Victoria, British Columbia--(Newsfile Corp. - May 11, 2023) - Tiny Ltd. (formerly,
WeCommerce Holdings Ltd.) (TSXV: TINY) ("Tiny" or "the
"Company"), a leading provider of ecommerce enablement software
and tools for merchants, today announced the financial results for the
WeCommerce group of companies for the three-month period ended March 31,
2023 ("Q1 2023"). The financial results relate to the WeCommerce group
of companies prior to the merger of WeCommerce Holdings Ltd. with Tiny
Capital Ltd. which was completed on April 17, 2023 (the "Merger"). For
further details regarding the Merger, please see the Company's
management information circular dated March 6, 2023, a copy of which is
available under the Company's profile on SEDAR at
www.sedar.com. Currency amounts are expressed in Canadian dollars unless otherwise
noted.
Q1 2023 Financial Results
|
For the three-month period
ended March 31,
|
|
2023
|
|
|
2022 |
|
Revenue
|
|
|
|
|
|
Recurring subscription revenue
|
8,104,423
|
|
|
7,354,028
|
| Digital goods revenue |
4,523,329
|
|
|
3,745,630
|
|
Agency service revenue
|
937,314
|
|
|
994,101
|
|
13,565,066
|
|
|
12,093,759
|
| Operating loss |
(2,525,927
|
) |
|
(1,280,176
|
| Net (loss)/income |
(4,315,842
|
) |
|
790,114
|
| EBITDA1 |
530,909
|
|
|
4,493,740
|
| EBITDA %1 |
4%
|
|
|
37%
|
|
Adjusted EBITDA1
|
3,988,174
|
|
|
2,831,783
|
|
Adjusted EBITDA %1
|
29%
|
|
|
23%
|
|
Cash provided by operating activities
|
1,218,038
|
|
|
3,907,178
|
-
Revenue in Q1 2023 was $13,565,066, an increase of $1,471,307 or 12%
(5% on a constant currency basis) compared to Q1 2022.
-
Adjusted EBITDA(1) for Q1 2023 amounted to
$3,988,174 or 29% of revenue, compared to $2,831,783 or 23% of
revenue in Q1 2022.
-
Unrestricted cash on hand at March 31, 2023 was $9,129,722 compared
to $10,946,852 on December 31, 2022. Total debt outstanding at March
31, 2023 was $46,590,824 compared to $46,935,066 on December 31,
2022.
-
Net loss was $4,315,842 in Q1 2023 compared to net income of
$790,114 in Q1 2022. In Q1 2023, the Company experienced an increase
in finance costs, acquisition related costs and severance.
Acquisition related costs incurred include $2,467,468 related to the
amalgamation transaction with Tiny Capital and severance of $650,503
was incurred as a result of restructuring of executive team in light
of the pending transaction.
"WeCommerce, as a standalone entity, had a great start to 2023 with
continued growth in both revenue and adjusted EBITDA," said Chris
Sparling, Co-Chief Executive Officer. "We are excited for the next
chapter of WeCommerce as the combination with Tiny is now complete. We
are confident that the company is well positioned to capitalize on
acquisition opportunities and to continue strategic investment in our
now expanded portfolio."
Tiny is also pleased to announce that commencing market open on May 11,
2023, its common shares are now trading on the OTCQX International under
the trading symbol TNYZF. U.S. investors can find current financial
disclosure and Real-Time Level 2 quotes for the company on
www.otcmarkets.com.
There will be no change to the Company's Canadian listing as the
Company's common shares will continue to trade on the TSX Venture
Exchange under the symbol TINY.
Financial Statements
Tiny has posted the consolidated
financial statements and Management's Discussion and Analysis
("MD&A") for the WeCommerce group of companies with respect to Q1
2023 is available on SEDAR at
www.sedar.com.
Annual General Meeting
Tiny will host its Annual General
Meeting and Investor Day at 11 a.m. PT on June 15, 2023 at the Fairmont
Empress Hotel in Victoria, BC. Shareholders who plan on attending should
RSVP
here. Management and board members will be available to answer questions.
About Tiny
Tiny is a leading technology holding company with
a strategy of acquiring majority stakes in wonderful businesses. Tiny
has three core business segments, Beam, WeCommerce and Dribbble, with
other standalone businesses including a private equity investment fund.
Beam, and its subsidiary companies including MetaLab, helps start-ups to
Fortune 500 companies to design, build and ship premium digital products
for both mobile and web. The Company's capabilities as an end-to-end
product partner provide clients with intimate insight into end-user
behavior, allowing for a thorough, strategy-led approach to product
design, engineering, brand positioning and marketing.
