Victoria, British Columbia--(Newsfile Corp. - April 9, 2025) - Tiny Ltd. (TSXV: TINY) ("Tiny" or the "Company"), a Canadian technology holding company that acquires wonderful businesses for the long term, today announced that it has closed its previously announced bought deal offering of 17,400,000 subscription receipts ("Subscription Receipts"), at a price of $1.15 per Subscription Receipt, for gross aggregate proceeds of $20,010,000 (the "Offering").
The net proceeds from the Offering will be used to fund the purchase price of the previously announced acquisition of a 66.0% interest in Serato Audio Research Limited ("Serato"), a global DJ software company based in Auckland, New Zealand (the "Acquisition"). The underwriting syndicate was co-led by Canaccord Genuity Corp. and Roth Canada, Inc. (the "Co-Lead Underwriters") and included Scotia Capital Inc., Cormark Securities Inc. and Ventum Financial Corp. (collectively with the Co-Lead Underwriters, the "Underwriters"). The net proceeds from the sale of the Subscription Receipts will be held by Computershare Trust Company of Canada, as subscription receipt agent, pending the fulfilment or waiver of all outstanding conditions precedent to the closing of the Acquisition (other than the payment of the consideration for the Acquisition and such other conditions precedent that, by their nature, are to be satisfied at the time of closing of the Acquisition). There can be no assurance that the applicable closing conditions will be met or that the Acquisition will be consummated.
In connection with the Offering, the Company has granted the Underwriters an option to purchase up to an additional 15% of the number of Subscription Receipts sold in the Offering on the same terms and conditions as the Offering, exercisable by the Co-Lead Underwriters at any time, in whole or in part, up to the earlier of: (i) thirty days following the closing of the Offering and (ii) the termination of the agreement related to the Acquisition (the "Over-Allotment Option"). If the Underwriters exercise the Over-Allotment Option in full, an additional 2,610,000 Subscription Receipts will be issued, listed, and admitted to trading. If the closing of the Acquisition occurs on or prior to the closing of the Over-Allotment Option, the Company will deliver Class A common shares ("Common Shares") and warrants, instead of Subscription Receipts, to investors on the closing of the Over-Allotment Option.
Upon the satisfaction or waiver of each of the conditions precedent to the closing of the Acquisition and the conditions precedent to the previously announced concurrent private placement (other than the payment of the consideration for the Acquisition and such other conditions precedent that, by their nature, are to be satisfied at the time of closing of the Acquisition or the concurrent private placement), one Common Share and one-half of one Common Share purchase warrant will be automatically issued on conversion of each Subscription Receipt (subject to customary anti-dilution protection), without payment of additional consideration or further action by the holder. Each warrant will entitle the holder thereof to purchase one Common Share at an exercise price of $1.45 per Common Share until 1:30 p.m. (Vancouver time) on April 9, 2027. The Company may accelerate the expiry date of the warrants if, at any time after the date there is four months after the closing of the Offering, the volume weighted average trading price of the Common Shares is equal to or greater than $2.90 for any 20 consecutive trading days.
If the Acquisition is not completed as described above by July 8, 2025 or if the Acquisition is terminated at an earlier time, the gross proceeds of the Offering and pro rata entitlement to interest earned or deemed to be earned on the gross proceeds of the Offering, net of any applicable taxes, will be paid to holders of the Subscription Receipts, and the Subscription Receipts will be cancelled. The Acquisition is expected to close in the second quarter of 2025, subject to the satisfaction of customary closing conditions and regulatory approvals.
The Subscription Receipts issued pursuant to the Offering will trade on the TSX Venture Exchange under the ticker symbol "TINY.R" beginning on April 14, 2025 under the CUSIP 88770A118.
In connection with the Offering and further to Tiny's press release dated March 31, 2025, Tiny expects to enter into subscription agreements with certain investors pursuant to which Tiny will agree to sell up to $34.6 million aggregate principal amount of convertible debentures (the "Convertible Debentures") on a "private placement" basis (the "Concurrent Private Placement"), with an original issue discount of 7.5%, for aggregate gross proceeds of up to $32 million. Each Convertible Debenture will have a face value (i.e. principal amount) of $1,000 and will be offered and sold at a price of $925 per Convertible Debenture. The principal amount of the Convertible Debentures will be convertible into Common Shares at an initial conversion price equal to $1.50 (the "Conversion Price"). The Conversion Price may be adjusted in certain circumstances, subject to a minimum conversion price of $1.15 and other applicable policies of the TSX Venture Exchange. The net proceeds of the Concurrent Private Placement will be used to finance a portion of the cash component of the purchase price for the Acquisition.
