Kuuhubb Announces Appointment of New Board Member, €2,000,000 Convertible Debenture Financing and Provides Corporate and Financial Update
August 29, 2018
Toronto, Canada -
Kuuhubb Inc. (“Kuuhubb” or the “Company”) (TSX-V: KUU), a technology company focused on acquiring, developing and distributing mobile game applications, provides corporate update:
Changes to Board of Directors:
Kuuhubb is pleased to announce the appointment of Mr. Carl-Gustaf von Troil to its Board of Directors. Mr. von Troil is a seasoned investor with extensive executive experience in a multitude of industries, including banking, manufacturing and real estate. He currently sits on the Board of Directors of United Bankers, a publicly listed wealth management company based in Helsinki, Finland.
“We are pleased to welcome Mr. von Troil to our board of directors,” said Jouni Keranen, Kuuhubb’s CEO. “His significant banking and investing experience as well as finance, strategy and leadership skills will be invaluable as we grow our global business initiatives.”
Mr. von Troil will replace Mr. Maurice Colson who is stepping down as a director of the Company upon closing of the announced financing (see below). The Board thanks Mr. Colson for his contributions during his tenure with the Company and we wish him the best in his future endeavours.
€2,000,000 Convertible Debenture Financing:
Kuuhubb also announces a proposed private placement financing for gross proceeds of EUR2,000,000 through the issuance by the Company of an unsecured convertible debenture (the “Debenture”) in the principal amount of EUR2,000,000. “We have a good relationship with the proposed investor and expect to close this financing within the next two weeks,” said Christian Kolster, Kuuhubb’s Executive Vice President. Kuuhubb plans to use the proceeds from the financing (the “Proposed Financing”) for new product launches, business development and general corporate purposes.
The Debenture will (a) have an interest rate of 5.5% per annum (with the interest payable every six months), (b) mature on the date which is three years from closing date of the Proposed Financing, and (c) be convertible at the option of the holder into common shares of Kuuhubb at a conversion price of Cdn$1.10 per share.
As well, Kuuhubb would have the option to convert the Debenture into common shares of the Company after the two year anniversary of the issuance of the Debenture if the market price of such shares exceeds Cdn$1.10 per share. Kuuhubb would also have the option to redeem the Debenture after the two year anniversary of the issuance of the Debenture.
Closing of the Proposed Financing is subject to the execution of the definitive documentation and receipt of all necessary approvals, including TSX Venture Exchange approval. The final terms of the Debenture may be varied from the foregoing as may be approved by the TSX Venture Exchange. The Debenture will be subject to a four month hold period following issuance and will not be listed for trading on any exchange.
Update on recent financial performance and corporate activities:
The Company plans to publish its consolidated financial statements and related management’s discussion and analysis for the financial year ended June 30, 2018 on or before October 29, 2018. The Company’s financial year end is June 30.
Financial Highlights for the Three Month Period Ended June 30, 2018:
- Revenue (unaudited): US$5.5 million during the three months ended June 30, 2018. This revenue was generated primarily from sales of the Recolor app, the in-application sale of virtual goods from the My Hospital game and in-application ad revenue. Recolor experienced a onetime technical issue in a distributor’s platform which negatively impacted revenue and profitability during the quarter ended June 30, 2018.
- In May 2018, the Company soft launched Incolour, its first India-specific mobile app. Incolour is a standalone colouring app that utilizes the best functionalities of Recolor’s app in an entirely new interface, providing its community access to daily themed features designed to promote user engagement and a family-friendly platform ideally suited to both global and local brand partnership campaigns. The Company’s Incolour marketing strategy is centred around creating partnerships with significant social media influencers and Bollywood stars.