
third-party resources.
More opportunities for acquihires and larger-scale acquisitions
may arise in the future, to further scale and diversify the
business.
Outlook
Our pipeline is growing strongly, year after year. However, for
us quality comes above quantity. We take a portfolio approach about
how many games we will launch in a given year and focus on the
lifetime of each title. When titles like Streets of Rogue (launched
into 1.0 in 2017, developed by Doghelm, a 1st party studio) break
the top10 portfolio daily revenue, you know it's a great title with
phenomenal potential for the upcoming sequel. We're not in the
launch-and-forget business, we're in the plant a seed and
see-it-grow business.
Perspective is everything. With all the challenges we're facing,
work doesn't actually stop. Everyone at tinyBuild loves video
games. There are many more jobs out there with better hours, more
security, and less stress. We're here because we love what we do.
And we're being bonded by a - albeit absolutely terrible - unique
experience that we believe will enable us to grow into the
strongest, most resilient entertainment company in the world.
The implication of the conflict in Ukraine and the fluid
macroeconomic situation impose caution and vigilance. Our priority
remains staff's safety and well-being. Once again, despite the
odds, we look forward with determination and we are confident that
we will deliver results at least in line with expectations, plus
accretive acquisitions.
Alex Nichiprochik
CEO and Founder
Chief Financial Officer's Review
2021 saw another strong financial performance for tinyBuild,
ahead of ambitious targets set by management, both in terms of back
catalogue and in terms of new games. Nine new titles were released,
all of them being own-IP from tinyBuild, and the company closed the
year with over thirty games in pipeline. In addition to game
releases and new games in the pipeline, the tinyBuild's family grew
with seven acquisitions, including the complimentary publisher
Versus Evil.
Revenue
tinyBuild saw total revenues increase 39% (2020: 35%) from
$37.6m to $52.2m. tinyBuild's revenue is generated mainly from
game's sales on various platforms, a variety of platform deals
(e.g. subscription programs, development partnerships and
exclusivity agreements). The addition of Red Cerberus starting from
November 2021 also adds fast-growing service revenues from QA and
testing. Last but not least, events include primarily revenues from
DevGAMM, our Eastern Europe game developers conference, which was
held both, in person and online in 2021.
Revenue generated from own-IP (1st and 2nd party games)
increased to 81% of gaming revenues (2020: 70%). Our strategy is to
continue to expand own-IP portfolio, which will also support
underlying adj. EBITDA margin expansion in the long term.
Adjusted EBITDA and Operating Profit
Adjusted EBITDA is presented net of amortisation of development
costs, and excluding share-based compensation expenses, giving a
clear picture of the business progression. It increased from $15.3m
to $22.2m in 2021, a growth of 45%, largely driven by strong 2021
revenue and relative stability with tinyBuild's operating expenses.
The increase in margins to 42.5% in FY 2021 (2020: 40.6%) is
consistent with a higher share of revenues from own-IP titles and
the inherently higher profitability attached to back catalogue
sales that increased to 83% of group sales in 2021 (2020: 75%).
Operating profit increased to $12.6m (2020: $7.6m) mostly as a
result of lower charges relating to share-based compensation which
were unusually high in 2020 due to accelerated vesting of options
held by management in 2020.
Interest income and taxation
Interest income was $0m (2020: $0.1m) and taxation $4.3m (2020:
$2.8m).
Financial Position
In 2021, the net cash position increased from $26.3m to $48.8m,
mainly driven by a successful IPO on the AIM in the LSE, while the
company accelerated investments in new titles and focused on
acquisitions. Capitalized software development costs, mainly
consisting of porting, localization and developer salaries,
increased from $10.0m to $15.4m reflecting the increase in spend
for upcoming pipeline releases. Goodwill of $13.2m appears for the
first time, due to strategic acquisition of Versus Evil and Red
Cerberus in November of 2021. IP has increased from $5.1m in 2020
to $18.6m in 2021 because of identifiable assets from the
aforementioned acquisition. tinyBuild currently still holds the 25
million USD credit line with Bank of America.
