REG - tinyBuild, Inc. - Preliminary Audited Results
15/04/2025 07:02
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RNS Number : 9902E tinyBuild, Inc. 15 April 2025
15 April 2025
tinyBuild, Inc
("tinyBuild" or the "Company")
Preliminary Audited Results for the year ended 31 December 2024
tinyBuild (AIM:TBLD), a premium video games publisher and developer with
global operations, announces the Company's audited results for the twelve
months ended 31 December 2024.
Financial Summary (audited):
(12 months ended December, $'000) 2024 2023 change
Revenue 34,699 44,663 -22%
Operating profit/ (loss) (20,378) (63,757) nmf
Profit/ (loss) before tax (20,261) (63,494) nmf
Basic earnings/ (loss) per share ($ cent) (5.4) (30.7) nmf
Operating cash flow 6,290 10,879 -42%
Net cash, at 31 December 3,088 2,500 24%
Adj. EBITDA(1) (3,681) (7,113) nmf
(1) Excludes share-based compensation expenses, and exceptional items (e.g.
Impairment) includes amortisation of Development costs
Financial highlights:
● Revenue declined 22% to $34.7m (2023: $44.7m), due to lower flow through from
titles launched in 2023, the disappointing performance of 2024 launches (e.g.
Broken Roads and Level Zero: Extraction), some game delays and a generally
weak market.
● Adj. EBITDA loss improved to $3.7m (2023: $7.1m), as the result of cost
actions and a slightly more favourable revenue mix partly offset lower
revenues.
● Operating loss was $20.4m (2023: $63.8m), because of a further $13.7m
impairment of development advances (2023: $36.2m), and a $1.8m impairment of
trade receivables (2023: $nil). Excluding these one-off charges, the operating
loss is $4.9m (2023: $12.3m).
● Loss before tax was $20.3m (2023: $63.5m) and basic EPS was -5.4c (2023:
-30.7c).
● Operating cash flow decreased to $6.3m (2023: $10.9m), because of revenue
decline and broadly neutral net working capital contribution.
● As expected, net cash at 31 December 2024 was $3.1m compared to $2.5m at 31
December 2023, reflecting lower revenues and $19.4m investment in development
costs (2023: $31.9m).
Operational highlights:
● Back catalogue sales represented 87% of total revenue (2023: 92%), including a
solid performance of the top franchises.
● Contribution to revenues from own-IP titles increased to 77% of Gaming
revenues (2023: 66%), as performance of first- and second-party titles
improved.
● In H1 2024, tinyBuild sold Total Reliable Delivery Service and Surgeon
Simulator to Atari.
● In 2024, tinyBuild released a number of new titles, including Lil' Guardsman,
Kill it With Fire 2, Broken Roads, DUCKSIDE, Level Zero: Extraction, VOIN and
Drill Core, plus v1.0 for I am Future and Deadside, and DLCs for Cartel
Tycoon, Punch Club 2 and Not For Broadcast.
Employee Benefit Trust:
● During the year, the Employee Benefit Trust has purchased an additional
971,636 ordinary shares on the market and held a total of 3,937,587 ordinary
shares as of 31 December 2024. The EBT was set up in 2022 for the benefit of
current and future employees and will continue to act independently of the
Company to satisfy potential future option exercises of vested options
granted.
Post Period End highlights:
● On 3 April 2025, tinyBuild announced the disposal of Red Cerberus for a total
consideration of $1.5m in cash, subject to standard net working capital
adjustments, and the proceeds will be used for general working capital
purposes.
● Deadside's strong performance following its v1.0 and console launch, will help
support investments in upcoming high-potential game releases scheduled for the
second half of this year. Kingmakers is currently #15 in the global Steam
wishlists rank, SAND #40, Streets of Rogue 2 #57 and FEROCIOUS #135.
● The announcement trailer of SpeedRunners 2, tinyBuild's iconic competitive
platformer, collected over 20 million views across YouTube in the first three
days, making it one of the most successful announcements in the Company's
history. The Company also announced new titles such as The King is Watching,
ALL WILL FALL and Of Ash and Steel.
Outlook:
● As at 31 March 2024, the Company had cash levels in the low single digit
millions. Cash and cash equivalents are anticipated to reach a trough point in
the summer of 2025 and is expected to improve post the launch of certain
high-potential new games.
● The performance of Deadside and the disposal of Red Cerberus has provided the
Company with greater flexibility and the exact release dates for games will be
set taking into account competitive launches and, as is standard, risk remains
around new launches and the ability to convert wishlists into revenue.
● The cash position will be carefully managed as the Company invests in upcoming
game releases in a disciplined manner. The Company has no borrowings and it
continues to assess its IP portfolio for strategic opportunities.
● The pipeline for 2025 and beyond is strong and includes a number of
larger-budget (above $1m), high-potential games alongside continuous
investment in the catalogue including updates, DLCs and platform launches.
● The continuation of the conflict in Ukraine and the evolving 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 in line with expectations.
Alex Nichiporchik, Chief Executive Officer of tinyBuild, commented:
"In 2024 we adjusted our strategy and focused on cash generation making hard
choices that allowed us to invest in a disciplined manner in high-potential
games. tinyBuild will only be successful if it continues to create and expand
new IP even when the whole industry is retrenching."
"Our back-catalogue is well-diversified and it will generate revenues in the
long term as demonstrated by the relaunch of Deadside. We see early signs of
success in our shift towards the 1,000 hour game ideal, and we will experiment
with the aim. to add additional revenue streams, including multimedia."
Enquiries:
tinyBuild, Inc investorrelations@tinybuild.com (mailto:investorrelations@tinybuild.com)
Alex Nichiporchik - Chief Executive Officer and Co-Founder
Giasone (Jaz) Salati - Chief Financial Officer
Berenberg (Nominated Adviser and Broker) +44 (0)20 3207 7800
Mark Whitmore, Ciaran Walsh, Milo Bonser
SEC Newgate (Financial PR) tinybuild@secnewgate.co.uk
Robin Tozer +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
(http://www.tinybuildinvestors.com) .
CHAIRMAN'S STATEMENT
The games industry is in flux. The past year has seen fundamental shifts in
how games are discovered, played, and monetized. Long development cycles, the
increasing cost of production, and rapidly evolving platform dynamics are
putting pressure on studios and publishers to adapt or be left behind. As
tinyBuild faces and decodes these challenges, we deal with them not just as
obstacles but as opportunities to refine our approaches, move with greater
speed and ensure that our games reach players in the right way, at the right
time.
One of our key changes has been ensuring our games get to market quicker,
without compromising on quality. Our teams have become more efficient, focused
on tighter production cycles and smarter iteration. In parallel to this
production strategy, we continue to publish partners who are creating
incredibly unique and appealing titles: The King is Watching was one of the
standout titles of the latest Steam Next Fest, a signal the title is on the
right track to success. Kingmakers, Rust and Streets of Rogue 2 have also
generated strong anticipation, reinforcing our confidence that we are
developing games that exceed players' expectations. At the same time,
Deadside's console release has revitalized its presence on Steam and led to a
significant uptick of players, validating our long-term approach to growing
our evergreen titles.
The reality of the industry today is that platforms like Steam are more
competitive than ever before. The rules and algorithms are constantly
shifting, and success demands a deep understanding of what makes games
discoverable and engaging. We continue to refine our publishing and marketing
strategies, leveraging tests, community insights and platform relationships to
maximize our games' reach. At the same time, we are making sure our
development teams are structured in a way that allows for more creative
autonomy while keeping efficiency at the core of our process.
Within such a rapidly changing market, adaptability is key. The industry-wide
wave of cancellations and studio closures has created a future vacuum - fewer
games will be launching over the next few years in the spaces we operate on,
creating an opportunity for those who can deliver high-quality experiences
efficiently. Our focus remains on filling these gaps with well-positioned,
efficiently-made games that players can truly engage with for the long run.
Looking forward to 2025 and beyond, tinyBuild is sharpening its approach:
smarter development cycles, better execution, and a portfolio built for
resilience. Our mission remains unchanged: to create games that players love,
while ensuring a sustainable and thriving business based on the continuous
management of the titles that succeed at launch. The challenges ahead are
real, but so are the opportunities, and we are more confident than ever in our
ability to seize them thanks to an incredibly creative team and the games they
are building.
Henrique Olifiers
Non-Executive Chairman
CHIEF EXECUTIVE'S REVIEW
2024 was another turbulent year for the industry. We saw firsthand how
inflated pandemic-era budgets finally hit the market, and not all of those
heavily funded projects have landed well with players. Many studios and
publishers are adapting slowly to players' shorter attention spans and a
"play, don't show" mindset. These factors have shaped tinyBuild's approach
over the last twelve months-and will continue to influence us in the year
ahead.
From a macro perspective, studios in higher-cost locations felt even more
acutely the pinch of rising operational expenses over the past few years. For
some, that posed existential questions about sustainability. Meanwhile, some
of our own teams leveraged more distributed setups, allowing us to stay
nimble, reduce overhead, and focus on the actual product: great games that
connect with audiences quickly.
Industry overcapacity and fast iteration
The funding crunch that began in 2023 with rising capital costs persisted into
2024, adding to rising labor expenses. Mix that with a crowded release slate
of unfinished games and you have all the ingredients for a disaster. For
smaller or less agile studios, the window to capture audience interest
narrowed dramatically.
Meanwhile, gamer tastes shifted even further toward real-time involvement,
such as open alpha or beta tests and influencer-led previews. These are
invaluable opportunities to iterate fast, gather player feedback early, and
respond in days or weeks instead of months.
In this context it is essential to stay lean and flexible to adapt the cost
base quickly when needed, shifting budget from one project to the other, from
one studio to the other one. We refined our pipeline, prioritizing titles that
resonated in our demos and playtests - taking by the horns that "play, don't
show" ethos that modern gamers demand.