WeCommerce provides merchants with a suite of ecommerce software tools
to start and grow their online stores. Our family of companies and
brands includes Pixel Union, Out of the Sandbox, KnoCommerce, Archetype,
Yopify, SuppleApps, Rehash, Foursixty and Stamped. As one of Shopify's
first partners since 2010, WeCommerce is focused on building, acquiring,
and investing in leading technology businesses operating in the Shopify
partner ecosystem.
Dribbble is a creative network and community that design professionals
use to meet, collaborate, and showcase their work. Dribbble also hosts
an online marketplace for graphics, fonts, templates, and other digital
assets.
Other standalone businesses include several software and internet
companies and the operation of a private equity fund where the Company
serves as the general partner (the "Tiny Fund"). The Tiny Fund commenced
operations in August 2020 and has total committed capital of US$150
million.
For more about Tiny, please visit
www.tiny.com
or refer to the public disclosure documents available under Tiny's SEDAR
profile on SEDAR at
www.sedar.com.
Company Contact:
David Charron
Chief Financial
Officer
Phone: 416-418-3881
Email:
david@tiny.com
Non-IFRS Financial Measures
This news release makes to
reference to certain non-IFRS measures and ratios, hereafter, referred
to as "non-IFRS measures". These measures are not recognised measures
under IFRS, and do not have a standardized meaning prescribed by IFRS
and are therefore unlikely to be comparable to similar measures
presented by other companies. Rather, these measures are provided as
additional information to complement those IFRS measures by providing
further understanding of the results of operations from management's
perspective. Accordingly, these measures should not be considered in
isolation nor as a substitute for analysis of the financial information
reported under IFRS. The Company uses non-IFRS measures including
"EBITDA", "EBITDA %", "Adjusted EBITDA", "Adjusted EBITDA %", and
"Constant Currency". Management uses these non-IFRS measures to
facilitate operating performance comparisons from period to period, to
prepare annual operating budgets and forecasts and to determine
components of management compensation. As required by Canadian
securities laws, the Company defines and reconciles these non-IFRS
measures below:
EBITDA and EBITDA %
EBITDA is defined as earnings (net
income or loss) before finance costs, income taxes, depreciation and
amortization. EBITDA is reconciled to net income (loss) from the
financial statements.
EBITDA % ratio is determined by dividing EBITDA by total revenue for the
year.
EBITDA and EBITDA % is frequently used to assess profitability before
the impact of finance costs, income taxes, depreciation and
amortization. Management uses non-IFRS measures in order to facilitate
operating performance comparisons from period to period and to prepare
annual operating budgets.. EBITDA and EBITDA % are measures commonly
reported and widely used as a valuation metric.
Adjusted EBITDA and Adjusted EBITDA %
Adjusted EBITDA
removes unusual, non-cash or non-operating items from EBITDA such as
listing expenses, acquisition costs, restructuring charges, asset
impairments, non-cash stock-based compensation, fair value adjustments
to contingent consideration payable and foreign exchange gains and
losses. The Company believes adjusted EBITDA provides improved
continuity with respect to the comparison of its operating performance
over a period of time. Adjusted EBITDA is reconciled to net income
(loss) from the financial statements.
Adjusted EBITDA % is determined by dividing Adjusted EBITDA by total
revenue for the year.
Adjusted EBITDA and Adjusted EBITDA % is frequently used by securities
analysts and investors when evaluating a Company's ability to generate
liquidity from the Company's core operations. It provides a consistent
basis to evaluate profitability and performance trends by excluding
items that the Company does not consider to be controllable activities
for this purpose. Adjusted EBITDA and EBITDA % are measures commonly
reported and widely used as a valuation metric.
Constant Currency
Constant currency is determined by
applying the same foreign currency exchange rates to the financial
results of the current and equivalent prior-year period. The Company's
reporting currency is the Canadian dollar but we conduct business in
Canadian, U.S. and Singapore dollars. The Company measures its
performance before the impact of foreign currency. Constant currency is
reconciled to revenue from the financial statements.
The Company believes Constant Currency allows for current financial
performance to be understood against comparative periods without the
impact of fluctuations in foreign exchange rates against the Canadian
dollar.