Cash Flow
Cash flows from operating activities decreased from $16.4m to
$13.3m as tinyBuild receivables and prepaids increased ($6.1m).
Accrued expenses and other current liabilities saw an increase in
2021 of $1.9m. It's important to note that said timing issues can
fluctuate year over year and variability here is to be expected
especially during the Holiday season and partners' payment terms.
Cash generated from operations include an add back of $2.5m for
share based payments in the current year (2020: $5.8m)
Acquihires and Acquisitions
In 2021 tinyBuild made seven acquisitions for a total upfront
payment of $25.5m (cash and shares). In February of 2021, tinyBuild
acquired We're Five (TRDS) and Hungry Couch (Black Skylands). In
June of 2021, tinyBuild elevated Streets of Rogue from 3(rd) party
to 1(st) party via acquisition of DogHelm. In August 2021,
tinyBuild acquired the studio Animal (Rawmen). In September of 2021
tinyBuild acquired Bad Pixel (Deadside). Finally, in November of
2021, tinyBuild completed its acquisition of Versus Evil, a US
based publisher and Red Cerberus gaming services provider.
Events after the reporting date
In early 2022, in response to the sudden invasion of Ukraine,
tinyBuild enacted contingency plans to move staff and their
families out of risky areas in East Ukraine and Kyiv. In addition,
tinyBuild has also helped staff relocating away from sanctioned
nations providing logistic and financial support. tinyBuild's
people resilience and cohesiveness has been nothing short of
incredible and allowed the Company to secure production lines for
upcoming titles with minimal disruption.
TINYBUILD INC.
CONSOLIDATED UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2021
Unaudited 2020
2021
Note $'000 $'000
Revenue 3 52,153 37,648
Cost of sales (18,112) (15,120)
Gross profit 34,041 22,528
Administrative expenses:
- General administrative expenses (14,469) (8,714)
- Share-based payment expenses (2,452) (5,845)
- IPO related costs (4,588) (467)
Total administrative expenses (21,509) (15,026)
Other operating income - 162
Operating profit 12,532 7,664
Finance costs (8) (21)
Finance income - 57
Profit before tax 12,524 7,700
Income tax expense (4,288) (2,752)
Profit and total comprehensive
income
for the year 8,236 4,948
Attributable to:
Owners of the parent company 8,261 4,942
Non-controlling interests (25) 6
8,236 4,948
Basic earnings per share ($)* 4 0.043 0.028
Diluted earnings per share ($)* 4 0.042 0.027
Adjusted EBITDA** 5 22,239 15,275
*Basic earnings per share and diluted earnings per share for the
comparative period have been adjusted to reflect the stock split
that occurred during 2021.
**Adjusted EBITDA is a non-GAAP measure and is defined as
earnings before interest, tax, depreciation, amortisation
(excluding amortisation of capitalised software development costs),
share-based payments expenses and other significant one-off
expenses (e.g. IPO and acquisition costs).
TINYBUILD INC.
CONSOLIDATED UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
Unaudited 2020
2021
ASSETS Note $'000 $'000
Non-current assets
Intangible assets 6 57,156 15,141
Property, plant and equipment:
- owned assets 41 87
- right-of-use assets 528 673
Trade and other receivables 266 16
Total non-current assets 57,991 15,917
Current assets
Trade and other receivables 13,528 4,999
Cash and cash equivalents 48,832 26,313
Total current assets 62,360 31,312
TOTAL ASSETS 120,351 47,229
EQUITY AND LIABILITIES
Equity
Share capital 203 1
Share premium 63,546 18,674
Warrant reserve 1,920 -
Retained earnings 30,632 19,919
Equity attributable to owners of
the parent company 96,301 38,594
Non-controlling interest 137 162
Total equity 96,438 38,756
LIABILITIES
Non-current liabilities
Lease liabilities 277 442
Contingent consideration 6,336 -
Deferred tax liabilities 4,339 1,663
Total non-current liabilities 10,952 2,105
Current liabilities
Borrowings - 13
Trade and other payables 5,262 3,496
Contingent consideration 4,793 -
Contract liabilities 2,645 2,675
Lease liabilities 261 184
Total current liabilities 12,961 6,368
Total liabilities 23,913 8,473
TOTAL EQUITY AND LIABILITIES 120,351 47,229
TINYBUILD INC.
