March 2, 2021
Toronto, Canada – March 2, 2021 - Kuuhubb Inc. (“Kuuhubb” or the “Company”) (TSX- V: KUU), a mobile game development and publishing company targeting the female audience with bespoke mobile experiences, has reported its unaudited financial results for the three and six months ended December 31, 2020. The Company’s unaudited consolidated financial statements as at, and for the three and six months ended December 31, 2020 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 Three and Six Months Ended December 31, 2020:
Jouni Keränen, CEO of Kuuhubb Inc., commented, “We continue our focus on divestment of Recolor and investment in the Match-3 genre through our proprietary game engine . We remain steadfast with our cost cutting initiatives, which has translated to improved profitability at the start of this calendar year. Continuous improvement of Key Metrics in the game has enabled us to be optimistic about our upcoming flagship product Tiles & Tales, which is progressing through soft launch stages and towards commercial launch later this year.”
Financial Results for the Three and Six Months Ended December 31, 2020:
(1) Classification of Recolor Oy as held for sale and discontinued operations
As part of the efforts to meet the Company’s obligations and build growth, the Company announced it is exploring multiple strategic alternatives, including the divestiture of Company-owned assets such as shares of Recolor Oy. This may be completed within twelve months and as such the associated assets and liabilities within Recolor Oy are presented as held for sale and the net income attributable as discontinued operations in the consolidated financial statements. Unless otherwise indicated, the analysis and discussions herein are based on the Company’s continuing operations consisting of the Company’s “My Hospital” operation.
Settlement Agreement with Cherrypick Games:
As previously announced on February 8, 2021, the Company has entered into an agreement with Cherrypick Games S.A. (“Cherrypick”) to amend (the “Amendment”) the settlement terms to the settlement agreement (the “Settlement Agreement”) relating to the acquisition of the My Hospital application from Cherrypick. Pursuant to the Amendment, Kuuhubb shall pay to Cherrypick: (i) €100,000 (approximately CAD$153,700) on or before February 7, 2021 (already paid) and €150,000 (approximately CAD$230,550) on or before February 15, 2021 (already paid), which payments replace and supersede the second payment (the “Second Payment”) of €250,000 (approximately CAD$384,250) under the Settlement Agreement; (ii) €1,085,507 (approximately CAD$1,668,424) on or before the earlier of a sale of Recolor Oy and August 31, 2021, which payments replace and supersede the third payment of €1,059,707 (approximately CAD$1,628,770) under the Settlement Agreement, as well as interest of €4,257 (approximately CAD$6,543) relating to the Second Payment as well as interest of €21,543 (approximately CAD$33,112); and (iii) the date of the remaining outstanding payment of €550,000 (approximately CAD$845,350) remained unchanged on or before May 31, 2021.
Further details on the arbitration award to Cherrypick and Kuuhubb’s Agreement with Cherrypick can be found in the Company’s consolidated financial statements for the year ended June 30, 2020 and news release dated August 19, 2020 and February 8, 2021, under the Company’s profile at www.sedar.com.
Exploration of Strategic Alternatives to Enhance Shareholder Value
On September 30, 2020, the Company announced that it has been conducting a process to explore strategic alternatives, including the potential divestiture of certain Company-owned assets, including the sale of Recolor Oy within the next twelve months. To date, the Company has executed confidentiality agreements with several parties who expressed an interest in receiving information about Recolor Oy and its business in connection with a possible transaction. There can be no assurance that the strategic alternatives review process will result in any strategic change or outcome and the Company does not know the exact timetable for the conclusion of its review of strategic alternatives. There can be no certainty that any potential transaction will emerge from this process. The process may result in a variety of outcomes or no outcome at all, and there can be no assurance that the Company will pursue or execute any specific action or transaction. The Company continues to operate in the normal course during the on-going process.
EBITDA - Non-IFRS Measure
EBITDA is intended to provide additional information to investors and analysts. The Company calculated EBITDA as set out on page 2 and 3 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.