TORONTO, March 01, 2019 (GLOBE NEWSWIRE) -- Kuuhubb Inc. (“Kuuhubb” or the “Company”) (KUU.V), a mobile game development and publishing company targeting a female audience with bespoke mobile experiences, has reported its unaudited financial results for the three and six month periods ended December 31, 2018. The Company’s unaudited consolidated financial statements as at, and for, the three and six months ended December 31, 2018 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 Fiscal Second Quarter Ended December 31, 2018:
- The non-GAAP adjusted EBITDA during the three and six-month periods ended December 31, 2018 was negative US$93,415 and negative US$308,932, respectively, making this period’s adjusted EBITDA a near break-even quarter.
- The non-GAAP adjusted EBITDA for the three-month period ended December 31, 2018 was calculated by adjusting the net operating loss of US$2,073,772 with share-based compensation expense of US$319,778, depreciation and amortization of US$1,497,277 and interest expenses and foreign exchange loss of US$163,302.
- The non-GAAP adjusted EBITDA for the six-month period ended December 31, 2018 was calculated by adjusting the net operating loss of US$4,364,919 with share-based compensation expense of US$789,408, depreciation and amortization of US$3,033,911 and interest expenses and foreign exchange loss of US$232,668.
- Revenue for the three and six-month periods ended December 31, 2018 was US$3.1 million and US$7.2 million, respectively (unaudited). This revenue was generated from sales of the Recolor app, the in-app sale of virtual goods from the My Hospital game and in-app ad revenue.
- The Company had a cash position of US$2.2 million for the period ended December 31, 2018.
Recent Board Member Changes:
In addition to the changes to the composition of the Board of Directors announced on February 27, 2019, Kuuhubb announces that Mr. Carl-Gustaf von Troil has resigned from the Board.
The Company refers to the press release issued on February 27, 2019 about the settlement agreement between the Company and certain shareholders and directors.
Lower Revenue Due to Limited User Acquisition (UA) Spending:
The company faced several challenges in the second quarter. Revenue continued to decline due to a significantly reduced user acquisition (UA) spending budget. Kuuhubb spent US $0.2 million on user acquisition during the quarter, compared to US $3.6 million in the corresponding quarter last year. The ongoing conflict of management with certain former Directors on the Board, coupled with the recent Shareholder Requisition announced in the third quarter consumed substantial resources, which management believes will have a negative impact on third quarter profit.
Technical Improvements and New Product Launches:
Kuuhubb has implemented a series of product improvements in Recolor that are indicating improved metrics and remains focused on improving the user experience, overall quality and monetization of Recolor. Although the last three quarters have experienced declines in user acquisitions and revenue, management believes these declines have been stabilized and are now positioned for improvement in the second half of our 2019 fiscal year.
Kuuhubb has strengthened its technology and development capabilities and increased its product pipeline for 2019. The Company has implemented a return to growth strategy by increasing its rollout of new commercially live products from two to six in calendar year 2019. Management intends to launch a new product in every quarter, with the first commercially launched product being Dancing Diaries, developed in partnership with a UK-based studio. Subsequent quarters will follow with commercial launches of Recolor by Numbers, Matching Stories and Neybers 2.0.
The company closed a non-dilutive financing of Euro 2 million in December 2018 and has been approved for an additional non-dilutive financing of approximately Euro 1 million in February 2019, providing necessary funds for the development and marketing of the previously mentioned new products. With the investments in future growth, the next few quarters will focus on sustainable ROI positive revenue growth, maximizing the combined total potential of the expanding product portfolio.
Kuuhubb is a publicly listed mobile game development and publishing company, targeting 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 selected 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 has a global presence with a strong focus on U.S. and Asian markets.
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, products 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 and development 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 November 8, 2018 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.
For further information, please contact:
Jouni Keränen – CEO
Office: +358 40 590 0919
Office: +1 (416) 479-9547