CONSOLIDATED UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2021
Note Share Share Warrant Retained Total Non-controlling Total
capital premium reserve earnings equity interest equity
attributable
to owners
of the
parent
company
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January
2020 1 18,674 - 9,132 27,807 156 27,963
Profit and total
comprehensive
income for the year - - - 4,942 4,942 6 4,948
Transactions
with owners
in their
capacity as
owners:
Share-based payments - - - 5,845 5,845 - 5,845
Total transactions
with
owners - - - 5,845 5,845 - 5,845
Balance at 31 December
2020 1 18,674 - 19,919 38,594 162 38,756
Profit and total
comprehensive
income for the year - - - 8,261 8,261 (25) 8,236
Transactions
with owners
in their
capacity as
owners:
Share split 178 (178) - - - - -
Issue of shares, net
of transaction costs 23 46,816 - - 46,839 - 46,839
Issue of shares on
exercise
of options 1 154 - - 155 - 155
Issue of warrants - (1,920) 1,920 - - - -
Share-based payments - - - 2,452 2,452 - 2,452
Total transactions
with
owners 202 44,872 1,920 2,452 49,446 - 49,446
Unaudited Balance at
31 December 2021 203 63,546 1,920 30,632 96,301 137 96,438
TINYBUILD INC.
CONSOLIDATED UNAUDITED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2021
Unaudited 2020
2021
Note $'000 $'000
Cash flows from operating activities
Cash generated from operations 13,290 16,470
Net cash generated by operating activities 13,290 16,470
Cash flows from investing activities
Purchase of subsidiaries, net of cash (11,784) -
acquired
Software development (15,085) (6,549)
Purchase of intellectual property (10,832) (570)
Proceeds on disposal of intangible 45 -
assets
Purchase of property, plant and equipment - (24)
Net cash used in investing activities (37,656) (7,143)
Cash flows from financing activities
Proceeds from borrowings - 175
Repayment of borrowings (13) -
Proceeds from issuance of shares, 46,839 -
net of transaction costs
Proceeds from exercise of share options 155 -
Payment of principal portion of lease
liabilities (96) (198)
Net cash generated by/(used in) financing
activities 46,885 (23)
Cash and cash equivalents
Net increase in the year 22,519 9,304
At 1 January 26,313 17,009
At 31 December 48,832 26,313
TINYBUILD INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
1 GENERAL INFORMATION
TinyBuild Inc. ("the Company") is a private company limited by
shares, and is registered, domiciled and incorporated in Delaware,
USA. On 9 March 2021 the Company became a public company. The
address of the registered office is 1100 Bellevue Way NE, STE 8A
#317, Bellevue, WA 98004, United States.
The Group ("the Group") consists of TinyBuild Inc. and all of
its subsidiaries. The Group's principal activity is that of an
indie video game publisher and developer.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The preliminary results for the year ended 31 December 2021 are
unaudited. The financial information set out in this announcement
does not constitute the Group's financial statements for the year
ended 31 December 2021.
This financial information should be read in conjunction with
the financial statements of the Group for the year ended 31
December 2020 (the "Prior year financial statements"), which are
available from the Registrar of Companies.
Accounting policies
The Group's principal accounting policies used in preparing this
information are as stated on pages 43 to 49 of the prior year
financial statements. There has been no significant change to any
accounting policy from the date of the prior year financial
statements other than the policies described below.
Business combinations
The acquisition method of accounting is used to account for
business combinations regardless of whether equity instruments or
other assets are acquired.
