KuuHubb Inc.
TSX VENTURE : KUU

KuuHubb Inc.

November 30, 2017 22:37 ET

Kuuhubb Inc. Reports First Quarter Financial Results

TORONTO, ONTARIO--(Marketwired - Nov. 30, 2017) - Kuuhubb Inc. ("Kuuhubb" or the "Company") (TSX VENTURE:KUU), a technology company focused on acquiring, developing and distributing lifestyle and mobile video game applications, announces its financial results for the three month period ended September 30, 2017. The Company's consolidated financial statements as at and for the three months ended September 30, 2017 and related management's discussion and analysis can be found on the Company's SEDAR profile at www.sedar.com. References to "Cdn$" are to Canadian dollars, references to "US$" are to United States dollars and references to "EUR" are to Euros. The Company's financial year end is June 30.

Financial Highlights for the Three Month Period Ended September 30, 2017:

  • The Company recognized revenue of Cdn$3,587,523 during the three months ended September 30, 2017.

    As Kuuhubb acquired Sumoing Oy (Recolor Oy) on August 18, 2017, these results only include Sumoing Oy revenues from August 18 to September 30. Pro forma figure for group revenue for the quarter was US$4.93 million if the Sumoing Oy acquisition had occurred on July 1, 2017.

  • The Company recorded a net loss of Cdn$2,224,227 during the three month period ended September 30, 2017.

    Expenses for the quarter included Sumoing Oy (Recolor Oy) acquisition-related one time expenses totalling Cdn$0.51 million.

  • The Company had shareholders' equity of Cdn$29,166,866 as at September 30, 2017.

Growth Activities during the Quarter:

  • In July 2017, the Company announced that it had entered into a strategic partnership with India's largest talent management agency Kwan Entertainment Talent Management Agency.

  • In August 2017, the Company closed a brokered private placement offering of subscription receipts of the Company (the "August Financing") led by Cormark Securities Inc. and including Echelon Wealth Partners Inc. The August Financing included the sale of 16,445,000 subscription receipts at a price of Cdn$1.05 per subscription receipt, for aggregate gross proceeds of Cdn$17,267,250. Following satisfaction of the escrow release conditions, the Company issued 16,445,000 common shares pursuant to the exercise of the said subscription receipts for no additional consideration.

  • In August 2017, Kuuhubb, through its wholly-owned subsidiary Kuuhubb Oy, completed the acquisition (the "Sumoing Acquisition") of all of the outstanding shares of Sumoing Oy ("Sumoing"), a company incorporated pursuant to the laws of Finland and creator of the world's leading digital coloring book application called Recolor (the "Recolor App"). The Recolor App is a high-quality digital coloring book on mobile, including 1,500+ beautiful art illustrations and unique 3D content. Sumoing is a Helsinki-based game development studio that specializes in lifestyle genre apps targeted to the female audience. Sumoing's applications have more than 40 million all-time downloads. Total consideration paid for the Sumoing Acquisition was Cdn$12,174,137 (EUR8,233,000). A portion of the net proceeds from the August Financing were used to fund this purchase price.

Subsequent Events:

  • On October 25, 2017, Sumoing Oy changed its name to Recolor Oy.

  • Following the acquisition of Sumoing Oy, Kuuhubb's management team engaged in a focused 90-day integration plan, designed to capitalize on synergies, evaluate costs, identify growth opportunities, re-deploy resources and human capital to capture value, and mitigate financial and operational risks. Kuuhubb management reported that all significant integration efforts had been successfully achieved.

  • On November 20, 2017, the Company announced that it had signed a term sheet to acquire Neybers, an interior design game where users can play with photo quality items from real brands. Neybers fits well with Kuuhubb's strategy of building a portfolio of female oriented niche lifestyle community and design applications. Neybers has a strong focus on esthetics and female user base with a 22 minute play session average - attributes that dovetail well with Kuuhubb's flagship app Recolor.

Performance Update:

  • Kuuhubb estimates gross revenue for October and November 2017 to be approximately US$4 million (Recolor & MyHospital total).

  • All financial results going forward will be reported in United States dollars.

About Kuuhubb

Kuuhubb is a company active in the digital space that focuses mainly on lifestyle and mobile video game applications. Its strategy is to create sustainable shareholder value through acquisitions of proven, yet underappreciated, assets with robust long-term growth potential. Headquartered in Helsinki, Finland, Kuuhubb has a global presence with a strong focus on developing U.S. brand collaborations and Asian partnerships.

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 and 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 things, 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 and the other risks disclosed under the heading "Risk Factors" in the Company's annual information form dated October 30, 2017 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.

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