Toronto, Ontario--(Newsfile Corp. - May 30, 2022) - Kuuhubb Inc. (TSXV: KUU) ("Kuuhubb" or the "Company"), a mobile game development and publishing company focused on providing the female audience with creative interactive gaming experiences, has announced it has released its unaudited consolidated financial results for the three- and nine- month periods ended March 31, 2022. The results have been filed with the Canadian Securities Administrators and are now available on the Company's issuer profile at www.sedar.com. The Company's financial year end is June 30.
Highlights:
- Revenues of US$983,589 and US$2,949,388 recognized for the three and nine months ended March 31, 2022.
- The Kuu Hubb Oy restructuring was certified by the court on May 12, 2022.
Financial Results for the Three and Nine Months Ended March 31, 2022:
Three Months Ended March 31, 2022:
- The Company generated a total of US$983,589 revenues for the three months ended March 31, 2022.
- The Company incurred cost of sales of US$212,502 for the three months ended March 31, 2022. The cost of sales is predominantly related to the application marketplace (such as Apple App Store and Google Play) fees and other third-party direct costs.
- The Company incurred office and general expenses of US$775,283 for the three months ended March 31, 2022. These fees were related to Kuuhubb's operations including staff and management salaries.
- The Company's EBITDA for the three months ended March 31, 2022 was negative US$665,222 by adjusting the net loss before income taxes of $780,155 with the following items:
- Add back of:
- non-cash depreciation and amortization of US$5,558;
- non-cash share-based compensation of US$36,399;
- net interest and accretion expenses of US$249,570;
- Deduct:
- Foreign exchange gain of US$176,594.
- Add back of:
Nine Months Ended March 31, 2022:
- The Company generated a total of US$2,949,388 revenues for the nine months ended March 31, 2022.
- The Company incurred cost of sales of US$860,766 for the nine months ended March 31, 2022. The cost of sales is predominantly related to the application marketplace (such as Apple App Store and Google Play) fees and other third-party direct costs.
- The Company incurred office and general expenses of US$2,322,286 for the nine months ended March 31, 2022. These fees were related to Kuuhubb's operations including staff and management salaries.
- The Company's EBITDA for the nine months ended March 31, 2022 was negative US$1,654,020 by adjusting the net loss before income taxes of $2,417,208 with the following items:
- Add back of:
- non-cash depreciation and amortization of US$16,516;
- non-cash share-based compensation of US$116,930;
- net interest and accretion expenses of US$802,079;
- Deduct:
- Foreign exchange gain of US$172,337.
- Add back of:
Other:
- As at May 30, 2022, the Company had outstanding 66,658,043 common shares, 2,500,000 common share purchase warrants and 6,350,000 stock options.
- The Company also has two convertible debentures with face value of €2,000,000 each. The debentures can be converted to approximately 6,408,727 common shares upon conversion.
Classification of Recolor Oy out of "held for sale and discontinued operations"
The Company was not able to complete the divestiture of Company-owned assets such as shares of Recolor Oy in the past twelve months after best efforts by the management. In addition, the recent restructure of the Company's main operating subsidiary also hinders the Company's ability to continue to pursue the divestiture. Therefore, the associated assets and liabilities and the net income within Recolor Oy, previously presented as held for sale and attributable as discontinued operations in the consolidated financial statements, have been classified back to normal continuing operations. The comparative figures have been reclassified to reflect these changes.
Additional Financial Details & Announcements:
Private Placement of Kuuhubb AG
Kuuhubb AG closed a private placement in December 2021 with an existing shareholder of the Company. The Company issued $234,038 (€200,000) debentures with maturity on February 28, 2022 (in negotiation to extend to February 2024) and annual interest rate of 12%. The loan is unsecured and has a mandatory conversion feature where upon conversion the debt holder would become approximately 9% shareholder of Kuuhubb AG upon maturity.
In January, February and March 2022, as part of the same private placement, the Company received additional €30,000, €100,000 and €100,000 from existing shareholders for the same terms.
