October 7, 2020
|Kuuhubb Inc. (“Kuuhubb” or the “Company”) (TSX- V: KUU), a mobile game development and publishing company focused on providing the female audience with creative interactive gaming experiences, has announced that further to its news release issued on August 19, 2020, the Company has agreed to settlement terms (the “Settlement Agreement”) with Cherrypick Games S.A. (“Cherrypick”), in relation to the Company’s acquisition of the My Hospital application from Cherrypick (the “Acquisition”).|
Pursuant to the award rendered by the sole arbitrator appointed by the Arbitration Institute of the Finland Chamber of Commerce, Kuuhubb was required to pay to Cherrypick €1,600,000 (approximately CAD$2,520,000) composed of the scheduled payments plus interest of 10% per annum thereon, in addition to court costs and fees, including the costs of the arbitrator in the amount of €297,984 (approximately CAD$469,000). Further details on Kuuhubb’s dispute with, and the subsequent arbitration award in favour of, Cherrypick can be found in the Company’s interim condensed consolidated financial statements for the three and nine months ended March 31, 2020 and news release dated August 19, 2020, under the Company’s profile at www.sedar.com.
Pursuant to the Settlement Agreement now reached between the parties, Kuuhubb shall pay to Cherrypick €750,000 (approximately CAD$1,173,675) on October 6, 2020 (the “First Payment”), €250,000 (approximately CAD$391,225) on November 15, 2020 (the “Second Payment”), and €1,059,707 (approximately CAD$1,658,335) on December 15, 2020 (the “Third Payment”). In addition, Cherrypick has agreed to give to Kuuhubb a discount of €450,000 on the remaining €100,000 monthly instalments payable by Kuuhubb to Cherrypick under the terms of the Acquisition, for an aggregate net payment of €550,000 (approximately $860,695), payable on May 31, 2021 (the “Remaining Purchase Price”). In the event Kuuhubb does not pay the Remaining Purchase Price by June 30, 2021, Kuuhubb shall pay to Cherrypick an additional €300,000 (approximately $469,470).
Under the terms of the Settlement Agreement, Cherrypick shall hand over development obligations concerning My Hospital to Kuuhubb on October 31, 2020. From October 31, 2020 to December 31, 2020, Cherrypick shall provide assistance to Kuuhubb in maintaining the My Hospital application. After such interim transition period, Kuuhubb shall take over all development and maintenance responsibilities concerning My Hospital.
Jouni Keränen, CEO of Kuuhubb stated, “While we strongly disagree with the sole arbitrator’s decision and the arbitration award, the final settlement with Cherrypick enables us to provide My Hospital the resources and attention needed to reach its full potential and to focus on the strategic review process”. There can be no assurance that the strategic alternatives review process will result in any strategic change or outcome. The Company does not know the exact timetable for the conclusion of its review of strategic alternatives, and it does not intend to comment further unless and until an approved course of action has been determined or the Company has otherwise determined that further disclosure is appropriate or required by regulatory/governing bodies.