Kuuhubb Reports Fiscal Q2 2022 Financial Results

March 2, 2022


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, has announced that it has released its unaudited consolidated financial results for the three and six months periods ended December 31, 2021. The results have been filed with the Canadian Securities Administrators and are now available on the Company’s issuer profile at www.sedar.com. The Company’s financial year end is June 30.

Highlights:

  • Revenues of US$963,865 and US$1,965,799 recognized for the three and six months ended December 31, 2021.
  • Ongoing Kuu Hubb Oy restructuring is expected to be completed during the FY22. The exact restructuring plan will be announced once finalized.

Financial Results for the Three and Six Months Ended December 31, 2021:

Three Months Ended December 31, 2021:

  • The Company generated a total of US$963,865 revenues for the three months ended December 31, 2021.
  • The Company incurred cost of sales of US$263,488 for the three months ended December 31, 2021. The cost of sales is predominantly related to the application marketplace (such as Apple App Store and Google Play) fees and other third-party direct costs.
  • The Company incurred office and general expenses of US$721,755 for the three months ended December 31, 2021. These fees were related to Kuuhubb’s operations including staff and management salaries.
  • The Company’s EBITDA for the three months ended December 31, 2021 is negative US$500,825 by adjusting the net loss before income taxes of $665,002 with the following items:
    Add back of:
    o non-cash depreciation and amortization of US$6,013;
    o non-cash share-based compensation of US$29,905;
    o net interest and accretion expenses of US$215,171;
    Deduct:
    o Foreign exchange loss of US$86,912
  • The Company generated a total of US$1,965,799 revenues for the six months ended December 31, 2021.
  • The Company incurred cost of sales of US$648,264 for the six months ended December 31, 2021. The cost of sales is predominantly related to the application marketplace (such as Apple App Store and Google Play) fees and other third-party direct costs.
  • The Company incurred office and general expenses of US$1,547,003 for the six months ended December 31, 2021. These fees were related to Kuuhubb’s operations including staff and management salaries.
  • The Company’s EBITDA for the six months ended December 31, 2021 is negative US$988,798 by adjusting the net loss before income taxes of $1,637,053 with the following items:
    Add back of:
    o non-cash depreciation and amortization of US$10,958; 
    o non-cash share-based compensation of US$80,531; 
    o net interest and accretion expenses of US$552,509;
    o Foreign exchange loss of US$4,257

Other:

  • As at March 1, 2022, the Company had outstanding 66,658,043 common shares, 2,500,000 common share purchase warrants and 6,350,000 stock options.
  • The Company also has two convertible debentures with face value of €2,000,000 each. The debentures can be converted to approximately 6,408,727 common shares upon conversion.

Classification of Recolor Oy out held for sale and discontinued operations

The Company was not able to complete the divestiture of Company-owned assets such as shares of Recolor Oy in the past twelve months after best efforts by the management. In addition, the recent restructure of the Company’s main operating subsidiary also hinders the Company’s ability to continue to pursue the divestiture. Therefore, the associated assets and liabilities and the net income within Recolor Oy, previously presented as held for sale and attributable as discontinued operations in the consolidated financial statements, have been classified back to normal continuing operations. The comparative figures have been reclassified to reflect these changes.

Additional Financial Details & Announcements:

Private Placement of Kuuhubb AG

Kuuhubb AG closed a private placement in December 2021 with an existing shareholder of the Company. The Company issued $234,038 (€200,000) debentures with maturity on February 28, 2022 (in negotiation to extend to February 2024) and annual interest rate of 12%. The loan is unsecured and has a mandatory conversion feature where upon conversion the debt holder would become approximately 9% shareholder of Kuuhubb AG upon maturity.

In January and February 2022, as part of the same private placement, the Company received additional €30,000 and €100,000 from existing shareholders for the same terms.

Restructuring of Kuu Hubb Oy

In September 2021, Kuu Hubb Oy had applied to undertake Finnish restructuring proceedings under the jurisdiction of the District Court of Helsinki, in Finland. The debt restructuring process of Kuu Hubb Oy in accordance with the Finnish Restructuring of Enterprises Act (25.1.1993/47 “REA”) has been initiated by a decision of the District Court of Helsinki on September 7, 2021.

During the last several months, Kuu Hubb Oy has, together with the administrator, formulated a restructuring program. The general outline and parameters of the program have been informed to major creditors and the program was submitted to the District Court of Helsinki on February 28, 2022. The program will be voted on at a later date approved by the court.

CEO’s Message

Jouni Keränen, CEO of Kuuhubb Inc., commented, “The restructuring process of Kuuhubb Inc’s Finnish subsidiary Kuu Hubb Oy has progressed to the next phase with the proposal having been submitted to the District Court of Helsinki on February 28th 2022. Kuuhubb continues to focus on improving its existing portfolio of high-quality gaming and mobile app assets and is exploring new and innovative ways to upgrade its user gaming experience and further refine its monetization model.”

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.