We continued to work on deeply replayable titles, the 1,000-hour games,
developing systems rather than content and focusing on emergent gameplay
whenever possible. It's about letting players shape their experience.
Minecraft, Rust, and ARK all prove how powerful that model can be. This
approach resonates with the general shift in consumer expectations - players
want to define their own goals, storylines, and achievements in-game.
We like multiplayer experiences (Secret Neighbor, SpeedRunners, Pandemic
Express, Deadside, SAND, Rawmen, Kingmakers, Level Zero), even better if
coupled with features that all players can enjoy right away. Think crafting,
social hubs, and user-driven events, instead of churning out DLCs for a
shrinking hardcore fans base.
CASE STUDY - Short development cycle
One notable achievement in 2024 was the rapid development and successful
launch of DUCKSIDE. Conceived in January and announced on April 1st, this
persistent-world PvP survival game entered the market in under 12 months,
ended up attracting over 120,000 highly engaged players.
The project built on existing technology from Deadside, allowing the team to
address typical complexities associated with large-scale multiplayer worlds,
such as server stability and building mechanics, without lengthy delays.
Streamlined collaboration between internal teams fueled DUCKSIDE's rapid
iteration cycle. Weekly multi-hour play sessions and direct code-sharing
minimized development bottlenecks, and new Steam Playtest features accelerated
user acquisition and feedback.
The result is an example of agile production at scale, centered around
emergent gameplay that resonates with fans of the survival-shooter genre. The
game has also been designed to be accessible to newcomers to the genre,
blending humor with hardcore survival elements. Player feedback highlighted
the refreshing "duck with a gun" concept while enjoying the game's high level
of difficulty-an intentional design that amplifies both the risk and reward of
persistent PvP.
An open discussion with the community on the back of multiple playtests
surfaced issues like base-building systems leading to server crashes. And it
gave the team a chance to find solutions, such as balancing the wipe cycle,
which resets player progress to keep the gameplay consistently engaging.
And DUCKSIDE is not the only game that was developed in under a year. Drill
Core, a completely new IP, was also developed in less than 12 months from
prototype to successful launch in September 2024. The game accumulated 85%
positive reviews since launch, increasing to 95% positive reviews after the
recent Jungle update.
Looking ahead to 2025
Even more than in the past, we are now laser-focused on games that are both
scalable and true to our emergent design values. We remain confident that by
staying agile, we can deliver compelling experiences - even in a crowded
market. Our pipeline speaks louder than any commentary: Kingmakers (#15 on
team global wishlists), SAND (#40), Streets of Rogue 2 (#57) and FEROCIOUS
(#135), to name just a few.
2024 was about adaptation, learning, and setting the stage for a strong 2025.
Our entire team remains committed to pushing boundaries, embracing new models
of play, and delivering on the promise of truly player-driven games. Thank you
for joining us on this journey and we look forward to making further
announcements during the year.
Alex Nichiporchik
CEO and Founder
Dated: 15 April 2025
CHIEF FINANCIAL OFFICER'S REVIEW
2024 was a transition year. In January, we successfully raised over $11m in
new capital, welcoming Atari as a new core investor in tinyBuild. Throughout
the year we continued to monitor cash flow carefully to provide adequate
funding to the most promising, high-potential project which received strong
external validation.
Revenue
Revenue generated from games sold to consumers dropped to $29.9m (-18% y-o-y),
as a result of limited flow-through from new games released in 2023,
aggravated by a 50% drop in development revenues, mostly due to further
decline in platform deals (e.g., subscription programs, development
partnerships and exclusivity agreements). Events revenues were up to $1.4m as
DevGAMM strengthened its position in new locations. Overall, revenues declined
by 22% (2023: -23%) from $44.7m to $34.7m.
Revenue generated from own-IP (first- and second-party games) increased to 77%
of gaming revenues (2023: 65%), as a result of changes in portfolio mix.
Revenues from new releases increased to 13% (2023: 8%), with successful new
releases including DUCKSIDE and Drill Core. The top five games generated 45%
of total revenues (2023: 47%), and the top 10 games 59% (2023: 65%),
demonstrating broader diversification across audiences, genres and
technologies.
Operating Loss and Adjusted EBITDA
Operating loss was $20.5m (2023: $60.8m operating loss), impacted by the $10m
decline in revenues, the $13.7m impairment of software development costs.
There were no exceptional charges for 2024 (2023: $3.5m related to a legal
settlement).
Adjusted EBITDA is presented net of amortisation of development costs,
excluding share-based compensation expenses, amortisation of purchased IP and
other intangible assets and one-off costs. Adjusted EBITDA loss was $3.8m
(2023: $7.1m loss), driven by the decline in revenues more than offsetting the
reduction in costs.
Interest income and taxation
Interest income was $0.1m (2023: $0.4m) and the tax charge was $0.3m (2023:
$0.6m tax credit).
Financial Position
In 2024, the net cash position increased to $3.1m from $2.5m. Investments in
new games, including a number of larger-budget titles, more than offset cash
generated by the operations and was partly funded by the January capital raise
and partly funded by disposal of non-core IP such as Surgeon Simulator and
Totally Reliable Delivery Service. In February 2024, tinyBuild also paid the
remaining $2.0m as part of the legal settlement announced in December 2023.
Capitalised software development costs decreased from $31.9m in 2023 to $19.3m
in 2024 as a result of more selective investments in upcoming pipeline
releases. As at 28 February 2025, before the launch of high-potential games
planned for release in 2025, the Company had cash levels in the low
single-digit millions. This is anticipated to reduce toward the half year as
the Company invests in upcoming game releases.
Goodwill remained at zero (2023: nil). IP decreased to $11.4m (2023: $16.1m)
and Software Development decreased to $29.1m (2023: $34.0m) as the impairment
carried out in 2024 more than offset additions.
Cash Flow
Cash flows from operating activities decreased from $10.9m to $6.2m primarily
due to lower revenues and game delays, more than offsetting the decrease in
investments. It is important to note that timing issues can fluctuate year
over year and variability here is to be expected especially during the holiday
season and partners' payment terms.
Employee incentive plan and EBT update
During the year, the Employee Benefit Trust has purchased an additional
971,636 ordinary shares on the market and held a total of 3,937,587 ordinary
shares as of 31 December 2024. The EBT was set up in 2022 for the benefit of
current and future employees and will continue to act independently of the
Company to satisfy potential future option exercises of vested options
granted.
As previously announced, the Remuneration Committee of tinyBuild intends to
utilise share awards to incentivise and retain key employees and executive
directors. The share awards not only encourage share ownership and stakeholder
alignment in the business but also serves to preserve cash resources that
would otherwise be used by the Company to satisfy bonus awards. A further
announcement will be made in due course in connection with these awards, which
includes a multiyear vesting share award to Giasone (Jaz) Salati, CFO of the
Company. Where possible, the Company has the option to issue shares from the
employee benefit trust to satisfy such awards.
Acquisitions and disposals
In the first half of 2024 the Company sold Totally Reliable Delivery Service
and Surgeon Simulation for an aggregate consideration of $3m.
Events after the reporting date
On 3 April tinyBuild announced the disposal of Red Cerberus for $1.5m in cash,
subject to standard net working capital adjustments. The disposal will be
marginally accretive in 2025 and the proceeds shall be used for general
working capital purposes.
Giasone (Jaz) Salati
Chief Financial Officer
TINYBUILD INC.
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
Note $'000 $'000
Revenue 5 34,699 44,663
Cost of sales:
- Cost of sales (21,370) (30,980)
- Impairment of software development costs (13,663) (36,206)
Total cost of sales (35,033) (67,186)
Gross loss (334) (22,523)
Administrative expenses:
- General administrative expenses (19,110) (26,090)
- Impairment of intangible assets - (11,849)
- Impairment of trade receivables (1,811) -
- Share-based payment expenses (147) (414)
- Non-recurring costs 6 - (3,500)
Total administrative expenses (21,068) (41,853)
Other income 7 1,024 619
Operating loss 9 (20,378) (63,757)
Finance costs 10 (27) (128)
Finance income 11 144 391
Loss before tax (20,261) (63,494)
Income tax (expense)/credit 12 (333) 649
Loss for the year (20,594) (62,845)
Loss for the year is attributable to:
Owners of the parent company (20,522) (62,537)
Non-controlling interests (72) (308)
(20,594) (62,845)
Basic earnings per share ($) 13 (0.054) (0.307)
Diluted earnings per share ($) 13 (0.054) (0.307)
Adjusted EBITDA* 14 (3,681) (7,113)
*Adjusted EBITDA is a non-IFRS measure and is defined as earnings after
capitalised software development costs but before interest, tax, depreciation,
amortisation, share-based payment expenses, impairment and other significant
one-off other income or expense items.