The consideration transferred is the sum of the acquisition-date
fair values of the assets transferred, equity instruments issued or
liabilities incurred by the acquirer to former owners of the
acquiree and the amount of any non-controlling interest in the
acquiree. For each business combination, the non-controlling
interest in the acquiree is measured at either fair value or at the
proportionate share of the acquiree's identifiable net assets. All
acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity
assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the
contractual terms, economic conditions, the consolidated entity's
operating or accounting policies and other pertinent conditions in
existence at the acquisition-date.
Contingent consideration to be transferred by the acquirer is
recognised at the acquisition-date fair value. Subsequent changes
in the fair value of the contingent consideration classified as an
asset or liability is recognised in profit or loss. Contingent
consideration classified as equity is not remeasured and its
subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets
acquired, liabilities assumed and any non-controlling interest in
the acquiree and the fair value of the consideration transferred
and the fair value of any pre-existing investment in the acquiree
is recognised as goodwill.
Business combinations are initially accounted for on a
provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises additional
assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed
at the acquisition-date. The measurement period ends on either the
earlier of (i) 12 months from the date of the acquisition or (ii)
when the acquirer receives all the information possible to
determine fair value.
3 SEGMENTAL REPORTING
IFRS 8 Operating Segments requires that operating segments be
identified on the basis of internal reporting and decision-making.
The Group identifies operating segments based on internal
management reporting that is regularly reported to and reviewed by
the Board of directors, which is identified as the chief operating
decision maker. Management information is reported as one operating
segment, being revenue from self-published franchises and other
revenue streams such as royalties, licensing, development and
events.
Whilst the chief operating decision maker considers there to be
only one segment, the Company's portfolio of games is split between
those based on IP owned by the Group and IP owned by a third party
and hence to aid the readers understanding of our results, the
split of revenue from these two categories are shown below.
Game and merchandise royalties Unaudited Year
Year ended ended 31
31 December December
2021 2020
$'000 $'000
Owned IP 30,640 24,683
Third-party IP 9,231 9,239
_
39,871 33,922
Three customers were responsible for approximately 67% of the
Group's revenues (2020: four - 80%).
The Group has six right-of-use asset located overseas with a
carrying value of $528,000 (2020: $49,084). All other non-current
assets are located in the US.
4 EARNINGS PER SHARE
The Group reports basic and diluted earnings per common share. Basic
earnings per share is calculated by dividing the profit attributable
to common shareholders of the Company by the weighted average number
of common shares outstanding during the period.
Diluted earnings per share is determined by adjusting the profit attributable
to common shareholders by the weighted average number of common shares
outstanding, taking into account the effects of all potential dilutive
common shares, including options.
Unaudited Year ended
Year ended 31 December
31 December 2020*
2021
$'000 $'000
Total comprehensive income attributable
to the owners of the company 8,261 4,942
Weighted average number of shares 191,241,890 179,602,538
Basic earnings per share ($) 0.043 0.028
Total comprehensive income attributable
to the owners of the company 8,261 4,942
Weighted average number of shares 191,241,890 179,602,538
Dilutive effect of share options 4,933,940 2,739,413
Weighted average number of diluted shares 196,175,829 182,341,951
Diluted earnings per share ($) 0.042 0.027
*Basic earnings per share and diluted earnings per share for the
comparative period have been adjusted to reflect the stock split
that occurred during 2021.
5 ADJUSTED EBITDA
The Directors of the Group have presented the performance measure adjusted
EBITDA as they monitor this performance measure at a consolidated level
and they believe this measure is relevant to an understanding of the
Group's financial performance. Adjusted EBITDA is calculated by adjusting
profit from continuing operations to exclude the impact of taxation,
net finance costs, share-based payment expenses, depreciation, amortisation
of purchased intellectual property, acquisition costs and IPO transaction
costs. Adjusted EBITDA is not a defined performance measure in IFRS.
The Group's definition of adjusted EBITDA may not be comparable with
similarly titled performance measures and disclosures by other entities.
