Mr. Bill Mitoulas reports

KUUHUBB REPORTS FISCAL Q3 2023 FINANCIAL RESULTS & CONDITIONAL AMENDMENT TO THE 2018 CONVERTIBLE DEBENTURE

Kuuhubb Inc. has released its unaudited financial results for the financial Q3 2023. The results have been filed with the Canadian Securities Administrators and are now available on SEDAR.

Unaudited financial results for financial Q3 2023 (ended March 31, 2023)

• The company generated a total of $654,717 (U.S.) and $2,026,968 revenues for the three and nine months ended March 31, 2023.
• The company incurred cost of sales of $234,644 (U.S.) and $661,074 for the three and nine months ended March 31, 2023. 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 $42,999 (U.S.) and $583,613 for the three and nine months ended March 31, 2023. These fees were related to Kuuhubb's audit fees, general legal counsel and other professional services.
• The company recorded a net loss of $541,501 and $2,132,909 for the three and nine months ended March 31, 2023.
• The company's three months ended March 31, 2023, EBITDA (earnings before interest, taxes, depreciation and amortization) is negative $169,43 (U.S.) by adjusting the net loss before income taxes of $541,501 with the following items:
• Add back of:
  • Non-cash depreciation and amortization of $4,326 (U.S.);
  • Non-cash share-based compensation of $18,950 (U.S.);
  • Net interest and accretion expenses of $165,525 (U.S.);
  • Foreign exchange loss of $183,268 (U.S.).
• The company's nine months ended March 31, 2023, EBITDA is negative $1,001,539 (U.S.) by adjusting the net loss before income taxes of $2,132,809 with the following items:
• Add back of:
  • Non-cash depreciation and amortization of $11,633 (U.S.);
  • Non-cash share-based compensation of $153,257 (U.S.);
  • Net interest and accretion expenses of $372,026 (U.S.);
  • Foreign exchange loss of $424,922 (U.S.).
• As at March 1, 2023, the company had 64,458,043 issued and outstanding common shares (2.2 million from warrant exercise was not yet issued) and 8,125,000 stock options.

Conditional amendment to the 2018 convertible debenture

On March 24, 2023, an agreement was reached between the company and the creditor of the two-million-euro private placement financing closed in November, 2018, resulting in a conditional amendment to the loan agreement. As per the terms of this amendment, the loan will now mature on Sept. 1, 2025, with an adjusted interest rate of 9 per cent per annum, payable on a monthly basis. The conversion price has also been revised to 50 cents per share. The company has the option to convert the loan, subject to the condition that the volume weighted average price of the shares exceeds 50 cents per share for a continuous period of 30 days.

The effectiveness of the aforementioned amendment is contingent upon the payment of certain outstanding amounts. Specifically, a payment of 165,000 euros is required to cover unpaid arrear interest, along with an additional payment of 12,233 euros representing interest accrued between Nov. 8, 2021, and March 15, 2023, at an annual rate of 5.5 per cent. Furthermore, an interest rate of 9 per cent will apply to the 165,000 euros unpaid arrear interest from March 16, 2023, until the conditional payments are made.

As of the current reporting date, these conditional payments remain outstanding, and any necessary regulatory approvals have not yet been obtained. Consequently, the loan is still considered to be in default and will only be adjusted in accordance with the aforementioned amendment once the conditions have been fulfilled and approval has been obtained from the relevant regulatory bodies.

Additional financial details and announcements (subsequent to March 31, 2023):

Subsequent to the period ended March 31, 2023, the company received the following additional financing and made the following announcements.

Private placement

The company closed private placements subsequent to the period-end with existing shareholders of the company. The company issued 130,000 euros of debentures with two-year maturity at annual 12-per-cent interest. 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.

About Kuuhubb Inc.

Kuuhubb is a publicly listed mobile game development and publishing company, targeting the female audience with bespoke mobile experiences. Its mission is to become a top player in the female mobile game space. The company believes in empowering women by creating games and apps that will have its female audience relax, express and entertain themselves every day. Through the company's games and partnerships with select developers, the company explores new lifestyle trends that can be converted into games and apps which will bring value to its users, employees and shareholders. Headquartered in Helsinki, Finland, Kuuhubb is targeting global audience with a strong focus on the United States and Asian markets.

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