TINYBUILD INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
$'000 $'000
Loss for the year (20,594) (62,845)
Other comprehensive loss net of taxation
Exchange differences on translation of foreign operations - may be
reclassified to profit and loss
(118) (24)
Total comprehensive loss for the year (20,712) (62,869)
Total comprehensive loss for the year is attributable to:
Owners of the parent company (20,640) (62,561)
Non-controlling interests (72) (308)
(20,712) (62,869)
TINYBUILD INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER
2024
2024 2023
ASSETS Note $'000 $'000
Non-current assets
Other intangible assets 15 41,750 51,512
Property, plant and equipment:
- owned assets 16 287 661
- right-of-use assets 16 374 374
Other receivables 18 408 385
Total non-current assets 42,819 52,932
Current assets
Trade and other receivables 19 7,951 13,666
Cash and cash equivalents 3,088 2,500
Total current assets 11,039 16,166
TOTAL ASSETS 53,858 69,098
EQUITY AND LIABILITIES
Equity
Share capital 24 397 204
Share premium 24 76,809 65,593
Own shares 24 (1,100) (1,031)
Warrant reserve 1,920 1,920
Translation reserve (135) (17)
Accumulated Deficit (38,587) (18,213)
Equity attributable to owners of the parent company 39,304 48,456
Non-controlling interest (423) (351)
Total equity 38,881 48,105
LIABILITIES
Non-current liabilities
Lease liabilities 20 218 146
Deferred tax liabilities 22 154 388
Total non-current liabilities 372 534
Current liabilities
Trade and other payables 19 14,441 20,227
Lease liabilities 20 164 232
Total current liabilities 14,605 20,459
Total liabilities 14,977 20,993
TOTAL EQUITY AND LIABILITIES 53,858 69,098
The Consolidated Financial Statements were approved by the Board of Directors
and authorised for issue on 15 April 2025 and are signed on its behalf by:
Alex Nichiporchik - CEO and Founder
TINYBUILD INC.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Share capital Share premium Own shares Warrant reserve Translation reserve Accumulated deficit Total equity attributable to owners of the parent company Non-controlling interest Total
equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2024 204 65,593 (1,031) 1,920 (17) (18,213) 48,456 (351) 48,105
Loss for the year - - - - - (20,522) (20,522) (72) (20,594)
Other comprehensive loss:
Foreign exchange differences on the translation of foreign operations - - - - (118) - (118) - (118)
Total comprehensive loss for the year - - - - (118) (20,522) (20,640) (72) (20,712)
Transactions with owners in their capacity as owners:
Share-based payment charge - - - - - 148 148 - 148
Issue of shares, net of $889K issuance costs 24 193 11,216 - - - - 11,409 - 11,409
Own shares acquired 24 - - (69) - - - (69) - (69)
Total transactions with owners 193 11,216 (69) - - 148 11,488 - 11,488
Balance at 31 December 2024 397 76,809 (1,100) 1,920 (135) (38,587) 39,304 (423) 38,881
TINYBUILD INC.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share capital Share premium Own shares Warrant reserve Translation reserve Accumulated deficit Total equity attributable to owners of the parent company Non-controlling interest Total
equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2023 204 65,593 - 1,920 7 43,910 111,634 (43) 111,591
Loss for the year - - - - - (62,537) (62,537) (308) (62,845)
Other comprehensive income:
Foreign exchange differences on the translation of foreign operations - - - - (24) - (24) - (24)
Total comprehensive income for the year - - - - (24) (62,537) (62,561) (308) (62,869)
Transactions with owners in their capacity as owners:
Share-based payment charge - - - - 414 414 - 414
Own shares acquired - - (1,031) - - - (1,031) - (1,031)
Total transactions with owners - - (1,031) - - 414 (617) - (617)
Balance at 31 December 2023 204 65,593 (1,031) 1,920 (17) (18,213) 48,456 (351) 48,105
TINYBUILD INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
Note $'000 $'000
Cash flows from operating activities
Cash generated from operations 25 6,173 10,617
Net interest received 117 262
Net cash generated by operating activities 6,290 10,879
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired - (1,234)
Software development costs 15 (19,315) (31,899)
Proceeds on disposal of intangible assets 15 2,594 -
Purchase of property, plant and equipment 16 (22) (180)
Net cash used in investing activities (16,743) (33,313)
Cash flows from financing activities
Proceeds from issuance of shares 12,298 -
Transaction costs arising from issuance of shares (889) -
Acquisition of own shares (69) (1,031)
Payment of principal portion of lease liabilities (299) (531)
Net cash generated by/(used in) financing activities 11,041 (1,562)
Cash and cash equivalents
Net increase/(decrease) in the year 588 (23,996)
At 1 January 2,500 26,496
At 31 December 3,088 2,500
1 GENERAL INFORMATION
tinyBuild Inc. ("the Company") is a public company limited by shares, and is
registered, domiciled and incorporated in Delaware, USA. tinyBuild has been
listed on the London Stock Exchange (AIM:TBLD) since March 2021. The address
of the registered office is 1239 120(th) Ave NE, Suite A, Bellevue, WA 98005,
United States of America.
The Group ("the Group") consists of tinyBuild Inc. and all of its subsidiaries
as listed in note 17. 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 principal accounting policies applied in the
preparation of these financial statements are set out below. These policies
have been consistently applied to all the periods presented, unless otherwise
stated.
The financial statements have been prepared on a going concern basis and in
accordance with International Financial Reporting Standards ("IFRS") as issued
by the International Accounting Standards Board ("IASB").
The financial statements have been prepared on the historical cost basis
except for, where disclosed in the accounting policies, certain financial
instruments that are measured at fair value.
The financial statements are prepared in US Dollars ($), which is the
functional currency and presentational currency of the Company. Monetary
amounts in these financial statements are rounded to the nearest thousand US
Dollars ($'000), unless otherwise stated.
The preparation of consolidated financial
statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement
in the process of applying the Group's accounting policies. The areas
involving judgement or areas where assumptions and estimates are significant
to the financial statements are disclosed in note 3.
Basis of consolidation
Subsidiaries are all entities over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group and
are deconsolidated from the date control ceases. Inter-company transactions,
balances and unrealised gains and losses on transactions between group
companies are eliminated.
Non-controlling interests in the net assets of consolidated subsidiaries are
identified separately from the Group's equity therein. The Group elected to
initially recognise the non-controlling interests at its proportionate share
of the acquired net identifiable assets. Non-controlling interests consist of
the amount of those interests at the date of the original business combination
and the non-controlling shareholder's share of changes in equity since the
date of the combination. Total comprehensive income is attributed to
non-controlling interests even if this results in the non-controlling
interests having a deficit balance.
The results and financial position of foreign operations that have a
functional currency different from the presentation currency are translated
into the presentation currency as follows:
· Assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of that statement;
· Income and expenses for each income statement and statement of
comprehensive income are translated at average exchange rates; and
· All resulting exchange differences are recognised in other
comprehensive income.
Adoption of new and revised standards
With effect from 1 January 2024, the Group has adopted the following new IFRSs
(including amendments thereto) and International Financial Reporting
Interpretations Committee ("IFRS IC") interpretations, that became effective
for the first time. The new standards adopted have not had any material impact
on the Group.
Standard/amendment Effective date
Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 (issued on 22 1 January 2024
September 2022)
Classification of Liabilities as Current or Non-current - Amendments to IAS 1 1 January 2024
Classification of Non-Current Liabilities with Covenants - Amendments to IAS
1
Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7 1 January 2024
New and revised standards in issue but not yet effective
The following standards and interpretations relevant to the Group are in issue
but are not yet effective and have not been applied in the preparation of the
financial statements.
Standard/amendment Effective date
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of 1 January 2025
Exchangeability
Annual Improvements Volume 11 1 January 2026
Amendments to the Classification and Measurements of Financial Instruments - 1 January 2026
Amendments to IFRS 9 and IFSR 7
Contracts Referencing Nature-depended Electricity - Amendments to IFRS 9 and 1 January 2026
IFRS 7
IFRS 19 Subsidiaries without Public Accountability: Disclosures 1 January 2027
IFRS 18 Presentation and Disclosure in the Financial Statements 1 January 2027
The above standards are not expected to materially impact the Group.
Revenue recognition
IFRS 15 Revenue from Contracts with Customers has been applied for all periods
presented within the financial statements.
Revenue is recognised when control of a service or product provided by the
Group is transferred to the customer, in line with the Group's performance
obligations in the contract, and at an amount reflecting the consideration the
Group expects to receive in exchange for the provision of services.
The Group recognised revenue from the following activities:
Game and Merchandise Royalties
The Group develops and publishes video games based on its own and third-party
intellectual property. The Group grants third-party distributors licences to
sell these video games, and these distributors are considered to be the
Group's customers when assessing revenue recognition. The majority of the
Group's revenue is in the form of royalties received from third-party
distributors under the relevant licence agreements. Generally, royalty revenue
earned from third-party licensees is recorded in the period earned, being the
point at which the distributor sells the content to the end user, in
accordance with IFRS 15. Based on an evaluation of Principal vs Agent
considerations, in particular who is primarily responsible for delivering the
goods, the Group has determined that the third-party platform is considered to
be the principal to end customers for the sale of full games and related
content. Therefore, the Group reports revenue related to these arrangements
net of the fees retained by the storefront. The Group will occasionally
enter contracts with a fixed amount of royalty revenue in exchange for making
a game available to a third-party platform for their customers to download for
an agreed period of time, with minimal future performance obligations required
by the Group. These contracts are determined as right to use licenses in
accordance with IFRS 15 and the fixed fee is recognised upon satisfying the
performance obligation of providing the game licence for the specified
subscription‐based platform, being the date the game is first made available
on the third-party platform.
Development Services
Development advances received from distribution partners to assist with the
development of game titles are recognised as contract liabilities in the
statement of financial position and subsequently recognised as income when
distinct performance obligations set out in the contract are met. Performance
obligations for development service contracts typically include the delivery
of video game. The transaction price for the performance obligation is
generally a fixed amount which is specified in the contract.
The Group recognises revenue over time for contracts where the Group transfers
control of the product over time and where the contract meets one of the
following criteria. Different contracts meet different criteria, as below,
which varies between contracts.
● the customer simultaneously receives and consumes the benefits
provided by the Group's performance as the Group performs it;
● the Group's performance creates or enhances an asset that the
customer controls as the asset is created or enhanced; or
● the Group's performance does not create an asset with an
alternative use to the Group and the Group has an enforceable right to payment
for performance completed to date.
Revenue is recognised based on time-based input measure of progress as the
Company's efforts are incurred evenly over time and the customer obtains
generally equal benefit from the service through the development period.
Payment is typically due upon milestones specified in the contract. When
payment from a customer is received in advance of performance obligations
being satisfied, a contract liability is recognised in the statement of
financial position. There is not considered to be a significant financing
component in these contracts with customers as the period between the
recognition of revenue and the milestone payment is expected to be less than
one year at contract inception.