Unaudited Year ended
Year ended 31 December
31 December 2020
2021
$'000 $'000
Profit for the year 8,236 4,948
Income tax expense 4,288 2,752
Finance costs 8 21
Finance income - (57)
Share-based payment expenses 2,452 5,845
Amortisation of purchased intellectual property,
brands and customer relationships 1,662 1,222
Depreciation of property, plant and equipment 117 239
IPO related costs 4,588 467
Acquisition costs 888 -
Other operating income - (162)
Adjusted EBITDA 22,239 15,275
6
INTANGIBLE Purchased Software
ASSETS Customer intellectual development
Goodwill Brands relationships property costs Total
$'000 $'000 $'000 $'000 $'000 $'000
Cost:
As at 1 January
2020 - - - 5,600 10,578 16,178
Additions -
internally
generated - - - - 6,549 6,549
Additions -
separately
acquired - - - 570 - 570
As at 31
December 2020 - - - 6,170 17,127 23,297
Additions -
internally
generated - - - - 15,084 15,084
Additions -
separately
acquired - - - 10,832 - 10,832
Additions
through
business
combinations
(note 7) 13,202 1,815 4,261 2,356 - 21,634
Transfers - - - 1,962 (1,962) -
Disposals - - - - (90) (90)
Unaudited As at
31 December
2021 13,202 1,815 4,261 21,320 30,159 70,757
Amortisation and
impairment:
As at 1 January
2020 - - - 267 2,568 2,835
Amortisation
charge for
the year - - - 819 4,502 5,321
As at 31
December 2020 - - - 1,086 7,070 8,156
Amortisation
charge for
the year - 10 51 1,601 3,500 5,162
Impairment
charge for
the year - - - - 283 283
Unaudited As at
31 December
2021 - 10 51 2,687 10,853 13,601
Carrying amount:
Unaudited As at
31 December
2021 13,202 1,805 4,210 18,633 19,306 57,156
As at 31
December 2020 - - - 5,084 10,057 15,141
7 BUSINESS COMBINATIONS
On 24 November 2021, the Group acquired 100% of the issued share capital
of Versus Evil LLC, a Delaware limited liability company, together
with its two wholly owned subsidiaries, Red Cerberus LLC and Steven
Joseph Escalante - Serviços de Tecnologia de Informação,
Eireli LLC.
The goodwill of $13,202,000 represents our bolstered publishing capabilities
in RPG and Strategy genres. The acquisitions also added Quality Assurance
functions and improved our in-house porting facilities that have helped
our plan to make our titles as widely available as possible from day
one.
Consideration for the acquisition comprised $13,062,000 cash. Contingent
consideration of $11,123,000 has been recognised in respect of a variable
number of equity instruments which will be issued in the event of
the acquired company meeting certain EBITDA targets in the future.
The potential outcome of the undiscounted contingent consideration
ranges between $Nil and $18,750,000. Acquisition related costs totalling
$887,502 have been recognised in profit or loss within general administrative
expenses.
7 BUSINESS COMBINATIONS (CONTINUED)
The fair values of the identifiable assets acquired, and liabilities
assumed at the date of acquisition were:
Fair value
Book value adjustments Total
Unaudited
$'000 $'000 $'000
Intangible assets - 8,432 8,432
Property, plant and equipment 2 - 2
Trade and other receivables 1,912 - 1,912
Cash 1,278 - 1,278
Trade and other payables (635) - (635)
Total 2,557 8,432 10,989
Goodwill 13,202
24,191
Consideration:
Cash 13,062
Fair value of contingent consideration
- equity 11,129
Total consideration 24,191
8 POST REPORTING DATE EVENTS
In early 2022, in response to the sudden invasion of Ukraine,
tinyBuild enacted contingency plans to move staff and their
families out of risky areas in East Ukraine and Kyiv. In addition,
tinyBuild has also helped staff relocating away from sanctioned
nations providing logistic and financial support . tinyBuild's
people resilience and cohesiveness has been nothing short of
incredible and allowed the Company to secure production lines for
upcoming titles with minimal disruption.
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END
FR PPUAWWUPPUAB
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March 29, 2022 02:01 ET (06:01 GMT)
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