Restructuring of Kuu Hubb Oy
Kuu Hubb Oy applied to undertake Finnish restructuring proceedings under the jurisdiction of the District Court of Helsinki, Finland in accordance with the Finnish Restructuring of Enterprises Act (25.1.1993/47 "REA") on September 7, 2021.
Subsequent to the period end, Kuuhubb Oy and its creditors have entered into an agreement to restructuring debt, certified on May 12, 2022. The key indicative terms of the final creditor resolution are as follows:
Creditors of Kuu Hubb OY debt totaling EUR 7,619,788.34 (approximately CAD 10.4 million) would undergo the following restructuring:
- All prior defaults, penalties are waived.
- 80% of existing debt with creditors will be forgiven.
- 20% of existing debt with creditors will be classified as "Debt Under Restructuring."
- Debt Under Restructuring will total EUR 1,523,957.67 (approximately CAD 2.1 million).
- Eight payments will be paid over a period of 84 months (7 years), on September 30th of each year.
- First payment of EUR 38,098 in 2022, Second payment of EUR 158,745 in 2023, Third payment of EUR 241,293 in 2024, Fourth payment of EUR 241,293 in 2025, Fifth payment of EUR 241,293 in 2026, Sixth payment of EUR 241,293 in 2027, Seventh payment of EUR 241,293 in 2028, and final payment of EUR 120,646 in 2029.
- No interest or overdue interest is paid to unsecured restructuring debt.
- No option to extend payment period.
However, if Kuuhubb Oy were to be disposed of in the next 9 years, the proceeds will be used to repay the original (undiscounted) debts.
As a result of the Debt Restructuring Program, all legal matters related to Cherry Pick Games have been resolved and settled.
CEO's Message
Jouni Keränen, CEO of Kuuhubb Inc., commented, "With the restructuring proposal of Kuuhubb Inc's Finnish subsidiary Kuu Hubb Oy having been approved by the District Court of Helsinki, the company can now start to look into the future. Kuuhubb has an amazing team of talented people and a unique portfolio of high quality game properties. We have built a solid foundation where we can now focus on our next generation of games and finding innovative new distribution and monetization mechanics to propel the company into the next phase of its growth."
EBITDA - Non-IFRS Measure
EBITDA is intended to provide additional information to investors and analysts. The Company calculated EBITDA as set out on page 1 of this press release. EBITDA does not have any standardized meaning prescribed by IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate EBITDA differently.
About Kuuhubb
Kuuhubb is a publicly listed mobile game development and publishing company, targeting the casual audience with bespoke mobile experiences. Our Mission is to become a top player in the casual mobile game space. We believe in empowering people by creating games and apps that will have our audience relax, express and entertain themselves every day. Through our games and partnerships with select developers, we explore new lifestyle trends that can be converted into games and apps which will bring value to our users, employees, and shareholders. Headquartered in Helsinki, Finland and with an office in Zug, Switzerland, Kuuhubb is targeting global audience with a strong focus on U.S. and Asian markets.
Cautionary Note Concerning Forward-Looking Information
This press release contains forward-looking information. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements relating to future revenue and development, growth of the Company's business) are forward looking information. This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other thing:, risks related to the growth strategy of the Company; the possibility that results from the Company's growth plans will not be consistent with the Company's expectations; the early stage of the Company's development; competition from companies in a number of industries; the ability of the Company to manage expansion and integrate acquisitions into its business, future business development of the Company, including the ability to complete the sale of Recolor OY and the Codecacao Acquisition on terms which are economic or at all; the ability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to the effects of COVID-19 on its business segments, capital market conditions, restrictions on labour and international travel and supply chains; and the other risks disclosed under the heading "Risk Factors" in the Company's management discussion and analysis for the twelve months ended June 30, 2020 filed on SEDAR at www.sedar.com. Forward-looking information speaks only as of the date on which it is provided and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information, please contact:
Kuuhubb Inc.
Jouni Keränen - CEO
jouni@kuuhubb.com
Office: +358 40 590 0919
Bill Mitoulas
Investor Relations
bill@kuuhubb.com
Office: +1 (416) 479-9547
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/125866