Event Revenue
Event revenue is recognised at the conclusion of each event. In cases where
the invoices raised exceed the services rendered, a contract liability
representing advances or deferred revenue is recognised.
Liquidity
The Group going concern assessment is based on forecasts and projections of
anticipated new release performance. The assumptions applied are subjective
and management applies judgement in estimating the probability, timing and
value of underlying cash flows. The Group decreased its loss in the current
year, but still had a loss for the financial year of $20.6 million and has net
current liabilities of $3.2 million. The Group continues to take action on
costs, regularly reviewing investment in new games to align with audience
validation. The group remains in a significant net asset position of $39
million at the reporting date. Whether and when the Group can attain
profitability and positive cash flows is uncertain. The Group continues to
have no borrowings and has cash and cash equivalents of $3.1 million at the
reporting date. Generating further funds through the sale of intellectual
property remains an option for the Group. Furthermore, the Group has a number
of high-potential games in the pipeline, which are anticipated to contribute
to organic revenue growth in FY25. However, there can be no assurance that the
Company will succeed in generating sufficient revenues from product sales to
continue its operations as a going concern. Management has considered the
significance of the above conditions in relation to the Company's ability to
meet its current obligations and to achieve its business targets in the next
financial year. Having considered the information available and recent changes
to the business, the Directors confirm that they have a reasonable expectation
that the Group will have adequate resources to continue in operational
existence for 12 months from issuance of these financial statements, and
accordingly these financial statements are prepared on a going concern basis.
Foreign currencies
Transactions in currencies other than the functional currency (i.e., in
foreign currencies) are initially recorded at the exchange rate prevailing on
the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are
translated at the rate of exchange ruling at the reporting date. Non-monetary
assets and liabilities denominated in foreign currencies are translated at the
rate ruling at the date of the transaction, or, if the asset or liability is
measured at fair value, the rate when that fair value was determined.
All translation differences are taken to profit or loss, except to the extent
that they relate to gains or losses on non-monetary items recognised in other
comprehensive income, when the related translation gain or loss is also
recognised in other comprehensive income.
Non-recurring costs
IAS 1 requires material items to be disclosed separately in a way that enables
users to assess the quality of a Group's profitability. In practice, these are
commonly referred to as "exceptional" items, but this is not a concept defined
by IFRS and therefore there is a level of judgement involved in determining
what to include in underlying profit. We consider items which are
non-recurring and significant in size or in nature to be suitable for separate
presentation (see note 6).
Research and development expenditure
Expenditure on research activities as defined in IFRS is recognised in the
income statement as an expense as incurred.
Expenditure on developing new software products and substantial enhancements
to existing software product is recognised as intangible assets only when the
following criteria are met:
1. It is technically feasible to develop the product to be used or
sold;
2. There is an intention to complete and use or sell the product;
3. The Group is able to use or sell the product;
4. Use or sale of the product will generate future economic
benefits;
5. Adequate resources are available to complete the development; and
6. Expenditure on the development of the product can be measured
reliably.
The capitalised expenditure represents costs directly attributable to the
development of the asset from the point at which the above criteria are met up
to the point at which the product is ready for use. If the qualifying
conditions are not met, such development expenditure is recognised as an
expense in the period in which it is incurred.
Software development costs largely relate to amounts paid to external
developers, consultancy costs and the direct payroll costs of the internal
development teams. Capitalised development expenditure is reviewed at the end
of each accounting period for the conditions set out above as well as for
indicators of impairment. Intangible assets that are not yet available for use
are tested for impairment annually by comparing their carrying amount with
their recoverable amount based on cash flow forecasts for the developed
products.
Finance income and costs
Finance costs comprise interest charged on liabilities and finance costs
accruing from lease liabilities. Interest income and interest expenses are
recognised in the statement of comprehensive income as they accrue, using the
effective interest method.
EBITDA and adjusted EBITDA
Earnings before Interest, Taxation, Depreciation and Amortisation ("EBITDA")
and Adjusted EBITDA are non-IFRS measures used by Management to assess the
operating performance of the Group. EBITDA is defined as profit before finance
costs, finance income, tax, depreciation and amortisation (excluding
amortisation of capitalised software development costs). Share-based payment
costs, impairment, acquisition costs, other non-recurring items and other
gains are excluded from EBITDA to calculate Adjusted EBITDA. The Directors
primarily use the Adjusted EBITDA measure when making decisions about the
Group's activities. As these are non-IFRS measures, EBITDA and Adjusted EBITDA
measures used by other entities may not be calculated in the same way and
hence are not directly comparable.
Segmental reporting
The Group reports its business activities in one area: video games
development, which is reported in a manner consistent with the internal
reporting to the Board of directors, which has been identified as the chief
operating decision maker.
Property, plant and equipment
Property, plant and equipment are initially recognised at cost of purchase or
construction, which includes any costs directly attributable to bringing the
asset to the location and condition necessary for it to be capable of
operating in the manner intended by management.
After initial recognition, items of property, plant and equipment are carried
at cost less any accumulated depreciation and impairment losses.
Depreciation is calculated so as to write off the cost of an asset, less its
estimated residual value, over its useful economic life as follows:
Fixtures, fittings and
equipment
2 - 7 years straight line
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected to arise from the continued use of
the asset. Any gain or loss arising on the disposal or retirement of an item
of property, plant and equipment is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognised in the
income statement.
Intangible assets - goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised.
Instead, goodwill is tested annually for impairment, or more frequently if
events or changes in circumstances indicate that it might be impaired and is
carried at cost less accumulated impairment losses. Impairment losses on
goodwill are taken to profit or loss and are not subsequently reversed.
Intangible assets - other than goodwill
The Group has four categories of intangible assets:
Brands
Brands acquired in a business combination are recognised at fair value at the
acquisition date. They have a finite useful life and are subsequently carried
at cost less accumulated amortisation and impairment losses. At the time of
purchase, the Group estimates the useful life for financial reporting purposes
and recognises amortisation on a straight-line basis over the useful life of
the asset, typically 15 years.
Customer relationships
Customer relationships acquired in a business combination are recognised at
fair value at the acquisition date. They have a finite useful life and are
subsequently carried at cost less accumulated amortisation and impairment
losses. At the time of purchase, the Group estimates the useful life for
financial reporting purposes and recognises amortisation on a straight-line
basis over the useful life of the asset, typically 7 years.
Purchased intellectual property
The Group purchases intellectual property related to video games. At the time
of purchase, the Group estimates the useful life of the intellectual property
for financial reporting purposes and recognises amortisation on a
straight-line basis over the useful life of the asset, typically 7 years.
Software development costs
The Group incurs software development costs through game studios within the
Group's control pursuant to IAS 38. Costs are amortised upon release of the
game over three years in a 40:35:25 ratio reflecting the pattern in which the
asset's future economic benefits are expected to be consumed.
Development advances paid to external developers for the development of
specified games are capitalised as incurred. Amortisation commences upon
release of the specified games and at a rate equivalent to the costs being
recovered from developers for non-owned IP, reflecting the pattern in which
the asset's future economic benefits are expected to be consumed. For
developer advances where the Group owns the underlying IP, costs are amortised
upon release of the game over three years in a 40:35:25 ratio.
The Group capitalises costs for localisation, porting and quality assurance of
games as software development costs pursuant to IAS 38. Costs are amortised
upon release of the game over three years in a 40:35:25 ratio.
Impairment of property, plant and equipment (including right-of-use assets)
and of intangible assets
At each reporting period end date, the Group reviews the carrying amounts of
its property, plant and equipment and intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any). Where it is
not possible to estimate the recoverable amount of an individual asset, the
Group estimates the recoverable amount of the cash-generating unit to which
the asset belongs.
The recoverable amount is the higher of fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific
to the asset for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Financial instruments
Financial assets and liabilities are recognised on the statement of financial
position when the Group has become party to the contractual provisions of the
instrument. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or
loss) are added to or deducted from the fair value of the financial assets or
financial liabilities, as appropriate, on initial recognition. Transaction
costs directly attributable to the acquisition of financial assets or
financial liabilities at fair value through profit or loss are recognised
immediately in profit or loss.
Trade and other receivables
Trade receivables that do not have a significant financing component are
initially recognised at transaction price and thereafter are measured at
amortised cost using the effective interest method, less any allowance for
expected credit losses. Other receivables are stated at their transaction
price (discounted if material) less any expected impairment losses.
Platform receivables are stated at the estimated amount that Management
expects to collect from each platform, net of the applicable fees. Management
estimates this amount monthly based on preliminary sales reports provided by
each platform. Credit terms are typically 30 to 45 days.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together
with other short-term, highly liquid investments maturing within 90 days from
the date of acquisition that are readily convertible into known amounts of
cash and which are subject to an insignificant risk of changes in value.
Classification and subsequent measurement of financial liabilities
The Group's financial liabilities include, trade and other payables and lease
liabilities. The Company has no borrowings.
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument
is any contract that evidences a residual interest in the assets of the Group
after deducting all its liabilities. Financial liabilities are measured
subsequently at amortised cost using the effective interest rate method.
Trade and other payables
Trade and other payables and borrowings are initially recognised at fair value
less transaction costs and subsequently measured at amortised cost using the
effective interest rate method, with all movements being recognised in the
statement of profit and loss. Cost approximates to fair value.
Equity
Equity instruments issued are recorded at fair value on initial recognition
net of transaction costs.
Repurchase of the Company's own equity instruments is recognised and deducted
directly in equity. No gain or loss is recognised in profit or loss on the
purchase, sale, issuance or cancellation of the Company's own equity
instruments.
