tinyBuild

The 2023 fiscal year represented a strategic "reset" for tinyBuild, characterized by a transition from aggressive acquisition-led growth to a leaner, internal-production model. Facing a challenging macroeconomic environment and a sharp decline in large-contract deals, revenues fell 29% to $44.7 million. The period was marked by a comprehensive loss of $62.8 million, primarily driven by $48.1 million in asset impairments related to studio closures, game cancellations, and the write-down of software development costs. Despite these headwinds, the company maintained a strong back-catalogue performance, which accounted for 92% of total sales, and leveraged its owned intellectual property for 68% of revenue.

To stabilize its financial position and address a year-end cash low of $2.5 million, the company executed a $12.3 million fundraise in early 2024. This capital injection, which included investment from Atari, resulted in CEO Alex Nichiporchik becoming the majority shareholder with a 57.9% stake. Operational restructuring involved the divestment of several titles and studios, the settlement of a $3.5 million legal claim regarding the Versus Evil acquisition, and a pivot toward "games as a service" and high-potential emergent gameplay titles.

The geographic and operational scope remains global, though the company is actively mitigating geopolitical risks associated with its workforce in Ukraine and Eastern Europe. Moving forward, the strategy emphasizes "canon-commercial" multimedia expansions and a data-centric publishing model to reduce dependency on external suppliers. Management expresses optimism for 2024, citing a significantly reduced cost base and a focused pipeline of high-potential franchises designed to deliver more predictable, long-term growth.

TinyBuild, Inc. is undertaking a critical fundraising initiative to raise approximately $14.16 million (£10.3 million) to address a severe liquidity crisis. The company, traded on the London Stock Exchange’s AIM market, faces a projected cash shortage by January 2024 driven by game delays at its Versus Evil subsidiary, a $3.5 million litigation settlement, and significant cost-reduction charges. Management warns that failure to secure these funds would likely necessitate US Chapter 11 insolvency proceedings, potentially resulting in a total loss for existing stockholders.

The capital injection consists of a multi-part strategy: a placing and subscription of new shares, a $2 million private placement from Atari, and an open offer allowing qualifying stockholders to subscribe for up to 33,979,706 new shares. All shares are priced at 5 pence, representing a 100% premium to the closing price on December 20, 2023. CEO Alex Nichiporchik has committed to underwriting the fundraise up to $10 million. This support may increase his ownership stake from 37.8% to as much as 59.1%, requiring a "whitewash" waiver to exempt him from mandatory takeover bid requirements under the company’s charter.

The proposed transaction involves significant dilution of approximately 109% for existing stockholders. Participation is subject to strict international securities laws, specifically excluding the United States and other restricted jurisdictions. A Special Meeting is scheduled for January 18, 2024, to approve the necessary resolutions, including the disapplication of pre-emptive rights. If approved, admission and commencement of new share dealings are expected on January 19, 2024, providing the essential liquidity required to stabilize the company’s operations and avoid insolvency.

During the 2022 fiscal year, tinyBuild achieved record financial performance, reporting a 21% increase in consolidated revenues to $63.3 million and a 39.7% rise in annual profit to $11.5 million. This growth was underpinned by a strategic shift toward a lower-risk, owned-IP portfolio model, which accounted for 77% of total sales. The company successfully diversified its revenue streams, reducing concentration from its top three titles to 30%, while evolving the "Hello Neighbor" franchise into a multimedia brand with over 70 million downloads. Operations are supported by a global footprint of 12 internal studios and over 400 employees, managed through a decentralized, product-centric structure.

The geographic and operational scope of the period was significantly impacted by geopolitical instability in Ukraine and Russia. In response, the company executed a large-scale relocation of over 100 staff members to a new hub in Serbia and other EU locations, incurring $1.7 million in non-recurring costs. Despite these challenges and an $11.2 million impairment charge related to underperforming back-catalogue assets from previous acquisitions, Adjusted EBITDA rose to $24.4 million. The company maintained a disciplined investment approach, focusing on high-margin internal development and selective IP acquisitions, such as the Bossa Studios catalogue, rather than large-scale corporate M&A.

Financially, the group transitioned to a more conservative three-year accelerated amortization schedule for software development to better reflect consumption patterns. While net cash decreased to $26.5 million due to $35.8 million in development reinvestment, the balance sheet remains robust with $133.8 million in total assets and an undrawn $35 million credit facility. Governance remains stable under the leadership of CEO Alex Nichiporchik, who holds a 37.8% stake, ensuring a continued focus on a "canon-commercial" strategy aimed at delivering a minimum 2x return on investment across its pipeline of over 80 titles.

The 2021 fiscal year marked a transformative period for tinyBuild as it successfully transitioned to a public company via a March IPO on the London Stock Exchange’s AIM market. This strategic shift facilitated record financial performance, with consolidated revenue rising 39% to $52.2 million and Adjusted EBITDA growing 46% to $22.2 million. These results were underpinned by an aggressive expansion of the company’s own-IP portfolio, which increased to 81% of total revenue, and a robust back-catalogue that contributed 83% of sales. The company’s "multi-game and franchise" model was further validated by the continued success of the Hello Neighbor franchise, which surpassed 70 million downloads and expanded into a multimedia brand.

Operational growth was largely driven by a significant M&A program, including seven acquisitions such as Versus Evil and Red Cerberus. These transactions, totaling millions in investment, bolstered publishing, QA, and development capabilities while diversifying the global footprint into high-skill, low-cost regions. Despite these gains, the company faced substantial geopolitical headwinds due to the conflict in Ukraine. Management responded with a large-scale extraction operation to relocate staff to new hubs in the Balkans and Western Europe. While the affected regions account for less than 5% of annual revenues, the company remains focused on mitigating regional instability and reducing revenue concentration among its top titles and platform partners.