NON-IFRS MEASURES RECONCILIATIONS
EBITDA and Adjusted EBITDA
|
For the three-month period ended March 31,
|
|
2023
|
|
|
2022
|
|
Net (loss)/income
|
(4,315,842
|
)
|
|
790,114
|
|
Income tax (recovery)/expense
|
347,350
|
|
|
41,625
|
|
Depreciation and amortization
|
3,238,400
|
|
|
3,064,477
|
| Finance costs |
1,261,001
|
|
|
597,524
|
|
EBITDA
|
530,909
|
|
|
4,493,740
|
|
|
|
|
|
|
EBITDA Adjustments
|
|
|
|
|
| Share-based compensation |
(85,691
|
) |
|
901,365
|
| Foreign exchange gain |
(7,898
|
) |
|
(560,770
|
| Acquisition costs |
2,467,468
|
|
|
104,819
|
|
Fair value adjustments of contingent consideration
|
189,462
|
|
|
(2,147,090
|
| Severance costs |
650,503
|
|
|
41,316
|
|
Non-recurring professional fees
|
195,921
|
|
|
-
|
|
Acquisition-related compensation
|
47,500
|
|
|
-
|
|
(Gain)/loss on sale of intangibles and property and
equipment
|
-
|
|
|
(1,597
|
|
Adjusted EBITDA
|
3,988,174
|
|
|
2,831,783
|
EBITDA % and Adjusted EBITDA %
|
For the three-month period ended March 31,
|
|
2023
|
|
|
2022
|
|
EBITDA
|
530,909
|
|
|
4,493,740
|
| Revenue |
13,565,066
|
|
|
12,093,759
|
|
EBITDA %
|
4%
|
|
|
37%
|
|
|
|
|
|
| Adjusted EBITDA |
3,988,174
|
|
|
2,831,783
|
| Revenue |
13,565,066
|
|
|
12,093,759
|
|
Adjusted EBITDA %
|
29%
|
|
|
23%
|
Constant Currency
|
For the three-month period ended March 31,
|
|
|
% Change
|
|
2023
|
|
|
2022 |
|
|
As reported
|
|
|
Foreign exchange impact
|
|
|
Constant currency
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring subscription revenue
|
8,104,423
|
|
|
7,354,028
|
|
|
10%
|
|
|
(7%)
|
|
|
3%
|
|
Digital goods revenue
|
4,523,329
|
|
|
3,745,630
|
|
|
21%
|
|
|
(9%)
|
|
|
12%
|
|
Agency service revenue
|
937,314
|
|
|
994,101
|
|
|
(6%)
|
|
|
(4%)
|
|
|
(10%)
|
|
13,565,066
|
|
|
12,093,759
|
|
|
12%
|
|
|
(7%)
|
|
|
5%
|
Cautionary Note Regarding Forward-Looking Information
This news release contains certain forward-looking statements and
forward-looking information within the meaning of Canadian
securities law. Such forward-looking statements and information
include, but are not limited to, statements or information with
respect to: requirements for additional capital and future
financing; estimated future working capital, funds available, uses
of funds, future capital expenditures and other expenses for
specific operations and intellectual property protection; industry
demand; ability to attract and retain employees, consultants or
advisors with specialized skills and knowledge; anticipated joint
development programs; incurrence of costs; competitive conditions;
general economic conditions; anticipated revenue growth; growth
strategy; and scalability of developed technology.
Forward-looking statements and information are frequently
characterized by words such as "plan", "project", "intend",
"believe", "anticipate", "estimate", "expect" and other similar
words, or statements that certain events or conditions "may" or
"will" occur. Although the Company's management believes that the
assumptions made and the expectations represented by such statement
or information are reasonable, there can be no assurance that a
forward-looking statement or information referenced herein will
prove to be accurate. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are
made and are subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those anticipated in the forward-looking statements.
Factors that could cause actual results to differ materially from
those in forward-looking statements include risks relating to
reliance on the Shopify platform; the Company's limited operating
history; reliance on management and key employees; conflicts of
interest in relation to the Company's officers, directors, and
consultants; additional financing requirements; resale of Common
Shares in the publicly- traded market; market price fluctuations for
the Common Shares; global financial conditions; management of
growth; risks associated with the Company's strategy of growth
through acquisitions; tax risks; currency fluctuations; competitive
markets; uncertainty and adverse changes in the economy;
unsustainability of the Company's rapid growth and inability to
attract new customers, retain revenue from existing merchants, and
increase sales to both new and existing customers; adverse effects
on the Company's revenue growth and profitability due to the
inability to attract new customers or sell additional products to
existing customers; the successful integration of the Company with
Tiny Capital; future results of operations being harmed due to
declines in recurring revenue or contracts not being renewed;
security and privacy breaches; changes in client demand; challenges
to the protection of intellectual property; infringement of
intellectual property; ineffective operations through mobile
devices, which are increasingly being used to conduct commerce; and
risks associated with internal controls over financial reporting.
The Company undertakes no obligation to update forward-looking
statements and information if circumstances or management's
estimates should change except as required by law. The reader is
cautioned not to place undue reliance on forward-looking statements
and information. More detailed information about potential factors
that could affect results is included in the documents that may be
filed from time to time with the Canadian securities regulatory
authorities by the Company.
For a more detailed discussion of certain of these risk factors,
see the Company's most recent MD&A described in the "Risk
Factors" as well as the list of risk factors in the Company's
management information circular dated March 6, 2023 available on
SEDAR at
www.sedar.com
under the Company's profile.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE
EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF
THIS RELEASE.
SOURCE: TINY LTD.
1Refer to "Non-IFRS Measures" for further
information