March 4, 2019
Toronto, Canada – March 1, 2019 - Kuuhubb Inc. (“Kuuhubb” or the “Company”) (TSX- V: KUU), a mobile game development and publishing company targeting a female audience with bespoke mobile experiences, has reported its unaudited financial results for the three and six month periods ended December 31, 2018. The Company’s unaudited consolidated financial statements as at, and for, the three and six months ended December 31, 2018 and related management’s discussion and analysis can be found on the Company's SEDAR profile at www.sedar.com. The Company’s financial year end is June 30.
Highlights for the Fiscal Second Quarter Ended December 31, 2018:
Recent Board Member Changes:
In addition to the changes to the composition of the Board of Directors announced on February 27, 2019, Kuuhubb announces that Mr. Carl-Gustaf von Troil has resigned from the Board.
The Company refers to the press release issued on February 27, 2019 about the settlement agreement between the Company and certain shareholders and directors.
Lower Revenue Due to Limited User Acquisition (UA) Spending:
The company faced several challenges in the second quarter. Revenue continued to decline due to a significantly reduced user acquisition (UA) spending budget. Kuuhubb spent US $0.2 million on user acquisition during the quarter, compared to US $3.6 million in the corresponding quarter last year. The ongoing conflict of management with certain former Directors on the Board, coupled with the recent Shareholder Requisition announced in the third quarter consumed substantial resources, which management believes will have a negative impact on third quarter profit.
Technical Improvements and New Product Launches:
Kuuhubb has implemented a series of product improvements in Recolor that are indicating improved metrics and remains focused on improving the user experience, overall quality and monetization of Recolor. Although the last three quarters have experienced declines in user acquisitions and revenue, management believes these declines have been stabilized and are now positioned for improvement in the second half of our 2019 fiscal year.
Kuuhubb has strengthened its technology and development capabilities and increased its product pipeline for 2019. The Company has implemented a return to growth strategy by increasing its rollout of new commercially live products from two to six in calendar year 2019. Management intends to launch a new product in every quarter, with the first commercially launched product being Dancing Diaries, developed in partnership with a UK-based studio. Subsequent quarters will follow with commercial launches of Recolor by Numbers, Matching Stories and Neybers 2.0.
The company closed a non-dilutive financing of Euro 2 million in December 2018 and has been approved for an additional non-dilutive financing of approximately Euro 1 million in February 2019, providing necessary funds for the development and marketing of the previously mentioned new products. With the investments in future growth, the next few quarters will focus on sustainable ROI positive revenue growth, maximizing the combined total potential of the expanding product portfolio.