Kuuhubb Reports Fiscal 2022 Year End Audited Annual Financial Results

Toronto, Ontario--(Newsfile Corp. - October 31, 2022) - Kuuhubb Inc. (TSXV: KUU) ("Kuuhubb" or the "Company"), 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 audited annual financial results for the financial year ended June 30, 2022. The results have been filed with the Canadian Securities Administrators and are now available on SEDAR.

Audited Annual Financial Results for the Financial Year Ended June 30, 2022

• The Company generated a total of US$3,831,497 revenues for the year ended June 30, 2022.
• The Company incurred cost of sales of US$1,104,701 for the year ended June 30, 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 consulting and professional fees of US$798,996 for the year ended June 30, 2022. These fees were related to Kuuhubb's audit fees, general legal counsel and other professional services.
• The Company recognized a total of $7,361,711 gain and present value adjustment upon completion of Kuuhubb Oy restructure.
• The Company recorded a net income of $4,196,799.
• The Company's EBITDA is negative US$2,273,409 by adjusting the net income before income taxes of $4,196,799 with the following items:
  Add back of:
  • non-cash depreciation and amortization of US$20,944;
  • non-cash share-based compensation of US$129,648;
  • net interest and accretion expenses of US$844,466;
  • Foreign exchange loss of US$2,491
    and deduct:
  • Non-cash $7,361,711 gain and present value adjustment upon completion of Kuuhubb Oy restructure.
  • non-cash fair value gain of loan receivable from Valiance UG and other of US$105,046
• As at October 28, 2021, the Company had 66,658,043 common shares, 2,500,000 common share purchase warrants and 4,850,000 stock options.

Restructuring of Kuuhubb Oy

Kuu Hubb Oy applied to undertake Finnish restructuring proceedings under the jurisdiction of the District Court of Helsinki, Finland in accordance with the Finnish Restructuring of Enterprises Act (25.1.1993/47 "REA") on September 7, 2021.

Kuuhubb Oy and its creditors have entered into an agreement to restructuring debt, certified on May 12, 2022. The key indicative terms of the final creditor resolution are as follows:

Total nominal debt amount of €7,619,788 (approximately US$7.9 million) would undergo the following restructuring:

- All prior defaults, penalties are waived;
- 80% of the above existing debt nominal amount with creditors will be forgiven;
- 20% of existing debt nominal amount with creditors will be classified as "Debt Under Restructuring";
- Debt Under Restructuring will total €1,523,958;
- Eight payments will be paid over a period of 84 months (7 years), on September 30th of each year:

• First payment of 2.5% of the Debt Under Restructuring (or €38,098) in 2022 (paid), Second payment of 10.42% of the Debt Under Restructuring (or €158,745) in 2023, Third payment of 15.83% of the Debt Under Restructuring (or €241,293) in 2024, Fourth payment of 15.83% of the Debt Under Restructuring (or €241,293) in 2025, Fifth payment of 15.83% of the Debt Under Restructuring (or €241,293) in 2026, Sixth payment of 15.83% of the Debt Under Restructuring (or €241,293) in 2027, Seventh payment of 15.83% of the Debt Under Restructuring (or €241,293) in 2028, and final payment of 7.93% of the Debt Under Restructuring (or €120,646) in 2029.

- No interest or overdue interest is paid to unsecured restructuring debt; and
- No option to extend payment period.

However, if Kuuhubb Oy were to be disposed of within 9 years, the proceeds will be used to repay the original (undiscounted) debts nominal amount.

Additional Financial Details & Announcements (Subsequent to Fiscal Year End):

Subsequent to the fiscal year ended June 30, 2022, the Company received the following additional financing and made the following announcements.

Private Placement

The Company closed private placements subsequent to the year end with a existing shareholder of the Company. The Company issued €300,000 debentures with 2-year maturity at annual 12% interest. The loan bears annual interest rate of 12%. The loan is unsecured and has a mandatory conversion feature where upon conversion the debt holder would become a significant shareholder of Kuuhubb AG upon maturity. The conversion is subject to certain conditions, events, and regulatory approvals.

CEO's Message

Jouni Keränen, CEO of Kuuhubb Inc., commented, "During the fiscal year of 2022 Kuuhubb Oy successfully went through a restructuring process by negotiating a solution that the Company and all of its creditors unanimously supported. This solution was beneficial to the Company's balance sheet as it included an 80% reduction of the creditors' liabilities and resulted in a materially stronger balance sheet for Kuuhubb Oy and Kuuhubb Inc. With respect to the Kuuhubb Inc. restructuring, the Company is continuing with its discussions and negotiations with its creditors. Internally the flagship product Tiles & Tales continued to improve its monetization metrics during the soft launch and continuous efforts are ongoing to reach a point where a successful commercial launch is possible. The Company has a long-term view on growth and will work towards creating successful evergreen digital entertainment properties around the core portfolio of products which include Tiles & Tales, Recolor and MyHospital."

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.

About Kuuhubb

Kuuhubb is a publicly listed mobile game development and publishing company, targeting the female audience with bespoke mobile experiences. Our Mission is to become a top player in the female mobile game space. We believe in empowering women by creating games and apps that will have our female audience relax, express and entertain themselves every day. Through our games and partnerships with select developers, we explore new lifestyle trends that can be converted into games and apps which will bring value to our users, employees, and shareholders. Headquartered in Helsinki, Finland, Kuuhubb is targeting global audience with a strong focus on U.S. and Asian markets.

For further information, please contact:

Kuuhubb Inc.
Jouni Keränen - CEO
jouni@kuuhubb.com
Office: +358 40 590 0919

Bill Mitoulas
Investor Relations
bill@kuuhubb.com
Office: +1 (416) 479-9547

Cautionary Note Concerning Forward-Looking Information

This press release contains forward-looking information. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements relating to future revenue and development, growth of the Company's business) are forward looking information. This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other thing:, risks related to the growth strategy of the Company; the possibility that results from the Company's growth plans will not be consistent with the Company's expectations; the early stage of the Company's development; competition from companies in a number of industries; the ability of the Company to manage expansion and integrate acquisitions into its business, future business development of the Company, including the ability to complete the sale of Recolor OY and the Codecacao Acquisition on terms which are economic or at all; the ability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to the effects of COVID-19 on its business segments, capital market conditions, restrictions on labour and international travel and supply chains; and the other risks disclosed under the heading "Risk Factors" in the Company's management discussion and analysis for the twelve months ended June 30, 2020 filed on SEDAR at www.sedar.com. Forward-looking information speaks only as of the date on which it is provided and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/142442