Tiny Reports First Quarter and Full Year 2022 Results

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.

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¹Refer to "Non-IFRS Measures" for further information

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