Kuuhubb Inc. Reports First Quarter Financial Results
November 30, 2017
Kuuhubb Inc. ("Kuuhubb" or the "Company") (TSX VENTURE:KUU) a technology company focused on acquiring, developing and distributing lifestyle and mobile video game applications, announces its financial results for the three month period ended September 30, 2017. The Company’s consolidated financial statements as at and for the three months ended September 30, 2017 and related management’s discussion and analysis can be found on the Company's SEDAR profile at www.sedar.com
. References to "Cdn$" are to Canadian dollars, references to "US$" are to United States dollars and references to “€” are to Euros. The Company’s financial year end is June 30.
Financial Highlights for the Three Month Period Ended September 30, 2017:
Growth Activities during the Quarter:
- The Company recognized revenue of Cdn$3,587,523 during the three months ended September 30, 2017.As Kuuhubb acquired Sumoing Oy (Recolor Oy) on August 18, 2017, these results only include Sumoing Oy revenues from August 18 to September 30. Pro forma figure for group revenue for the quarter was US$4.93 million if the Sumoing Oy acquisition had occurred on July 1, 2017.
- The Company recorded a net loss of Cdn$2,224,227 during the three month period ended September 30, 2017.Expenses for the quarter included Sumoing Oy (Recolor Oy) acquisition-related one time expenses totalling Cdn$0.51 million.
- The Company had shareholders’ equity of Cdn$29,166,866 as at September 30, 2017.
- In July 2017, the Company announced that it had entered into a strategic partnership with India’s largest talent management agency Kwan Entertainment Talent Management Agency.
- In August 2017, the Company closed a brokered private placement offering of subscription receipts of the Company (the “August Financing”) led by Cormark Securities Inc. and including Echelon Wealth Partners Inc. The August Financing included the sale of 16,445,000 subscription receipts at a price of Cdn$1.05 per subscription receipt, for aggregate gross proceeds of Cdn$17,267,250. Following satisfaction of the escrow release conditions, the Company issued 16,445,000 common shares pursuant to the exercise of the said subscription receipts for no additional consideration.
- In August 2017, Kuuhubb, through its wholly-owned subsidiary Kuuhubb Oy, completed the acquisition (the “Sumoing Acquisition”) of all of the outstanding shares of Sumoing Oy (“Sumoing”), a company incorporated pursuant to the laws of Finland and creator of the world’s leading digital coloring book application called Recolor (the “Recolor App”). The Recolor App is a high-quality digital coloring book on mobile, including 1,500+ beautiful art illustrations and unique 3D content. Sumoing is a Helsinki-based game development studio that specializes in lifestyle genre apps targeted to the female audience. Sumoing’s applications have more than 40 million all-time downloads. Total consideration paid for the Sumoing Acquisition was Cdn$12,174,137 (€8,233,000). A portion of the net proceeds from the August Financing were used to fund this purchase price.
- On October 25, 2017, Sumoing Oy changed its name to Recolor Oy
- Following the acquisition of Sumoing Oy, Kuuhubb’s management team engaged in a focused 90-day integration plan, designed to capitalize on synergies, evaluate costs, identify growth opportunities, re-deploy resources and human capital to capture value, and mitigate financial and operational risks. Kuuhubb management reported that all significant integration efforts had been successfully achieved.
- On November 20, 2017, the Company announced that it had signed a term sheet to acquire Neybers, an interior design game where users can play with photo quality items from real brands. Neybers fits well with Kuuhubb’s strategy of building a portfolio of female oriented niche lifestyle community and design applications. Neybers has a strong focus on esthetics and female user base with a 22 minute play session average – attributes that dovetail well with Kuuhubb’s flagship app Recolor.
- Kuuhubb estimates gross revenue for October and November 2017 to be approximately US$4 million (Recolor & MyHospital total).
- All financial results going forward will be reported in United States dollars.