Impairment of financial assets under IFRS 9
The Group assesses, on a forward-looking basis, the expected credit losses
associated with its financial assets measured at amortised cost. The Group
applies the simplified approach to providing for expected credit losses
prescribed by IFRS 9, which requires the use of the lifetime expected loss
provision for all trade receivables. For other financial assets measured at
amortised cost, the Group recognises twelve month expected credit losses if
there has not been a significant increase in credit risk and lifetime expected
credit losses if there has been a significant increase in credit risk.
Significant financial difficulties of the customer, probability that the
customer will enter bankruptcy or financial reorganisation default or
delinquency in payments, and the unavailability of credit insurance at
commercial rates are considered indicators that the receivable may be
impaired.
Financial assets are written off when there is no reasonable expectation of
recovery. Where receivables have been written off, the Group continues to
engage in enforcement activity to attempt to recover the receivable due. Where
recoveries are made, these are recognised in the Statement of Comprehensive
Income.
Platform receivables
To measure the expected credit losses, trade and other receivables, including
platform receivables, have been grouped based on shared credit risk
characteristics and the days past due. For other financial assets at amortised
cost, the Group determines whether there has been a significant increase in
credit risk since initial recognition.
Share-based payments
The Group operates a number of equity-settled, share-based compensation plans,
under which the Group receives services from employees and contractors as
consideration for equity instruments (options) of the Company. The fair value
of the employee services received in exchange for the grant of the options is
recognised as an expense. A credit is recognised directly in equity. The total
amount to be expensed is determined by reference to the fair value of the
options granted:
- including any market performance conditions (for example, an
entity's share price);
- excluding the impact of any service and non-market performance
vesting conditions (for example, profitability, sales growth targets and
employment status over a specified time period); and
- including the impact of any non-vesting conditions (for
example, the requirement for employees to save). Non-market performance and
service conditions are included in assumptions about the number of options
that are expected to vest.
The total expense is recognised over the vesting period, which is the period
over which all of the specified vesting conditions are to be satisfied. For
share options which vest in instalments over the vesting period, each
instalment is treated as a separate share option grant, each with a different
vesting period.
At the end of each reporting period, the company revises its estimates of the
number of options that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to original estimates, if
any, in the statement of comprehensive income, with a corresponding adjustment
to equity.
Taxation
The tax expense for the period comprises current and deferred tax. Tax is
recognised in profit or loss, except if it arises from transactions or events
that are recognised in other comprehensive income or directly in equity. In
this case, the tax is recognised in other comprehensive income or directly in
equity, respectively. Where tax arises from the initial accounting for a
business combination, it is included in the accounting for the business
combination.
Current tax
Tax currently payable is based on the taxable profit for the year and is
calculated using the tax rates in force or substantively enacted at the
reporting date. Taxable profit differs from accounting profit either because
some income and expenses are never taxable or deductible, or are deductible in
other years.
Deferred tax
Using the statement of financial position asset and liability method, deferred
tax is recognised in respect of all temporary differences between the carrying
value of assets and liabilities in the consolidated statement of financial
position and the corresponding tax base. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset or liability
in a transaction other than a business combination that, at the time of the
transaction, affects neither accounting nor taxable profit or loss and does
not give rise to equal taxable and deductible temporary differences.
Deferred tax is calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted by the
reporting date.
The measurement of deferred tax assets and liabilities reflect the tax
consequences that would follow the manner in which the Group expects, at the
end of the reporting period, to recover or settle the carrying amount of its
asset and liabilities.
Deferred tax assets are recognised only to the extent that the Group considers
that it is probable (i.e., more likely than not) that there will be sufficient
taxable profits available for the asset to be utilised within the same tax
jurisdiction. Deferred tax assets and liabilities are offset only when there
is a legally enforceable right to offset current tax assets against current
tax liabilities, they relate to the same tax authority and the Group's
intention is to settle the amounts on a net basis.
Since the Group is able to control the timing of the reversal of the temporary
difference associated with interests in subsidiaries, a deferred tax liability
is recognised only when it is probable that the temporary difference will
reverse in the foreseeable future mainly because of a dividend distribution.
At present, no provision is made for the additional tax that would be payable
if the subsidiaries in certain countries remitted their profits because such
remittances are not probable, as the Group intends to retain the funds to
finance organic growth locally.
Leases
On commencement of a contract (or part of a contract) which gives the Group
the right to use an asset for a period of time in exchange for consideration,
the Group recognises a right-of-use asset and a lease liability unless the
lease qualifies as a 'short-term' lease or a 'low-value' lease.
Short-term leases
Where the lease term is twelve months or less and the lease does not contain
an option to purchase the leased asset, lease payments are recognised as an
expense on a straight-line basis over the lease term.
Leases of low-value assets
For leases where the underlying asset is 'low value' (i.e., the asset value,
when new, is less than $5,000), lease payments are recognised as an expense on
a straight-line basis over the lease term.
Initial and subsequent measurement of the right-of-use asset
A right-of-use asset is recognised at commencement of the lease and initially
measured at the amount of the lease liability, plus any incremental costs of
obtaining the lease and any lease payments made at or before the leased asset
is available for use by the Group.
The right-of-use asset is subsequently measured at cost less accumulated
depreciation and any accumulated impairment losses. The depreciation methods
applied are as follows:
Leased property on a straight-line basis
over the shorter of the lease term and the useful life
The right-of-use asset is adjusted for any re-measurement of the lease
liability and lease modifications.
Initial measurement of the lease liability
The lease liability is initially measured at the present value of the lease
payments during the lease term discounted using the interest rate implicit in
the lease, or the incremental borrowing rate if the interest rate implicit in
the lease cannot be readily determined.
The lease term is the non-cancellable period of the lease plus additional
periods arising from extension options that the Group is reasonably certain to
exercise and termination options that the Group is reasonably certain not to
exercise.
Subsequent measurement of the lease liability
The lease liability is subsequently increased for a constant periodic rate of
interest on the remaining balance of the lease liability and reduced for lease
payments.
Interest on the lease liability is recognised in profit or loss, unless
interest is directly attributable to qualifying assets, in which case it is
capitalised in accordance with the Group's policy on borrowing costs.
Remeasurement of the lease liability
The lease liability is adjusted for changes arising from the original terms
and conditions of the lease that change the lease term, the Group's assessment
of its option to purchase the leased asset, the amount expected to be payable
under a residual value guarantee and/or changes in lease payments due to a
change in an index or rate. The adjustment to the lease liability is
recognised when the change takes effect and is adjusted against the
right-of-use asset, unless the carrying amount of the right-of-use asset is
reduced to nil, when any further adjustment is recognised in profit or loss.
On termination of leases, the right-of-use asset and lease liability are
reduced to nil, with any resulting gain or loss being recognised in profit or
loss.
Adjustments to the lease payments arising from a change in the lease term or
the lessee's assessment of its option to purchase the leased asset are
discounted using a revised discount rate. The revised discount rate is
calculated as the interest rate implicit in the lease for the remainder of the
lease term or, if that rate cannot be readily determined, the lessee's
incremental borrowing rate at the date of reassessment.
Changes to the amounts expected to be payable under a residual value guarantee
and changes to lease payments due to a change in an index or rate are
recognised when the change takes effect and are discounted at the original
discount rate unless the change is due to a change in floating interest rates,
when the discount rate is revised to reflect the changes in interest rate.
Lease modifications
A lease modification is a change that was not part of the original terms and
conditions of the lease and is accounted for as a separate lease if it
increases the scope of the lease by adding the right to use one or more
additional assets with a commensurate adjustment to the payments under the
lease.
For a lease modification not accounted for as a separate lease, the lease
liability is adjusted for the revised lease payments, discounted using a
revised discount rate. The revised discount rate used is the interest rate
implicit in the lease for the remainder of the lease term, or if that rate
cannot be readily determined, the lessee company's incremental borrowing rate
at the date of the modification.
Where the lease modification decreases the scope of the lease, the carrying
amount of the right-of-use asset is reduced to reflect the partial or full
termination of the lease. Any difference between the adjustment to the lease
liability and the adjustment to the right-of-use asset is recognised in profit
or loss.
For all other lease modifications, the adjustment to the lease liability is
recognised as an adjustment to the right-of-use asset.
2 JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
Judgements
In the course of preparing the financial statements, judgements have been made
in the process of applying the accounting policies that have had a significant
effect in the amounts recognised in the financial statements. The following
are the areas requiring the use of judgements that may significantly impact
the financial statements.
Capitalisation of development expenditure
Management has to make judgements as to whether development expenditure has
met the criteria for capitalisation or whether it should be expensed in the
year. Development expenditure is capitalised only after its reliable
measurement, technical feasibility and commercial viability can be
demonstrated.
Allocation of transaction price to performance obligations
For development contracts relating to multiple game titles, the Group
allocates the transaction price to each performance obligation on the basis of
the relative stand-alone selling price of each distinct good or service
promised in the contract. The stand-alone selling price is determined to be
the price at which the Group would sell the promised good or service
separately to a customer. Where the stand-alone selling price is not directly
observable, the Group estimates it using an adjusted market assessment
approach. The Group evaluates the video game market and applies judgement when
determining the price that a customer would be willing to pay for the goods
and services.
Recognition of development services revenue over time
The Group recognises revenue over time for contracts where the Group transfers
control of the product over time and where the contract meets one of the three
criteria listed in IFRS 15 Revenues from Contracts with Customers. Revenue
is recognised based on time elapsed from execution of the contract or
commencement of the development work to the expected release date of the
product. Determining the release date for a product requires a significant
amount of judgement and is contingent on internal and external factors.
Estimates
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised where the revision affects only that period, or in the
period of the revision and future periods where the revision affects both
current and future periods. Estimates include:
Measurement, useful lives and impairment of intangible assets
Purchased intellectual property is considered to have a useful economic life
of seven years. Other intangible assets (except for goodwill) are also
considered to have a finite useful economic life. They are amortised over
their estimated useful lives that are reviewed at each reporting date. In the
event of impairment, an estimate of the asset's recoverable amount is made.