In connection with the Offering, the Company will pay the Underwriters a cash commission equal to 5.5% of the gross proceeds from the Offering. 50% of the cash commission, being approximately $550,000, was paid in connection with the closing of the Offering with the remaining 50% payable upon the satisfaction of the escrow release conditions.
The Subscription Receipts are governed by the terms of a Subscription Receipt Agreement dated April 9, 2025 entered into by the Company, the Co-Lead Underwriters and Computershare Trust Company of Canada, as subscription receipt agent, and were issued pursuant to the Company's prospectus supplement dated April 2, 2025 to its short form base shelf prospectus dated September 29, 2023.
In addition, certain directors and officers of the Company subscribed for 478,400 Subscription Receipts pursuant to the Offering.
The involvement of the directors and officers of the Company in the Offering are "related party transactions" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and the Company is relying on the exemptions in sections 5.5(a) and 5.7(a) [Fair Market Value Not More Than 25% of Market Capitalization] of MI 61-101 in order to be exempt from the formal valuation and minority shareholder approval requirements therein, as the aggregate fair market value of such transactions does not exceed 25% of the Company's current market capitalization, as determined in accordance with MI 61-101.
The Subscription Receipts and the underlying warrants and Common Shares (including such Common Shares underlying the warrants) have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the "1933 Act") and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any Subscription Receipts or the underlying Warrants and Common Shares (including such Common Shares underlying the warrants) in the United States or to, or for the account or benefit of, U.S. persons.
About Tiny
Tiny is a Canadian holding company that acquires wonderful businesses using a founder-friendly approach. It focuses on companies with unique competitive advantages, recurring or predictable revenue streams, and strong free cash flow generation. Tiny typically holds businesses for the long-term, with a parent-level focus on capital allocation, collaborative management and operations, and incentive structures within the operating companies to drive results for Tiny and its shareholders.
Tiny operates across three principal reporting segments: Digital Services, delivering design and development solutions that help global companies build exceptional products; Software and Apps, offering industry-leading applications and themes that empower merchants in the Shopify ecosystem; and Creative Platform, featuring Dribbble, the premier social network for designers, alongside Creative Market, a marketplace for high-quality digital assets including fonts, graphics, and templates.
For more about Tiny, please visit www.tiny.com or refer to the public disclosure documents available under Tiny's profile on SEDAR+ at www.sedarplus.ca.
Cautionary Note Regarding Forward-Looking Information
Certain statements in this press release may constitute forward-looking statements that reflect management's expectations regarding the Offering, the Concurrent Private Placement and the proposed Acquisition as of the date of this press release. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "forecast", "expect", "estimate", "predict", "intend", "would", "could", "if", "may" and similar expressions.
This press release includes, among others, forward-looking statements regarding the Company's expectations regarding: the Concurrent Private Placement; the anticipated timing for closing the Acquisition; timing for the satisfaction of closing conditions under the Acquisition Agreement; and the expected date of the closing of the Acquisition. These statements reflect current expectations of management regarding future events and operating performance, and speak only as of the date of this press release. In addition, forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
By their nature, forward-looking statements require management to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that management's assumptions may not be accurate and that actual results, performance or achievements may differ significantly from such predictions, forecasts, conclusions or projections expressed or implied by such forward-looking statements. We caution readers not to place undue reliance on the forward-looking statements in this press release as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, outlooks, expectations, goals, estimates or intentions expressed in the forward-looking statements.
These factors include, but are not limited to: general global economic, market and business conditions; governmental and regulatory requirements and actions by governmental authorities; relationships with employees, customers, business partners and competitors; and diversion of management time on the Acquisition. There are also risks that are inherent in the nature of the Acquisition, including failure to satisfy the conditions to the closing of the Acquisition and failure to obtain any required regulatory and other approvals (or to do so in a timely manner). The anticipated timeline for closing of the Acquisition may change for a number of reasons, including the inability to secure necessary regulatory or other approvals in the time assumed or the need for additional time to satisfy the conditions to the closing of the Acquisition. As a result of the foregoing, readers should not place undue reliance on the forward-looking information contained in this news release concerning the timing of the Acquisition. For a more detailed discussion of certain of these risk factors, see the list of risk factors in the Company's Annual Information Form dated April 30, 2024 which is available on SEDAR+ at www.sedarplus.com under the Company's profile. Additional information about risks and uncertainties is contained in the other filings of the Company with securities regulators, including the Company's prospectus supplement dated April 2, 2025.
The Company cautions that the foregoing list is not exhaustive of all possible factors, as other factors could adversely affect our results. When relying on our forward-looking statements to make decisions with respect to the Company and its securities, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company does not intend, and disclaims any obligation, to update any forward-looking statements, whether written or oral, or whether as a result of new information or otherwise, except as may be required by law.
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