The company concluded the year in a strong liquidity position, reporting $48.8 million in cash and total assets expanding to $122.4 million. Following the IPO, tinyBuild established formal corporate governance structures and performance-based remuneration policies to align leadership with shareholder interests. With a pipeline of over 30 titles and a data-centric marketing strategy leveraging thousands of influencers, the group is positioned as a multimedia powerhouse. The transition to a public entity has provided the capital necessary to continue its trajectory of organic investment and strategic acquisitions within the global indie gaming market.

The fiscal year 2020 marked a transformative period for tinyBuild as it transitioned from a private entity to a public company listed on the London AIM. This shift was underpinned by a record financial performance, characterized by a 35% increase in revenue to $37.6 million and a 99% surge in adjusted EBITDA to $15.3 million. This growth was primarily driven by a strategic pivot toward an "own-IP" model, which accounted for 70% of sales. The company’s back catalogue proved exceptionally resilient, contributing 75% of total revenue, while the expansion of the Hello Neighbor franchise into a multimedia property served as a successful template for long-term brand scaling.

Operationally, the company leverages a high-efficiency development and marketing strategy. By utilizing low-cost development hubs in Eastern Europe and South America and maintaining deep partnerships with over 10,000 influencers, the firm achieved over 5 billion YouTube views while keeping marketing spend below 7% of revenue. The 2021 IPO further strengthened the balance sheet, raising $50 million to fund an aggressive "acquihire" strategy. This resulted in the integration of several development teams and the acquisition of multiple intellectual properties to populate a robust pipeline of 21 upcoming titles.

Despite this momentum, the business faces specific risks, including a high dependency on its top five titles for 70% of revenue and a reliance on seven major third-party distribution platforms. However, the company ended 2020 debt-free with a strong net cash position of $26.3 million and a return to net profitability. Governance has been formalized through the adoption of the QCA Code and the establishment of dedicated committees to oversee internal controls and cybersecurity. Moving forward, the focus remains on scaling franchises and acquiring high-performing developers to sustain shareholder value within the global video game market.

This document outlines the March 2021 admission of tinyBuild, Inc., a Delaware-incorporated video game publisher and developer, to the London Stock Exchange’s AIM market. Trading under the symbol TBLD, the company executed a placing of approximately 91.3 million shares at 169 pence each, resulting in a post-admission market capitalization of £340.6 million. The offering raised net proceeds of £28.6 million intended to fund a strategic shift toward an "own-IP" model, including mergers, acquisitions, and the expansion of a 23-title development pipeline.

The company’s financial trajectory is characterized by rapid growth, with revenues increasing from $11.9 million in 2017 to $28.0 million in 2019. This performance was largely driven by the success of the Hello Neighbor franchise and a robust back catalogue that accounted for nearly 80% of 2019 revenue. Strategically, the firm utilizes an "acquihire" model to integrate long-term development partners and leverages a global footprint to access cost-effective talent in emerging markets. Despite this growth, the company acknowledges significant risks, including a high dependency on seven third-party distribution platforms and a concentrated revenue stream where the top five titles generated 70% of H1 2020 revenue.

Operating as a U.S. entity on a UK exchange, the company maintains a complex regulatory and governance framework. Shares are classified as "restricted securities" under U.S. Regulation S, Category 3, prohibiting sales to U.S. persons for a one-year period and requiring settlement via Depositary Interests in the CREST system. Governance is managed by a five-member board adhering to the QCA Corporate Governance Code, with founders Alex Nichiporchik and Luke Burtis retaining a 45.3% stake. Financial reporting transitioned from US GAAP to IFRS, revealing a 2019 adjusted EBITDA of $7.7 million and a strong liquidity position of $21.3 million in cash as of mid-2020.

TinyBuild Inc. established a comprehensive corporate governance framework through its 2021 recapitalization and incorporation in Delaware, coinciding with its listing on the London Stock Exchange’s AIM market. The company authorized 800 million shares of common stock following a significant 1:129.826 stock split and the conversion of all preferred shares. This structural foundation prioritizes long-term stability and protection against hostile takeovers by implementing a classified Board of Directors with staggered three-year terms. Directors are shielded by robust indemnification clauses and can only be removed for cause by a supermajority 75% stockholder vote, which is the same high threshold required for any amendments to the corporate bylaws or voluntary delisting from the exchange.

The governance model incorporates rigorous transparency and regulatory compliance measures tailored for public listing. Stockholders are legally obligated to disclose beneficial ownership interests starting at a 3% threshold, with subsequent reporting required for every 1% change. Failure to meet these disclosure requirements within 14 days empowers the Board of Directors to impose severe sanctions, including the suspension of voting rights, the withholding of dividends, and the restriction of share transfers. These provisions ensure the company maintains a clear understanding of its ownership structure and can respond effectively to rapid accumulations of voting power.

Furthermore, the framework includes strict "Article XII" provisions regarding mandatory offers and control. Any entity acquiring 30% or more of the voting rights triggers specific disclosure rules, while reaching a 50% threshold necessitates a mandatory cash offer to all remaining stockholders at the highest price paid by the acquirer in the previous year. To protect minority interests, the Board maintains broad enforcement powers to penalize non-compliance, including the forced sale of securities. By designating Delaware as the exclusive legal forum while adhering to FCA and AIM standards, the company creates a dual-layered regulatory environment designed to balance director autonomy with stringent shareholder accountability.