The value of the intangible assets is tested whenever there are indications of
impairment and reviewed at each reporting date or more frequently should this
be justified by internal or external events.
After assessing the carrying value of each intangible asset which is not yet
ready for use at the reporting date, which is shown net of any impairment
charge posted, management estimate that the forecast cash generation is in
excess of the intangible asset held. The forecast cash generation is taken
from the Group's forecasts which cover the trading expectations for a minimum
of two years after the reporting date. The sensitivity of the assumptions used
within these forecasts is considered in note 15. The forecast revenue and cash
generation from each intangible asset are separately identifiable within the
Group forecasts. The forecast cash generation represents significant
assumptions regarding its commercial performance, should the assumptions prove
to be significantly incorrect there would be a risk of material adjustment in
the financial year following the release of that product.
4 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.
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
in understanding our results, the split of revenue from these two categories
are shown below.
Game and merchandise royalties Year ended Year ended 31 December 2023
31 December 2024
$'000 $'000
Owned IP 23,107 23,765
Third-party IP 6,756 12,816
29,861 36,581
Three customers were responsible for approximately 68% of the Group's revenues
(2023: three - 60%).
The Group has five (2023: nine) right-of-use assets located overseas with a
carrying value of $374,000 (2023: $374,000). The Group also has tangible
assets located overseas with a carrying value of $291,552 (2023: $540,757).
All other non-current assets are located in the US.
5 REVENUE Year Ended Year ended 31 December 2023
31 December 2024
An analysis of the Group's revenue is as follows: $'000 $'000
Revenue analysed by class of business
Game and merchandise royalties 29,861 36,581
Development services 3,456 6,919
Events 1,382 1,163
34,699 44,663
Revenue analysed by timing of revenue
Transferred at a point in time 31,243 37,744
Transferred over time 3,456 6,919
34,699 44,663
For royalties receivable, the Group recognises royalty income in the period in
which it is earned. The Group does not have visibility of the geographical
locations of end consumers due to the data being held by third party
distribution platforms and therefore cannot present an analysis of revenue by
geographical location. For royalties payable to the game developers, the Group
recognizes royalty expense in the period when earned and presented in the cost
of sales. Royalty expense was $5,822,958 and $12,072,067 for the years ended
December 31, 2024 and December 31, 2023, respectively.
6 NON-RECURRING COSTS Year ended Year ended
31 December 2024 31 December 2023
$'000 $'000
Legal settlement (note 27) - 3,500
- 3,500
7 OTHER INCOME & EXPENSES Year ended Year ended
31 December 2024 31 December 2023
$'000 $'000
Gain on disposal of subsidiary - 708
Gain on disposal on non-current assets 1,069 -
Other expenses (45) (89)
1,024 619
Other income and expenses are included in determining operating loss in the
Statement of Comprehensive Income.
8 EMPLOYEES Year ended Year ended
31 December 31 December
2024 2023
An analysis of the Group's staff costs is as follows: $'000 $'000
Employee benefit expense 7,658 10,454
Equity-settled share-based payments 147 414
Total employee benefit expense 7,805 10,868
An analysis of key management personnel remuneration is set out in note 26.
9 OPERATING LOSS Year ended Year ended
31 December 31 December
2024 2023
The operating loss is arrived at after charging: $'000 $'000
Net foreign exchange (gain)/loss (12) 78
Amortisation of intangible assets 13,893 15,135
Impairment of intangible assets 13,663 48,055
Depreciation of property, plant and equipment - owned 272 420
Depreciation of property, plant and equipment - right-of-use assets 250 365
10 FINANCE COSTS Year ended Year ended
31 December 31 December
2024 2023
$'000 $'000
Lease finance costs 27 40
Foreign exchange losses - 88
27 128
11 FINANCE INCOME Year ended Year ended
31 December 2024 31 December 2023
$'000 $'000
Bank interest income 144 391
12 INCOME TAX Year ended Year ended
31 December 2024 31 December 2023
$'000 $'000
Current tax:
Current tax expense 567 763
Deferred tax:
Origination and reversal of timing differences (234) (1,412)
Total income tax expense/(credit) 333 (649)
Factors affecting tax charge for the year
The tax assessed on the loss on the ordinary activity for the year differs
from the main rate of corporation tax in the US of 21%. The differences are
reconciled below:
Year ended Year ended
31 December 2024 31 December 2023
$'000 $'000
Loss before tax (20,261) (63,494)
Tax at the US corporation tax rate of 21% (4,276) (13,334)
Adjusted for the effects of:
Expenses not deductible for tax purposes:
- Relating to share-based payments 2 6
- Other non-taxable expenses - (119)
Adjustments in respect of prior periods 1,123 -
Unrecognised deferred tax assets 3,217 12,300
Uncertain tax positions 56 198
Impact of foreign operations 276 318
State income taxes (78) (59)
Other 13 41
Total income tax expense/(credit) 333 (649)
13 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 Group 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 and warrants to the extent that they are deemed to
be issued for no consideration in accordance with IAS 33.
Year ended Year ended
31 December 2024 31 December 2023
$'000 $'000
Loss attributable to the owners of the Group (20,522) (62,537)
Weighted average number of shares 383,484,707 203,877,356
Basic loss per share ($) (0.054) (0.307)
Loss attributable to the owners of the Group (20,522) (62,537)
Weighted average number of shares 383,484,707 203,877,356
Dilutive effect of share options - -
Dilutive effect of warrants - -
Dilutive effect of restricted stock awards - -
Weighted average number of diluted shares 383,484,707 203,877,356
Diluted loss per share ($) (0.054) (0.307)
The 2,078,084 options outstanding (2023: 2,963,027), 1,511,449 warrants
outstanding (2023: 1,511,449) and 1,400,000 restricted stock awards
outstanding (2023: nil) are not included in the calculation of the diluted
loss per share because they are antidilutive for the years ended 31 December
2024 and 31 December 2023. These options could potentially dilute the basic
earnings per share in the future.
Pursuant to IAS 33 Earnings per Share, options whose exercise price is higher
than the value of the Group's security were not taken into account in
determining the effect of dilutive instruments. The calculation of diluted
earnings per share does not assume conversion, exercise, or other issue of
potential ordinary shares that would have an antidilutive effect on earnings
per share.
14 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, acquisitions costs, and other significant non-recurring
expenses. 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.
Year ended Year ended
31 December 2024 31 December 2023
$'000 $'000
Loss for the year (20,594) (62,845)
Income tax expense/(credit) 333 (649)
Finance costs 27 128
Finance income (144) (391)
Share-based payment expenses 147 414
Amortisation of purchased intellectual property, brands and customer 4,482
relationships (note 15)
3,389
Depreciation of property, plant and equipment (note 16) 522 785
Impairment of intangible assets (note 15) 13,663 48,055
Legal settlement (note 6) - 3,500
Acquisition costs - 27
Other income (note 7) (1,024) (619)
Adjusted EBITDA (3,681) (7,113)
15 INTANGIBLE ASSETS Purchased intellectual property Software development costs
Goodwill Brands Customer relationships Total
$'000 $'000 $'000 $'000 $'000 $'000
Cost:
As at 1 January 2023 13,202 1,815 4,261 29,966 65,697 114,941
Additions - internally generated - - - - 31,899 31,899
Additions - separately acquired 2,418 - - - - 2,418
Disposals (2,418) - - - (413) (2,831)
As at 31 December 2023 13,202 1,815 4,261 29,966 97,183 146,427
Additions - internally generated - - - - 19,315 19,315
Disposals - - - (2,000) (1,159) (3,159)
As at 31 December 2024 13,202 1,815 4,261 27,966 115,339 162,583
Amortisation and impairment:
As at 1 January 2023 9,456 806 660 6,900 16,735 34,557
Amortisation charge for the year - 73 353 4,056 10,652 15,134
Impairment charge 6,164 - 2,773 2,912 36,206 48,055
Eliminated on disposal (2,418) - - - (413) (2,831)
As at 31 December 2023 13,202 879 3,786 13,868 63,180 94,915
Amortisation charge for the year - 73 97 3,219 10,504 13,893
Impairment charge for the year - - - - 13,663 13,663
Eliminated on disposal - - - (510) (1,128) (1,638)
As at 31 December 2024 13,202 952 3,883 16,577 86,219 120,833
Carrying amount:
As at 31 December 2024 - 863 378 11,389 29,120 41,750
As at 31 December 2023 - 936 475 16,098 34,003 51,512
The following intangible assets are individually material to the financial
statements:
Description
Carrying amount
Remaining amortisation period
Hello Neighbor IP $1.3m
1.7 years
Bad Pixel IP
$3.5m
3.7 years
The recoverable amount of the Group's goodwill has been determined by a
value-in-use calculation using a discounted cash flow model, based on an
annual projection period approved by management and extrapolated for a further
four years, together with a terminal value. Red Cerberus and Versus Evil are
distinct business operations classified as cash generating units (CGUs) due to
being the smallest identifiable group of assets that generate cash inflows
which are largely independent of the cash inflows from other assets. Where the
value in use of the CGU's goodwill was not sufficient to support the carrying
value, the assets were impaired.
15 INTANGIBLE ASSETS (CONTINUED)
Purchased intellectual property relates to the intellectual property rights to
certain games and franchises. The intellectual property is considered to have
a useful life of seven years and is amortised on a straight-line basis over
the useful life. The intellectual property is assessed for indicators of
impairment annually. A formal impairment review is only undertaken if there
are indicators of impairment. Any impairment is recognised immediately within
the Statement of Comprehensive Income. Amortisation of purchased intellectual
property is recognised within general administrative expense in the
Consolidated Income Statement.
Amortisation of other intangible assets, consisting of Brand and Customer
Relationships, is recognised within general administrative expense in the
Consolidated Income Statement.
