October 30, 2019
Toronto, Canada – October 28, 2019 - Kuuhubb Inc. (“Kuuhubb” or the “Company”) (TSXV: KUU), a mobile game development and publishing company focused on providing the female audience with creative interactive gaming experiences, is pleased to announce that it has released its audited annual financial results for the financial year ended June 30, 2019. The results have been filed with the Canadian Securities Administrators and are now available on SEDAR.
Jouni Keränen, CEO of Kuuhubb Inc., commented, “We have had a challenging year. Significant resources were spent on the proxy battle, which ended in April. Financial constraints resulted in decreasing revenues and numerous difficult decisions were required to ensure the execution of our key priorities. A turn-around is now taking place and moving forward from the past has required us to take a large goodwill write down for this fiscal year. This Quarter will see the commercial launch of Kuuhubb’s first new game in over two years, as our pipeline of new products will start hitting the market. We are excited to soon commercially launch the second generation of Kuuhubb games such as Dance Talent and Tiles & Tales. We will continue to focus on innovation and efficiency, and aim to enter the female gaming market’s largest segment, Match-3, with unique and differentiating concepts that have the potential to become major hits. Work has also begun on our third-generation game in casual esports, utilizing the proprietary Kuuhubb game engine resulting in faster time to market and lower overall development costs.”
Audited Annual Financial Results for the Financial Year Ended June 30, 2019:
Costs Related to Q2 & Q3 2019 Proxy Fight and Board of Directors Changes:
The company incurred significant costs related to proxy fight, and added new board members with the necessary and relevant industry knowledge to help the Company focus on achieving its long-term strategic objectives. Appointed were Messrs. Garner Bornstein, an entrepreneur with a proven track record of creating successful companies in the world of disruptive technology; Elmer Kim, an accomplished private equity, family office and investment management executive with over 25 years of investment and technology industry experience; and Andre Lüdi, an investment bank and private wealth management executive with over 30 years of experience in the European financial sector.
Limited User Acquisition (UA) and Marketing Spending Impacting Fiscal Year Revenue:
Revenues declined due to the significantly reduced marketing budget related to Kuuhubb’s user acquisition spending. The Company spent 76% less in the fiscal 2019 compared to fiscal 2018. The shareholder requisition in the third quarter consumed substantial resources that would have ideally been deployed in furthering the Company’s user acquisition marketing efforts.
Game Expansion and Growth Strategy:
Kuuhubb is building a leading lifestyle game portfolio and is solidifying its position as an industry innovator, targeting the female demographic. As a mobile game development and publishing company focused on providing the female audience with creative interactive gaming experiences, the Company strategy is to use its in-house technology and experienced development teams located in Helsinki, Finland and Zagreb, Croatia to leverage its existing communities built through its Recolor franchise to enter popular gaming genres and commercialize new titles in the coming 12 to 24 months.
The Company’s first-generation gaming assets, Recolor and My Hospital have generated revenues in excess of USD $33M and the Company continues to work on improving the user experience, overall quality and monetization of those titles. Building on that established colouring trend, Kuuhubb intends to commercially launch two new games by the end of calendar 2019.
The 2nd generation of new titles diversifies Kuuhubb’s gaming portfolio into the Match-3, or “matching tiles”, genre. New titles under development and currently in soft launch are Dance Talent, due to be commercially launched by the end of 2019. Also currently in soft launch is Tiles & Tales, scheduled for commercial launch in 2020. Kuuhubb’s expansion into next generation Match-3 games, Dance Talent and Tiles & Tales, take the basic tile matching concept and expand on it by adding visual and story-based progression through a so called ‘meta game’. Meta games enable a higher level of player interaction through characters and stories and result in enhanced engagement and increased longevity of the games.
While still focused on the commercialization of its 2nd generation titles, Dance Talent and Tiles & Tales, Kuuhubb’s vision is to continue to innovate. The Company anticipates that its 3rd generation games will capitalize on a significant opportunity in the casual, mobile esports game niche as it plans to combine the immensely popular casual and Battle Royale genres to create a unique title for the female gaming market.
Additional Financial Details (Subsequent to Fiscal Year End):
Subsequent to the fiscal year ended June 30, 2019, the Company received the following additional financings and cash collections. These new financings are part of ongoing negotiations to secure funding for more effective marketing and user acquisition for our upcoming new products:
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.