Software development costs relate to costs incurred for the localisation and
porting of games, advances paid to external developers under development
agreements and the direct payroll and overhead costs of the internal
development teams. Amortisation of software development costs commences upon
release of the game and is recognised within cost of sales in the Consolidated
Income Statement. Included within software development costs is $14,906,000
(2023: $5,701,000) relating to intangible assets under development for which
amortisation has not yet commenced. Amortisation of these costs will commence
upon publication of the game or content, which varies by item but are expected
to be released within one to two years after the date of this report.
If a game title misses its forecast, the Group considers it to be an
indication of impairment and performs impairment testing accordingly. During
2024, the Group recorded impairment losses of $13,663,000 (2023: $36,206,000)
against the carrying value of software development costs. $13,663,000 (2023:
$26,409,000) resulted from a value-in-use calculation being performed for each
game title using a pre-tax discount rate of 7% and forecast net revenues. The
value in use and therefore the recoverable amount for a number of games was
lower than the existing carrying amounts. The recoverable amounts for these
game titles are not considered material. The sensitivities are as follows for
the impairment:
· A 1% increase/decrease in the pre-tax discount rate would
increase/decrease the impairment charge by $138,000/($142,000), respectively.
· A 1% increase/decrease in forecast future cash flows would
decrease/increase the impairment charge by ($84,000)/$84,000, respectively.
In the prior year further impairment of $9,797,000 related to cancelled games
mainly as a result of studio closures. The software development costs
associated with these games were written down to a carrying value of $nil.
16 PROPERTY, PLANT AND EQUIPMENT Right-of-use assets Fixtures, fittings and equipment
(note 21)
Total
$'000 $'000 $'000
Cost:
As at 1 January 2023 662 1,419 2,081
Additions 399 219 618
Disposals (83) (52) (135)
Remeasurement 21 - 21
Foreign exchange 20 26 46
As at 31 December 2023 1,019 1,612 2,631
Additions 303 22 325
Disposals - (256) (256)
Foreign exchange (56) (194) (250)
As at 31 December 2024 1,266 1,184 2,450
Accumulated depreciation and impairment:
As at 1 January 2023 320 625 945
Charge for the year 365 420 785
Eliminated on disposals (44) (12) (56)
Foreign exchange 4 (82) (78)
As at 31 December 2023 645 951 1,596
Charge for the year 250 272 522
Eliminated on disposals - (248) (248)
Foreign exchange (3) (78) (81)
As at 31 December 2024 892 897 1,789
Carrying amount:
As at 31 December 2024 374 287 661
As at 31 December 2023 374 661 1,035
Depreciation and impairment of property, plant and equipment is recognised
within general administrative expenses in the Statement of Comprehensive
Income.
17 SUBSIDIARIES
The principal subsidiaries of the Company, all of which have been included in
the consolidated financial information, are as follows:
Name of subsidiary Principal activity Country of incorporation and registered office Proportion of ownership interest and voting rights held
tinyBuild LLC 1 1100 Bellevue Way NE, STE 8A #317, Bellevue, WA 98004, USA 100%
tinyBuild BV 1 Wandelpad 30, 1211 GN Gemeente Hilversum, Netherlands 100%
tinyBuild Studios, SIA 1 Lacplesa 52-77, 1011 Riga, Latvia 100%
Pine Events Inc. 2 1100 Bellevue Way NE, STE 8A #317, Bellevue, WA 98004, USA 51%
DevGAMM LLC 2 1100 Bellevue Way NE, STE 8A #317, Bellevue, WA 98004, USA 49%
Hologryph LLC 1 1100 Bellevue Way NE, STE 8A #317, Bellevue, WA 98004, USA 100%
Hungry Couch LLC 1 1100 Bellevue Way NE, STE 8A #317, Bellevue, WA 98004, USA 100%
Animal LLC 1 1100 Bellevue Way NE, STE 8A #317, Bellevue, WA 98004, USA 100%
Bad Pixel LLC 1 1100 Bellevue Way NE, STE 8A #317, Bellevue, WA 98004, USA 100%
DogHelm LLC 1 1100 Bellevue Way NE, STE 8A #317, Bellevue, WA 98004, USA 100%
Versus Evil LLC 1 4801 W Lovers LN, Dallas, TX 75209, USA 100%
Red Cerberus LLC 1 4801 W Lovers LN, Dallas, TX 75209, USA 100%
Red Cerberus Brasil LTDA (formerly Steven Joseph Escalante - Serviços de 1 Avenida das Nações Unidas, 13.797, 100%
Tecnologia de Informação, Eireli LLC)
Bloco II, 12º andar, Brooklin Paulista, São Paulo, SP, CEP 04578-000, Brazil
tinyBuild d.o.o. 1 Bulevar Mihajla Pupina, 115 Beograd (Novi Beograd), Grad Beograd, PAK 190624, 0%
Serbia
Konfa Games LLC 1100 Bellevue Way NE Ste 8A PMB 317 100%
Bellevue WA 98004
Scythe Studios LLC 1239 120th Ave NE, STE A, Bellevue, WA 98005, USA 100%
Bunny Crimes LLC 1239 120th Ave NE, STE A, Bellevue, WA 98005, USA 100%
Fantastic Signals LLC 1239 120th Ave NE, STE A, Bellevue, WA 98005, USA 100%
17 SUBSIDIARIES (CONTINUED)
Principal activity key
1 Video game development
2 Gaming events
No subsidiary undertakings have been excluded from the consolidation.
The wife of the Company's CEO is a member and manager of DevGAMM LLC and
pursuant to an agreement tied to her continued service to DevGAMM LLC, her
membership interest in DevGAMM LLC is 51% at the year ended 31 December 2024
(2023: 51%). The Group continues to consolidate the results of DevGAMM LLC on
the basis of control. tinyBuild d.o.o. is also included within the
consolidation as tinyBuild holds control.
DevGAMM LLC contributed $1,331,000 to the Group's revenue in the year ended 31
December 2024 (2023: $1,093,000). Other than DevGAMM LLC's revenue, the
revenue, net assets and cash flows of all non-controlling interests are not
considered to be material to the Group.
18 TRADE AND OTHER RECEIVABLES As at 31 December As at 31 December
2024 2023
$'000 $'000
Non-current assets
Other receivables 408 385
Current assets
Platform receivables 6,818 11,934
Prepaid expenses and other current assets 1,133 1,732
7,951 13,666
Total trade and other receivables 8,359 14,051
All of the platform receivables are non-interest bearing, and receivable under
normal commercial terms. The carrying value of trade and other receivables
approximates their fair value. In the current year, the Group recognized a
material write-down of certain trade receivables in line with its assessment
of credit risk and expected credit losses. After this write-down, management
determined that any further loss allowance for expected credit losses on
remaining financial assets measured at amortized cost is not material to the
financial statements..
19 TRADE AND OTHER PAYABLES As at 31 December 2024 As at 31 December 2023
$'000 $'000
Trade payables 924 5,658
Accrued expenses and other current liabilities 13,107 14,569
Deferred revenue 410 -
14,441 20,227
The Group considers that the carrying value of trade and other payables
approximates their fair value.
20 LEASES
The maturity of the gross contractual undiscounted cash flows due on the
Group's lease liabilities is set out below based on the period between the
reporting date and the contractual maturity date.
As at 31 December As at 31 December
2024 2023
$'000 $'000
Maturity analysis:
Within 1 year 200 260
Between 1 and 5 years 235 160
435 420
Less unearned interest (53) (42)
Lease liability 382 378
Analysed as:
Non-current 218 146
Current 164 232
382 378
As disclosed in more detail in note 16, the carrying value of right-of-use
assets in respect of the above lease liabilities is $374,000 (2023: $374,000).
The Group's lease arrangements are in relation to five property leases (2023:
nine property leases). The leases have termination dates ranging from 2025 to
2027 and have extension options ranging from three to five years.
The rates of interest implicit in the Group's lease arrangements are not
readily determinable and management have determined that the incremental
borrowing rate to be applied in calculating the lease liability is 12%. The
fair value of the Group's lease obligations is approximately equal to their
carrying amount.
20 LEASES (CONTINUED)
As at 31 December As at 31 December
2024 2023
Effects of leases on financial performance: $'000 $'000
Depreciation charge on right-of-use assets included within 'general
administrative expenses'
250 365
Interest expense on lease liabilities included within 'finance costs' 26 40
276 405
As at 31 December As at 31 December
2024 2023
Effects of leases on cash flows: $'000 $'000
Total cash outflow for leases (326) (334)
21 FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
The Group's financial instruments at the reporting dates mainly comprise cash
and various items arising directly from its operations, such as trade and
other receivables and trade and other payables.
(a) Risk management policies
The Group's Directors are responsible for overviewing capital resources and
maintaining efficient capital flow, together with managing the Group's market,
liquidity, foreign exchange, interest and credit risk exposures.
(b) Financial assets and liabilities
Financial assets and liabilities analysed by the categories were as follows:
As at 31 December As at 31 December
2024 2023
Financial assets at amortised cost: $'000 $'000
Trade and other receivables 7,226 12,325
Cash and cash equivalents 3,088 2,500
10,314 14,825
Financial liabilities at amortised cost:
Trade and other payables 14,441 20,227
Lease liabilities 382 378
14,823 20,605
The carrying value of all financial instruments is not materially different
from their fair value. Cash and cash equivalents attract floating interest
rates. Accordingly, their carrying amounts are considered to approximate to
fair value.
Fair values of financial liabilities
The Group measures financial instruments at fair value. They are classified
into the following hierarchy:
- Level 1 Quoted prices in active markets.
- Level 2 Level 1 quoted prices are not available
but fair value is based on observable market data.
- Level 3 Inputs are not based on observable market
data.
(c) Credit risk
Credit risk is the risk that the counterparty will default on its contractual
obligations resulting in financial loss to the Group. Maximum credit risk at
the reporting dates was as follows:
As at 31 December As at 31 December
2024 2023
$'000 $'000
Current trade and other receivables 6,818 11,940
Non-current trade and other receivables 408 385
Cash and cash equivalents 3,088 2,500
10,314 14,825
Before accepting a new customer, the Group assesses both the potential
customer's credit quality and risk. Customer contracts are drafted to reduce
any potential credit risk to the Group. Where appropriate the customer's
recent financial statements are reviewed.
Trade receivables are regularly reviewed for impairment loss. The Group has
assessed the credit risk of its financial assets measured at amortised cost
and has determined that the loss allowance for expected credit losses of those
assets is immaterial to the financial statements.
The Group's exposure to credit losses has historically been low given the size
and sophistication of the customers and there being no historical write offs.
Accounts receivable from the Group's four largest customers at 31 December
2024 totalled approximately $4.6m (2023: three customers - $4.9m).
(d) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting
obligations associated with financial liabilities. Management monitors the
level of cash and cash equivalents on a continuous basis to ensure sufficient
liquidity to be able to meet the Group's obligations as they fall due.
Contractual cash flows relating to the Group's financial liabilities are as
follows:
As at 31 December As at 31 December
2024 2023
$'000 $'000
Within 1 year:
Trade payables 924 5,658
Accruals and other payables 13,517 14,569
Lease liabilities 164 232
14,605 20,459
Between 1-2 years: Lease liabilities 163 80
Between 2-3 years: Lease liabilities 55 66
Total 14,823 20,605
(e) Capital management
The Group's main objective when managing capital is to protect returns to
shareholders by ensuring the Group will continue to operate for the
foreseeable future. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders or issue new shares.
The Group considers its capital to include cash, share capital and retained
earnings.
As at 31 December As at 31 December
2024 2023
$'000 $'000
Net cash 3,088 2,500
Total equity 38,881 48,105
41,969 50,605
22 DEFERRED TAX
The deferred tax balances recognised in the consolidated statement of
financial position are as follows:
As at 31 December As at 31 December
2024 2023
$'000 $'000
Deferred tax liability:
Short-term temporary differences 154 388
Net deferred tax liability 154 388
Year Year
ended 31 December ended 31 December
The net movement is explained as follows: 2024 2023
$'000 $'000
Opening deferred tax liability 388 1,800
Credit to profit or loss (234) (1,412)
Closing deferred tax liability 154 388
23 SHARE-BASED PAYMENTS
The Group operates two share-based plans, the Stock Restriction Agreement and
an Equity Incentive Plan, which are detailed as follows:
The Stock Restriction Agreement is a plan that provides for grants of
Restricted Stock Awards (RSA) for the founders of the Group and acquired
employees. The awarded shares are made in the Group's ordinary share capital.
The fair value of the RSAs is estimated by using the Black-Scholes valuation
model on the date of grant, based on certain assumptions, and is charged on a
straight-line basis over the required service period, normally two to three
years. Forfeitures are recorded as they are incurred. The 2024 grants vest in
instalments over a three-year period. Each instalment has been treated as a
separate RSA grant because each instalment has a different vesting period.
This plan is equity-settled. A reconciliation of RSAs is as follows:
Year Year
ended 31 December ended 31 December
2024 2023
Opening RSA outstanding - 477,327
RSA granted 1,400,000 29,251
RSA vested - (267,914)
RSA forfeited - (238,664)
Closing RSA outstanding 1,400,000 -
Weighted average remaining contractual life in years 2.67 -
The Group has an Equity Incentive Plan that provides for the issuance of
non-qualified stock options to officers and other employees and contractors
that have a contracted term of 10 years and generally vest over four years.
Forfeitures are recorded as they are incurred.
tinyBuild established an Employee Benefit Trust (EBT) to facilitate off-market
and on-market stock option exercise by employees who were awarded Equity
Incentive Plan stock options. The EBT is an independent Trust enabling option
exercise and share settlement off-market without impacting market liquidity.
The shares held by the EBT are disclosed as Treasury Shares within the Group's
statement of changes in equity.
The stock options are granted on shares issued by the Company. A
reconciliation of share option movements is shown below:
Number of options outstanding Weighted average exercise price ($) Number of options exercisable Weighted average exercise price ($) Weighted average remaining contractual life (years)
At 1 January 2023 3,547,217 1.02 1,812,394 0.94 7.58
Forfeited during the period (584,190) 0.74
At 31 December 2023 2,963,027 1.12 2,099,155 1.19 6.59
Forfeited during the period (884,943) 0.62
At 31 December 2024 2,078,084 1.28 1,739,533 1.46 5.51
During the period covered by the financial statements, a total of 884,943
options with a weighted average exercise price of $0.62 were forfeited. No
options were granted or exercised during the current or previous year.
23 SHARE CAPITAL As at 31 December As at 31 December
2024 2023
No. No.
Class of share
Ordinary shares of $0.001 each 397,219,319 203,878,238
As at 31 As at 31
December 2024 December 2023
$'000 $'000
Class of share
Ordinary shares of $0.001 each 397 204
In January 2024, a fundraise was approved in a special meeting on 26 January
2024. As part of this fundraise, 193,341,081 Ordinary shares of $0.001 each
were issued at 5 pence per share raising gross proceeds of approximately $12.3
million in aggregate. Net proceeds were approximately $11.4 million.
The Company is authorised to issue up to 800,000,000 shares.
There are 1,400,000 shares reserved for issue in respect of restricted stock
awards (note 23) and a further 3,630,429 shares reserved for issue in respect
of potential earnouts for past acquihires.
Ordinary shares
Each ordinary share entitles the holder to one vote at general meetings of the
company, to participate in dividends and to share in the proceeds of winding
up the company.
Treasury shares
Treasury shares are shares in tinyBuild Inc that are held by the tinyBuild
Employee Benefit Trust for the purpose of issuing shares under the equity
incentive plan (note 23). Shares issued to employees are recognised on a
first-in-first-out basis.
Number of shares $'000
At 1 January 2023 70,000 -
Acquisition of shares by the Trust 2,895,951 1,031
At 31 December 2023 2,965,951 1,031
Own shares acquired 971,636 69
At 31 December 2024 3,937,587 1,100
25 CASH GENERATED FROM OPERATIONS Year ended Year ended
31 December 2024 31 December 2023
$'000 $'000
Loss after tax (20,594) (62,845)
Adjustments for:
Share-based payments 147 414
Amortisation of intangible assets 13,893 15,134
Impairment of intangible assets 13,663 48,055
Gain on disposal of operations - (708)
Write-off of bad debt 1,814 87
Depreciation of property, plant and equipment 522 785
Loss on disposal of property, plant and equipment 125 80
Gain on disposal of intangible asset (1,024) -
Finance income (144) (391)
Finance costs 27 128
Income tax expense/(credit) 333 (649)
Movements in working capital:
Decrease in receivables 3,877 12,398
Decrease in payables (6,133) (399)
Income tax paid (333) (1,472)
Cash generated from operations 6,173 10,617
Changes in liabilities arising from financing activities
The table below details changes in the Group's liabilities arising from
financing activities, including both cash and non-cash changes. Liabilities
arising from financing activities are those for which cash flows were, or
future cash flows will be, classified in the Group's consolidated cash flow
statement as cash flows from financing activities.
As at 1 January 2024 Cash flows Non-cash movements As at 31 December 2024
$'000 $'000 $'000 $'000
Cash and cash equivalents 2,500 588 - 3,088
Lease liabilities (378) 299 (303) (382)
Net debt 2,122 887 (303) 2,706
As at 1 January 2023 Cash flows Non-cash movements As at 31 December 2023
$'000 $'000 $'000 $'000
Cash and cash equivalents 26,496 (23,996) - 2,500
Lease liabilities (367) 476 (488) (378)
Net debt 26,130 (23,520) (488) 2,122
26 RELATED PARTY TRANSACTIONS
Interests in subsidiaries are set out in note 17.
An analysis of key management personnel remuneration is included in the
Remuneration Committee Report on an individual basis, and is summarised below:
Key management personnel remuneration Year ended Year ended
31 December 2024 31 December 2023
$'000 $'000
Aggregate emoluments 1,197 2,511
Equity-settled share-based payments 9 46
1,206 2,557
Transactions with other related parties
During the year, the Company paid $2m in final settlement of the global
settlement agreement entered into with Steve Escalante, Lance James and Stall
Proof, LLC in 2023.
As part of the capital raise in January 2024 (note 24), a $10m investment was
received from the CEO, Alex Nichiporchik.
There were no other related party transactions during the period which require
disclosure.
26 ULTIMATE CONTROLLING PARTY
The Company's ultimate controlling party is Alex Nichiporchik who owned 57.9%
(2023: 37.8%) of outstanding shares on a fully diluted basis as of 31 December
2024.
27 POST REPORTING DATE EVENTS
On 3 April tinyBuild announced the disposal of Red Cerberus for a total
consideration of $1.5m in cash, subject to standard net working capital
adjustments. Red Cerberus, based in Sao Paolo Brazil, was acquired by
tinyBuild in November 2021 together with Versus Evil. Red Cerberus had a book
value of $0.8m as 31 December 2024, and it generated $4.3m in revenues
and a net loss of $0.1m in the 2024 financial year (audited). The disposal
will be marginally accretive to net profit in 2025 and the proceeds will be
used for general working capital purposes.
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. END FR PKQBKKBKBNQDRecent news on tinyBuild
See all newsREG - tinyBuild, Inc. - Preliminary Audited Results
AnnouncementREG - tinyBuild, Inc. - Notice of Results & Investor Presentation
AnnouncementREG - tinyBuild, Inc. - Sale of Red Cerberus
AnnouncementREG - tinyBuild, Inc. - Pre-Close Trading Update
AnnouncementREG - AIM - AIM Notice - 31/01/2025
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